21st Sep 2010 15:11
RAM INVESTMENT GROUP PLC
("RAM" of the "Company")
UNAUDITED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
CHAIRMAN'S STATEMENT
Business Overview
These interim results are the first results that consolidate the Group's principal operating subsidiaries TrainFX Limited ("TrainFX") and Ram Vision Limited ("Ram Vision") for a full period. The profit and loss account reflects the start up of Ram Vision in a seasonally weaker half and the pre revenue start up of the new contracts at TrainFX. The results also include some non recurring corporate costs incurred during the process of acquiring the 50.1% of shares in TrainFX not already owned. This constituted a reverse take over under AIM rules and therefore necessitated the Group to complete an admission document.
Since 30 June 2010 the balance sheet of the Group has been significantly strengthened with the completion of £2.5m gross of new capital raised, comprising £1.0m of equity and £1.5m of senior debt in September. This funding has enabled us to complete the acquisition of 50.1% of TrainFX, which completed on the 17th September, discharge some bridging debt accumulated during the first half of the year, discharge the exceptional admission costs and provide sufficient working capital and capital expenditure for the Group going forward.
When the Group made its initial investment in TrainFX in May 2009, it was principally a research and development business in train technology. Your board identified that the business had a considerable opportunity in the markets it was targeting. There was also an opportunity to buy the business from a distressed owner that subsequently went into administration. The process of acquiring the whole of TrainFX required a reverse take-over process under AIM rules that has required us to undertake an admission in order to complete the 100% purchase. . However, we are delighted that this process has now ended and management can now focus on developing the business.
The Group has incurred circa £0.25m of non recurring cost in the first half of the year. Considerable legal due diligence and external accounting work has been paid for to enable us to complete the admission document. In addition, substantial staff and management time at both Group and subsidiary level has been deployed on this process. It is hoped that the work here has given a strong platform for the Group going forward.
TrainFX
When the Company first acquired an interest in TrainFX it had almost negligible revenue. From November 2009 until the current time, TrainFX has secured orders worth £2.5m. The company recorded some maiden revenue against these contracts in the first half but the second half of this year and into next year will show more significant revenue streams being booked against completion of these contracts. The business is expected to deliver a profit contribution from its current work in progress in 2011. Encouragingly, the company is at this moment tendering for a substantial amount of further work in advanced passenger information systems, CCTV and train management information solutions. In addition the company is ready to start installing its Digital Media Network on trains and is negotiating on external Group funding arrangements to facilitate this.
Ram Vision
Ram Vision made a loss in the first half of the year in its first full period of trading with the Group. The company was newly formed in November 2009. This loss was as expected as the business is seasonal and has required start up investment in repositioning it. The company has been rebranded, all shopping mall contracts have been renegotiated and the company has moved premises in the period. We believe the business is now soundly based with a clear business plan and following recent contract awards we are now selling off a substantially upgraded estate from the business and assets that we acquired at the end of last year. Much has been achieved in a relatively short period of time and the company is now being applauded within the industry for service and technological lead. We believe that the company is well placed to be a market leader in screen advertising in shopping malls.
Outlook
The second half of 2010 is expected to show a significant rise in turnover on a reduced overhead and as such the Group is anticipating a significantly improved profit and loss account for the period, although this will not offset the first half losses. We are expecting the Group as a whole to be profitable in 2011 as the benefits from the investment made in the last 2 years start coming through.
The overall Group cost base is running at a reduced level going forward. TrainFX's cost base is slightly higher as a result of a substantial rise in contracted turnover and Ram Vision is slightly higher as more resource is going in to sell a much larger network. But both subsidiaries have an ability to scale up their business on a relatively fixed cost base and both businesses have good gross margins.
The first half of this year has been challenging as a result of tight working capital and the need to complete the admission document. Nonetheless we have made big strides in both subsidiaries despite this distraction and both of these issues are now behind us in the second half the year. Despite a generally flat economy we are encouraged by the outlook for both subsidiaries into 2011 and beyond.
T Baldwin
Chairman
RAM INVESTMENT GROUP PLC
CONSOLIDATED INCOME STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2010
|
|
|
6 Months to |
|
6 Months to |
|
Year to |
|
|
|
30 June 2010 |
|
30 June 2009 |
|
31 Dec 2009 |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(Audited) |
|
|
|
|
|
|
||
|
|
|
£ |
|
£ |
|
£ |
|
Continuing operations |
|
|
|
|
|
|
|
Revenue |
|
685,884 |
|
- |
|
360,733 |
|
Cost of sales |
|
(489,294) |
|
- |
|
(224,598) |
|
|
|
196,590 |
|
- |
|
136,155 |
|
|
|
|
|
|
|
|
|
Administrative expenses |
|
(1,484,362) |
|
(323,759) |
|
(1,682,179) |
|
Loss on disposal of assets |
|
- |
|
- |
|
(148,997) |
|
Operating Loss |
|
(1,287,772) |
|
(323,759) |
|
(1,695,021) |
|
|
|
|
|
|
|
|
|
Finance income |
|
- |
|
80 |
|
85 |
|
Finance expense |
|
(142,944) |
|
(29,000) |
|
(127,281) |
|
Net finance (expense)/income |
|
(142,944) |
|
(28,920) |
|
(127,196) |
|
|
|
|
|
|
|
|
|
Share of loss of associate |
|
- |
|
- |
|
(29,048) |
|
|
|
|
|
|
|
|
|
Loss before income tax |
|
(1,430,716) |
|
(352,679) |
|
(1,851,265) |
|
|
|
|
|
|
|
|
|
Income tax expense |
|
- |
|
- |
|
- |
|
Loss for the period from continuing operations |
|
(1,430,716) |
|
(385,679) |
|
(1,851,265) |
|
|
|
|
|
|
|
|
|
Loss attributable to: |
|
|
|
|
|
|
|
Owners of the parent |
|
(1,149,519) |
|
(352,679) |
|
(1,492,304) |
|
Non-controlling interest |
|
(281,197) |
|
- |
|
(358,961) |
|
|
|
(1,430,716) |
|
(352,679) |
|
(1,851,265) |
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
Basic earnings per share - continuing operations |
|
(1.5)p |
|
(1.4)p |
|
(3.5)p |
|
Diluted earnings per share - continuing operations |
|
(1.5)p |
|
(1.4)p |
|
(3.5)p |
|
|
|
|
|
|
|
|
|
|
||||||
RAM INVESTMENT GROUP PLC
CONSOLIDATED STATEMENT COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2010
|
|
|
6 Months to |
6 Months to |
Year to |
||
|
|
|
30 June 2010 |
|
30 June 2009 |
|
31 Dec 2009 |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(Audited) |
|
|
|
|
|
|
|
|
|
|
|
£ |
|
£ |
|
£ |
|
Loss for the year |
|
(1,430,716) |
|
(352,679) |
|
(1,851,265) |
|
Other comprehensive income: |
|
|
|
|
|
|
|
Changes in fair value of available-for-sale financial assets |
|
- |
|
(353,436) |
|
(225,243) |
|
Other comprehensive income, net of tax |
|
- |
|
(382,356) |
|
(225,243) |
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
(1,430,716) |
|
(706,115) |
|
(2,076,508) |
|
|
|
|
|
|
|
|
|
Loss attributable to: |
|
|
|
|
|
|
|
Owners of the parent |
|
(1,149,519) |
|
(706,115) |
|
(1,717,547) |
|
Non-controlling interest |
|
(281,197) |
|
- |
|
(358,961) |
|
|
|
(1,430,716) |
|
(706,115) |
|
(2,076,508) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
RAM INVESTMENT GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2010
|
|
6 Months to |
6 Months to |
|
Year to |
|
|
30 June 2010 |
30 June 2009 |
|
31 Dec 2009 |
|
|
(Unaudited) |
(Unaudited) |
|
(Audited) |
|
|
|
|
|
|
|
|
£ |
£ |
|
£ |
|
Assets |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Property, plant & equipment |
318,240 |
- |
|
277,133 |
|
Intangible assets |
2,392,007 |
- |
|
2,163,834 |
|
Available-for-sale financial assets |
365,650 |
1,390,097 |
|
365,650 |
|
|
3,075,897 |
1,390,097 |
|
2,806,617 |
|
Current assets |
|
|
|
|
|
Trade and other receivables |
385,242 |
477,633 |
|
608,143 |
|
Cash and cash equivalents |
145,359 |
83,375 |
|
439,390 |
|
|
530,601 |
561,008 |
|
1,047,533 |
|
|
|
|
|
|
|
Total assets |
3,606,498 |
1,951,105 |
|
3,854,150 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Capital and reserves attributable to equity holders of the Company |
|
|
|
|
|
Ordinary shares |
801,884 |
504,903 |
|
759,884 |
|
Deferred shares |
9,983,447 |
9,983,447 |
|
9,983,447 |
|
Share premium account |
15,202,691 |
13,330,425 |
|
14,876,985 |
|
Merger reserve |
327,272 |
|
|
327,272 |
|
Shares to be issued reserve |
128,799 |
|
|
113,799 |
|
Retained earnings |
(24,459,633) |
(22,298,683) |
|
(23,310,115) |
|
Minority interest in equity |
(640,158) |
|
|
(358,961) |
|
Total equity |
1,344,302 |
1,520,092 |
|
2,392,311 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Non current Liabilities |
|
|
|
|
|
Borrowings |
375,000 |
200,000 |
|
190,000 |
|
|
375,000 |
200,000 |
|
190,000 |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
1,554,696 |
231,013 |
|
1,056,839 |
|
Borrowings |
332,500 |
- |
|
215,000 |
|
|
1,887,196 |
231,013 |
|
1,271,839 |
|
|
|
|
|
|
|
Total liabilities |
2,262,196 |
431,013 |
|
1,461,839 |
|
|
|
|
|
|
|
Total equity and liabilities |
3,606,498 |
1,951,105 |
|
3,854,150 |
|
|
|
|
|
|
RAM INVESTMENT GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
|
|
Share capital |
Share premium |
Retained earnings |
Shares to be issued reserve |
Merger Reserve |
Total |
Non-controlling interest |
Total equity |
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2009 |
|
10,116,600 |
11,601,271 |
(21,592,568) |
- |
- |
125,303 |
- |
125,303 |
|
Loss for year |
|
- |
- |
(1,492,304) |
- |
- |
(1,492,304) |
(358,961) |
(1,851,265) |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
Changes in fair value of available for sale financial assets |
|
-
|
- |
(225,243) |
- |
- |
(225,243) |
- |
(225,243) |
|
Transactions with owners: |
|
|
|
|
|
|
|
|
|
|
Issue of share capital |
|
626,731 |
3,369,156 |
|
|
327,272 |
4,323,159 |
- |
4,323,159 |
|
Cost of share capital issue |
|
|
(93,442) |
|
|
|
(93,442) |
|
(93,442) |
|
Share options issued |
|
|
|
|
103,799 |
|
103,799 |
|
103,799 |
|
Convertible loan-equity component |
|
|
|
|
10,000 |
- |
10,000 |
- |
10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at 31 December 2009 |
|
10,743,331 |
14,876,985 |
(23,310,115) |
113,799 |
327,272 |
2,751,272
|
(358,961) |
2,392,311 |
|
Loss for year |
|
- |
- |
(1,149,519) |
- |
- |
(1,149,519) |
(281,197) |
(1,430,716) |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
Changes in fair value of available for sale financial assets |
|
- |
- |
- |
- |
- |
- |
- |
- |
|
Share of other comprehensive income/(loss) of associate |
|
- |
- |
- |
- |
- |
- |
- |
- |
|
Transactions with owners: |
|
|
|
|
|
|
|
|
|
|
Issue of share capital |
|
42,000 |
325,706 |
- |
- |
|
367,706 |
- |
367,706 |
|
Costs of issue of share capital |
|
- |
- |
- |
- |
- |
- |
- |
- |
|
Share options issued |
|
- |
- |
- |
- |
- |
- |
- |
- |
|
Convertible loan-equity component |
|
- |
- |
- |
15,000 |
- |
15,000 |
- |
15,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at 30 June 2010 |
|
10,785,331 |
15,202,691 |
(24,459,634) |
128,799 |
327,272 |
1,984,459 |
(640,158) |
1,344,301 |
RAM INVESTMENT GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD ENDED 30 JUNE 2010
|
|
6 Months to |
6 Months to |
|
Year to |
|
|
30 June 2010 |
30 June 2009 |
|
31 Dec 2009 |
|
|
(Unaudited) |
(Unaudited) |
|
(Audited) |
|
|
£ |
|
|
£ |
|
Cash flows from operating activities |
|
|
|
|
|
Loss before tax |
(1,430,716) |
(706,115) |
|
(2,076,508) |
|
Adjustments for: |
|
|
|
|
|
Depreciation |
85,400 |
- |
|
84,461 |
|
Equity settled share based payment transactions |
- |
35,993 |
|
178,149 |
|
Share of loss of associate |
- |
- |
|
29,048 |
|
Net finance expense recognised in profit or loss |
142,944 |
28,920 |
|
127,197 |
|
Change in value of available for sale financial assets |
- |
353,436 |
|
225,243 |
|
Loss on disposal of financial assets |
- |
- |
|
114,120 |
|
|
(1,202,372) |
(287,766) |
|
(170,649) |
|
Changes in working capital: |
|
|
|
|
|
Decrease/(increase) in trade and other receivables |
285,025 |
(108,301) |
|
(199,348) |
|
Increase/(decrease) in trade and other payables |
435,734 |
(13,886) |
|
(675,052) |
|
Cash (used in) / generated from operations |
(481,613) |
(409,953) |
|
(2,192,690)
|
|
Interest paid |
(142,944) |
(29,000) |
|
(127,281)) |
|
Net cash (used in) / generated from operating activities |
(624,557) |
(438,953) |
|
(2,319,971) |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Interest received |
- |
80 |
|
85 |
|
Loans granted to associate |
- |
- |
|
(159,499) |
|
Proceeds from sale of investment |
- |
- |
|
157,915 |
|
Acquisition of plant & machinery |
(90,753) |
- |
|
(34,632) |
|
Acquisition of financial assets |
- |
(920,000) |
|
- |
|
Acquisition of subsidiary net of cash |
(60,876) |
5,378 |
|
10,121 |
|
Acquisition of intangibles |
(10,345) |
- |
|
(175,000) |
|
Net cash from investing activities |
(161,974) |
(914,542) |
|
(201,010) |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Proceeds from issue of shares |
- |
1,212,005 |
|
2,590,506 |
|
Proceeds from issue of convertible notes |
200,000 |
200,000 |
|
200,000 |
|
Proceeds from borrowings |
292,500 |
20,000 |
|
335,000 |
|
Repayment of other short term loans |
- |
(25,000) |
|
(195,000) |
|
Net cash used in financing activities |
492,500 |
1,407,005 |
|
(2,930,506) |
|
|
|
|
|
|
|
(Decrease)/increase in cash equivalents |
(294,031) |
53,510 |
|
409,525 |
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of year |
439,390 |
29,865 |
|
29,865 |
|
|
|
|
|
|
|
Cash and cash equivalents at end of year |
145,359 |
83,375 |
|
439,390 |
|
|
|
|
|
|
RAM INVESTMENT GROUP PLC
NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2010
ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been applied consistently to all the years presented unless otherwise stated.
1.1 Basis of preparation
These interim statements have been prepared on a basis consistent with International Financial Reporting Standards (IFRS). They do not contain all of the information required for full financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2009. These interim financial statements do not constitute statutory accounts within the meaning of the Companies Act.
The interim financial information have not been reviewed nor audited by the auditors. The interim financial information was approved by the Board of Directors on 17 September 2010. The information for the year ended 31 December 2009 is extracted from the statutory financial statements for that year which have been reported on by the Group's auditors and delivered to the Registrar of Companies. The audit report was unqualified.
The accounting policies applied by the Group in these interim financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended and as at 31 December 2009
The interim report is the responsibility of, and has been, approved by the Directors. The Directors are responsible for preparing the interim financial statements in accordance with the AIM rules for Companies.
1.1.1 Going concern
The financial statements have been prepared on the going concern basis which assumes that the company and its subsidiaries will continue in operational existence for the foreseeable future. The company has successfully raised £2.5m from equity and debt finance hence the directors have reasonable expectation that the Group has adequate resources to continue in operational existence.
1.2 Consolidation
(a) Subsidiaries
Subsidiary undertakings are all entities over which the Group has the power to govern the financial and operating policies of the subsidiary and therefore exercise control. The existence and effect of both current voting rights and potential voting rights that are currently exercisable or convertible are considered when assessing whether control of an entity is exercised. Subsidiaries are consolidated from the date at which the Group obtains relevant level of control and are de-consolidated from the date at which control is relinquished.
The acquisition method of accounting is used for all business combinations. On acquisition, the assets, liabilities and contingent liabilities of the subsidiary are measured at their fair values. The cost of the business combination is measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Any excess of the cost of the combination over the fair value of the group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of the combination is less than the fair value of the group's share of the identifiable net assets acquired, the difference is credited to the income statement in the period of acquisition.
Where payment of part of the cost of the combination is contingent on future events, for instance future profit streams of the subsidiary acquired, a provision is recognised at the date of acquisition if it is thought probable that such future events will be achieved, and the cost of the combination increased accordingly. The provision is recognised at its fair value, discounted to recognise the effect of the time value of money. The discount is released over the period over which the future events are assessed such that at the date of payment the provision is equal to the amount of deferred consideration to be paid. The provision is assessed at each reporting date and adjusted if expectations of the amount payable have changed.
Inter-company transactions and balances between group companies are eliminated on consolidation.
Where a minority has retained an interest in a subsidiary, the group treats transactions with the minority as transactions with parties external to the group. Disposals to non-controlling interests result in gains and losses for the group which are recognised in the income statement. Purchases from minority interests result in goodwill which is calculated as the difference between the consideration paid for the increase in stake and the relevant share acquired of the carrying value of the net assets of the subsidiary at the date the increased stake is obtained. The minority's share of profit or loss, comprehensive income and assets are shown in the Income Statement, Statement of Comprehensive Income and Statement of Financial Position as non-controlling interests.
(b) Associates
Associates are all entities over which the group exercises significant influence but does not exercise control. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost, which includes goodwill identified on acquisition, net of any accumulated impairment loss. The group's share of its associate's profits or losses after acquisition of its interest is recognised in the income statement and cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Where the group's share of losses of an associate equals or exceeds the carrying amount of the investment, the group only recognises further losses where it has incurred obligations or made payments on behalf of the associate.
1.3 Segment reporting
In accordance with IFRS 8, segmental information is presented based on the way in which financial information is reported internally to the chief operating decision maker. The group's internal financial reporting is organised along product and service lines and therefore segmental information has been presented about business segments. A business segment is a group of assets and operations engaged in providing products and services that are subject to risks and returns which are different from those of other business segments.
The group has determined its reportable segments in accordance with IFRS 8. In accordance with that Standard the results of certain operating segments may be aggregated if they are sufficiently similar in nature. Where a business segment contributes in excess of either 10% of total revenue, 10% of total assets or 10% of the absolute amount of reported profit or loss, it is disclosed as a separate segment. Because the group has determined that its reportable segments are based on products and services, the disclosures specifically required by IFRS 8 in respect of products and services are not separately disclosed.
Information regarding geographical revenues and non-current assets is disclosed in note 4 to the financial statements.
1.4 Property, plant and equipment
All property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
All assets are depreciated in order to write off the costs, less anticipated residual values of the assets over their useful economic lives on a straight line basis as follows:
·; Plant and machinery: 5-10 years
·; Fixtures and fittings: 5-10 years
·; Motor vehicles: 4 years
·; Computer equipment: 3 years
Items of property, plant and equipment held under finance leases are depreciated over the shorter of the lease term and the useful economic life of the asset.
1.5 Intangible assets
Acquired intangible assets are shown at historical cost. Acquired intangible assets have a finite useful life and are carried at cost, less accumulated amortisation over the finite useful life.
(a) Goodwill
Goodwill relating to acquisitions occurring prior to the date of transition to IFRS is carried at the net book value at that date as permitted by IFRS 1. Goodwill arising on acquisitions subsequent to the date of transition is stated at cost. In both cases, goodwill is not amortised, but is subject to an annual test for impairment. Impairment testing is performed by the directors as set out below. Where an impairment is identified, it is charged to the income statement in that period.
(b) Concession rights
Concession rights are shown at historical cost. Concession rights in a business combination at fair value at the acquisition date. Concession rights have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using straight line method to allocate the cost of the concession rights over the estimated useful life of 5 to 10 years.
1.6 Impairment of non-financial assets
Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation but are instead tested annually for impairment and are subject to additional impairment testing if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. A review for indicators of impairment is performed annually. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Any impairment charge is recognised in the income statement in the year in which it occurs. When an impairment loss, other than an impairment loss on goodwill, subsequently reverses due to a change in the original estimate, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, up to the carrying amount that would have resulted, net of depreciation, had no impairment loss been recognised for the asset in prior years.
1.7 Financial assets
The group classifies its financial assets as either at fair value through profit and loss, or as available for sale financial assets. The group does not hold any held to maturity financial assets, or financial assets classified as loans and receivables.
The classification is dependent on the purpose for which the financial assets are acquired and is determined by the directors on initial recognition.
Financial assets at fair value through profit or loss are financial assets which are held for trading. A financial asset is classified as at fair value through profit or loss if it is acquired principally for the purpose of selling in the short term. Derivatives are also classified as held for trading unless they are designated as effective hedges. Such assets are classified as current assets. Financial assets at fair value through profit or loss are shown at fair value at each reporting date with changes in fair value shown in the income statement.
Available for sale financial assets consist of equity investments in other companies where the group does not exercise either control or significant influence. Available for sale financial assets are shown at fair value at each reporting date with changes in fair value being shown in the statement of comprehensive income.
Where financial assets are quoted the fair value at each reporting date is based on the quoted bid price at that date. Where an available for sale financial asset consists of an equity investment in an unquoted company where a reliable fair value cannot be determined, such investments are shown at cost less impairment.
1.8 Trade and other receivables
Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.
Trade and other receivables are recognised at fair value subsequently measured at amortised cost using effective interest method, less any appropriate allowance for estimated irrecoverable amounts.
1.9 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and other short term highly liquid deposits with original maturities of three months or less. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
1.10 Share capital
Ordinary shares of the company are classified as equity. Mandatorily redeemable preference shares and other classes of share where an obligation exists to transfer economic benefits are classified as liabilities.
Costs directly attributable to issue of new shares are shown in equity as a deduction.
1.11 Trade payables
Trade payables are recognised initially at fair value and are subsequently measured at amortised cost using the effective interest method. As the payment period of trade payables is short future cash payments are not discounted as the effect is not material.
1.12 Borrowings
Interest-bearing borrowings are recognised initially at fair value, net of any transaction costs incurred. Borrowings are subsequently stated at amortised cost using the effective interest method with any difference between the proceeds (net of transaction costs) and the redemption value being recognised over the period of the borrowings.
Borrowing costs incurred which are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset.
The fair value of the liability portion of convertible loan stock is determined using a market interest rate for a comparable loan stock with no conversion option. This amount is recorded as a liability on an amortised cost basis until the loan stock is redeemed or converted. The remainder of the carrying amount of the loan stock is allocated to the conversion option and shown within equity.
All borrowings are classified as current unless the group has an unconditional right to defer payment of the borrowings until at least twelve months from the balance sheet date.
1.13 Taxation
The tax expense for the year represents the total of current taxation and deferred taxation. The charge in respect of current taxation is based on the estimated taxable profit for the year. Taxable profit for the year is based on the profit as shown in the income statement, as adjusted for items of income or expenditure which are not deductible or chargeable for tax purposes. The current tax liability for the year is calculated using tax rates which have either been enacted or substantially enacted at the balance sheet date.
Deferred tax is provided in full, using the liability method on temporary differences arising between the tax base of assets and liabilities and their carrying values in the financial statements. The deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates which have been enacted or substantially enacted at the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.
1.14 Share-based payments
The cost of share-based payment arrangements, which occur when employees receive shares or share options, is recognised in the income statement over the period over which the shares or share options vest.
The expense is calculated based on the value of the awards made, as required by IFRS 2 'Share-based Payment'. The fair value of the awards is calculated by using the Black-Scholes option pricing model taking into account the expected life of the awards, the expected volatility of the return on the underlying share price, the market value of the shares, the strike price of the awards and the risk-free rate of return. The charge to the income statement is adjusted for the effect of service conditions and non-market performance conditions such that it is based on the number of awards expected to vest. Where vesting is dependent on market-based performance conditions, the likelihood of the conditions being achieved is adjusted for in the initial valuation and the charge to the income statement is not therefore adjusted so long as all other conditions are met.
Where an award is granted with no vesting conditions, the full value of the award is recognised immediately in the income statement.
1.15 Provisions
Provisions are recognised in the balance sheet where there is a legal or constructive obligation to transfer economic benefits as a result of a past event. Provisions are discounted using a rate which reflects the effect of the time value of money and the risks specific to the obligation, where the effect of discounting is material.
Provisions are measured at the present value of expenditures expected to be required to settle the obligation using a pre-tax that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in provision due to the passage of time is recognised as interest expense.
1.16 Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the group's activities. Revenue is shown net of value-added tax, returns, rebates and discounts and after eliminating sales within the group.
The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the group's activities. The group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
1.17 Leases
On inception of a lease of an item of property, plant and equipment, the terms and conditions of the lease are reviewed to determine the appropriate classification for the lease. Where the Group bears substantially all the risks and rewards of ownership of the item, the lease is classified as a finance lease and the item is capitalised within the appropriate class of property, plant and equipment at the lower of the fair value of the leased item and the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to obtain a constant rate on the finance balance outstanding. The outstanding capital element of the lease payments are included within current and long-term payables as appropriate; the interest element of the lease payments is charged to the income statement over the period of the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Leases where the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases, net of any incentives received from the lessor, are charged to the income statement on a straight line basis over the term of the lease.
Rental income received under operating leases is credited to the income statement on a straight line basis over the lease term.
2. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the year.
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|
6 Months to |
6 Months to |
Year to |
|
|
30 June 2010 |
30 June 2009 |
31 Dec 2009 |
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
|
|
|
|
(Loss)/Profit attributable to equity holders of the company (£) |
(1,149,519) |
(352,679) |
(1,492,304) |
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|
|
|
|
|
Weighted average number of ordinary shares in issue |
78,912,115 |
25,191,357 |
42,611,295 |
|
|
|
|
|
|
Basic earnings per share (pence per share) |
(1.5) |
(1.4) |
(3.5) |
As at 30 June 2009, the potentially dilutive ordinary shares were anti-dilutive because the group was loss-making.
3. BORROWINGS
On 4 March 2010, the company borrowed £292,500 from a consortium of lenders, arranged by Eden Corporate Finance. This bridging loan was for working capital purposes in advance of the reverse take over. The loan was secured at an interest of 20% for three months.
On 27 April 2010, the company issued £200,000 unsecured convertible loan notes to Boldhurst Properties Limited. The loan was secured for an 18 month period with interest of 8% per annum.
4. BUSINESS COMBINATIONS
On 25 February 2010, the board resolved to capitalise the £175,000 loan taken to acquire assets for RAM Vision Limited by issuance of 2,085,824 ordinary shares at 8.5 pence per share in RAM Investment Group Plc. In addition, the board resolved to acquire the remaining 50% of RAM Vision Limited. The consideration was paid by issuance of 2,141,176 ordinary shares at 9 pence per share in RAM Investment Group Plc.
Contact:
Edward Adams, RAM Investment Group plc on 07967 008448
Tim Baldwin, RAM Investment Group plc on 0207 518 4303
Sandy Jamieson, Libertas Capital Corporate Finance Limited on 0207 569 9650
Related Shares:
RAM.L