Final Results

ILA GROUP LIMITED

("Ila" or "the Company")

PRELIMINARY RESULTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2010

CHAIRMAN'S STATEMENT

The six months to 30 June 2010 has been a period of tremendous change and development for Ila Security Ltd, which started trading in 2008. It was acquired by Baylon Holdings by way of a reverse acquisition on 5 March 2010. Following this transaction, the accounting reference date was changed to 30 June, meaning these accounts cover a six month period for the Company.

Ila manufactures and markets branded personal security alarms and devices designed with Ila's own look and feel to appeal to women, which is a key part of the brand. The first product was the Dusk, a personal alarm emitting a 130dB female scream designed to shock and disorientate an attacker. 

During the first half of 2010 Ila developed 5 new products, entered new markets, gained new customers, raised new funds for expansion and appointed new directors. This flurry of activity means that the Company is now almost unrecognisable from where it was at the start of year, a transformation we are very proud of, and which puts the Company in excellent shape for the future.

The new products developed in 2010 include;

- the Wedge: a door wedge which triggers a loud siren when breached, and helps to keep the door from opening. It can be used in homes, hotel rooms, student accommodation and businesses.

- the Sport: a pedometer with built-in alarm, which gives data distance travelled and calories burnt. It is designed for early morning and late night walkers and joggers.

- theHook: a fold out mechanical hook which protects handbags by suspending them from a table. This lifts the bag from the floor, keeping it close and in sight, helping to keep it clean and prevent it from being stolen. 

-the Pebble: a key ring personal alarm designed to look good and be with the user at all times. It emits a high pitched alarm when activated to shock and draw attention to any potential attacker.

-the Wordlock: which is a travel padlock that uses combinations of letters to make words rather number sequences as your code for unlocking this attractive device.

The range of products can be retailed from unique branded display units, which have great presence and impact within a store, effectively getting across Ila's 'safety with style' message to the consumer.

Between the re-admission of the Company to AIM on 5th March 2010 and the end of June, the Company was pleased to announce the appointment of Sir Richard Greenbury as a non-executive Director to the board, as well as announcing deals with Shoppers Drug Mart in Canada, a number of UK high street retailers and QVC the UK's premier television sales network.

Since that time the Company has continued trading strongly with further orders from API in New Zealand, Chapters Indigo in Canada and M&S in the UK. The Company also has sales stands at most House of Fraser stores stocking its full range of products. Ila products are now selling in 15 different countries around the world and Ila is growing this number all the time through both retailers direct to the high street and a growing number of distributors.

The Company is exploring all possible routes to expand both its product lines and brands to ensure that its now significant sales and distribution network can be utilized to its fullest extent.

Financial performance

Revenue for the six months to 30 June 2010 was £136,105 (18 months to 31 December 2009 was £539,071) and the total loss for the period before exceptional items was £598,752 (18 months to 31 December 2009: £247,205).

Current trading and prospects

Post the period end, trading has been very encouraging, including new sales announced with Chapters Indigo in North America, and House of Fraser and Marks and Spencer in the UK. The Marks and Spencer re-order, was particularly pleasing given they were Ila's original customer in 2008 and they continue to enjoy great success with our products.

Other orders have been received from API, an Australian pharmacy group, and a leading French supermarket.

Revenues are significantly ahead of prior periods, both within the UK and overseas. The pipeline of potential demand from around the world is tremendously encouraging and we anticipate significant growth for the rest of the financial year. A number of new products are also at various stages of development.

The Company will continue to aggressively target organic growth by increasing sales and expanding its product range, and will also consider growth by acquisition. Those companies considered will have products, routes to market and production capabilities that fit into Ila's growing network and portfolio. 

Overall, Ila has made remarkable progress in a short space of time, and I look forward to reporting further progress in due course.

Simon McGivern

3 December 2010

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED BALANCE SHEET

GROUP CASH FLOW STATEMENT

1. Accounting Policies

Basis of preparation 

The Group's Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRS") issued by the International Accounting Standards Board as adopted by the European Union ("Adopted IFRS") and with those parts of the Companies Act 2006 applicable to companies preparing their financial statements under IFRS.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of IFRS, this announcement does not itself contain sufficient information to comply with IFRS. The Group expects to publish full financial statements that comply with IFRS in December 2010.

As a result of the application of Amendments to IAS 1 Presentation of Financial Statements: A Revised Presentation the Group has elected to present a single Consolidated Statement of Comprehensive Income. Previously the Group presented an income statement only, with movements in other comprehensive income recognised as part of total recognised income and expense in the Consolidated Statement of Changes in Shareholders' Equity. In addition, certain primary statement titles have changed in order to align with the terms used in IAS 1. The Amendment does not change the recognition or measurement of transactions and balances in the financial statements.

2. Segment Information

 As the company operates in one business segment and as such this is the primary business segment. The company's secondary segment is geographical. The segmental results by geographical area are shown below:

3. Components of income tax expense

4. Earnings per Ordinary Share

The calculation of basic loss per share is based on the loss attributable to ordinary shareholders and the weighted average number of ordinary shares in issue during the period.

The calculation of diluted loss per share is based on loss per share attributable to ordinary shareholders and the weighted average number of ordinary shares that would be in issue, assuming conversion of all dilutive potential ordinary shares into ordinary shares.

Reconciliations of the loss and weighted average number of shares used in the calculations are set out below:

Due to the Group's loss for the period, the diluted loss per share is the same as the basic loss per share.

5. Acquisition

On 5 March 2010, Baylon Holdings Ltd (formerly Molectra Group ltd and now Ila Group Ltd) was deemed to be acquired via a reverse acquisition. The consideration paid has been estimated from the pre-combination fair value and the issued equity of Baylon Holdings Ltd.

The book values of the companies acquired were as follows:

The book value of the assets acquired is not considered to be materially different from the fair value.

The consideration for the acquisition is to be satisfied by issuing up to 763,308,454 fully paid shares in Ila Group Ltd (the Consideration Shares). The Consideration Shares were split into two tranches: 388,600,221 Initial Consideration Shares which were allotted to the Vendors on Completion, and 374,708,233 Contingent Consideration Shares, which may be allotted to the Vendors depending on the extent to which the Company's Australian subsidiary received a tax rebate from the Australian authorities, as described further below.

The subsidiary may receive a tax credit in respect of Research and Development. If the full estimated value of the potential tax credit (£554,444) is received, then none of the Contingent Consideration Shares will be allotted to the Vendors. If no tax credit is received by the deadline of 31 December 2010 (subject to an extension to 31 March 2011) or if such a tax credit is received but it is less than the estimated value of £554,444, then some or all of the Contingent Consideration Shares will be allotted to the Vendors.

In the event £233,290 has been received to the date of these accounts and it is not anticipated that any further credits will be forthcoming. As a result 154,400,846 Contingent Consideration Shares are likely to be issued in April 2011.

6. Events after the reporting period

On 3 August 2010, the Company placed 27,029,141 ordinary shares of no par value raising £270,291.

7. Publication of non-statutory accounts

The financial information set out in this preliminary announcement does not constitute the Group's financial statements for the six months ended 30 June 2010.

The auditors' report was unqualified and did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report.

The full audited financial statements of Ila Group Ltd for the period ended 30 June 2010 are expected to be posted to shareholders by no later than 6 December 2010 and will be available to the public at the Company's office - 4 Ingate Place, Battersea, London, SW8 3NS and available to view on the Company's website at www.ilasecurity.com from that date.

Further to the Company’s announcement of 25 June 2010 concerning a change of accounting reference date, unaudited interim accounts for the Company for the six months ended 31 December 2010 will be notified by the end of March 2011 and thereafter the Company will continue to report its annual and interim accounts in accordance with a 30 June accounting reference date. On 5 March 2010, Baylon Holdings Ltd (now renamed Ila Group Ltd) became the legal parent of Ila Security Ltd in a share-for-share exchange. In accordance with IFRS 3 ‘Business combinations’, this transaction has been accounted for as a reverse acquisition, such that in substance, Ila Security Ltd has acquired Baylon Holdings Ltd. Accordingly, the comparative information for Ila Security Ltd has been presented for the eighteen months ended 31 December 2009 and the financial statements present a continuation of the business of Ila Security Ltd as the legal subsidiary.

8. Annual General Meeting

The Annual General Meeting will be held on 20 December 2010 at 12.00pm at the offices of BBH London, 60 Kingly Street, London, W1B 5DS and a notice of AGM will be posted to shareholders shortly.

For further information, please see www.ilasecurity.com or contact:

Ila Group Limited 020 7501 1050

Simon McGivern

Paul Gazzard

finnCap 020 7600 1658

Ed Frisby/Ben Thompson - corporate finance

Joanna Weaving - corporate broking

Lothbury Financial Services 020 7868 2010

Gary Middleton

Simon Astley