RNS Number:3314Q
Greenchip Investments PLC
30 September 2003
GREENCHIP INVESTMENTS PLC
INTERIM REPORT - SIX MONTHS ENDED 30 JUNE 2003
CHAIRMAN'S STATEMENT
Current operations
This reporting period has proved no less challenging than its predecessor where,
as more fully set out in the full year Report and Financial Statements, the
Company had to deal with many technical, and, latterly, significant financial
challenges in its quest to commercialise its developing technology. I believe
that it is worthwhile to reiterate two important points from the last full
year's Statement:
"In the interim statement published on 27th September 2002, the Board also
mentioned that it had identified, and was pursuing, a number of potential merger
/acquisition transactions. One such potential acquisition was, in fact, at an
advanced stage of discussions and, subject to financing and final due diligence,
was expected to close no later than February of this year. I regret to inform
shareholders that, despite the potential benefits of the acquisition, the Group
was not able to complete the transaction due to its inability to secure the
necessary finance. Accordingly, negotiations in respect of this transaction
have been abandoned."
"Regrettably, I have to report that, in common with many early stage development
projects, it has proved more difficult, time consuming and expensive than
originally envisaged to bring this technology to commercial fruition."
That situation has continued in the six months under review and, regrettably, I
am unable to report that any meaningful commercial breakthrough was made prior
to 30th June, or, indeed, up to the date of writing. A downscaled development
team in the United States has continued with the technical effort concomitant
with the directors seeking new funding opportunities to enable the Company to
move the technology into what one would hope would be its final stages. That
said, I am unable to report tangible progress and the Company's position remains
perilous - especially for the US subsidiaries where the deficit on Shareholders
Funds per the attached Consolidated Balance Sheet is vested.
This is the position in which the Company finds itself, and although new funding
efforts will continue to be made, the prevailing circumstances are unhelpful to
that process.
Financial Statements
The attached Financial Statements (which are both unaudited and unreviewed)
indicate a somewhat bleak position. In the absence of either the raising of
fresh capital or achieving the required level of technological breakthrough to
see the way clear to profitable operations, I can make little comment upon them.
There is very limited trade and the US operations continue to be loss-making,
leading to a potentially serious deficit on net assets in the US subsidiaries, a
deficit which will not be able to be met from the parent company without a new
injection of funds.
s.142 Extraordinary General Meeting
On 20th August 2003 the Company held an Extraordinary General Meeting (EGM)
pursuant to the provisions of s.142 (Companies Act 1985). For ease of reference,
I set out below the "Additional Information" included in the EGM Notice which
background information remains highly pertinent to the present state of affairs:
"The Directors have closely considered the implications of the disappointing
lack of progress which has been made in the period as to finalising the product
development and testing of new degradable plastics technologies being at the
heart of the Company's business plan pursuant to its acquisition of Programmable
Life Inc in January 2002. While considerable efforts have certainly been made
and substantial funds expended in pursuit of these goals, the Company has not
yet been able to bring its plans to fruition such that any commercially
licensable system(s) or product(s) can be profitably marketed. These efforts
have largely exhausted the Company's resources and, consequently, its ability to
continue with the product development and marketing effort.
The acquisition of Programmable Life Inc resulted in an increase in the
Company's issued share capital from circa 35m to 135m Ordinary Shares. Upon
preparation of the statutory accounts of the Company for the 12 months to 31
December 2002, this gave rise to Goodwill upon Consolidation of approximately
#4.1m. While the Company can sustain itself with the technology of its US
subsidiaries 'on hold' while new funding arrangements might be able to be made
for the continuation of the development effort, the Directors believe that the
aforementioned Goodwill must be considered seriously impaired. They have
therefore made a full provision against it, as shown in the Company's current
Report and Accounts, and as a result of which, the provisions of s.142 have
become applicable.
The purpose of the EGM is to provide shareholders, inter alia, with the
opportunity:
* to make further enquiries of the Directors;
* to consider such proposals that the Directors may be able to put to the
meeting;
* to consider what measures should be taken going forward.
This Notice has had to be issued very soon after the production of the statutory
accounts for the Company. Consequently, your Board, is unable to say at the time
of writing what measures may be available for consideration at the meeting.
However, shareholders can be assured that every effort is being, and will
continue to be made to investigate any relevant proposal that may come forward.
In circumstances where the Board is able to do so, further information will be
sent to shareholders prior to the meeting."
In the absence of any firm proposal, the meeting provided a forum at which
shareholders could ask questions of a general nature to which the directors (in
the context of this being a public company) could only respond in equally
general terms; no resolutions were placed before shareholders and, consequently,
there was nothing to announce to the market following it.
Future Prospects
Your Board is, of course, continuing to pursue any reasonable opportunity to
either raise new capital to continue with the development effort in the USA or
to introduce a totally new opportunity to take advantage of the Company's listed
status. I hope to be able to report further on one or more of these matters at
the Company's next Annual General Meeting which is being convened on 31st
October 2003.
It may be some comfort to shareholders that, as previously reported, your
Directors are working on a totally unpaid basis, as indeed they have done since
November of last year, sacrifices which, together with those made by former
directors and advisers, allow the Company to maintain operations both here and
in the United States, albeit on highly restricted bases.
On behalf of my co-directors, I wish to thank all those who have remained
steadfast in their support of the Board through such turbulent times and I look
forward to the Company making tangible progress in the upcoming weeks and
months.
Colin Hill
Non-Executive Chairman
30th September 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited Interim Results for the six months to 30th June 2003
Six months Six months Year to
to 30/06/03 to 30/06/02 31/12/02
Unaudited Unaudited Audited
# # #
TURNOVER 44,473 70,899 80,861
COST OF SALES 13,572 30,187 82,326
_________ ___________ _____________
GROSS PROFIT/(LOSS) 30,901 40,712 (1,465)
Administrative expenses 107,273 524,905 4,985,539
Other operating income - - 7,565
_________ ___________ _____________
OPERATING LOSS (76,372) (484,193) (4,979,439)
Loss on disposal of investments (920) - -
Interest receivable 16 10,710 12,757
Waiver of secured loans - - 155,247
Provisions against investments - - (315,567)
Interest payable (3,167) - (12,777)
_________ ___________ _____________
LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION (80,443) (473,483) (5,139,779)
Tax on loss on ordinary activities - - -
_________ ___________ _____________
LOSS FOR FINANCIAL PERIOD
AFTER TAXATION (80,443) (473,483) (5,139,779)
===== ====== =======
Loss per ordinary share - basic and diluted (0.05)p (0.36)p (3.68)p
===== ====== =======
Loss per ordinary share before impairment
of goodwill- basic and diluted (0.05)p (0.36)p (0.74)p
===== ====== =======
CONSOLIDATED BALANCE SHEET AS AT 30TH JUNE 2003
Unaudited Interim Results for the six months to 30th June 2003
As at As at As at
30/06/03 30/06/02 31/12/02
Unaudited Unaudited Audited
# # #
FIXED ASSETS
Goodwill on consolidation - 4,101,234 -
Other intangible assets 146,570 133,466 157,233
Tangible assets 1 8,435 1
Investments - 32,442 91,875
___________ _____________ ___________
146,571 4,275,577 249,109
___________ _____________ ___________
CURRENT ASSETS
Stocks 976 35,568 1,000
Debtors 1,999 34,036 12,518
Cash at bank and in hand 30,544 407,585 64,376
___________ _____________ ___________
33,519 477,189 77,894
CREDITORS: Amounts falling
due within one year (75,349) (274,619) (131,180)
___________ _____________ ___________
NET CURRENT (LIABILITIES)/ASSETS (41,830) 202,570 (53,286)
___________ _____________ ___________
TOTAL ASSETS LESS CURRENT
LIABILITIES 104,741 4,478,147 195,823
CREDITORS: Amounts falling
due after more than one year (174,213) (213,873) (180,119)
___________ _____________ ___________
TOTAL NET (LIABILITIES)/ASSETS (69,472) 4,264,274 15,704
====== ======= ======
CAPITAL AND RESERVES
Called up share capital 1,602,816 1,352,816 1,602,816
Share premium account 7,136,165 7,011,165 7,136,165
Profit and loss account (8,808,453) (4,099,707) (8,723,277)
_____________ _____________ _____________
SHAREHOLDERS' FUNDS (69,472) 4,264,274 15,704
======= ======= =======
COMPANY BALANCE SHEET AS AT 30TH JUNE 2003
Unaudited Interim Results for the six months to 30th June 2003
As at As at As at
30/06/03 30/06/02 31/12/02
Unaudited Unaudited Audited
# # #
FIXED ASSETS
Tangible assets - 1,426 -
Investments - 3,820,761 91,875
___________ _____________ ___________
- 3,822,187 91,875
___________ _____________ ___________
CURRENT ASSETS
Debtors 1,822 434,155 12,334
Cash at bank and in hand 29,959 354,621 32,787
___________ _____________ ___________
31,781 788,776 45,121
CREDITORS: Amounts falling
due within one year (15,648) (32,196) (70,376)
___________ _____________ ___________
NET CURRENT ASSETS/(LIABILITIES) 16,133 756,580 (25,255)
___________ _____________ ___________
TOTAL ASSETS LESS CURRENT
LIABILITIES 16,133 4,578,767 66,620
CREDITORS: Amounts falling
due after more than one year - (1,185) (1,185)
___________ _____________ ___________
TOTAL NET ASSETS 16,133 4,577,582 65,435
====== ======= ======
CAPITAL AND RESERVES
Called up share capital 1,602,816 1,352,816 1,602,816
Share premium account 7,136,165 7,011,165 7,136,165
Profit and loss account (8,722,848) (3,786,399) (8,673,546)
_____________ _____________ _____________
SHAREHOLDERS' FUNDS 16,133 4,577,582 65,435
======= ======= =======
CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS TO 30TH JUNE 2003
Unaudited Interim Results for the six months 30th June 2003
Six months Six months Year to
to 30/06/03 to 30/06/02 31/12/02
Unaudited Unaudited Audited
# # #
Net cash outflow from operating activities (85,124) (508,265) (902,514)
__________ __________ _________
Returns on investments and servicing
of finance
Bank interest received 16 10,710 12,757
Bank and other loan interest paid (1,102) - (12,777)
__________ __________ _________
Net cash (outflow)/inflow from returns on
investments
and servicing of finance (1,086) 10,710 (20)
__________ __________ _________
Capital expenditure
Proceeds from disposal of investments 90,955 - -
Proceeds from disposal of tangible fixed - - 285
assets
___________ ___________ _________
Net cash inflow from capital expenditure 90,955 - 285
__________ __________ _________
Acquisitions and disposals
Acquisition of a subsidiary - (288,318) (288,318)
Net cash acquired with subsidiary - 4,323 4,323
____________ ____________ ___________
Net cash outflow from acquisitions and
Disposals - (283,995) (283,995)
____________ ____________ _____________
Increase/(decrease) in cash in the period 4,745 (781,550) (1,186,244)
====== ====== =======
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Unaudited Interim Results for the six months 30th June 2003
Six months Six months Year to
to 30/06/03 to 30/06/02 31/12/02
Unaudited Unaudited Audited
# # #
Loss for the financial period (80,443) (473,483) (5,139,779)
Exchange differences on translation of
net assets of subsidiary undertaking (4,733) 19,467 62,193
_________ ___________ _____________
Total recognised losses relating to the period (85,176) (454,016) (5,077,586)
===== ====== =======
NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS TO 30TH JUNE 2003
1. The interim financial statements for the six months ended 30th June 2003
are unaudited and were approved by the directors on 30th September 2003. The
financial information set out above does not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985. The information
given as comparative figures for the year ended 31st December 2002 was extracted
from the Company's audited statutory accounts for that financial year.
2. ACCOUNTING POLICIES
The principal accounting policies of the Company have remained unchanged from
those set out in the Company's 2002 accounts. It is apposite to update the going
concern note as follows:
The substantial product development and marketing effort expended during 2002,
which absorbed most of the group's available cash resources, has continued
albeit at a much reduced level. The directors are of the opinion that new
funding is required to bring the product development and marketing programme to
fruition and accordingly the directors intend to raise additional finance during
the course of the next twelve months.
Whilst the directors are hopeful that the Group will be able to secure
additional funding to enable it to continue to meet its debts as they fall due
and to undertake the programme described above for at least twelve months from
the date of approval of these financial statements, there can be no guarantee
that this will be the case.
The financial statements have been prepared on the going concern basis, the
validity of which is dependent upon the directors securing additional finance as
described above.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or to amounts and
classification of liabilities that may be necessary should the entity be unable
to continue as a going concern.
3. The results of Programmable Life Inc have been consolidated using the
acquisition method.
4. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING
ACTIVITIES
Six months Six months Year to
to 30/06/03 to 30/06/02 31/12/02
Unaudited Unaudited Audited
# # #
Operating loss (76,372) (484,193) (4,979,439)
Amortisation of intangible fixed assets 6,852 24,068 4,115,125
Depreciation - 1,899 10,676
Loss on disposal of tangible fixed assets - - (285)
Decrease in stocks 24 35,933 70,501
Decrease in debtors 12,518 307,180 328,698
Decrease in creditors (28,146) (393,152) (447,790)
___________ ___________ ___________
Net cash outflow from operating activities (85,124) (508,265) (902,514)
====== ====== ======
5. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Six months Six months Year to
to 30/06/03 to 30/06/02 31/12/02
Unaudited Unaudited Audited
# # #
Opening net (debt)/ funds (124,794) 1,168,011 1,168,011
Increase/(decrease) in cash in period 4,745 (781,550) (1,186,244)
Acquisition of subsidiary - - (342,431)
Other (922) 21,124 235,870
______________ ___________ ___________
Closing net (debt)/ funds (120,971) 407,585 (124,794)
======= ====== ======
6. EARNINGS PER SHARE
The calculation of earnings per ordinary share is based on losses of
#80,443 and on the weighted average number of shares in issue during the period
of 160,281,597 ordinary 1p shares. The diluted earnings per share has been
presented on the same basis as the basic earnings per share as all potential
ordinary shares would be anti-dilutive.
7. Copies of the interim report are available to the public free of charge
from the Company at 18 Pall Mall, London SW1Y 5LU during normal office hours,
Saturdays and Sundays excepted, for 14 days from today.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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