REG - AFC Energy Plc - Final Results and Notice of AGM <Origin Href="QuoteRef">AFEN.L</Origin> - Part 2
24/03/2016 13:40
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assumptions and may involve a series of complex judgements about future
events. To the extent that the final tax outcome of these matters is different
from the amounts recorded, such differences will impact income tax expense in
the period in which such determination is made.
Capitalisation of Development Expenditure
The Company uses the criteria of IAS 38 to determine whether development
expenditure should be capitalised. After assessing these, management has
concluded it would not be appropriate to capitalise development expenditure
incurred during the year ended 31 October 2015.
Share-Based Payments
Certain employees (including Directors and senior Executives) of the Company
receive remuneration in the form of share-based payment transactions, whereby
employees render services as consideration for equity instruments
("equity-settled transactions").
The fair value is determined using an appropriate pricing model.
The cost of equity-settled transactions is recognised, together with a
corresponding increase in equity, over the period in which the performance
and/or service conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award ("the vesting date").
The cumulative expense recognised for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which the vesting
period has expired and the Company's best estimate of the number of equity
instruments that will ultimately vest. The profit or loss charge or credit for
a period represents the movement in cumulative expense recognised as at the
beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for
awards where vesting is conditional upon a market condition, which are treated
as vesting irrespective of whether or not the market condition is satisfied,
provided that all other performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, the minimum expense
recognised is the expense as if the terms had not been modified. An additional
expense is recognised for any modification which increases the total fair
value of the share-based payment arrangement, or is otherwise beneficial to
the employee as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested
on the date of cancellation, and any expense not yet recognised for the award
is recognised immediately. However, if a new award is substituted for the
cancelled award, and designated as a replacement award on the date that it is
granted, the cancelled and new awards are treated as if they were a
modification of the original award, as described in the previous paragraph.
Licence Fees
Licence fees are recognised on a straight line basis over the life of the
licence, with payments being received in staggered instalments. Fees which are
contingent on an event are recognised when the Company believes that it is
probable that the event will occur.
4. Segmental analysis
Operating segments are determined by the chief operating decision maker based
on information used to allocate the Company's resources. The information as
presented to internal management is consistent with the Statement of
Comprehensive Income. It has been determined that there is one operating
segment, the development of fuel cells. In the year to 31 October 2015, the
Company operated mainly in the United Kingdom and in Germany. All non current
assets are located in the United Kingdom.
5. Operating loss
This has been stated after:
Year ended31 October 2015 £ Year ended31 October 2014£
Government grants received and receivable (2,262,506) (591,269)
R&D tax credit receivable (174,937) -
Depreciation/Impairment of property and equipment 198,769 300,612
Research and Development expenditure 3,475,657 1,284,044
Amortisation/Impairment of intangible assets 79,522 11,875
Write off of Waste2Tricity investment and receivable 558,983 -
Equity-settled share-based payment expense 216,202 239,968
Foreign exchange differences 42,975 44,211
Auditor's remuneration - audit 30,000 20,000
Auditor's remuneration - tax 9,500 2,500
Auditor's remuneration - other services - 14,360
6. Staff numbers and costs, including Directors
The average numbers of employees in the year were:
Year ended 31 October 2015Number Year ended31 October 2014Number
Support, operations and technical 39 37
Administration 5 12
44 49
The aggregate payroll costs for these persons were:
£ £
Wages and salaries (including Directors' emoluments) 2,660,709 2,214,039
Social security 317,242 247,339
Employer's pension contributions 35,095 31,443
Equity-settled share-based payment expense 216,202 239,968
3,229,248 2,732,789
7. Directors' remuneration
Year ended 31 October 2015 £ Year ended31 October 2014£
Wages and salaries 978,656 667,078
Social security 131,225 80,535
Equity-settled share-based payment expense 170,001 83,829
Other compensation (see note 25) 48,149 82,923
Company pension contributions 1,844 12,569
1,329,875 926,934
The emoluments of the Chairman 57,346 58,325
The emoluments of the highest-paid Director 661,932 370,613
Company pension contributions of highest paid Director - 8,000
The remuneration, details of share options and interests in the Company's
shares of each Director are shown in the Directors' Report.
8. Financial income
Year ended 31 October 2015 £ Year ended31 October 2014£
Gain/(Loss) on derivative financial instrument 3,288,497 (636,330)
Bank interest receivable 5,775 48,667
Total interest receivable 3,294,272 (587,663)
9. Taxation
Recognised in the income statement Year ended 31 October 2015 £ Year ended31 October 2014£
Research and development tax credit - current year (569,706) (421,280)
Total tax credit (569,706) (421,280)
Reconciliation of effective tax rates
Loss before tax (5,351,931) (5,858,297)
Tax using the domestic rate of corporation tax of 20.42% (2014: 21.67%) (1,092,864) (1,269,298)
Effect of:
Expenses not deductible for tax purposes 659,518 151,115
Above the line tax credit 185,396 19,643
Research and development allowance (450,148) (347,762)
Research and development tax credit (569,706) (421,280)
Depreciation in excess of capital allowances 47,737 65,133
Losses surrendered for research and development 232,349 625,971
Unutilised losses carried forward 418,012 755,198
Total tax credit for the year (569,706) (421,280)
10. Loss per share
The calculation of the basic loss per share is based upon the net loss after
tax attributable to ordinary Shareholders of £4,782,225 (2014: loss of
£5,437,017) and a weighted average number of shares in issue for the year.
Year ended 31 October 2015 Year ended31 October 2014
Basic loss per share (pence) (1.66)p (2.42)p
Diluted loss per share (pence) (1.66)p (2.42)p
Loss attributable to equity Shareholders (4,782,225) (5,437,017)
Number Number
Weighted average number of shares in issue 288,431,626 224,533,287
Diluted earnings per share
As set out in Note 18, there are share options and warrants outstanding as at
31 October 2015 which, if exercised, would increase the number of shares in
issue. However, the diluted loss per share is the same as the basic loss per
share, as the loss for the year has an anti-dilutive effect.
11. Intangible assets
2015 Patents £ 2014Patents£
Cost
Balance at 1 November 748,113 637,898
Retirements (401,166) -
Additions 98,980 110,215
Balance at 31 October 445,927 748,113
Amortisation
Balance at 1 November 469,040 457,165
Retirements (401,166) -
Charge for the year 39,877 11,875
Balance at 31 October 107,751 469,040
Net book value 338,176 279,073
12. Property and equipment
Leasehold improvements£ Fixtures, fittingsand equipment£ Motor Vehicles£ Total£
Cost
At 31 October 2013 221,512 2,693,951 10,495 2,925,958
Additions 51,247 - - 51,247
At 31 October 2014 272,759 2,693,951 10,495 2,977,205
Transfers 45,852 (45,852) - -
Additions 18,851 - 17,994 36,845
Disposals - (1,326,821) (10,495) (1,337,316)
At 31 October 2015 337,462 1,321,278 17,994 1,676,734
Depreciation
At 31 October 2013 213,057 1,847,390 6,705 2,067,152
Charge for the year 27,047 270,067 3,498 300,612
At 31 October 2014 240,104 2,117,457 10,203 2,367,764
Transfers 9,783 (9,783) - -
Charge for the year 39,645 194,882 3,887 238,414
Disposals - (1,035,277) (10,495) (1,045,772)
At 31 October 2015 289,532 1,267,279 3,595 1,560,406
Net Book Value
At 31 October 2015 47,930 53,999 14,399 116,328
At 31 October 2014 32,655 576,494 292 609,441
There are no assets held under finance leases.
13. Investment
The Company holds 23% in Waste2Tricity Ltd ("W2T") (a Company registered in
England & Wales). As at 31 October 2015 the Company held 230,000 shares
representing 23% (2014: 230,000 representing 23%) of the share capital of W2T.
In the view of the Directors this investment has no value currently and has
been recognised at cost less impairment. No revenue was recognised in the
period under the licence agreements with Waste2Tricity Limited and
Waste2Tricity International (Thailand) Limited and accrued licence fees
receivable as at 31 October 2014 of £506,483 has also been written off.
Year ended 31 October 2015 £ Year ended31 October 2014£
Investment in W2T - 52,500
14. Inventory and work in progress
Year ended 31 October 2015 £ Year ended31 October 2014£
Inventory 219,421 88,304
Work in progress - 68,744
219,421 157,048
15. Trade and other receivables
Year ended 31 October 2015 £ Year ended31 October 2014£
Current:
R&D tax credits receivable 718,023 787,075
EU grants receivable 2,513,395 419,183
Other receivables 226,922 2,296,634
3,458,340 3,502,892
The trade and other receivables balances are categorised as loans and other
receivables. There is no significant difference between the fair value of the
trade and other receivables and the values stated above.
16. Cash and cash equivalents
Year ended 31 October 2015 £ Year ended31 October 2014£
Cash at bank 675,603 2,956,871
Bank deposits 1,080,842 1,901,332
1,756,445 4,858,203
Cash at bank and bank deposits consist of cash. There is no material foreign
exchange movement in respect of cash and cash equivalents. Restricted cash,
not included in cash and cash equivalents, is E125,000 held in an escrow
account to support a bank guarantee relating to the Stade site.
This information is provided by RNS
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