- Part 4: For the preceding part double click ID:nRSO2046Bc
E'000 E'000
UK 7,806 5,803
Other countries 19,215 19,528
Un-allocated - Goodwill 4,231 4,231
31,252 29,562
The segmental assets in the current year and the previous year were predominantly held in Europe. Additions to property,
plant, equipment and intangible assets in the current year and the previous year were predominantly incurred in Europe.
There are no significant intersegment revenues.
4. Other operating costs
Other operating costs consist of the operating costs, other than the cost of sales, associated with the operation of the
plant in Arnhem and the offices in Dallas and London (previously Windsor):
2016 2015
E'000 E'000
Sales and marketing 3,743 3,191
Research and development 1,863 1,205
Depreciation and amortisation 2,672 2,475
Other operating costs 3,554 2,395
Administration costs 6,628 6,719
Exceptional Items - 2,937
18,460 18,922
During the period, E420,000 (2015: E201,000) of development costs were capitalised and included in intangible fixed assets,
including E282,000 (2015: Enil) which were capitalised within Tricoya Technologies Limited ('TTL'). In addition E367,000 of
internal costs have been capitalised and are included within tangible fixed assets in relation to the expansion of our
plant in Arnhem, Netherlands (2015: Enil).
Total operating costs (excluding exceptional items) have increased by E2,475,000. However this includes a total of
E1,666,000 of consolidated operating costs incurred by TTL in the current year, which were previously reported separately
under the share of joint venture loss (2015: share of loss was E1.1m) (see note 9).
Other operating costs largely relate to costs associated with the Group's manufacturing office in the Netherlands,
excluding research & development costs.
Administration costs also include the costs associated with the Group's head office in London (previously Windsor), the US
office in Dallas together with business development and management costs.
Exceptional costs in the prior year relate to the arbitration with Diamond Wood (see note 5).
5. Exceptional items
Exceptional items were recorded in previous periods as follows:
On 25 July 2014 Accsys announced that the arbitration tribunal (the "Tribunal") appointed in relation to the dispute
between Accsys and Diamond Wood China Limited ("Diamond Wood") had issued its award. In response to Diamond Wood's claim
against Accsys, namely for damages in excess of E140 million as previously published by Diamond Wood, and for the
continuation of the Licence Agreement, the Tribunal ruled that Diamond Wood could only claim for limited damages (if any)
up to a maximum of E0.3m. However, the Tribunal also ruled that the licence agreement between the two parties is to
continue. In addition the Tribunal issued a final award in respect of costs payable to Diamond Wood as well as any
remaining own legal costs. The exceptional item reported in the financial year to 31 March 2015 therefore represents the
final amounts paid in respect of the above arbitration with Diamond Wood of E2.9m.
In addition there was also an exceptional item gain of E267,000 recorded relating to the acquisition of the remaining 50%
of Tricoya Technologies Limited in the prior period (see note 9).
6. Employees
2016 2015
E'000 E'000
Staff costs (including Directors) consist of:
Wages and salaries 8,403 7,138
Social security costs 1,144 1,051
Other pension costs 567 516
Share based payments 1,009 1,427
11,123 10,132
The average monthly number of employees, including Executive Directors, during the year was as follows:
Number Number
Administration, research and engineering 75 67
Operating 46 44
121 111
Headcount increase of 10 includes addition of three employees who have transferred to Accsys from Ineos following the
acquisition of Ineos's 50% interest in TTL on 31 March 2015 (see note 9).
7. Directors' remuneration
2016 2015
E'000 E'000
Directors' remuneration consists of:
Directors' emoluments 1,302 992
Company contributions to money purchase pension schemes 55 50
1,357 1,042
Compensation of key management personnel included the following amounts:
Salary, bonus and short term benefits Share based payments charge
2016 2015
Pension Total Total
E'000 E'000 E'000 E'000 E'000
Paul Clegg 532 34 454 1,020 916
Hans Pauli 275 12 139 426 432
William Rudge 216 9 97 322 269
1,023 55 690 1,768 1,617
The Group made contributions to 3 (2015: 3) Directors' personal pension plans.
The figures in the above table are impacted by foreign exchange noting that the remuneration for P Clegg and W Rudge are
denominated in Pounds Sterling. Their total remuneration increased by 5% and 4% respectively when excluding the impact of
foreign exchange.
8. Operating loss
2016 2015
E'000 E'000
This has been arrived at after charging:
Staff costs 11,123 10,131
Legal costs - Diamond Wood arbitration (note 5) - 2,937
Depreciation of property, plant and equipment 2,148 2,100
Amortisation of intangible assets 524 375
Operating lease rentals 933 1,030
Foreign exchange (gains)/losses 47 (31)
Research & Development (excluding staff costs) 634 658
Loss on disposal of property, plant and equipment 35 -
Fees payable to the Company's auditors for the audit of the Company's annual financial statements 74 72
Fees payable to the Company's auditors for other services:
- audit of the Company's subsidiaries pursuant to legislation 106 91
- audit related assurance services 27 27
Total audit and audit related services: 207 190
- tax compliance services 107 71
- all other services 10 15
Total tax and other services: 117 86
9. Joint venture and business combination - Tricoya Technologies Limited
Tricoya Technologies Limited ('TTL'), was incorporated in order to develop and exploit Accsys' Tricoya technology for use
within the worldwide panel products market estimated to be worth more than E60 billion annually.
During the previous period and up until 31 March 2015, TTL operated as a 50:50 joint venture with Ineos and TTL was
accounted for using the equity method reflecting that it was a joint venture.
On 31 March 2015 Accsys acquired Ineos's 50% equity interest as part of terms which included the termination of the joint
venture agreement and for consideration of E1. Therefore as at 31 March 2015, Accsys owned 100% of the share capital of TTL
and its balance sheet has been fully consolidated from 31 March 2015. An exceptional gain of E267,000 was recorded in the
prior year as a gain on acquisition of subsidiary due to this bargain purchase.
In February 2016 BP's participation in the proposed consortium (the 'Consortium') to fund, build and operate the world's
first Tricoya® wood elements acetylation plant was announced. Accsys and BP Ventures ('BPV') agreed initial funding in
respect of the Consortium, with BPV acquiring an initial 3% equity interest in Tricoya Technologies Limited ('TTL'),
implying a valuation of TTL at E35 million today. The plant is expected to be located at the Saltend Chemicals Park in
Hull, UK, adjacent to BP's existing acetyls facility.
BPV's on-going participation in the Consortium remains conditional upon the full Consortium being finalised later this
calendar year. The Consortium is also expected to include Medite, part of the Medite Smartply group and Accsys's historic
joint development partner. Medite has received board approval in principle to invest in the Consortium and to enter a
long-term offtake commitment for up to nearly half of the Tricoya plant's initial annual capacity.
The Hull plant will have an initial capacity of 30,000 tonnes per annum (tpa) (sufficient to manufacture 40,000m³ of
panels) and scope to expand. Approximately 60% of the plant's output is expected to be sold under committed take-or-pay
agreements with Medite and Masisa; cash flow break-even is at approximately 40% capacity. The plant is expected to cost
approximately E61m, with a further approximately E15m required for continued market seeding, marketing, IP development and
engineering functions to cash breakeven.
BP and Medite are together expected to invest approximately E30m and up to E20m is expected to be provided from bank debt,
which is possible as a result of a committed off-take agreement from Medite. Accsys contribution is substantially in the
form of intellectual property and the development of the Tricoya business to date such that our remaining contribution is
expected to be limited to approximately E1m and our on-going provision of Accoya as market seeding material as we have been
since 2011.
The balance of approximately E25m is expected to be contributed by the final consortium members and TTL has engaged Opus
Corporate Finance LLP to advise in this respect. As a result, Accsys is expected to retain a substantial interest in the
consortium, reflective of the substantial investment we have made in respect of the Tricoya technology and market
development over many years.
The formation of the Consortium remains conditional upon detailed agreements being finalised between the parties including
the third party debt and equity finance. However we are confident that the substantial progress made over the last year by
the Consortium will lead to the completion later this year, with the Tricoya plant being operational in 2018.
During the period ended 31 March 2016, TTL has been fully consolidated and the results are included as part of the overall
group results and included within the Business Development and Research and Development segments as set out in note 3.
The TTL results for the period from 1 April 2015 to 31 March 2016, together with the balance sheet as at 31 March 2016 are
set out below:
Income statement for TTL:
Consolidated Equity Accounted 50%
2016 2015
E'000 E'000
Revenue 318 483
Costs:
Staff costs 864 1,346
Research & development (excluding staff costs) 142 515
Intellectual Property 303 242
Sales & marketing 214 381
Amortisation 143 195
EBIT (1,348) (2,196)
EBIT attributable to Accsys shareholders (1,338) (1,098)
Investment in joint venture at 1 April - 340
Group share of loss reported - (1,098)
Less elimination of mark-up on recharged costs - 29
Investments in joint venture - 1,600
Disposal of investment in joint venture on acquisition of investment in subsidiary - (871)
Carrying value of joint venture at 31 March - -
Tricoya Technologies Limited statement of financial position at 31 March 2016:
2016 2015
E'000 E'000
Non-current assets
Intangible assets 3,065 1,855
Current assets
Receivables due within one year 230 71
Cash and cash equivalents 1,519 1,338
1,749 1,409
Current liabilities
Trade and other payables (2,220) (2,229)
Net current assets (471) (820)
Net assets 2,594 1,035
97% attributable to Accsys Technologies (2015: 100%) 2,517 1,035
Less elimination of mark-up on recharged costs - 29
Equity and reserves
Share capital 8,206 5,300
Other Reserves 600 600
Accumulated loss (6,212) (4,865)
Total equity 2,594 1,035
10. Finance income
2016 2015
E'000 E'000
Interest receivable on bank and other deposits 13 73
11. Finance expense
2016 2015
E'000 E'000
Arnhem land sale and leaseback finance charge 181 208
Other finance expenses 10 -
191 208
12. Tax expense
2016 2015
E'000 E'000
(a) Tax recognised in the statement of comprehensive income comprises:
Current tax expense
UK Corporation tax on profits for the year - -
Research and development tax credit in respect of current year (256) (190)
(256) (190)
Overseas tax at rate of 15% (29) 39
Overseas tax at rate of 25% 687 758
Deferred Tax
Utilisation of deferred tax asset - -
Total tax charge reported in the statement of comprehensive income 402 607
2016 2015
E'000 E'000
(b) The tax credit for the period is lower than the standard rate of
corporation tax in the UK (2016: 20%, 2015: 21%) due to:
Loss profit before tax (466) (7,653)
Expected tax credit at 20% (2015 - 21%) (93) (1,607)
Expenses not deductible in determining taxable profit 120 79
Under provision in respect of prior years 183 802
Losses transferred to deferred tax asset but not recognised 294 1,422
Effects of overseas taxation 145 109
Other temporary differences 9 (8)
Research and development tax credit in respect of prior years (58) 29
Research and development tax credit in respect of current year (198) (219)
Total tax charge reported in the statement of comprehensive income 402 607
13. Dividends Paid
2016 2015
E'000 E'000
Final Dividend ENil (2015: ENil) per Ordinary share proposed
and paid during year relating to the previous year's results - -
14. Loss per share
The calculation of loss per ordinary share is based on loss after tax and the weighted average number of ordinary shares in
issue during the year.
Basic and diluted earnings per share 2016 2015 2015 2014
Total Before exceptional items Total Before exceptional items
Weighted average number of Ordinary shares in issue ('000) 89,568 88,538 88,538 87,482
Loss for the year (E'000) (858) (5,590) (8,260) (8,163)
Basic and diluted loss per share E(0.01) E(0.06) E(0.09) E(0.09)
Basic and diluted losses per share are based upon the same figures. There are no dilutive share options as these would
increase the loss per share.
The weighted average number of shares has been represented for all periods to take account of the 5 to 1 share
consolidation which became effective on 12th September 2014.
15. Share based payments
The group operates a number of share schemes which give rise to a share based payment charge. The group operates a Long
Term Incentive Plan ('LTIP') in order to reward members of the senior management team and the executive directors. As part
of the award of nil costs options under the LTIP, the recipients relinquished all share options that they held which had
been awarded under the 2005 and 2008 Share Option plans. Other employees continue to hold options awarded under these
earlier schemes.
In addition, the group operated an Employee Share Participation Plan, which is available to all employees, and also makes
annual awards under the Employee Benefit Trust. Details of all these schemes are given below.
Options - total
The following figures take into account options awarded under the LTIP in the period together with share options awarded in
previous years under the 2005 and 2008 Share Option schemes.
Outstanding options granted are as follows:
Number of outstanding Weighted average remaining
options at 31 March contractual life, in years
Date of grant 2016 2015 2016 2015
28 March 2007 115,586 115,586 1.0 2.0
20 November 2007 48,444 48,444 1.6 2.6
18 June 2008 8,498 8,498 2.3 3.3
8 December 2008 37,110 37,110 2.7 3.7
27 July 2010 164,321 164,321 4.3 5.3
1 August 2011 140,000 160,000 5.3 6.3
19 September 2013 (LTIP) 4,103,456 4,278,630 7.5 8.5
Total 4,617,415 4,812,589 6.9 7.9
Movements in the weighted average values are as follows:
Weighted
average
exercise
price Number
Outstanding at 31 March 2014 E0.10 24,523,583
Forfeited before 12 September 2014 E 0.97 (21,248)
Outstanding 11 September 2014 E 0.11 24,502,335
Adjustment for 12 September 2014 share consolidation E 0.45 (19,601,898)
Outstanding - after impact of 2014 share consolidation E 0.56 4,900,437
Forfeited after 12 September 2014 E 9.15 (33,998)
Expired during the year E1.60 (53,850)
Outstanding at 31 March 2015 E0.48 4,812,589
Forfeited during the year E0.00 (175,174)
Exercised during the year E0.50 (20,000)
Outstanding at 31 March 2016 E0.49 4,617,415
The exercise price of options outstanding at the end of the year ranged between Enil (for LTIP options) and E12.90 (2015:
NIL and E12.90) and their weighted average contractual life was 6.9 years (2015: 7.9 years).
Of the total number of options outstanding at the end of the year, 124,555 (2015: 77,057) had vested and were exercisable
at the end of the year. 20,000 options were exercised in the current year (2015: Enil).
Long Term Incentive Plan ('LTIP')
In the 2014 financial year, the group established a Long Term Incentive Plan, the participants of which are key members of
the management team. The establishment of the LTIP was approved by the shareholders at the AGM in September 2013.
A prerequisite of participation in the LTIP was for the management team to agree to the cancellation of their entire
outstanding share options, providing the Company with a 5% reduction in the level of dilution to make the new awards. A
cancellation was agreed as the most appropriate action as it would focus the management team on the new LTIP and not on
historical awards or arrangements. Details of the share options cancelled upon implementation of the LTIP in September 2013
(previously awarded under the 2005 and 2008 Share Option schemes) are set out further below.
LTIP overview
Under the LTIP, awards can be granted on a discretionary basis to key members of the management team. In 2013, an initial
'one off' grant was made in order to focus the management team on the growth of the Company over the next three years.
Awards were granted in the form of nil-cost options and consist of the following 'elements':
Element Objective Description
A Retention based award to lock-in executives whohave contributed to theturnaround In consideration to agreeing to the cancellation of the participant's existing options, a proportion of the new share award vests on continuity of employment over the next three years.To ensure there is no value shift to the participants via the cancellation, this element requires an additional three years of services from the participant and will be forfeited if the share price at the end of the performance period is
below E0.65.
B Performance based shareaward This element aligns the participant to the future success of the Company by linking the level of vesting to EBITDA and share price growth against the constituents of the MSCI Europe Index (or another other broad based European index as deemed appropriate by the Remuneration Committee).
C Exceptional performancemultiplier This element ensures that if significant value is created for shareholders then participants will be entitled to receive an appropriate proportion of this value.
Performance conditions
Awards granted under the LTIP are subject to continued employment and satisfaction of the performance conditions.
Performance will be measured at the end of a three year performance period for each Element.
Element A - Vesting is contingent upon continued employment for three years and share price not falling below E0.65 at the
end of the performance period.
Element B - Measured against two equally weighted performance conditions:
Threshold Target Maximum
EBITDA (50% of Element B) E0m E1.6m E4m
Share price growth(50% of Element B) Median of the constituents ofthe MSCI Europe Index 60th percentile of theconstituents of the MSCIEurope Index Upper quartile of theconstituents of the MSCIEurope Index
Vesting level1 25% 60% 100%
Notes:
1. Vesting is on a straight line basis between the respective EBITDA and share price targets.
Element C - This element vests in full if the share price is at or above E1.30 at the end of the performance period.
Awards made in September 2013
Immediately following the establishment of the new LTIP in September 2013, awards were made to members of the management
team. A total of 4,278,630 nil cost options were awarded. 1,593,331 were allocated as Element A, 1,837,572 as Element B and
847,727 were allocated as Element C. At the same time, a total of 4,456,229 of old options were cancelled. As at 31 March
2016, 175,174 options had been forfeited due to one leaver during the period. All other recipients were still employed by
the Group as at 31 March 2016.
Element A was designed to recognise the contribution made by individuals to the turnaround of the Company and the
cancellation of the existing options was a prerequisite for participation in the LTIP. The quantum of Element A for each
participant was linked to the expected value of the existing options which were cancelled where there was a reasonable
probability of pay out. As a result, under IFRS 2, the award of Element A was accounted for as a modification of the
existing share options and as the award was designed to avoid any transfer of value, the resulting share based payment
charge is the same as if the existing options had not been cancelled.
Elements B and C have been accounted for as new awards with the fair value calculated based on a modified Black-Scholes
model assuming inputs described below:
Element Element B Element B Element C
(EBITDA) (Share price growth)
Grant date 19 Sep 13 19 Sep 13 19 Sep 13
Share price at grant date (E) 0.70 0.70 0.70
Exercise price (E) 0.00 0.00 0.00
Expected life (years) 3 3 3
Contractual life (years) 10 10 10
Vesting conditions (Details set out above) EBITDA Share Price Exceptional Multiplier
Risk free rate 0.48% 0.48% 0.48%
Expected volatility 40% 40% 40%
Expected dividend yield 0% 0% 0%
Fair value of option E0.647 E0.388 E0.220
The figures in the table above have been adjusted to reflect the 5 for 1 share consolidation which became effective on 12
September 2014. No LTIP options vested in the period and no new awards were made in the period.
2005 and 2008 Share Option schemes
The following share options awarded under the group's 2005 and 2008 Share Option schemes impacted the current or preceding
financial year;
Options granted on 28 March 2007 at an exercise price of E2.59 per Ordinary share vest to one third of the options granted
upon achievement of each of the following:
· Cumulative E5 million licence income recognised under Group accounting policies
· Cumulative E20 million revenue from sales of Accoya® wood
· Announcement of annual Group distributable earnings exceeding E5 million
Once vested, these options may be exercised until 31 March 2017. At 31 March 2016, 115,586 (2015: 115,586) of these
options were outstanding at an exercise price of E9.15.
Options granted on 20 November 2007 vest to one third of the options granted upon achievement of each of the following:
· Annual Accoya® wood production exceeds 23,000m3 in a financial year
· Annual Accoya® wood sales revenue exceeds E26 million in financial year
· The second pair of reactors in the wood modification plant are processing more than 25 batches per month
Once vested these options may be exercised until 20 November 2017. At 31 March 2016, 48,444 (2015: 48,444) of these options
were outstanding at an exercise price of E12.90.
Options granted on 18 June 2008 vest to one third of the options granted upon achievement of each of the following:
· Announcement of audited Annual Accoya® wood sales revenue exceeds E20 million in financial year
· Announcement of audited annual Group distributable earnings exceeding E15 million
· Announcement of audited cumulative E75 million gross licence revenue recognised under Group accounting
policies
Once vested these options may be exercised until 18 June 2018. At 31 March 2016, 8,498 (2015: 8,498) of these options were
outstanding at an exercise price of E9.90.
Options granted on 8 December 2008 vest to one third of the options granted upon achievement of each of the following:
· Announcement of audited Annual Accoya® wood sales revenue exceeds E20 million in financial year
· Announcement of audited annual Group distributable earnings exceeding E15 million
· Announcement of audited Cumulative E75 million gross licence revenue recognised under Group accounting
policies
Once vested these options may be exercised until 8 December 2018. At 31 March 2016, 37,110 (2015: 37,110) of these options
were outstanding at an exercise price of E4.85.
Options granted on 27 July 2010 were partially exchanged in the period for new awards issued under the LTIP. 30% of the
options vest on achievement of median TSR. Once vested, these options may be exercised until 27 July 2020. Full vesting of
the options granted occurs upon achievement of upper quartile TSR measured over the three year period. At 31 March 2016,
164,321 (2015: 164,321) of these options were outstanding at an exercise price of E1.20.
Options granted on 1 August 2011 were partially exchanged in the period for new awards issued under the LTIP. 30% of the
options vest on achievement of median TSR. Full vesting of the options granted occurs upon achievement of upper quartile
TSR measured over the three year period. Once vested, these options may be exercised until 1 August 2021. At 31 March 2016,
140,000 (2015: 160,000) of these options were outstanding at an exercise price of E0.50.
TSR is measured on a relative basis compared to the FTSE Small Cap index over a three year period from grant date. Unless
discretion is exercised by the Nomination & Remuneration Committee, all options are forfeit following an option holder's
termination of contract.
No options were granted under the 2005 or 2008 Share Option schemes in the current or previous period.
The fair value of share options granted under the 2005 and 2008 Share Option Schemes during the previous years was
calculated based on a modified Black-Scholes model assuming inputs shown below for more recent awards:
Grant date August 2011 July 2010
Share price at grant date (E) 0.50 1.70
Exercise price (E) 0.50 1.70
Expected life (years) 3 3
Contractual life (years) 10 10
Risk free rate 1.54% 2.30%
Expected volatility 85% 60%
Expected dividend yield 0% 0.0%
Fair value of option E0.200 E0.532
The figures in the table and notes above have been adjusted to reflect the 5 for 1 share consolidation which became
effective on 12 September 2014. Volatility was estimated by reference to the historic volatility since October 2005 when
the Company's shares were listed on AIM. The resulting fair value is expensed over the vesting period of the options on the
assumption that a proportion of options will lapse over the service period as employees leave the Group.
Employee Benefit Trust - Share bonus award
Following a share issue on 6 July 2015, in connection with the employee remuneration and incentivisation arrangements for
the period from 1 April 2014 to 31 March 2015, 951,295 (2015: 783,597) new Ordinary shares were held by an Employee Benefit
Trust, the beneficiaries of which are primarily the Executive Directors and Senior Managers. Such new Ordinary shares vest
if the employees remain in employment with the Company at the vesting date, being 1 July 2016 (subject to certain other
provisions including regulations, good-leaver, take-over and nomination and remuneration committee discretion provisions).
As at 31 March 2016, the Employment Benefit Trust was consolidated by the Company and the 944,529 shares are recorded as
Own Shares within equity. During the period, 746,241 Ordinary shares awarded in the prior year vested.
Employee Share Participation Plan
During the year, the Company continued to operate the Employee Share Participation Plan (the 'Plan') that was initiated in
a prior year. The Plan was intended to promote the long term growth and profitability of Accsys by providing employees with
an opportunity to acquire an ownership interest in new ordinary shares ('Shares') in the Company as an additional benefit
of employment.
Under the terms of the Plan, the Company issues these Shares to a trust for the benefit of the subscribing employees. The
Shares are released to employees after one year, together with an additional Share on a 1 for 1 matched basis provided the
employee has remained in the employment of Accsys at that point in time (subject to good leaver provisions). The Plan is in
line with industry approved employee share plans and was open for subscription by employees twice in the year following
release of annual and half yearly financial results. The maximum amount available for subscription by any employee is
E5,000 per annum.
During the year ended 31 March 2016 the plan was open for subscription twice. In July 2015 various employees subscribed for
a total of 63,909 Shares at an acquisition price of E0.97 per Share. In December 2015 various employees subscribed for a
total of 16,302 Shares at an acquisition price of E0.92 per Share. Also during the year, 1 for 1 Matching shares were
awarded in respect of subscriptions that were made in the previous year as a result of all participants continuing to
remain in employment at the point of vesting. 27,825 Matching shares were issued to employees in July 2015 and 53,922
shares were issued in January 2016.
16. Intangible assets
Internal Intellectual
Development property
costs rights Goodwill Total
E'000 E'000 E'000 E'000
Cost
At 31 March 2014 1,855 73,292 4,231 79,378
Additions 201 - - 201
Addition on acquisition of subsidiary 1,981 - - 1,981
At 31 March 2015 4,037 73,292 4,231 81,560
Additions 1,490 - - 1,490
At 31 March 2016 5,527 73,292 4,231 83,050
Accumulated amortisation
At 31 March 2014 132 70,913 - 71,045
Amortisation 100 275 - 375
Addition on acquisition of subsidiary 126 - - 126
At 31 March 2015 358 71,188 - 71,546
Amortisation 249 275 524
At 31 March 2016 607 71,463 - 72,070
Net book value
At 31 March 2016 4,920 1,829 4,231 10,980
At 31 March 2015 3,679 2,104 4,231 10,014
At 31 March 2014 1,723 2,379 4,231 8,333
The carrying value of internal development costs, intellectual property rights and goodwill on consolidation are considered
part of a single cash generating unit which incorporates the manufacturing and licensing operations given the manufacturing
reliance on IP of the Group. The recoverable amount of internal development costs, intellectual property rights and
goodwill relating to this operation is determined based on a value in use calculation which uses cash flow projections
based on board approved financial budgets. Cash flows have been projected for a period of 10 years plus assumptions
concerning a terminal value, corresponding with the expected minimum life of the intellectual property rights and based on
a pre-tax discount rate of 20% per annum (2015: 20%). The key assumption used in the value in use calculations is the level
of future licence fees and manufacturing revenues estimated by management over the budget period. These have been based on
past experience and expected future revenues. The Directors have considered whether a reasonably possible change in
assumptions may result in an impairment. An impairment would arise if the total volume of forecast Accoya manufactured is
95% lower than projected sales in future years.
17. Property, plant and equipment
Land and Plant and Office
buildings machinery equipment Total
E'000 E'000 E'000 E'000
Cost or valuation
At 31 March 2014 5,251 27,518 732 33,501
Additions - 847 63 910
Foreign currency translation gain - - 27 27
At 31 March 2015 5,251 28,365 822 34,438
Additions - 2,474 435 2,909
Disposals - (114) (10) (124)
Foreign currency translation (loss) - - (9) (9)
At 31 March 2016 5,251 30,725 1,238 37,214
Accumulated depreciation
At 31 March 2014 307 11,836 618 12,761
Charge for the year 117 1,896 87 2,100
Foreign currency translation gain - - 29 29
At 31 March 2015 424 13,732 734 14,890
Charge for the year 117 1,912 119 2,148
Disposals - (76) (12) (88)
Foreign currency translation (loss) - - (8) (8)
At 31 March 2016 541 15,568 833 16,942
Net book value
At 31 March 2016 4,710 15,157 405 20,272
At 31 March 2015 4,827 14,633 88 19,548
At 31 March 2014 4,944 15,682 114 20,740
Included within property, plant and equipment are assets with an initial cost of E6,596,000 and a net book value at 31
March 2016 of E3,869,000 which has been accounted for as a finance lease under the terms of the sale and leaseback
agreement entered into in a prior year, and the finance lease agreements entered into in the current year. (See note 28).
18. Other financial assets
2016 2015
E'000 E'000
Available for sale investments - -
Accsys Technologies PLC has previously purchased a total of 21,666,734 unlisted ordinary shares in Diamond Wood China. The
carrying value of the investment is carried at cost less any provision for impairment, rather than at its fair value, as
there is no active market for these shares, and there is significant uncertainty over the future of Diamond Wood, and as
such a reliable fair value cannot be calculated.
The historical cost of the unlisted shares held at 31 March 2016 is E10m (2015: E10m). However, a provision for the
impairment of the entire balance of E10m continues to be recorded as at 31 March 2016. (See note 5).
19. Deferred Taxation
The Group has a deferred tax asset of Enil (2015: Enil) relating to trading losses brought forward.
The Group also has an unrecognised deferred tax asset of E23,167,000 (2015: E23,186,000) which is largely in respect of
trading losses of the UK subsidiary. The deferred tax asset has not been recognised due to the uncertainty of the timing of
future expected profits of the related legal entity which is dependent on the profits attributable to licensing and future
manufacturing income.
20. Subsidiaries
A list of subsidiary investments, including the name, country of incorporation and proportion of ownership interest is
given in note 4 to the Company's separate financial statements.
21. Inventories
2016 2015
E'000 E'000
Materials and work in progress 2,534 3,068
Finished goods 5,811 4,826
8,345 7,894
The amount of inventories recognised as an expense during the year was E30,985,787 (2015: E30,158,361). The cost of
inventories recognised as an expense includes a net credit of E203,129 (2015: debit of E157,836) in respect of the
inventories sold in the period which had previously been written down to net realisable value.
22. Trade and other receivables
2016 2015
E'000 E'000
Trade receivables 4,051 3,024
Other receivables 180 1,086
Prepayments 916 888
Accrued income 500 -
5,647 4,998
The Directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
The majority of trade and other receivables is denominated in Euros, with E380,000 of the trade and other receivables
denominated in US Dollars (2015: E600,000).
The age of receivables past due but not impaired is as follows:
2016 2015
E'000 E'000
Up to 30 days overdue 258 466
Over 30 days and up to 60 days overdue 61 13
Over 60 days and up to 90 days overdue 0 21
Over 90 days overdue 4 2
323 502
In determining the recoverability of a trade receivable the Group considers any change in the credit quality of the trade
receivables from the date credit was initially granted up to the reporting date. Included in the provision for doubtful
debts are individually impaired trade receivables and accrued income with a balance of E25,001,000 (2015: E25,001,000) due
from Diamond Wood.
Movement in provision for doubtful debts:
2016 2015
E'000 E'000
Balance at the beginning of the period 25,021 25,019
Net increase/(release) of impairment if
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