22nd Jun 2005 11:59
Kryso Resources PLC22 June 2005 KRYSO RESOURCES PLC (the "Company") Company Registration Number 05190505 Report and AccountsKryso Resources plc has published its Report and Accounts for the period ended31 December 2004 and these have been posted to shareholders. Copies of theReport and Accounts are available free of charge from Ruegg & Co Limited, 39Cheval Place, London SW7 1EW, Telephone 020 7584 3663. Financial StatementsFOR THE PERIOD ENDED31 DECEMBER 2004 Chairman's StatementIt gives me great pleasure to submit our company's first Chairman's Statement.Kryso Resources plc was floated on the AIM section of the London Stock Exchangein early December 2004. £32.6m, or 26m shares, was raised at 10p in addition tothe 30m shares held by the founders. All the directors, with the exception of the Deputy Chairman, Simon Cawkwell,have lived and worked in Tajikistan for many years. I myself worked there from1994 to 1996 for the Zeravshan Gold Company (ZGC). Vassilios Carellas and CraigBrown, the former from South Africa and the latter from New Zealand, arrived inTajikistan soon after in early 1995 and also worked for the ZGC. They havecontinued to work in the country's gold mining sector for the last ten yearsuntil their establishment of Kryso Resources plc. The fifth director is AbualiIsmatov, a prominent businessman in Tajikistan through whom Kryso can and doesaccess Tajik society. Most shareholders will be aware of recent political instability in Tajikistan'stwo neighbours, Kyrgyzstan and Uzbekistan and some have feared that similardifficulties may emerge in Tajikistan. Our view is that we are guests inTajikistan and that it is not our business to express any view as to the conductof Tajik domestic politics. The civil war of the early 1990s, after thecountry's independence from the former Soviet Union in 1991, is now over. Itdeeply informed the Tajiks to sink their differences and develop their economy;this is where Kryso's opportunities arise. There is an extensive geologicaldatabase held by the Tajik government assembled principally during Soviet times,much of which has to be followed up. Needless to add, the Tajiks are set uponreleasing this mineral wealth. The Company's prime task is to open the Pakrut mine, which is about 100kilometres northeast of Dushanbe, the capital. This substantial undertaking isproceeding according to plan. Kryso established their exploration camp at thePakrut Deposit earlier this year with the intention of carrying out drilloperations throughout the year. Graeme Noble, an experienced drill supervisorfrom New Zealand with over six years experience of working in Tajikistan andover 30 years worldwide, has been contracted to supervise the company's drillprogramme at the Pakrut Deposit. Three diamond drill rigs have been purchased,one of which is already on site while the other two are expected to arrivewithin the next few weeks. A sample preparation and assay laboratory has beenconstructed in Dushanbe. The remaining laboratory equipment is expected toarrive in the coming weeks together with the diamond drills. Earlier this year, the Company began the rehabilitation of one of the existingexploration adits from which to begin the diamond drill programme, which hasbeen approved by Snowden Mining Industry Consultants who have been contracted tocarry out the Bankable Feasibility Study on the Pakrut Deposit. There are many other opportunities in Central Asia and I trust that these willform a rich harvest in due course. We think it unwise to comment on how theseopportunities will be handled in advance of negotiations being concluded. Thisis partly for reasons of commercial confidentiality but it also reflects Kryso'sbelief that we prefer to be totally confident of an advance before it isdisclosed in the normal manner by Regulatory News Service. We consider that we have an exciting time ahead of us. We look forward withconfidence to 2006 and beyond. Dr. Trevor DavenportChairman 20 June 2005 Directors' ReportThe Directors present their Report and the Audited Financial Statements of theGroup for the period ended 31 December 2004. Principal activities and review of the businessThe Company was incorporated on 27 July 2004. The principal activity of the Company during the period was that of a holdingcompany. The principal activity of the Group is that of mineral exploitation. A review of the Group's activities and performance for the period ended 31December 2004 and its prospects for 2005 is contained in the Chairman'sstatement. Results and dividendsThe trading results for the period and the Group's financial position at the endof the period are shown in the attached financial statements.The Directors have not recommended the payment of a dividend. Future developmentsA review of the business and future prospects is set out in the Chairman'sStatement on pages 2 and 3. The Directors and their interestsThe Directors who served the Company during the period together with theirbeneficial interests in the shares of the Company were as follows: At Date of 31 December Appointment 2004Dr Trevor George Davenport 27 July 2004 -Simon Alleton Cawkwell 27 July 2004 *700,000Vassilios Carellas 27 July 2004 7,000,000Craig William Brown 27 July 2004 **7,000,000Abuali Ismatov 27 July 2004 7,000,000 *Of the shares in which Simon Cawkwell is interested 200,000 are beneficiallyowned by his daughter, Sophia Lucy Cawkwell.*\* These shares are held by Westrock Resources Limited, a Bahamian company inwhich Craig Brown is interested. On 24 November 2004 each of the Directors was granted 400,000 options under ashare option scheme to vest as follows: (a) after 12 months, 100,000 exercisable at the Placing Price (10p) and 100,000exercisable at the Placing Price plus 50 per cent (15p) and (b) after 24 months, 50,000 exercisable at the Placing Price (10p) and 50,000exercisable at the Placing Price plus 50 per cent and (c) after 36 months, 50,000 exercisable at the Placing Price (10p) and 50,000exercisable at the Placing Price plus 50 per cent. (15p).Substantial shareholdings As at 15 June 2005, the directors were aware of the following shareholdings inexcess of 3% of the Company's issued share capital. Percent Number of of issued ordinary ordinary shares share capital Pershing Keen Nominees Limited 10,512,530 18.77Credit Suisse First Boston Nominees Limited 9,000,000 16.07Vassilios Carellas 7,000,000 12.50Westrock Resources Limited 7,000,000 12.50Abuali Ismatov 7,000,000 12.50Gartmore Smaller Companies Trust 3,875,000 6.92Chase Nominees Limited 2,100,000 3.75 Charitable and political donationsThe Company made no charitable donations during the period. There were nopolitical donations. Corporate governanceThe Company shares are traded on the Alternative Investment Market of the LondonStock Exchange and the Company is not therefore required to report on compliancewith the Combined Code appended to the listing rules. However, the Board ofDirectors supports the principles of good governance and the further guidanceincluded in the Turnbull report. It is the Board's policy to comply as far as isreasonable for a business the size of Kryso Resources Plc. Internal controlThe Directors acknowledge their responsibilities for the Group's system ofinternal control. The Board considers major business and financial risks. Allstrategic decisions are decided by the Board and the making of individualinvestment and loan decisions is designated to members of the Board. Acceptingthat no systems of control can provide absolute assurance against materialmisstatement or loss, the Directors believe that the established systems forinternal control within the group are appropriate to the business. Audit CommitteeThe Audit Committee of the Company comprises the non-executive Directors of theCompany and meets at least twice each year. The Audit Committee is responsiblefor ensuring that the Group's financial performance is properly monitored,controlled and reported. It also meets the auditors and reviews reports from theauditors relating to accounts and internal control systems. The Audit Committeemeets once a year with the auditors, without executive board members present.Remuneration Committee The Remuneration Committee comprises the non-executive Directors of the Company.It is responsible for reviewing the performance of the executive directors,setting their remuneration, considering the grant of the options under any shareoption scheme and in particular the price per share and the application ofperformance standards which may apply to any such grant. Nomination committeeA nomination committee has not been appointed. One will be appointed as and whenthe Board deem it necessary. In the meantime the present Board acts as thenomination committee. Going concernAfter making enquiries, the Directors have formed a judgement at the time ofapproving the accounts that there is a reasonable expectation that the Companyand Group have adequate resources to continue its operations for the foreseeablefuture. For this reason, the Directors continue to adopt the going concern basisin preparing the accounts. Supplier payment policyThe Group seeks to maintain good relations with all of its trading partners. Inparticular, it is the Group' policy to abide by the terms of payment agreed witheach of its suppliers. As at 31 December 2004 the number of creditors' days inrespect of trade creditors was 20 days. Directors' responsibilitiesCompany law requires the Directors to prepare financial statements for eachfinancial year which give a true and fair view of the state of affairs of theCompany and of the Group at the end of the year and of the Group's profit orloss for the year then ended. In preparing those financial statements, the Directors are required to selectsuitable accounting policies, as described on pages 16 to 18, and then applythem on a consistent basis, making judgements and estimates that are prudent andreasonable. The Directors must state whether applicable accounting standardshave been followed, subject to any material departures. The Directors must alsoprepare the financial statements on the going concern basis unless it isinappropriate to presume that the company will continue in business. The Directors are responsible for keeping proper accounting records whichdisclose with reasonable accuracy at any time the financial position of theGroup and to enable them to ensure that the financial statements comply with theCompanies Act 1985. The Directors are also responsible for safeguarding theassets of the group and hence for taking reasonable steps for the prevention anddetection of fraud and other irregularities. AuditorsCLB were appointed during the period and a resolution to reappoint CLB asauditors for the ensuing year will be proposed at the Annual General Meeting inaccordance with section 385 of the Companies Act 1985.Signed by order of the directors Craig William BrownCompany Secretary Approved by the directors on 20 June 2005 Consolidated Profit and Loss Account - Period ended 31 December 2004 2004 Note US$000Group turnover 2 -Cost of sales -Gross profit -Administrative expenses (186)Development expenditure (11)Exceptional gain on foreign exchange 3 201Operating profit 4 4Interest receivable 16Profit on ordinary activities before taxation 20Tax on profit on ordinary activities 7 -Profit on ordinary activities after taxation 9 20Dividends 10 -Profit for the financial period 20Profit per share 8 US$0.0013 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 topublish its own Profit and Loss Account. The Company has no recognised gains or losses other than the results for theperiod, as set out above and therefore no separate statement of total recognisedgains or losses has been presented. Consolidated Balance Sheet - At 31 December 2004 2004 Note US$000Fixed assetsIntangible assets 11 4,666Tangible assets 12 75 4,741Current assetsStocks 14 18Debtors 15 227Cash at bank 4,938 5,183Creditors: Amounts falling due within one year 16 (123)Net current assets 5,060Total assets less current liabilities 9,801Capital and reservesCalled-up equity share capital 20 1,027Share premium account 21 8,754Profit and loss account 21 20Shareholder funds 22 9,801 Company Balance Sheet - At 31 December 2004 2004 Note US$000Fixed assetsInvestments 13 5,440Current assetsDebtors 15 10Cash at bank 4,645 4,655Creditors: Amounts falling due within one year 16 (151)Net current assets 4,504Total assets less current liabilities 9,944Capital and reservesCalled-up equity share capital 21 1,027Share premium account 22 8,754Profit and loss account 22 163Shareholder funds 23 9,944 Consolidated Cash Flow Statement - Period ended 31 December 2004 2004 US$000Net cash inflow from operating activities 7Returns on investments and servicing of financeInterest received 16Net cash inflow from returns on investments and servicing of finance 16Taxation -Capital expenditure and financial investmentPayments to acquire tangible fixed assets (61)Net cash outflow for capital expenditure and financial Investment (38)AcquisitionCash acquired with subsidiaries 634Cash inflow before financing 596FinancingIssue of equity share capital (net of issue costs) 4,341Net cash inflow from financing 4,341Increase in cash 4,937 Major non-cash transactionDuring the period the Company issued 30,000,000 ordinary shares of 1p inexchange for the entire share capital of Kryso Resources Limited. Reconciliation of operating profit to net cash inflowfrom operating activities 2004 US$000Operating profit 4Amortisation 77Depreciation 10Increase in stocks (13)Increase in debtors (115)Increase in creditors 44Net cash inflow from operating activities 7 Notes to the Financial Statements - Period ended 31 December 2004 1. Accounting policiesBasis of accountingThe financial statements have been prepared under the historical cost conventionand in accordance with applicable accounting standards. The functional currency of the company and group is US dollars and accordinglythe amounts in the financial statements are denominated in that currency. Thebalance sheet rates of exchange for the US dollar to UK Sterling were 1.8562 to:£1. Basis of consolidationThe consolidated financial statements incorporate the financial statements ofthe company and all Group undertakings. These are adjusted, where appropriate,to conform to Group accounting policies. Acquisitions are accounted for underthe acquisition method and goodwill on consolidation is capitalised and writtenoff over ten years from the year of acquisition. The results of companiesacquired or disposed of are included in the Group profit and loss account afteror up to the date that control passes respectively. As a consolidated Groupprofit and loss account is published, a separate profit and loss account for theparent company is omitted from the Group financial statements by virtue ofsection 230 of the Companies Act 1985. TurnoverTurnover comprises the value of goods and services supplied by the company, netof value added tax and trade discounts.AmortisationAmortisation is calculated so as to write off the cost of an asset, less itsestimated residual value, over the useful economic life of that asset asfollows: Goodwill - 10% straight line Research and exploration expenditureResearch and exploration expenditure is written off in the year in which it isincurred. When a decision is taken that a mining property becomes viable forcommercial production, all further pre-production expenditure is capitalised.Capitalisation of pre-production expenditure ceases when the mining property iscapable of commercial production. Capitalised research and development expenditure is amortised upon commencementof production using a suitable method based on the volumes of proved andprobable reserves of ore and are written off if the property is abandoned. Fixed AssetsAll fixed assets are initially recorded at cost. DepreciationDepreciation is provided to write off the cost of an asset, less its estimatedresidual value, over the expected useful economic life of that asset as follows: Plant & Equipment 33% straight lineMotor Vehicles 33% straight line StocksStocks are valued at the lower of cost and net realisable value, after makingdue allowance for obsolete and slow moving items. Foreign CurrenciesTransactions in foreign currencies are translated at the exchange rate ruling atthe date of the transaction. Monetary assets and liabilities in foreigncurrencies are translated at the rates of exchange ruling at the balance sheetdate. Exchange differences are dealt with through the profit and loss account. Deferred taxationDeferred tax is recognised in respect of all timing differences that haveoriginated but not reversed at the balance sheet date where transactions orevents have occurred at that date that will result in an obligation to pay more,or a right to pay less or receive more tax, with the following exceptions: • Provision is made for tax on gains arising from the revaluation (and similarfair value adjustments) of fixed assets, and gains on disposal of fixed assetsthat have been rolled over into replacement assets, only to the extent that, atthe balance sheet date, there is a binding agreement to dispose of the assetsconcerned. However, no provision is made where, on the basis of all availableevidence at the balance sheet date, it is more likely than not that the taxablegain will be rolled over into replacement assets and charged to tax only wherethe replacement assets are sold; • Deferred tax assets are recognised only to the extent that the directorsconsider that it is more likely than not that there will be suitable taxableprofits from which the future reversal of the underlying timing differences canbe deducted; • Deferred tax is measured on an undiscounted basis at the tax rates that areexpected to apply in the periods in which timing differences reverse, based ontax rates and laws enacted or substantively enacted at the balance sheet date. Capital instrumentsShares are included in shareholders' funds. Other instruments are classified asliabilities if they contain an obligation to transfer economic benefits and ifnot they are included in shareholders' funds. The finance cost recognised in theprofit and loss account in respect of capital instruments other than equityshares is allocated to periods over the term of the instrument at a constantrate on the carrying amount. Operating lease agreementsRentals applicable to operating leases where substantially all of the benefitsand risks of ownership remain with the lessor are charged against profits on astraight line basis over the period of the lease. Going concernUnited Kingdom company law requires the company's directors to consider whetherit is appropriate to prepare the financial statements on the basis that thegroup is a going concern. In considering this matter the directors have reviewedthe Group's budget for 2005 and its plan for 2006. This included considerationof the cash flow implications of the budget and plan. The Directors see noreason why the group and the company should not continue in operationalexistence for the foreseeable future. For this reason they have adopted thegoing concern basis in preparing the Group's financial statements. 2. TurnoverThe Group did not trade in the period. 3. Exceptional itemThe exceptional item arises as a result of translating the group's bank balancesat the year end. 4. Operating profitOperating profit is stated after charging: 2004 US$000Amortisation 77Depreciation of owned fixed assets 10Auditors' remuneration- as auditors 19- non-audit services 31The audit fee to the parent company was US$10,000 5. Particulars of employeesThe average number of staff employed by the group during the financial periodamounted to: 2004Administrative and management 8Mining 20 28The aggregate payroll costs of the above were: 2004 US$000Wages and salaries 54Social security costs 2 566. Directors' emolumentsThe Directors' aggregate emoluments in respect of qualifying services were: 2004 US$000Emoluments receivable - from the company - - from group companies 46 7. Taxation on ordinary activities(a) Analysis of charge in the yearCurrent tax: 2004 US$000UK Corporation tax based on the results for the period at 30% -Overseas tax credits -Total current tax - Kryso Resources Limited is registered as an exempted company for British VirginIslands income tax purposes and the subsidiary undertakings have recorded noassessable profit for Tajikstan profits tax purposes and accordingly, noprovision for British Virgin Islands income tax or Tajikstan profits tax hasbeen made. No provision for deferred taxation has been made on the grounds that it isimmaterial. (b) Factors affecting current tax chargeThe tax assessed on the profit on ordinary activities for the period is lowerthan the standard rate of corporation tax in the UK. 2004 US$000Profit on ordinary activities before taxation 20 Profit on ordinary activities by rate of tax at 30% 6Disallowed expenditure (2)Non taxable items (44)Overseas losses 40 Total current tax - (note 7(a)) - Deferred tax assets have not been recognised in the financial statements as thedirectors are uncertain as to when they will be utilised. 8. Profit per share 2004 US$000Profit per ordinary share 0.0013 The basic profit per share is calculated by dividing the profit on ordinaryactivities after tax of US$20,000 by the weighted average number shares in issueand carrying the right to receive dividend during period ended 31 December 2004being 15,405,262 shares The diluted earnings per ordinary share calculation is the same as the basicearnings per share calculation. 9. Profit attributable to members of the parent companyThe profit dealt with in the accounts of the parent company was US$163,000. 10. DividendsNo dividends have been paid in respect of the period. 11. Intangible fixed assetsGroup Goodwill US$000CostAcquired in period 4,743 At 31 December 2004 4,743 AmortisationCharge for the period 77At 31 December 2004 77 Net book valueAt 31 December 2004 4,666 12. Tangible fixed assetsGroup Plant & machinery US$000CostAcquired in period 85At 31 December 2004 85DepreciationCharge for the period 10At 31 December 2004 10Net book valueAt 31 December 2004 7513. Investments - Shares in Group undertakingsCompany Total US$000CostAdditions 5,440At 31 December 2004 5,440Net book valueAt 31 December 2004 5,440Subsidiary undertaking Proportion Country of of votingName of company Holding incorporation rights held Nature of businessDirectly HeldKryso Resources Limited Ordinary British 100% Holding Company Shares Virgin IslandsIndirectly HeldLimited Liability Company Ordinary Tajikstan 100% Mineral ExploitationPakrut SharesLimited Liability Company Ordinary Tajikstan 100% Mineral ExploitationKuhi Zarin SharesInternational Mining Ordinary UK 100% Service CompanySupplies and SharesServices Limited Aggregate capital Profit and reserves or lossName of company US$000 US$000Kryso Resources Limited 873 (24)Limited Liability Company Pakrut 53 (22)Limited Liability Company Kuhl Zarin 5 (2)International Mining Supplies and Services Limited 38 (17) On 5 November 2004 the Company acquired the entire issued capital of KrysoResources Limited in consideration for the issue of 29,999,800 shares in KrysoResources plc and the transfer of the 200 subscriber shares.This included acquiring the 100% shareholding in all the above companies. Netassets/liabilities acquired are considered to be at fair value. US$000Tangible assets 24Stock 5Debtors 112Cash 634Creditors (78)Net assets acquired 697Value of shares issued 5,440Goodwill arising 4,74314. Stocks Group Company 2004 2004 US$000 US$000Consumables 18 -15. Debtors Group Company 2004 2004 US$000 US$000Other debtors 227 1016. Creditors: Amounts falling due within one year Group Company 2004 2004 US$000 US$000Amount due to related undertaking - 129Other creditors 101 -Accruals and deferred income 22 22 123 151 17. Treasury policy and financial instrumentsThe Group operates informal treasury policies which include ongoing assessmentsof interest rate management and borrowing policy. The Board approves alldecision on treasury policy. Facilities are arranged, based on criteria determined by the board, as requiredto finance the long term requirements of the group. The Group has financed itsactivities by the raising of funds through the placing of shares. The Group has taken advantage of the exemption permitting it not to includeshort term debtors and in the disclosures required by FRS 13 'Derivatives andOther Financial Instruments: Disclosure' other than the currency disclosures. At 31 December 2004 there were monetary assets denominated in the functionalcurrency and UK Sterling of the operations. The floating rate financial assets comprise bank deposits earning interest atrates based upon individual bank base rates. The interest rate profile of the Group's financial assets and liabilities at theyear end were as follows: 2004 Non Floating interest InterestSterling - 2,601USDollar - 59There are no material differences between the book value and fair value of thefinancial assets at the year end. 18. Commitments under operating leases At 31 December 2004 the Group had annual commitments under non-cancellableoperating leases as set out below. Group Company 2004 2004 Land and Other Land and Other Buildings items Buildings items US$ US$000 US$000 US$000Operating leases which expire:Within 1 year 10 - - - 10 - - -19. Related party transactionsThe company is exempt from the requirement to disclose related partytransactions with other group companies under the provisions of FinancialReporting Standard No. 8. All Group transactions were eliminated onconsolidation. During the period, Simon Cawkwell, a director was paid US$36,759 in respect ofcommission for obtaining investors. Mr Cawkwell's wife was paid US$5,452 for providing management services to theGroup. 20. Share capitalAuthorised share capital: 2004 2004 No. US$000Ordinary shares of £0.01 each 100,000,000 2000 On 1 November 2004 the company increased its authorised share capital to £1,000,000 by the creation of 950,000 Ordinary shares and subdivided each of itsissued and un-issued shares of £1 into 100 Ordinary shares of 1p each.Allotted, called up and fully paid: 2004 2004 No. US$000Ordinary shares of £0.01 each 56,000,000 1,027The following shares were issued in the period US$000 No ReasonNovember 2004 550 30,000,000 AcquisitionsNovember 2004 477 26,000,000 Placing on AIM 1,027 56,000,00020. Share capital (continued)Share Option SchemeThe Company has adopted an unapproved employee share option scheme (for thepurposes of this paragraph referred to as the "Scheme"). Under the Scheme theDirectors have the discretion to grant options to subscribe for Ordinary Sharesup to a maximum of 5 per cent of the Company's issued share capital with amaximum of one per cent to any one individual. Options can be granted to anyemployee of the Group. The option price is not to be less than the PlacingPrice. The options cannot be exercised for a period of one year from the date ofgrant. In event of any employee to whom options have been granted ceasing to bean employee of the Group he or she will have a set period in which to exercisethose options (depending on the reasons for leaving) failing which the optionswill lapse. The Company has granted 400,000 options to Ruegg and Co and 300,000 options toHitchens, Harrison to acquire ordinary shares of 1p at 10p each at any time upto 2 December 2009. 21. ReservesGroup Share Profit premium and loss account account US$000 US$000Premium arising on shares issued 9,239 -Less share issue costs (485) - 8,754 -Profit for the period - 20Balance carried forward 8,754 20Company Share Profit premium and loss account account US$000 US$000Premium arising on shares issued 9,239 -Less share issue costs (485) -Profit for the period - 163Balance carried forward 8,754 163 22. Reconciliation of movements in shareholders' fundsGroupEquity shareholders' funds 2004 US$000Profit for the financial period 20Dividends - 20New equity share capital subscribed 9,781Net increase to funds 9,801Closing shareholders' equity 9,801 CompanyEquity shareholders' funds 2004 US$000Profit for the financial period 163New equity share capital subscribed 9,781Net addition to funds 9,944Closing shareholders' equity funds 9,94423 Controlling partyThere is no ultimate controlling party. Notice of Annual General Meeting NOTICE IS HEREBY given that the Annual General Meeting of the Company will beheld at 2 Stone Buildings, Lincoln's Inn, London WC2A 3TH on 14 July 2005 at11am for the following purposes: ORDINARY BUSINESS To consider and if thought fit, to pass the following resolutions which will beproposed as ordinary resolutions: 1 To receive and adopt the Company's annual accounts for the financial year ended 31 December 2004 together with the last directors' report and auditors' report on those accounts. 2 To reappoint Trevor Davenport who retires by rotation. 3 To reappoint Simon Cawkwell who retires by rotation. 4 To reappoint CLB as auditors, to hold office from the conclusion of the meeting to the conclusion of the next meeting at which the accounts are laid before the Company, at a remuneration to be determined by the directors. SPECIAL BUSINESS To consider and, if thought fit, pass the following resolutions, of whichresolution 5 will be proposed as an ordinary resolution and resolution 6 will beproposed as a special resolution. 5 THAT the directors be and they are generally and unconditionally authorisedfor the purposes of section 80 of the Companies Act 1985 (the "Act") to exerciseall the powers of the Company to allot relevant securities (within the meaningof that section) up to an aggregate nominal amount of £200,000 provided thatthis authority is for a period expiring at the Company's next Annual GeneralMeeting but the Company may before such expiry make an offer or agreement whichwould or might require relevant securities to be allotted after such expiry andthe directors may allot relevant securities in pursuance of such offer oragreement notwithstanding that the authority conferred by this resolution hasexpired. This authority is in substitution for all subsisting authorities, tothe extent unused. 6 THAT subject to the passing of the previous resolution the directors be andthey are empowered pursuant to section 95 of the Act to allot equity securities(within the meaning of section 94(2) of the Act) wholly for cash pursuant to theauthority conferred by the previous resolution as if section 89(1) of the Actdid not apply to any such allotment, provided that this power shall be limitedto the allotment of equity securities: (a) in connection with an offer of such securities by way of rights to holdersof ordinary shares in proportion (as nearly as may be practicable) to theirrespective holdings of such shares, but subject to such exclusions or otherarrangements as the directors may deem necessary or expedient in relation tofractional entitlements or any legal or practical problems under the laws of anyterritory, or the requirements of any regulatory body or stock exchange; and (b) otherwise than pursuant to sub-paragraph (a) above to an aggregate nominalamount of £60,000; and shall expire on the conclusion of the next Annual General Meeting of theCompany after the passing of this resolution save that the Company may, beforesuch expiry make an offer or agreement which would or might require equitysecurities to be allotted after such expiry and the directors may allot equitysecurities in pursuance of any such offer or agreement notwithstanding that thepower conferred by this resolution has expired.By order of the Board Vassilios CarellasManaging Director Dated: 21 June 2005 Registered Office:2 Stone BuildingsLincoln's InnLondonWC2A 3TH Notes:1 A member to attend and vote at the meeting convened by the notice set outabove is entitled to appoint a proxy (or proxies) to attend and, on a poll, tovote in his place. A proxy need not be a member of the Company. 2 A form of proxy is enclosed. To be effective, it must be deposited at theoffice of the Company's registrars so as to be received not later than 48 hoursbefore the time appointed for holding the annual general meeting. Completion ofthe proxy does not preclude a member from subsequently attending and voting atthe meeting in person if he or she so wishes. 3 The register of interests of the directors and their families in the sharecapital of the Company and copies of contracts of service of directors with theCompany or with any of its subsidiary undertakings will be available forinspection at the registered office of the Company during normal business hours(Saturdays and public holidays excepted) from the date of this notice until theconclusion of the AGM. 4 In accordance with Regulation 41 of the Uncertificated Securities Regulations2001, only those members entered on the Company's register of members not laterthan 11am on 12 July 2005 or, if the meeting is adjourned, shareholders enteredon the Company's register of members not later than 48 hours before the timefixed for the adjourned meeting shall be entitled to attend and vote at themeeting. 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