Interim Results
Cinpart PLC
27 September 2007
CINPART PLC INTERIM RESULTS
For Immediate Release: 27 September 2007
CINPART PLC
Interim Report for the six months ended 30 June 2007
Chairman's commentary on the six months ended 30 June 2007
I present the interim results for Cinpart for the six months ended 30 June 2007.
These show a loss for the period of £11,486 compared to the loss of £130,523 for
the same period in 2006 on sales of £1,492,836 compared with £1,576,338.
Due to the adoption by the company of IFRS for the 2007 accounting year we are
required to take into account the value of share options of £84,000 granted to
the Directors and therefore before accounting for the options the profit for the
period is £72,514. This is a significant improvement and reflects the initial
effects of the changes implemented by the new management team since the
beginning of the year. No interim dividend is proposed.
The fund raising in June 2007 has resulted in a healthier balance sheet and has
enabled the company to embark on investment in new plant and machinery to
increase the efficiency of the manufacturing operation, which are expected to
result in yearly savings in excess of £150,000 in 2008 and in excess of £200,000
annually in subsequent years, based on current levels of turnover.
Some expenditure on airfreight is still continuing in the second half of the
year but the majority of product is now being shipped by sea resulting in
significant savings. Further reorganisation costs will be incurred in the second
half but we are confident that we will continue to achieve a pre-option charge
net pre-tax profit.
A new sales and marketing initiative has been implemented to increase our sales
in the gas ignition market and to take us into new markets, which is already
yielding new business and a significantly higher level of enquires. Again, the
full effects of the new initiative will not be felt until 2008. The integration
of Derlite and the newly acquired Gasignition business, which is expected to add
£300,000 in additional sales in 2008, is continuing and a much simplified
company structure is being implemented.
We have yet to experience any down turn in orders as a result of the current
economic climate, particularly in the US, but the company currently only has one
major customer in the US and the market there for our products is largely
untapped. We are confident, under the new management team, we can increase our
total business in the US and in the rest of the world. The company is planning
and working towards a major increase in turnover over the next few years.
The Board is currently seeking to accelerate the growth of Cinpart by
acquisitions. These would be in the areas of component sourcing and distribution
and sub-contract manufacture where part of the operation could be relocated to
our operation in Thailand. A number of opportunities have been identified and
negotiations have commenced in several cases.
Eliminating the high cost of airfreight and reducing manufacturing costs
together with increased efficiency and cost savings implemented by the new
management team and the drive for new business means that the prospects for
Cinpart have never been better.
.
Philip E Palmer
Chairman
27 September 2007
Unaudited consolidated income statement for the six months ended 30 June 2007
Notes Six months ended 30 Six months ended 30 Year ended
June 2007 June 2006 31 December 2006
Unaudited Unaudited Unaudited
£ £ £
1,492,836 1,576,338 2,752,230
Revenue
Cost of sales (1,047,350) (1,209,819) (2,048,045)
Gross profit 445,486 704,185
366,519
Administrative expenses (430,950) (846,588) (1,148,649)
Exceptional items - 370,106 188,138
Operating profit/(loss) 14,536 (256,326)
(109,963)
Finance income 28 54 33
Finance costs (26,050) (20,615) (39,598)
Loss before taxation (11,486) (130,524) (295,891)
Taxation - - -
Loss for the period (11,486) (130,524) (295,891)
Loss per share:
Basic 3 (0.13)p (1.64)p (3.65)p
Diluted 3 (0.08)p (1.33)p (2.23)p
Unaudited Consolidated statement of recognised income and expense
Loss for the period (11,486) (130,524) (295,891)
Exchange translation gains/ 12,233 - (35,701)
(loss) on foreign currency
net investments in subsidiary
undertakings
Total recognised income/ 747 (130,524) (331,592)
(expense) for the period
Unaudited consolidated balance sheet at 30 June 2007
Notes 30 June 2007 30 June 2006 31 December 2006
Unaudited Unaudited Unaudited
£ £ £
Non-current assets
Goodwill 105,028 243,386 -
Plant and equipment 113,606 111,355 116,405
Total non-current assets 218,634 354,741 116,405
Current assets
Inventories 198,778 180,512 259,571
Trade and other receivables 806,662 357,779 534,490
Cash and cash equivalents 482,450 11,865 7,245
Total current assets 1,487,890 550,156 801,306
Current liabilities
Financial liabilities - borrowings (170,331) (360,290) (771,580)
Trade and other payables (768,487) (1,212,761) (852,474)
Total current liabilities (938,818) (1,573,051) (1,624,054)
Net current assets/(liabilities) 549,072 (1,022,895) (822,748)
Non-current liabilities
Financial liabilities - borrowings (13,000) (3,121) (116,000)
Total current liabilities (13,000) (3,121) (116,000)
Net assets/(liabilities) 754,706 (671,275) (822,343)
Equity
Share capital 6 3,756,907 3,526,492 3,533,397
Share premium account 2,353,419 1,041,532 1,084,627
Retained earnings/(losses) (5,355,620) (5,239,299) (5,440,367)
754,706 (671,275) (822,343)
Unaudited consolidated cashflow statement for the six months ended 30 June 2007
Six months ended Six months ended 30 Year ended
30 June 2007 June 2006 31 December 2006
Unaudited Unaudited Unaudited
£ £ £
Net cash used in operating activities (58,187) (173,960) (702,293)
Investing activities
Interest received 28 13 33
Purchases of property plant and equipment (22,798) 9,302 (14,509)
Acquisition of subsidiary, net of cash acquired (205,840) - -
Liquidation of subsidiary - (20,799) 90,105
Net cash generated from/(used in) investing (228,610) (11,484) 75,629
activities
Financing activities
Drawn down/(repayment) of borrowings (704,250) 188,166 593,790
Proceeds on issue of shares 1,492,302 - 50,000
Interest paid (26,050) (20,574) (39,598)
Net cash generated from financing activities 762,002 167,592 619,619
Cash and cash equivalents at beginning of period 7,245 29,717 29,717
Cash and cash equivalents at end of period 482,450 11,865 7,245
Notes to the interim statement for the six months ended 30 June 2007
1 Accounting policies
Basis of preparation
The next annual financial statements of the Cinpart Group plc ('the Group') will
be prepared in accordance with International Financial Reporting Standards
(IFRS) as adopted for use in the EU and applied in accordance with the
provisions of the Companies Act 1985.
Accordingly, the interim financial information in this report has been prepared
using accounting policies consistent with IFRS. IFRS is subject to amendment and
interpretation by the International Accounting Standards Board (IASB) and the
International Financial Reporting Interpretations Committee (IFRIC) and there is
an ongoing process of review and endorsement by the European Commission. The
financial information has been prepared on the basis of IFRS that the Directors
expect to be applicable as at 31 December 2007.
The principal accounting policies set out below have been consistently applied
to all periods presented.
IFRS transition
IFRS 1 permits companies adopting IFRS for the first time to take certain
exemptions from the full requirements of IFRS in the transition period. The
interim financial information has been prepared on the basis of the following
exemptions:
• Business combinations prior to 1 January 2006 have not been restated to
comply with IFRS 3 'Business Combinations'
• IFRS 2 'Share-based Payments' has been applied retrospectively to those
options that were issued after 7 November 2002 and had not vested by 1st
January 2006.
The disclosures required by IFRS 1 concerning the transition from UK GAAP to
IFRS are given in note 8.
Non-statutory accounts
The financial information for the year end 31 December 2006 set out in this
interim report does not comprise the Group's statutory accounts as defined in
section 240 of the Companies Act 1985.
The statutory accounts for the year ended 31 December 2006, which were prepared
under UK Generally Accepted Accounting Practice (UK GAAP), have been delivered
to the Registrar of Companies. The auditors reported on those accounts; their
report was unqualified, did not include references to any matters to which the
auditors drew attention by way of emphasis without qualifying their report and
did not contain a statement under either Section 237 (2) or Section 237 (3) of
the Companies Act 1985.
The financial information for the 6 months ended 30 June 2007 and 30 June 2006
is unaudited.
Basis of consolidation
The financial information incorporates the results of the Company and entities
controlled by the Company (its subsidiaries). Control is achieved where the
Company has the power to govern the financial and operating policies of an
investee entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the period are
included in the consolidated income statement from the effective date of
acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the results of subsidiaries to bring
the accounting policies used into line with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
Notes to the interim statement for the six months ended 30 June 2007 continued
1 Accounting policies continued
Business combinations and goodwill
On acquisition, the assets and liabilities and contingent liabilities of
subsidiaries are measured at their fair values at the date of acquisition. Any
excess of cost of acquisition over the fair values of the identifiable net
assets acquired is recognised as goodwill. Any deficiency of the cost of
acquisition below the fair values of the identifiable net assets acquired (i.e.
discount on acquisition) is credited to profit and loss in the period of
acquisition. Goodwill arising on consolidation is recognised as an asset and
reviewed for impairment at least annually by comparing the carrying value of the
asset to the recoverable amount. Any impairment is recognised immediately in
profit or loss and is not subsequently reversed.
Revenue recognition
Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for goods and services provided in
the normal course of business, net of discounts, VAT and other sales related
taxes.
Sales of goods are recognised when goods are delivered and title has passed.
Foreign currency
Transactions in foreign currency are recorded at the rates of exchange
prevailing on the dates of the transactions. At each balance sheet date,
monetary assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the balance sheet date. Exchange gains
and losses on short-term foreign currency borrowings and deposits are included
with net interest payable. Exchange differences on all other transactions,
except relevant foreign currency loans, are taken to operating profit.
The results of overseas operations are translated at the average rates of
exchange during the year and their balance sheers translated into sterling at
the rates of exchange ruling on the balance sheet date. Exchange differences
which arise from translation of the opening net assets are and results of
foreign subsidiary undertakings and from translating the income statement at an
average rate are taken to reserves.
All other differences are taken to the income statement and tax charges or
credits that are directly and solely attributable to such exchange differences
are taken to reserves.
Taxation
The tax expense represents the sum of the tax currently payable and any deferred
tax.
The tax currently payable is based on the estimated taxable profit for the year.
Taxable profit differs from net profit as reported in the income statement
because it excludes items of income or expense that are taxable or deductible in
other years and it further excludes items that are never taxable or deductible.
The Group's liability for current tax is calculated using tax rates that have
been enacted or substantially enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries, except where the Group is able to
control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset realised. Deferred tax is
charged or credited to profit and loss, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and
the Group intends to settle its current assets and liabilities on a net basis.
Share based payments
The cost of share-based employee compensation arrangements, whereby employees
receive remuneration in the form of shares or share options, is recognised as an
employee benefit expense in the income statement.
The total expense to be apportioned over the vesting period of the benefit is
determined by reference to the fair value (excluding the effect of non
market-based vesting conditions) at the date of the grant. The assumptions
underlying the number of awards expected to vest are subsequently adjusted for
the effects of non market-based vesting to reflect the conditions prevailing at
the balance sheet date. Fair value is measured by the use of a binomial model.
The expected life used in the model has been adjusted, based on management's
best estimate, for the effects of the non-transferability, exercise restrictions
and behavioural considerations.
• The exemption permitted under IFRS 1 to apply IFRS 2 'Share-based
Payments' retrospectively to those options that were issued after 7 November
2002 and had not vested by 1st January 2006 has been taken.
Plant and equipment
Plant and equipment are stated at cost less accumulated depreciation and any
recognised impairment loss.
Depreciation is charged so as to write off the cost of assets, over their
estimated useful lives, using the straight-line method, on the following bases:
Leasehold improvements - 5 years
Fixtures, fittings and equipment - between 3 and 10 years
Plant, machinery and motor vehicles - between 3 and 5 years
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost
comprises direct materials and, where applicable, direct labour costs and those
overheads that have been incurred in bringing the inventories to their present
location and condition. Cost is calculated using the weighted average method.
Net realisable value represents the estimated selling price less all estimated
costs of completion and costs to be incurred in marketing, selling and
distribution.
Financial instruments
Financial assets and financial liabilities are recognised on the balance sheet
when the Group becomes a party to the contractual provisions of the instrument.
Investments are classified as either held-for trading or available for sale at
initial recognition and this designation is re-evaluated at each balance sheet
date. At the balance sheet date all such investments are classified as
available-for-sale. Investments are initially measured at cost, including
transaction costs. At subsequent reporting dates available-for-sale investments
are measured at fair value or at a cost where fair value is not readily
ascertainable. Gains and losses arising from changes in fair value are
recognised directly in equity until the investment is disposed of or is
determined to be impaired, at which time the cumulative gain or loss recognised
previously in equity is included in the net profit or loss for the period.
Trade and other receivables are measured at initial recognition at fair value,
and are subsequently measured at amortised cost using the effective interest
method. A provision is established when there is objective evidence that the
Group will not be able to collect all amounts due. The amount of any provision
is recognised in the income statement.
Cash and cash equivalents comprise cash held by the Group and short-term bank
deposits with an original maturity of three months or less.
Trade and other payables are initially measured at fair value, and are
subsequently measured at amortised cost, using the effective interest rate
method.
Financial liabilities and equity instruments issued by the Group are classified
in accordance with the substance of the contractual arrangements entered into
and the definitions of a financial liability and an equity instrument. An equity
instrument is any contract that evidences a residual interest in the assets of
the Group after deducting all of its liabilities. Equity instruments issued by
the company are recorded at the proceeds received, net of direct issue costs.
Interest bearing bank loan, overdrafts and other loans are recorded at the
proceeds received, net of direct issue costs. Finance costs are accounted for on
an accruals basis in the income statement using the effective interest method.
2. Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial information in conformity with generally accepted
accounting practice requires management to make estimates and judgements that
affect the reported amounts of assets and liabilities as well as the disclosure
of contingent assets and liabilities at the balance sheet date and the reported
amounts of revenues and expenses during the reporting period.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The significant judgements
made by management in applying the Group's accounting policies and the key
sources of estimation uncertainty were:
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in
use of the cash generating units to which goodwill has been allocated. The value
in use calculation requires the Group to estimate the future cash flows expected
to arise from the cash-generating unit and a suitable discount rate in order to
calculate the present value. No provision for impairment was made in the period
and the carrying value of goodwill at the balance sheet date was £105,028.
Share based payments
In determining the fair value of equity settled share based payments and the
related charge to the income statement, the Group makes assumptions about future
events and market conditions. In particular, judgement must be made as to the
likely number of shares that will vest, and the fair value of each award
granted. The fair value is determined using a valuation model which is dependent
on further estimates, including the Group's future dividend policy, employee
turnover, the timing with which options will be exercised and the future
volatility in the price of the Group' shares. Such assumptions are based on
publicly available information and reflect market expectations and advice taken
from qualified personnel. Different assumptions about these factors to those
made by the Group could materially affect the reported value of share based
payments.
3. Earnings per share
The calculation of basic and diluted loss per share is based on the loss for the
year attributable to ordinary shareholders of £11,486 (31 December 2006: loss
£295,891) and the weighted average number of shares in issue during the period
of 8,859,226 (31 December 2006: 8,098,629 - restated following the share capital
reorganisation). The weighted average number of shares used in the diluted loss
per share is 14,022,270 (31 December 2006: 13,261,673). The difference in the
weighted average number of shares used in diluted EPS compared to basic EPS
relates to the issue of employee share options in the period.
4. Acquisition of subsidiary
On 30 June 2007 the Group acquired the entire issued share capital of Gas
Ignition Limited, a supplier of gas ignition products to the boiler and
industrial markets. The consideration of £150,000 was satisfied by the issue of
2,142,857 new ordinary shares, at 7p each.
Book value Fair value Fair value
adjustments
£ £ £
Inventories 1,525 - 1,525
Cash 10,886 - 10,886
Trade and other payables 99,287 - 99,287
Borrowings (66,726) - (66,726)
44,972 - 44,972
Goodwill 36,720 68,308 105,028
70,815 68,308 150,000
Satisfied by:
Issue of Cinpart plc shares 150,000 - 150,000
Net cash inflow arising on acquisition:
Cash and cash equivalents acquired 10,886 - 10,886
The fair values on acquisition of Gas Ignition Limited are provisional due to
the timing of the transaction and will be finalised during the 2007 financial
year.
Goodwill arising on the acquisition of Gas Ignition Limited is the difference
between the fair value of the assets and liabilities acquired and the
consideration paid. The fair value of the consideration is based on the expected
future revenues generated from the products and customer list. Since the
acquisition date, Gas Ignition Limited has contributed £0 to group profit. If
the acquisition had occurred on 1 January 2007, group turnover for the period
would have been £1,698,891 and group loss for the period would have been
£13,257.
5. Cash used in operating activities
Six months ended 30 Six months ended Year ended
June 2007 30 June 2006 31 December 2006
Unaudited Unaudited Unaudited
£ £ £
Operating profit/(loss) 14,536 (109,963) (256,326)
Depreciation charge 26,755 75,023 95,658
Impairment of goodwill - - 243,387
Utilisation of provision for restructuring costs - (99,410) (99,410)
Closure of subsidiaries - (370,106) (431,524)
Loss on sale of fixed assets - 10,438 9,721
Share based payments 84,000 - -
Decrease in stocks 62,318 201,434 122,374
Increase in debtors (141,473) (141,329) (318,041)
Decrease in creditors (115,399) 259,954 (31,275)
Other non cash operating adjustment 11,076 (1) (36,857)
Net cash outflow from operating activities (58,187) (173,960) (702,293)
6. Movement in called up share capital
Six months ended Six months ended 30 Year ended
30 June 2007 June 2006 31 December 2006
Unaudited Unaudited Unaudited
£ £ £
Numbers
Ordinary shares 0.01p each - 792,178,629 861,226,247
New Ordinary shares 1p each 30,963,297 - -
Deferred shares 9.5p each 15,409,000 15,409,000 15,409,000
New Deferred shares of 0.49p each 404,779,408 404,779,408 404,779,408
451,151,705 1,212,367,037 1,281,414,655
Allotted, called up and fully paid
New Ordinary shares of 0.01p each 309,633 79,218 86,123
Deferred shares 9.5p each 1,463,855 1,463,855 1,463,855
New Deferred shares of 0.49p each 1,983,419 1,983,419 1,983,419
3,756,907 3,526,492 3,533,397
On the 6 June 2007 the Directors announced their plans to restructure the share
capital by the consolidation of every 100 0.01p ordinary share into one new
ordinary share of 1p. The reorganisation took place on the 29 June 2007.
On the 29 June 2007 12,857,142 new ordinary shares were placed, raising £900,000
to replay high cost borrowings and finance extra working capital to remove the
need for expensive worldwide air-freight costs.
At the same time the Directors swapped debt amounting to £463,240 for equity by
the issue of 6,617,712 new ordinary shares.
A further 2,142,857 new ordinary shares were issued in respect of the business
acquisition of Gas Ignition Ltd.
The issue of 733,333 shares announced on 13 December 2006 were allotted in June
2007.
7. Statement of changes in Equity
Six months ended Six months ended 30 Year ended
30 June 2007 June 2006 31 December 2006
Unaudited Unaudited Unaudited
£ £ £
Total recognised income and expenditure 747 (130,524) (331,592)
Share based payments 84,000 - -
Issue of new ordinary shares net of expenses 1,492,302 - 50,000
Capital and reserves attributable to equity (822,343) (540,751) (540,751)
holders at the beginning of the period
Capital and reserves attributable to equity 754,706 (671,275) (822,343)
holders at the end of the period
8. Transition to IFRS
Cinpart plc reported under UK GAAP in its previously published financial
statements for the year ended 31 December 2006. The analysis below shows a
reconciliation of the net assets and profit as reported under UK GAAP as at 1
January 2006 and 30 June 2006. There is no reconciliation as at 31 December 2006
as there was no effect of the transition on net assets at that date.
Reconciliation of net assets as at 1 January 2006
UK GAAP Effect of IFRS
transition
£ £ £
Non-current assets
Goodwill 243,387 243,387
Plant and equipment 256,791 - 256,791
Total non-current assets 500,178 500,178
Current assets
Inventories 425,052 - 425,052
Trade and other receivables 937,668 - 937,668
Cash and cash equivalents 29,717 - 29,717
Total current assets 1,392,437 - 1,392,437
Current Liabilities
Financial liabilities - borrowings (850,873) - (850,873)
Trade and other payables (1,473,712) - (1,473,712)
Total current liabilities (2,324,585) - (2,324,585)
Net current assets/(liabilities) (932,148) - (932,148)
Non-current liabilities
Financial liabilities - borrowings (9,371) - (9,371)
Provision for liabilities and charges (99,410) - (99,410)
Total current liabilities (108,781) - (108,781)
Net assets (540,751) - (540,751)
Equity
Share capital 3,526,492 - 3,526,492
Share premium account 1,041,532 - 1,041,532
Retained earnings (5,108,775) - (5,108,775)
(540,751) - (540,751)
Reconciliation of net assets as at 30 June 2006
UK GAAP Effect of IFRS
transition
£ £ £
Non-current assets
Goodwill 1 225,513 17,873 243,386
Plant and equipment 111,355 - 111,355
Total non-current assets 336,868 17,873 354,741
Current assets
Inventories 180,512 - 180,512
Trade and other receivables 357,779 - 357,779
Cash and cash equivalents 11,865 - 11,865
Total current assets 550,156 - 550,156
Current Liabilities
Financial liabilities - borrowings (360,290) - (360,290)
Trade and other payables (1,212,761) - (1,212,761)
Total current liabilities (1,573,051) - (1,573,051)
Net current assets/(liabilities) (1,022,895) - (1,022,895)
Non-current liabilities
Financial liabilities - borrowings (3,121) - (3,121)
Total current liabilities (3,121) - (3,121)
Net assets (689,148) 17,873 (671,275)
Equity
Share capital 3,526,492 - 3,526,492
Share premium account 1,041,532 - 1,041,532
Retained earnings (5,257,172) 17,873 (5,239,299)
(689,148) 17,873 (671,275)
The transition adjustment relates to the add back of goodwill amortised under UK
GAAP.
Cashflow statement
The Group's consolidated cashflow statements are presented in accordance with
IAS7. The statements present substantially the same information as that required
under UK GAAP, with the following principle exceptions:
1. Under UK GAAP, cash flows are presented under nine standard headings, whereas
IFRS requires the classification of cash flows resulting from operating,
investing and financing activities.
2. The cash flows reported under IAS7 relate to movements in cash and cash
equivalents, which include cash and short term liquid investments. Under UK
GAAP, cash comprises cash in hand and deposits repayable upon demand.
Reconciliation of loss for the year ended 31 December 2006
UK GAAP Effect of transition IFRS
£ £ £
Revenue 2,752,230 2,752,230
Cost of sales (2,048,045) - (2,048,045)
Loss before taxation 704,185 - 704,185
Administrative expenses 2 (1,184,396) 35,747 (1,148,649)
Exceptional items 223,885 (35,747) 188,138
Operating loss (256,326) (256,326)
-
Finance income 33 - 33
Finance costs (39,598) - (39,598)
Loss before taxation (295,891) - (295,891)
Reconciliation of loss for the period ended 30 June 2006
UK GAAP Effect of transition IFRS
£ £ £
Revenue 1,576,338 - 1,576,338
Cost of sales (1,209,819) - (1,209,819)
Loss before taxation 366,519 - 366,519
Administrative expenses 1 (864,461) 17,873 (846,588)
Exceptional items 370,106 - 370,106
Operating loss
(127,836) 17,873 (109,963)
Finance income 54 - 54
Finance costs (20,615) - (20,615)
Loss before taxation (148,397) 17,873 (130,524)
1. Under IAS 38, goodwill is not amortised. Instead it is subject to an annual
impairment review. Any impairment is recognised immediately. An adjustment
has been made to reverse the amortisation charged in the 6 months to 30 June
2006.
2. Under IAS 38, goodwill is not amortised. Instead it is subject to an annual
impairment review. Any impairment is recognised immediately. An adjustment
has been made to reverse the amortisation charged in the year to 31 December
2006 and to increase the impairment charge recognised in the year.
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