31st Mar 2008 13:49
IQ Holdings plc31 March 2008 FOR IMMEDIATE RELEASE 31 March 2008 IQ HOLDINGS PLC ("IQ Holdings" or the "Company" ) IQ Holdings, the business research and competitive intelligence group, ispleased to announce results for the year ended 30th September 2007 which was aneventful year, paving the way for the Company's admission to AiM in conjunctionwith the acquisition of Rosslyn Research Ltd ("Rosslyn") in November 2007 and asuccessful equity fundraising of £850,000. HHIGHLIGHTS • Turnover of £417,701 (2006: £347,200); • Gross Profits of £312,196 (2006: £253,824); • Loss on ordinary activities before taxation narrowed to loss of £180,676 (2006: loss £188,502); • Successful move from PLUS to AiM; • £850,000 raised through the placing of 42,500,000 ordinary shares at 2p; • Rosslyn acquired for £600,000 and is delivering immediate economies of scale; and • Joe Seydel joins the experienced Board of Directors. Commenting on today's statement, Tim Hearley, Chairman, of IQ Holdings, said: "The results show a continued transition from the traditional business of IQResearch Ltd , the wholly owned trading subsidiary of IQ Holdings, and acontinued investment in developing its financial services research proposition.In November 2007, we acquired Rosslyn and our shares were admitted to the AIMmarket, this was a material event in IQ Holdings' history. The board has made,and will continue to make, strenuous efforts to grow the group both organicallyand through further acquisitions with a view to enhancing shareholder value.The benefits of the acquisition of Rosslyn are already being experienced, partlythrough the ability of the Company to offer a more broadly based range ofservices, and partly through the increased turnover and profitability. In thefirst two months of 2008 Rosslyn has been awarded new business to a maximumvalue of £400,000 and has actually commenced work on new business to a value ofat least £200,000." Enquiries: IQ Holdings plcJulian Green Tel: 020 7328 8823 Grant Thornton Corporate Finance (Nomad)Gerry Beaney / Fiona Kindness Tel: 020 7383 5100 SVS Securities plc (Broker)Peter Manfield Tel: 020 7638 5600 Bishopsgate Communications LtdDominic Barretto/ Nick Farmer Tel: 020 7562 [email protected] IQ Holdings Plc Chairman's Report for the Year Ended 30 September 2007 I am pleased to announce the results of IQ Holdings plc ("IQH" or "the Company")for the year ended 30th September 2007 which was an eventful year, paving theway for the Company's admission to AiM in conjunction with the acquisition ofRosslyn Research Ltd ("Rosslyn") in November 2007 and a successful equityfundraising of £850,000. The results show a continued transition from thetraditional business of IQ Research Ltd ("IQR"), the wholly owned tradingcompany of IQH, and a continued investment in developing its financial servicesresearch proposition. The figures for the year show a larger than anticipated loss but this doesinclude certain items of expenditure which will not be repeated in the currentyear. In particular there has been real progress in the development of theresearch product designed for the life and pensions industry which is now agrowing source of revenue for the Company. In November 2007 the Company acquired Rosslyn, a research business offeringcomplementary services to IQH and additional resource which enables IQH to offeran extended range of research services on a larger geographic scale and to abroader range of clients. Specifically, it offers an international quantitativeresearch capability, a UK field research resource and access to an internationalnetwork of independent research companies in many countries around the world.The acquisition has delivered immediate economies of scale, and based upon itshistorical pre-tax profit levels of approximately £100,000 per annum Rosslynshould have a positive financial impact on the Group. As the acquisitioncompleted after the period end, these results do not include any contributionfrom Rosslyn. The Company is well advanced in its integration of Rosslyn, having moved intoshared office accommodation in January 2007, nine months prior to completion ofthe acquisition. In particular, this enabled the Company to identify potentialsynergy for merging the operations of the two businesses. To this end, theCompany is implementing the integration of the information technology systems ofthe two businesses and moving the location of the business premises to moresuitable accommodation; both of which will be completed within six months fromthe date of the acquisition. On admission to AiM in November 2007, Joachim (Joe) Seydel, Managing Director ofRosslyn, joined the board of directors. Joe is an experienced researcher, wellknown within the market research industry and a regular speaker at tradeconferences. The Board was further strengthened by the appointment of PeterParkinson as a non executive director, who also temporarily assumesresponsibility of Finance Director as Neil McGowan recovers his health. JanetteWeir, an executive director of IQR also was appointed to the Company's board,bringing additional management experience. Both of these appointments were madein January 2008. The benefits of the acquisition of Rosslyn are already being experienced, partlythrough the ability of the Company to offer a more broadly based range ofservices, and partly through the increased turnover and profitability. In thefirst two months of 2008 Rosslyn has been awarded new business to a maximumvalue of £400,000 and has actually commenced work on new business to a value ofat least £200,000. The board is confident that following the above changes these will be reflectedin significantly increased levels of trading and profitability. The board hasmade, and will continue to make, strenuous efforts to grow the group bothorganically and through further acquisitions with a view to enhancingshareholder value. Tim Hearley Chairman Date: 28th March 2008 Directors' Report for the Year Ended 30 September 2007 The directors present their report and the audited consolidated financialstatements for the year ended 30 September 2007. Directors' responsibilities The directors are responsible for preparing the Annual Report and the financialstatements in accordance with applicable law and United Kingdom GenerallyAccepted Accounting Practice. Directors are required by company law to prepare financial statements which givea true and fair view of the state of affairs of the group at the end of thefinancial year and of the profit or loss of the company and group for the periodending on that date. In preparing those financial statements, directors arerequired to: - select suitable accounting policies and apply them consistently;- make judgements and estimates that are reasonable and prudent;- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;- prepare the financial statements on a going concern basis unless it is inappropriate to presume that the group will continue in business. The directors are responsible for keeping proper accounting records whichdisclose with reasonable accuracy at any time the financial position of thecompany and group and enable them to ensure the financial statements comply withthe Companies Act 1985. They have general responsibility for taking such stepsas are reasonably open to them to safeguard the assets of the company and groupand to prevent and detect fraud and other irregularities. Each director has taken steps that they ought to have taken as a director inorder to make themselves aware of any relevant audit information and toestablish that the company's auditors are aware of that information. Thedirectors confirm that there is no relevant information that they know of andwhich they know the auditors are unaware of. Principal activity The principal activity of the group has continued to be providers of marketresearch and market information. Business review and Future Developments A review of the group's trading during the financial period, including futuredevelopments is included in the Chairman's Report on Page 2. Key Performance Indicators The Group considers its key performance indicator to be turnover. Turnover hasincreased during the year as outlined in the Profit and Loss account due togrowth from existing and new customers. Principal Risks and Uncertainties Facing the Group The Group's principal Risk has been liquidity risk. The group's policy has beento ensure continuity of funding through placing of shares and negotiation ofbanking facilities. The group's credit risk is attributable to its trade debtorsand the amounts presented in the balance sheet are net of allowances fordoubtful debts. Payment of Creditors The group's policy for all suppliers is to fix terms of payment when agreeingthe terms of each business transaction to ensure that the supplier is aware ofthose terms and to abide by the agreed terms of payment. Research and Development The group has continued to undertake the development of research products andthese costs have been expensed in the profit and loss account. IFRS AIM listed companies are required to apply IFRS to their Financial Statementsfor their first accounting period commencing on or after 1 January 2007. For thegroup this will be the accounting period ending 30 September 2008. The InterimReport will be prepared in accordance with IFRS. Going concern The financial statements have been prepared on a going concern basis notwithstanding net liabilities of £185,078 and a Loss for the financial year of£180,676. As noted in Note 21 on page 26 and in the Chairman's Report on page 2,since the year end the company has raised additional funds and acquired RosslynResearch Limited. However, the directors acknowledge that the validity of thegoing concern basis remains dependent on the achievement of the subsidiarycompanies' trading forecasts prepared by the directors and the ability of thecompany to raise additional funding to meet its cash flow requirements shouldthese forecasts not be achieved. This should enable the Company to continue inoperational existence for the foreseeable future by meeting its liabilities asthey fall due for payment. Based on this understanding, the directors believe that it remains appropriateto prepare the financial statements on a going concern basis. The financialstatements do not include any adjustments, particularly as the regards thecarrying value of goodwill, which would result from the basis of preparationbeing inappropriate. Results and dividend The results for the group are set out in the financial statements. The directors do not recommend the payment of a dividend. Directors The directors who held office during the year were as follows:- T M Hearley- R A Martin (resigned 31 December 2006)- J E Green- N G McGowan The following directors were appointed after the year end:- J Seydel (appointed 29 November 2007)- P W Parkinson (appointed 22 January 2008)- J Weir (appointed 31 January 2008) Share options The unapproved share option scheme, adopted by the Company on 9 February 2005,was terminated pursuant to a board resolution of the Company passed on 12September 2007. The option scheme rules provided that the directors of theCompany were able to grant non-transferable options to acquire ordinary sharesin the Company to directors, employees and consultants of the Group. The optionscheme rules provided that the options granted under the 2005 Scheme wereexercisable in whole or in part by an option holder during the four yearsfollowing the expiration of a period of three years from the date of grant ofthe option, and that any options lapsed automatically where the option holderceased to be in the employment of a member of the Group. Options were issued on 9 February 2005 to Tim Hearley (in respect of 100,000shares) and on 21 February 2005 to R A Martin (in respect of 100,000 shares), NG McGowan (60,000 shares) and A Taralle (50,000 shares) a director of IQResearch Limited. R A Martin has ceased to be in the employment of the Group andhis options have therefore lapsed. N G McGowan, A Taralle and T Hearley haveeach executed a deed of waiver dated 7 August 2007, to waive all entitlementunder the share option scheme. There were therefore no options outstanding onthe termination of the scheme. In the directors' opinion these options had no value prior to their termination. Warrants - post balance sheet events By a Resolution of the Board dated 29 October 2007 the Company executed aWarrant Instrument constituting the Warrants to subscribe for Ordinary Shares atthe Placing Price of £0.02 and granted the following Warrants to directors. Name No. of No. of Value of warrants Ordinary Warrants Shares subscribed subject to WarrantsT M Hearley 750,000 750,000 £15,000J E Green 2,500,000 2,500,000 £50,000N G McGowan 750,000 750,000 £15,000J Weir 1,125,000 1,125,000 £22,500A Taralle 1,125,000 1,125,000 £22,500 The principal terms of the Warrants are as follows : (a) the exercise price is £0.02 subject to adjustment in certain limitedcircumstances as detailed in paragraph (d) below: (b) upon exercise of each Warrant, the holders of a Warrant shall be entitledto subscribe for one New Ordinary Share; (c) the warrants are exercisable from 29 October 2007 until 29 October 2012,after which they will lapse; (d) Upon the variations of the issued share capital of the Company, theCompany shall effect such adjustments ( if any) to the exercise price and/or thenumber of Warrants as the Company's auditors shall advise to be appropriate. Substantial shareholdings The company has been notified of the following substantial holdings of ordinaryshares at 30 September 2007 and 18 March 2008: At 30 September 2007 At 18 March 2008 Number of % Holding Number of Shares % Shares Holding DSL Client 400,000 4% 1,000,000 1%NomineesLimitedFitel 600,000 6% 1,500,000 2%NomineesLimitedJ E Green 3,907,500 39% 9,768,750 11%(Director)HTL 600,000 6% 1,500,000 2%PropertiesLimitedMaxiimar 871,875 9% - -Group LtdRangedetail 375,000 4% 937,500 1%Ltd (ownedby NMcGowan, adirector)Janette 441,143 4% 1,102,857 1%Weir(Director)Bank of New 5,000,000 6%York(Nominees)Pershing 10,000,000 12%KeenNomineesLtd(PSL981)Pershing 7,500,000 9%KeenNomineesLtd (GWCLT)SVS 10,495,000 12%(Nominees)LtdPW Spungin 5,000,000 6%Giltspur 7,350,000 9%NomineesLtdEuroclear 8,712,500 10%NomineesLtd Auditors The auditors, RSM Bentley Jennison, will be proposed for re-appointment inaccordance with section 385 of the Companies Act 1985. Approved by the Board on 31 March 2008 and signed on its behalf by:......................................... J E Green Director Independent Auditors' Report to the Members of IQ Holdings Plc We have audited the group and parent company financial statements (the"financial statements") of IQ Holdings Plc for the year ended 30 September 2007set out on pages 10 to 27. These financial statements have been prepared inaccordance with the accounting policies set out therein. This report is made solely to the company's members, as a body, in accordancewith Section 235 of the Companies Act 1985. Our work has been undertaken so thatwe might state to the company's members those matters we are required to stateto them in an auditors' report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company and the company's members as a body, for our audit work, for thisreport, or for the opinions we have formed. Respective responsibilities of directors and auditors As described in the statement of Directors' responsibilities on page 3, thecompany's directors are responsible for the preparation of financial statementsin accordance with applicable law and United Kingdom Accounting Standards(United Kingdom Generally Accepted Accounting Practice). Our responsibility isto audit the financial statements in accordance with relevant legal andregulatory requirements and International Standards on Auditing (UK andIreland). We report to you our opinion as to whether the financial statements give a trueand fair view and are properly prepared in accordance with the Companies Act1985. We also report to you whether in our opinion the information given in theDirectors' Report is consistent with the financial statements. In addition wereport to you if, in our opinion, the group has not kept proper accountingrecords, if we have not received all the information and explanations we requirefor our audit, or if information specified by law regarding directors'remuneration and transactions with the company and other members of the group isnot disclosed. We read the Directors' Report and consider the implications for our report if webecome aware of any apparent misstatements within it. Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing(UK and Ireland) issued by the Auditing Practices Board. An audit includes anexamination, on a test basis, of evidence relevant to the amounts anddisclosures in the financial statements. It also includes an assessment of thesignificant estimates and judgements made by the directors in the preparation ofthe financial statements, and of whether the accounting policies are appropriateto the group's and company's circumstances, consistently applied and adequatelydisclosed. We planned and performed our audit so as to obtain all the information andexplanations which we considered necessary in order to provide us withsufficient evidence to give reasonable assurance that the financial statementsare free from material misstatement, whether caused by fraud or otherirregularity or error. In forming our opinion we also evaluated the overalladequacy of the presentation of information in the financial statements. Opinion In our opinion:- the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the group's and the parent company's affairs as at 30 September 2007 and of the group's loss for the year then ended;- the financial statements have been properly prepared in accordance with the Companies Act 1985; and- the information given in the Directors' Report is consistent with the financial statements. Emphasis of matter Without qualifying our opinion, we draw attention to Note 1 in the financialstatements which indicates that the Company incurred a net loss of £180,676during the year ended 30 September 2007 and, as of that date, the Company'stotal liabilities exceeded its total assets by £185,078. These conditions, alongwith other matters explained in Note 1 to the financial statements and in theChairman's Report on page 2, indicate the existence of a material uncertaintywhich may cast significant doubt about the Company's ability to continue as agoing concern. The financial statements do not include the adjustments thatwould result if the Company was unable to continue as a going concern. RSM Bentley JennisonChartered Accountants & Registered Auditors Charterhouse31 March 2008 Legge Street Birmingham B4 7EU IQ Holdings Plc Consolidated Profit and Loss Account for the Year Ended 30 September 2007 Note 2007 2006 £ £Turnover 417,701 347,200Cost of sales (105,505) (93,376) Gross profit 312,196 253,824Administrative expenses (489,999) (433,338) Operating loss 2 (177,803) (179,514)Interest receivable and similar income 754 62Interest payable and similar charges 5 (3,627) (9,050)Loss on ordinary activities before taxation (180,676) (188,502)Loss for the financial year 16 (180,676) (188,502) Loss per ordinary share Basic 1.9p 3.0p Diluted 1.9p 3.0p Turnover and operating loss derive wholly from continuing operations.The group has no recognised gains or losses for the year other than the results above. IQ Holdings Plc Consolidated Balance Sheet as at 30 September 2007 2007 2006 Note £ £ £ £Fixed assetsIntangible assets 8 78,347 97,934Tangible assets 9 - 1,156 78,347 99,090Current assetsDebtors 11 301,028 109,078Cash at bank and in 6,350 9,034hand 307,378 118,112Creditors: Amounts 12 (552,416) (337,450)falling due within oneyearNet current liabilities (245,038) (219,338)Total assets less (166,691) (120,248)current liabilitiesCreditors: Amounts 13 (18,387) (65,104)falling due after morethan one yearNet liabilities (185,078) (185,352)Capital and reservesCalled up share capital 15 99,427 63,237Share premium reserve 16 194,093 49,333Profit and loss account 16 (478,598) (297,922)Equity shareholders' 17 (185,078) (185,352)deficit Approved by the Board on 31 March 2008 and signed on its behalf by:......................................... J E Green Director IQ Holdings Plc Company Balance Sheet as at 30 September 2007 2007 2006 Note £ £ £ £Fixed assetsInvestments 10 50,000 50,000Current assetsDebtors 11 135,465 58,734Cash at bank and - 200in hand 135,465 58,934Creditors: 12 (47,200) (46,366)Amounts fallingdue within oneyearNet current 88,265 12,568assetsTotal assets less 138,265 62,568currentliabilitiesCreditors: 13 - (30,000)Amounts fallingdue after morethan one yearNet assets 138,265 32,568Capital and reservesCalled up share 15 99,427 63,237capitalShare premium 16 194,093 49,333reserveProfit and loss 16 (155,255) (80,002)accountEquity 17 138,265 32,568shareholders'funds Approved by the Board on 31 March 2008 and signed on its behalf by:......................................... J E Green Director IQ Holdings Plc Consolidated Cash Flow Statement for the Year Ended 30 September 2007 2007 2006 Note £ £ £ £Net cash flow from operating 18 (30,320) (19,164)activitiesReturns on investment and 19 (2,873) (8,988)servicing of financeCash outflow before management (33,193) (28,152)of liquid resources andfinancingFinancingRepayment of loans and (57,018) (15,219)borrowingsIssue of equity shares 84,750 40,000Expenses paid in connection - (3,577)with share issues 27,732 21,204Net cash flow (5,461) (6,948) Reconciliation of net cash flow to movement in net debt 2007 2006 Note £ £Decrease in cash in the year 20 (5,461) (6,948)Cash outflow from decrease in debt and lease financing 57,018 15,218Change in net debt resulting from cash flows 51,557 8,270Net debt at the start of the year 20 (105,707) (113,977)Net debt at the end of the year 20 (54,150) (105,707) IQ Holdings Plc Notes to the Financial Statements for the Year Ended 30 September 2007 1. Accounting policies Basis of preparation The consolidated financial statements have been prepared under thehistorical cost convention and in accordance with applicable accountingstandards. The consolidated financial statements include the financial statements of the company and its subsidiary undertakings made up to 30 September 2007. Theacquisition method of accounting has been adopted. Under this method, theresults of the subsidiary undertakings acquired or disposed of in the year areincluded in the consolidated profit and loss account from the date ofacquisition or up to the date of disposal. Under section 230(4) of the Companies Act 1985 the company is exempt fromthe requirement to present its own profit and loss account. Its loss for thefinancial year was £75,253 (2006 - £44,151). Going concern The financial statements have been prepared on a going concern basis notwithstanding net liabilities of £185,078 and a Loss for the financial year of£180,676. As noted in Note 21 on page 26 and in the Chairman's Report on page 2,since the year end the company has raised additional funds and acquired RosslynResearch Limited. However, the directors acknowledge that the validity of thegoing concern basis remains dependent on the achievement of the subsidiarycompanies' trading forecasts prepared by the directors and the ability of thecompany to raise additional funding to meet its cash flow requirements shouldthese forecasts not be achieved. This should enable the Company to continue inoperational existence for the foreseeable future by meeting its liabilities asthey fall due for payment. Based on this understanding, the directors believe that it remains appropriateto prepare the financial statements on a going concern basis. The financialstatements do not include any adjustments, particularly as the regards thecarrying value of goodwill, which would result from the basis of preparationbeing inappropriate. Turnover Turnover represents revenue earned under contracts to provideprofessional services. Revenue is recognised as earned when, and to the extentthat, the firm obtains the right to consideration in exchange for itsperformance under these contracts. It is measured at the fair value of the rightto consideration, which represents amounts chargeable to clients, includingexpenses and disbursements but excluding VAT. Revenue is generally recognised as contract activity progresses so that forincomplete contracts it reflects the partial performance of the contractualobligations by reference to the value of work performed. Revenue not billed toclients is included in debtors and invoices on account in excess of the relevantamount of revenue are included in deferred income. Depreciation Depreciation is provided on tangible fixed assets so as to write off thecost, less any estimated residual value, over their expected useful economiclife as follows: Office equipment 20% reducing balance Goodwill Goodwill is the difference between the fair value of considerationpaid for an acquired entity and the aggregate of the fair value of that entity'sidentifiable assets and liabilities. Positive goodwill is capitalised, classified as an asset on thebalance sheet and amortised on a straight line basis over its useful economiclife. It is reviewed for impairment at the end of the first full financial yearfollowing the acquisition and in other periods if events or changes incircumstances indicate that the carrying value may not be recoverable. Amortisation Amortisation is provided on intangible fixed assets so as to writeoff the cost or valuation, less any estimated residual value, over theirexpected useful economic life. Goodwill was previously amortised on a straight line basis over itsexpected life of 20 years. The directors have reviewed the expected remaining useful economic life ofgoodwill. As a result of this review, goodwill is now being amortised over afive year period, starting 1 October 2006 to an estimate its residual value. Theeffect of this change on the amortisation charge for the year is disclosed inNote 8. Deferred taxation Deferred tax is provided in full on timing differences whichrepresent a liability at the balance sheet date, at rates expected to apply whenthey crystallise based on current tax rates and law. Timing differences arisefrom the inclusion of items of income or expenditure in tax computations inperiods different from those in which they are included in the financialstatements. Deferred tax assets and liabilities are not discounted. Operating leases Rentals payable under operating leases are charged in the profitand loss account on a straight line basis over the lease term. Share Based Payments The Group has applied the requirements of FRS 20 Share BasedPayments. The Group issues equity-settled share based payments to directors.Equity settled share based payments are measured at fair value (excluding theeffect of non market based vesting conditions) at the date of grant. The fairvalue determined at the grant date of the equity settled share based payments isexpensed on a straight-line basis over the vesting period, based on the Group'sestimate of shares that will eventually vest and adjusted for the market-basedvesting conditions. There has been no charge to the profit and loss account for the period asdisclosed in the Directors' report. Classification of financial instruments issued by the Company Following the adoption of FRS 25, financial instruments issued bythe Company are treated as equity (i.e. forming part of shareholders' funds)only to the extent that they include no contractual obligations upon the Companyto deliver cash or financial assets or to exchange financial liabilities withanother party under conditions that are potentially unfavourable to the Company. 2 Operating loss Operating loss is stated after charging: 2007 2006 £ £ £ £Hire of plant and machinery (Operating Leases) 4,353 - Auditors' remunerationThe audit of the company's annual accounts 6,500 6,000The audit of the company's subsidiaries' annual 7,500 4,000accountsOther services 1,250 2,000 15,250 12,000 Depreciation of owned tangible fixed assets 1,156 1,800Amortisation of goodwill 19,587 5,342 3 Particulars of employees The average number of persons employed by the group (includingdirectors) during the year was as follows: 2007 2006 No. No.Employees 4 4 The aggregate payroll costs of these persons were as follows: 2007 2006 £ £Wages and salaries 280,572 269,277Social security 24,474 29,684 305,046 298,961 4 Directors' emoluments The directors' emoluments for the year are as follows: 2007 2006 £ £Directors' emoluments (including benefits in kind) 247,959 216,875 The aggregate of emoluments and amounts receivable under long termincentive schemes of the highest paid director was £118,680 (2006 - £117,800). £14,584 (2006: £12,500) was paid to Rangedetail Limited for makingavailable the services of N McGowan as a director of the group and is includedin the figures above. £7,500 (2006: £7,500 ) was paid to Vail Corporation Limited for making availablethe services of T M Hearley, as a director of the group and is included in thefigures above. 5 Interest payable and similar charges 2007 2006 £ £Bank interest payable 3,427 5,642Loan interest 200 3,408 3,627 9,050 6 Taxation Analysis of current period tax credit 2007 2006 £ £Total tax on loss on ordinary activities - - Factors affecting current period tax credit The tax assessed on the loss on ordinary activities for the year ishigher than (2006 - higher than) the standard rate of corporation tax in the UKof 30.00% (2006 - 30.00%). The differences are reconciled below: 2007 2006 £ £Loss on ordinary activities before taxation (180,676) (188,502)Standard rate corporation tax credit (54,203) (56,551)Expenses not deductible for tax purposes (including goods) 8,000 1,604Losses carried forward 46,203 54,947 Total current tax for the year - - Factors which may affect future tax charges The company has tax losses of approximately £450,000 available tocarry forward against future trading profits. A deferred tax asset has not been recognised in respect of these losses due touncertainty over the timing of when these losses will be utilised. 7 Loss per share Basic The calculation of the loss per share is based on the loss for the year aftertaxation of £180,676 (2006: £188,502) and on 9,420,000 (2006: 6,323,705)ordinary shares, being the time-weighted average number of shares in issueduring the year. Diluted There are no share options that have a dilutive effect this year or last year. 8 Intangible fixed assets Group Goodwill £CostAs at 1 October 2006 and 30 September 2007 106,837AmortisationAs at 1 October 2006 8,903Charge for the year 19,587As at 30 September 2007 28,490Net book valueAs at 30 September 2007 78,347As at 30 September 2006 97,934 As explained in Note 1, the amortisation period of goodwill wasreviewed with effect from 1 October 2006. As a result of this change, theamortisation charge for the year is £13,487 higher than if it had beencalculated at the previous rate. 9 Tangible fixed assets Group Office equipment £CostAs at 1 October 2006 and 30 September 2007 10,346DepreciationAs at 1 October 2006 9,190Charge for the year 1,156As at 30 September 2007 10,346Net book valueAs at 30 September 2007 -As at 30 September 2006 1,156 10 Fixed asset investments Company Group shares £CostAs at 1 October 2006 and 30 September 2007 50,000Net book valueAs at 30 September 2007 50,000As at 30 September 2006 50,000 The company holds more than 20% of the share capital of thefollowing company: Country of Principal Class % Year end incorporation activitySubsidiary undertakingsIQ Research England Providers Ordinary 100 30Limited of market September research 2007 and business information Capital & Profit/(loss) reserves for the year £ £Subsidiary undertakingsIQ Research Limited (351,217) (71,930) Investments in subsidiary undertakings comprise the entire issuedordinary share capital of IQ Research Limited. The principal activity of IQResearch Limited is provider of market research and business information. 11 Debtors Group Company 2007 2006 2007 2006 £ £ £ £Trade debtors 218,016 92,374 - -Amounts owed by group undertakings - - 39,207 29,714Other debtors - - 14,946 14,946Prepayments and accrued income 83,012 16,704 81,312 14,074 301,028 109,078 135,465 58,734 12 Creditors: Amounts falling due within one year Group Company 2007 2006 2007 2006 £ £ £ £Convertible debenture loans (unsecured) 14,342 - 14,342 -Bank loans and overdrafts 19,494 29,637 12 -Other loans (unsecured) 8,277 20,000 8,277 20,000Trade creditors 144,172 58,522 - -Social security and other taxes 233,741 143,159 - -Other creditors 9,661 17,299 6,269 -Director current accounts 10,539 10,000 - -Accruals and deferred income 112,190 58,833 18,300 26,366 552,416 337,450 47,200 46,366 13 Creditors: Amounts falling due after more than one year Group Company 2007 2006 2007 2006 £ £ £ £Bank loans and overdrafts 18,387 35,104 - -Convertible debentures (unsecured) due between - 30,000 - 30,000two and five years 18,387 65,104 - 30,000 14 Maturity of borrowings Group Amounts repayable: Convertible Bank loans & Other loans Total debentures overdrafts £ £ £ £As at 30 September 2007In one year or less on demand 14,342 19,494 8,277 42,113Between one and two years - 16,717 - 16,717Between two and five years - 1,670 - 1,670 14,342 37,881 8,277 60,500 As at 30 September 2006In one year or less on demand - 29,637 20,000 49,637Between one and two years - 16,717 - 16,717Between two and five years 30,000 18,387 - 48,387 30,000 64,741 20,000 114,741 Company Amounts repayable: Convertible Bank loans & Other loans Total debentures overdrafts £ £ £ £As at 30 September 2007In one year or less on demand 14,342 12 8,277 22,631 14,342 12 8,277 22,631 As at 30 September 2006In one year or less on demand - - 20,000 20,000Between two and five years 30,000 - - 30,000 30,000 - 20,000 50,000 The convertible loan of £14,342 is for a term of up to 3 years from15 February 2005. Allied to this is an option in favour of the holder to convertall or part of this loan into new ordinary shares of 1p each in the company atthe price of 8p per share, provided that the conversion would be in multiples of£5,000. Interest is payable on this loan at the rate of 6% per annum up to andincluding the date of the Conversion Notice (but shall cease to accruethereafter on the amount of the loan). The bank loans and overdrafts are secured by debentures dated 13 May 2004 infavour of National Westminster Bank plc. 15 Share capital 2007 2006 £ £AuthorisedEquity15,000,000 Ordinary shares of 1 pence each 150,000 150,000Allotted, called up and fully paidEquity9,942,705 (2006 - 6,323,705) Ordinary shares of 1 pence each 99,427 63,237 During the year, the company issued the following shares; Shares Share price Consideration allotted £ 8 November 2006 1,924,000 5 p 96,2008 November 2006 1,095,000 5 p 54,75029 January 2007 600,000 5 p 30,000 3,619,000 180,950 16 Reserves Group Share Profit and Total premium loss account reserve £ £ £Balance at 1 October 2006 49,333 (297,922) (248,589)Premium on issue of shares 144,760 - 144,760Transfer from profit and loss account - (180,676) (180,676)for the yearBalance at 30 September 2007 194,093 (478,598) (284,505) Company Share Profit and Total premium loss account reserve £ £ £Balance at 1 October 2006 49,333 (80,002) (30,669)Premium on issue of shares 144,760 - 144,760Transfer from profit and loss account - (75,253) (75,253)for the yearBalance at 30 September 2007 194,093 (155,255) 38,838 17 Reconciliation of movements in shareholders' funds Group Company 2007 2006 2007 2006 £ £ £ £Loss attributable to (180,676) (188,502) (75,253) (44,151)members of the group /companyNew share capital 180,950 41,424 180,950 41,423subscribedNet addition/(reduction) 274 (147,078) 105,697 (2,728)to shareholders' fundsOpening equity (185,352) (38,272) 32,568 35,296shareholders' fundsClosing equity (185,078) (185,352) 138,265 32,568shareholders' funds 18 Reconciliation of operating loss to operating cash flows 2007 2006 £ £Operating loss (177,803) (179,514)Depreciation, amortisation and impairment charges 20,743 7,142Loss on disposal of fixed assets - 5,000Decrease in stocks - 9,875Increase in debtors (191,950) (3,177)Increase in creditors 318,690 141,510Net cash outflow from operating activities (30,320) (19,164) 19 Analysis of cash flows 2007 2006 £ £Returns on investment and servicing of financeOther interest paid (3,627) (9,050)Interest received 754 62 (2,873) (8,988) 20 Analysis of net debt At start of Cash flow At end of period period £ £ £Cash at bank and in hand 9,034 (2,684) 6,350Bank overdraft - (2,777) (2,777)Cash and bank net debt 9,034 (5,461) 3,573 Debt due within one year (49,637) 10,301 (39,336)Debt due after one year (65,104) 46,717 (18,387)Change in debt (114,741) 57,018 (57,723) Net debt (105,707) 51,557 (54,150) 21 Post balance sheet events On 28 November 2007 the Company commenced trading on the AIM market of theLondon Stock Exchange. On the same date the Company raised gross proceeds of£850,000 and completed the acquisition of Rosslyn Research Limited. Financial Assets and Liabilities The Group uses financial instruments, comprising borrowings, cash liquidresources and various items such as trade debtors, trade creditors, etc. thatarise directly from its operations. The main purpose of these financialinstruments is to raise finance for the Group's operations. The main risks arising from the Group's financial instruments are interest riskand liquidity risk. The directors review and agree policies for managing theserisks and these are summarised below. Short term debtors and creditors have been excluded from all the followingdisclosures. Interest rate risk The Group finances its operations through share capital and loans, and has abank borrowing facility. Interest receivable and payable is accrued and credited/charged to the profit and loss account in the period to which it relates. Liquidity risk The Group seeks to manage financial risk to ensure sufficient liquidity isavailable to meet foreseeable needs. Fair Value The fair values of the Group's financial instruments are considered equal to thebook value. 22 Related parties Controlling entity The company has been controlled throughout the current period by its directors,by virtue of them holding a majority of the issued ordinary shares of thecompany. Related party transactions Included in 'Cash at bank and in hand' at 30 September 2007 is £6,362 (2006 -£4,097) held in a client account on behalf of IQ Research Limited by List basisLimited (trading as 'C F Consultants'), a company of which J C Green, a directorand controlling shareholder of the company secretary (C F Secretaries Limited),is a director and controlling shareholder. At 30 September 2007 included in'Trade Creditors' is £15,430 due to CF Consultants. The 'Other loans' due within one year of £8,277 includes a loan of £Nil (2006 -£10,000) from the Trustees of the Estate of Mrs C E Major deceased, of which J CGreen, a director and controlling shareholder of the company secretary (C FSecretaries Limited), is a trustee, and a loan of £8,277 (2006 - £10,000) fromMaxiimar International Limited, a company of which R A Martin, a director of IQHoldings PLC, is a director and controlling shareholder. Interest is payable at8% on these loans and the loans are repayable at 3 months notice. Included in 'Trade creditors' is £7,500 (2006 - £6,662) due to MaxiimarInternational Limited. During the year the group was charged fees of £7,500 byMaxiimar International Limited, a company of which R A Martin, a director of IQHoldings PLC, is a director and controlling shareholder. Included in 'Creditors' is £10,539 (2006 - £10,000) due to J E Green, a directorof IQ Holdings Plc. This relates to a loan made during the year by J E Green toIQ Research Limited. There is no fixed repayment date and the loan is interestfree. During the year, the group was charged fees of £Nil ( 2006: £32) by Binns & CoPR Limited, and included in 'Trade creditors' is £1,658 (2006 - £1,658) due toBinns & Co PR Limited, a company of which T M Hearley, a director of IQ HoldingsPLC, is a director and controlling shareholder. During the year, the group was charged fees of £6,250 (2006: £7,500) by VailCorporation Limited, and included in 'Trade creditors' is £4,675 (2006 - £8,813)due to Vail Corporation Limited, a company of which T M Hearley, a director ofIQ Holdings PLC, is a director and controlling shareholder. During the year, the group was charged fees of £14,584 (2006: £12,500) byRangedetail Limited, and included in 'Trade creditors' is £12,500 (2006 -£7,762) due to Rangedetail Limited, a company of which N G McGowan, a directorof IQ Holdings PLC, is a director and controlling shareholder. Director's loan account The following balance owed to the director was outstanding at the year end: Maximum 2007 2006 Balance £ £ £Julian Green 10,539 10,539 10,000 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
1Spatial Holdings