Interim Results - Six months

RNS Number : 0992Q

Jarvis Securities plc

29 July 2010

 



29 July 2010

Jarvis Securities plc

("Jarvis", the "Company" or the "Group")

Interim Results for the six months ended 30 June 2010

Highlights:

·     Average daily trade volumes up 62% on the first six months of 2009

·     Client numbers up 68% on 30 June 2009

·     Client cash balances up 58% on 30 June 2009

·     X-O.co.uk low-cost internet dealing service successfully launched

·     Revenue up 10% and profit before tax of £0.8 million.

·     Revenue excluding interest turn up 20% on six months ended 30 June 2009

·     Third interim dividend of 2p per ordinary share declared

Andrew Grant, Chairman and Chief Executive, commented: "These results are particularly pleasing for all concerned as they demonstrate that the efforts and internal changes undertaken over the last two years has enabled us to produce good results without  reliance on interest income and that there is a fundamental business plan that works."

Enquiries:

Jarvis Securities plc          Tel: [phone]

Andrew Grant

Arbuthnot Securities         Tel: [phone]

Alasdair Younie

Notes:

Jarvis Securities plc is the holding company for Jarvis Investment Management Limited (AIM: JIM.L) a stock broking company and outsourced service provider for bespoke tailored financial administration. Jarvis was established in 1984 and is a member of the London Stock Exchange; a broker dealer member of PLUS Markets, authorised and regulated by the Financial Services Authority and an HM Revenue & Customs approved ISA manager. Jarvis has more than 50,000 retail clients and a growing number of institutional clients. As well as normal retail broking Jarvis provides cost effective and flexible share trading facilities within ISA and SIPP wrappers.

Jarvis provides outsourced and partnered financial administration services to a number of third party organisations.  These organisations include advisers, stockbrokers, banks and fund managers.  Jarvis can tailor its administration processes to the requirements of each organisation and has a strong reputation for flexibility and cost-effectiveness.

This announcement can also be found on the Company's website, www.jarvissecurities.co.uk

Chairman's statement

During the period under review we have seen some very volatile activity in equity markets generally and in specific stocks such as BP.  These global events have in fact contributed to continued growth and to achieve record trade volumes, daily average volumes and client numbers.

New commercial agreements have been signed and most significantly a new contract with Worldlink, the owner of the UK and US patent for the transmission of profiled REAL-time data to mobile devices.  The contract is for the provision of a retail share trading platform for clients of Worldlink and certain national newspapers.  The first, The Daily Express have launched "The Express Share dealing Service" and it is anticipated that others will follow. The Worldlink "Imobilemarkets" service is being made available to clients of Jarvis free of charge and it is hoped that this in turn will drive activity through stock and financial news flow. I am also pleased to be able to report that we have not experienced any new commercial client failures during this period and my belief that we now have a better quality robust commercial client base as stated in my last statement is founded.

The launch of our most recent on line trading facility X-O.co.uk in January 2010 has provided very positive results.  Prospects for this service are very encouraging and an anticipated rise in interest rates will further enhance the financial returns being achieved.

As has been previously stated the low bank base rate continues to impact on our financial results though we have seen a slight improvement during the period in rates being secured.  Cash funds are currently just below record levels but continue to spike to new heights with the increased trading activity and client accounts.  These  factors coupled with the close monitoring and control of costs whilst continuing to drive higher volumes through our platform have enabled us to exceed our forecast. The half year results should give shareholders a growing confidence that 2010 will be a good year despite the economic climate. 

Andrew J Grant

Chairman

Key performance indicators (KPI)

The key performance indicators (KPIs) are designed to give stakeholders in the business a more rounded view of the Group's performance. Further details on the KPIs and their measurement can be found in the last Annual Report. A selection of KPIs and the Group's results to the interim period for these are detailed below. These results have been annualised from the position at 30 June 2010 where measurement over a year is required.

KPI:	30/6/10	30/6/09
Profit before tax margin	33%	47%
ROCE - return on capital employed (annualised)	112%	162%
Revenue per employee (annualised)	£150,878	£167,902
Funds under administration	£612M	£431M
Growth in client numbers (annualised)	49.2%	7.8%
Complaints ratio (annualised)	1.08	1.10
Telephone calls answered in three rings	95%	87%
Sickness days (annualised)	0.75%	1.51%
Growth in basic earnings per share	-26.4%	-13.1%

Consolidated income statement for the period ended 30 June 2010

		Six months ended
	Notes	30/6/10	30/6/09
		£	£
Continuing operations
Revenue		2,539,774	2,308,657
Administrative expenses		(1,693,328)	(1,219,673)
Finance costs		(2,266)	(2,209)
Profit before income tax		844,180	1,086,775
Income tax charge	4	(257,740)	(294,041)
Profit for the period		586,440	792,734
Attributable to equity holders of the parent		586,440	792,734
Earnings per share	5	p	p
Basic		5.58	7.58
Diluted		5.21	7.02

Consolidated statement of financial position at 30 June 2010

	Notes	30/6/10		31/12/09	30/6/09
		£		£	£
Assets
Non-current assets
Property, plant and equipment		196,361		267,105	322,704
Intangible assets		293,876		439,481	430,673
Goodwill		342,872		342,872	342,872
Investment held to maturity		-		39,601	39,601
Available-for-sale investments		100,450		112,001	115,001
Deferred income tax		-		-	-
		933,559		1,201,060	1,250,851
Current assets
Trade and other receivables		10,609,465		9,581,911	6,792,679
Investments held for trading		18,825		26,722	56,161
Cash and cash equivalents		14,880,035		8,522,615	10,424,001
		25,508,325		18,131,248	17,272,841
Total assets		26,441,884		19,332,308	18,523,692
Equity and liabilities
Capital and reserves
Share capital	7	105,655		105,000	105,000
Share premium		833,317		779,934	779,934
Merger reserve		9,900		9,900	9,900
Capital redemption reserve		9,845		9,845	9,845
Fair value reserve		29,901		85,902	113,902
Share option reserve		85,310		74,394	63,114
Retained earnings		494,636		328,206	340,916
Own shares held in treasury		(83,319)		(83,319)	(83,319)
Total equity		1,485,245		1,309,862	1,339,292
Non-current liabilities
Deferred income tax		1,599		1,599	-
Current liabilities
Trade and other payables		24,680,031		17,602,538	16,396,267
Income tax	4	275,009		418,309	788,133
		24,955,040		18,020,847	17,184,400
Total equity and liabilities		26,441,884		19,332,308	18,523,692

Consolidated statement of comprehensive income

				Six months ended
				30/6/10	30/6/09
				£	£
Purchase of own shares				-	-
Deferred tax (charge) / asset on share options				-	-
Net income recognised directly in equity				-	-
Profit for the period				586,440	792,734
Total comprehensive income for the period				586,440	792,734
Attributable to equity holders of the parent				586,440	792,734

Consolidated statement of changes in equity for the period

	Share capital	Share premium	Merger reserve	Capital redemption reserve	Fair value reserve	Share option reserve	Retained earnings	Own shares held	Attributable to equity holders of the company
	£	£	£	£	£	£	£	£	£
Balance at 31/12/08	105,000	779,934	9,900	9,845	56,401	54,099	1,255,387	(83,319)	2,187,247
Expense of employee options	-	-	-	-	-	9,015	-	-	9,015
Profit for the period	-	-	-	-	-	-	792,734	-	792,734
Dividends	-	-	-	-	-	-	(1,707,205)	-	(1,707,205)
Investment revaluation	-	-	-	-	57,501	-	-	-	57,501
Balance at 30/6/09	105,000	779,934	9,900	9,845	113,902	63,114	340,916	(83,319)	1,339,292
Expense of employee options	-	-	-	-	-	11,280	-	-	11,280
Profit for the period	-	-	-	-	-	-	405,770	-	405,770
Dividends	-	-	-	-	-	-	(418,480)	-	(418,480)
Investment revaluation	-	-	-	-	(28,000)	-	-	-	(28,000)
Balance at 31/12/09	105,000	779,934	9,900	9,845	85,902	74,394	328,206	(83,319)	1,309,862
Issue of shares	655	53,383	-	-	-	-	-	-	54,038
Expense of employee options	-	-	-	-	-	10,916	-	-	10,916
Profit for the period	-	-	-	-	-	-	586,440	-	586,440
Dividends	-	-	-	-	-	-	(420,010)	-	(420,010)
Investment revaluation	-	-	-	-	(56,001)	-	-	-	(56,001)
Balance at 30/6/10	105,655	833,317	9,900	9,845	29,901	85,310	494,636	(83,319)	1,485,245

Condensed statement of cashflows for the period ended 30 June 2010

				Six months ended
				30/6/10	30/6/09
				£	£
Net cash from operating activities				127,082	616,495
Additions to non-current assets				(15,463)	(327,961)
Proceeds from the sale of property, plant and equipment				5,000	-
Net cash used in investing activities				(10,463)	(327,961)
Other financing cash flows (net)				(365,971)	(313,860)
Net cash from (used in) financing activities				(365,971)	(313,860)
Net (decrease) in cash and cash equivalents				(249,352)	(25,326)
Cash and cash equivalents at 1 January				507,306	273,621
Cash and cash equivalents at 30 June				257,954	248,295
Bank balances and cash				257,954	248,295
Net cash held to settle DVP bargains				14,622,081	10,175,706
Cash and cash equivalents per Balance Sheet				14,880,035	10,424,001

Notes forming part of the interim financial statements

1. Basis of preparation

The interim consolidated financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting. These interim financial statements have been prepared in accordance with those IFRS standards and IFRIC interpretations issued and effective or issued and early adopted as at the time of preparing these statements (July 2010).

These consolidated interim financial statements have been prepared in accordance with the accounting policies set out below, which have been consistently applied to all the periods presented. These accounting policies comply with applicable IFRS standards and IFRIC interpretations issued and effective at the time of preparing these statements.

At the date of authorisation of these interim financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases had not yet been adopted by the EU):

IFRS 9 - Financial Instruments

IAS 24 - Related party disclosures (Revised 2009)

IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments

Amendment to IFRS 1 - Limited exemption from IFRS7 disclosures for first time adopters

Amendment to IAS 32 Classification of Rights Issues

Amendment to IFRIC 14 Prepayments of a minimum funding requirement

Adoption of these Standards and Interpretations is not expected to have a material impact on the financial statements of the Company or Group.

The preparation of these interim financial statements in accordance with IFRS requires the use of certain accounting estimates. It also requires management to exercise judgement in the process of applying the Company's accounting policies. The areas involving a high degree of judgement or complexity, or areas where the assumptions and estimates are significant to the consolidated interim financial statements are disclosed in Note 9.

The financial information contained in this report, which has not been audited, does not constitute statutory accounts as defined by Section 434 of the Companies Act 2006. The auditors' report for the 2009 accounts was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.

2. Accounting policies

(a) Revenue

Revenue represents net sales of services, commissions and interest excluding value added tax. Management fees charged in arrears are accrued pro-rata for the expired period of each charging interval. Interest is accrued on cash deposits pro-rata for the expired period of the deposit. Commission income is recognised as earned.

(b) Basis of consolidation

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date on which control ceases. The group financial statements consolidate the financial statements of Jarvis Securities plc, Jarvis Investment Management Limited, Sharegain Limited, JIM Nominees Limited, Galleon Nominees Limited and Dudley Road Nominees Limited made up to 30 June 2010.

The Group uses the purchase methodof accounting for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.  Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The cost of acquisition over the fair value of the Group's share of identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the Group's share of the net assets of the subsidiary acquired, the difference is recognised in the income statement.

Intra-group sales and profits are eliminated on consolidation and all sales and profit figures relate to external transactions only. No profit and loss account is presented for Jarvis Securities plc as provided by S408 of the Companies Act 2006.

(c) Property, plant and equipment

All property, plant and equipment is shown at cost less subsequent depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is provided on cost in equal annual instalments over the lives of the assets at the following rates:

Leasehold improvements	-	33% on cost
Motor vehicles	-	15% on cost
Office equipment	-	20% on cost

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement. Impairment reviews of property, plant and equipment are undertaken if there are indications that the carrying values may not be recoverable or that the recoverable amounts may be less than the asset's carrying value.

(d) Intangible assets

Intangible assets are carried at cost less accumulated amortisation. If acquired as part of a business combination the initial cost of the intangible asset is the fair value at the acquisition date. Amortisation is charged to administrative expenses within the income statement and provided on cost in equal annual instalments over the lives of the assets at the following rates:

Databases	-	4% on cost
Customer relationships	-	7% on cost
Software developments	-	33% on cost
Website	-	33% on cost

Impairment reviews of intangible assets are undertaken if there are indications that the carrying values may not be recoverable or that the recoverable amounts may be less than the asset's carrying value.

(e) Goodwill

Goodwill represents the excess of the fair value of the consideration given over the aggregate fair values of the net identifiable assets of the acquired trade and assets at the date of acquisition. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Any negative goodwill arising is credited to the income statement in full immediately.

(f) Deferred income tax

Deferred income tax is provided in full, using the liability method, on differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. The deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting or taxable profit or loss. Deferred income tax is determined using tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

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

(g) Segmental reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. The directors regard the operations of the Group as a single segment.

(h) Pensions

The group operates a defined contribution pension scheme. Contributions payable for the year are charged to the income statement.

(i) Stockbroking balances

The gross assets and liabilities of the group relating to stockbroking transactions on behalf of clients are included in trade receivables, trade payables and cash and cash equivalents.

(j) Operating leases and finance leases

Costs in respect of operating leases are charged on a straight line basis over the lease term in arriving at the profit before income tax. Where the Company has entered into finance leases, the obligations to the lessor are shown as part of borrowings and the rights in the corresponding assets are treated in the same way as owned fixed assets. Leases are regarded as finance leases where their terms transfer to the lessee substantially all the benefits and burdens of ownership other than right to legal title.

(k) Finance lease interest

The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

(l) Investments

The Group classifies its investments in the following categories: investments held to maturity, investments held for trading and available-for-sale investments. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re-evaluates this designation at every reporting date.

Investments held to maturity - Investments held to maturity are stated at cost. Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability to hold to maturity. Assets in this category are classified as non-current.

Investments held for trading - Investments held for trading are stated at fair value. An investment is classified in this category if acquired principally for the purpose of selling in the short term. Assets in this category are classified as current.

Available-for-sale investments - Available-for-sale investments are stated at fair value. They are included in non-current assets unless management intends to dispose of them within 12 months of the balance sheet date.

Purchases and sales of investments are recognised on the trade-date - the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value. Investments are derecognised when the rights to receive cash flows from the investments have expired or been transferred and the Group has transferred substantially all the risks and rewards of ownership. Realised and unrealised gains and losses arising from changes in fair value of investments held for trading are included in the income statement in the period in which they arise. Unrealised gains and losses arising in changes in the fair value of available-for-sale investments are recognised in equity. When investments classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment securities.

The fair value of quoted investments is based on current bid prices. If the market for an investment is not active, the Group establishes fair value by using valuation techniques. These include the use of recent arm's length transactions, reference to other instruments that are substantially the same, or discounted cash flow analysis refined to reflect the issuer's specific circumstances.

The Group assesses at each balance sheet date whether there is objective evidence that an investment is impaired. In the case of investments classified as available-for-sale, a significant or prolonged decline in the fair value below its cost is considered in determining whether the security is impaired.

Investments in subsidiaries

Investments in subsidiaries are stated at cost less provision for any impairment in value.

(m) Cashflow statement

Cash movements relating to stockbroking balances derived from client trading are excluded from the cashflow statement on the basis that these amounts do not form part of the cashflow position of the group. DVP cash is client funds held in trust for delivery versus payment transactions in order to pay market counterparties for the purchase of equities and other instruments settled via CREST, the electronic mechanism for the simultaneous and irrevocable transfer of cash and securities operated by Euroclear UK & Ireland Ltd. Hence such cash and cash equivalents are not readily available for use by the company as they relate to client transactions.

(n) Foreign exchange

The Group offers settlement of trades in sterling, US dollars, euros, Canadian dollars, Australian dollars, South African rand and Swiss francs. The Group does not hold any assets or liabilities other than in sterling and converts client currency on matching terms to settlement of trades realising any currency gain or loss immediately in the income statement. Consequently the Group has no foreign exchange risk.

(o) Share capital

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction from proceeds, net of income tax. Where the Company purchases its equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income tax), is deducted from equity attributable to the company's equity holders until the shares are cancelled, reissued or disposed of.  Where such shares are subsequently sold or reissued, any consideration received, net of any directly incremental transaction costs and the related income tax effects, is included in equity attributable to the company's equity holders.

 

(p) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

 

(q) Current income tax

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the balance sheet date.  They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate based on the taxable profit for the year.  

 

(r) Dividend distribution

Dividend distribution to the Company's shareholders is recognised as a liability in the Group's financial statements in the period in which interim dividends are notified to shareholders and final dividends are approved by the Company's shareholders.

(s) Share based payments

The Group has applied the requirements of IFRS 2 Share-based Payment. In accordance with the transitional provisions, IFRS 2 has been applied to all grants of equity instruments after 7 November 2002 that were unvested at 1 January 2005. The Company has also adopted IFRIC 11 from 1 January 2008.

The Group issues equity-settled share-based payments to certain employees and other personnel. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effects of non market-based vesting conditions.

Fair value is measured by use of a Black-Scholes option pricing model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

3. Segmental information

All of the reported revenue and operational results for the period derive from the Group's continuing financial services operations.

4. Income tax charge

Interim period income tax is accrued based on an estimated average annual effective income tax rate of 30.5%.

5. Earnings per share

	Six months ended 30/6/10			Six months ended 30/6/09
	Earnings	Weighted average no. of shares	Per share amount	Earnings	Weighted average no. of shares	Per share amount
	£	£	p	£	£	p
Earnings attributable to ordinary shareholders	586,440	10,506,681	5.58	792,734	10,462,000	7.58
Dilutive effect of options		754,500			831,000
Diluted earnings per share	586,440	11,261,181	5.21	792,734	11,293,000	7.02

Treasury shares have been deducted from the number of shares in issue for the purpose of calculating the weighted average number of shares at the period end.

6. Dividends

During the interim period dividends totalling 4p per ordinary share were declared and paid.

7. Share capital

During the interim period 65,500 new Ordinary 1p shares in the company were issued to satisfy the exercise of options by employees of the Group.

8. Interim measurement

Costs that incur unevenly during the financial year are anticipated or deferred in the interim report only if it would also be appropriate to anticipate or defer such costs at the end of the financial year.

9. Critical accounting estimates and judgements

The Group makes estimates and assumptions concerning the future. These estimates and judgements are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets within the next financial year relate to goodwill, intangible assets and the expense of employee options.

The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2 (e). These calculations require the use of estimates.

The Group considers at least annually whether there are indications that the carrying values of intangible assets may not be recoverable, or that the recoverable amounts may be less than the asset's carrying value, in which case an impairment review is performed. These calculations require the use of estimates.

Employee options are expensed equally in each year from issue to the date of first exercise. The total cost is calculated on issue based on the Black Scholes method with a volatility rate of 30% and a risk free interest rate of 3.75%. It is assumed that all current employees with options will still qualify for the options at the exercise date.

10. Related party transactions

The ultimate controlling party of the Company and Group is Andrew J Grant. On 26 September 2007 the Company entered into a lease with Sion Holdings Limited, a company controlled by A J Grant, for the rental of 78 Mount Ephraim, a self-contained office building. The lease has an annual rental of £63,500, being the market rate on an arm's length basis, and expires on 26 September 2017. During the period the Company paid Sion Holdings Limited rent of £31,750 under the terms of the lease of 78 Mount Ephraim.

11. Capital commitments

At 30 June 2010 the Company had no material capital commitments.

12. Event after the statement of financial position date

The Board propose the payment of a third interim dividend for the year to 31 December 2010 of 2p per Ordinary Share to holders on the register at 13 August 2010 and payable on 10 September 2010.

13. Intangible assets impairment review

During the interim period an impairment review was undertaken resulting in an impairment charge to the income statement of £124,847.

INDEPENDENT REVIEW REPORT TO

JARVIS SECURITIES PLC

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2010 which comprises the consolidated income statement, consolidated statement of financial position, consolidated statement ofcomprehensiveincome, consolidated statement of changes in equity, consolidated statement of cashflows and the related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company, as a body, in accordance with our instructions.  Our review has been undertaken so that we might state to the company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

 

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union.

Horwath Clark Whitehill LLP

Chartered Accountants

10 Palace Avenue

Maidstone

Kent

ME15 6NF

 

END

 

 

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