Pure Wafer plc
Annual report and accounts
Year ended 30 June 2012
Registered number: 05289130 Corporate statement
Pure Wafer is an industry-leading, provider of silicon 
wafer reclaim services.  Pure Wafer cleans and polishes 
silicon wafers sent for reclaim by the majority of the 
world’s largest semiconductor manufacturers.  Pure 
Wafer operates state-of-the-art foundries in the UK and 
the USA which have the capability to meet the stringent 
quality standards required by its customers.
Pure Wafer is also involved in the design, manufacture 
and installation of photovoltaic systems in the UK.
Pure Wafer is listed on the Alternative Investment Market 
(AIM) of the London Stock Exchange.  Headquartered 
in the UK, it operates on a global basis through an 
international sales force throughout Europe, North 
America and South East Asia. Annual report and accounts 2012  Pure Wafer plc       1
IFC Corporate statement 
01 Highlights
02 Pure Wafer at a glance
04 Chairman’s statement
06 Chief Executive’s review
08 Financial review
10 Board of Directors, senior management and 
advisers
12 Directors’ report 
17 Directors’ remuneration report
20 Consolidated statement of Directors’ 
responsibilities
21 Consolidated independent auditors’ report to the 
members of Pure Wafer plc
22 Consolidated income statement
23 Consolidated statement of comprehensive 
income
24 Consolidated statement of changes in equity
25 Consolidated balance sheet 
26 Consolidated statement of cash flows
27 Notes to the consolidated financial statements
52 Company independent auditors’ report to the 
members of Pure Wafer plc
53 Company balance sheet
54 Notes to the Company financial statements
60 Notice of Annual General Meeting
Financial results

 continued growth
 compared to prior year
 the 2nd half over 1st half
 compared to prior year 
 restructured to ease increased 
 with increased volumes
 rescheduled over existing term 
including an initial six month 
capital moratorium
 negotiated
 cost of manufacture, in a growing 
 capacity
Highlights 2       Pure Wafer plc   Annual report and accounts 2012
Pure Wafer at a glance

record with two of the world’s most 
advanced wafer reclaim facilities and a 
blue chip customer base that includes 
the majority of the world’s largest 
semiconductor manufacturers and 


customers to design and develop a 
service that delivers reclaimed wafers 
to the exacting specifications and high 
standards required by today’s leading 


Pure Wafer was established in 2000 by 
a management team widely experienced 
in the semiconductor industry with the 



2004 and in February 2007 Pure Wafer 
completed the acquisition of a wafer 



the art, purpose built facility situated in 



of 4,500m
2
 and includes over 2,000m
2
 of 





was originally designed for 200mm and 
smaller diameter wafer reclaim services, 
but following the acquisition by Pure 
Wafer in 2007 capability to reclaim 

Pure Wafer has the latest generation of 

most advanced equipment as used by 


specifications, we are positioned to offer 
the most effective wafer reclaim services 
to our customers with minimal silicon 

maximise the number of times a test 

Pure Wafer is a worldwide leader in the provision of 300mm 
wafer reclaim services
manufacturers to gain efficiencies through the increased use 
 Annual report and accounts 2012  Pure Wafer plc       3

At Pure Wafer our process for reclaiming 


 Inspection of the wafers for defects 
and classification by type of 
contaminant to be removed

chemicals appropriate to remove the 
contaminant 
 Assessment of flatness and 
correction of defects using Pure 
Wafer’s advanced polishing processes
 Cleaning and drying
 Final quality inspection and 

Wafer reclaim
During the many stages of the manufacturing process of 


consumable in the manufacture of semiconductors and the ability 
to reclaim them through Pure Wafer’s advanced process provides 



functionality at a reduced cost, the industry has sought to increase 

300mm wafer processing now represents the fastest growing area 

However , wafer reclaim is a highly specialised and technically 

able to meet the exacting standards required by semiconductor 
manufacturers for the reclaim of 300mm wafers, of which Pure 
 4       Pure Wafer plc   Annual report and accounts 2012
Chairman’s statement
Introduction

semiconductor industry maintaining its 
growth path with Pure Wafer continuing 
to enjoy increasing and sustained 
demand for its wafer reclaim services 
from all geographical areas in which we 
trade and with all customers across the 


Wafer to consolidate its standing in the 
semiconductor industry as one of the 
leading wafer reclaim companies in the 

Pure Wafer and indeed, the 
semiconductor industry as a whole is to a 
very large extent insulated from the much 
publicised economic problems of the 
Eurozone, with revenues denominated in 


currently being driven by the increasing 

heavily populated economies of China, 

With industry analysts forecasting 
continued growth through to 2015 and 
beyond, our major customers have 
committed and commenced substantial 
new investment in 300mm silicon chip 
manufacturing facilities amounting to tens 

their confidence in sustainable growth, 
which will give rise to further wafer 


give exciting long term prospects for Pure 

During the financial year as volume 
demand strengthened, both 

Prescott have continued to run at record 
levels of productivity, which together with 
the close management of the overall level 
of costs, has resulted in Pure Wafer’s cost 

further confidence in the strength of the 

During the financial year we saw the 

meaningful contribution to the Group’s 
results despite the challenges set by the 



completed many domestic, commercial 

gained a reputation for being one of the 




Financial results












results show significant improvement on 
prior years, and the Board is encouraged 
by the actions of the management team 


and to continue reducing costs across all 

Group Funding

capital repayments to our asset based 

the successfully completed negotiations 



capital requirement, arising from the 
increased volumes of wafer reclaim and 


agreement further demonstrates the 

funders have to Pure Wafer and shows 
a confidence in the sustained recovery 
and continued growth of the business, 


Management

their support and efforts during a year 
in which volumes have shown continued 
growth, productivity levels have been 
at record levels, a high level of cost 
control has been maintained and our 
new products have made a meaningful 

In December 2011, we announced the 





experience in the technology industry and 
more specifically relevant experience in 

this as a good addition to the Pure Wafer 



for his contribution to the Group and wish 

Outlook

strongly with a continuation of high 
volumes enjoyed during the prior 

high and stable volumes are being seen 
from our customers in all geographical 

manufacturing facilities currently under 
construction by the semiconductor 
industry and in some cases nearing 
completion gives an optimistic long term 


to consolidate its standing as one of the world’s 
leading wafer reclaim companies Annual report and accounts 2012  Pure Wafer plc       5
With industry analysts forecasting 
many years of sequential growth for the 
industry fuelled by the world’s emerging 


With our installed capacity and high 
quality offering together with our low 
cost of manufacturing Pure Wafer is in a 


We fully expect that Pure Wafer’s solar 
division will continue to trade strongly and 
produce results in line with management 
expectations during the period, despite 
the uncertainty over the Government’s 


gained in this sector has resulted in many 
orders being in place with some exciting 
opportunities in both commercial and 
public sector projects for the upcoming 


foundation on which to move forward, 
and build upon for further growth and 

Stephen Boyd
Chairman
 6       Pure Wafer plc   Annual report and accounts 2012
Chief Executive’s review
Operational Review

continued the upward trend that we 
enjoyed during last financial year with 
continued growth in volumes of wafers 

semiconductor industry continued its 


the period with 300mm wafer reclaim 

year , whilst 200mm wafer reclaim was as 

customers completed their transition 

see the second half of the year achieve 
an even stronger growth with increases 

compared to the first half, demonstrating 


the significant challenge of achieving 
increasing volumes whilst maintaining 
the cost reductions and benefits gained 

where our suppliers were requesting 
price increases for the majority of our 

to report that we managed to build on 
our past successes and reduce costs 


savings were in part due to the economies 
of scale as well as successful engineering 
activities to reduce consumable usage 
and costs within our processes, all 
without affecting the quality of the 

As volumes increased our operational 
teams processed the increased volumes 
with only a modest increase in headcount 
and thus Pure Wafer benefited from 
the cost efficiencies as record levels of 
productivity were once again achieved in 



the year , enabling Pure Wafer to continue 
to trade competitively throughout this 

Highlights

growth

compared to prior year

the 2nd half over 1st half


compared to prior year



restructured to ease increased 

increased volumes

rescheduled over existing term 
including an initial six month 
capital moratorium

negotiated


with significant installed capacity
Swansea site, UK

our European and Asian customers 

site to increase 300mm volume sales 

whilst 200mm volumes dropped by 

completed their transition from 200mm 

half of the financial year showed strong 
growth compared to the first half for our 

which reflects the continuing growth 
of the industry across all geographical 

productivity levels have produced results 
which have contributed to the Group 

Prescott site, Arizona, USA




with every major 300mm integrated chip 
manufacturer which has a manufacturing 


when compared to the prior year with 

With record productivity levels and a 
low cost of manufacture the Prescott 


With the Group’s current installed 
capacity for 300mm and smaller 
diameter wafers at Pure Wafer’s high 

Arizona, together with the reduced cost 
per wafer , the Board believes that the 
Increased revenues together with continued and sustained 
cost reduction activities with record productivity levels 
have enabled Pure Wafer to return to operating profit Annual report and accounts 2012  Pure Wafer plc       7

Solar pv

pv division was both successful and 
frustrating with trading experiencing 

Government’s indecision and many 



between wafer reclaim and solar panel 

troughs in the demand for our products 
can be met whilst managing labour costs 


with both commercial and public sector 
property owners, which together with 
the domestic demand resulted in a first 

customer base gives confidence that we 
will be successful in building on this first 

Peter Harrington
Group Chief Executive
 8       Pure Wafer plc   Annual report and accounts 2012
Financial review
Reporting currency



reporting currency allows us to produce 
accounts that are clearer and more 
transparent without the need for the large 
and numerous adjustments required at 

EBITDA and cash generation
Increased sales volumes and steady 
selling prices, whilst reducing production 
costs per wafer , have resulted in increased 



increased profit along with successful 

resulted in net cash inflow from operating 




Volumes and revenue
Wafer reclaim 

300mm equivalent wafers increased by 




of turnover by origin and destination can 





Gross profit


of increased volumes processed and the 
cost saving initiatives implemented in the 

Administrative expenses



has been driven principally by a reduction 
in the depreciation and amortisation 
charge as a result of certain tangible fixed 

Operating profit


of increased revenue and a reduction in 

Loss before tax


Foreign exchange
We continue to maintain as much of the 

order to provide a natural hedge against 

Taxation
During the year the Group submitted a 

and Development, the amounts received 

incurred during the year , the Board has 





Increased sales volumes and reduced production 
costs per wafer have resulted in EBITDA of $6.0m 
up 88% Annual report and accounts 2012  Pure Wafer plc
Funding arrangements

agreement with its lenders to restructure 
the capital repayment terms of hire 

terms of this revised arrangement capital 






Richard Howells
Group Finance Director
 10       Pure Wafer plc   Annual report and accounts 2012
Board of Directors, senior management and advisers
Executive Directors
1. Peter Harrington
Group Chief Executive


experience in commercial and project 

finance executive with Meissner+Wurst, 
one of the world’s leading constructors 

2. Keith Baker
Chief Operating Officer



for leading chip manufacturers such as 




in the early development of the 300mm 

3. Richard Howells ACA
Group Finance Director





largest manufacturer of upholstered 







and was involved in the restructure of 
the Group following its acquisition in 

4. Jerry Winters
US Operations Director

years’ experience in the semiconductor 

He started his career with Fairchild’s 

his nine years with that company, held 
positions in both engineering and 




and European silicon wafer reclaim 

Pure Wafer organisation following the 



123
4 Annual report and accounts 2012  Pure Wafer plc       11

5. Stephen Boyd
Non-Executive Chairman






6. Dr Eurfyl ap Gwilym
Non-Executive Director and Deputy 
Chairman
Eurfyl ap Gwilym has a wide experience of 
the technology industry, having served on 
the Boards of many companies including 
Philips Electronics, GE Information 

He is currently advising a number of 


7. Paul Dolan FCA
Non-Executive Director
Paul Dolan spent many years as an audit 
partner at Deloitte, where his clients 
included several semiconductor and 



at XP Power plc, and remained in this 
position until the relocation of XP Power 


became Chair of the Audit Committee on 

Advisers
Company Secretary and 
Registered Office
D R Howells
Pure Wafer plc



Solicitors
Morgan Cole LLP



Bankers
Royal Bank of Scotland PLC

Cardiff CF10 3YB
Nominated advisers/brokers
WH Ireland Limited
4 Colston Avenue

Auditors
PricewaterhouseCoopers LLP



Registrars
Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands
B63 3DA
5
7
6 12       Pure Wafer plc   Annual report and accounts 2012
Directors’ report

Principal activities 




A review of developments affecting the Group during the year and its prospects for the future is set out in the Chairman’s statement, 

Business review



Dividends

Principal risks and uncertainties 

Market risk


quality and endeavouring to qualify to provide wafer reclaim services to as many of the major semiconductor manufacturers as we 




Credit risk



Treasury risk


Competitor risk

Technology risk



Capital structure





 Annual report and accounts 2012  Pure Wafer plc       13

With regard to the appointment and replacement of Directors, the Company is governed by its Articles of Association, the 


Supplier payment policy 



Directors and their interests 



E ap Gwilym
P Dolan
P G Harrington Group Chief Executive






30 June 
2012 
2p ordinary 
share 
warrants 
Number

2011 
2p ordinary 
share 
warrants 
Number
30 June 
2012 
2p ordinary 
shares 
 Number

2011 
2p ordinary 
shares 
 Number
 12,508,107 12,508,107 7,500,000 7,500,000
P G Harrington 4,065,135 4,065,135 1,784,066 1,784,066
 3,127,027 3,127,027 1,413,012 1,413,012
 - - P Dolan - 1,065,000 1,065,000
E ap Gwilym - 525,000 525,000
 2,345,270 2,345,270 937,500







30 June
2012
2p ordinary
Share
Options
Number
Granted during 
the year
2p ordinary 
Share Options 
Number

2011
2p ordinary


Number
P G Harrington 3,000,000 1,500,000 1,500,000
 1,500,000 750,000 750,000
 250,000 250,000 1,000,000 500,000 500,000 14       Pure Wafer plc   Annual report and accounts 2012
Substantial shareholders 

shares
Number
 8,366,000
Polar Capital European Forager Fund Ltd 8,058,748
 7,500,000
Aviva

Authority to issue and allot shares

may only issue the shares pursuant to the authority within the statutory terms given by shareholders’ resolutions or contained in 









Health and safety, environmental and social responsibility



is in place with internal management control systems to ensure that this is achieved as best as is practicable, and to ensure that the 

Charitable and political donations

Going concern









Directors’ report  Annual report and accounts 2012  Pure Wafer plc       15
Corporate governance







Board responsibilities








Audit Committee





Remuneration Committee





Treasury Committee


Board meetings


Board 
meeting
Audit 
Committee

Committee
 11 2 2
P G Harrington 11
 11
 6
 5
P Dolan 11 4 2
E ap Gwilym 11 4 2
 11 16       Pure Wafer plc   Annual report and accounts 2012
Risk management














Research and Development

Employees
Issues affecting employees are communicated via the management structure to enable employees to be aware of the Company’s 





Dialogue with shareholders




Auditors







Peter Harrington
Group Chief Executive

Directors’ report  Annual report and accounts 2012  Pure Wafer plc       17
Introduction


Role of the Remuneration Committee








Membership and meetings


Advisers


Remuneration policy







Basic salary


Performance related bonuses
Payments under the scheme to Executive Directors are based upon the achievement of financial targets for the Company as set by 

Benefits


Share incentives

Directors’ remuneration report 18       Pure Wafer plc   Annual report and accounts 2012
Directors’ remuneration
Total
 Benefits Bonus Pension 2012 2011
Director $ 42,589 52,300
P G Harrington 202,233 20,117 50,558 280,830 274,702
 202,233 18,577 254,011 248,786
 63,376 6,654 85,874 E ap Gwilym 35,227 35,227 36,581
P Dolan 41,009 43,055
 17,757 14,645 191,868 187,526
733,236 63,105 36,663 931,408




30 June
2012
2p ordinary
Share
Options
Number 
Granted during 
the year
2p ordinary 
Share
Options
Number

2011
2p ordinary


Number 
P Harrington 3,000,000 1,500,000 1,500,000
 1,500,000 750,000 750,000
 250,000 250,000 1,000,000 500,000 500,000
Service contracts for Directors








Directors’ remuneration report  Annual report and accounts 2012  Pure Wafer plc
Letters of appointment for Non-Executive Directors





Directors’ interest in shares


Eurfyl ap Gwilym

 20       Pure Wafer plc   Annual report and accounts 2012





not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of 













understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial 



transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure 
that the financial statements comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the 





By order of the Board
Peter Harrington
Group Chief Executive

Consolidated statement of Directors’ responsibilities Annual report and accounts 2012  Pure Wafer plc       21





Respective responsibilities of Directors and auditors





 responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save 

Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable 






Opinion on financial statements 





Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ report for the financial year for which the Group financial statements are 

Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our 



Other matter 

Jason Clarke (Senior Statutory Auditor)
For and on behalf of PricewaterhouseCoopers LLP


Independent auditors’ report to the members of Pure Wafer plc 22       Pure Wafer plc   Annual report and accounts 2012
Note 2012
$000
2011

Revenue 4, 5 35,751
Cost of sales (24,254)
Gross profit 11,497 8,305
 (5,419)
 (64)
Earnings before interest, taxation, depreciation and amortisation 6,014 3,211
 (5,553)
Operating profit/(loss) 5, 6 461
Finance income 8 - Finance costs (1,014)
 10 (122)
Loss on ordinary activities before taxation (675)
 11 384 511
Loss for the financial year (291)
Loss per share
Basic loss per share 12 (0.2)c
Diluted loss per share 12 (0.2)c




Consolidated income statement

 Annual report and accounts 2012  Pure Wafer plc       23
2012
$000 
2011

Loss for the year (291)
Total comprehensive income for the year (291)

Consolidated statement of comprehensive income
 24       Pure Wafer plc   Annual report and accounts 2012

capital


premium
account

Merger
reserve


earnings


reserve


equity

 4,317 24,857 58,826 27,362
Comprehensive income
Loss for the financial year
 113 113
 4,317 24,857 58,826 22,885
Comprehensive income
Loss for the financial year
 64 64
Transactions with owners
Proceeds from issue of shares 23 23
Balance at 30 June 2012 4,340 24,857 58,826 (62,517) (2,825) 22,681

Consolidated statement of changes in equity
 Annual report and accounts 2012  Pure Wafer plc       25
Note 2012
$000
2011

Non-current assets
Goodwill 13 6,630 6,630
 13 1,132
Property, plant and equipment 14 25,054
32,816
Current assets
Inventories 15 2,267
 16 7,337 7,248
Cash and cash equivalents 16 2,043 2,032
11,647 11,474
Total assets 44,463 50,267
Current liabilities
 17 (5,478)
 (6,778)
Derivative financial instruments 18 -
(12,256)
Non-current liabilities
 (7,755)
Deferred income 21 (1,771)
(9,526)
Total liabilities (21,782)
Net assets 22,681 22,885
Equity
 23 4,340 4,317
 24,857 24,857
Merger reserve 58,826 58,826
 (62,517)
Exchange translation reserve (2,825)
Total equity 22,681 22,885



Peter Harrington Richard Howells
Director Director
Consolidated balance sheet
 26       Pure Wafer plc   Annual report and accounts 2012
Consolidated statement of cash flows

Note 2012
$000
2011

Net cash inflow from operating activities 25 5,717 1,374
Taxation 
 384
Investing activities 
Purchase of property, plant and equipment (180)
Proceeds from disposal of property, plant and equipment 108 Net cash used in investing activities (72)
Financing activities 
Interest paid (946)
 (1,898)
 (1,442) Proceeds from share issue 23 Net cash used in financing activities (4,263)
Net increase /(decrease) in cash and cash equivalents 1,766
Cash and cash equivalents at beginning of year (1,615)
Exchange losses on translation - Cash and cash equivalents at end of year 16 151
 Annual report and accounts 2012  Pure Wafer plc       27
1. General information



Adoption of new and revised standards








the basis of including companies in the consolidated financial statements but is not expected to impact the Group’s financial 









 2. Summary of significant accounting policies
Basis of preparation

Going concern









Notes to the consolidated financial statements 
 28       Pure Wafer plc   Annual report and accounts 2012
2. Summary of significant accounting policies (continued)
Basis of consolidation







cost of the acquisition over the Group’s share of the fair value of the net identifiable assets of the subsidiary acquired is recorded 



Segmental reporting



Foreign currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic 





and losses resulting from the settlement of such transactions and from the translation at exchange rates ruling at the balance sheet 
date of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when 

Financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the 





impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts 









Derivative financial assets and liabilities are stated at fair value, which includes accrued interest receivable and payable where 

Notes to the consolidated financial statements 
 Annual report and accounts 2012  Pure Wafer plc
2. Summary of significant accounting policies (continued)
Financial liabilities and issue costs


Revenue recognition




Provisions
A provision is recognised in the balance sheet when the Group has a legal or constructive obligation as a result of a past event, 


A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the 




Share based payments





Property, plant and equipment
Property, plant and equipment are shown in the balance sheet at their historical cost less accumulated depreciation and 
 probable that future economic benefits associated with them will flow to the Group and the cost of the item can be measured 

Depreciation is provided so as to write off the initial cost of each asset to its residual value on a straight line basis over its estimated 

Long leasehold buildings  15 years
Fixtures and fittings  5 years

Computer equipment  3 years

Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its 

 30       Pure Wafer plc   Annual report and accounts 2012
Notes to the consolidated financial statements 

2. Summary of significant accounting policies (continued) 
Government grants
Government grants are recorded initially as deferred income and recognised in the income statement in line with the expense to 



Intangible assets – goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the net identifiable assets and liabilities acquired 





Internally generated intangible assets – research and development

An internally generated intangible asset arising from the Group’s development is recognised only if all of the following conditions are 




Intangible assets – other



Impairment of assets

subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount 




Inventories




 Annual report and accounts 2012  Pure Wafer plc       31
2. Summary of significant accounting policies (continued)
Leasing
Assets held under finance leases are recognised as assets of the Group at their fair value, or , if lower , at the present value of the 





Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight line basis over the lease 

Restructuring costs


Operating profit/(loss)

Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that 


Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is 


Cash and cash equivalents


Taxes

Current tax is the expected tax payable on the taxable income for the year , using tax rates substantively enacted at the balance sheet 

Deferred tax is provided in full on temporary differences between the carrying amount of assets and liabilities in the financial 


Deferred tax is determined using the tax rates that have been enacted or substantively enacted by the balance sheet date, and are 

Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of 
the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in 

 32       Pure Wafer plc   Annual report and accounts 2012
2. Summary of significant accounting policies (continued)
Share capital


Pensions

3. Critical accounting judgements and key sources of estimation uncertainty
Critical accounting judgements and key sources of estimation uncertainty




 the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods 

Impairment of non-current assets
Determining whether goodwill, property, plant and equipment, or intangible assets are impaired requires an estimation of the value 














Notes to the consolidated financial statements 
 Annual report and accounts 2012  Pure Wafer plc       33
3. Critical accounting judgements and key sources of estimation uncertainty (continued)
Deferred tax



Useful life of property, plant and equipment



than this, the carrying value would need to be depreciated over a shorter timeframe, resulting in an increase in the annual 

4. Revenue

2012
$000
2011

Continuing operations 35,751
5. Business and geographical segments 





 34       Pure Wafer plc   Annual report and accounts 2012
Notes to the consolidated financial statements 

5. Business and geographical segments (continued)

UK
Wafers
North
America
Wafers
UK
Solar Consolidated
 $000 $000 $000 $000
Revenue 18,093 15,258 2,400 35,751

Segment result
 3,372 3,236 202 6,810
Depreciation (4,102) (1,868) - (5,970)
Amortisation of government grants 543 - - 543
Amortisation of intangibles - - (126) (126)
Segment result (187) 1,368 76 1,257
Unallocated corporate expenses (796)
Operating profit 461
Finance costs (1,014)
 (122)
Loss before tax (675)
Tax 384
Loss for the financial year (291)
UK
North
America Eliminations Consolidated
 $000 $000 $000 $000
Balance sheet
Assets
 39,471 19,638 (14,661) 44,448
Unallocated corporate assets 15
Consolidated total assets 44,463
Liabilities
 (10,869) (25,169) 14,661 (21,377)
Unallocated corporate liabilities (405)
Consolidated total liabilities (21,782)

 Annual report and accounts 2012  Pure Wafer plc       35
5. Business and geographical segments (continued)

Wafers
North
America
Wafers

 Consolidated

Revenue 16,016 13,324

Segment Result
 2,037 4,057
Depreciation
Amortisation of government grants 562 562
Amortisation of intangibles
Segment result 157
Unallocated corporate expenses
Operating loss
Finance costs

Loss before tax
Tax 511 
Loss for the financial year 

North
America Eliminations Consolidated

Balance sheet
Assets
 42,400 21,186 50,255
Unallocated corporate assets 12
Consolidated total assets 50,267
Liabilities
 13,331
Unallocated corporate liabilities
Consolidated total liabilities 


Analysis by-product

2012 2011
$000
150mm wafers 923
200mm wafers 9,876 10,744
300mm wafers 22,193
 359 312
 2,400
35,751 36       Pure Wafer plc   Annual report and accounts 2012
Notes to the consolidated financial statements 

5. Business and geographical segments (continued)
Analysis by destination 

2012 2011
$000
Europe 8,403
 16,761 15,536
Asia 10,587 8,174
35,751
6. Operating profit/(loss) 
 2012 2011
$000
Government grants (543)

 4,869
 1,101 1,048

 678 644
 39 14
 23 20
Profit on disposal of property, plant and equipment (47) 126 85
 12,081 10,788
Auditors’ remuneration 
2012 2011
$000
Fees payable to the Company’s auditors for the audit of the Company’s annual accounts 9
 61 55
 70 64

 15
 11 26 Annual report and accounts 2012  Pure Wafer plc       37
7. Information regarding Directors and employees
2012 2011
$000
Directors’ emoluments
 997
Contributions to money purchase pension schemes 46 43
1,043
2012
$000
2011

Highest paid Director
 273 267
Contributions to money purchase pension schemes 8 8
281 275
2012
No.
2011

Number of Directors in defined contribution pension scheme 3 3
2012 2011
No.
Average number of persons employed (including Directors)
Production 207 202
 29 26
236 228
2012
$000
2011

Staff costs during the year (including Directors)
Wages and salaries 9,994
 1,685 1,601
 64 113
Pension costs 338 151
12,081 10,788 38       Pure Wafer plc   Annual report and accounts 2012
Notes to the consolidated financial statements 

8. Finance income 
2012 2011
$000
 — —
9. Finance costs 
2012 2011
$000
 337 134
Interest on obligations under finance leases and hire purchase contracts 677 1,072
1,014 1,206
10. Other gains and losses
2012 2011
$000
Foreign exchange losses (127)
Derivative financial instruments 5 50
(122)
11. Tax on loss on ordinary activities
2012 2011
$000
Current taxation
 — —
 (384)
Total current tax (384)
Deferred taxation
 — —
Total credit for the year (384)


2012 2011
$000
Loss on ordinary activities before tax (675)
 (176)
Factors affecting charge for the year
 176 1,428
 (384)
 (384)
 Annual report and accounts 2012  Pure Wafer plc
12. Loss per share

2012 2011
Earnings/(losses)
 (291)
Number of shares
 127,003 126,303

 57,215 52,166
Dilutive weighted average number of shares 184,218
 (0.2)c
 (0.2)c 40       Pure Wafer plc   Annual report and accounts 2012
Notes to the consolidated financial statements 

13. Goodwill and other intangible fixed assets
Other
Goodwill Intangibles Total
$000 $000 $000
Cost
 6,630 7,548
Additions — 741 741
 6,630
Additions —65 65
At 30 June 2012 6,630 1,724 8,354
Amortisation 
 — 381 381
Charge for the year —85 85
 — 466 466
Charge for the year — 126 126
At 30 June 2012 — 592 592
Carrying amount 
At 30 June 2012 6,630 1,132 7,762
 6,630 7,823

Goodwill is reviewed annually or when other events or changes in circumstance indicate that the carrying amount may not be fully 











Other intangibles



 Annual report and accounts 2012  Pure Wafer plc       41
14. Property, plant and equipment 
Long leasehold Fixtures and Plant and Computer Motor
buildings fittings machinery equipment vehicles Total
$000 $000 $000 $000 $000 $000
Cost
 17,116 700 61,676 685 22
Additions 7 22 187 25 — 241
 17,123 722 61,863 710 22 80,440
Additions 3 71 32 — 115
Disposals — — ——
At 30 June 2012 17,132 725 60,738 742 22 79,359
Depreciation
 538 668 14
Charge for the year 1,143 6,253 14 4 7,507
 10,188 631 682 18
Charge for the year 1,144 63 4,740 4
Eliminated on disposal — — ——
At 30 June 2012 11,332 694 41,556 701 22 54,305
Carrying amount
At 30 June 2012 5,800 31 19,182 41 — 25,054
 28 4


15. Inventories
2012 2011
$000
 1,420
 653 423
Finished goods 194 374
2,267

16. Other financial assets

2012 2011
$000
 5,847
 577 411
Accrued income 913
7,337 7,248 42       Pure Wafer plc   Annual report and accounts 2012
Notes to the consolidated financial statements 

16. Other financial assets (continued)
Trade receivables 



Before accepting any new customer , the Group uses an external credit scoring system to assess the potential customer’s credit 


 due at the reporting date for which the Group has not provided as there has not been a significant change in the credit quality and 


Ageing of past due but not impaired receivables
2012 2011
$000
Less than three months 954
More than three months 69 618
1,023 1,537
Movement in the allowance for doubtful debts
2012 2011
$000
Balance at beginning of the year 184 116
Amounts written off as uncollectable (38) —
Provision against specific customers (70) 68
Balance at end of the year 76 184
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable 



Ageing of impaired trade receivables
2012 2011
$000
Current 76 11
 — 48
120+ days — 125
76 184

Deferred taxation






Cash and cash equivalents
 Annual report and accounts 2012  Pure Wafer plc       43
17. Other financial liabilities
Trade and other payables
2012 2011
Current liabilities $000
 2,567
 138 106
Accruals and other creditors 2,773
5,478 5,178




18. Derivative financial instruments 
2012 2011
$000
Current liabilities
Interest rate swap -

19. Interest-bearing loans and borrowings
2012 2011
$000
Current liabilities
 1,892 3,647
 1,898
Hire purchase and finance lease agreements 2,988
6,778 8,214
Non-current liabilities
 1,702
Hire purchase and finance lease agreements 6,053 8,052
7,755 11,651

2012 2011
$000
Bank loans
Within one year 1,898
Between one and two years 1,702
Between two and five years - 1,701
3,600
Hire purchase contracts and finance leases
Within one year 2,988
Between one and two years 3,079
Between two and five years 2,974 5,383
9,041 10,721

 44       Pure Wafer plc   Annual report and accounts 2012
Notes to the consolidated financial statements 

19. Interest-bearing loans and borrowings (continued)




20. Obligations under finance leases 
        Minimum lease payments
2012 2011
$000

 3,521 3,413
 6,675
 10,196
 (1,155)
Present value of lease obligations 9,041 10,721








21. Deferred income
2012 2011
$000
Unamortised grant income:
 558 538
 1,771 2,334
Balance at 30 June 2,329 2,872


2012
$000
2011

 2,872
New grants recognised in the financial year - 375
Amount credited to profit and loss account in the financial year (543)
As at 30 June 2,329 2,872 Annual report and accounts 2012  Pure Wafer plc       45
22. Financial risk management
Capital risk management




and equity directly attributable to equity holders of the Parent, comprising issued capital, reserves and retained earnings as 




 2012 2011
$000
Debt (12,641)
Cash and cash equivalents including overdrafts 151
Net debt (12,490)
Equity 22,681 22,885
Net debt to equity ratio 1:1.82
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement 
and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity 

2012 2011
$000
Financial assets

 2,043 2,032
 5,847
7,890 8,000
Financial liabilities 
 - 5

 1,892 3,647
 3,600
 9,041 10,721
 2,567
17,100
Financial risk management objectives







 46       Pure Wafer plc   Annual report and accounts 2012
Notes to the consolidated financial statements 

22. Financial risk management (continued)
Market risk



Foreign currency risk management 


2012 2011
$000
Monetary assets
Euro 440 227
 131 120
Yen 86 Monetary liabilities
Euro 115 142
 3,659 4,275
Yen - 75
Interest rate risk management

managed by the Group maintaining an appropriate mix between fixed and floating rate borrowings, by the use of interest rate swap 



Interest rate swap contracts
Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts 


interest rate swaps at the reporting date is determined by discounting the future cash flows using the curves at the reporting date 





 Annual report and accounts 2012  Pure Wafer plc       47
22. Financial risk management (continued)
Credit risk management





Liquidity risk management

 Liquidity and interest risk tables

been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be 

Weighted
average Less than 6 months 1–2 2–5
effective 6 months –1 year Years years Total
interest rate $000 $000 $000 $000 $000
2012
Variable interest rate instruments (overdraft) 4.5% 1,892 — — — 1,892
Variable interest rate instruments (bank loans) 4.9% 949 949 2,274 — 4,172
Fixed interest rate instruments (finance leases) 5.2% 812 813 1,625 1,796 5,046
Variable interest rate instruments (finance leases) 7.2% 674 689 1,454 1,714 4,531
5.6% 4,327 2,451 5,353 3,510 15,641
2011
 3,647 — — — 3,647
 5,724
 711 711 1,422 2,844 5,688
 623 624 1,247
 2,284 4,567 7,266 20,047


Fair value of financial instruments





 48       Pure Wafer plc   Annual report and accounts 2012
23. Called up share capital 
2012 2011
$000
Called up, allotted and fully paid
 4,340 4,317

Warrants






Placee Percentage

Peter Harrington




Marilyn Bollengier 








Royal Bank of Scotland plc (RBS) Warrant 





Notes to the consolidated financial statements 
 Annual report and accounts 2012  Pure Wafer plc
23. Called up share capital (continued)
Share based payments




Granted 2012
Options at
exercise price
of £0.02
Granted 2011

exercise price of

Number of options 5,175,000 5,550,000
Exercisable from 1 November 2012 1 November 2011


Average exercise
Per share

Number
 5,550,000
 5,175,000
Exercised
At 30 June 2012 10,025,000

Expiry date
Exercise price
Per share

Number
 2 pence 4,850,000
 2 pence 5,175,000





 50       Pure Wafer plc   Annual report and accounts 2012
24. Operating lease arrangements 
2012 2011
$000
Minimum lease payments under operating leases recognised as an expense in the year 737 750


2012 2011
$000
Land and buildings
 95 - 300
 - 53
 7,684 8,250
7,779 8,603



2012 2011
$000
Equipment
 2 10 14
12 14
2012 2011
$000
Other 
 8 14 32
 67 89 32
Notes to the consolidated financial statements 
 Annual report and accounts 2012  Pure Wafer plc       51
25. Notes to the consolidated cash flow statement
2012 2011
$000
Loss for the period (291)

 (384)
 1,014 1,206
 64 113
 (5)
 (47) —
 5,553 7,586
 5,904 3,754
Increase in receivables (90)
Decrease in payables (24)
Increase in inventory (73)
Net cash inflow from operating activities 5,717 1,374
26. Related party transactions




 52       Pure Wafer plc   Annual report and accounts 2012



Respective responsibilities of Directors and auditors





 responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save 

Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable 






Opinion on financial statements 




Opinion on other matter prescribed by the Companies Act 2006


Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our 






Other matter 

Jason Clarke (Senior Statutory Auditor)
For and on behalf of PricewaterhouseCoopers LLP


Independent auditors’ report 
to the members of Pure Wafer plc Annual report and accounts 2012  Pure Wafer plc       53
Company balance sheet

2012 2011
Note $000
Fixed assets
Investments 4 17,922
Current assets
Debtors 5 2,476 3,822
 2 —
 2,478 3,822
Creditors: amounts falling due within one year 6 (407)
Net current assets 2,071 2,817
Total assets less current liabilities 19,993
Net assets 19,993
Capital and reserves
Called up share capital 8 4,340 4,317
 24,857 24,857
Profit and loss account (8,049)
Exchange translation reserve (1,155)
Shareholders’ funds 19,993



Peter Harrington   Richard Howells
Director    Director 54       Pure Wafer plc   Annual report and accounts 2012
Notes to the Company financial statements 

1. Accounting policies – Company

accounting policies adopted, which have been applied consistently throughout the current and the prior financial year , are described 

Accounting convention
 Investments

Cash flow statement


Share based payments





Taxation


Deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax, or 

differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in 


 Annual report and accounts 2012  Pure Wafer plc       55
2. Information regarding Directors and employees
2012 2011
$000
Directors’ emoluments
 997
Contributions to money purchase pension schemes 46 43
1,043
Certain Directors are remunerated by subsidiary companies and therefore do not form part of the wages and salaries figures 

2012
$000
2011

Highest paid Director
 273 267
Contributions to money purchase pension schemes 8 8
281 275
2012
No.
2011

Number of Directors in defined contribution pension scheme 3 3
2012
No.
2011

Average number of persons employed (including Directors)
 6 6
2012 2011
$000
Staff costs during the year (including Directors)
Wages and salaries 472 684
 66 75
Pension costs 25 30
 64 113
627
3. Loss for the year



 56       Pure Wafer plc   Annual report and accounts 2012
4. Investments
Investment in
subsidiaries
$000
Cost and net book value
 17,922

Holding
 Activity Country of incorporation
Pure Wafer International Limited
wafers 


wafers 

 Dormant
5. Debtors
2012 2011
$000
 2,461 3,810
 15 12
2,476 3,822
6. Creditors: amounts falling due within one year 
2012 2011
$000
 372
 37 105
407 1,005
7. Borrowings 
2012 2011
$000
Overdraft
Within one year 372
372
Notes to the Company financial statements 
 Annual report and accounts 2012  Pure Wafer plc       57
8. Called up share capital
2012 2011
$000
Called up, allotted and fully paid
 4,340 4,317

Warrants





Placee Percentage

Peter Harrington




Marilyn Bollengier 







Royal Bank of Scotland plc (RBS) Warrant 



 58       Pure Wafer plc   Annual report and accounts 2012
8. Called up share capital (continued)
Share based payments




Granted 2012
Options at
exercise price
of £0.02
Granted 2011

exercise price

Number of options 5,175,000 5,550,000
Exercisable from 1 November 2012 1 November 2011


Average exercise
Per share

Number
 5,550,000
 5,175,000
Exercised
At 30 June 2012 10,025,000

Expiry date
Exercise price
Per share

Number
 2 pence 4,850,000
 2 pence 5,175,000






Notes to the Company financial statements 
 Annual report and accounts 2012  Pure Wafer plc
9. Combined reconciliation of movement in shareholders’ funds and statement of movements on reserves
 Exchange
 premium Profit and translation Total
capital account loss account reserve 2012 2011
 $000
At the beginning of the year 4,317 24,857 20,739 21,578
Loss for the financial year — — — (833)
 —— 64 — 64 113
Issue of share capital 23 — — — 23 —
At the end of the year 4,340 24,857 19,993
10. Related party transactions
 60       Pure Wafer plc   Annual report and accounts 2012


Resolutions


Directors’ report, the last Directors remuneration report and the auditors’ report on those accounts, and the auditable part 









any share options granted to employees of the Company in accordance with the terms of the Company’s 2005 






of this authority which would or might require relevant securities to be allotted after such expiry and the Directors may allot 




resolution 6 or by way of a sale of shares held in treasury, as if section 561 of the Act did not apply to any such allotment, 




or other arrangements as the Directors may deem necessary or expedient in relation to treasury shares, fractional 
entitlements, record dates or any legal or practical problems under the laws of any territory or the requirements of 






Notice of Annual General Meeting Annual report and accounts 2012  Pure Wafer plc       61
Resolutions (continued)

aggregate nominal amount of £127,002


which would or might require equity securities to be allotted for cash after such expiry and the Directors may allot equity 



















By order of the Board
Richard Howells



 62       Pure Wafer plc   Annual report and accounts 2012
Notes 
Entitlement to attend and vote




Website giving information regarding the Meeting

Attending in person

Appointment of proxies



appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set out in the notes to the 








Appointment of proxy using hard copy proxy form






In the case of a member which is a Company, the proxy form must be executed under its common seal or signed on its 



Appointment of proxy by joint members




Changing proxy instructions





If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of 
 Annual report and accounts 2012  Pure Wafer plc       63
Notes (continued)
Termination of proxy appointments



is a Company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of 







Corporate representatives

Issued shares and total voting rights




Questions at the Meeting

 answering the question would interfere unduly with the preparation for the meeting or involve the disclosure of 



Voting


Documents on display





Communication






   Pure Wafer plc
Central Business Park
Swansea Vale
Swansea SA7 0AB
Tel: +44 (0)1792 311 200
Fax: +44 (0)1792 795 420
Web: www.purewafer.com