TIDMPAL
RNS Number : 0607N
Equatorial Palm Oil plc
04 June 2010
Equatorial Palm Oil plc / Index: AIM / Epic: PAL / Sector: Food Producers
4 June 2010
Equatorial Palm Oil plc ('EPO' or 'the Company')
Final Results and Notice of Annual General Meeting
Equatorial Palm Oil plc, the AIM listed Liberian focussed sustainable oil palm
plantation developer, announces its final results for the year ended 31 December
2009 and gives notice of its Annual General Meeting to be held at the offices of
Sprecher Grier Halberstam LLP, 5th Floor, One America Square, Crosswall, London
EC3N 2SG on 30 June 2010 at 11am.
Overview
· Continued work throughout 2009 at Palm Bay and Butaw to prepare for
plantation rehabilitation
· Active development strategy focussed on becoming a large scale West African
producer of sustainable palm oil
· Successful GBP6.5m equity raising and admission of EPO's shares on AIM in
February 2010
· Cornerstone investor secured - BioPalm Energy Ltd, a subsidiary of Indian
Conglomerate The Siva Group further to a GBP5 million placing
· Reactivation of 3,000 ha of existing plantations at Palm Bay and 220,000
oil palm seeds ordered to be planted at nurseries being established at Palm Bay
and Butaw plantations
· First palm oil mill is in transit to Liberia from Malaysia with expected
palm oil production in Q4 2010 to provide cash flow
· Post tax loss of GBP943,000 (2008: GBP1,410,000) - reflects a reduction of
over GBP620,000 in administrative expenditure throughout 2009
Chairman's Statement
It gives me pleasure to report on Equatorial Palm Oil Plc's progress over this
pivotal reporting period.
During the year ended 31 December 2009, EPO undertook further positive
preliminary operational and field activities in preparation for the
rehabilitation and development of the Group's palm oil concessions in Liberia
upon securing further funding by way of an admission to the Alternative
Investment Market ('AIM') of the London Stock Exchange.
Subsequent to year end, the Company's financing endeavours culminated in a
successful GBP6.5m equity raising and admission of EPO's shares on AIM in
February 2010. In May 2010, we were very pleased to welcome BioPalm Energy Ltd
('BioPalm'), a subsidiary of Indian conglomerate The Siva Group, as a
cornerstone investor following a GBP5m placement. These two fund raisings have
positioned the Group to move forward with implementing our strategy which is
focussed on becoming a large scale West African producer of sustainable palm
oil.
The Directors believe that EPO is ideally positioned to create value for
shareholders given its land position of circa 169,000 hectares ('ha') in
Liberia, our strong management team, defined development strategy, expected
short term cash flow from the reactivation of existing plantations and a solid
funding base.
Our operations in Liberia comprise three areas: 34,393 ha at Palm Bay Oil Palm
Plantation ('Palm Bay'), 54,549 ha at Butaw Oil Palm Plantation ('Butaw'), and
80,000 ha in the River Cess County ('River Cess'). Palm Bay and Butaw are held
under government ratified long term concessions and all three areas are
considered highly suitable for sustainable oil palm plantation development.
Importantly, our plantation areas are well located, with established
infrastructure, close to deep water ports and with access to suitable labour.
We aim to provide early cash flow through the reactivation of 3,000 ha. of
existing plantations at Palm Bay. As part of the reactivation, the Company
announced on 2 June 2010 that our first palm oil mill is in transit to Liberia
from Malaysia and is expected to be delivered to Liberia in July. The Directors
expect that production of palm oil, providing the Company with cash flow, will
commence in Q4 this year. Once production has started, we intend to sell CPO to
the local market. In addition, we have ordered 220,000 oil palm seeds to be
planted at nurseries being established at Palm Bay and Butaw. Looking further
ahead, our long term strategy is to plant 50,000 ha. of oil palm within ten
years for sustainable CPO production with a target of producing 250,000 tonnes
per annum ('tpa') and eventually extending our planting programme out to 100,000
ha. In tandem with our own plantation development we have an out-grower
(smallholder) programme which will enable local communities to gain direct
ownership within the palm industry while also increasing production of crude
palm oil.
Liberia provides the Company with a low cost production environment and
immediate access to the sizeable and well established West African palm oil
market. The country has worked hard to stabilise its political system and we
believe it has a highly encouraging investment outlook. Our view is supported
by recent investment in the country by major international companies including
Arcelor Mittal and Firestone. Importantly major international palm oil
producers are active in Liberia with Sime Darby commencing operations and Golden
Agri announcing significant palm oil investment plans. The willingness of such
companies to invest heavily in Liberia reaffirms the potential of this region
for palm oil.
Palm oil is the most widely produced edible oil in the world and is indigenous
to West Africa. The Board believes that with the implementation of techniques
from South East Asia and the latest seed genetics, Africa should again become a
key player in the buoyant world CPO market. Furthermore, demand for CPO is
increasing and is forecast to grow at an annualised growth rate of 5-6 per cent.
between 2008 and 2015. This will be facilitated by an increasing global
population and improved standards of living, the latter being a primary driver
in India and China. Preference in diet has also played a part with the US
seeing a 30% annualised growth in demand of CPO in the last seven years due to
positive health findings and additionally, industrial demand has been
underpinned by crude mineral oil prices.
Public awareness of palm oil has increased significantly in recent times and as
an emerging developer we have first mover advantage in establishing new
sustainable palm oil plantations. It is the Board's view that a clear
commitment to environmentally and socially sustainable palm oil production is
not simply the only option but also very achievable. We believe that if
developed sustainably, palm oil can responsibly provide enormous benefits to
countries such as Liberia whilst remaining an excellent investment.
Management
We have a strong management team in place that has extensive experience of both
the region and the development of large scale oil palm plantations. Both our
Plantations Director Geoff Brown and Managing Director Peter Bayliss, have many
years of direct experience working in the sector, with Geoff Brown having
occupied the roles of Managing Director of London Sumatra Indonesia and Chairman
of New Britain Palm Oil Ltd. We are confident that with an experienced
management team behind us that we can move forward and implement our strategy
effectively.
Financial Review
In February 2010, the Company raised GBP6.5 million before expenses, by way of a
placing of 49,398,337 ordinary shares at 17.5p as part of the Company's
admission to AIM. Subsequently in May 2010, the Company raised GBP5 million
before expenses, by way of a placing subscription with BioPalm for 33,333,333
ordinary shares at 15p. The funds will be used for the continued development of
the Company's 169,000 hectare land position and the acceleration of the
plantation rollout programme.
For the year ended 31 December 2009, the Group reported an after tax loss of
GBP943,000, down from the prior year loss of GBP1,410,000, reflecting a
reduction of over GBP620,000 in administrative expenditure throughout 2009.
Over the course of the period, we invested in our land position and leases in
preparation for the fundraising and admission to AIM post-period end, increasing
the book value of our non-current assets to GBP7.3 million, up from GBP6.7m in
2008.
Outlook
We have a highly active development programme to crystallise the value of what I
believe to be one of the most exciting palm oil opportunities in West Africa.
The reactivation of existing oil palms has commenced and we expect to be
generating cash flow as soon as we receive delivery of our mill, which is being
shipped from Malaysia in June 2010. Additionally, in tandem with our own
development schedule, we are examining a number of strategic partnerships which
we believe will fast track the development of our portfolio and assist us in
becoming a major palm oil company in Liberia.
The Board is confident that EPO offers investors a comparably lower cost entry
point for palm oil development and investment and looks forward to the
development of this exciting opportunity.
Finally I would like to thank my fellow Board members and staff for their hard
work and determination to date, all of which has placed us in an excellent
position to take the Company forward.
Michael Frayne
Chairman
3 June 2010
Principal Activities and Review of Operations
The principal activities of the Company are the evaluation and development of
the cultivation of oil palms for the production of crude palm oil and associated
products in Liberia.
The Company holds two concession agreements with the Government of Liberia for
the investment, rehabilitation and participation by the Company over 10,200
hectares of existing oil palm plantations and a further 78,548 hectares of
agricultural land for development into oil palm plantations. The concession
agreements are held by the wholly owned subsidiaries LIBINC Oil Palm Inc
('LIBINC') and Liberia Forest Products Inc ('LFPI') and include respectively the
Palm Bay plantation in Grand Bassa County and the Butaw plantation in Sinoe
County.
In addition, the Company has entered into a memorandum of intent with the River
Cess County to establish a joint venture to develop oil palm plantations over at
least a further 80,000 hectares.
The development of our land bank is progressing well and we have embarked upon
our reactivation programme at Palm Bay. The existing plantations are considered
to be in reasonable condition by the Independent Expert Agronomist, who believe
that the plantations are capable of producing economic yields of fresh fruit
bunches ('FFB') in areas which have not been used for shifting cultivation and
where the number of palm oils per hectare is close to 140-180 plants per
hectare. With this in mind, we consider an area of 3,000 hectares at Palm Bay
to be the most economically viable for rehabilitation. Weeding and clearing of
undergrowth has commenced and further to completion, we expect that the
reactivation should immediately enhance land valuations.
Throughout 2009, we continued work on a number of preliminary operational
activities at both Palm Bay and Butaw, conducting ongoing survey work to ensure
that demographic and social reports on the existing inhabitants and ongoing
economic activities in and around the concession areas are current. These
routine surveys continue to provide valuable data on population numbers and
activities at both sites, providing the Company with significant opportunity to
further develop dialogue with local stakeholders. Communication between the
Company and local communities is imperative and we are committed to maintaining
consistent communication concerning development plans and future opportunities
for employment.
Additionally, we have embarked upon an active recruitment programme and now have
125 employees who are engaged in preliminary field activities at Palm Bay and
Butaw estates. We have been clearing and maintaining roads, concession
boundaries lines and enabling access to be made to all areas of the existing
plantings on both concessions and our increased workforce are vital in this
process.
We have identified potential oil palm nursery sites and have cleared each
concession in preparation for the establishment of seedling nurseries at both
Palm Bay and Butaw. We have also placed an initial order of 220,000 oil palm
seeds with Unipalm, the sales agent for Feronia Inc, whose seed garden is in The
Democratic Republic of Congo. The seeds will be delivered in batches and have
been developed and specifically cultivated for the West African palm oil sector,
with the first batch delivered in May. Having prepared the nurseries, the seeds
will immediately be planted and will provide seedlings to facilitate the
Company's initial round of planting of circa 1,200 hectares of land, 600
hectares at each plantation.
Other ongoing work programmes include the clearing and surveying of existing
social infrastructure at both concessions. The Company has reviewed factory
sites, office and workshop facilities and housing at the plantations and
rehabilitation and repair plans have been compiled for implementation.
Additionally, rehabilitation and repair work has commenced on a number of
priority social infrastructure projects including schools, clinics and priority
housing together with associated water and sanitation facilities. In
particular, construction work commenced on two temporary elementary schools at
Butaw which will provide schooling for between 300-400 students currently
residing on the concession. The schools will be completed in time to enable the
enrolment of students in time for the commencement of the new academic year in
September 2010. We also commenced refurbishment work on the existing elementary
school at Palm Bay and completion of this project will take place in time for
the commencement of the new academic year when 400 local students are due to
enrol. Temporary school facilities have been provided at alternative sites at
Palm Bay to enable studies to continue for the 350 existing students during the
rehabilitation of the permanent school buildings.
We have also enhanced medical and first aid facilities at both concession areas.
The health facility at Butaw underwent further expansion during 2009 with the
addition of a Maternity Unit and the establishment of a Malaria & TB Control
Unit at the site as part of a nationwide programme spearheaded by the Ministry
of Health. Patient numbers treated at the facility throughout 2009 averaged in
the region of 500 consultations per month. Renovation of a temporary First Aid
Post at the Palm Bay concession was completed during the fourth quarter of 2009
and the facility became operational on the appointment of qualified health
workers in December 2009. Early indications are that patient numbers will exceed
500 consultations per month at this facility.
Throughout 2009 routine security operations continued to be carried out by
Company security personnel in conjunction with the Liberian National Police and
aided by the establishment of Magisterial Courts on both concessions as provided
for under the terms of the concession agreements signed with the Government of
Liberia. During the year there were no security breaches or incidents of note
which occurred on either concession.
* * ENDS * *
For further information please visit www.epoil.co.uk, www.modipalm.com.my, or
contact:
+--------------+---------------------------+-------------------+
| Michael | Equatorial Palm Oil plc | Tel: 020 7766 |
| Frayne | | 7555 |
+--------------+---------------------------+-------------------+
| Peter Krens | Mirabaud Securities LLP | Tel: 020 7484 |
| | | 3510 |
+--------------+---------------------------+-------------------+
| Pascal Keane | Shore Capital & Corporate | Tel: 020 7408 |
| | Limited | 4090 |
+--------------+---------------------------+-------------------+
| Edward | Shore Capital & Corporate | Tel: 020 7408 |
| Mansfield | Limited | 4090 |
+--------------+---------------------------+-------------------+
| Hugo de | St Brides Media & Finance | Tel: 020 7236 |
| Salis | Ltd | 1177 |
+--------------+---------------------------+-------------------+
| Paul Youens | St Brides Media & Finance | Tel: 020 7236 |
| | Ltd | 1177 |
+--------------+---------------------------+-------------------+
GROUP STATEMENT OF COMPREHENSIVE INCOME
As at 31 December 2009
+-----------------------------------+-------+---------+----------+
| | Note | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+-----------------------------------+-------+---------+----------+
| | | | |
+-----------------------------------+-------+---------+----------+
| Administrative expenses | | (771) | (1,395) |
+-----------------------------------+-------+---------+----------+
| | | | |
+-----------------------------------+-------+---------+----------+
| Operating loss | 3 | (771) | (1,395) |
+-----------------------------------+-------+---------+----------+
| | | | |
+-----------------------------------+-------+---------+----------+
| Interest received | 4 | - | 12 |
+-----------------------------------+-------+---------+----------+
| Interest payable | 4 | (172) | (27) |
+-----------------------------------+-------+---------+----------+
| | | | |
+-----------------------------------+-------+---------+----------+
| Loss on ordinary activities | | (943) | (1,410) |
| before taxation | | | |
+-----------------------------------+-------+---------+----------+
| | | | |
+-----------------------------------+-------+---------+----------+
| Taxation on loss on ordinary | 5 | - | - |
| activities | | | |
+-----------------------------------+-------+---------+----------+
| | | | |
+-----------------------------------+-------+---------+----------+
| Loss for the year after taxation | | (943) | (1,410) |
+-----------------------------------+-------+---------+----------+
| | | | |
+-----------------------------------+-------+---------+----------+
| Other Comprehensive income | | | |
+-----------------------------------+-------+---------+----------+
| Currency translation differences | | (273) | 359 |
+-----------------------------------+-------+---------+----------+
| Total comprehensive income for | | (1,216) | (1,051) |
| the year | | | |
+-----------------------------------+-------+---------+----------+
| | | | |
+-----------------------------------+-------+---------+----------+
| Loss per share expressed in pence | | | |
| per share | | | |
+-----------------------------------+-------+---------+----------+
| - Basic & diluted | 9 | (2.9)p | (4.6)p |
+-----------------------------------+-------+---------+----------+
| | | | |
+-----------------------------------+-------+---------+----------+
All of the operations are considered to be continuing.
GROUP BALANCE SHEET
As at 31 December 2009
+-------------------------------------+------+---------+---------+
| | | 2009 | 2008 |
| |Note | GBP'000 | GBP'000 |
+-------------------------------------+------+---------+---------+
| | | | |
+-------------------------------------+------+---------+---------+
| ASSETS | | | |
+-------------------------------------+------+---------+---------+
| Non-current assets | | | |
+-------------------------------------+------+---------+---------+
| Intangible assets | 11 | 7,232 | 6,663 |
+-------------------------------------+------+---------+---------+
| Plant and equipment | 15 | 58 | 75 |
+-------------------------------------+------+---------+---------+
| | | 7,290 | 6,738 |
+-------------------------------------+------+---------+---------+
| | | | |
+-------------------------------------+------+---------+---------+
| Current assets | | | |
+-------------------------------------+------+---------+---------+
| Other receivables | 16 | 347 | 14 |
+-------------------------------------+------+---------+---------+
| Cash & cash equivalents | 20 | 63 | 18 |
+-------------------------------------+------+---------+---------+
| | | 410 | 32 |
+-------------------------------------+------+---------+---------+
| | | | |
+-------------------------------------+------+---------+---------+
| LIABILITIES | | | |
+-------------------------------------+------+---------+---------+
| Current liabilities | | | |
+-------------------------------------+------+---------+---------+
| Trade and Other payables | 17 | 2,009 | 1,091 |
+-------------------------------------+------+---------+---------+
| Short term borrowings | 18 | 2,002 | 774 |
+-------------------------------------+------+---------+---------+
| | | 4,011 | 1,865 |
+-------------------------------------+------+---------+---------+
| | | | |
+-------------------------------------+------+---------+---------+
| Net current (liabilities) | | (3,601) | (1,833) |
+-------------------------------------+------+---------+---------+
| | | | |
+-------------------------------------+------+---------+---------+
| NET ASSETS | | 3,689 | 4,905 |
+-------------------------------------+------+---------+---------+
| | | | |
+-------------------------------------+------+---------+---------+
| SHAREHOLDERS' EQUITY | | | |
+-------------------------------------+------+---------+---------+
| Share Capital | 19 | 320 | 320 |
+-------------------------------------+------+---------+---------+
| Share premium | | 6,175 | 6,175 |
+-------------------------------------+------+---------+---------+
| Other reserves | | 104 | 377 |
+-------------------------------------+------+---------+---------+
| Retained loss | | (2,910) | (1,967) |
+-------------------------------------+------+---------+---------+
| Total equity | | 3,689 | 4,905 |
+-------------------------------------+------+---------+---------+
COMPANY BALANCE SHEET
As at 31 December 2009
+--------------------------------------+------+-+----------+---------+
| | | 2009 | 2008 |
| |Note | GBP'000 | GBP'000 |
+--------------------------------------+------+------------+---------+
| | | | |
+--------------------------------------+--------+----------+---------+
| ASSETS | | | |
+--------------------------------------+--------+----------+---------+
| Non-current assets | | | |
+--------------------------------------+--------+----------+---------+
| Investments | 13 | - | - |
+--------------------------------------+--------+----------+---------+
| Plant and equipment | 15 | 22 | 44 |
+--------------------------------------+--------+----------+---------+
| | | 22 | 44 |
+--------------------------------------+--------+----------+---------+
| | | | |
+--------------------------------------+--------+----------+---------+
| Current assets | | | |
+--------------------------------------+--------+----------+---------+
| Other receivables | 16 | 7,623 | 6,420 |
+--------------------------------------+--------+----------+---------+
| Cash & cash equivalents | 20 | 33 | 18 |
+--------------------------------------+--------+----------+---------+
| | | 7,656 | 6,438 |
+--------------------------------------+--------+----------+---------+
| | | | |
+--------------------------------------+--------+----------+---------+
| | | | |
+--------------------------------------+--------+----------+---------+
| LIABILITIES | | | |
+--------------------------------------+--------+----------+---------+
| Current liabilities | | | |
+--------------------------------------+--------+----------+---------+
| Trade and Other payables | 17 | 1,994 | 1,091 |
+--------------------------------------+--------+----------+---------+
| Short term borrowings | 18 | 2,002 | 774 |
+--------------------------------------+--------+----------+---------+
| | | 3,996 | 1,865 |
+--------------------------------------+--------+----------+---------+
| | | | |
+--------------------------------------+--------+----------+---------+
| Net current assets | | 3,660 | 4,573 |
+--------------------------------------+--------+----------+---------+
| | | | |
+--------------------------------------+--------+----------+---------+
| NET ASSETS | | 3,682 | 4,617 |
+--------------------------------------+--------+----------+---------+
| | | | |
+--------------------------------------+--------+----------+---------+
| SHAREHOLDERS' EQUITY | | | |
+--------------------------------------+--------+----------+---------+
| Share capital | 19 | 320 | 320 |
+--------------------------------------+--------+----------+---------+
| Share premium | | 6,175 | 6,175 |
+--------------------------------------+--------+----------+---------+
| Equity reserve | 19 | - | - |
+--------------------------------------+--------+----------+---------+
| Other reserves | | 21 | 21 |
+--------------------------------------+--------+----------+---------+
| Retained loss | | (2,834) | (1,899) |
+--------------------------------------+--------+----------+---------+
| Total equity | | 3,682 | 4,617 |
+--------------------------------------+--------+----------+---------+
| | | | | |
+--------------------------------------+------+-+----------+---------+
CASH FLOW STATEMENTS
As at 31 December 2009
+--------------------------+-+---------+---------+---------+---------+
| | | Group | Group | Company | Company |
| | | 2009 | 2008 | 2009 | 2008 |
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+-+---------+---------+---------+---------+
| Cash flows from | | | | | |
| operating activities | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| Operating Loss | | (771) | (1,395) | (763) | (1,352) |
+--------------------------+-+---------+---------+---------+---------+
| (Increase)/decrease in | | (333) | 67 | (1,203) | (1,351) |
| trade and other | | | | | |
| receivables | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| Increase in trade and | | 918 | 807 | 903 | 807 |
| other payables | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| Depreciation | | 23 | 48 | 22 | 23 |
+--------------------------+-+---------+---------+---------+---------+
| Net cash outflow from | | (163) | (473) | (1,041) | (1,873) |
| operating activities | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| Cash flows from | | | | | |
| investing activities | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| Interest Received | | - | 12 | - | 12 |
+--------------------------+-+---------+---------+---------+---------+
| Payments to acquire | | (839) | (1,405) | - | - |
| intangible assets | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| Payments to acquire | | (9) | (5) | - | (5) |
| tangible assets | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| Net cash | | (848) | (1,398) | - | 7 |
| (outflow)/inflow from in | | | | | |
| investing activities | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| Cash flows from | | | | | |
| financing activities | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| Short term borrowings | | 1,228 | 774 | 1,228 | 774 |
+--------------------------+-+---------+---------+---------+---------+
| Issue of ordinary share | | - | - | - | - |
| capital | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| Share issue costs | | - | - | - | - |
+--------------------------+-+---------+---------+---------+---------+
| Interest paid | | (172) | (27) | (172) | (27) |
+--------------------------+-+---------+---------+---------+---------+
| Net cash inflow from | | 1,056 | 747 | 1,056 | 747 |
| financing activities | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| Net increase/(decrease) | | 45 | (1,124) | 15 | (1,119) |
| in cash and cash | | | | | |
| equivalents | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| Cash and cash | | 18 | 1,142 | 18 | 1,137 |
| equivalents at beginning | | | | | |
| of period | | | | | |
+--------------------------+-+---------+---------+---------+---------+
| Cash and cash | | 63 | 18 | 33 | 18 |
| equivalents at end of | | | | | |
| period | | | | | |
+--------------------------+-+---------+---------+---------+---------+
STATEMENT OF CHANGES IN EQUITY
For the period ended 31 December 2009
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| | Called | | Foreign | | Share |Retained | Total |
| | up | Share | currency | | based |earnings | equity |
| | share |premium |translation | Equity |payment | | |
| |capital |reserve | reserve |reserve |reserve | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Group | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| As at 1 | 206 | 2,863 | (3) | | 21 | (557) | 3,430 |
| January 2008 | | | | 900 | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Share | 114 | 3,312 | - | | - | - | 2,526 |
| capital | | | | (900) | | | |
| issued | | | | | | | |
| (Note 19) | | | | | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Cost of | - | - | - | | - | - | - |
| share issue | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| (Loss) for | - | - | - | | - | (1,410) | (1,410) |
| the year | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Share based | - | - | - | - | - | - | - |
| payments | | | | | | | |
| | | | | | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Currency | - | - | 359 | | - | - | 359 |
| translation | | | | | | | |
| differences | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| As at 31 | 320 | 6,175 | 356 | | 21 | (1,967) | 4,905 |
| December | | | | - | | | |
| 2008 | | | | | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| | | | | | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| As at 1 | 320 | 6,175 | 356 | | 21 | (1,967) | 4,905 |
| January 2009 | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Share | - | - | - | | - | - | - |
| capital | | | | - | | | |
| issued | | | | | | | |
| (Note 19) | | | | | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Cost of | - | - | - | | - | - | - |
| share issue | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| (Loss) for | - | - | - | | - | (943) | (943) |
| the year | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Share based | - | - | - | - | - | - | - |
| payments | | | | | | | |
| | | | | | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Currency | - | - | (273) | | - | - | (273) |
| translation | | | | | | | |
| differences | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| As at 31 | 320 | 6,175 | 83 | | 21 | (2,910) | 3,689 |
| December | | | | - | | | |
| 2009 | | | | | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
STATEMENT OF CHANGES IN EQUITY
For the period ended 31 December 2009
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| | Called | | Foreign | | Share |Retained | Total |
| | up | Share | currency | | based |earnings | equity |
| | share |premium |translation | Equity |payment | | |
| |capital |reserve | reserve |reserve |reserve | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Company | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| As at 1 | 206 | 2,863 | - | | 21 | (532) | 3,458 |
| January 2008 | | | | 900 | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Share | 114 | 3,312 | - | | - | - | 2,526 |
| capital | | | | (900) | | | |
| issued (Note | | | | | | | |
| 19) | | | | | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Cost of | | - | - | | - | - | - |
| share issue | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| (Loss) for | | - | - | | | (1,367) | (1,367) |
| the year | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Share based | - | - | - | | - | - | - |
| payments | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Currency | - | - | - | | - | - | - |
| translation | | | | | | | |
| differences | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| As at 31 | 320 | 6,175 | - | | 21 | (1,899) | 4,617 |
| December | | | | - | | | |
| 2008 | | | | | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| | | | | | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| As at 1 | 320 | 6,175 | - | | 21 | (1,899) | 4,617 |
| January 2009 | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Share | - | - | - | | - | - | - |
| capital | | | | - | | | |
| issued (Note | | | | | | | |
| 19) | | | | | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Cost of | | - | - | | - | - | - |
| share issue | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| (Loss) for | | - | - | | | (935) | (935) |
| the year | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Share based | - | - | - | | - | - | - |
| payments | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| Currency | - | - | - | | - | - | - |
| translation | | | | | | | |
| differences | | | | - | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
| As at 31 | 320 | 6,175 | - | | 21 | (2,834) | 3,682 |
| December | | | | - | | | |
| 2009 | | | | | | | |
+--------------+---------+---------+-------------+---------+---------+----------+---------+
Notes
The financial information set out in this announcement does not constitute
statutory accounts as defined in the Companies Act 2006.
The financial information for the year ended 31 December 2008 has been extracted
from the consolidated financial statements to that date which received an
unmodified auditor's report and have been delivered to the Registrar of
Companies. The financial information for the year ended 31 December 2009 has
been extracted from the consolidated financial statements to that date which
have received an unmodified auditor's report but have not yet been delivered to
the Registrar of Companies.
The financial statements and the Notice of Annual General Meeting are being
posted to shareholders today and will be available later today from the
Company's registered office, One America Square, Crosswall, London EC3N 2SG and
website at www.epoil.co.uk.
1. Summary of Significant Accounting Policies
The principal accounting policies are summarised below. They have all been
applied consistently throughout the period.
Authorisation of financial statements
The consolidated financial statements of Equatorial Palm Oil Plc for the year
ended 31 December 2009 were authorised for issue by the Board on 3 June 2010 and
the balance sheets signed on the Board's behalf by Michael Frayne and Anthony
Samaha.
Basis of accounting
These financial statements have been prepared under the historical cost
convention and in accordance with International Financial Reporting Standards as
adopted by the European Union and IFRIC interpretations and with those parts of
the Companies Act, 2006 applicable to companies reporting under IFRS.
Basis of consolidation
The consolidated financial statements comprise the financial statements of
Equatorial Palm Oil Plc and its subsidiaries (the 'Group') as at 31 December
each year. The financial statements of the subsidiaries are prepared for the
same reporting year as the parent company, using consistent accounting policies.
All intra-group balances, transactions, income and expenses and profits and
losses resulting from intra-group transactions that are recognised in assets,
are eliminated in full.
Subsidiaries are fully consolidated from the date of acquisition, being the date
on which the Group obtains control, and continue to be consolidated until the
date that such control ceases.
Revenue
The Group had no revenue during the year.
Foreign currencies
The consolidated financial statements are stated in thousands of Sterling (GBP),
which is the reporting currency of the Group and the Company and all values are
rounded to the nearest GBP'000 unless otherwise stated. Each entity in the
Group determines its own functional currency and items included in the financial
statements of each entity are measured using that functional currency. As at the
reporting date the assets and liabilities of these subsidiaries are translated
into the presentation currency of the Company at the rate of exchange ruling at
the balance sheet date and their income statements are translated at the average
exchange rate for the year. The exchange differences arising on the translation
are taken directly to a separate component of equity. All other differences are
taken to the income statement. The relevant exchange rates used at year end
were GBP:USD - 1.59 and GBP:AUD - 1.78.
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in
hand and short-term deposits.
For the purposes of the Cash Flow Statement, cash and cash equivalents consist
of cash and cash equivalents as defined above.
Intangible assets
Intangible assets are recognised if it is probable that they will provide a
future economic benefit to the Company and are recorded at cost less eventual
amortisation and provision for impairment in value.
The costs in respect of project evaluation and the development of the
cultivation of oil palms are capitalised at cost. The developments are not yet
at a stage where accounting for biological assets, under IAS 41, is deemed
necessary.
Goodwill on consolidation is capitalised and shown within intangible assets.
Positive goodwill is subject to an annual impairment review, and negative
goodwill is immediately written-off to the income statement when it arises.
Investment
Investments in subsidiary undertakings are stated at cost less any provision for
impairment in value, prior to their elimination on consolidation.
Where the Group has entered into a contract to acquire a company, and the
acquisition has not been completed at the balance date, but it is probable that
the acquisition will be completed and provide a future economic benefit to the
Group, the costs incurred in respect of that acquisition are capitalised.
Impairment of non-financial assets
Non-financial assets and identifiable intangibles, other than exploration and
evaluation assets, are reviewed for impairment each reporting date and whenever
events or changes in circumstances indicate that the carrying amount may not be
recoverable. If the expected undiscounted future cash flow from the use of the
assets and their eventual disposition is less than the carrying amount of the
assets, an impairment loss is recognised and measured using the asset's fair
value or discounted cash flows.
Property, Plant and Equipment
Plant and equipment is stated at cost less accumulated depreciation and any
accumulated impairment losses.
Depreciation is provided on all plant and equipment to write off the cost less
estimated residual value of each asset over its expected useful economic life on
a straight-line basis at the following annual rates:
Plant and Equipment 25% - 33%
Vehicles 20%
All assets are subject to annual impairment reviews.
Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax. The tax currently payable is based on taxable profit for the period. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the Balance Sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability method. Deferred
tax is calculated at the tax rates that are expected to apply in the period when
the liability is settled or the asset is realised.
Share-based payments
The Group has applied the requirements of IFRS 2 Share-based Payments.
Where equity instruments are granted to persons other than employees, the income
statement is charged with the fair value of goods and services received, except
where it is in respect to costs associated with the issue of securities, in
which case it is charged to the share premium account.
Equity-settled share-based payments are measured at fair value at the date of
grant. The fair value is determined using a Black-Scholes model.
Financial Instruments
The Group's financial assets consist of cash and trade and other receivables.
Cash consists of cash on hand and cash held on current account or on short-term
deposits at variable interest rates. Any interest earned is accrued monthly and
classified as interest.
Trade and other receivables are stated at cost less impairment losses.
The Group's financial liabilities consist of trade and other payables and
short-term borrowings, which are stated at their cost. All interest and other
borrowing costs incurred in connection with the above are expensed as incurred
and reported as part of net financing costs in the income statement.
Convertible loan notes are included within short-term borrowings and treated as
solely liability with no equity component due to the conversion terms being AIM
admission placing price.
Going concern
These financial statements have been prepared on a going concern basis, taking
into account the equity funds raised subsequent to the year end of GBP6.5
million and GBP5 million, before expenses, in February 2010 and May 2010,
respectively.
Adoption of new and revised Accounting Standards
In the current year the Company has adopted all of the new and revised Standards
and Interpretations issued by the Accounting Standards Board that are relevant
to its operation and effective and mandatory for the current annual reporting
period and there is no material financial impact on the financial statements of
the group or the company.
IASB and IFRIC have issued the following standards and interpretations with an
effective date after the date of these financial statements:
International Accounting Standards (IAS/IFRSs) and (Effective date)
+-------+---------------------------------------------------------+----------+
| IFRS | Amendment to IFRS 2 - Group cash settled and share-based payment |
| 2 | transactions (1 January 2010) |
+-------+--------------------------------------------------------------------+
| IFRS | Business Combinations - revised January 2008 (1 July 2009) |
| 3 | |
+-------+--------------------------------------------------------------------+
| IFRS | Measurement of non-current assets classified as held for sale (1 |
| 5 | January 2010) |
+-------+--------------------------------------------------------------------+
| IAS | Consolidated and Separate Financial Statements - revised January |
| 27 | 2008 (1 July 2009) |
+-------+--------------------------------------------------------------------+
| IAS | Intangible Assets (1 January 2010) | |
| 38 | | |
+-------+---------------------------------------------------------+----------+
| | International Financial Reporting Interpretations | |
| | Committee (IFRIC) | |
+-------+---------------------------------------------------------+----------+
| IFRIC | Distribution of non-cash assets to owners (1 July 2009) | |
| 17 | | |
+-------+---------------------------------------------------------+----------+
2. Revenue and Segmental Analysis
The Group had no revenue during the period.
The Group operates in the business segment of the evaluation and development of
the cultivation of oil palms.
The Group has material interests in two geographical segments, the United
Kingdom and Liberia.
+-----------------------------+---------+---------+---------+
| By geographical area | United | Liberia | Total |
| | Kingdom | | |
+-----------------------------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+---------+---------+---------+
| 2009 | | | |
| | | | |
| Loss for the year ended | | | |
| 31 December 2009 | (935) | (8) | (943) |
+-----------------------------+---------+---------+---------+
| | | | |
+-----------------------------+---------+---------+---------+
| Other segment information: | | | |
+-----------------------------+---------+---------+---------+
| Additions to Intangible | - | 839 | 839 |
| assets | | | |
+-----------------------------+---------+---------+---------+
| Total Segment assets | 400 | 7,300 | 7,700 |
+-----------------------------+---------+---------+---------+
| Segment liabilities | (3,996) | (15) | (4,011) |
+-----------------------------+---------+---------+---------+
| 2008 | | | |
| | | | |
| Loss for the year ended | (1,367) | (43) | (1,410) |
| 31 December 2008 | | | |
+-----------------------------+---------+---------+---------+
| | | | |
+-----------------------------+---------+---------+---------+
| Other segment information: | | | |
+-----------------------------+---------+---------+---------+
| Additions to Intangible | - | 3,931 | 3,931 |
| assets | | | |
+-----------------------------+---------+---------+---------+
| Total Segment assets | 76 | 6,694 | 6,770 |
+-----------------------------+---------+---------+---------+
| Segment liabilities | (1,865) | - | (1,865) |
+-----------------------------+---------+---------+---------+
3. Operating Loss
The operating loss is stated after charging:
+------------------------+----------------+---------+---------+
| | Group | Group |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+-----------------------------------------+---------+---------+
| Auditors' remuneration | - audit | 15 | 10 |
| | services | | |
+------------------------+----------------+---------+---------+
| | - other | - | 30 |
| | services | | |
+------------------------+----------------+---------+---------+
| Depreciation (note 15) | 23 | 48 |
+-----------------------------------------+---------+---------+
| Directors' emoluments (note 8) | 587 | 326 |
+------------------------+----------------+---------+---------+
Auditors' remuneration for non-audit services provided during 2008 amounting to
GBP30,000 relates to the provision of Reporting Accountants services for the
proposed re-Admission to AIM.
4. Interest
+------------------------------------------+---------+---------+
| | Group | Group |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+------------------------------------------+---------+---------+
| Received | | |
+------------------------------------------+---------+---------+
| Bank interest received | - | 12 |
+------------------------------------------+---------+---------+
| Payable | | |
+------------------------------------------+---------+---------+
| On short term borrowings | (172) | (27) |
+------------------------------------------+---------+---------+
5. Taxation
+-------------------------------------------+---------+---------+
| | Group | Group |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+-------------------------------------------+---------+---------+
| Current year taxation | | |
+-------------------------------------------+---------+---------+
| UK corporation tax at 28% on results for | - | - |
| the period (2008: 28.5%) | | |
+-------------------------------------------+---------+---------+
| | | |
+-------------------------------------------+---------+---------+
| Factors affecting the tax charge for the | | |
| period | | |
+-------------------------------------------+---------+---------+
| Loss on ordinary activities before tax | (943) | (1,410) |
+-------------------------------------------+---------+---------+
| | | |
+-------------------------------------------+---------+---------+
| Loss on ordinary activities at the UK | (264) | (402) |
| standard rate of 28% (2008: 28.5%) | | |
+-------------------------------------------+---------+---------+
| Effects: | | |
+-------------------------------------------+---------+---------+
| Future tax benefit not brought to account | 264 | 402 |
+-------------------------------------------+---------+---------+
| Current period taxation | - | - |
+-------------------------------------------+---------+---------+
No deferred tax assets have been created.
6. Directors' Emoluments
+------------------------------------------+---------+---------+
| | Group | Group |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+------------------------------------------+---------+---------+
| Michael Frayne1 | 33 | 72 |
+------------------------------------------+---------+---------+
| Ross Warner | 6 | 36 |
+------------------------------------------+---------+---------+
| Anthony Samaha | 24 | 36 |
+------------------------------------------+---------+---------+
| Geoff Brown | 220 | 86 |
+------------------------------------------+---------+---------+
| Peter Bayliss | 131 | 76 |
+------------------------------------------+---------+---------+
| Joseph Jaoudi | 173 | 20 |
+------------------------------------------+---------+---------+
| Total | 587 | 326 |
+------------------------------------------+---------+---------+
1) Services provided by Adelise Services Ltd.
7. Compensation of Key Management Personnel (excluding Directors)
+------------------------------------------+---------+---------+
| | Group | Group |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+------------------------------------------+---------+---------+
| Salaries | 132 | 176 |
+------------------------------------------+---------+---------+
| Social Security | 3 | 3 |
+------------------------------------------+---------+---------+
| Total | 135 | 179 |
+------------------------------------------+---------+---------+
8. Staff Costs (including Directors)
+------------------------------------------+---------+---------+
| | Group | Group |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+------------------------------------------+---------+---------+
| Staff Costs | | |
+------------------------------------------+---------+---------+
| Directors Fees | 587 | 326 |
+------------------------------------------+---------+---------+
| Salaries & Wages | 304 | 520 |
+------------------------------------------+---------+---------+
| Social Security Costs | 55 | 32 |
+------------------------------------------+---------+---------+
| Total Staff Costs | 946 | 878 |
+------------------------------------------+---------+---------+
| Capitalised to Intangible Assets | (419) | (512) |
+------------------------------------------+---------+---------+
| Total Staff Costs Expenses | 527 | 366 |
+------------------------------------------+---------+---------+
The Group averaged 172 employees during the year ended 31 December 2009 (2008:
160). The Company averaged 9 employees during the year ended 31 December 2009
(2008: 9). The Group had an average of 20 employees involved in administration
and an average of 152 employees involved in field and operational support
activities for the year ended 31 December 2009 (2008: 9 and 151 respectively).
9. Loss Per Share
The basic loss per share is derived by dividing the loss for the period
attributable to ordinary shareholders by the weighted average number of shares
in issue.
As inclusion of the potential Ordinary shares would result in a decrease in the
loss per share they are considered to be anti-dilutive, as such, a diluted
earnings per share is not included.
+-----------------------------------------+---------+---------+
| | Group | Group |
| | 2009 | 2008 |
| | | |
| | GBP'000 | GBP'000 |
+-----------------------------------------+---------+---------+
| Loss for the period | (943) | (1,410) |
+-----------------------------------------+---------+---------+
| Weighted average number of Ordinary | 32.0 | 30.7 |
| shares of 1p in issue | million | million |
+-----------------------------------------+---------+---------+
| Loss per share - basic | (2.9)p | (4.6)p |
+-----------------------------------------+---------+---------+
10. Financial Instruments
The Group's financial instruments, other than its investments, comprise cash and
items arising directly from its operation such as trade receivables and trade
payables, finance leases, and provisions.
The Group seeks to obtain a favourable interest rate on its cash balances
through the use of bank treasury deposits.
At the period end the Group had a cash balance of GBP63,000, made up as follows:
+------------------------------------------+---------+---------+
| | | |
| | Group | Group |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+------------------------------------------+---------+---------+
| British pounds | 33 | 17 |
+------------------------------------------+---------+---------+
| US dollars | 30 | 1 |
+------------------------------------------+---------+---------+
There is no material difference between the book value and fair value of the
Group's cash.
As at 31 December 2009, the Group had three overseas subsidiaries which operated
in Liberia and whose expenditure is primarily denominated in US dollars. Foreign
exchange risk is inherent in the Group's activities and is accepted as such.
The majority of parent Company expenses are denominated in British pounds.
Management review the Group and Company's exposure to currency risk, interest
rate risk, liquidity risk and credit risk on a regular basis and consider that
through this review they manage the exposure of the Group and Company.
No formal policies have been put in place in order to hedge the Group and
Company's activities to the exposure to currency risk or interest risk.
The Group and Company manage the interest rate risk associated with the Group
cash assets by ensuring that interest rates are as favourable as possible,
whether this is through investment in floating or fixed interest rate deposits,
whilst managing the access the Group requires to the funds for working capital
purposes.
11. Intangible Assets
+--------------------------------------------+---------+
| | Group |
+--------------------------------------------+---------+
| | GBP'000 |
+--------------------------------------------+---------+
| Net book value as at 1 January 2008 | 2,388 |
+--------------------------------------------+---------+
| Acquired through business combination in | 3,134 |
| February 2008 | |
+--------------------------------------------+---------+
| Currency translation | 344 |
+--------------------------------------------+---------+
| Development expenditure | 797 |
+--------------------------------------------+---------+
| Amortisation/Impairment | - |
+--------------------------------------------+---------+
| Net book value as at 31 December 2008 | 6,663 |
+--------------------------------------------+---------+
| Currency translation adjustment | (270) |
+--------------------------------------------+---------+
| Development expenditure | 839 |
+--------------------------------------------+---------+
| Amortisation/Impairment | - |
+--------------------------------------------+---------+
| Net book value as at 31 December 2009 | 7,232 |
+--------------------------------------------+---------+
| | |
+--------------------------------------------+---------+
The Directors undertook an impairment review as at 31 December 2009 and as a
result of this review no provision was required. The land subject to the
concession licence held by Liberia Forest Products Incorporated contains
approximately 4,600 hectares of existing palm plantations which have not been
maintained for a considerable period of time. The directors have engaged
agricultural experts to assess the possibility of regenerating the plantations
and whilst the directors' are optimistic that the plantations can be
regenerated, they consider it prudent to attribute nil value to the reexisting
plantations until a detailed assessment of its economic potential value has been
completed.
12. Business Combinations
2008
On 21 February 2008 EBF (Mauritius) Limited acquired 100% of the share capital
of LIBINC Oil Palm Inc for cash consideration of USD200,000 (GBP137,931) and the
issue of 84.2 million fully paid 'old' ordinary shares in the Company with an
assessed fair value of 3p per share. A further USD700,000 (GBP482,759) is
payable to the vendors upon the Company completing its readmission to AIM.
LIBINC Oil Palm Inc was incorporated in Liberia on 4 October 2007 and at the
date of acquisition was a non-trading entity of USD100 capital and the holder of
a fifty year agreement with the Government of Liberia to rehabilitate and
develop the Palm Bay Oil Palm plantation in Grand Bassa County, Liberia. The
fair value adjustment of this acquisition, as disclosed in note 11, amounted to
GBP3,134,000.
13. Investments
Subsidiaries of Equatorial Palm Oil plc
+--------------------+--------------+---------+---------+---------------+
| Company | Country | Holding |Holding | Nature of |
| | of | 2009 | 2008 | business |
| | Registration | | | |
+--------------------+--------------+---------+---------+---------------+
| | Guernsey | 100% | 100% | Holding |
| Direct | | | | Company |
| Equatorial | | | | |
| Biofuels | | | | |
| (Guernsey) Limited | | | | |
+--------------------+--------------+---------+---------+---------------+
| | Mauritius | 100% | 100% | Holding |
| Indirect | | | | Company |
| EBF (Mauritius) | | | | |
| Limited | | | | |
+--------------------+--------------+---------+---------+---------------+
| EBF Liberia | Liberia | 100% | 100% | Operating |
| | | | | company in |
| | | | | Liberia |
+--------------------+--------------+---------+---------+---------------+
| Liberia Forest | Liberia | 100% | 100% | Operating |
| Products | | | | company in |
| Incorporated | | | | Liberia |
+--------------------+--------------+---------+---------+---------------+
| Liberia | Liberia | 100% | 100% | Non-operating |
| Agricultural | | | | company in |
| Development | | | | Liberia |
| Corporation | | | | |
+--------------------+--------------+---------+---------+---------------+
| LIBINC Oil Palm | Liberia | 100% | 100% | Operating |
| Inc. | | | | company in |
| | | | | Liberia |
+--------------------+--------------+---------+---------+---------------+
14. Loans to Subsidiaries
+------------------------------------------+---------+---------+
| | Company | Company |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+------------------------------------------+---------+---------+
| Equatorial Biofuels (Guernsey) Limited | 30 | 14 |
+------------------------------------------+---------+---------+
| EBF (Mauritius) Limited | 5,944 | 5,651 |
+------------------------------------------+---------+---------+
| Equatorial Biofuels Liberia Incorporated | 1,304 | 741 |
+------------------------------------------+---------+---------+
| Total | 7,278 | 6,406 |
+------------------------------------------+---------+---------+
The loans to subsidiaries are interest free and have no fixed repayment date.
They are denominated in US Dollars and are repayable on demand. Repayment of
loans is subject to the Director's assessment of the Group's requirements and
availability of appropriate liquid resources.
15. Property, Plant and Equipment
+-------------------------------------------+---------+---------+
| Plant and Equipment | Group | Company |
| | GBP'000 | GBP'000 |
+-------------------------------------------+---------+---------+
| Cost | | |
+-------------------------------------------+---------+---------+
| Opening cost at 1 January 2008 | 144 | 90 |
+-------------------------------------------+---------+---------+
| Additions | 5 | 5 |
+-------------------------------------------+---------+---------+
| Currency translation adjustment | 15 | - |
+-------------------------------------------+---------+---------+
| Closing cost at 31 December 2008 | 164 | 95 |
+-------------------------------------------+---------+---------+
| Additions | 9 | - |
+-------------------------------------------+---------+---------+
| Currency translation adjustment | (3) | - |
+-------------------------------------------+---------+---------+
| Closing cost at 31 December 2009 | 170 | 95 |
+-------------------------------------------+---------+---------+
| | | |
+-------------------------------------------+---------+---------+
| Depreciation | | |
+-------------------------------------------+---------+---------+
| Opening balance at 1 January 2008 | (41) | (28) |
+-------------------------------------------+---------+---------+
| Charge for the year to 31 December 2008 | (48) | (23) |
+-------------------------------------------+---------+---------+
| Closing balance at 31 December 2008 | (89) | (51) |
+-------------------------------------------+---------+---------+
| Charge for year to 31 December 2009 | (23) | (22) |
+-------------------------------------------+---------+---------+
| Closing balance at 31 December 2009 | (112) | (73) |
+-------------------------------------------+---------+---------+
| | | |
+-------------------------------------------+---------+---------+
| Net Book Value | | |
+-------------------------------------------+---------+---------+
| At 1 January 2009 | 75 | 44 |
+-------------------------------------------+---------+---------+
| At 31 December 2009 | 58 | 22 |
+-------------------------------------------+---------+---------+
16. Other Receivables
+-------------------------------+---------+---------+---------+---------+
| | Group | Group | Company | Company |
| | 2009 | 2008 | 2009 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------+---------+---------+---------+---------+
| Other receivables (i) | 42 | 8 | 40 | 8 |
+-------------------------------+---------+---------+---------+---------+
| Prepayments (ii) | 305 | 6 | 305 | 6 |
+-------------------------------+---------+---------+---------+---------+
| Amounts owed by subsidiary | - | - | 7,278 | 6,406 |
| undertakings as per note 14 | | | | |
| (iii) | | | | |
+-------------------------------+---------+---------+---------+---------+
| | 347 | 14 | 7,623 | 6,420 |
+-------------------------------+---------+---------+---------+---------+
(i) Other receivables are non-interest bearing and generally repayable between
30 and 60 days.
(ii) The Mill deposit of GBP264,000 has been fully reinstated in the 2009 Group
and Company Balance Sheets reversing the 2008 provision made against its future
recoverability.
(iii)The loans to subsidiaries are interest free and have no fixed repayment
date. They are denominated in US Dollars and are repayable on demand.
17. Trade and Other Payables
+--------------------------+---------+---------+---------+---------+
| | Group | Group | Company | Company |
| | 2009 | 2008 | 2009 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+---------+---------+---------+---------+
| Accruals | 688 | 568 | 688 | 568 |
+--------------------------+---------+---------+---------+---------+
| Trade payables | 596 | 399 | 596 | 399 |
+--------------------------+---------+---------+---------+---------+
| Other payables | 725 | 124 | 710 | 124 |
+--------------------------+---------+---------+---------+---------+
| | 2,009 | 1,091 | 1,994 | 1,091 |
+--------------------------+---------+---------+---------+---------+
The Accruals balance includes an amount of GBP440,000 payable in respect of the
acquisition of LIBINC Oil Palm Inc and the Company completing its readmission on
AIM (2008: GBP483,000).
18. Short term borrowings
The short term borrowings of the Group and Company comprise:
+----------------------------+------+-------+---------+---------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+----------------------------+------+-------+---------+---------+
| | | | | |
+----------------------------+------+-------+---------+---------+
| GBP Convertible loan notes | | | 1,234 | - |
+----------------------------+------+-------+---------+---------+
| AUD 200,000 convertible | | | 112 | 96 |
| loan note | | | | |
+----------------------------+------+-------+---------+---------+
| Accrued interest and | | | 45 | 3 |
| rolled charges theron | | | | |
+----------------------------+------+-------+---------+---------+
| Loans from Adelise | | | - | 652 |
| Services Ltd | | | | |
+----------------------------+------+-------+---------+---------+
| Interest thereon | | | 5 | 23 |
+----------------------------+------+-------+---------+---------+
| AUD 500,000 Promissory | | | 280 | - |
| Notes | | | | |
+----------------------------+------+-------+---------+---------+
| Accrued interest and | | | 96 | - |
| rolled charges thereon | | | | |
+----------------------------+------+-------+---------+---------+
| US $350,000 refundable | | | 230 | - |
| deposit from Agriterra | | | | |
+----------------------------+------+-------+---------+---------+
| Total | | | 2,002 | 774 |
+----------------------------+------+-------+---------+---------+
The sterling Convertible Loan Notes were issued in connection with the pre-IPO
fundraising as follows:
+--------------------------------------+----------+----------+
| | | |
| | | GBP'000 |
+--------------------------------------+----------+----------+
| | | |
+--------------------------------------+----------+----------+
| to certain investors | | 524 |
+--------------------------------------+----------+----------+
| to Adelise Services Ltd as converted | | 700 |
| debt | | |
+--------------------------------------+----------+----------+
| to trade creditors as payables | | 10 |
| settlement | | |
+--------------------------------------+----------+----------+
| | | 1,234 |
+--------------------------------------+----------+----------+
These loan notes are unsecured and interest free and were convertible into new
Ordinary Shares upon Admission at the Placing Price of 17.5p with attached
warrants.
No equity component of these convertible loan notes has been included in
reserves.
The AUD 200,000 convertible loan note was repayable on 30 June 2009 with a 20%
coupon at repayment.
The loans due to Adelise Services Ltd, a Company controlled by Michael Frayne,
comprising of principal of GBP652,000 incur interest charged at 2% above LIBOR.
The financing obtained from Adelise Services Ltd by way of unsecured 6 month
promissory notes and converted to convertible loan note are as follows:
On 27 March 2009, the Company received AUD100,000 provided by way of an
unsecured 6 month promissory note to Adelise Services Limited with a repayable
of AUD125,000 due on 26 September 2009. This is now due and payable and accrues
at a rate of 35% per annum until repaid.
On 16 April 2009, the Company received AUD300,000 provided by way of an
unsecured 6 month promissory note to Adelise Services Limited with a repayable
of AUD375,000 due on 15 October 2009. This is now due and payable and accrues
at a rate of 35% per annum until repaid.
On 30 April 2009, the Company received AUD100,000 provided by way of an
unsecured 6 month promissory note to Adelise Services Limited with a repayment
of AUD125,000 due on 29 October 2009. This is now due and payble and accrues at
a rate of 35% per annum until repaid.
On 18 August 2009 Agriterra Limited announced it had signed a Memorandum of
Understanding to acquire Equatorial Biofuels (Guernsey) Limited, a wholly owned
subsidiary of the Company for USD2.5 million cash and USD12m in shares in
Agriterra including a refundable deposit of USD350,000. On 22 September 2009 it
was announced by Agriterra the MOU had been terminated. The USD350,000 deposit
shall become repayable to Agriterra effectively no later than 120 business days
after 18 August 2009 together with interest at a rate of 12% per annum accuring
from that initial date.
19. Called Up Share Capital
+---------------------------------------+----------+-+---------+---------+----------+
| | | 2009 | 2008 |
| Authorised | | GBP'000 | GBP'000 |
+---------------------------------------+------------+---------+--------------------+
| | | | |
| 100,000,000 Ordinary shares of 1p | | 1,000 | 1,000 |
| each | | | |
+---------------------------------------+------------+---------+--------------------+
| | | | | | |
| | | | 2009 | 2008 | |
| Allotted, called up and fully paid | | | GBP'000 | GBP'000 | |
+---------------------------------------+----------+-+---------+---------+----------+
| | | | | | |
| 32,020,000 Ordinary shares of 1p each | | | 320 | 320 | |
| | | | | | |
+---------------------------------------+----------+-+---------+---------+----------+
Subsequent to the year end, as a result of the Admission to AIM on 26 February
2010, the called up share capital was increased by the allotment of 49,398,337
ordinary shares at a placing price of 17.5p per share. In addition, as announced
on 27 May 2010, the Company placed 33,333,333 ordinary shares at a placing price
of 15p per share to BioPalm Energy Ltd.
Share Options
No unconditional options were issued during the current period.
As at 31 December 2009 the options in issue, which have been restated for the
April 2008 1 for 10 share consolidation, were:
+------------+----------------+--+-------------+
| Exercise | Expiry Date | | Options in |
| Price | | | Issue |
| | | | 31 December |
| | | | 2009 |
+------------+----------------+--+-------------+
| 30p | 14 February | | 300,000 |
| | 2011 | | |
+------------+----------------+--+-------------+
No options lapsed or were cancelled and no options were exercised during the
period.
Subsequent to the year end, options to subscribe for 8,350,000 Ordinary Shares
at the Placing Price within 5 years after the date of grant have been granted to
the Directors, management and others by the Company conditional on Admission as
follows:-
+-------+-------+-------------+-------------+-------------+-------------+-----------+
| | | | Number | Number | Number | |
| | | | of | of | of | |
+-------+-------+-------------+-------------+-------------+-------------+-----------+
| | | | Options | Options | Options | |
+-------+-------+-------------+-------------+-------------+-------------+-----------+
| | | Number | Exercisable | Exercisable | Exercisable | |
| | | of | | | | |
+-------+-------+-------------+-------------+-------------+-------------+-----------+
| | | Options | on | on | on | |
+-------+-------+-------------+-------------+-------------+-------------+-----------+
| | | Exercisable | Performance | Performance | Performance | |
+-------+-------+-------------+-------------+-------------+-------------+-----------+
| | | on | Milestone | Milestone | Milestone | TOTAL |
| | | Grant | 1¹ | 2² | 3³ | |
+-------+-------+-------------+-------------+-------------+-------------+-----------+
| | | | | | | |
+-------+-------+-------------+-------------+-------------+-------------+-----------+
| Directors | | | | | |
+---------------+-------------+-------------+-------------+-------------+-----------+
| Peter Bayliss | 500,000 | 500,000 | 500,000 | 500,000 | 2,000,000 |
+---------------+-------------+-------------+-------------+-------------+-----------+
| Michael | 312,500 | 312,500 | 312,500 | 312,500 | 1,250,000 |
| Frayne | | | | | |
+---------------+-------------+-------------+-------------+-------------+-----------+
| Joe Jaoudi | 312,500 | 312,500 | 312,500 | 312,500 | 1,250,000 |
+---------------+-------------+-------------+-------------+-------------+-----------+
| Geoff Brown | 250,000 | 250,000 | 250,000 | 250,000 | 1,000,000 |
+---------------+-------------+-------------+-------------+-------------+-----------+
| Anthony | 250,000 | 250,000 | 250,000 | 250,000 | 1,000,000 |
| Samaha | | | | | |
+---------------+-------------+-------------+-------------+-------------+-----------+
| Employees | 137,500 | 137,500 | 137,500 | 137,500 | 550,000 |
+-------+-------+-------------+-------------+-------------+-------------+-----------+
+---------------+---------+---------+---------+---------+-----------+
| Others | 325,000 | 325,000 | 325,000 | 325,000 | 1,300,000 |
+---------------+---------+---------+---------+---------+-----------+
| | | | | | |
+---------------+---------+---------+---------+---------+-----------+
| | | | | | ________ |
+---------------+---------+---------+---------+---------+-----------+
| Total | | | | | 8,350,000 |
+---------------+---------+---------+---------+---------+-----------+
| | | | | | |
+---------------+---------+---------+---------+---------+-----------+
¹ Performance Milestone 1 is Commission 5 tonne per hour mill at Palm Bay.
² Performance Milestone 2 is the production of 4,000 tonnes of CPO from mills
owned by the Group.
³ Performance Milestone 3 is the planting of first 2,500 hectares of new palm
oil plantation.
20. Analysis of changes in net funds
+-------------------------+---------+---------+---------+---------+
| | Group | Group | Company | Company |
| | 2009 | 2008 | 2009 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------------+---------+---------+---------+---------+
| Balance at beginning of | 18 | 1,142 | 18 | 1,137 |
| period | | | | |
+-------------------------+---------+---------+---------+---------+
| Change during the | 45 | (1,124) | 15 | (1,119) |
| period | | | | |
+-------------------------+---------+---------+---------+---------+
| Balance at the end of | 63 | 18 | 33 | 18 |
| the period | | | | |
+-------------------------+---------+---------+---------+---------+
21. Commitments
Operating lease commitments
Operating leases relate to office facilities. The Company entered into a 5 year
lease with a break clause after 3 years.
+--------------------------------+---------+---------+---------+---------+-+
| | Group | Group | Company | Company | |
| | 2009 | 2008 | 2009 | 2008 | |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | |
+--------------------------------+---------+---------+---------+---------+-+
| Non-cancellable operating | | | | | |
| lease payments: | | | | | |
+--------------------------------+---------+---------+---------+---------+-+
| Not longer than one year | - | 100 | - | 100 |
+--------------------------------+---------+---------+---------+-----------+
| Longer than one year and not | 182 | - | 182 | - |
| longer than five years | | | | |
+--------------------------------+---------+---------+---------+-----------+
| | 182 | 100 | 182 | 100 |
+--------------------------------+---------+---------+---------+---------+-+
Liberia commitments
Under the investment agreements entered into by LFPI and LIBINC, the Group is
obliged to spend USD14.245m during the four years from 31 December 2007. The
majority of this expenditure is likely to be incurred in the later part of this
four year period.
Placement Commitments
Pursuant to a mandate letter (the "Mandate Letter") dated 8 December 2009 from
Mombaur McCabe Limited ("MML") to the Company, MML has agreed to provide
placement agent services to the Company. MML's services will be to (i)
introduce the Company to a well-capitalised strategic investor with a long-term
strategic interest in West African palm oil ("Strategic Investor") and (ii)
participate in negotiations, to the extent requested, with a view to protecting
and enhancing the interests of the Company.
Under the Mandate Letter, the Company has agreed to pay MML a fee equal to 3.5%
of the gross proceeds invested by the Strategic Investor in the Placing plus a
fee equal to 3.5% of the first US$20,000,000 and 1% of any amount above
US$20,000,000 invested by the Strategic Investor subsequently. In addition, the
Company has agreed to reimburse MML for any reasonable out of pocket expenses.
The Company has agreed to indemnify any director, officer, employee, controlling
person, representative or agent of MML and MML's subsidiaries, affiliates and
associated companies from and against any losses, claims, damages, charges or
liabilities relating to or arising out of MML's services under the Mandate
Letter, except in certain limited circumstances.
The Mandate Letter is governed by English law and any disputes shall be decided
by arbitration in London in accordance with the rules of the London Court of
International Arbitration.
22. Related Party Transactions
There is no ultimate controlling party.
Included within short term borrowings and disclosed in note 18 are interest
bearing loans due to Adelise Services Ltd ("Adelise"), a company controlled by
Michael Frayne of GBP376,000 comprising principal of GBP280,000 and interest
charged of GBP96,000 calculated at 2% above LIBOR, together with Convertible
Loan Notes amounting to GBP700,000.
Details of related party transactions in relation to services provided by
Adelise, a company associated with Michael Frayne, are disclosed in note 6.
Irvine Energy Plc ("Irvine") made payments for serviced office facilities and
administrative support to the Company, who shares common board members with
Irvine. These payments are all on arms' length terms and amount to GBP18,000 for
the financial period. There were no amounts outstanding to or from Irvine at the
year-end or at the previous year-end in respect of these services.
Details of loans to subsidiaries are disclosed in note 14.
Included within other payables are unpaid directors' fees as follows:
+------------------------------------------------+---------+---------+
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+------------------------------------------------+---------+---------+
| Michael Frayne | 90 | 57 |
+------------------------------------------------+---------+---------+
| Ross Warner | 22 | 16 |
+------------------------------------------------+---------+---------+
| Geoff Brown | 220 | - |
+------------------------------------------------+---------+---------+
| Anthony Samaha | 40 | 16 |
+------------------------------------------------+---------+---------+
| Peter Bayliss | 131 | - |
+------------------------------------------------+---------+---------+
| Joseph Jaoudi | 193 | 20 |
+------------------------------------------------+---------+---------+
| Total | 696 | 109 |
+------------------------------------------------+---------+---------+
Also included within other payables are amounts owing to a director and a former
director as follows:
+------------------------------------------------+---------+---------+
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+------------------------------------------------+---------+---------+
| Ross Warner | 10 | 10 |
+------------------------------------------------+---------+---------+
| Anthony Samaha | 4 | 3 |
+------------------------------------------------+---------+---------+
| Total | 14 | 13 |
+------------------------------------------------+---------+---------+
A wholly owned subsidiary of the Company, Equatorial Biofuels (Liberia) Inc. has
been granted a residential lease by a key Company employee, David Parker, in the
City of Monrovia. The monthly rent under the lease is US$5,750.
On 3 November 2006, Sanita Investments Limited (the "Landlord") granted to the
Company a lease in respect of Floors 1 to 4, 94 Jermyn Street, London SW1 6JE
(the "Lease"). The principal terms of the Lease provided that the term of the
Lease was 5 years from the date of the Lease (the "Term"), the yearly rent
payable by the Company to the Landlord for the first 3 years of the Term was
GBP99,150, the yearly rent payable by the Company for the next 2 years of the
Term was the higher of GBP99,150 and the market rent for the premises based on a
rent review carried out by the Landlord 3 years after the date of the Lease and
the Lease may be terminated on the third anniversary of the date of the Lease by
the Company giving not less than 6 months' termination notice to the Landlord
provided that there is no material breach by the Company of any terms or
covenants of the Lease and the Company gives full vacant possession of the
premises in accordance with the covenants contained in the Lease.
23. Post Balance Date Events
Convertible Loan Notes
The Company has issued various Convertible Loan Notes during November 2009 to
February 2010 to certain investors in connection with the pre-IPO fundraising
undertaken by the Company in November 2009. The aggregate nominal amount of
convertible loan notes issued is GBP2,096,560 of which GBP1,391,000 was issued
at 31 December 2009. All these loan notes are convertible into new Ordinary
Shares upon Admission at the Placing Price with attached Warrants on conversion.
Warrant Agreements
Pursuant to warrant instruments dated 22 February 2010 and executed by the
Company, the Company created warrants which give the right, conditional upon
Admission, to subscribe for Ordinary Shares at the Placing Price. Pursuant to a
board resolution passed on 22 February 2010, the Board resolved to issue:
(a) to Mirabaud and Shore Capital, conditional upon Admission, Warrants to
subscribe for 1,843,400 Ordinary Shares to be exercised at any time between the
date of issue and the date falling on the fifth anniversary of Admission;
(b) to broker for Investor Subscription Letter, conditional on Admission,
Warrants to subscribe for 15,000 Ordinary Shares to be exercised between the
date of issue and the date falling on the fifth anniversary of Admission;
(c) Warrant to subscribe for 11,980,337 Ordinary Shares to holders of
Convertible Loan Notes on the basis of one Warrant for every Ordinary Share
arising on Convertible Loan Notes, half of which will be exercisable between the
date of conversion (i.e. the date of Admission), and the date falling on the
third anniversary of Admission and half of which will be exercisable between the
date of conversion (i.e. the date of Admission) and the date falling on the
second anniversary of Admission;
(d) Warrants to subscribe for 18,627,500 Ordinary Shares to Placees and to the
Investor Subscription Letter on the basis of one Warrant for every two Placing
Shares (or Subscription Shares subscribed for in the case of the Investor under
the Investor Subscription Letter) exercisable on or before the date falling on
the second anniversary of Admission; and
(e) Warrants to subscribe for 81,500 Ordinary Shares under or in connection with
the Facility Letters to be exercised at any time between the date of issue and
the date falling on the second anniversary of Admission.
Options
Conditional upon Admission to AIM it has been agreed to grant options to
subscribe for 8,350,000 Ordinary Shares at the placing price within five years
after the date of grant to the Directors, Management and others, with a
proportion of certain of these options subject to performance milestones (see
Note 19).
Investor Subscription
Pursuant to an investor subscription letter dated 10 February 2010 from the
Company to Andrew Milne (the "Investor") and a letter of con?rmation dated 10
February 2010 from the Investor to the Company (together, the "Investor
Subscription Letter"), the Company has agreed to issue, and the Investor has
irrevocably agreed to subscribe for, 6,857,143 Ordinary Shares at a price of
17.5 pence per Ordinary Share (the "Subscription"). In addition, the Company
has agreed to issue the Investor with 1 Warrant for every two ordinary Shares
subscribed for pursuant to the Investor Subscription Letter.
The Company and the Investor have agreed that the Subscription shall be
structured as follows:
(a) on or prior to the date immediately preceding Admission, the Investor shall
subscribe for, and make settlement in respect of the ?rst tranche of the
Subscription being, 300,000 Ordinary Shares (and the Investor will be issued
with 150,000 Warrants); and
(b) on or prior to the date which is 12 months following the date of Admission,
the Investor shall subscribe for, and make settlement in respect of, the second
tranche of the Subscription being a further 6,557,143 Ordinary Shares ("Second
Tranche Shares") (and the Investor shall be issued with 3,278,571 Warrants) of
which the Investor must subscribe for, and make settlement in respect of, at
least 1,500,000 Ordinary Shares (in respect of which the Investor will be issued
with 750,000 Warrants) on or prior to the date which is 6 months from the date
of Admission.
Subscription for Second Tranche Shares shall be by way of notice from the
Investor to the Company specifying the number of Second Tranche Shares the
Investor wishes to subscribe for ("Subscription Notice"). Each Subscription
Notice must be for a minimum of 300,000 Second Tranche Shares (or, if less, the
balance of the Second Tranche Shares the Investor is required to subscribe for
under the Investor Subscription Letter).
The Subscription is conditional on Admission becoming effective on or before 26
February 2010 (or such later date as may be noti?ed by the Company to the
Investor not being later than 31 March 2010). The allotment and issue of the
Second Tranche Shares will also be conditional on admission of such Second
Tranche Shares to trading on AIM by no later than the date which is 10 days from
the date of the relevant Subscription Notice.
The Company shall pay to the Investor's broker commission of 5 per cent. of the
aggregate value of gross monies raised under the Investor Subscription Letter at
the Placing Price and, pursuant to a warrant instrument, grant Warrants to
subscribe for such number of Ordinary Shares equivalent to 5 per cent. of the
aggregate of the number of Subscription Shares to be issued under the Investor
Subscription Letter.
The Investor Subscription Letter contains a number of warranties and
representations given by the Investor to the Company in connection with the
Subscription, including, without limitation, that the Investor can subscribe for
Ordinary Shares in accordance with all applicable laws.
The Investor Subscription Letter is governed by English law and the Company and
the Investor have agreed to submit to the non-exclusive jurisdiction of the
English courts in respect of any disputes that may arise out of it.
Credit Facilities
The three credit facility letters dated 22 February 2010 between the Company and
respectively Michael Frayne, Anthony Samaha and Mirabaud Investment Management
Limited, and referred to in the Company's Placing and Admission to AIM document
dated 23 February 2010, were terminated on 3 June 2010 following the completion
of the GBP5m placement to BioPalm announced in May 2010, in accordance with the
terms of the three credit facility letters.
Placement to BioPalm Energy Ltd
On 27 May 2010 the Company announced a subscription agreement with BioPalm
Energy Ltd, a subsidiary of Indian conglomerate The Siva Group, to raise GBP5
million, before expenses, by way of a placing of 33,333,333 ordinary shares at
15p.
24. Profit and Loss Account of the Parent Company
As permitted by section 408 of the Companies Act 2006, the profit and loss
account of the parent company has not been separately presented in these
accounts. The parent company loss for the year was GBP935,572 (2008:
GBP1,367,036).
25. Notice of Annual General Meeting
The Company's Annual General Meeting will be held at the offices of Sprecher
Grier Halberstam LLP, 5th Floor, One America Square, Crosswall, London EC3N 2SG
on Wednesday 30th June 2010 at 11 am.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FJMPTMBJMBRM
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