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RNS Number : 9592S
Graphene NanoChem PLC
30 September 2014
 



30 September 2014

 

 

Graphene NanoChem PLC

 

("Graphene NanoChem", the "Company" or the "Group")

 

Interim results for the six months ended 30 June 2014

 

Graphene NanoChem (AIM: GRPH), the performance nanochemicals and advanced materials company, is pleased to announce its unaudited interim results for the six months ended 30 June 2014.

 

Financial Highlights

·      Revenue up 103% to £20.4m (H1 2013: £10.1m)

·      Gross profit/(loss) £0.1m (H1 2013 : (£0.8m))

·      Loss before tax of £3.5m (H1 2013: £5.4 m)

·      Cash and cash equivalents of  £2.8m (FY 2013 : £7.4m)

·      £23.8m of cash and working capital facility, in aggregate (FY 2013: £20.4m)

 

Operational Highlights

Significant Progress in the Oil & Gas Market Segments Expansion

·   In May 2014, Graphene Nanochem undertook the first commercial delivery of its nanosurfactant to Scomi Oiltools, which is produced using Graphene NanoChem's fluid dispersion technology under the SimPlat Cavitation platform. This new product has been produced and delivered and further orders are expected in the future.

·   In September 2014, the Group received a commercial purchase order for 380 drums of the Group's second product line, PlatQuartZ™  (Plat Q Series), from Scomi Oiltools for a NOC for deployment into the Southeast Asia market and the management is confident for follow on orders

·   Scaled-up 2,500 tonne per month dedicated fluid dispersion unit for oilfield chemicals blending application successfully commissioned. This is the first of its kind in the world and Graphene NanoChem has applied for the patent accordingly.

·   In July 2014, the Group saw its first commercial purchase of 1,000 tonnes of the PlatDrill™ Series by Scomi Oiltools, deployed to a national oil and gas company ("NOC") for the Southeast Asia market

·   50/50 joint venture ("JV Co.") executed with Scomi Oiltools to produce and supply 45,000 tonnes of green chemicals including 30,000 tonnes of the PlatDrill Series and 50 tonnes of graphene nanomaterials for the oilfield chemicals market. The JV Co. facility to be constructed in Port Klang, Malaysia is targeted to come on line in Q2 2016 will provide the capacity increase for the PlatDrill Series production ("Port Klang Facility")

·   The JV Co. provides high quality earnings, with high visibility, over a long period of time with guaranteed offtake from Scomi Oiltools of 135,000 tonnes of the PlatDrill Series over a period of 5 years, with an option to renew for additional 5 years

·   The Group is currently seeing market demand for the PlatDrill Series and PlatQuartZ (PlatQ Series) well in excess of the Graphene Nanochem's capacity from both Scomi's existing market pipeline and available tenders for contract renewals and the drilling of new wells.

Robust Operational Performance for the Fuel Additive Segment

·   Completion of the upgrade of the Senawang Chemicals Facility to increase production capacity and improve production margins   

·   144% increase in year-on-year sales of waste-based biofuels into the Fuel Additive market through sale of 32,988 metric tonnes ("MT") into the Malaysian and European markets (2013:13,537MT)

·   Renewal of the supply of PlatClear™ to tier-1 multinational oil and gas company for the EU market to 2015

Blending Mandate

·   The commencement of the increase of the Malaysian blending mandate from B5 to B7 targeted by Q1 2015 increasing the local volume requirement for biofuels in the country

Advanced Materials Platform

·   Patent filed by HWV Technologies Ltd, a Singapore-based water treatment company, on a graphene enhanced membrane filter developed for water treatment system adopting graphene produced by Graphene NanoChem. The innovative filter can be run at half the cost, is half the size of the existing product and is capable of delivering double the throughput, bringing a wealth of benefits to the end user. With rig regulations becoming more stringent, there is demand from both the on and offshore market for this product.

·   Heads of Agreement executed with Emery Advanced Materials, to develop pathway for potential joint venture collaboration in three key application areas: rubber, plastic additives and polymers.

Technology Innovation & Licensing

·   Four new patent applications filed, one related to the process upgrade of the Senawang Chemicals Facility and three related to the Advanced Materials platform;

·   Royalty bearing patent technology licensing agreement signed with Cetane Energy which allows the Group to manufacture its base oil for the PlatDrill series.

·   The Scomi-Platinum JVCo will employ Graphene NanoChem's technology for the production joint venture and the parties have entered into two 15-year royalty bearing, technology licensing agreements for the exclusive licensing of the base oil and graphene nanomaterial technologies to Scomi-Platinum JVCo for the production of PlatDrill.

·   Graphene NanoChem is greatly encouraged by independent endorsement of its products, following comments from Wan Ruzlan Iskandar Wal Salaidin, President, Market Units of Scomi: "Our test results of PlatDrill-R, have shown remarkable thermal and electrical stability, surpassing the performance of other known base oils in the market place. Our internal tests with PlatQ Series lubricants, as a new addition to our technology solutions offering for commercial deployment, have demonstrated market-leading enhancement in torque reduction and rate of penetration, yielding more than 20% in Oil-based Muds and more than 80% in Water-based Muds."

 

Outlook

 

·   In ensuring the consistency of the performance of its high volume low margin Fuel Additive segment the Group is working on enhancing its processing capability to allow higher feedstock mix from waste sources. This will allow the Group to deliver lower production costs in 2015 and ensure stability in margins. The Group expects to update the market by the end of the year.

·   The first deployment of the PlatDrill Series into the oilfield chemicals market marked a significant milestone for the Group, specifically in overcoming the initial challenges in introducing new substitute product in a well-established industry value chain mainstream. In collaboration with Scomi Oiltools, the market pipeline for the PlatDrill Series has been identified to be well in excess of the production capacity of the Group.

·   The Group is preparing for the next deployment of PlatDrill and in view of the step-up increase in volume requirement, is increasing its current production capacity from 12,000 metric tonne to 20,000 metric tonne in 2015 as the PlatDrill Series continues its growing traction as mainstream oilfield chemical product. Additional volume requirement of the PlatDrill Series from 2016 onwards will be serviced from the Port Klang Facility.

·   The commercial deployment of PlatQuartZ, the Group's second graphene-enhanced nanofluids line, has been brought forward and the Group will be delivering its first order of 380 drums of its nano-engineered biodegradable lubricants for both oil and water based muds. The Group is also gearing up to deliver the next order in the pipeline for PlatQuartZ, expected in Q4, 2014.

·   Impending sales of higher margin speciality chemicals for the Oilfield Chemicals business segment is expected to contribute to revenues in the second half of 2014. The Group is currently developing the solution for its next phase of expansion in the Oil & Gas sector, which is the Oilfield Services market, specifically in wastewater treatment solution. Produced water is the largest waste stream generated by the oil and gas industry and there is huge opportunity and demand for a highly efficient wastewater treatment solution with improved footprint. The Group expects to update the market on the progress by the end of the year.

·   Cash and facilities are available to fully fund the Group's existing pipeline.

·   While the Group looks ahead to an exciting 2015, there have been a series of delays in the deployment of the Plat Drill Series, due to both regulatory and testing constraints.  Management now believes that these delays will result in revenue previously forecast to fall into FY2014 being partially recognised in FY2104 and FY2015, as a result management now anticipates making a loss for the year to 31 December 2014. The Company still remains optimistic for 2015 and beyond, however the latest delays mean that results to 31 December 2014 are now likely to be significantly below current market expectations.

 

Jespal Deol, Chief Executive Officer of Graphene NanoChem, commented: "Overall, the year to date has been a mixed performance for the Group. Our financial performance for the first half of 2014 was more robust than year-ago levels and in line with our long term strategy to expand into higher margin products, we successfully closed the first sale of both the PlatDrill and the PlatQ Series, our graphene-enhanced nano-engineered products designed for the Oilfield Chemicals market.

"These are significant milestones for the Group as we continue to leverage on our partner's channel network with leading oil and gas companies to expand market share in the higher margin market segments, building on the positive momentums generated by our products. However the delay in the commercial deployment of the PlatDrill Series originally targeted in the first half of 2014 and the impact of lower margins for the fuel additives business have impacted our performance and we have now set expectations for the current year which reflect the delay.

"The Group remains committed to its stated strategy of focusing on delivering innovative high value high margin products in attractive growth sectors. We have made good progress in positioning our products for mainstream application in the oilfield chemicals market and our industry partnerships are helping to expand and accelerate growth in supply. We remain confident in the future growth of our chosen market segment which will generate sustained sales growth for the Group to drive future profitability."

 

 

For further information:

 

Graphene NanoChem

Tel: +603 2282 3080

Jespal Deol, Chief Executive Officer




Panmure Gordon (NOMAD and Broker)


Fred Walsh / Adam James

Tel: +44 (0) 20 7886 2500

Tom Nicholson

Tel: +60 12 2940659



Buchanan

Tel: +44 (0) 20 7466 5000

Mark Edwards / Fiona Henson / Jason Day


 

 

About Graphene NanoChem

Graphene Nanochem plc is a technology commercialisation company that operates two commercial platforms, the Advanced Chemicals platform that manufactures renewable chemical products for high growth sectors and the Advanced Materials platform that focuses on graphene nanomaterials applications for selected industries targeting high performance use.

Headquartered in Malaysia, Graphene Nanochem was admitted to the AIM of the London Stock Exchange on 26 March 2013, following the reverse acquisition of Biofutures International plc, and trades under the symbol GRPH.L.

To find out more, please visit www.graphenenanochem.com.

 

 

 

Chief Executive Officer's Statement

 

Business Overview

The Group's strategy is to leverage on its nanotechnology platforms to deliver innovative high value high margin performance products in attractive growth sectors that will ensure sustained global growth for the Group. In driving business clarity, the Group has narrowed down its industry focus to the oil and gas sector, driven by the huge market opportunities and growth potential.

The Group currently operates in the Fuel Additive and Oilfield Chemicals market segments within the Oil & Gas sector with planned expansion into the Oilfield Services segment.

Update

Fuel Additives

The Group achieved a 144% increase in year-on-year sales of waste-based biofuels into the Fuel Additive market through the sale of 32,988MT into the Malaysian and European markets  (2013:13,537MT) and has continued to maintain key long-term relationships with blue-chip tier-1 international oil and gas customers servicing the Malaysian and EU markets.

The Group has invested in and successfully completed the upgrade of its Senawang Chemicals Facility to increase the production capacity and process efficiency to improve its production margins. The upgrade has enabled plant capacity to be increased from 80,000 tonnes to 120,000 tonnes per annum of which 70% is already forward sold up to 2015. The Group expects to continue to be a dominant player in this market segment where the focus will be to continuously improve the profit margins through optimum feedstock mix.

The planned increase of the biofuels blending mandate from B5 to B7 to be implemented in Q1 2015 is expected to benefit the Group through an increase of the volume demand of its customers to meet the local blending requirement.

Oilfield Chemicals

A US$21 billion market space, the Oilfield Chemicals segment is a natural step-up expansion for the Group in executing its planned roadmap towards end-market diversification into high value high margin products. Two key graphene-enhanced performance nanofluids line, namely the PlatDrill and the PlatQ Series were developed for commercial deployment into the oilfield chemicals market.

The PlatDrill Series is an environmentally friendly high performance drilling fluids solution designed to satisfy the demanding technical, as well as increasingly stringent environmental requirements of modern day drilling. Enhanced by nanomaterials, the PlatDrill Series have been nano-engineered with improved performance matrices and functionality for high temperature and high pressure operations, whilst maintaining its biodegradability and low toxicity functions.  

Plat Drill™ Series

·     Engineered drilling fluids that provide superior performance over conventional drilling fluids

·     Customized synthetic based fluids that meet offshore, onshore & deep sea performance & environmental requirements

·     Customized application of nano materials based on formation type and wellbore requirements

·     Completed acceptance tests by end users - customized offering post profiling of wells (end user data), performance enhancement validation test vs incumbent offering

 

The initial deployment is the culmination of the previously announced two years of intensive collaboration with Scomi Oiltools, and various end-customers, customizing the fluid solutions, including completing several stages of testing and validation to ensure successful commercial deployment of the PlatDrill Series. However, introducing new substitute products within a well-established mainstream industry value chain, particularly where customisation of applications is required, has had its own initial challenges which have been successfully addressed by the Group resulting in the first commercial rollout of 1,000 tonne of the PlatDrill Series in July 2014.

The product was deployed to a NOC through Scomi Oiltools and is a major milestone for the Group in expanding its footprint within this attractive business segment. We are making good progress in increasing the sales volume for the PlatDrill Series and have established the market pipeline to be well in excess of the Group's existing production capacity. A testament to the market demand and to the Group's continued acceleration in penetrating the Oilfield Chemicals market is its recently announced production and supply joint venture with Scomi Oiltools to set up a dedicated 45,000 metric tonne per annum production chemical facilities for oilfield chemicals, which includes a 30,000 metric tonne per annum PlatDrill facility, in Port Klang, Selangor, reflecting the continued confidence of both parties in the future growth of this market segment. The Port Klang Facility, expected to come on line in Q2 2016, provides high quality earnings, with high visibility, over a long period of time with guaranteed offtake of 135,000 tonnes of the PlatDrill Series over a period of 5 years from Scomi Oiltools with an option to renew for an additional 5 years.

The Group is preparing for the next deployment of PlatDrill and in view of the step-up increased in the volume requirement, is ready to increase its current production capacity from 12,000 metric tonne to 20,000 metric tonne in 2015 as the PlatDrill Series continue its growing traction as mainstream oilfield chemical product. Additional volume requirement of the PlatDrill Series from 2016 onwards is expected to be serviced from the Port Klang Facility.

The deferment of the commercial rollout of the PlatDrill Series originally planned for early 2014, due to the additional requirement for different customization to suit well conditions, a delay in well selection for onsite testings and the impact of lower margins for the fuel additives business have impacted the performance of the Group. The Group has now set expectations for the current year which reflect the delay. However with the PlatDrill Series now formally rolling out under strong market momentum, the Group remains confident in continued positive market prospects and growth.

The Group is also pleased to report that the commercial deployment of  PlatQuartz (Plat Q Series), the Group's second graphene-enhanced nanofluids line, has been brought forward and the Group will be delivering its first order of 380 drums of its nano-engineered biodegradable lubricants for both oil and water based muds.  PlatQuartZ offers high performance non-toxic lubricant additive solution for oilfield drilling, designed to enhance drilling rates by improving drilling efficiency and increasing wellbore stability. Enhanced by nanomaterials, PlatQuartZ  has undergone rigorous testing and demonstrated market-leading enhancement in torque and drag reduction by reducing the coefficient of friction between pipe and wellbore, thus improving the rate of penetration in drilling activity, translating to overall cost and time improvement in drilling.

Plat Q™ Series

·     High performance nano-engineered biodegradable lubricant for both oil and water based drilling fluids which are highly resistant to High Pressure High Temperature conditions

·     Imports extreme pressure lubricating properties to oil based drilling fluids

·     Premium seal lubricant that blends with all petroleum base oils improving efficiency and extending operating life

·     Similar performance enhancement properties to water based drilling fluids where environmental constraints preclude the use of petroleum based lubricants and drilling fluids

·     Completed acceptance tests by end users - customized offering post profiling of wells (end user data), performance enhancement validation test vs incumbent offering

The Group is also gearing up to deliver the next order in the pipeline for PlatQuartZ, expected in Q4, 2014.

Oilfield Services 

Looking ahead, the Group has identified recurring income opportunities within the Oil & Gas sector and is currently developing the solution for its next phase of expansion in the Oil & Gas sector, which is the Oilfield Services market, specifically in wastewater treatment solution.

Produced water is the largest waste stream generated by the oil and gas industry and there is huge opportunity and demand for a highly efficient wastewater treatment solution with improved footprint. Working with HWV Technologies, the Group is exploring opportunities for the deployment of a graphene-enhanced wastewater treatment facility for onshore and offshore deployment.

The Group expects to update the market on the progress by the end of the year.

The Group continues to leverage on our partner's channel network with leading oil and gas companies to expand market share in the higher margin market segments, building on the positive momentums generated by its products. Southeast Asia has been identified as the first launch pad for the commercial rollout of the Group's products and services, leveraging on Scomi Oiltools' existing customer pipeline with national oil companies in the region. Scomi Oiltools has presence in over 42 locations in 21 countries worldwide and is one of the leading firms in the global supply of drilling fluid services to national and multinational oil and gas companies with an order book of RM5.2 billion (£963 million).

Financial Overview

Revenue for the period doubled to £20.4m (2013:£10.1m). The increase in sales within the fuel additive business contributing 97% of total sales was attributable to the long term contracts executed with its tier-1 oil and gas partners namely Shell and Chevron. A balanced portfolio of revenue with 40% of fuel additive sales achieved locally and 57% internationally.

 

Gross profit for the period was £0.1m (2013: gross loss £0.8m). The turnaround to profitability was achieved despite a feedstock price anomaly for the period that effected gross margins. The margin spread between the primary waste based palm feedstock and crude palm oil had decreased by approximately £56 per MT and £58 per MT to the 2013 and three year (2011 to 2013) average spread respectively. This resulted in increased production cost of £1.9m. In mitigation, the Group is continuing technology development to allow for a higher mix into the feedstock product matrix of palm oil mill effluent oil. This is a relatively cheap hard to treat feedstock that will lower production cost in the near future.

 

In line with cost reduction initiatives, the operating expenditure for the period was £1.2m (31 December 2013: £2.8m), a 14% reduction on 2013 full year expenditure on a pro rata basis and approximately half the 2013 interim comparative period.

 

Cash and cash equivalents at the end of the period was £2.8m (31 December 2013: £7.4m). The increase of working capital facility from Malaysian Debt Ventures Berhad during the period of £7.4m offers the Group £23.8m in cash and facility in aggregate to fully fund the Group's existing pipeline. The Group maintains an excellent relationship with it bankers and financiers.

 

The net asset position at the end of the period was £30.7m providing balance sheet support for continued growth of the group.

 

The total comprehensive loss for the period was £3.7m, a £1.3m reduction in losses compared to the equivalent period in the prior year (2013: £5.0m).

Summary and Outlook

The Group has recorded substantial achievements during the first half; notably the JV with Scomi, the offtake arrangement of 135,000MT of Plat Drill Series over a 5 year period, the production of 5,000MT of PlatDrill, the development of Plat Q Series for sale in the 4th Quarter 2013 and the development of graphene enhanced nano engineered waste water treatment systems for the oil and gas industry.  These achievements have been balanced by the lower margins achieved within the fuel additives sector and the delay in Plat Drill deployment during the period. With upcoming sales of higher margin oilfield chemicals during the second half of 2014, the Group is confident of an improved second half performance.

The Group remains committed to its stated strategy of focusing on delivering innovative high value high margin products in attractive growth sectors and the Directors look forward to the future with confidence as the Group prepares to roll out its offerings within the oil and gas energy value chain. While 2015 looks extremely exciting for the Group, there have been a series of delays in the deployment of the Plat Drill Series, due to both regulatory and testing constraints.  Management now believes that these delays will result in revenue previously forecast to fall into FY2014 being recognised in FY2015, as a result management now anticipates making a loss for the year to 31 December 2014. The Company still remains optimistic for 2015 and beyond, however the latest delays mean that results to 31 December 2014 are now likely to be significantly below current market expectations.

The Group is also focused on developing quality collaborations with industry partners and, depending on the progress of engagement with these partners, will adopt the suitable commercialization and business models on a case-by-case basis. In March 2014, the Group executed a heads of agreement with Emery Advanced Materials to explore potential collaboration on three key applications areas: Rubber, Plastic Additives and Polymer. Work is currently ongoing to identify the right products to commercialize. 

 

A product-focus approach is a critical component to the Group's commercialization efforts and the Group intends to adopt a similar approach for each of its collaboration and market development efforts - defining a priority focus on product opportunities as opposed to generic application areas to secure immediate and medium term wins whilst it continues to invest in long term opportunities.

 



 

Financial statements

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME



 

 

Six months ended 30 June 2014

 

 

Six months ended 30 June 2013

 

 

 

Year ended 31 December 2013



(unaudited)

(unaudited)

(audited)



£'000s

£'000s

£'000s

Continuing operation





Revenue

20,441

10,062

31,600


Cost of sales

(20,330)

(10,873)

(33,429)


Gross profit/(loss)

111

(811)

(1,829)


Other income

89


83


Administrative expenses

(1,226)

(2,373)

(2,845)  


Finance costs

(1,349)

(1,252)

(2,626)


Depreciation and amortisation

(1,158)

(928)

(3,019)


Loss before tax

(3,533)

(5,364)

(10,236)


Income tax

48


211


Loss for the period/year attributable to the  owners of the parent

(3,485)

(5,364)

(10,025)

 

Other comprehensive loss




Net exchange differences on translating foreign operations

(179)

349

(3,329)

 

Total other comprehensive loss, net of tax

(179)

349

(3,329)






Total comprehensive loss

(3,664)

(5,015)

(13,354)


        




Loss per share




Basic and diluted (pence per share)

(2.99)

(8.19)

(11.08)

 



CONSOLIDATED STATEMENT OF FINANCIAL POSITION


As at

30 June 2014

As at

30 June 2013

As at

31 December 2013


(unaudited)

(unaudited)

(audited)


£'000s

£'000s

£'000s

Assets




Non current assets




Property, plant and equipment

38,071

38,272

36,953

Investment in a jointly controlled entity

78

-

-

Goodwill

3,168

796

3,176

Intangible assets

9,143

7,745

8,013


50,460

46,813

48,142

Current assets




Inventories

6,438

1,733

3,070

Trade and other receivables

7,274

2,952

4,633

Cash and cash equivalents

2,760

24,784

7,368


16,472

29,469

15,071





Total assets

66,932

76,282

63,213





Liabilities




Current liabilities




Trade and other payables

Redeemable convertible cumulative   preference  shares

3,383 

2,454 

2,019

3,498

Borrowings

19,044

18,742

11,550


22,427

21,196

17,067

Non-current liabilities




Borrowings

12,572

14,872

13,803

Deferred tax

1,261

1,521

1,309


13,833

16,393

15,112





Total liabilities

36,260

37,589

32,179









Equity




Share capital

23,307

23,307

23,307

Share premium account

139,639

139,639

139,639

Reverse acquisition reserve

(99,731)

(104,100)

(103,151)

Translation reserve

(3,508)

349

(3,329)

Redeemable convertible cumulative preference  shares

Irredeemable convertible preference shares

 

-

2,241

 

105

2,523

 

94

2,265

Accumulated losses

(31,276)

(23,130)

(27,791)

 

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS















 

Six months ended 30 June 2014

 

Six months ended 30 June 2013

 

Year ended 31 December 2013





(unaudited)

(unaudited)

(audited)





£'000s

£'000s

£'000s

Cash flows from operating activities







Loss before tax



(3,533)

(5,364)

(10,236)

Adjustments for:







Depreciation of property, plant and equipment



915

869

2,061


Amortisation of intangible assets



243

59

958


Gain on disposal of property, plant and equipment



(8)

-

-


Interest income



(80)

-

(82)


Impairment of tangible fixed assets



-

-

1,760

               Finance cost



1,349

1,252

2,626

Operating loss before working capital changes



(1,114)

(3,184)

(2,913)


Decrease in trade and other receivables



(2,640)

(3,441)

(2,258)


(Decrease)/increase in  inventories



(3,368)

800

(501)


Increase/(decrease) in trade and other payables



1,365

(3,769)

(2,499)

Cash used in operations



(5,757)

(9,594)

(8,171)


 Interest paid



(1,347)

(1,252)

(2,544)

 Net cash used in operating activities



(7,104)

(10,846)

(10,715)








 Cash flows from investing activities







 Purchase of intangible assets



(1,407)

(1,245)

(1,780)


 Purchase of property, plant and equipment



(2,442)

(465)

(5,410)


 Net cash arising from Reverse Acquisition



-

34,36

4,366


 Proceed from disposal of property, plant

   and equipment



 

8

 

-

 

-


 Subscription of shares in a jointly controlled

  entity  



 

(78)

 

-

 

-

 Net cash (used in)/from investing activities



(3,919)

32,656

(2,824)








 Cash flows from financing activities







 Issuance of shares



-

-

32,500


 Listing expenses



-

-

(2,307)


 Increase/(Repayment) of borrowings



6,262

175

(8,821)


 Repayment to shareholders



-

-

(714)


 Repayment to directors



-

-

(25)

 Net cash from financing activities



6,262

175

20,633








 Net (decrease)/increase in cash and cash

     equivalents



 

(4,761)

 

21,985

 

7,094

 Cash and Cash Equivalents at beginning year



7,368

2,301

485

 Effect of exchange differences



153

498

(211)

 Cash and Cash Equivalents at end of period/year



2,760

24,784

7,368

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

                                                                                       Unaudited Six month ended 30 June 2014



 

 

 

Share capital

 

 

 

Share premium

 

 

Reverse acquisition reserve

 

 

 

Translation reserve

 

 

Accumulated losses

Equity component of preference shares

 

 

 

Total equity

 



£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

 










 

At 1 January 2014

 

Total comprehensive income


23,307

139,639

(103,151)

(3,329)

(27,791)

2,359

31,034

 

Loss for the financial year


-

-

-

-

(3,485)

-

(3,485)

 

Foreign translation

 Differences


 

-

 

-

 

-

 

(179)

 

-                                

 

(118)

 

(297)

 



-

-

-

(179)

(3,485)

(118)

(3,782)

 

 

Transaction with owner









 

Adjustment rising from conversion of redeemable preference share to ordinary shares of a subsidiary company after the reverse acquisition


 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

3,420

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

3,420

 



-

-

3,420

-

-                                

-

3,420

 










 

At 30 June 2014


23,307

139,639

(99,731)

(3,508)

(31,276)

2,241

30,672

 

 

                                                                                            Unaudited Six month ended 30 June 2013

 



 

 

 

Share capital

 

 

 

Share premium

 

 

Reverse acquisition reserve

 

 

 

Translation reserve

 

 

Accumulated losses

 

Equity component of preference shares

 

 

 

Total equity



£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

 










 

At 1 January 2013

 

Total comprehensive income


1,664

12,089

1,732

-

(17,766)

2,689

408 

 

Loss for the financial year


-

-

-

-

(5,364)


(5,364)

 

Foreign translation

 Differences


 

-

 

-

 

-

 

349

 

-

 

(61)

 

288

 



-

-

-

349

(5,364)

(61)

(5,076)

 

 

Transaction with owner









 

Issuance of ordinary

  shares

Share issue cost

Adjustment arising from reverse acquisition


 

4,643

-

 

17,000

 

27,857

(2,307)

 

102,000

 

-

-

 

(105,832)

 

-

-

 

-

 

-

-

 

-

 

-

-

 

-

 

32,500

(2,307)

 

13,168

 



21,643

127,550

(105,832)

-

-

-

43,361

 










 

At 30 June 2013


23,307

09,639

(104,100)

349

(23,130)

2,628

38,693

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Cont'd)

 

                                                                                       Year ended 31 December 2013



 

 

 

Share capital

 

 

 

Share premium

 

 

Reverse acquisition reserve

 

 

 

Translation reserve

 

 

Accumulated losses

 

Equity component of preference shares

 

 

 

Total equity



£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s










At 1 January 2013

 

Total comprehensive income


1,664

12,089

1,732

-

(17,766) 

2,689

408

 

Loss for the financial year


-

-

-

-

(10,025)

-

(10,025)

 

Foreign translation

 Differences


 

-

 

-

 

-

 

(3,329)

 

-

 

(330)

 

(3,659)

 



-

-

-

(3,329)

(10,025)

(330)

(13,684)

 

 

Transaction with owner









 

Issuance of ordinary

 shares

Share issue cost

Adjustment from reverse acquisition


 

4,643

-

 

17,000

 

27,857

(2,307)

 

102,000

 

-

-

 

(104,883)

 

-

-

 

-

 

-

-

 

-

 

-

-

 

-

 

32,500

(2,307)

 

14,117

 



21,643

127,550

(104,883)

-

-

-

44,310

 










 

At 31 December 2013


23,307

139,639

(103,151)

(3,329)

(27,791)

2,359

31,034

 

 



 

NOTES TO THE UNAUDITED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2014

 

1          Basis of preparation

 

These unaudited interim condensed consolidated financial statements (the "interim financial statements") are for the six months ended 30 June 2014. They have been prepared using the recognition and measurement principles of IFRS (as adopted by the EU). IFRS include interpretations issued by the International Financial Reporting Interpretation Committee (IFRIC). They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2013.

 

The interim financial statements have been prepared under the historical cost convention. These interim financial statements have been prepared in accordance with the accounting policies as set out on pages 34 to 43 in the Group's consolidated financial statements for the year ended 31 December 2013. The accounting policies have been applied consistently throughout the Group for the purpose of preparation of the interim financial statements. The financial information contained in these interim financial statements comprises the Group statement of financial position as at 30 June 2014 and 30 June 2013 and the Group statement of comprehensive income, the Group statement of cash flows and the Group statement of changes in equity for the half years ended 30 June 2014 and 30 June 2013.

 

The Group adopted IFRS 11, Joint Arrangements in the current financial period. Joint arrangements are arrangements of which the Group has joint control, established by contracts requiring unanimous consent for decisions about the activities that significantly affect the arrangements' returns.

 

Joint arrangements are classified and accounted for as follows:

 

• A joint arrangement is classified as "joint operation" when the Group or the Company has rights to the assets and obligations for the liabilities relating to an arrangement. The Group and the Company account for each of its share of the assets, liabilities and transactions, including its share of those held or incurred jointly with the other investors, in relation to the joint operation.

 

• A joint arrangement is classified as "joint venture" when the Group has rights only to the net assets of the arrangements. The Group accounts for its interest in the joint venture using the equity method.

 

The financial information set out in these interim financial statements are unaudited and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.

 

2          Income tax

 

There was no tax charge due to the losses arising in the period except for a reversal of deferred tax during the period.

 

 

 

 

3          Net exchange differences on translating foreign operations

 

Income and expenditure for overseas subsidiaries are included based upon average exchange rates to give a fair approximation to the transaction rate. Balance sheet items are included at the exchange rate at the balance sheet date. All other differences are included within the translation reserve, including related goodwill and intangible assets, which are translated at the rate ruling at the balance sheet date (30 June 2014 £1 = RM 5.4674, 31 December 2013 £1 = RM 5.4076  and at 30 June 2013 £1= RM 4.8540).

 

 

4          Availability of half yearly report

 

The Company's half yearly report will be available in soft copy from the investors' section of the Company's website (http://www.graphenenanochem.com).

 

5.            Loss per share

                  Basic

 

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

 



Six months ended 30 June 2014

Six months ended 30 June 2013

Year ended 31 December 2013

Loss attributable to equity holders of the Company

£3,485,000

£5,364,000

£10,025,000

Weighted average number of ordinary shares in issue


116,536,536

65,462,276

90,513,232

Basic loss per share in pence

(2.99)p

(8.19)p

(11.08)p










Diluted

 Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all contracted dilutive potential ordinary shares.  The Company doesnot have any dilutive potential ordinary shares at the reporting date.

 

Accordingly, the diluted loss per share is the same as the basic loss per share.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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