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SBS Group PLC (SBG)

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Friday 08 September, 2006

SBS Group PLC

Report and Accounts


FOR IMMEDIATE RELEASE 8 September 2006

                         SBS GROUP PLC (the "Company")                         

                              REPORT AND ACCOUNTS                              

                       FOR THE YEAR ENDED 10 MARCH 2006                        

CHAIRMAN'S STATEMENT

The audited results for the twelve months ended 10 March 2006 showed that your
Company incurred a loss, both before and after taxation, of £40,000 (10 March
2005 loss £41,000).

At present the Company does not conduct business and is a cash shell. We
consider that we have adequate resources to satisfy our ongoing liabilities.

We would further advise shareholders that the London Stock Exchange has now
informed us via our Nominated Adviser that in line with their policy on
"shells" they will suspend trading in the Company's shares from 9th October
2006 unless the Company has by then announced a "reverse transaction". The
Board is actively seeking acquisitions to provide such a reverse transaction
and thereby enable us to re-establish shareholder value; announcements will be
made in due course.

The audited accounts will be sent to the shareholders and will be available
from the Company's registered office at Finsgate, 5-7 Cranwood Street, London
EC1V 9EE, for a period of 30 days from the date hereof.

Contact: Stephen Oakes, Director on 020 7877 8788

Roland Cornish, Beaumont Cornish Limited on 020 7628 3396

SBS GROUP PLC

PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED 10 MARCH 2006

                                                    2006             2005     
                                                                              
                                          Notes     £000             £000     
                                                                              
Turnover                                            -            1            
                                                                              
Cost of Sales                                       -                         
                                                                              
                                                          
                                                                              
Gross Profit                                        -            1            
                                                                              
                                                          
                                                                              
Administrative expenses:                            (41)         (42)         
                                                                              
                                                          
                                                                              
                                                    (41)         (42)         
                                                                              
                                                         
                                                                              
Operating loss                                      (41)         (41)         
                                                                              
Interest receivable and similar income                1            -            
                                                                              
                                                          
                                                                              
Loss on ordinary activities            2            (40)         (41)         
before taxation                                                               
                                                                              
Tax on loss on ordinary activities     4              -            -            
                                                                              
                                                            
                                                                              
Loss for the financial period                       (40)         (41)         
                                                                              
Dividends                                             -            -            
                                                                                      
                                                                              
Retained Loss for the financial period 9            (40)         (41)         
                                                                                     
                                                                              
                                                   Pence         Pence    
                                                                              
Loss per share                         5            (1.0)        (1.1)        
                                                                              
Fully diluted loss per share           5            (0.7)        (0.9)        
                                                                              

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

FOR THE YEAR ENDED 10 MARCH 2006

                                                    2006          2005                
                                                    £'000         £'000        
                                                                               
Loss for the year                                   (40)          41           
                                                                                      
                                                                               
Total recognised losses relating to                 (40)          41           
the year                                                                       
                                                                                      

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' DEFICIT

                                                    2006          2005           
                                                    £'000         £'000        
                                                                               
Loss for the year                                   (40)          (41)         
                                                                               
New share capital subscribed                        50            71           
                                                                                       
                                                                               
Net increase in shareholders' funds                 10            30           
                                                                               
Equity shareholders' deficit at 10 March 2005       (21)          (51)         
                                                                                      
                                                                               
Equity shareholders' deficit at 10 March 2006       (11)          (21)         
                                                                                       
                                                                               

BALANCE SHEET

AS AT 10 MARCH 2006

                                                   2006              2005    
                                                                             
                              Notes                £'000            £'000    
                                                                             
Current Assets                                                               
                                                                             
Debtors                       6                   6                 1        
                                                                             
Cash at bank and in hand                          46                35       
                                                                                 
                                                                             
                                                  52                36       
                                                                             
Creditors                                                                    
                                                                             
Amounts falling due within    7                   (63)              (57)     
one year                                                                            
(including convertible loans)                                                
                                                                                  
                                                                             
Net Current Liabilities                           (11)              (21)     
                                                                                 
                                                                             
Net Liabilities                                   (11)              (21)     
                                                                                 
                                                                             
Capital and Reserves                                                         
                                                                             
Called up share capital       8                   363               353      
                                                                             
Share premium account         9                   6,427             6,387    
                                                                             
Profit and loss account       9                   (6,801)           (6,761)  
                                                                               
                                                                             
Equity Shareholders' Deficit                      (11)              (21)     
                                                                               

CASH FLOW STATEMENT

FOR THE YEAR ENDED 10 MARCH 2006

                                       Notes        2006         2005                 
                                                    £'000        £'000        
                                                                              
Net cash outflow from                  11           (40)         (10)         
                                                                              
operating Activities                                                          
                                                                              
Interest received                                     1            -           
                                                                                      
                                                                              
Financing                                                                     
                                                                              
Issue of shares                                     50           45           
                                                                                        
                                                                              
Net Cash Inflow from Financing                      50           45           
                                                                                      
                                                                              
Increase in cash                       12           11           35           
                                                                                       
                                                                              
Reconciliation of net cash flow to                                            
movement in net debt                                                                   
                                                                              
Net increase in cash                                11           35           
                                                                              
Issue of Convertible loan notes                     -            (50)         
                                                                                      
                                                                              
                                                    11           (15)         
                                                                              
Opening net debt                       12           (15)         -            
                                                                                      
                                                                              
Closing net debt                       12           (4)          (15)         
                                                                                      

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 10 MARCH 2006

1. ACCOUNTING POLICIES

(a) Accounting convention

The financial statements have been prepared under the historical cost
convention and in accordance with applicable Accounting Standards.

(b) Basis of preparation

The Company is an AIM listed "shell" which is actively seeking a suitable
acquisition. On the basis that the finance raised in the year and expected
future AIM costs, the accounts have been prepared on a going concern basis.

2. LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION

                                                  2006           2005
                                                 £'000          £'000                       
                                                                       
                             
                                                                       
The loss on ordinary activities before 
taxation is stated after charging:                                                 
                                                                       

Auditors remuneration:                             
Audit                                              4              2     
                                                                                                              
Non-Audit services                                 3              -    
                                                                       
                                                                  

3. STAFF NUMBERS AND COSTS

The only staff of the company were the directors, who received no remuneration
in the year.

4. TAX ON PROFIT ON ORDINARY ACTIVITIES

There is no tax charge for the year or prior period due to losses incurred.

                                                  2006           2005                             
                                                  £'000          £'000                                               
                                                                       
Loss before tax                                    (40)           (41)        
                                                                                                              
Corporation tax at 30%                             (12)           (12)        
                                                                                                                                                                                                     
Permanent differences:                                                 
Losses carried forward                              12             12                           
                                                                       
Current tax charge                                   -             -

      
5. EARNINGS PER SHARE

The calculation of earnings per share is based on a loss of £40,000 (2005 -
loss £41,000) and weighted average shares in issue of:

                                                       2006           2005          
                                                       Number         Number    
                                                                           
Basic                                                  4,198,588      3,671,238 
                                                                           
Fully diluted                                          5,960,399      4,671,238 
                                                                           

                                                       2006           2005        
                                                       pence          pence     
                                                                           
Loss per share: Basic                                  (1.0)          (1.1)     
                                                                           
              : Fully diluted                          (0.7)          (0.9)     
                                                                           
   

6. DEBTORS

                                                       2006           2005      
                                                                           
                                                       £'000          £'000     
                                                                           
Falling due within one year:                                               
                                                                           
Other debtors                                          6              1         
                                                                           
     
                                                       6              1         
                                                                               
                                                                           

7. CREDITORS

                                                       2006            2005      
                                                                           
                                                       £'000          £'000     
                                                                           
Amounts falling due within one year:                                       
                                                                           
Trade creditors                                        -              1         
                                                                           
Other creditors                                        13             6         
                                                                           
Convertible loan                                       50             50        
                                                                              
                                                                           
                                                       63             57        
                                                                             

The convertible loan note has a final redemption date of 28 November 2006 and
gives the right to convert the notes into 1,000,000 ordinary shares of 1p each
at 5p per share

8. SHARE CAPITAL

                                                       2006           2005          
                                                       £'000          £'000     
                                                                           
Authorised                                                                 
                                                                           
268,471,881 ordinary shares of 1p each                 2,685          2,685     
                                                                           
643,431 deferred shares of 49p each                    315            315       
                                                                             
                                                                           
                                                       3,000          3,000     
                                                                            
                                                                           
Issued                                                                     
                                                                           
4,784,889(2005-3,784,889) ordinary shares of 1p each   48        38        
                                                                           
643,431 deferred shares of 49p each                    315       315       
                                                                              
                                                                           
                                                       363       353       
                                                                              

On 6 October 2005, 1,000,000 ordinary shares of 1p each were placed with
investors at 5p each. In addition, warrants were issued on that date, entitling
holders to subscribe for 1,000,000 warrants to subscribe for ordinary shares of
1p at 5p each and a further 1,000,000 warrants to subscribe at 8p per share.
The last exercise date for both sets of warrants is 10 October 2012.

9. RESERVES

                                                       Share          Profit    
                                                       Premium        & Loss    
                                                       account        account   
                                                       £'000          £'000     
                                                                           
At 10 March 2005                                       6,387          (6,761)   
                                                                           
Retained loss for the period                           -              (40)      
                                                                           
Shares issued                                          40             -         
                                                                           
                                                                           
At 10 March 2006                                       6,427          (6,801)   
                                                                           

10. CONTROL

SBS Group Plc's shares are traded on AIM. At the date of the Annual Report, in
the Directors' opinion, there is no controlling party.

11. NET CASH OUTFLOW FROM OPERATING ACTIVITIES

                                                       2006         2005    
                                                       £000        £'000    
                                                                            
Operating loss                                         (41)        (41)        
                                                                            
(Increase) in debtors                                  (5)         (1)         
                                                                            
Increase in creditors                                  6           32          
                                                                             
                                                                            
                                                       (40)        (10)        
                                                                            
    

12. ANALYSIS OF CHANGE IN NET DEBT

                                       10 March        Cash       10 March    
                                         2005          Flow         2006    
                                         £'000        £'000        £'000    
                                                                            
Cash at bank and in hand                  35            11           46          
                                                                            
                                                                            
                                          35            11           46          
                                                                            
Convertible loan notes                   (50)           -           (50)        
                                                                                    
                                                                            
                                         (15)           11           (4)         
                                                                            


13. FINANCIAL INSTRUMENTS

The Company's financial instruments comprise Other creditors, convertible loan,
cash, and equity shares.

The Company has taken advantage of the exemption under FRS13 to exclude short
term debtors and short term creditors from the disclosure of financial assets
and liabilities.


                                                                                                         

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