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Vicorp Group PLC (VICP)

  Print   

Monday 12 May, 2008

Vicorp Group PLC

Final Results

RNS Number : 1832U
Vicorp Group PLC
12 May 2008
 






12th May 2008                    


VICORP GROUP PLC

('Vicorp', 'the Group' or 'the Company')


Audited results for the year ending 31 December 2007

Vicorp (AIM: VICP) is a leading developer of advanced voice self-service solutions, comprising both products and services, that enable organisations to create and manage improved voice services for consumers. The company is pleased to announce its results for the year ending 31 December 2007.


HIGHLIGHTS

  • FY revenues up to £1,703,397 (FY 2006: £539,597)

  • Professional Services Revenues were £741,592 (FY 2006: £ 59,468)

  • Pre tax loss of £926,183 (FY 2006 loss: £2,760,683)

  • Post tax loss of £711,631 (FY 2006 loss: £2,573,304)

  • R&D credits received of £214,883 (FY 2006 : £228,971)

  • Awarded UK Platinum Partner status by IBM on 19 September 2007

  • Cash at bank as at 31 December £270,269, plus trade receivables of £538,314


Brendan Treacy, Chief Executive of Vicorp, commented, 'We are pleased that the effect of several contract wins is now starting to be reflected in our trading results. Despite some delays in the commencement of client projects, the company was able to reach a small profit in the fourth quarter of the year. In particular we are delighted with the early success of our move into professional services (PS), which made a significant contribution to revenues in the second half of 2007. We expect the level of PS work to increase in 2008.

We are satisfied that the business now has the momentum for a stable period of growth in 2008.'


For further information, please contact:

Vicorp Group Plc 

01753 660 500  

Brendan Treacy, Chief Executive

Zimmerman Adams International Ltd 

020 7060 1760

Ray Zimmerman/Jonathan Evans

SVS Securities plc  

020 7638 5600

 Peter Manfield/Richard Morrison

Conduit PR  

020 7429 6666  

Christian Taylor-Wilkinson  



Chairman's Statement


Vicorp has started to deliver on its commercial opportunities in the second half of 2007. Despite some delays our principal projects are now all up and running and these have contributed to the Group achieving a break-even position in the last quarter of 2007. We expect the key client relationships that have been established in 2007 to continue throughout 2008 and in addition we shall be continuing to develop our client base.  


The combination of our ability to rapidly prototype and build advanced speech applications using our professional services team, aided by our market leading development tools and platform software, now gives us the ability to address a broader income stream, across services and products. Our professional services team, with skills ranging from strategy consulting to application delivery, is now a major income contributor.


Additionally we are starting to see a steady build-up in our renewable support business and the company will actively be seeking new ways to provide services that are based on 'pay as you go' pricing models.


At the close of 2007 the Group's cash position was satisfactory. The Group will start to look at opportunities as a route to growth and geographic expansion and if suitable opportunities can be identified. 


The Group has started into 2008 in a far more stable position than in previous years and the directors believe that a combination of a growing client base and several new opportunities in the UK market and internationally will provide stability to the Group. We are seeing an increasing number of large organisations that have now reached the point where their older voice applications have reached the end of their working life and need to be upgraded. Vicorp's services and technologies are well placed for the current market demand, being flexible enough to fit within the migration path from old to new speech applications as well as cost effective. 


According to research from Datamonitor, the number of Voice xML based applications is expected to double between 2007 and 2012 and is already outpacing sales of legacy systems. Enabling applications in VoicexML is Vicorp's core strength and we expect to benefit from the growth in the market.


The company has also commenced strategic consulting activity for clients looking to implement speech biometric technologyas a means of improving telephone security. Two consulting contracts have been awarded to the company so far in 2008.


Our move to AIM in June 2007 was an important milestone for the business and will enable the company to maximise its growth potential as well as access the equity capital markets. . The move to AIM also brought several new fund managers into the Vicorp investor base and we are fortunate to now have the support of a broad base of institutional funds.


The Board continues to build value for all stakeholders and has maintained its performance based option scheme incentives for all staff. Details are in the Directors Report.


I would like to thank the directors and staff for their significant contribution to the development of the business in 2007 and we expect to maintain the momentum in 2008.




     

Tim Hearley

Non-executive Chairman




CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2007




2007

2006


Note

£

£

Assets








Non-current assets




Property, plant and equipment

11

90,870

116,806

Other intangible assets

12

570,779

441,668

Investments 


-

-







661,649

558,474





Current assets




Inventories 

15

4,997

5,947

Trade receivables

16

 538,314

58,939

Other current assets

16

388,184

325,567

Cash and cash equivalents

16

270,269

49,198







 1,201,764

439,651





Total Assets


1,863,413

998,125



=================

=================





Equity and liabilities




Equity attributable to equity holders of the parent




Share capital

17

192,062

104,612

Share premium

18

5,886,788

3,495,694

Retained non-capital earnings

19

(4,852,281)

(4,140,650)











1,226,569

(540,344)



Current liabilities




Trade and other payables

22

629,102

1,178,297

Bank overdraft and loans - due within a year

20

7,742

360,172









Total liabilities


636,844

1,538,469







Total equity & liabilities


1,863,413

998,125



=================

=================




CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007




Year ended 31/12/07

Year ended 31/12/06


Note

£ 

£ 





Revenue

4

1,703,397

539,597





Cost of sales


(17,767)

(43,902)





Gross profit


1,685,630

495,695





Administrative expenses


(2,611,813)

(3,256,378)





Loss from operations

6

(926,183)

(2,760,683)





Finance (costs)/income

7

331

41,592





Loss before tax


(926,514)

(2,802,275)





Income tax income

9

214,883

228,971





Loss for the period


(711,631)

(2,573,304)


=================

=================



Earnings per share

10


Basic

(0.0037)

(0.025)


Diluted

(0.0030)

(0.017)





The group has no recognised gains or losses other than the results for the year as set out above. 

 


All of the activities of the group are classed as continuing.


The Company has taken advantage of section 230 of the Companies Act 1985 not to publish

its own Profit and Loss Account.






CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2007 



Share capital

Share premium

Accumulated losses

Total


£

£

£

£

Balance at 31 December 2005

83,220

2,751,969

(2,670,791)

164,398


Changes in equity for the period Jan - Dec 2006





Loss for the period

-

-

(1,921,548)

(1,921,548)

Share options adjustment

-

-

10,021

10,021

Other intangible assets - development



441,668

441,668











Total recognised income and expense for the year

-

-

(1,469,859)

(1,469,859)


Issue of share capital

21,392

743,725

-

765,117







Balance at 31 December 2006

104,612

3,495,694

(4,140,650)

(540,344)


================

================

================

================

Changes in equity for 2007






Loss for the period

-

-

(711,631)

(711,631)











Total recognised income and expense for the period

-

-

(711,631)

(711,631)


Issue of share capital

87,450

2,391,094

-

2,478,544


Balance at 31 December 2007

192,062

5,886,788

(4,852,281)

1,226,569


================

================

================

================



CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD ENDED 31 DECEMBER 2007




Year ended 31/12/07

Year ended 31/12/06


£

£

Cash flow from operating activities






Loss from operations

(926,183)

(2,108,927)




Adjustments for:



Depreciation of property, plant and equipment

461,373

71,817

Gain on disposal of property, plant and equipment

-

703

Share options adjustment


10,021




Operating cash flows before movement in working capital

(464,810)

(2,026,386)





(Increase)/decrease in inventories

950

10,353

(Increase)/decrease in receivables

(541,992)

222,121

Increase/(decrease) in payables

(686,626)

22,081




Income taxes received

214,883

228,955

Interest paid

(13,538)

(49,386)




Net cash from/(used in) operating activities

(1,026,323)

434,124


Investing activities






Interest received

13,207

7,794

Purchases of property, plant and equipment

(564,547)

(12,704)

Acquisition of subsidiary


(1)




Net cash used in investment activities

(551,340)

(4,911)





Cash flows from financing activities






Repayments of borrowings

(215,000)

-

Proceeds on issue of convertible loan notes

-

215,000

Issue of equity share capital 

87,450

21,392

Share premium on issue of equity share capital

2,391,094

743,725




Net cash from financing activities

2,263,544

980,117


Net increase/(decrease) in cash and cash equivalents

221,071

(617,056)




Cash and cash equivalents at beginning of year

49,198

666,254




Cash and cash equivalents at end of year

270,269

49,198


Bank balances and cash

270,269

49,198


================

================



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD 

ENDED 31 DECEMBER 2007


1          Presentation of financial statements


The financial statements have been prepared in accordance with International Accounting and Financial Reporting Standards (IFRS). 


2          First-time adoption of international financial reporting and accounting standards


In the current year, the Group has adopted International Financial Reporting and Accounting Standards for the first time. 


The Group has applied IFRS 1 First time adoption of International Financial Reporting Standards to provide a starting point for reporting under International Financial Reporting and Accounting Standards. The date of transition to International Financial Reporting and Accounting Standards was selected as 1 January 2007 and all comparative information in these financial statements has been restated to reflect the Group's adoption of International Financial Reporting and Accounting Standards. 


The adoption of International Financial Reporting and Accounting Standards has resulted in the following changes to the group's accounting policies. 


 IFRS2 concerning share-based payments


The IFRS2 standard affects the Group insofar as it needs to account for the effect of share options in issue. In these financial statements no charge to profit and loss has been made arising from the implementation of IFRS2 as the share price at the end of December 2007 is lower than the price of the options. A charge of £10,021 has been made in the preceding period. The corresponding credits have been included in general reserves on the Balance Sheet. 


IAS 38 treatment of development costs


The Vicorp Group PLC accounting policy for the treatment of software development is in accordance with IAS38. 


Capitalisation of development costs:

 

1)       Vicorp adopts the same cost identification for IAS as it does for the measurement of research and development tax claims. Amounts are capitalised at year-end and are net of any impairment in assets value as assessed by the directors of the Company. As a conservative measure, no more than 60% of development cost is capitalised in any year, to allow for any cost or design inefficiencies.
 

2)       The opening carried values have been arrived at by applying the policy retrospectively from 2003 with the retrospective cumulative adjustment being treated as a prior year adjustment as referred to in note 12.

 

    Amortisation basis:


Amortisation takes place over five years in which the percentage weightings are respectively 40:30:15:10:5. This approximates to the working life of the products in use and the period for which average product support revenues are expected to arise.



Reconciliation of equity 


The impact of the changes to the Group's accounting policies relates to intangible assets and the effect on the equity of the Group was as follows.

 

 
As reported under
previous GAAP
Effect of transition to IFRSs
IFRSs
Equity at 1 January 2006
164,398
531,059
695,457
 
 
 
 
Equity at 31 December 2006
(982,012)
441,668
(540,344)
 
 
 
 
Loss for 2006
(1,911,527)
(661,777)
(2,573,304)

 



3          Summary of significant accounting policies


The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below. 


            Basis of consolidation


The consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by the Company made up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee enterprise so as to obtain benefits from its activities. 


On acquisition, the identifiable assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. 


The results of subsidiaries acquired or disposed of during the year 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 financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. 

 

           All significant intercompany transactions and balances between group enterprises are eliminated on

           consolidation. 


Investments in associates


An associate is an enterprise over which the group is in a position to exercise significant influence, through participation in the financial and operating policy decision of the investee. 


The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting. The carrying amount of such investments is reduced to recognise any impairment in the value of individual investments. 


Where a Group enterprise transacts with an associate of the Group, unrealised profits and losses are eliminated to the extent of the Group's interest in the relevant associate, except where unrealised losses provide evidence of an impairment of the asset transferred. 



        

            Revenue recognition


This represents sales of goods, licences and services, all exclusive of value added tax.


Income from hardware sales and consultancy services is recognised on an invoiced basis.


Licence income is recognised on the earlier of the contracted date for acceptance of licences by the customer or their actual use in commercial production.


Maintenance services revenue is recognised rateably over the maintenance period.


Interest income is accrued on a time basis, by reference to the principal outstanding and at the interest rate applicable. 


            Leasing


Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. 


            Foreign currencies


Transactions in foreign currencies other than GBP are initially recorded at the rates of exchange prevailing on the dates of the transactions. Monetary assets and liabilities denominated in such currencies are retranslated at the rates prevailing at the balance sheet date. Profits and losses arising on exchange are included in the net profit or loss for the period. 


On consolidation, the assets and liabilities of the Group's overseas operations are translated at the exchange rates prevailing at the balance sheet date. Income and expense items are translated at the average exchange rates for the period.

     

            Retirement benefit costs


Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. 


            Taxation

        

The charge for current tax is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using rates that have been enacted or 

substantively enacted by the balance sheet date. 

 

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit. In principal, deferred tax liabilities are 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 negative goodwill) or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction, which affects neither the tax profit nor the accounting profit.



           Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries    

           and associates, and interests in joint ventures, 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. 


Deferred tax is calculated at the rates that are expected to apply when the asset or liability is settled. Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. 


Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. 


Property, plant and equipment


Fixtures and equipment are stated at cost less accumulated depreciation. 


Depreciation is charged so as to write off the cost or valuation or assets, other than land and properties under construction, over their estimated useful lives, using the straight-line method, on the following bases.


Equipment, fixtures & fittings                                14% - 25% straight line

 

Computer hardware & software                              25% - 50% straight line

 

Leasehold improvements                                      20% straight line


Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, whether shorter, the term of the relevant lease. 


The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and it is recognised in income. 


            Impairment

    

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets with finite lives 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 (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit which the asset belongs. 


If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying of the asset (cash-generating unit) is reduced to its recoverable amount. Impairment losses are recognised as an expense immediately, unless the relevant asset is land or buildings at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. 

    

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) 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 (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately, unless the 

relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.


            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 to completion and costs to be incurred in marketing, selling and distribution.


Trade receivables


Trade receivables are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. 


            Convertible loan notes


Convertible loan notes are regarded as compound instruments, consisting of a liability component and an equity component. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible debt. The difference between the proceeds of issue and the convertible loan notes and the fair value assigned to the liability component, representing the embedded option to convert the liability into equity of the Group, is included in capital reserves (equity).


The interest expense on the liability component is calculated by applying the prevailing market rate for similar non-convertible debt to the instrument. The difference between this amount and the interest paid is added to the carrying value of the convertible loan note. 


Trade payables


Trade payables are stated at their nominal value. 


Provisions


Provisions are recognised when the Group has a present obligation as a result of a past event which it is probable will result in an outflow of economic benefits that can be reasonably estimated. 


Share option schemes


The Company operates an Enterprise Management Incentive (EMI) share option scheme for employees and unapproved share option schemes for non-employees. Full details of the options granted under these schemes during the year are set out in the Directors' Report. It is the policy of the Company to grant share options that have an exercise price representing fair 

market value at the date of grant. Fair market values are determined historically via the Inland Revenue Share Valuation Division or, since listing, by reference to the quoted share price, depending on the nature of the option and any conditions that determine the exercise of the option.


The accounting for options granted to employees and others is addressed by Financial Reporting Standard 20 'Share-based payment' which applied for the first time in the year ended 31 December 2007. In the particular circumstances of the options issued during the year, taking account of their fair market value at the date of grant and the performance conditions attached, the directors do not consider it appropriate to reflect any charge in the profit and loss account as at 31 December 2007. The directors will continue to keep the position under review in line with the requirements of FRS 20.


4    Revenue


    An analysis of the Group's revenue is as follows:


Year ended 31/12/07

Year ended 31/12/06


£

£

Continuing operations:



  Hardware

53,911

53,751

  Licenses

634,716

93,665

  Professional services

 741,592

59,468

  Maintenance

270,178

332,713

  Other revenue

 3,000

-





1,703,397

539,597


===============

===============



5    Business and geographical segments


    The following table provides an analysis of the Group's sales by geographical market. 


    An analysis of the Group's revenue is as follows:


Year ended 31/12/07

Year ended 31/12/06


£

£

United Kingdom

1,402,379

139,129

Rest of Europe 

228,392

217,214

USA and Canada

 51,370

183,254

Asia

 20,956

-





1,703,097

539,597


================

================



6    Loss from operations 


    Loss from operations has been arrived at after charging (crediting):



Year ended 31/12/07

Year ended 31/12/06


£

£

Net foreign exchange losses/(gains)

(14,068)

16,786


=================

===============

Auditor's remuneration: audit services

34,700

25,750

  taxation services 

6,500

5,860


=================

===============

Research and development costs

502,578

996,174


=================

===============



Total staff costs incurred during the period amounted to £1,580,068 (2006 £1,858,425) and total depreciation amounted to £461,373 (2006 £733,594).

 

   7.      Finance costs


 


Year ended 31/12/07

Year ended 31/12/06


£

£

Interest payable and similar charges:



- convertible loan notes 

16,096

1,624

- bank overdrafts and other

6,702

9,258

- personal guarantee

2,055

-

- HM Revenue & Customs

(11,315)

38,504


Total borrowing costs

13,538

49,386


===============

===============



8    Income from investments

    


Year ended 31/12/07

Year ended 31/12/06


£

£

Interest on bank deposits

 13,207

7,794


===============

===============



9    Income tax expense



Year ended 31/12/07

Year ended 31/12/06


£

£

Current tax: 



   UK Taxation

-

-

  Research and development tax credit

(214,883)

(228,971)




Total current tax 

(214,883)

(228,971)


===============

===============


There is no UK tax charge for the year owing to the availability of tax losses within the main trading company of the group, Vicorp UK Ltd., and accordingly no reconciliation of the tax charge with the loss on ordinary activities before taxation is presented. Tax losses available to be carried forward against future trading profits are considered to be in the excess of £9 million.



10    Earnings per share


    The calculation of the basic and diluted earnings per share is based on the following data.


    Earnings

        


Year ended 31/12/07

Year ended 31/12/06


£

£

Earnings for the purpose of basic earnings per share (net loss for the year)

(711,631)

(2,573,304)

Effect of dilutive potential ordinary shares:

-

-

Interest on convertible loan notes (net of tax)

16,096

1,624




Earnings for the purposes of diluted earnings per share

(695,535)

(2,571,680)


===============

===============

 

    Number of shares



Year ended 31/12/07

Year ended 31/12/06




Weighted average number of ordinary shares for the purposes of basic earnings per share

192,062,303

104,611,898

Effect of dilutive potential ordinary shares:



Convertible loan notes

-

10,831,213




Weighted average of ordinary shares for the purposes of diluted earnings per share

192,062,303

115,443,111


===============

===============


11    Property, plant and equipment



Leasehold Improvements

Equipment, Fixtures & Fittings

Computer Hardware & Software

Total


£

£ 

£ 

£ 

Cost or valuation





At 1 January 2007 

97,691

18,857

418,451

534,999

Additions  

-

5,073

22,267

27,340






At 31 December 2007

97,691

23,930

440,718

562,339






Accumulated Depreciation





At 1 January 2007

25,337

12,725

380,131

418,193

Charge for the year 

19,538

4,214

29,524

53,276






At 31 December 2007

44,875

16,939

409,655

471,469






Carrying amount





At 31 December 2007

52,816

6,991

31,063

90,870


==============

============

==============

==============

At 31 December 2006

72,354

6,132

38,320

116,806


==============

============

==============

==============



12    Other Intangible assets


Development Costs


£

Cost


At 1 January 2007

2,499,457

Additions

537,208



At 31 December 2007

3,036,665


=============



Amortisation


At 1 January 2007

2,057,789

Charge for the year

408,097



At 31 December 2007

2,465,886


=============



Carrying amount 


At 31 December 2007

570,779


=============

At 31 December 2006

441,668


=============


13    Prior Year Adjustment


The prior year adjustment of £441,668 represents the net amount from the application of IAS 38 (see note 3) from 01 January 2003 to 31 December 2006.  The opening carried values under IAS38 have been arrived at by applying the policy retrospectively from 2003 with the cumulative adjustment being treated as a prior year adjustment.


14    Subsidiaries


Details of the company's subsidiaries at 31 December 2007 are as follows:


Name of subsidiary

Place of incorporation (or registration) and operation

Proportion of ownership interest

Proportion of voting power held

Activity






Vicorp UK Limited

UK

100%

100%

Product development, sales and support of communications software






Vicorp Services Limited

UK

100%

100%

Product support and maintenance






Vicorp Holding Company LCC

USA

100%

100%

Non-trading






Dialogue Design Limited

UK

100%

100%

Non-trading



    

The financial statements of all subsidiaries mentioned above have been consolidated in the Group financial statements. 



Group companies




£ 

Cost


At 1 January 2007

116,423

Additions

-

At 31 December 2007

116,423



Net book value


At 31 December 2007

116,423


==============

At 31 December 2006

116,423


==============


15    Inventories



Year ended 31/12/07

Year ended 31/12/06


£

£

Inventories, licences and hardware for resale

4,997

5,947


==============

==============


16    Other financial assets


            Trade receivables 

 

Comprise amounts receivable from the sale of goods £ 538,314 (2006: £ 58,939). Other current assets include R&D tax claim for the period July - December 2007 £ 102,738 (In September 2007 an amount of £ 112,924 in respect of R&D tax claim Jan - June 2007, has been received; 2006: £ 228,971). 


Bank balances and cash 

Comprise cash and short-term deposits held by the group treasury function. The carrying amount of these assets approximates their fair value. 


            Credit risk

The Group's credit risk is primarily attributable to its trade. The amounts presented in the balance sheet are net of allowances for doubtful receivables, estimated by the Group's management based on prior experience and the current economic environment. 


The credit risk on liquid funds and derivative financial instruments is limited because the counter parties are banks with high credit ratings assigned by international credit-rating agencies. 


The Group has no significant concentration of credit risk, with exposure spread over a large number of counter parties and customers. 


    

17    Share Capital



Year ended 31/12/07

Year ended 31/12/06


£ 

£ 

Reported as at 1 January

104,612

83,220

New equity share capital subscribed

87,450

21,392




Reported as at 31 December 

192,062

104,612


================

================


At the beginning of February 2007 the Company completed a private placement of 4,232,000 Ordinary Shares in the market at £0.0375. An amount of £ 154,468 was added to the share premium account. Cost of £ 17,500 associated with this transaction was set against the share premium account.


A further 3,200,000 Ordinary Shares were issued in March 2007 at a premium totalling £116,800. 


In April 2007 another 11,366,665 Ordinary Shares were issues at a premium totalling £ 414,833. 


Early May 2007 a number of warrant holders have exercised their warrants into 1,530,980 Ordinary Shares at the exercise price of £0.0375.  


Costs associated with these transactions reduced the share premium account by £ 25,000.


On 30 May 2007 all convertible loan holders converted £ 532,915 (Including Interest) of their convertible loan into 26,645,670 Ordinary Shares. 


June 2007: AIM floating. A private placing of 40,475,000 Ordinary Shares in the market at £0.04 was completed. An amount of £ 1,578,525 was added to the share premium account and this account was reduced by £ 393,233 for costs associated with the Aim floating.


B. Treacy, a director of the Company, controls the Company as a result of controlling, directly or indirectly, 26.37% of the issued share capital of the Company.



18     Share premium reserve

    


Year ended 31/12/07

Year ended 31/12/06


£ 

£ 

Balance at 1 January 2007

3,495,694

2,751,969

New equity share capital subscribed

2,391,094

743,725




Balance at 31 December 2007

5,886,788

3,495,694


================

================



19    Accumulated losses



£



Balance at 1 January 2006


 as originally stated

(2,670,791)

- net losses for the year

(1,911,527)

- prior period adjustments

441,668



Balance at 1 January 2007

(4,140,650)

Net loss for the year

(711,631)



Balance at 31 December 2007

(4,852,281)


==============



20    Bank overdrafts and loans


    

2007

2006


£ 

£

Bank overdrafts

7,742

145,172

Other loans

-

215,000


7,742

360,172


================

================


21         Convertible loan notes

        

The convertible loan stock at 31 December 2006, which was secured by a debenture over certain assets of the Company, was held by Mr. B. Treacy, by Noble VCT, by Noble Income & Growth Plc and by Mr. M. van der Weegh & Mr. H. Kruitbosch, was converted into share capital on 30 May 2007. 


The options were converted into ordinary share capital at £0.02 per share up to the value of the outstanding amount including any accrued interest. 


22         Other financial liabilities


Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period take for trade purchases is 28 days. 


The directors consider that the carrying amount of trade payables approximates to their fair value.


23         Operating lease commitments



Year ended 31/12/07

Year ended 31/12/06


£ 

£ 




Minimum lease payments under operating leases recognised in income for the period

147,353

147,353


================

================



At the balance sheet date, the Group had outstanding commitments under non-cancellable leases, which fall due as follows.


 


Year ended 31/12/07

Year ended 31/12/06


    £

    £

Land and buildings



Leases expiring after five years

142,440

142,440


================

================


24        Subsequent events


There have been no events subsequent to the balance sheet date which would cause any alteration to be made to the financial statements.


25        Related party transactions


Directors' and executives' remuneration


Remuneration paid to directors and other members of key management during the year was as follows.



Year ended 31/12/07

Year ended 31/12/06


£ 

£ 




Salaries

313,434

398,082

Post retirement benefits

19,512

23,050





The remuneration committee having regard to comparable market statistics decides the remuneration of directors and key executives.

This information is provided by RNS
The company news service from the London Stock Exchange
 
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