1st Sep 2005 07:00
Vislink PLC01 September 2005 Vislink plc News Release: Transition from UK GAAP to IFRS 1 September 2005 Vislink plc ("The Group"), a leading supplier of microwave radio and satellitetransmission products for the broadcast and security markets and of CCTV systemsfor the marine security market has today announced its interim results for thesix months to 30 June 2005. These interim financial statements are the firstinterim financial statements following the adoption of International FinancialReporting Standards (IFRS). As the Group has not previously published a full set of financial statementsunder IFRS the content of these statements has been expanded to includesummarised reconciliations of net assets and equity from previously reportedamounts under UK GAAP for the six months ended 30 June 2004 and the year ended31 December 2004. The purpose of this release is to provide a more detailed analysis of the impactof adopting IFRS on the Group. 1. Introduction In accordance with European Union (EU) regulations, all listed groups within theEU are required to adopt International Financial Reporting Standards (IFRS) intheir consolidated accounts for accounting periods beginning on or after 1January 2005. Therefore, the Group's first IFRS results are for the six monthsending 30 June 2005. These results and the financial statements for the year to31 December 2005 will include comparative information for 2004. The purpose of this report is to provide guidelines as to the impact of theinitial transition balance sheet adjustments and the restatement of the 2004published financial statements. Although our independent auditors have providedguidance on the process of transition, the numbers in this report are notaudited. 2. Summary of changes The major changes required to the financial statements of the Group by theintroduction of IFRS are: •the recording of share-based payments at fair value •the cessation of the amortisation of goodwill •the timing of the recognition of a dividend creditor •the recognition of certain deferred tax liabilities •the recognition of intangible assets whereby certain qualifying costs in respect of product development which were written off under UK GAAP are required to be capitalised and amortised over a future period of time The restated accounting policies and reconciliations between financialstatements previously presented under UK GAAP and the IFRS presentation areincluded in the following appendices: Appendix 1: Restatement of Group accounting policiesAppendix 2: Restatement of the balance sheet at 1 January 2004Appendix 3: Restatement of the income statement for the year ended 31 December2004Appendix 4: Restatement of balance sheet at 31 December 2004Appendix 5: Restatement of cash flow statement for year ended 31 December 2004 3. Summary of Impacts to Financial Statements 3.1 Summary profit and loss impact for year ended 31 December 2004 The table below shows the impact of the adoption of IFRS on the consolidatedincome statement of the Group for the year ended 31 December 2004. Before Tax After Tax EPS £'000 £'000 Pence-------------------------------------------------------------------------------- Reported (loss) - UK GAAP (809) (1,574) (1.56)IFRS adjustments:(with paragraph references)5.1: IFRS 2 - Share based payments (47) (47) (0.05)5.2: IFRS 3 - Goodwill amortisation 1,132 1,132 1.135.2: IFRS 3 - Goodwill impairment (817) (817) (0.82)5.4: IAS 12 - Taxation - 7 0.015.6: IAS 38 - Development costs 236 167 0.17 -------------------------------------Sub total of adjustments 504 442 0.44 ------------------------------------- -------------------------------------Restated (loss) - IFRS (305) (1,132) (1.12)-------------------------------------------------------------------------------- 3.2 Net asset adjustments The table below shows the impact of the adoption of IFRS on the Groupconsolidated shareholders' equity statement at 31 December 2004 and 1 January2004. At 31 December At 1 January 2004 2004 £'000 £'000-------------------------------------------------------------------------------- Total shareholders' equity - UK GAAP 24,136 26,820IFRS adjustments:(with paragraph references)5.2: IFRS 3 - Goodwill 300 -5.3: IAS 10 - Dividend 246 2025.4: IAS 12 - Taxation (321) (328)5.6: IAS 38 - Development cost 640 514 ------------------------------Sub total of adjustments 865 388 ------------------------------ ------------------------------Total shareholders' equity - IFRS 25,001 27,208-------------------------------------------------------------------------------- 3.3 Underlying Profit Under UK GAAP the Group has previously presented a measure of underlying profitin the income statement by excluding goodwill and exceptional non-trading items.The term "underlying" is not a defined term under IFRS and therefore may not becomparable with similarly titled profit measurements reported by othercompanies. It is not intended to be a substitute for, or superior to GAAPmeasurements of profit. In implementing IFRS it is necessary to revise the Group's definition ofunderlying profit in order that the Group may continue to present a measure ofits underlying performance. In presenting underlying profits and earnings pershare under IFRS the Group will exclude non-trading exceptional items as before,the impairment of goodwill and the amortisation of acquired intangible assetsresulting from business combinations. The table below shows the comparative underlying earnings between UK GAAP andIFRS: UK GAAP IFRS --------------------------- ------------------------------ Pre Post Basic EPS Pre Post tax Basic EPS tax tax Pence tax £'000 Pence £'000 £'000 £'000------------------------------------------------ ------------------------------ Loss as reported (809) (1,574) (1.56) (305) (1,132) (1.12)Adjustments:Rationalisation 1,539 1,539 1.52 1,539 1,539 1.52costsGoodwill 1,132 1,021 1.01 - - -amortisationGoodwill impairment - - - 817 817 0.81------------------------------------------------ ------------------------------Underlying earnings 1,862 986 0.97 2,051 1,224 1.21-------------------------------------------------------------------------------- 4. Transitional arrangements Under the provisions of IFRS1 (First Time Adoption of IFRS) specific exemptionsmay be applied in certain areas as part of the transition of the financialstatements to IFRS. The Group has elected to take advantage of the followingexemptions: •Business combinations completed prior to 1 January 2004 have not been restated under the provision of IFRS 3 Business Combinations; •Under the transitional provisions in IFRS2 Share-based Payments, only share grants made after 7 November 2002 have been fair valued: •The 2004 comparative information has not been prepared in accordance with IAS 32, 'Financial instruments: Disclosure and presentation' and IAS 39, 'Financial instruments: 'Recognition and measurement'. 5. Details of changes 5.1 IFRS2 - Share-based payments IFRS 2 Under UK GAAP share incentive schemes were accounted for under UITF 17, which isbased on the intrinsic value of the awards. All approved employee share savingschemes were exempted from a charge under this standard. In addition, as theGroup's existing executive options had a strike price equal to the market valueat the time of the grant, the intrinsic value of these awards was calculated aszero and so no charge to the profit and loss account was made historically. Under IFRS2 share awards must be measured at fair value at grant date and shouldbe recognised as an expense over the vesting period. The Group has undertaken a review of methods for valuing share options awards,as all options granted since 7 November 2002, a date specified in IFRS2, whichvest after the effective date of IFRS2 on 1 January 2005 require valuation.Options issued under the Vislink plc Sharesave Scheme and the Vislink plc ShareOption Scheme have been valued using the Black-Scholes model. The impact of this standard on the financial statements of the Group will be acharge to the profit and loss account of £47,000 for the year ended 31 December2004 offset by an equivalent credit to reserves. 5.2 IFRS 3 - Business combinations IFRS3 deals with accounting for business combinations including goodwill andintangible assets. The Group's current policy under UK GAAP is that goodwill recognised onacquisitions made after 1997 was amortised over its useful life, which in thecase of acquisitions by the Group was 20 years. In addition the Group tested forimpairment when there is an indication that the carrying value of an asset mightbe impaired. Under IFRS3 this policy will be replaced by an annual impairment test andcessation of goodwill amortisation. At the transition date the Group had goodwill assets of £18.1 million, whichunder the transitional arrangements laid out in IFRS 1 was deemed to be the fairvalue of these assets. During the year ended 31 December 2004, under UK GAAP, a goodwill amortisationcharge of £1.13 million was made, which is added back under IFRS. At 31 December 2004 an impairment review was undertaken in respect of thegoodwill associated with the UK broadcast business. The goodwill at 31 December2004 was considered to be fairly valued after the goodwill amortisation chargein 2004 of £0.82million. Therefore this charge has been reclassified as animpairment of goodwill under IFRS. 5.3 IAS 10 - Events after the balance sheet date IAS10 does not permit dividends declared after the balance sheet date to berecognised as a liability. Consequently, under IFRS, the Group will no longermake provision for unapproved dividends at a period end. The effect of this change is to increase shareholders' equity at 1 January 2004by £202,000 and at 31 December 2004 by £246,000 and a corresponding reduction intrade and other payables.5.4 IAS 12 - Taxation IAS12 requires entities to provide for deferred taxation based on temporarydifferences between the carrying amount of assets/liabilities and their taxbase. Consequently, the Group has made additional provision for deferred tax inrespect of certain non-qualifying properties. The effect of this change is to decrease shareholders' equity at 1 January 2004by £328,000 and at 31 December 2004 by £321,000 and a corresponding increase inthe deferred tax liability. In addition the Group has made provision for deferred tax on separatelyidentified intangible development costs, see 5.6 below. 5.5 IAS 21 - Effects of changes in foreign exchange rates IAS21 requires that the cumulative impact of movements in translation rates onthe foreign net assets of the business needs to be tracked separately and that,should a subsidiary be sold, the cumulative translation value associated withthe subsidiary is reversed as part of the sale transaction. The Group hastherefore reclassified the cumulative translation movements on the net assets ofits overseas subsidiaries (Hernis and MRC) from the profit and loss account to atranslation reserve. There is no net impact on total shareholders' equity. At 1 January 2004 the cumulative historic translation deficit was £2.13million.At 31 December 2004 this had increased by £0.92million to £3.05million. 5.6 IAS38 - Research and development costs IAS 38 requires that all development costs meeting specified criteria becapitalised as intangible assets. As part of the IFRS transition preparationVislink has reviewed all its development projects, whether the costs werepreviously recognised under UK GAAP or not, to determine whether the criteria inIAS 38 were met or not. The key eligibility criteria for capitalisation relateto: • The identification of development costs. In general the Group's research and development activities are closely interrelated and it is not until the technical feasibility of a product can be determined with reasonable certainty that development costs are separately identifiable; and • The generation of future economic benefit. Intangible assets are not recognised unless the resultant product is expected to generate future economic benefit in excess of the amount capitalised. As a result of the review the development costs associated with certain productsmet the criteria of IAS 38 and have therefore been capitalised, and subsequentlyamortised over their estimated useful lives (generally three years). The netbook value capitalised as at 1 January 2004 was £0.84million. A deferred taxliability associated with the capitalised amount of £0.32million was alsocreated (see 5.4). For the year ended 31 December 2004 a further £0.99million was capitalised underIFRS and there is an amortisation charge of £0.76million. The deferred taxliability is also increased in the year by £0.07million. At 31 December 2004 the net book value of capitalised development costs underIFRS is £1.03million (after a reduction in respect of a foreign exchangeadjustment of £0.04million) and the associated deferred tax liability is£0.39million. - Ends - For further information, please contact: Ian Scott-Gall 01488 685500Chief Executive, Vislink plcJames Trumper 01488 685500Group Finance Director, Vislink plc Appendix 1Restatement of accounting policies This appendix provides a summary of Vislink's new Group accounting policiesunder IFRS. Basis of preparation The restated financial information for the transition to IFRS at 1 January 2004,the interim period ended 30 June 2004 and the year ended 31 December 2004 havebeen prepared in accordance with all International Financial Reporting Standardsand IFRIC interpretations that had been published by 30 June 2005 and apply toaccounting periods beginning on or after 1 January 2005. The standards used arethose endorsed by the EU together with those standards and interpretations thathave been issued by the IASB but had not been endorsed by the EU by 30 June2005. The 2004 comparative information has, as permitted by the exemption inIFRS 1, not been prepared in accordance with IAS 32, 'Financial instruments:Disclosure and presentation' and IAS 39, 'Financial instruments: Recognition andmeasurement'. Basis of consolidationThe Group financial statements include the results of the Company and itssubsidiary undertakings. The results of subsidiaries acquired during the yearare included from the date of acquisition. The results of businesses disposed ofare included to the date of disposal. The financial statements of the subsidiaries and the Company are prepared forthe same reporting year as the Group, using consistent accounting policies butin accordance with UK Generally Accepted Accounting Principles (UKGAAP).Adjustments are made to bring into line any dissimilar accounting policies thatmay exist. All intercompany balances and transactions, including unrealisedprofits arising from inter-group transactions, have been eliminated in full. Business combinations and goodwillGoodwill represents the excess of the fair value of the purchase considerationfor the interest in subsidiary undertakings over the fair value to the Group ofthe net tangible and intangible assets and any contingent liabilities acquired. Goodwill arising on acquisitions is capitalised and subject to impairmentreview, both annually and when there are indications that the carrying value maynot be recoverable. Prior to 1 January 1997, goodwill was written off to reserves in the year ofacquisition. Goodwill arising after 1 January 1997 was amortised over itsestimated useful life; under IFRS such amortisation ceased on 31 December 2003.From 1 January 2004 it will be subject to impairment reviews as above. Acquired intangible assetsIntangible assets acquired as part of business combinations are capitalised atfair value at the date of acquisition. Following the initial recognition, thecarrying amount of an intangible asset is its cost less accumulated amortisationand any accumulated impairment losses. Amortisation is charged on the basis ofthe estimated useful life (5 years) and the expense is taken to the incomestatement. InvestmentsAll investments are initially recorded at cost, being the fair value ofconsideration given including the acquisition costs associated with theinvestment. Subsequently they are reviewed for impairment on an individualbasis, if events or changes in circumstances indicate the carrying value may notbe fully recoverable. Property, plant and equipmentTangible fixed assets are stated at cost less accumulated depreciation and anyprovision for impairment. Depreciation is calculated in order to write off the cost of property plant andequipment, other than land, over their estimated useful lives by equal annualinstallments using the following rates:--------------------------------------------------------------------------------Freehold and long leasehold buildings 2%Motor vehicles 25%Plant and machinery 10%-33%Fixtures and fittings 10%Durable tools 10%-33%-------------------------------------------------------------------------------- LeasesAssets held under finance leases are capitalised and included in property, plantand equipment at fair value. Depreciation is provided in accordance with theGroup's depreciation policy. The capital elements of obligations under financeleases are recorded as liabilities. The interest elements of the rentalobligation are allocated to accounting periods over the lease term to give aconstant periodic rate of interest on the outstanding liability. Rentals payable under operating leases are charged to the income statement on astraight-line basis. Inventory and work in progressInventory is stated at the lower of cost and net realisable value. Cost is basedon normal levels of cost and activity and comprises cost of purchase and, whereapplicable, cost of conversion to current condition. Cost of purchase includescharges such as freight or duty where appropriate. Cost of conversion includesdirect labour, direct expenses and fixed and variable production overheadexpenditure. Net realisable value comprises the actual or estimated selling price (net oftrade but before settlement discounts), less all further costs to completion,and less all costs to be incurred in marketing, selling and distribution. Work in progress is stated net of amounts taken to cost of sales under long termcontracts. The amount by which turnover exceeds a payment received on account isincluded in debtors as amounts recoverable on long term contracts. Payments onaccount in excess of work in progress are included in creditors as paymentsreceived on account. Trade and other receivables Trade receivables are recognised and carried at original invoice amount less anallowance for any uncollectible amounts. An estimate for doubtful debts is madewhen collection of the full amount is no longer probable. Bad debts are writtenoff when identified. Net cash and cash equivalents Net cash and short-term deposits in the balance sheet comprise cash at bank andin hand and short-term deposits with an original maturity of less than threemonths, reduced by overdrafts to the extent that there is a right of offsetagainst other cash balances. For the purposes of the consolidated cashflow statement, cash and cashequivalents consist of cash and short-term deposits as defined above net ofoutstanding bank overdrafts. Revenue recognitionRevenue represents net amounts receivable from outside customers for goods soldby Group companies in the ordinary course of business and excluding value addedtax. Sales are recognised when the significant rewards of ownership of the goodsare transferred to the customer, the sales price agreed and the receipt ofpayment can be assured. Long-term contracts are recognised in revenue on the basis of the sales value ofwork performed during the year by reference to expenditure to date as apercentage of total expected costs to complete on a contract-by-contract basis. Research and developmentResearch expenditure is written off as incurred. Where development expenditure meets the criteria for capitalisation as set outin IAS38 "Intangible Assets" the costs are capitalised and amortised over itsuseful economic life from the date of commercial manufacture of the product. Thekey eligibility criteria for capitalisation relate to: • The identification of development costs. In general the Group's research and development activities are closely interrelated and it is not until the technical feasibility of a product can be determined with reasonable certainty that development costs are separately identifiable; and • The generation of future economic benefit. Intangible assets are not recognised unless the resultant product is expected to generate future economic benefit in excess of the amount capitalised. If a product becomes unviable the deferred development costs are written off. Deferred TaxationDeferred corporation tax is provided, using the liability method, on alltemporary differences at the balance sheet date between the tax bases of assetsand liabilities and their carrying amounts for financial reporting purposes.Deferred tax liabilities are recognised in respect of all temporary differencesexcept where the deferred tax liability arises from the initial recognition ofgoodwill in business combinations. Deferred tax assets are recognised for all deductible temporary differences,carry-forward of unused tax assets and tax losses, to the extent that they areregarded as recoverable. They are regarded as recoverable where, on the basis ofavailable evidence, there will be suitable taxable profits against which thefuture reversal of the underlying temporary differences can be deducted. Thecarrying value of the amount of deferred tax assets is reviewed at each balancesheet date and reduced to the extent that it is no longer probable thatsufficient taxable profit will be available to allow all, or part, of the taxasset to be utilised. Deferred corporation tax assets and liabilities are measured at the tax ratesthat are expected to apply to the year when the asset is realised or theliability is settled, based on the tax rates (and tax laws) that have beenenacted at the balance sheet date. Foreign CurrenciesTrading results of overseas subsidiaries are translated into sterling at theaverage rates of exchange prevailing during the year. Their assets andliabilities are translated at the rates of exchange prevailing at the year-end.Exchange differences arising from restatement of the opening balance sheets andtrading results of overseas subsidiaries are dealt with through reserves. Other monetary assets and liabilities denominated in foreign currencies aretranslated at the exchange rates ruling at the balance sheet date and othernon-monetary assets at the exchange rates ruling at the dates of thetransactions. Derivative financial instrumentsThe Group uses forward foreign currency contracts to reduce its exposure toforeign exchange rates. The Group has only applied IAS32 and IAS 39 from 1January 2005 as permitted by the transition arrangements in IFRS1. PensionsGroup employees are members of money purchase schemes where the obligations ofGroup companies are charged to the profit and loss account as they are incurred. Property Provisions Provisions are made in respect of residual onerous long leasehold propertieswhere expected future rental costs are in excess of expected income fromsubletting. Share-based payments The fair value of employee share plans is calculated using an option-pricingmodel. In accordance with IFRS2 "Share-based payments" the resulting cost ischarged to the income statement over the vesting period of the plans. The valueof the charge is adjusted to reflect the expected and actual levels of optionsvesting. Employee Share Ownership Plan The Group's Employee Share Ownership Plan (ESOP) is a separately administeredtrust. The Company guarantees liabilities of the ESOP, and the assets of theESOP mainly comprise shares in the Company. The assets, liabilities, income andcosts of the ESOP have been included in the consolidated financial statements. Dividend distribution Dividend distribution to the Company's shareholders is recognised as a liabilityin the Group's financial statements in the period in which the dividends areapproved by the Company's shareholders. Appendix 2 Restatement of balance sheet as at 1 January 2004 from UK GAAP to IFRS As Reclassi- Proposed Taxation Effects Development As previously fications dividend IAS12 of costs restated reported to IFRS IAS10 foreign IAS38 in under format exchange accordance UK GAAP IAS21 with IFRSParagraph reference 5.3 5.4 5.5 5.6 £'000 £'000 £'000 £'000 £'000 £'000 £'000------------------------------------------------------------------------------------------------------------------ AssetsNon-current assets Goodwill 18,091 - - - - - 18,091Intangible assets 101 - - - 838 939Property, plant and equipment 4,464 (101) - - - - 4,363Deferred tax assets 1,241 - - - - 1,241 -------------------------------------------------------------------------------------- 22,555 1,241 - - - 838 24,634 -------------------------------------------------------------------------------------- Current assets Inventories 9,099 - - - - - 9,099Trade and other receivable 12,857 (1,716) - - - - 11,141Financial assets -available for saleinvestments 475 - - - - 475Cash at bank and in hand 9,540 - - - - - 9,540 -------------------------------------------------------------------------------------- 31,496 (1,241) - - - - 30,255 -------------------------------------------------------------------------------------- LiabilitiesCurrent liabilities Financial liabilities -borrowings 276 - - - - 276Trade and other payables 19,121 (405) (202) - - - 18,514Current tax liabilities 129 - - - - 129Provisions 1,431 - - - - 1,431 -------------------------------------------------------------------------------------- 19,121 1,431 (202) - - - 20,350 -------------------------------------------------------------------------------------- Net current assets 12,375 (2,672) 202 - - - 9,905 -------------------------------------------------------------------------------------- Non-currentliabilities Financialliabilities -borrowings 5,567 - - - - - 5,567Deferred tax liabilities 237 - 328 - 324 889Provisions 2,543 (1,668) - - - - 875 -------------------------------------------------------------------------------------- 8,110 (1,431) - 328 - 324 7,331 -------------------------------------------------------------------------------------- 26,820 - 202 (328) - 514 27,208------------------------------------------------------------------------------------------------------------------ Capital and reserves Called up share capital 2,552 - - - - - 2,552Share premium account 205 - - - - - 205Investment in own shares (160) - - - - - (160)Merger reserve 27,895 - - - - - 27,895Translation reserve - - - (2,133) - (2,133)Profit and loss account (3,672) - 202 (328) 2,133 514 (1,151) -------------------------------------------------------------------------------------- Total shareholders' equity 26,820 - 202 (328) - 514 27,208------------------------------------------------------------------------------------------------------------------ Appendix 3 Restatement of income statement for year to 31 December 2004 from UK GAAP toIFRS Reformatted UK Share-based Business Taxation Development IFRS GAAP as payments combinations IAS12 costs As restated previously IFRS2 IFRS3 IAS38 reportedParagraph reference 5.1 5.2 5.4 5.6 £'000 £'000 £'000 £'000 £'000 £'000--------------------------------------------------------------------------------------------------------------Continuing operationsRevenue 67,831 - - - - 67,831Cost of sales (51,612) - - - - (51,612) ------------------------------------------------------------------------------------ 16,219 - - - - 16,219Other income - - - - - -Sales and marketing (5,865) - - - - (5,865)Research and development (3,318) - - - 992 (2,326)Administrative costs (4,406) (47) - - - (4,453)Other expenses (270) - - - - (270)Impairment and amortisationof intangibles (1,132) - 315 - (756) (1,573)Rationalisation costs (1,539) - - - - (1,539) ------------------------------------------------------------------------------------Operating profit/(loss)from continuing operations (311) (47) 315 - 236 193 Interest payable and similarcharges (591) - - - - (591)Interest receivable 93 - - - - 93 ------------------------------------------------------------------------------------ Profit/(loss) on continuingactivities before taxation (809) (47) 315 - 236 (305) Tax on profit/(loss) on ordinary activities (765) - - 7 (69) (827) ------------------------------------------------------------------------------------ Profit/(loss)for the periodfrom continuing operations (1,574) (47) 315 7 167 (1,132) Discontinued operations (Loss)/profit for the period from discontinued operations - - - - - - Profit/(loss) for the periodbeing profit/(loss)attributable to shareholders (1,574) (47) 315 7 167 (1,132)-------------------------------------------------------------------------------------------------------------- Earnings per share expressed in pence per share: From continuing operations - basic (1.56)p (0.05)p 0.31p 0.01p 0.17p (1.12)p From continuing operations - diluted (1.55)p (0.05)p 0.31p 0.01p 0.17p (1.11)p--------------------------------------------------------------------------------------------------------------- Appendix 4 Restatement of balance sheet as at 31 December 2004 from UK GAAP to IFRS As Reclassi- Business Proposed Taxation Effects of Development As previously fications combinations dividend IAS12 foreign costs restated reported to IFRS IFRS3 IAS10 exchange IAS38 accordance under UK format IAS21 with IFRS GAAP Paragraph reference 5.2 5.3 5.4 5.5 5.6 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000---------------------------------------------------------------------------------------------------------------------Assets Non-current assets Goodwill 16,622 - 300 - - - - 16,922Intangible assets - 29 - - - - 1,033 1,062Property, plant andequipment 4,343 (29) - - - - - 4,314Deferred tax assets - 1,602 - - - - - 1,602 --------------------------------------------------------------------------------------------- 20,965 1,602 300 - - - 1,033 23,900 -------------------------------------------------------------------------------------------- Current assets Inventories 8,936 - - - - - - 8,936Trade and otherreceivable 16,988 (1,602) - - - - - 15,386Cash at bank and in hand 3,219 - - - - - - 3,219 --------------------------------------------------------------------------------------------- 29,143 (1,602) - - - - - 27,541 --------------------------------------------------------------------------------------------- Liabilities Current liabilitiesFinancialliabilities - borrowings - 2,190 - - - - - 2,190Trade and other payables 21,005 (2,396) - (246) - - - 18,363Current tax liabilities - 206 - - - - - 206Provisions - 757 - - - - - 757 --------------------------------------------------------------------------------------------- 21,005 757 - (246) - - - 21,516 --------------------------------------------------------------------------------------------- Net current assets 8,138 (2,359) - 246 - - - 6,025 --------------------------------------------------------------------------------------------- Non-current liabilities Financial liabilities -borrowings 3,378 - - - - - - 3,378Deferred taxliabilities - 541 - - 321 - 393 1,255Provisions 1,589 (1,298) - - - - - 291 --------------------------------------------------------------------------------------------- 4,967 (757) - - 321 - 393 4,924 --------------------------------------------------------------------------------------------- 24,136 - 300 246 (321) - 640 25,001--------------------------------------------------------------------------------------------------------------------- Capital and reservesCalled up share capital 2,552 - - - - - - 2,552Share premium account 205 - - - - - - 205Investment in own shares (160) - - - - - - (160)Merger reserve 27,895 - - - - - - 27,895Translation reserve - - (15) - - (2,997) (41) (3,053)Profit and loss account (6,356) - 315 246 (321) 2,997 681 (2,438) --------------------------------------------------------------------------------------------- Total shareholders'equity 24,136 - 300 246 (321) - 640 25,001--------------------------------------------------------------------------------------------------------------------- Appendix 5 Restatement of cashflow statement for the year ended 31 December 2004 from UKGAAP to IFRS Reformatted Reclassi- Share-based Business Taxation Development Restated in UK GAAP as fications payments combinations IAS12 costs accordance previously to IFRS2 IFRS3 IAS38 with IFRS reported IFRS format £'000 £'000 £'000 £'000 £'000 £'000 £'000--------------------------------------------------------------------------------------------------------------------- Continuing operations Operating profit (311) 311Net profit/(loss) (1,574) (47) 315 7 167 (1,132)Adjustments for: Taxation 765 - - (7) 69 827Depreciation 849 - - - - - 849(Profit) on disposal ofproperty, plant andequipment (2) - - - - - (2)Amortisationof goodwill 1,132 (1,132) - - - - -Impairment ofgoodwill - - 817 - - 817Amortisationof intangibles 1,132 - (1,132) - 756 756Share options - value of employee services - 47 - - - 47Interest income (93) - - - - (93)Interest expense 591 - - - - 591Changes in working capital(Increase) in inventories (68) - - - - - (68)(Increase) in trade andother receivables (3,999) - - - - - (3,999)Increase in payables 33 - - - - - 33(Decrease) in provisions (1,239) - - - - - (1,239) ------------------------------------------------------------------------------------------ Cash generated fromoperations (3,605) - - - - 992 (2,613) ------------------------------------------------------------------------------------------ Cash generated from/(absorbed by) operatingactivitiesInterestreceived 93 - - - - - 93Interest paid (590) - - - - - (590)Taxation paid (737) - - - - - (737) ------------------------------------------------------------------------------------------ Net cash (absorbed by)operating activities (4,839) - - - - 992 (3,847) ------------------------------------------------------------------------------------------ Cash flows frominvesting activities Proceeds from sale ofproperty, plant andequipment 2 - - - - - 2Purchase of property,plant and equipment (769) 40 - - - - (729)Expenditure ondevelopment costs (40) - - - (992) (1,032) ------------------------------------------------------------------------------------------ Net cash used in investing activities (767) - - - - (992) (1,759) ------------------------------------------------------------------------------------------ Cash flows fromfinancing activities Repayment of borrowings (275) - - - - - (275)Dividend paid toshareholders (202) - - - - - (202) ------------------------------------------------------------------------------------------ Net cash used in financing activities (477) - - - - - (477) ------------------------------------------------------------------------------------------ Effect of foreignexchange rate changes (238) - - - - - (238) ------------------------------------------------------------------------------------------ Net (decrease) in cash and cash equivalents (6,321) - - - - - (6,321) Cash and cash equivalents at beginning of period 9,540 - - - - - 9,540 ------------------------------------------------------------------------------------------ Cash and cash equivalents at end of period 3,219 - - - - - 3,219--------------------------------------------------------------------------------------------------------------------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Pebble Beach