REG - Nanoco Group PLC - Preliminary Results <Origin Href="QuoteRef">NANON.L</Origin> - Part 3
29/10/2014 11:41
- Part 3: For the preceding part double click ID:nRSN1851Ub
instruments
Loans and receivables Financial liabilities at amortised cost Group Company
Financial assets/(liabilities) £000 £000 £000 £000
31 July 2014
Trade receivables 116 - 116 -
Inter-company short-term loan to subsidiary - - - 27,500
Inter-company long-term loan from subsidiary - - - (450)
Cash, cash equivalents and deposits 12,182 - 12,182 3,733
Trade and other payables * - (858) (858) -
Financial liabilities - (158) (158) -
12,298 (1,016) 11,282 30,783
Loans and receivables Financial liabilities at amortised cost Group Company
Financial assets/(liabilities) £000 £000 £000 £000
31 July 2013Trade receivables 114 - 114 -
Inter-company short-term loan to subsidiaryInter-company long-term loan from subsidiary - - - 17,055(450)
Cash, cash equivalents and deposits 9,944 - 9,944 4,402
Trade and other payables * - (1,386) (1,386) -
Financial liabilities - (221) (221) -
10,058 (1,607) 8,451 21,007
*Excluding deferred revenue and accruals.
The values disclosed in the above table are carrying values. The Board
considers that the carrying amount of financial assets and liabilities
approximates to their fair value.
The main risks arising from the Group's financial instruments are credit risk
and foreign currency risk. The Board of Directors reviews and agrees policies
for managing each of these risks which are summarised below.
Other loans (note 17) are subject to interest at base rate plus 2%, however as
the Group's cash deposits which attract interest at rates set for the period
of the respective deposit, are of a greater amount, any increase in base rate
and thus interest payable are more than offset by higher interest income.
Credit risk
The Group's principal financial assets are cash, cash equivalents and
deposits. The Group seeks to limit the level of credit risk on the cash
balances by only depositing surplus liquid funds with multiple counterparty
banks that have investment grade credit ratings.
The Group trades only with recognised, creditworthy third parties. Receivable
balances are monitored on an on-going basis with the result that the Group's
exposure to bad debts is not significant. The Group's maximum exposure is the
carrying amount as disclosed in note 14, which was neither past due nor
impaired. All trade receivables are ultimately overseen by the Chief Financial
Officer and are managed on a day-to-day basis by the UK credit control team.
Credit limits are set as deemed appropriate for the customer.
The maximum exposure to credit risk in relation to cash, cash equivalents and
deposits is the carrying value at the balance sheet date.
Foreign currency risk
The Group is exposed to currency risk on sales and purchases that are
denominated in a currency other than the respective functional currency of the
Company. These are primarily US Dollars (USD) and Euros. Transactions outside
of these currencies are limited.
Almost all of the Company's revenue is denominated in USD. The Group purchases
some raw materials, certain services and some assets in USD which partly
offsets its USD revenue, thereby reducing net foreign exchange exposure.
The Group may use forward exchange contracts as an economic hedge against
currency risk, where cash flow can be judged with reasonable certainty.
Foreign exchange swaps and options may be used to hedge foreign currency
receipts in the event that the timing of the receipt is less certain. There
were no open forward contracts as at 31 July 2014 or at 31 July 2013.
The split of Group assets between Sterling and other currencies at the
year-end is analysed as follows:
31 July 2014 31 July 2013
GBP USD Total GBP USD Total
The Group £000 £000 £000 £000 £000 £000
Cash, cash equivalents and deposits 12,032 150 12,182 9,813 131 9,944
Trade receivables - 116 116 - 114 114
Trade payables (629) (131) (760) (1,024) (253) (1,277)
11,403 135 11,538 8,789 (8) 8,781
Sensitivity analysis to movement in exchange rates
The following table demonstrates the sensitivity to a reasonably possible
change in Sterling against the US Dollar exchange rate with all other
variables held constant, on the Group's loss before tax (due to foreign
exchange translation of monetary assets and liabilities) and the Group's
equity.
Increase/(decrease) in Sterling vs. US Dollar rate Impact on loss before tax and Group equity Impact on loss before tax and Group equity
% 2014£000 2013£000
10% (12) 1
5% (6) 1
(5)% 7 -
(10)% 15 (1)
Interest rate risk
As the Group has no significant borrowings the risk is limited to the
reduction of interest received on cash surpluses held at bank which receive a
floating rate of interest. The principal impact to the Group is the result of
interest-bearing cash and cash equivalent balances held as set out below:
31 July 2014 31 July 2013
Fixed rate Floating rate Total Fixed rate Floating rate Total
The Group £000 £000 £000 £000 £000 £000
Cash, cash equivalents and deposits 11,996 186 12,182 6,176 3,768 9,944
The Company
Cash, cash equivalents and deposits 3,733 - 3,733 1,500 2,902 4,402
As the majority of cash and cash equivalents are held on fixed deposit the
exposure to interest rate movements is immaterial.
Maturity profile
Set out below is the maturity profile of the Group's financial liabilities at
31 July 2013 based on contractual undiscounted payments including contractual
interest.
Less than 1 year 1 to 5 years Greater than 5 years Total
2014 £000 £000 £000 £000
Financial liabilities
Trade and other payables * 858 - - 858
Other loans (including contractual interest) 65 101 - 166
923 101 - 1,024
Less than 1 year 1 to 5 years Greater than 5 years Total
2013 £000 £000 £000 £000
Financial liabilities
Trade and other payables * 1,386 - - 1,386
Other loans (including contractual interest) 68 163 - 231
1,454 163 - 1,617
*Excluding deferred revenue and accruals. Trade and other payables are due
within three months.
The Directors consider that the carrying amount of the financial liabilities
approximates to their fair value.
As all financial assets are expected to mature within the next twelve months
an aged analysis of financial assets has not been presented.
The Company's financial liability, a long-term loan from a subsidiary
undertaking, is due after more than five years.
24. Related party transactions
The Group:
There were no sales to, purchases from, or at the year-end, balances with any
related party.
The Company:
The following table summarises inter-company balances at the year-end between
Nanoco Group PLC and subsidiary entities:
Notes 31 July 2014 31 July 2013
£000 £000
Long term loans owed to Nanoco Group PLC by:
Nanoco Life Sciences Limited 20,286 20,286
Nanoco Technologies Limited* 2,198 1,625
12 22,484 21,911
Less provision against debt owed by Nanoco Life Sciences Limited 12 (20,286) (20,286)
2,198 1,625
Short-term loan owed to Nanoco Group PLC by:
Nanoco Technologies Limited** 14 27,500 17,055
Long-term loan owed by Nanoco Group PLC to:
Nanoco Tech Limited 16 (450) (450)
* The movement in the long-term loan due from Nanoco Technologies Limited
relates to the recharge in respect of the expense for share-based payments for
staff working for Nanoco Technologies Limited and is included in investments.
** The movement in the short-term loan due from Nanoco Technologies Limited
relates to transfers of cash balances between the entities for the purposes of
investing short term funds and the funding of trading losses.
There are no formal terms of repayment in place for these loans and it has
been confirmed by the directors that the long-term loans will not be recalled
within the next twelve months.
None of the loans is interest bearing.
25. Compensation of key management personnel (including directors)
2014 2013
£000 £000
Short-term employee benefits 624 549
Pension costs 204 97
Benefits in kind 64 468
Share-based payments 180 305
1,072 1,419
This information is provided by RNS
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