Final Results

20 March 2014

Verdes Management plc

("Verdes" or the "Company")

Preliminary Results for the year ended 30 September 2013

Verdes Management Plc ("Verdes" or "the Company") announces its final results for the year ended 30 September 2013.

Financials

In the year to 30 September 2013 the Company reported turnover of £NIL (2012: £NIL) and a loss before tax of £413k (2012: Loss £806k).

Strategy

During the year, the Board actively considered a number of alternatives for the Company. Whilst this was underway, the cost base of the Company was reduced significantly and, as announced in our half year results, the Board composition also changed on 9 September 2013 just before the year end.

On that date Adam Webb resigned and Dr Daan van den Noort took on the position of non-executive Chairman with Sarah Bertolotti and Joep van den Aker also joining the Board.

The stated strategy of the Company at the time of the Board change was to build a strategic investment company in the fund management sector. This was actively worked on for a number of months with the support and assistance of Mr. Jan Geertman who worked alongside the Directors as a Board consultant. Unfortunately the bulk of the funding associated with this strategy which was to be provided by Newick Developments Limited, a funder associated with Mr. Geertman, was not received by the Company in accordance with the terms in place between the parties; and so on 30 January 2014 the Board took the difficult but appropriate decision to request the suspension of the Company from AIM due to the financial uncertainty that this caused. Jan Geertman also subsequently resigned from his consultancy position.

There followed a challenging period when the Directors felt it appropriate to protect the Company by filing a notice of intent to appoint an administrator whilst an alternative future for the Company was sought.

As detailed in the Company's announcement on 4 March 2014 the Directors were successful in identifying a solution. On that date the Company announced that Mr. David Breith had purchased a significant shareholding in Verdes from Westminster Asset Management Limited, and that the Company had also secured equity funding in the amount of £750,000 by way of a private placing. The Company's action led to the Company being regarded as an investing company. As a result, a new investing policy was announced on 4 March, and any acquisition under this policy will be treated as a "reverse takeover" under the AIM Rules for Companies. With this funding in place, and new investing policy announced, the suspension of the company from AIM was also lifted on 4 March 2014.

The Company is now seeking shareholders' approval for this proposed new investing policy which will be voted upon in a general meeting of the Company's shareholders convened for 20 March 2014. The new investing policy is set out within the Circular sent to the Company's shareholders on 4 March 2014, a copy of which is available on the Company's website.

The Company has already identified a potential acquisition target, though it is too early to determine whether this will lead to a transaction. Further information will be made available when appropriate.

Working capital

In the year to 30 September 2013 the Company raised £175,000 through a placing in October 2012 and also £125,000 by way of a convertible loan which was subsequently converted to equity in

January 2014. At the year end the Company had £38,000 of cash remaining. Subsequent to year end the Company raised £155,000 via a convertible loan from RAB Capital Limited and £25,000 via a convertible loan from Mr Peter Wildey. These loans have recently been repaid out of the proceeds of a recent placing. All conversion rights relating to these loans were also extinguished at that time.

As detailed above, the placing proceeds were used in part to repay the Convertible Loans; they also enabled the settling of legacy creditor positions. At the date of publication of this report approximately £400,000 of these funds remain after these payments have been made. This provides the Company with sufficient working capital for the next 12 months to meet running costs and also to embark on its new investing strategy. Further funds are likely to be raised alongside any acquisition under this new strategy.

Outlook

The recent investment in the company by David Breith, alongside the securing of new financing via the private placing, has secured the Company's immediate future. It is now well placed to embark on its proposed investing strategy when shareholders' approval has been obtained.

Daan van den Noort

Chairman

Date: 19 March 2014

Statement of Comprehensive Income Statement

For the year ended 30th September 2013

The company has no recognised gains or losses other than the results for the

period as set out above.

All amounts relate to continuing operations.

Notes 1 to 17 form part of these financial statements.

Statement of Financial Position

30th September 2013

These financial statements were approved and authorised for issue by the board and were signed on its behalf by:

D van den Noort S Bertolotti

Director Director

Date: 19 March 2014

Notes 1 to 17 form part of these financial statements.

Statement of Cash Flows

For the year ended 30th September 2013

Notes 1 to 17 form part of these financial statements.

Statement of Changes in Equity

For the year ended 30th September 2013

Notes 1 to 17 form part of these financial statements.

Notes

1. Accounting policies

Basis of accounting

The financial statements have been prepared under the historical cost convention and in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union and as applied in accordance with the provisions of Companies Act 2006.

Standards and interpretations effective in the current period

The following IFRS's which are effective for the first time have been applied in these financial statements. Where adoption is material their effect is detailed below:

• IAS 12 (revised), 'Income Taxes - Limited scope amendment (recovery of underlying assets)' has had no material impact on these financial statements;

New standards and interpretations

As of the date of approval of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective:

• IFRS 9 Financial instruments (Effective for periods commencing on or after 1 January 2013);

• IFRS 10 Consolidated financial statements (Effective for periods commencing on or after 1 January 2013);

• IFRS 11 Joint arrangements (Effective for periods commencing on or after 1 January 2013);

• IFRS 12 Disclosure of interests in other entities (Effective for periods commencing on or after 1 January 2013);

• IFRS 13 Fair value measurement (Effective for periods commencing on or after 1 January 2013);

• IAS 27 (Revised) Separate financial statements (Effective for periods commencing on or after 1 January 2013);

• IAS 28 (Revised) Investments in associates and joint ventures (Effective for periods commencing on or after 1 January 2013);

• Amendments to IAS 1: 'Presentation of Financial Statements' - Amendments resulting from Annual Improvements 2009-2011 Cycle (Effective for periods commencing on or after 1 January 2013); and

• Amendments to IAS 19, 'Employee benefits' - post-employment benefits and termination benefits projects 1 (Effective for periods commencing on or after 1 January 2013).

The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial statements of the company. The company does not intend to apply any of these pronouncements early.

Revenue

Revenue is recognised by the company in respect of services supplied during the year, exclusive of Value Added Tax. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

- Management ongoing fees are recognised when the services are rendered.

- Success fees are only recognised when all contractual obligations which determine success are satisfied. 

Property, plant and equipment

Property, plant and equipment is stated at historical cost less accumulated depreciation and any provision for impairment in value.

Depreciation

Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:

Fixtures, fittings & equip. - 25% straight line

Motor Vehicles - 25% straight line

Investments

Investments held as fixed assets are shown at cost less provision for impairment.

Pensions

Contributions to personal pension plans are recognised as an expense when employees have rendered service entitling them to the contributions.

Convertible debt

The proceeds received on issue of the convertible debt are allocated into their liability and equity components. The amount initially attributed to the debt component equals the discounted cash flows using a market rate of interest that would be payable on a similar debt instrument that does not include an option to convert. Subsequently, the debt component is accounted for as a financial liability measured at amortised cost until extinguished on conversion or maturity of the bond. The remainder of the proceeds is allocated to the conversion option and is recognised in the "Convertible debt option reserve" within shareholders' equity, net of income tax effects.

Taxation

Corporation tax payable is provided on taxable profits at the current rate.

Deferred income taxes are calculated using the liability method on temporary differences. This involves the comparison of the carrying amounts of assets and liabilities in the financial statements with their respective tax bases. In addition, tax losses available to be carried forward as well as other income tax credits to the company are assessed for recognition as deferred tax assets. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.

Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised only to the extent that the directors consider that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Investments

All investments are initially recorded at cost, being the fair value of the consideration given and including acquisition costs associated with the investment.

Trade and other receivables

Trade receivables and other receivables are recognised and carried forward at invoice amounts less provisions for any doubtful debts. Bad debts are written off when identified.

Cash and cash equivalents

Cash and cash equivalents are included in the balance sheet at cost. Cash and cash equivalents comprise cash at bank and in hand and short term deposits with an original maturity of three months or less.

2. Loss on ordinary activities before taxation

Loss before taxation is stated after charging:

3. Auditors' remuneration

4. Particulars of employees

Employee costs, including directors' remuneration, were as follows:

The average number of staff employed by the company (including directors) during the financial period amounted to:

5. Directors' Remuneration

The directors' aggregate emoluments in respect of qualifying services were:

During the year retirement benefits were accruing to 1 director (2012 - 1 director) in respect of defined contribution pension schemes.

6. Finance income and costs

7. Income tax expense

The company has traded at a loss for the current and previous period and has losses brought forward, therefore no provision for taxation was considered necessary.

Deferred Tax

At the period end the unutilized tax losses carried forward of the company are £2,352,816 (2012: £1,940,219). A deferred tax asset has not been recognised in respect of these losses in view of the uncertainty as to whether these losses are available for set off against future profits. The deferred tax asset that is not recognised in the financial statements in relation to losses carried forward of the company amounts to £471,118 (2012: £389,111).

Factors affecting current income tax charge

The tax assessed on the loss on ordinary activities for the period is higher than (2012 - higher than) the standard rate of corporation tax in the UK of 20% (2012 - 20%).

8. Earnings/(Loss) per share

The basic earnings per ordinary share is calculated by dividing profit/loss for the year attributable to equity holders of the company less non-equity dividends and other appropriations in respect of non-equity shares by the weighted average number of equity shares in issue during the year.

The diluted earnings per ordinary share is calculated by dividing profit/loss for the year less non-equity dividends and other appropriations in respect of non-equity shares by the weighted average number of equity shares outstanding during the year (after adjusting both figures for the effect of dilutive potential ordinary shares).

The calculation of basic and diluted earnings per ordinary share is based upon the following data:

9. Property, plant and equipment

10. Investments

Listed investments

The fair value of the listed investments at 30 September 2013 was £nil (2012 ‑ £nil).

11. Trade and other receivables

12. Trade and other payables

The unsecured loan is convertible at 0.055p per share at the option of the Lender. Conversion is conditional on a waiver being obtained, if required, from an obligation under rule 9 of the City Code on Takeovers and Mergers, triggered by converting the Loan, to make an offer for the shares in the Company not owned by the Lender. It is also conditional on the Company undertaking such capital reorganisation as may be necessary to enable it to allot shares at a price which is less than their par value. If those conditions are not satisfied by March 2014, the loan bears interest from that date and is repayable on demand.

13. Related party transactions

During the period the company was charged £14,382 for directors' services provided by its Director D A van den Noort. At the period end an amount of £7,795 was payable to D A van den Noort and is included within creditors.

During the period the company was charged £18,175 for services provided by S B Virtual Finance Limited, a company controlled by S Bertolotti. At the period end an amount of £5,760 was payable to S B Virtual Finance Limited and is included within creditors.

During the period the company was charged £12,702 for services provided by ABT Associates Limited, a company in which M Wood has significant influence. At the period end an amount of £nil was payable to ABT Associates Limited.

During the period the company was charged £773 for directors' services provided by its Director J van den Aker. At the period end an amount of £773 was payable to J van den Aker and is included within creditors.

During the period, the company entered into a convertible loan agreement with Westminster Asset Management Limited, a company associated with one of the placees which subscribed and paid for 125 million new ordinary shares in the placing announced on 29 October 2012, representing approximately 18.75% of the enlarged issued share capital following completion of the Placing.

14. Share options

The directors are interested in the following options to subscribe for ordinary shares pursuant to the directors' share option agreement:

The Options were exercisable at a price of £0.01 per £0.001 ordinary share and could be exercised in whole or in part during the period commencing 12 April 2014 to 11 April 2021 subject to achievement of the vesting conditions. No options were exercised in the period and the share options lapsed on R A H Webb leaving the company in the year.

15. Cash generated/used by operations

15. Share capital

Authorised share capital:

Allotted, called up and fully paid:

Allotted, called up and partly paid:

The fully paid ordinary £0.001 shares carry one vote per share and carry a right to dividends.The fully paid deferred 'B' shares (£0.009 each) do not carry any votes (other than in a class meeting of the B deferred shares) and have no right to a dividend.

The fully paid deferred shares (£0.065 each) do not carry any votes (other than in a class meeting of the £0.065 deferred shares) and have no right to a dividend.

The partly paid ordinary £0.001 shares carry one vote per share and carry a right to dividends. On liquidation of the company, the shareholder acknowledges that the liquidator may require them to pay the balance subscription on any share which has not been paid.

On 12 November 2012, 239,000,000 ordinary shares of £0.001 each were issued at a price of £0.001 per share which were fully paid. However, on 28 June 2013 64,000,000 of these shares were forfeited.

In September 2013, the company issued 25,000,000 warrants over the share capital of the company at an exercise price of 0.1p per share.

Since the year end the company has re-allotted 64,000,000 ordinary shares previously forfeited and subsequently held in the company's name at 0.055p per share (upon conversion of the convertible loan note.) In addition, since the year end, the company has waived any or all rights which it may have demanded further payment from the holders of the 7,247,295 partly paid ordinary shares of 0.1p each. As a result these shares have since become deemed fully paid with no further amounts being payable on them and the amount of 0.9p per share currently standing to the credit of the share premium account in respect of each shares has been re-designated as share capital.

In January 2014, following a capital reorganisation, each of the ordinary shares of £0.001 each were sub-divided into one ordinary share of 0.01p each and one C deferred shares of 0.09p each.

Since the capital reorganisation, in January 2014, the company received a conversion notice in relation to a convertible loan agreement and subsequently issued and allotted 163,272,727 new ordinary shares of 0.01p each (together with the 64,000,000 shares re-allotted as above)

On 11 March 2014, the company issued 100,000,000 ordinary shares of 0.01p each for a price of 0.75p per share (total consideration of £750,000).

17. Subsequent Events

Since the year end, the Company entered into 3 separate Convertible Loan agreements to provide loan capital of up to £800,000 to the company to allow it to develop its new strategy. The loans were convertible at the option of the lender and were repayable if such conversion did not occur. In the case of one of the Convertible loans, the obligations of the issuer were subsequently unmet and funds were not transferred which led to immediate financial constraints on the Company. As a result, the Board reviewed its options in order to minimise the financial uncertainty surrounding the company and whilst exploring these options it filed a notice of intention to appoint an administrator.

After a period of review, the Board have been successful in agreeing voluntary reductions to the amounts due to a number of its creditors amounting to approximately £110,000 net of VAT. Conditional on the success of the voluntary reductions, the Company has since raised £750,000 before expenses as explained in Note 16, by way of a share placing with an institutional investor. Using these funds, the remaining convertible loans (of which £180,000 had been drawn down) have been repaid and all conversion rights relating to these loans were extinguished at the same time.

Following the above arrangements, the company has sufficient working capital for the next 12 months to meet running costs and also to embark on its new investing strategy. Further funds are likely to be raised alongside any acquisition under this new strategy.

A copy of the Report and accounts is available on the Company's website on www.verdes-group.com and has been posted to shareholders today.

For further information please contact:

Verdes Management PLC

Daan van den Noort - Chairman 0208 133 2782

Sarah Bertolotti - Director

SPARK Advisory Partners Limited

Nominated Adviser

Neil Baldwin 0113 370 8974

SI Capital Limited

Broker

Andy Thacker / Nick Emerson 01483 413 510