Interim Results

Aurora Russia Limited 28 September 2007 28 September 2007 Aurora Russia Limited Results for the six months ended 30 June 2007 Aurora Russia Limited ('Aurora Russia' or the 'Company'), the AIM-quoted investment vehicle established to make equity or equity-related investments in small and mid-sized private companies in Russia, today announces its results for the six months ended 30 June 2007. Operational highlights - £40 million of its capital now committed (including an additional £10 million investment in Kreditmart, announced today, to fund further growth) - All investments continue to perform strongly: o Unistream (£10.3 million investment, 26% owned), one of the leading Russian international money transfer companies - 2006 volumes were $1.84 billion - Monthly volumes transferred exceeded US$400 million for the first time in August - Second part of acquisition completed in July 2007 for £3.1 million - Plans to establish up to 550 money transfer cash desks over the next few years o Kreditmart (£22.9 million investment, 100% owned), the finance company distributing mortgages, equity release loans and other consumer finance products - First loan shop opened in Moscow in March 2007 followed by St. Petersburg in August 2007. Additional loan shops in Omsk, Novossibirsk, Rostov, and Ekaterinburg are scheduled to open within the next sixty days - Signed agreements with 18 banks to distribute mortgage products to its customers and currently offers over 400 loan products through its system o OSG Records Management (£5.2 million investment, 37.1% holding, loan £1.5m), the regional market leader in records management - Forecast to grow revenues for the current year at 30% - Pipeline of potential investment opportunities continues to build. Financial highlights - Net asset value as at 30 June 2007 £72.6 million, representing 96.8p per share (£71.7 million or 95.6p per share as at 30 June 2006) - Cash and cash equivalents as at 30 June 2007 of £45.3 million (£71.2 million as at 30 June 2006) - Consolidated net loss for the period of £205,000 (net profit of £173,000 from incorporation in February 2006 to 30 June 2006) - Consolidated loss per share for the period 0.27p (earnings per share 0.23p from incorporation in February 2006 to 30 June 2006) Commenting, Sir Trevor Chinn, Chairman of Aurora Russia, said: 'We are delighted with the developments to date and the continued growth of all three of our investee businesses. The Russian economy continues to be buoyant and is promoting increased demand for consumer goods and services. Given the strong pipeline of potential investments we are currently evaluating, we believe that we are well positioned to take advantage of this trend.' Enquiries: Aurora Russia Limited James Cook, Moscow +7 495 644 1662 John McRoberts, London +44 (0) 20 7839 7112 Investec Investment Banking Rupert Krefting +44 (0) 20 7597 5133 Paul Gray +44 (0) 20 7597 5176 Financial Dynamics Ed Gascoigne-Pees +44 (0) 20 7269 7132 Felicity Murdoch +44 (0) 20 7269 7243 Chairman's Statement I am pleased to present the unaudited results of the Company for the six months to 30 June 2007. In this period, Aurora Russia recorded a loss of £205,000 or 0.27p per share, compared to a net profit of £173,000 or 0.23p per share for the prior year period which ran from the Company's incorporation in February 2006 to 30 June 2006. The net asset value of the Company as at 30 June 2007 was £72.6 million or 96.8p per share, compared to £71.7 million or 95.6p per share at 30 June 2006. Cash and cash equivalents as at 30 June 2007 were £45.3 million, compared to £71.2 million as at 30 June 2006. Aurora Russia continues to implement its investment strategy of making equity and equity related investments in small and mid-sized private Russian companies, focused on the financial, business and consumer services sectors, where the Directors believe that there is potential for growth together with viable exit opportunities. Aurora Russia, advised by Aurora Investments Advisors Limited (the 'Manager'), has now successfully made three investments and we are positive about the prospects for the investments made to date which include: Unistream, a leading Russian money transfer company; Kreditmart, a finance company distributing mortgages, equity release loans and other consumer finance products; and Whitebrooks, the regional market leader in records management trading as OSG Records Management. Due to our confidence in Kreditmart we have decided to increase our investment in the company by an additional £10 million to support further growth. A separate announcement has been released today providing further information on this investment. Including this additional investment in Kreditmart, the Company has now committed approximately £40 million of its capital. It is currently evaluating a number of potential investments and its pipeline of opportunities continues to grow. Valuation Policy As mentioned in my year end statement, the Financial Reporting Review Panel now requires that investments held for resale are consolidated when the holding is greater than 50 per cent. Therefore, Aurora Russia's results consolidate those of Kreditmart, which is 100 per cent owned. The Board is encouraged by the trading performance of the investee companies, but considers it too early in the lives of these investments to recognise any revaluation in excess of cost. Consequently, no valuation surplus has been reflected in these financial statements. Administration and operating expenses Administration and operating expenses predominantly relate to the Manager's Fee and the Manager's Option which is being amortised over a period of five years. Hedging Policy The Company's policy is to hedge against any serious deterioration in the foreign currency value of its investments and, in the period to date, this has been achieved through the use of a combination of currency options and forward contracts. Any profits or losses on such contracts are taken to the income statement and are offset against currency fluctuations in the valuation of the underlying investments. Change of Accounting Reference Date As previously reported, the Company's accounting reference date has been changed from 31 December to 31 March in order to allow our investee companies more time to finalise their audited financial statements. Therefore, the next audited financial statements of Aurora Russia will be for the 15 month period to 31 March 2008. In this transitional period unaudited results will be issued for the twelve month period to 31 December 2007. Outlook The Russian economy continues to be buoyant with GDP forecast to grow by approximately 7.5 per cent both in 2007 and 2008. Analysts expect consumer inflation to remain in the region of 8.0 to 8.5 per cent in 2007, reducing to below 7.5 per cent in 2008. Exports are expected to be higher on the back of higher oil prices. The strong economy has led to an increase in disposable income, driving demand for consumer goods and services. As a result, there has been an increase in the services sector which has expanded each year for the past eight years. Higher disposable incomes and the growing middle class create demand for consumer and financial service products on which Aurora Russia's investment strategy is focused. Given the strong pipeline of investments and potential transactions being evaluated, the Board remains confident that Aurora Russia will continue to provide its investors with exposure to quality growth companies in the financial, business and consumer services sectors in Russia. Sir Trevor Chinn Chairman Investment Manager's Report Since inception, Aurora Investment Advisors has evaluated over 70 separate companies seeking capital that fall within its investment criteria. From these companies, we have selected those which we believe have promising growth prospects, strong management, a coherent strategy and a clear route to exit. We are currently reviewing five potential investment opportunities and our pipeline continues to grow. We are also delighted to announce a further £10 million investment today in Kreditmart to help accelerate its promising growth potential. We have completed investments in Unistream, Kreditmart and OSG Records Management and all three businesses are experiencing continued growth. Unistream is a leading company for international transfers in Russia and Kreditmart is making its mark in the fast growing mortgage market. OSG Records Management remains the dominant provider of records management and archive services in Russia, Ukraine, and Kazakhstan. The macroeconomic indicators for the Russian economy continue to show sustained expansion with a budget surplus of 7.5 per cent. Industrial production is increasing by 7.8 per cent (YoY) and unemployment remains stable at 6.2 per cent. The annual GDP growth is expected to be 7.5 per cent this year while the Central Bank and Stabilization Fund reserves have grown to US$417.3 billion and US$127.5 billion respectively. All of these factors have given Russia a solid foundation for continued growth. The Financial Services, Business and Consumer sectors in which we are investing are benefiting from Russia's economic growth and are well positioned for further growth. Investment in Unistream In July we completed the second phase of our £10.3 million investment in Unistream, resulting in Aurora Russia owning 26 per cent of the company. The second phase of the investment was contingent upon the authorisation from the Central Bank of Russia (CBR) for Aurora Russia to invest in excess of 20 per cent in a Russian bank. Unistream is regulated by the CBR and has a banking license to receive/send money transfers, open bank accounts for corporate entities and accept loan payments through its points of sale. Unistream is well positioned to realize strong revenue growth potential through aggressive expansion of its distribution network using both company-owned locations and agents. Currently Unistream has 170 of its own cash desks and more than 70 under construction. It plans to establish up to 550 money transfer cash desks over the next few years. In 2006, Unistream transferred approximately US$1.84 billion, making it one of the fastest growing and one of the largest Russian international money transfer companies. It continues to experience rapid growth and management reports that monthly volumes in August exceeded US$400 million for the first time. Investment in Kreditmart Last year Aurora Russia committed £12.5 million to launch Kreditmart, a wholly owned finance company distributing mortgages, equity release loans and other consumer finance products. The company has a strong management team recruited from previous successful ventures in this sector. Kreditmart is making progress in building its distribution network. Kreditmart opened its first loan shop in Moscow in March 2007 followed by its second loan shop in St. Petersburg in August. Additional branches in Omsk and Novosibirsk are expected to open in October. Leases have been signed on locations in Ekaterinburg and Rostov-on-Don, both to open by year-end. In addition, Kreditmart has opened an additional 5 sales points in high street locations in Moscow and the Moscow Region within the real estate sales offices of Doki and Realmart. Kreditmart expects to announce further distribution through these real estate agents in the cities where they operate. Kreditmart now employs 80 people and is quickly growing its brand in Russia. Kreditmart has signed agreements with 18 banks to distribute mortgage products to its customers and currently offers over 400 loan products through its system. In light of these promising initial results, Aurora Russia has committed an additional £10 million to finance further growth of Kreditmart and to accelerate its expansion in Russia. Kreditmart received international exposure this year when it was featured in a segment on CNN about the growing mortgage industry in Russia. The Russian mortgage market continues to grow very quickly and is expected to reach US$26 billion by the end of 2007, up from US$10 billion at the end of 2006. Kreditmart is well-positioned to participate in this growth while providing affordable housing and consumer finance solutions to Russia's emerging middle class. Investment in Flexinvest The Company has acquired 100 per cent of the shares of Flexinvest, a holding company registered in Cyprus, which will be used for the purchase of a banking platform in Russia in due course. This company has been capitalised with £6.4 million of Aurora Russia's cash. Investment in OSG Records Management On 24 July 2006, Aurora Russia made its first investment paying £5.2 million for 40.31 per cent (37.1 per cent on a fully diluted basis) of the common shares of Whitebrooks Investments, the parent company of the OSG Records Management Group. Aurora Russia also provided the company with a US$5 million short-term convertible working capital facility of which US$2.8 million has so far been drawn down. OSG remains the largest operator in Russia (the majority of its business is in Russia), Ukraine and Kazakhstan, and is considered a regional market leader in records management, providing cost-effective total records management, document storage, data security and confidential data destruction solutions. OSG is also established in Poland. OSG posted revenues in excess of US$8 million in 2006 compared with just under US$5 million in 2005. We anticipate that revenues will continue to grow at an annual rate of over 30 per cent. The company continues to grow in its key markets of Russia, Ukraine and Kazakhstan. We remain bullish about the Russian economy and are confident that we will continue to build our pipeline of potential transactions and expect to complete further investments in due course. John McRoberts and James Cook Aurora Investment Advisors Unaudited Condensed Consolidated Income Statement For the period from 1 January 2007 to 30 June 2007 Period from Period from 1 January 2007 22 February 2006 to 30 June 2007 to 30 June 2006 Notes £'000 £'000 Revenue 5 - Loan interest receivable 53 - Administration and operating expenses 3 (2,111) (677) Unrealised gains on revaluation of investments 10 1 - Gains on derivatives 67 - Other exchange losses (51) - Operating loss (2,036) (677) Bank interest receivable 1,627 850 Finance income 1,627 850 (Loss)/profit before tax (409) 173 Tax 4 204 - Net (loss)/profit for the period (205) 173 (Loss)/profit per share - Basic and Diluted (0.27p) 0.23p All items in the above statement derive from continuing operations. All losses and income are attributable to the equity holders of the parent company. There are no minority interests. Unaudited Condensed Consolidated Balance Sheet As at 30 June 2007 30 June 31 December 2007 2006 Notes £'000 £'000 Non-current assets Goodwill 5 196 - Other intangible assets 6 65 - Plant and equipment 7 389 3 Investments - at fair value through profit and loss 10 15,488 15,401 Loans receivable from associated company 10 1,450 563 Loans and advances to customers 11 456 - Derivative assets 12 414 - Deferred tax assets 4 207 - 18,665 15,967 Current assets 684 274 Trade and other receivables Derivative assets 12 5 - Cash and cash equivalents 55,896 65,778 56,585 66,052 Total assets 75,250 82,019 Current liabilities 12 - 8 Derivative liabilities Trade and other payables 13 3,508 10,362 Total liabilities 3,508 10,370 Total net assets 71,742 71,649 Equity 750 750 Share capital Special reserve 70,750 70,750 Share options reserve 770 470 Revenue reserve - deficit (526) (321) Translation reserve (2) - Total equity 71,742 71,649 Net asset value per share - Basic and Diluted 95.7p 95.5p Unaudited Condensed Company Balance Sheet As at 30 June 2007 30 June 31 December 2007 2006 Notes £'000 £'000 Non-current assets Investment in subsidiaries - at fair value through profit and loss 8 12,925 12,500 Investments - at fair value through profit and loss 10 15,425 15,401 Loans receivable from associated company 10 1,450 563 Derivative assets 12 414 - 30,214 28,464 Current assets Trade and other receivables 419 153 Derivative assets 12 5 - Cash and cash equivalents 45,303 63,850 45,727 64,003 Total assets 75,941 92,467 Current liabilities 12 - 8 Derivative liabilities Trade and other payables 13 3,361 20,512 Total liabilities 3,361 20,520 Total net assets 72,580 71,947 Equity 750 750 Share capital Special reserve 70,750 70,750 Share options reserve 770 470 Revenue reserve - surplus/(deficit) 310 (23) Total equity 72,580 71,947 Net asset value per share - Basic and Diluted 96.8p 95.9p Unaudited Condensed Consolidated Statement of Changes in Equity For the period from 1 January 2007 to 30 June 2007 Share Share Special Share Revenue Translation Total Capital Premium Reserve Options Reserve Reserve Reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 For the period 22 February 2006 to 30 June 2006 Issue of ordinary share capital, net 750 70,790 71,540 of issue costs Conversion of share premium account (70,790) 70,790 - Net profit for the period 173 173 At 30 June 2006 750 - 70,790 - 173 - 71,713 For the period 1 January 2007 to 30 June 2007 At 1 January 2007 750 - 70,750 470 (321) - 71,649 Net loss for the period (205) (205) Recognition in respect of share-based 300 300 payments Loss recognised directly in equity (2) (2) At 30 June 2007 750 - 70,750 770 (526) (2) 71,742 Unaudited Condensed Consolidated Cash Flow Statement For the period from 1 January 2007 to 30 June 2007 Notes Period from Period from 1 January 2007 22 February 2006 to 30 June 2007 to 30 June 2006 Cash flows from operating activities £'000 £'000 Operating loss (2,036) (677) Adjustments for: Increase in operating trade and other receivables (178) (601) Increase in operating trade and other payables 65 114 Loan interest receivable (53) - Revaluation of investments (1) - Recognised share based payments 300 - Unrealised losses on derivatives 60 - Other unrealised exchange losses 31 - Depreciation 19 - Loans advanced to customers 11 (456) - Net cash outflow from operating activities (2,249) (1,164) Cash flows from investing activities (6,913) - Acquisition of investments Acquisition of subsidiary net of cash acquired (257) - Acquisition of derivatives (488) - Acquisition of intangible assets 6 (66) - Acquisition of plant and equipment 7 (404) - Loans advanced to associated company (872) - Bank interest received 1,367 850 Net cash (outflow)/inflow from investing activities (7,633) 850 Cash flows from financing activities - 75,000 Proceeds from issue of ordinary share capital Issue costs - (3,460) Net cash inflow from financing activities - 71,540 Net increase in cash and cash equivalents (9,882) 71,226 Opening cash and cash equivalents 65,778 - Closing cash and cash equivalents 55,896 71,226 Notes to the Unaudited Condensed Financial Statements For the period from 1 January 2007 to 30 June 2007 1. General information Aurora Russia Limited ('the Company') was incorporated in Guernsey on 22 February 2006, and was listed on AIM on 24 March 2006. The Company was established to acquire interests in small and mid-sized private companies in Russia, focusing on the financial, business and consumer services sectors. 2. Accounting Policies Basis of consolidation and preparation These unaudited interim condensed financial statements have been consolidated and prepared on a basis consistent with accounting policies set out in the Aurora Russia Limited audited annual report and financial statements for the period ended 31 December 2006. The Group's financial statements incorporate significant estimates, in particular in respect of the amounts recorded for the fair value of the investments. By their nature these estimates are subject to measurement uncertainty and the effect on the Group's financial statements of changes in estimates in future periods in future periods could be significant. Interim accounts The Company has complied with the requirements of IAS 34 Interim Financial Reporting in respect of these interim financial statements. The following additional accounting policies became effective during the period: Revenue recognition Revenue is recognised at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, VAT and other sales related taxes Impairment of tangible and intangible assets excluding goodwill At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Recoverable amount is the higher of fair value less costs to sell and value in use. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Impairment losses and reversals of impairment losses are recognised immediately in the income statement. Goodwill Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed. Loans and advances to customers Loans and advances to customers are accounted for at amortised cost using the effective interest method. Loans and advances are initially recognised when cash is advanced to the borrowers at fair value inclusive of transaction costs. Loans and advances are derecognised when the rights to receive cash flows from them have expired. Quoted investments Quoted investments are designated as fair value through profit and loss. They are initially recognised at cost on a trade date basis, and are subsequently re-measured at fair value, which is considered to be the bid price as at the balance sheet date. Upon the sale of these investments, any profit or loss is taken to the Income Statement. 3. Administration and operating expenses The net loss for the period has been arrived at after charging the following items of expenditure: 1 January 22 February to 30 June to 30 June 2007 2006 £'000 £'000 Company 719 521 Investment management fee Auditors' remuneration 15 9 Directors' remuneration 83 59 Share based payments 300 - Other operating and administrative expenses 213 88 1,330 677 Kreditmart 15 - Auditors' remuneration Directors' remuneration 40 - Other operating and administrative expenses 726 - 781 - Total 2,111 677 4. Tax 1 January to 30 22 February to 30 June June 2007 2006 £'000 £'000 Group Group Current tax charge 3 - Deferred tax asset arising on losses carried forward (207) - Net tax credit to the Income Statement (204) - The Company is exempt from Guernsey taxation on income derived outside Guernsey and bank interest earned in Guernsey. The Company has obtained exemption from Guernsey Income Tax under the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 and has paid an annual exemption fee of £600. The Group is liable to tax at a rate of 24% arising on its activities in Russia. The Group is liable to tax at a rate of 10% arising on its activities in Cyprus. 5. Goodwill £'000 Group Cost: 196 Recognised on acquisition of Flexinvest Limited At 30 June 2007 196 Net book value: At 30 June 2007 196 No impairment losses have been recognised in respect of the goodwill in the period ended 30 June 2007. For further details in respect of the acquisition of Flexinvest Limited, please refer to note 9. 6. Other intangible assets £'000 Group Cost: 66 Additions At 30 June 2007 66 Depreciation: 1 Charge for the period At 30 June 2007 1 Net book value: At 30 June 2007 65 Other intangible assets comprises computer software, website development costs, a company logotype and a promotional film. The useful life of the intangible assets is estimated to be 3 years. 7. Plant and equipment Fixtures & Furniture & fittings equipment Total £'000 £'000 £'000 Group Group Group Cost: - 3 3 At 31 December 2006 Additions 200 204 404 At 30 June 2007 200 207 407 Depreciation: - - - At 31 December 2006 Charge for the period 9 9 18 At 30 June 2007 9 9 18 Net book value: At 31 December 2006 - 3 3 At 30 June 2007 191 198 389 The useful lives of the assets are estimated as follows: Fixtures & fittings 3-4 years Furniture 5 years Equipment 3 years 8. Investment in subsidiaries - at fair value through profit and loss 2007 2006 £'000 £'000 Company Company Kreditmart Finance Limited 12,579 12,500 Flexinvest Limited 346 - 12,925 12,500 The financial statements of the Group consolidate the results, assets and liabilities of the subsidiary companies listed below: Name of subsidiary undertaking Country of Class of % of class Principal incorporation share held activity Kreditmart Finance Limited Cyprus Ordinary 100.0% Consumer finance Flexinvest Limited Cyprus Ordinary 99.5% Investment holding 9. Acquisition of subsidiary Flexinvest Limited Fair value on acquisition £'000 Company Non-current assets 62 Quoted investments Current assets 90 Cash and cash equivalents Current liabilities (2) Trade and other payables 150 Goodwill on acquisition 196 Cost of acquisition 346 Date of acquisition 27 June 2007 The cost of acquisition was paid entirely in cash. The Company purchased a 99.5% stake in Flexinvest Limited, the remaining 0.5% stake being purchased by the Company's subsidiary Kreditmart Finance Limited. 10. Investments - at fair value through profit and loss 2007 2007 2006 2006 £'000 £'000 £'000 £'000 Group Company Group Company Whitebrooks Investments Limited 5,147 5,147 5,036 5,036 Unistream Bank 10,278 10,278 10,365 10,365 Quoted investments 63 - - - Total investments at fair value through profit and 15,488 15,425 15,401 15,401 loss Change in fair value of investments at fair value through profit and loss 2007 2006 £'000 £'000 Group Group Whitebrooks Investments Limited 89 - Unistream Bank (88) - Total unrealised gains 1 - These changes are in respect of local currency revaluation for reporting purposes. The Company acquired a 40.3% stake in Whitebrooks Investments Limited ('Whitebrooks') on 24 July 2006, diluted to 37.1% after the agreement of a management option scheme. The Company committed to acquire a 26% stake in Unistream Bank ('Unistream') on 30 November 2006, conditional upon CBR approval. At the balance sheet date funds had been drawn down from this commitment to acquire a 17.7% stake. The remaining 8.3% stake was acquired on 26 July 2007 once the CBR had given its approval for the Company to own more than 20% of a Russian bank. As a result of the size of the stakes in these two companies, Whitebrooks and Unistream could potentially qualify as associated companies, which would normally require that they be equity accounted in the books of the Company. However, the Company has taken advantage of the exemption available to it under IAS 28, and hence accounts for these as investments at fair value through profit and loss. In the Group's 2006 financial statements, the investments in Whitebrooks and Unistream were deemed to be denominated in US dollars, however with effect from 1 January 2007, following a review of the Group's hedging strategy, these investments have been redenominated into Russian roubles, as it was felt that this best reflected the underlying nature of the currency exposure of the investee companies. In the view of the Valuation Committee, insufficient time has elapsed from the acquisition of the investments to permit any meaningful upwards revaluation of the investments. There are no factors of which the Committee is aware that would lead it to value the investments at less than cost price in their currency of denomination. In addition to its investment in the shares of Whitebrooks, the Company has provided the investee company with a loan facility of US$5 million. The drawn down tranches of the loan are each repayable within twelve months of the drawdown date, however it is likely that further drawdowns will be made in order to repay any amounts still outstanding at maturity. In the event of default the loan is convertible into ordinary shares of the borrower. The outstanding balance as at 30 June 2007 was as follows: 2007 2006 £'000 £'000 Group and Group and Company Company Loans drawn down plus capitalised interest 1,450 563 11. Loans and advances to customers 2007 2006 £'000 £'000 Group Group Residential mortgages 456 - The mortgages are secured upon borrowers' private residences, are repayable in equal monthly installments and mature between 2014 and 2022. Interest is charged at rates between 11% and 13%. 12. Derivative assets/(liabilities) The Group utilises currency options to hedge its rouble-denominated investments against any significant devaluation in the value of the rouble against sterling. Forward foreign exchange contracts are utilised to hedge the loan receivable from Whitebrooks against movements in the sterling exchange rate against the US dollar. At the balance sheet date the fair value of currency derivatives was as follows: 2007 2006 £'000 £'000 Group and Group and Company Company Non-current derivative assets 414 - £20m sterling/rouble 3 year call option @ 56.87 maturing 1 July 2010 Current derivative assets/(liabilities) 5 (8) Sterling/US dollar forward foreign exchange contracts The following contracts were open at the Balance Sheet date (Group and Company):- Sell US$ 1,600,000 at 1.9973 to buy £801,081 for value 31 December 2007; Sell US$ 1,200,000 at 2.0005 to buy £599,850 for value 31 December 2007. 13. Trade and other payables 2007 2007 2006 2006 £'000 £'000 £'000 £'000 Group Company Group Company Kreditmart Finance Limited - undrawn investment - - - 10,166 commitment Unistream Bank - undrawn investment commitment 3,181 3,181 10,214 10,214 Expense accruals 327 180 148 132 3,508 3,361 10,362 20,512 14. Events after the balance sheet date On 17 July 2007 the Company subscribed for a further 60,000 shares in Flexinvest Limited at a cost of £6,104,700. These funds are held in cash or cash equivalents pending investment in a banking platform. On 26 July 2007 the Company completed its purchase of Unistream Bank following receipt of Central Bank of Russia approval for the Company to own more than 20% of a Russian Bank. On 27 September 2007 the Board approved the investment of an additional £10 million in Kreditmart. 15. Related party transactions Transactions between the Company and any subsidiaries which are related parties have been eliminated on consolidation and are not disclosed in this note. The Company pays fees to Aurora Investment Advisors Limited ('AIAL') for its services as investment manager and advisor. The total charge to the Income Statement during the period was £719,470 (2006: £521,277). There were no outstanding fees at the period end (2006: Nil). John McRoberts and James Cook each hold 47.5% of the ordinary share capital and 42.5% of the non-voting preference share capital of AIAL. A trust created by Sir Trevor Chinn (in which he has no interest) holds 10% of the non-voting preference shares in AIAL. The Company pays fees to Investec Administration Services Limited ('IASL') for its services as administrator. The total charge to the Income Statement during the period was £40,000 (2006: £26,250), of which £18,750 was outstanding at the period end (2006: £18,750). Steve Coe, a director of the Company, served as a director of IASL until his resignation on 26 April 2007. The Directors of the Company and of Kreditmart OOO received fees for their services. The total charge to the Income Statement during the period was £123,263 (2006: £58,685), of which £37,786 was outstanding at the period end (2006: Nil). This information is provided by RNS The company news service from the London Stock Exchange

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