Interim Results
Accsys Technologies PLC
21 November 2007
21st November 2007
AIM: AXS
NYSE Euronext Amsterdam: AXS
INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2007
ACCSYS TECHNOLOGIES PLC ('Accsys' or 'the Company')
Highlights
• Results for the 6 month period show revenue of €3.8 million (2006: €nil)
and a pre tax loss of €5.0 million (2006: loss of €3.5 million), broadly in
line with business plans.
• Current net cash position of €53 million with no existing debt
• Listing on Euronext Amsterdam, with the placing of 5 million new Ordinary
shares raising €18.5 million after expenses.
• Good progress in scaling up the production processes at the group's own
AccoyaTM production facility. Supplies of AccoyaTM now being distributed
across UK, Netherlands and Germany.
• Plans being drawn up to double AccoyaTM production capacity at our Arnhem
facility
• Development work proceeding on acetylated fibre board opportunities
Post period Highlights
• Strong progress with other potential Licensees, including an option with
Al Rajhi for 100,000 cubic metres in the GCC countries
• Appointment of Finlay Morrison as CEO
• Licensing Agency Agreement with Skanfore now fulfilled enabling €8 million
agency revenue previously received to be recognised through profit and loss
during the second half
• First License Agreement signed with Diamond Wood China for 500,000 cubic
metres nameplate annual capacity with €9.5 million revenue arising during
the second half
Willy Paterson-Brown commented: 'Accsys has seen excellent progress in the year
to date, with recent licensing activity significantly increasing revenue and the
worlds first Accoya production facility being commissioned. We are delighted to
welcome Finlay Morrison as CEO, and the Board looks forward to a strong second
half.'
For further information, please contact:
Accsys Technologies PLC William Paterson-Brown, +44 (0) 20 8114 2510
Executive Chairman
www.accsysplc.com
Collins Stewart Europe Limited Tim Mickley / Michael O'Brien +44 (0) 20 7523 8000
Parkgreen Communications Justine Howarth / Bex Sanders-Hewett +44 (0) 20 7851 7480
Citigate First Financial B.V. Wouter van de Putte / Laurens Goverse + 31 (0) 20 575 4080
CHAIRMAN'S STATEMENT
Introduction
The period covered by this report has seen excellent progress for your Company.
The world's first AccoyaTM production facility has been commissioned and we have
seen very strong interest amongst many potential licensees to utilise the
group's proprietary production technology. Recent Licensing activity has
boosted the Company significantly, resulting in considerable revenue which means
that the Directors are confident that results for the year will be in line with
their expectations.
New Chief Executive Officer
In October, we welcomed Finlay Morrison as CEO which has added considerable
operational experience to our ever increasing team. Finlay's impressive career
includes senior roles with Celanese Corporation and Hoechst AG.
Arnhem technology demonstration facility
Having started up in March, our plant was formally opened on 31st May, with
production volumes rising as production processes are adjusted to reflect the
new operating environment encountered following the 80 fold scale up from the
large pilot reactor. Further refinements are currently being worked through as
the plant is steadily worked up to design capability. To facilitate licensing
we are now engaging globally recognised independent consultants for the
certification of resource utilisation requirements for different timber
dimensions. We are now actively planning expansion of the Arnhem plant to
double its production capacity.
Licensing
The primary goal of the business is to maximise returns through licensing the
Group's production technology. On 20th November we announced the signing of our
first full License Agreement, with Diamond Wood China Limited, for exclusive
rights to the Chinese market for 500,000 cubic metres of annual nameplate
capacity. Not only does this result in additional revenue to the Company but it
also allows us to recognise the balance of the License Agency Fee carried as
deferred income in the balance sheet at 30th September 2007.
In October we announced a License Option Agreement with Al Rajhi Holdings for
100,000 cubic metres of capacity in five of the GCC countries.
We have considerably strengthened our business development resources and now
have licensing representatives deployed across four continents. We are actively
engaged in discussions with a number of prospective licensees and expect to
announce additional technology licensing agreements before the end of the
financial year together with further license option agreements.
Trading Agreement
In May we concluded an agreement with Celanese Corporation for exclusive supply
of acetyls which included an investment of €22.1 million in the Company. Given
the progress we have made in our business development, the Company has since
agreed to a new arrangement with Celanese as it became clear that our trading/
supply relationship, in conjunction with our licensees, needed to be negotiated
on a case by case basis which had been a restriction for both companies in the
original agreement. We have built a solid relationship with Celanese and will
be able to enjoy the benefits of this going forward. Under the new agreement,
Celanese will relinquish its option to acquire further Ordinary shares in the
Company to take its equity stake up to 29.9% and we have agreed to the orderly
placement of Celanese's 5.23% existing share holding in the Company. Having
reached a new business relationship with Celanese we were immediately in a
position to proceed with our Licensing Agreement in China, mentioned above.
Results and Liquidity
Results for the six month period show revenue of €3.8 million (€2006: €nil) and
a pre tax loss of €5.0 million (2006: loss of €3.5 million). The increased
administration expenses of €6.1 million in the period (€9.9 million for the year
to March 2007), is largely attributable to expenses incurred in the Euronext
listing which amounted to €1.2 million. The Technology License signed yesterday
contributes significant revenues to the second half - €8 million from
recognition of the deferred income under the License Agency agreement with
Skanfore and €9.5 million from the agreement signed with Diamond Wood China. At
30th September, the group held cash balances of €59 million (which included €4
million of income tax deducted from gains arising upon exercise of share options
by employees subsequently paid to relevant tax authorities).
Dual Listing
On 18th September the Company was admitted to trading on Euronext Amsterdam by
NYSE Euronext. We were the first AIM listed company to become dual listed on
Euronext, raising a net €18.5 million with the placing of 5 million new Ordinary
shares. Fortis acted as Lead Manager and Sole Bookrunner for the successful
listing which allowed the Company to welcome a number of new, blue chip,
institutional investors from all over Europe.
Dividends
The directors' intention is to defer payment of dividends until the Company has
established strong cash flow and reported satisfactory profitability.
We have clearly had a very successful start to the second half of the year and
once again, I would like to thank you for your continued support.
Willy Paterson-Brown
Executive Chairman
21 November 2007
INTERIM FINANCIAL STATEMENTS TO 30 SEPTEMBER 2007
Consolidated Income Statement
Unaudited Unaudited Unaudited
6 months ended 6 months ended Year ended
30 Sept 2007 30 Sept 2006 31 March 2007
Notes €'000 €'000 €'000
Revenue 3,841 - 50
Cost of Sales (2,880) - -
Gross Margin 961 - 50
Administration expenses
General administrative expenses (6,088) (3,281) (9,853)
Impairment of tangible fixed assets (6,569)
Impairment of intangible fixed assets (5,850)
(6,088) (3,281) (22,272)
Loss from operations (5,127) (3,281) (22,222)
Finance income 158 (242) 37
Loss before tax (4,969) (3,523) (22,185)
Tax expense - - -
Loss after taxation attributable to (4,969) (3,523) (22,185)
equity holders
Loss per share
Basic and diluted 3 €(0.03) €(0.03) €(0.16)
All amounts relate to continuing activities
Consolidated Balance Sheet
Unaudited Unaudited Unaudited
6 months ended 6 months ended Year ended
30 Sept 2007 30 Sept 2006 31 March 2007
Notes €'000 €'000 €'000
NET ASSETS
Non-current assets
Intangible assets 8,248 14,446 8,380
Property, plant and equipment 22,146 18,889 21,611
30,394 33,335 29,991
Current assets
Inventories 2,089 237 910
Trade and other receivables 1,242 3,322 1,085
Other financial assets - 7,154 -
Cash and cash equivalents 58,966 5,518 10,825
62,297 16,231 12,820
Current liabilities
Deferred income (8,000) - -
Trade and other payables (7,133) (1,533) (3,102)
Net current assets 47,164 14,698 9,718
Total net assets 77,558 48,033 39,709
EQUITY
Equity and reserves
Share capital - Ordinary shares 1,552 1,325 1,406
Share capital - Deferred shares 148 148 148
Share premium account 78,020 25,504 35,689
Other reserves 106,707 106,707 106,707
Retained earnings (108,869) (85,651) (104,241)
Equity attributable to equity 77,558 48,033 39,709
holders of the parent
Consolidated statement of changes in Equity
Share Share Other Retained Total
Capital Premium Reserves Earnings
€000 €000 €000 €000 €000
Balance at 1 April 2006 1,473 25,504 106,707 (82,228) 51,456
Loss and total recognised income and
expense for the period - - - (3,523) (3,523)
Share based payments 100 100
Balance at 30 September 2006 1,473 25,504 106,707 (85,651) 48,033
Loss and total recognised income and
expense for the period - - - (18,662) (18,662)
Share based payments 72 72
Shares issued in the period 66 66
Share options exercised 15 15
Premium on shares issued 10,437 10,437
Share issue costs (252) (252)
Balance at 31 March 2007 1,554 35,689 106,707 (104,241) 39,709
Loss and total recognised income and
expense for the period - - - (4,969) (4,969)
Share based payments 342 342
Shares issued in the period 131 131
Share options exercised 15 15
Premium on shares issued 43,095 43,095
Share issue costs (765) (765)
Balance at 30 September 2007 1,700 78,019 106,707 (108,868) 77,558
Consolidated Cash Flow Statement
Unaudited Unaudited Unaudited
6 months 6 months Year ended
ended ended
30 Sept 2007 30 Sept 31 March
2006 2007
Notes €'000 €'000 €'000
Cash flows from operating activities
Loss for the period (4,969) (3,523) (22,185)
Adjustments for:
Amortisation of intangible assets 132 - 216
Depreciation of property, plant & equipment 714 162 733
Impairment of property, plant & equipment - - 6,569
Impairment of intangible assets - - 5,850
Investment revenue (158) 242 (37)
Equity-settled share-based payment expenses 342 100 172
Cash flows from operating activities before (3,939) (3,019) (8,682)
changes in working capital
(Increase)/decrease in trade and other (157) 158 20
receivables
Increase in deferred income 8,000 - -
(Increase) in inventories (1,179) (237) (910)
Increase in trade and other payables 4,031 (452) 1,118
Cash (absorbed by)/generated from operating 6,756 (3,550) (8,454)
activities
Cash flows from investing activities
Interest received 158 117 284
Disposal of financial assets at fair value - 8,000 15,266
through profit or loss
(Increase)/decrease in other loans and - 4,932 7,306
receivables
Purchase of intangible assets - (200) (200)
Purchase of property, plant and equipment (1,249) (8,358) (18,220)
Net cash from investing activities (1,091) 4,491 4,436
Cash flows from financing activities
Proceeds from issue of share capital 43,241 - 10,518
Share issue costs (765) - (252)
Net cash from financing activities 42,476 - 10,266
Net increase in cash and cash equivalents 48,141 941 6,248
Net increase in cash and cash equivalents 48,141 941 6,248
Opening cash and cash equivalents 10,825 4,577 4,577
Closing cash and cash equivalents 58,966 5,518 10,825
Notes forming part of the interim financial statements for the period ended 30
September 2007
1. Accounting policies
Basis of preparation
The interim report consolidates the financial statements of the Company and of
its subsidiaries drawn up to 30 September 2007 prepared in accordance with IFRSs
and IFRIC interpretations as adopted by the EU. This is the first time the Group
has prepared financial information in accordance with IFRSs, having previously
prepared its financial statements in accordance with UK GAAP. Details of the
transition are given in note 2.
The accounting policies set out below have, unless otherwise stated, been
applied consistently in these financial statements.
Basis of consolidation
Where the Company has the power, either directly or indirectly, to govern the
financial and operating policies of another entity or business so as to obtain
benefits from its activities, it is classified as a subsidiary. The consolidated
financial statements present the results of the Group as if they formed a single
entity. Inter-company transactions and balances between Group companies are
therefore eliminated in full.
The consolidated financial statements incorporate the results of business
combinations using the purchase method. In the consolidated balance sheet, the
acquiree's identifiable assets, liabilities, and contingent liabilities are
initially recognised at their fair values at the acquisition date. The results
of acquired operations are included in the consolidated income statement from
the date on which control is obtained.
Goodwill
Goodwill arising on the acquisition of a subsidiary undertaking is the
difference between the fair value of the consideration paid and the fair value
of the identifiable assets and liabilities acquired. It is capitalised, and is
subject to annual impairment reviews by the directors. Any impairment arising is
charged to the income statement.
Intangible assets
Intellectual property rights, including patents, which cover a portfolio of
novel chemical processes and products, are shown in the financial statements at
cost less any amounts by which the carrying value is assessed during an annual
review to have been impaired. No amortisation charge is made until plants
licensed to exploit the intellectual property are available for use, thereafter
the carrying value is amortised in equal amounts over the useful economic life
of the intellectual property. At present, the useful economic life of the
intellectual property is up to a maximum of 20 years.
Notes forming part of the interim financial statements for the period ended 30
September 2007, continued
Property, plant and equipment
Property, plant and equipment is stated at cost less depreciation and any
impairment charged. Depreciation is provided at rates calculated to write off
the cost less estimated
residual value of each asset, except freehold land, over its expected useful
life on a straight line basis, as follows:
Plant and machinery These assets comprise pilot plants and production
facilities. The pilot plants are designed to
validate technology designs and generally have short
lives, with depreciation rates between 33% and
50%. Production facilities are depreciated from the
date they become available for use at rates
applicable to the asset lives expected for each class
of asset, with rates between 5% and 20%.
Office equipment Between 20% and 50%.
Motor vehicles 20%.
Impairment
The carrying amount of the non-current assets of the Group is compared to the
recoverable amount of the assets whenever events or changes in circumstances
indicate that the net book value may not be recoverable. The recoverable amount
is the higher of value in use and the fair value less cost to sell. In assessing
the value in use, the expected future cash flows from the assets are determined
by applying a discount rate to the anticipated pre-tax future cash flows. An
impairment is recognised in the income statement to the extent that the carrying
amount exceeds the assets' recoverable amount. The revised carrying amounts are
amortised in line with Group accounting policies. A previously recognised
impairment loss, other than on goodwill, is reversed if the recoverable amount
increases as a result of a reversal of the conditions that originally resulted
in the impairment. This reversal is recognised in the income statement and is
limited to the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised in prior years. Assets are
grouped at the lowest levels for which there are separately identifiable cash
flows (cash generating units) for purposes of assessing impairment. The
estimates of future discounted cash flows are subject to risks and
uncertainties. It is therefore reasonably possible that changes could occur
which may affect the recoverability of assets.
Financial assets
Other financial assets
Other financial assets in the scope of IAS 39 are classified as financial assets
at fair value through profit or loss and loans and receivables, depending on the
purpose for which the asset was acquired. When financial assets are recognised
initially, they are measured at fair value plus, in the case of investments not
at fair value through profit or loss, directly attributable transaction costs.
Financial assets at fair value through profit or loss are carried in the balance
sheet at fair value with changes in fair value recognised in the consolidate
income statement.
Notes forming part of the interim financial statements for the period ended 30
September 2007, continued
Loans and receivables, which comprise non-derivative financial assets with fixed
and determinable payments that are not quoted on an active market are stated at
cost less any provision for impairment.
All regular way purchases and sales of financial assets are recognised on the
trade date, i.e. the date on which the Group commits to purchase the asset.
Regular way purchases or sales are purchases or sales of financial assets that
require delivery of assets within the period generally established by regulation
or convention in the marketplace.
Leases
The determination of whether an arrangement is, or contains, a lease is based on
the substance of the arrangement, and requires an assessment of whether the
fulfilment of the arrangement is dependent on the use of a specific asset or
assets and the arrangement conveys a right to use the asset. Leases are
classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other
leases are classified as operating leases. At present the group has no finance
leases.
Operating lease payments are recognised as an expense in the income statement on
a straight-line basis over the lease term.
Inventories
Raw materials, which consist of unprocessed timber, chemicals and various
materials used in manufacturing operations are valued at the lower of cost and
net realisable value. The basis on which cost is derived is a first-in,
first-out basis.
Finished goods, comprising processed timber, are stated at the lower of weighted
average cost of production or net realisable value. Costs include direct
materials, direct labour costs and production overheads (including the
depreciation/depletion of relevant property and plant and equipment). Net
realisable value represents the estimated selling price less all expected costs
to completion and costs to be incurred in selling and distribution.
Trade and other receivables
These assets are non-derivative financial assets with fixed or determinable
payments that are not quoted on an active market. They arise principally from
the provision of goods and services to customers.
Trade receivables are recognised and carried at original invoice amount less an
allowance for any uncollectible amounts. Provision is made when there is
objective evidence that the group will not be able to collect debts. Bad debts
are written off when identified.
Notes forming part of the interim financial statements for the period ended 30
September 2007, continued
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in
hand and short-term deposits with an original maturity of three months or less.
For the purpose of the consolidated cash flow statement, cash and cash
equivalents consist of cash and cash equivalents as defined above, net of
outstanding bank overdrafts.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic
benefit will flow to the Group and that the revenue can be reliably measured.
The following specific recognition criteria must also be met before revenue is
recognised:
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the
goods have passed to the buyer.
Royalty and licence fee income
Royalty and licence fee income is recognised over the period of the relevant
agreements according to the specific terms of each agreement or the quantities
and/or values of the licensed product sold. Initial 'up front' income received,
which is non-refundable, is recognised on a straight line basis over the period
of the agreement or pro-rata to the volume or value of sales according to the
specific terms of the agreement. The amount of income not recognised is included
in the financial statements as deferred income and shown as a liability.
The accounting policy for the recognition of technology license fees is based
upon an assessment of the work required before the licence is signed and
subsequently during the construction and commissioning of the licensees' plant,
with an appropriate proportion of the fee recognised upon signing and the
balance recognised as the project progresses to completion.
Similarly, when an 'up front' non refundable agency premium is received from an
agent, this is recognised upon signing of a technology licence negotiated by the
agent, pro rata to the capacity signed and the capacity under the agency
agreement. Where a negotiated licensee signs a licence option agreement in
advance of the technology licence, an assessment of the work completed is
undertaken to determine the proportion of the agency premium that may be
recognised in respect of such licence options. Currently, the proportion of the
agency premium assessed as recognisable upon signing a licence option is 20 per
cent.
Notes forming part of the interim financial statements for the period ended 30
September 2007, continued
Interest income
Revenue recognised as interest accrues using the effective interest method, i.e.
the rate that exactly discounts estimated future cash receipts through the
expected life of the financial instrument to the net carrying amount of the
financial asset.
Share based payments
The Company awards share options to certain directors and employees to acquire
shares of the Company. The fair value of options granted is recognised as an
employee expense with a corresponding increase in equity. The fair value is
measured at grant date and is charged to the income statement over the vesting
period during which the employees become unconditionally entitled to the
options.
The fair value of the options granted is measured using a modified Black Scholes
model, taking into account the terms and conditions upon which the options were
granted. The amount recognised as an expense is adjusted to reflect the actual
number of share options that vest only where vesting is dependent upon the
satisfaction of service and non-market vesting conditions.
Non-market vesting conditions are taken into account by adjusting the number of
equity instruments expected to vest at each balance sheet date so that,
ultimately, the cumulative amount recognised over the vesting period is based on
the number of options which eventually vest. Market vesting conditions are
factored into the fair value of the options granted. The cumulative expense is
not adjusted for failure to achieve a market vesting condition.
Pensions
Defined contribution plans
The Group contributes to certain defined contribution pension and employee
benefit schemes on behalf of its employees. These costs are charged to the
income statement on an accruals basis.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax
is recognised in the income statement except to the extent that it relates to
items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the balance sheet date
together with any adjustment to tax payable in respect of previous years.
Notes forming part of the interim financial statements for the period ended 30
September 2007, continued
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used
for taxation purposes. The following temporary differences are not provided for:
-
• the initial recognition of goodwill,
• the initial recognition of assets or liabilities that affect neither
accounting nor taxable profit other than in a business combination, and
• differences relating to investments in subsidiaries to the extent that
they will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities,
using tax rates enacted or substantively enacted at the balance sheet date.
Recognition of deferred tax assets is restricted to those instances where it is
probable that taxable profit will be available against which the difference can
be utilised.
Foreign currency translation
The consolidated financial statements are presented in Euro, which is also the
functional currency of all group companies. Transactions in foreign currencies
are initially recorded in the functional currency rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies
are retranslated at the functional currency rate of exchange ruling at the
balance sheet date. All differences are taken to the income statement.
Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates as at the dates of the initial
transactions. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was
determined.
Government grants
Government grants are recognised where there is reasonable assurance that the
grant will be received and all attaching conditions will be complied with. When
the grant relates to an expense item, it is recognised as income over the period
necessary to match the grant on a systematic basis to the costs that it is
intended to compensate. Where the grant relates to an asset, the fair value is
credited to a deferred income account and is released to the income statement
over the expected useful life of the relevant asset by equal annual instalments.
Notes forming part of the interim financial statements for the period ended 30
September 2007, continued
2 Transition to International Financial Reporting Standards (IFRS's)
The Group's transition date for the adoption of IFRS is 1 April 2006. This
transition date has been selected in accordance with IFRS 1 'First-time adoption
of International Financial Reporting Standards'. The Group has also adopted IAS
32 'Financial Instruments: Disclosure and Presentation' and IAS 39 'Financial
Instruments: Recognition and Measurement' from 1 April 2006.
The principal difference between reporting under IFRS as compared to UK GAAP as
at 30 September 2007 is not to amortise goodwill but instead test for
impairment.
The application of IFRS has also changed the presentation of the cash flow
statement which now shows cash flows derived from three types of activities -
operating, investing and financing. In addition, under IFRS, the cash flow
statement includes all cash flows in respect of cash and cash equivalents. This
is a broader definition of cash than under UK GAAP.
As a general rule, the Group is required to establish its IFRS accounting
policies for the year ended 31 March 2008 and apply these retrospectively to
determine its opening IFRS balance
sheet at the transition date of 1 April 2006 and the comparative information for
the period ended 30 September 2006 and the year ended 31 March 2006. However,
advantage has been taken of certain exemptions afforded by IFRS 1 'First-time
adoption of International Financial Reporting Standards' as follows:
• Business combinations prior to 1 April 2006 have not been restated.
The Group has applied IFRS 2 'Share-based Payment' retrospectively only to
awards made after 7 November 2002 that had not vested at 1 April 2006.
In preparing the IFRS accounts, the Group has adjusted amounts reported
previously in the financial statements prepared in accordance with UK GAAP. An
explanation of how the transition has affected the Group's financial performance
and position is set out in the following tables:
Notes forming part of the interim financial statements for the period ended 30
September 2007, continued
1 April 2006 30 Sept 2006 31 March 2007
€'000 €'000 €'000
Reconciliation of equity
Total net assets/Shareholders' funds 50,925 47,296 38,766
under UK GAAP
Goodwill amortisation added back 531 737 943
Total equity under IFRS 51,456 48,033 39,709
30 Sept 2006 31 March 2007
€'000 €'000
Reconciliation of loss
Loss for the period under UK GAAP (3,729) (22,597)
Goodwill amortisation added back 206 412
Loss under IFRS (3,523) (22,185)
3. Loss per share
6 months ended 6 months ended Year ended
30 September 2007 30 September 2006 31 March 2007
€'000 €'000 €'000
Weighted average number of
Ordinary shares in issue 147,991,415 132,463,447 135,217,231
Loss for the period/year
€'000
Loss per share 4.969 3,523 22,185
€(0.03) €(0.03) €(0.16)
Since none of the Company's potential Ordinary shares are dilutive, there is no
difference between basic and diluted loss per share.
Notes forming part of the interim financial statements for the period ended 30
September 2007, continued
4 Comparative figures
The comparative figures for the year ended 31 March 2007 and the six months
ended 30 September 2006 have been restated for the adoption of IFRS. The
comparative figures for the year ended 31 March 2007 are not the Company's
statutory accounts for that financial year. Those accounts, which were prepared
under UK GAAP, have been reported on by the Company's auditors and delivered to
the Register of Companies. The report of the auditors was unqualified, did not
include references to any matter to which the auditors drew attention by way of
emphasis without qualifying their report, and did not contain statements under
section 237(2) or (3) of the Companies Act. The financial information in this
document does not constitute statutory financial statements within the meaning
of the Act.
5 Post balance sheet events
On 20th November 2007, the group entered into a Technology License with Diamond
Wood China Limited for annual nameplate capacity of 500,000 cubic metres. This
is described in more detail in the Chairman's Statement.
INDEPENDENT REVIEW REPORT TO ACCSYS TECHNOLOGIES PLC
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2007 which comprises the consolidated income statement, the
consolidated balance sheet, the consolidated statement of changes in equity, the
consolidated cash flow statement and the related notes.
We have read the other information contained in the half-yearly financial report
and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the rules of
both the London Stock Exchange for companies trading securities on the
Alternative Investment Market and Euronext Amsterdam by NYSE Euronext which
require that the half-yearly report be presented and prepared in a form
consistent with that which will be adopted in the company's annual accounts
having regard to the accounting standards applicable to such annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Our report has been prepared in accordance with the terms of our engagement to
assist the company in meeting the requirements of the rules of both the London
Stock Exchange for companies trading securities on the Alternative Investment
Market and Euronext Amsterdam by NYSE Euronext and for no other purpose. No
person is entitled to rely on this report unless such a person is a person
entitled to rely upon this report by virtue of and for the purpose of our terms
of engagement or has been expressly authorised to do so by our prior written
consent. Save as above, we do not accept responsibility for this report to any
other person or for any other purpose and we hereby expressly disclaim any and
all such liability
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information
Performed by the Independent Auditor of the Entity'', issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 September 2007 is not prepared, in all
material respects, in accordance with the rules of both the London Stock
Exchange for companies trading securities on the Alternative Investment Market
and Euronext Amsterdam by NYSE Euronext.
BDO STOY HAYWARD LLP
Chartered Accountants
London, 21 November 2007
www.accsysplc.com www.titanwood.com www.accoya.info
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