RNS Number:8346V
Greenhouse Fund Limited (The)
01 May 2007
For Immediate Release 1 May 2007
The Greenhouse Fund Limited
("Greenhouse" or "the Fund")
Final Results for the period ended 31 December 2006
The Greenhouse Fund (AIM:GHF), the Jersey domiciled closed-ended investment
company, today reports its results for the period to 31 December 2006.
Highlights for the period:
*Successful placing and IPO, raising #9.8 million (gross)
*Maiden investment in Molectra, a tyre recycling technology
*Acquisition of Bauxsol technology licenses
*NAV at 31 December 2006 of 8.90p
*Cash and equivalents at 31 December 2006, #8.17m
*Post year-end further investment in Molectra
Commenting on the results, Chairman Nigel Wray said: "I am delighted to report
on the first year's trading for Greenhouse. The green sector continues to have a
remarkably high profile within the business and political arenas, and I believe
Greenhouse is ideally positioned to capitalise upon this.
The significant developments within our Molectra tyre recycling technology are
particularly exciting. The additional investment made in Molectra gives
Greenhouse the right to acquire a majority stake, and I look forward to
announcing further developments as soon as Molectra's technology is taken to its
next stage of operation".
For further information please contact:
Greenhouse Advisor
Paul Gazzard 01725 510 383
Rodger Sargent 020 7399 4260
Evolution Securities 020 7071 4300
Fergus Marcroft
Buchanan Communications 020 7466 5000
Charles Ryland
Ben Willey
CHAIRMAN'S STATEMENT
These are the first set of full accounts for The Greenhouse Fund Limited
covering the period to 31 December 2006. Greenhouse is a Jersey domiciled
closed-ended investment company, with the objective of creating a portfolio of
sustainable environmental technologies. It listed on AIM on 12 January 2006.
Financial performance
As at 31 December 2006, Greenhouse had net assets of #13.81m, including cash of
#8.17m and investments of #5.66m. The loss for the period was #0.3m and the
period end NAV was 8.9p.
Portfolio
Molectra Australia Pty Ltd ("Molectra")
On 27th March 2006, Greenhouse announced its first investment, in Molectra.
Molectra has developed a sustainable process that re-cycles and recovers
materials from used vehicle tyres. The disposal of tyres is a major
environmental issue as shredding and land-filling, the main disposal method
currently utilised, is being increasingly banned or becoming prohibitively
expensive around the globe. Greenhouse believes these legislative and commercial
pressures present a major opportunity for Molectra and will further benefit from
government incentive schemes designed to encourage environmentally responsible
behaviour.
The derivative products from tyres put through the Molectra process are;
*High grade crumb rubber; for large scale use in road surfacing and other
applications or in high value re-bonded rubber products;
*Oil; which may be further fractionated into valuable end products
including limolene for fragrances and fuel oils;
*Carbon; used for industrial applications such as activated carbon and
carbon black.
Greenhouse invested #750,000 by way of a convertible note secured over
Molectra's assets that, upon conversion, will equate to 32% of Molectra's
equity. On 26th March 2007, following the period covered by the accounts, G
reenhouse invested an additional c.#1.2million in Molectra Technologies Pty Ltd
("Molectra Technologies"), the parent of Molectra, in cash via a convertible
note. The convertible note is unsecured, cannot be redeemed for a cash
alternative, and must be exercised before 31 December 2008.
Upon conversion, Greenhouse would receive a 39% shareholding in Molectra
Technologies. Alternatively Greenhouse can elect to redeem the note for 39% of
the assets of Molectra Technologies, this redemption would translate into a 26%
stake in Molectra. This gives Greenhouse the right to acquire in total a
controlling 58% stake in Molectra. This subsequent investment also gives
Greenhouse the right to appoint two directors to the board of Molectra
Technologies with various controlling rights.
These investments enabled Molectra's existing plant to be scaled up and provided
the support and business infrastructure required to deliver the solution on a
larger scale. A commercial pilot plant, capable of processing 250,000 tyres per
year, has been constructed and has commenced continuous daily operations. The
primary objective of the pilot trial, run over a 3-month period was to establish
the scalability and the continuous commercial viability of the technology.
Greenhouse commissioned a report from Wiley & Co. ("Wiley"), to analyse all
aspects of the plant's operation, which was received in March 2007. Wiley is an
internationally renowned engineering firm that was involved in the construction
of the plant from inception. The report examined the construction, commissioning
and operation of the pilot plant, and crucially, the operating and capital costs
associated with the ten-fold scale up from pilot to full-scale plant. The Wiley
report strongly endorses the economic and commercial viability of the Molectra
process.
A full-scale plant is designed to process c.2.6 million tyres per year or 26,000
tonnes, which is ten-times the capacity of the current pilot plant. It is
anticipated that a full scale plant will cost c.#6 million to build and take
c.12 months to construct. Based on the Wiley report, the Directors expect the
operating cost associated with processing this volume would be c.#70 per tonne.
Various target sites outside Sydney in New South Wales, Australia, are currently
being considered for the full-scale plant.
Bauxsol licences and other assets
On 29 June 2006, Greenhouse announced the acquisition of five Bauxsol technology
sub-licences and the purchase of the business and assets of Sterling
Environmental Solutions Ltd from Virotec International Ltd ("Virotec"). Bauxsol
extracts heavy metals, arsenic, phosphates and cyanide from water, soil and air
through its bespoke re-agents, without creating any hazardous waste streams.
Once treated, wastes are rendered inert or non-hazardous, and significantly
easier and cheaper to either be disposed of or reused.
The consideration of #5 million was satisfied by the issue of 30,000,000 new
Greenhouse shares and #500,000 cash, giving Virotec a 19% holding in Greenhouse.
Virotec will receive an ongoing royalty on any revenue earned from the
technologies. In addition, if any of the technologies are subsequently sold by
Greenhouse, any sale will include the obligation to continue to pay royalties to
Virotec and for Virotec to retain a 19% interest in the technologies for zero
consideration.
The five Bauxsol platform technologies being sub-licensed to Greenhouse are:
(a) ViroConcrete, speciality cement products with many potential
applications. Following ongoing research and collaboration with Queens
University, Belfast, Greenhouse will increase commercial and sales support as
the concrete market gains awareness of the products and their potential;
(b) ViroAirFilter, development has progressed with the US
Environmental Protection Agency and is designed to remove mercury, CO2 and other
polluting metals from industrial flue emissions by 'gas scrubbing' such
hazardous compounds from waste gases prior to their release into the atmosphere;
(c) ViroFertiliser, aims to control the level of phosphate
pollution and to increase crop yields via the slow release of phosphate from
fertilisers. A ViroFertiliser re-agent is added to the fertiliser, binding with
the phosphate, keeping it in situ, thus decreasing the fertiliser run off, water
pollution and providing higher yields. Tests have shown a significant
improvement in crop yields when the ViroFertiliser was used on, amongst others,
cotton crops in Australia;
(d) Gastric animal applications, aims to relieve chronic gastric
problems within commercially farmed animals. Demonstrations indicating the
potential for a product have already been carried out on horses. Greenhouse is
currently negotiating with a partner to commence field trials with commercial
livestock;
(e) Any further new commercial applications developed from the
Bauxsol technology, giving Greenhouse access to the time of the scientists and
facilities involved in the development of Bauxsol in the Southern Cross
University in New South Wales, Australia.
Greenhouse's strategy is to continue to develop the Bauxsol technologies, using
both academic and commercial partners from within industry. Once an application
has been fully commercialised, Greenhouse will consider the strategic options
available so as to maximise shareholder value. Such alternatives may include
introducing new structures for each license, depending on the particular market
and opportunity that it faces.
Greenhouse also purchased the business and assets of Sterling Environmental
Solutions Ltd ("Sterling"), with a view to establishing a regional treatment
centre ("RTC") for the treatment of high strength organic waste streams.
Greenhouse believes this area of the waste management market is currently
lacking a high-technology solution. The Fund has recently retained an
independent consultant to re-examine the scale and economic rationale of
operating in this sector.
Board appointment
On 7th August 2006, it was announced that Brian Sheeran, was appointed to the
board of Greenhouse as non-executive Deputy Chairman.
The future
Greenhouse has always considered that Molectra has the potential to develop a
significant presence within the waste tyre recycling industry. Post year-end,
the pilot plant performance and Wiley report on its success confirms this. A
number of options for the development of the full-scale plant are currently
being considered.
The various Bauxsol applications continue to be developed, with ongoing research
by various academic, regulatory and commercial bodies. As well as developing the
existing portfolio, Greenhouse continues to actively seek out new sustainable
technologies, a number of which are currently being investigated and assessed.
The first year of Greenhouse has been a success, and I look forward to much more
in the future.
Nigel Wray
Chairman
Greenhouse Fund Limited
30th April 2007
THE GREENHOUSE FUND LIMITED
DIRECTOR'S REPORT
for the Period 13 December 2005 to 31 December 2006
The Directors submit their Report and Financial Statements for the period 13
December 2005 to 31 December 2006.
The Greenhouse Fund Limited (the "Fund") was incorporated on 13 December 2005
and operates as an unclassified fund within the provisions of the Collective
Investment Funds (Jersey) Law 1988.
Principal Activity
The Fund is a Jersey domiciled closed-ended investment company, created to
invest in sustainable environmental technologies, and was listed on AIM on 12
January 2006.
Listing
The Fund is listed on the Alternative Investment Market.
Investment Objective
The Fund's objective is to generate a significant level of long-term capital
growth through investment in a diverse portfolio of environmental technologies.
Investment Policy
The investment policy of the Fund is to invest in sustainable environmental
technologies to create a portfolio of investment holdings within the
Environmental Sector. It will invest in minority, majority or entire stakes in
public or private entities, depending on the opportunity. As well as making an
initial investment, the Fund may also meet the working capital requirements of a
portfolio company or from time to time make additional capital injections into
such portfolio company. The Fund will spread its investments across the
Environmental Sector.
Basic business principles and analysis and techniques will be applied to
determine the best opportunities for the Fund.
Distributions
It is not intended in normal circumstances that the Fund will pay dividends on
the shares.
The proceeds realised from the portfolio will be available for reinvestment into
further investment opportunities (net of any costs). The Board will, however,
consider the distribution of capital profits on the shares after the first three
years of the Fund's life and at any time if the Manager does not believe there
to be further attractive investment opportunities. Following the end of the
tenth year of the Fund's life, the proceeds from the sale of the portfolio will
be returned to Shareholders as determined by the Board.
The income statement is set out within this Annual Report and Financial
Statements. The Directors do not recommend the payment of a dividend.
Life
The Fund will have a ten year life, subject to extension by shareholders by
special resolution (requiring a two-thirds majority of those voting).
Custodian - Fixed Income Portfolio
BNP Paribas (Jersey Branch) provides custody services for the Fund.
Shareholder's Interests
Extent of Holdings No. of shareholders
1-9,999 13
10,000-99,999 20
100,000-999,999 17
1,000,000-9,999,999 20
10m+ 4
At 30 March 2007 the Fund was aware of the following interests of 3% or more in
the Ordinary share capital of the Fund:
Number % Held
Virotec Investments pty Limited 30,000,000 19.33%
ODL Nominees Limited 18,110,000 11.67%
PIHL Equity LLP 17,500,000 11.27%
Mr David Perry Gaskell 14,475,000 9.33%
Roy Nominees Limited 7,500,000 4.83%
Chase (GA Group) Nominees Limited 7,000,000 4.51%
Smith & Williamson Nominees 5,895,000 3.80%
J M Finn Nominees Limited 5,176,508 3.33%
Goldman Sachs International 5,128,000 3.30%
Vidacos Nominees Limited 5,000,000 3.22%
Smith & Williamson Nominees 5,000,000 3.22%
Directors' Interests
The maximum amount of remuneration payable to the Directors permitted under the
Articles is #75,000 per annum. The Directors received in aggregate #39,221 for
the period ended 31 December 2006.
The interests of the Directors in the Ordinary share capital of the Fund as at
31 December 2006 are:
Nigel William Wray controls or is beneficially interested in 40.31% of the
partnership capital of PIHL Equity LLP, which controls 17,500,000 shares in the
Fund. Mr Wray and family members hold, through a nominee account, a further
443,667 shares.
Roger Maddock controls 250,000 ordinary shares and by virtue of being a Director
of the Manager is treated as being interests in the 750,000 shares held by the
Manager.
Roger Maddock is both a Director of the Fund and non-executive Chairman of the
Manager.
By Order Of The Board
BNP Paribas Fund Services Jersey Limited
Secretary
30th April 2007
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the financial statements in
accordance with applicable law and International Financial Reporting Standards.
The Directors are required by the Companies (Jersey) Law 1991 to prepare
financial statements for each year which give a true and fair view of the state
of affairs of the Fund and of the profit or loss of the Fund for that period.
In preparing these financial statements the Directors are required to:
. select suitable accounting policies and then apply them consistently;
. make judgements and estimates that are reasonable and prudent;
. prepare the financial statements on a going concern basis unless it is
inappropriate to presume that the Fund will continue in business; and
. state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the financial
statements.
The Directors are responsible for keeping accounting records which are
sufficient to show and explain the Fund's transactions and are such as to
disclose with reasonable accuracy, at any time, the financial position of the
Fund and to enable them to ensure that the financial statements comply with the
Companies (Jersey) Law 1991. They are also responsible for safeguarding the
assets of the Fund and hence for taking reasonable steps for the prevention and
detection of fraud, errors and non-compliance with applicable law and
regulations.
In so far as the directors are aware:
. there is no relevant audit information of which the company's auditors
are unaware; and
. the directors have taken all steps that they ought to have taken to make
themselves aware of any relevant audit information and to establish that the
auditors are aware of that information.
The directors are responsible for the maintenance and integrity of the corporate
and financial information included on the company's website. Legislation in
Jersey governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
REPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF THE GREENHOUSE FUND LIMITED
We have audited the group and parent company financial statements (the
''financial statements'') of The Greenhouse Fund Limited for the period ended 31
December 2006 which comprise the group income statement, the group and parent
company balance sheets, the group and parent company statements of changes in
equity, the group and parent company statements of cash flows and notes 1 to 19.
These financial statements have been prepared under the accounting policies set
out therein.
This report is made solely to the company's members, as a body, in accordance
with the Companies (Jersey) Law 1991. Our audit work has been undertaken so that
we might state to the company's members those matters we are required to state
to them in an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company and the company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors' responsibilities for preparing the Annual Report and the
financial statements in accordance with applicable law and International
Financial Reporting Standards (IFRSs) are set out in the Statement of Directors'
Responsibilities.
Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and International Standards on
Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true
and fair view and whether the financial statements have been properly prepared
in accordance with the Companies (Jersey) Law 1991. We also report to you
whether in our opinion the information given in the Directors' Report is
consistent with the financial statements.
In addition we report to you if, in our opinion, the company has not kept proper
accounting records, if we have not received all the information and explanations
we require for our audit, or if information specified by law regarding
directors' remuneration and other transactions is not disclosed.
We read other information contained in the Annual Report and consider whether it
is consistent with the audited financial statements. The other information
comprises only the Directors' Report, the Chairman's Statement and the Statement
of Directors' Responsibilities. We consider the implications for our report if
we become aware of any apparent misstatements or material inconsistencies with
the financial statements. Our responsibilities do not extend to any other
information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (
UK and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of the
significant estimates and judgments made by the directors in the preparation of
the financial statements, and of whether the accounting policies are appropriate
to the group's and company's circumstances, consistently applied and adequately
disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Opinion
In our opinion:
* the group financial statements give a true and fair view, in accordance
with IFRSs, of the state of the group's affairs as at 31 December 2006 and
of its loss for the period then ended
* the parent company financial statements give a true and fair view,
in accordance with IFRSs, of the state of the parent company's affairs
as at 31 December 2006;
* the financial statements have been properly prepared in
accordance with the Companies (Jersey) Law 1991; and
* the information given in the Directors' Report is consistent
with the financial statements.
In our opinion the group financial statements give a true and fair view, in
accordance with IFRSs, of the state of the group's affairs as at 31 December
2006 and of its loss for the period then ended.
GRANT THORNTON UK LLP
REGISTERED AUDITOR
CHARTERED ACCOUNTANTS
London
30th April 2007
THE GREENHOUSE FUND LIMITED
Income Statement
For the Period
13 December
2005
to 31 December
2006
Notes #
Income
Bank interest 14,110
Deposit interest 372,948
---------------
Total Income 387,058
---------------
Operating expenses
Management fees 2 (190,093)
Other operating
expenses 3 (501,780)
---------------
Total operating
expenses (691,873)
---------------
---------------
Net loss for the
period (304,815)
---------------
Basic and diluted
loss per share
(pence) 5 (0.22)
All items in the above statement derive from continuing operations.
All income is attributable to the equity holders of the Greenhouse Fund Ltd. There are no
minority interests.
THE GREENHOUSE FUND LIMITED
Balance Sheet
As at 31 December 2006
Group Company
2006 2006
Notes
# #
Non-Current Assets
Intangible assets 6 4,942,801 -
Investments in subsidiaries 8 - 5,069,541
Investments held at fair value
through profit or loss 6 718,874 718,874
-------- --------
5,661,675 5,788,415
Current assets
Other receivables 10 38,181 38,181
Cash and cash equivalents 9 8,169,101 8,169,101
-------- --------
8,207,282 8,207,282
-------- --------
Total assets 13,868,957 13,995,697
Current liabilities
Other payables 11 (56,795) (56,797)
--------- ---------
--------- ---------
Net assets 13,812,162 13,938,900
--------- ---------
Equity
Share capital 12 14,116,977 14,116,977
Retained earnings 13 (304,815) (178,077)
--------- ---------
Total Equity 13,812,162 13,938,900
--------- ---------
Net asset value per Ordinary
share (pence) 14 8.90 8.98
--------- ---------
The financial statements were approved by the board of Directors and signed on 30th April 2007
THE GREENHOUSE FUND LIMITED
Statement of Changes in Equity
For the period 13 December 2005 to 31 December 2006
Group
Retained
earnings Total
# #
Net operating loss for the period (304,815) (304,815)
--------------------- ---- --------- --------
At 31 December 2006 (304,815) (304,815)
--------------------- ---- --------- --------
Company
Retained
earnings Total
# #
Net operating loss for the period (178,077) (178,077)
--------------------- ---- --------- --------
At 31 December 2006 (178,077) (178,077)
--------------------- ---- --------- --------
THE GREENHOUSE FUND LIMITED
Statement of Cash Flows
For the period 13 December 2005 to 31 December 2006
Group Company
Notes 2006 2006
# #
Cash flow from operating activities
Net loss for period (304,815) (178,077)
Amortisation 126,738 -
Increase in other receivables (38,181) (38,181)
Increase in other payables - 56,795
-------- --------
Net cash outflow from operating
activities (216,258) (159,463)
Cash flow from investing activities
Purchase of unlisted investments (718,873) (718,873)
Purchase of intangible investments (569,540) (569,540)
-------- --- --------
Net cash outflow from investing
activities (1,288,413) (1,288,413)
Cash flow from financing activities
Issue of Ordinary shares 10,072,250 10,072,250
Sales commission and formation costs
paid (455,273) (455,273)
--------- ---------
Net cash inflow from financing
activities 9,616,977 9,616,977
--------- ---------
Net increase in cash and cash
equivalents 8,112,306 8,169,101
Cash and cash equivalents at start of the period - -
--------- ---------
Cash and cash equivalents at 31
December 2006 9 8,112,306 8,169,101
--------- ---------
Notes to the financial statements
1 Summary of Significant Accounting Policies
These financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) adopted by
the International Accounting Standards Board (IASB), and
interpretations issued by the International Financial Reporting
Interpretations Committee of the IASB (IFRIC).
(a) Basis of preparation
The financial statements have been prepared on a historical cost
basis, except for the measurement at fair value of investments
and derivative instruments.
Adoption of new and revised standards
In the current year the Group has adopted all of the new and
revised Standards and Interpretations issued by the
International Accounting Standards Board (the IASB) and the
International Financial Reporting Interpretations Committee (the
IFRIC) of the IASB that are relevant to its operations and
effective for annual reporting beginning on 1 January 2006. The
adoption of these new and revised Standards and Interpretations
has had no material impact on the accounting policies of the
Group and the methods of computation in the Group's financial
statements.
At the date of authorisation of these financial statements, the
following Standards and Interpretations were in issue but not
yet effective:
- IAS 1 Presentation of Financial Statements: Capital
Disclosures
- IFRS 7 Financial Instruments Disclosure
- IFRS 8 Operating Segments
- IFRIC 7 Applying the Restatement Approach under IAS 29,
Financial Reporting in Hyperinflationary Economies
- IFRIC 8 Scope of IFRS 2
- IFRIC 9 Reassessment of Embedded Derivates
- IFRIC 10 Interim Financial Reporting and Impairment
- IFRIC 11 IFRS 2: Group and Treasury Share Transactions
- IFRIC 12 Service Concession Arrangements
The Directors anticipate that the adoption of these Standards
and Interpretations in future periods will have no material
financial impact on the financial statements of the Group.
(b) Basis of consolidation
The financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its
subsidiaries) made up to 31 December. Control exists when the
Company has the power, directly or indirectly, to govern the
financial and operating policies of an entity so as to obtain
benefits from its activities. The financial statements of
subsidiaries are included in the consolidated financial
statements from the date that control commences up to the date
that control ceases.
(c) Finance income and expense
Interest on short term deposits, expenses and interest payable
are treated on an accruals basis.
(d) Investing activities
Intangible assets
Intangible assets are stated at cost less any provisions for
amortisation and impairments. They are amortised over their
useful life, estimated to be 20 years, using the straight line
method. The amortisation charge is recognised within other
operating expenses in the income statement.
Impairment of intangible fixed assets
At each balance sheet date, the Group reviews the carrying
amount of its intangible assets to determine whether there is
any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent of the
impairment loss (if any). Where it is not possible to estimate
the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately
in profit or loss, unless the relevant asset is carried at a
revalued amount, in which case the impairment loss is treated as
a revaluation decrease.
Where an impairment loss subsequent reverses, the carrying
amount of the asset (or cash-generating unit) is increased to
the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been
recognised for the asset (cash-generating unit) in prior years.
A reversal of an impairment loss is recognised immediately in
profit or loss, unless the relevant asset is carried at a
revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
Investments held at fair value through profit or loss
For financial assets acquired, the cost is the fair value of the
consideration. Subsequent to initial recognition, held at fair
value assets are measured at fair value.
Unlisted investments are valued by the directors using the
International Private Equity and Venture Capital Valuation
Guidelines as recommended by the British Venture Capital
Association, with the valuation performed 6 monthly at each
reporting date.
Assets are derecognised at the trade date of the disposal, with
any gains or losses being taken to the income statement.
In addition certain expenses associated with the acquisition of
an investment have been capitalised.
(e) Movements in Fair Value
Changes in the fair value of all held at fair value assets are
taken to the income statement. On disposal, realised gains and
losses are also recognised in the income statement.
(f) Cash and cash equivalents
Cash and cash equivalents comprise current deposits with banks.
(g) Expenses
All expenses are recognised in the income statement on an
accruals basis.
Transactions costs incurred on the disposal of investments are
deducted from the proceeds on sale.
(h) Taxation
The Fund is an Exempt Company for Jersey taxation purposes. The
Fund pays an exempt company fee, for each company in the group,
which is currently #600 per annum.
(i) Foreign currency
The results and financial position of the Fund are expressed in
pounds sterling, which is the functional currency of the
Company.
Transactions in currencies other than sterling are recorded at
the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary items and non
monetary assets and liabilities that are fair valued and that
are denominated in foreign currencies are retranslated at the
rates prevailing on the balance sheet date. Gains and losses
arising on retranslation are included in net profit or loss for
the period where investments are classified as fair value.
(j) Share capital
Ordinary and Founder shares are compound instruments. The equity
element exists with the shares taking the legal form of an
equity instrument with discretionary dividends payable to
shareholders. However, the entity is a Limited Life Company with
an obligation to wind-up on the twelfth anniversary of the
Company's admission to AIM, meeting the definition of a
liability under IAS 32. The stated intention of the Fund is to
make distributions to Shareholders in advance of the wind-up
date, which the directors forecast will leave a minimal
liability enforceable on the company by the shareholders.
Accordingly, the fair value of the debt element of the compound
instrument on issue is considered to be immaterial, therefore
the consideration received on issue of the Ordinary and Founder
shares in issue are considered to be equity instruments under
IFRS and have been classified as equity.
(k) Key assumptions and estimates
The Group makes estimates and assumptions concerning the future.
The Board has considered the critical accounting estimates and
assumptions used in the financial statements and concluded that
the main area of significant risk which may cause material
adjustment to the carrying value of assets and liabilities
within the next financial year is in respect of the assumptions
used to value intangible assets, unlisted investments and the
split between share issue costs and listing expenses.
The Board has initially recorded the intangible assets at
purchase cost and they are then amortised over their estimated
useful life. The amortisation period is the Directors' best
estimate of the useful life of the licences, but this is
difficult to predict with any certainty for new technologies.
The carrying value of the intangible assets was #4,942,801 at
the year end.
Unlisted investments are recorded at their fair value upon
initial recognition and these are reviewed at each reporting
date, using generally accepted valuation methodologies, as noted
in the above policy. The initial fair value was equal to the
purchase cost and there was no change in the fair value at the
year end of #718,874.
Professional fees incurred as part of the IPO have been split
between costs associated with the Listing and costs associated
with the issue of shares. Fees relating to both activities have
been apportioned based on the Directors' estimate of the work
undertaken, with the majority of the fees considered to relate
to the issue of shares. The fees relating to the Listing were
#66,990 and the share issue expense of #455,273 has been off-set
against share capital.
(l) Segmental reporting
The Group primarily operates in the UK, however it has one
holding in an Australian entity, being the unlisted investment
of #718,874. No revenue or operating expenses were incurred
outside of the UK.
2 Management fee
2006
#
Management fee 190,093
========
The management fee paid to Development Capital Management (
Jersey) Limited is 2% per annum of the amount subscribed plus
any gains retained by the Fund for reinvestment.
The management agreement between the Fund and the Manager is
terminable by either party on twelve month's notice, subject to
an initial term of 36 months from admission.
3 Other operating expenses
#
Legal and professional fees 138,154
Amortisation charge 126,738
Admission costs 66,990
Other 58,149
Directors' remuneration 39,221
Marketing and public relations 31,583
Custodian fees and bank charges 25,945
Auditor's remuneration for audit services 15,000
--------
501,780
4 Loss attributable to the parent company
The loss attributable to the parent company, Greenhouse Fund
Ltd, was #178,077. As permitted by Companies (Jersey) Law 1991,
no separate profit and loss account is presented in respect of
the parent company.
5 Earnings per share
The earnings per Ordinary share is based on the net loss for the
period of #304,815 and on 137,341,906 weighted average Ordinary
shares in issue during the period.
The diluted return per Ordinary share is based on the net loss
for the period and 137,341,906 shares.
6 Investing activities
Group
Intangible Unlisted 2006
assets investments Total
# # #
Opening book cost - - -
Purchases at cost 5,069,539 718,874 5,788,413
Amortisation charge (126,738) - (126,738)
--------- ---------- --------
Closing net book amount 4,942,801 718,874 5,661,675
========= ========== ========
There has been no impairment in intangible assets in the period.
The useful economic life of the intangible asset is 20 years.
The intangible assets relate to the acquisition of intellectual
property by Greenhouse IP Development Ltd and the cost has been
apportioned equally to each licence acquired. The total
consideration for intangible assets was #569,539 cash and the
issue of 30,000,000 15p new shares in the Company to Virotec
Investments Pty. Limited.
Company
Intangible Unlisted 2006
assets investments Total
# # #
Opening book cost - - -
Purchases at cost - 718,874 718,874
--------- ---------- --------
- 718,874 718,874
========= ========== ========
The unlisted investments were designated as financial assets at
fair value through profit and loss upon initial recognition, in
accordance with the group's accounting policy.
7 Transactions costs
Group Company
2006 2006
# #
Sales - -
Purchases - -
-------- --------
- -
======== ========
8 Investment in subsidiary undertakings
Shares Loans Total
# # #
Greenhouse Organic Solutions 1 - 1
Ltd
Greenhouse IP Development Ltd 1 5,069,539 5,069,540
-------- --------- --------
2 5,069,539 5,069,541
======== ========= ========
The Fund holds 1 Ordinary share of #1 in Greenhouse Organic
Solutions Ltd, which is incorporated in Jersey. The principal
activity of this company is to develop a regional treatment
centre for high strength organic waste. The Fund also holds 1
Ordinary share of #1 in Greenhouse IP Development Ltd which is
incorporated in Jersey. This represents the entire issued share
capital of this company. The principal activity of this company
is to develop Bauxsol applications to commercialisation. The
authorised share capital of each is 10,000 shares of a nominal
value of #1.
9 Cash and cash equivalents
Group Company
2006 2006
# #
Cash at bank and in hand 169,101 169,101
Short-term bank deposits 8,000,000 8,000,000
-------- --------
8,169,101 8,169,101
======== ========
10 Debtors - Group and company
Group Company
2006 2006
# #
Bank and deposit interest receivable 34,244 34,244
Prepayments 3,937 3,937
-------- --------
38,181 38,181
======== ========
11 Creditors - amounts falling due within one year
Group Company
2006 2006
# #
Amounts due to subsidiary undertakings - 2
Accruals 56,795 56,795
-------- --------
56,795 56,797
======== ========
12 Share Capital
Authorised:
Founder shares of no par value 10
Ordinary shares of no par value Unlimited
#
Issued and fully paid:
2 Founder shares of no par value -
27,225,000 Ordinary shares issued on 14 December 272,250
2005 at 1p
98,000,000 Ordinary shares issued on 22nd December 9,800,000
2005 at 10p
30,000,000 Ordinary shares issued on 29th June 4,500,000
2006 at 15p ----------
14,572,250
Less Admission costs off-set against share capital (455,273)
----------
14,116,977
==========
Founder shares carry no right to vote at the general meetings of
the Company as there are Participating Ordinary Shares in issue.
Participating Ordinary shares have priority on winding up the
Company.
The 30,000,000 ordinary shares were issued as part of the
consideration for the investment in intangible assets.
13 Retained earnings
Group Company
2006 2006
# #
Balance at 19 December 2005 - -
Bank interest earned 387,058 387,058
Operating expenses (691,873) (565,135)
-------- --------
At 31 December 2006 (304,815 (178,077)
======== ========
14 Net Asset Value per share
The net asset value per ordinary share is based on the net
assets attributable to equity shareholders of #304,815 and on
155,225,000 ordinary shares in issue at the period end.
15 Financial instruments
The Fund's financial instruments comprise money market funds,
cash balances and debtors and creditors that arise directly from
its operations, for example, in respect of sales and purchases
awaiting settlement, and debtors for accrued income.
The main risks the Fund faces from its financial instruments are
(i) market price risk, being the risk that the value of
investment holdings will fluctuate as a result of changes in
market prices caused by factors other than interest rate or
currency movement, (ii) currency risk, (iii) credit risk, (iv)
interest rate risk and (v) liquidity risk.
The Board regularly reviews and agrees policies for managing
each of these risks. The Manager's policies for managing these
risks are summarised below and have been applied throughout the
period. The numerical disclosures exclude short-term debtors and
creditors as their carrying amount is considered to be a
reasonable approximation of their fair value.
Market price risk
Market price risk arises mainly from uncertainty about future
prices of financial instruments used in the Fund's operations.
It represents the potential loss the Fund might suffer through
holding market positions as a consequence of price movements and
movements in exchange rates.
Credit risk
The company places funds with third parties and is therefore
potentially at risk from the failure of any such third party of
which it is a creditor. The Company expects to place any such
funds on a short-term basis only.
Interest rate risk
The interest rate risk profile of financial assets at the
balance sheet date was as follows:
Fixed interest Floating
interest
# #
Sterling cash deposit 8,000,000 169,101
-------- --------
8,000,000 169,101
======== ========
Currency exposure
An analysis of the Group's currency exposure is detailed below:
Net Monetary Investments at
assets 31 December
2006
# #
Australian dollar 6 718,874
----------- -----------
6 718,874
=========== ===========
16 Post balance sheet events
On 27 March 2007, the Fund invested #1.2 million cash in
Molectra Technologies Pty Ltd ('MTP') via a convertible note.
Upon conversion the Fund would receive a 39% shareholding in
MTP, or alternatively to redeem for 39% of the assets of MTP
which would translate into a 26% stake in Molectra Australia Pty
Ltd.
17 Related party transactions
Virotec Investments Pty Limited hold 30,000,000 shares and Brian
Sheeran is both deputy Chairman of the Fund and Executive
Chairman of Virotec International plc.
During the period the Parent Company provided funds of
#5,069,539 to Greenhouse IP Development Limited for the purchase
of the Bauxsol Licences.
18 Directors interests & remuneration
The total compensation paid to Directors over the period was
#39,221.
Nigel William Wray controls or is beneficially interested in
40.31% of the partnership capital of PIHL Equity LLP, which owns
17,500,000 shares in the Fund. Mr Wray and family members hold,
through a nominee account, a further 443,667 shares.
Roger Maddock owns 250,000 ordinary shares and by virtue of
being a Director of the Manager is treated as being interested
in the 750,000 shares held by the Manager.
19 Commitments and contingencies
There were no contingencies as at 31 December 2006.
The only commitment relates to ongoing research being provided
by Queens University Belfast. This is part of ongoing testing
being performed in relation to the Virotec licences.
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of the
Company will be held on 13th June 2007 at BNP House, Anley
Street, St. Helier, Jersey, Channel Islands at 10.30am for the
transactions of the following business:
Ordinary Resolutions
1) To receive and adopt the Financial Statements of the
Company for the period ending 31 December 2006 and the
Directors' and Auditors' reports thereon.
2) To re-appoint Messrs Grant Thornton UK LLP as Auditors
of the Company and to authorise the Directors to fix their
remuneration.
3) To re-appoint Brian James Sheeran as Director of the
Company.
Special Resolution
4) That the Company be and is hereby generally and
unconditionally authorised to make market purchases of fully
paid shares in the Company ('Shares') provided that:
(a) the maximum number of Shares hereby authorised to be
purchased shall be 23,268,227.50 being 14.99 per cent of the
total number of Shares in issue as at 31 March 2007.
(b) The minimum price which may be paid for a Share is one
pence;
(c) The maximum price which may be paid for a Share is an
amount equal to 105% of the average of the middle market
quotations of a Share taken from the London Stock Exchange for
the five business days immediately preceding the date of
purchase (or such other amount as may be specified by the London
Stock Exchange from time to time);
(d) The minimum and maximum prices for the Shares, referred to
in sub-paragraphs (b) and (c) of this resolution are in all
cases exclusive of any expenses payable by the Company;
(e) The Company shall fund the payments of the purchases of
the Shares in any manner permitted by the Companies (Jersey) Law
1991, as amended (the 'Law');
(f) The Directors reasonably believe that the Company shall
be able to meet the solvency tests prescribed by the Law;
(g) The authority hereby conferred shall expire at the Annual
General Meeting of the Company to be held in 2008, unless such
authority is varied, revoked or renewed prior to such time by
the Company in general meeting by special resolution; and
(h) The Company may enter into a contract to purchase Shares
under the authority hereby conferred prior to the expiry of such
authority which will or may be completed or executed wholly or
partly after the expiration of such authority.
By order of the board
BNP Paribas Fund Services Jersey Limited, Secretary,
BNP House,
Anley Street,
St. Helier,
Jersey JE2 3QE.
30th April 2007
Notes:
1) A Shareholder entitled to attend and vote at the Meeting
convened by this Notice is entitled to appoint one or more
proxies to attend and (on a poll) to vote instead of him/her. A
proxy need not also be a member of the Company.
2) A form of proxy is enclosed. The Chairman of the Meeting
would be willing to act as your proxy if desired. Please sign
and complete the form and return, to reach the office of the
Registrar not later than 48 hours before the time fixed for the
meeting.
Corporate Information
Director of the Fund (all non-executive)
Nigel Wray (Chairman)
Brian Sheeran (Deputy Chairman)
Roger Maddock
Roger King
Registered Office Legal Adviser (English
Law)
BNP House Norton Rose
Anley Street Kempson House
St. Helier Camomile Street
Jersey JE2 3QE London EC3A 7AN
Manager and Promoter Legal Adviser (Jersey
Law)
Development Capital Management ( Carey Olsen
Jersey) Limited
BNP House 47 Esplanade
Anley Street St Helier
St. Helier Jersey JE10BD
Jersey JE2 3QE
Directors of the Manager Registrar
Roger Maddock Capita IRG (Offshore)
Limited
Anthony Able Victoria Chambers
Kevin Mundy Liberation Square
Marcel van Miert 1/3 The Esplanade
St. Helier
Jersey JE4 0FF
Custodian Nominated Adviser and
Broker
BNP Paribas (Jersey Branch) Evolution Securities
Limited
BNP House 100 Wood Street
Anley Street London EC2V 7AN
St. Helier
Jersey JE2 3QE
Investment Adviser Auditors to the Fund
Greenhouse Capital Limited Grant Thornton UK LLP
Suite 409 Grant Thornton House
St James Court Melton Street
St Dennie Street London NW1 2EP
Port Louis
Mauritius
Administrator and Secretary
BNP Paribas Funds Services Jersey
Limited
BNP House
Anley Street
St. Helier
Jersey JE2 3QE
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR OKKKQDBKBBQN
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