Interim Results
Angle PLC
24 January 2006
For Immediate release 24 January 2006
ANGLE plc
('ANGLE' or the 'Group')
Interim Results for the six months ended 31 October 2005
ANGLE plc, the intellectual property and technology commercialisation company,
today announces its interim results for the six months ended 31 October 2005.
For the first time, ANGLE is reporting its interim results under International
Financial Reporting Standards (IFRS).
Financial Highlights
• The value of investments (1) on the balance sheet increased by 83% to
£5.2 million (2004: £2.9 million).
• The flotation of Provexis in June 2005 delivered a gain in valuation
of £2.0 million at the placing price over the cost of investment. The
Provexis share price at close of business on 23 January 2006 values
ANGLE's investment at £6.3 million, a further gain in valuation of
£3.2 million since the period end.
• Operating costs to establish, develop and create value in Progeny(R)
companies were increased by 107% to £1.8 million (2004: £0.8 million).
This included expenditure on controlled investments (2) of £0.8
million (2004: £nil).
• Turnover for the half year increased 16% to £2.0 million (2004: £1.7
million).
• Loss before tax reduced by 49% to £0.8 million (2004: £1.6 million).
• Loss per share reduced by 51% to 4.7p (2004: 9.8p).
• Consulting and Management entered the second half with a strong order
book of £8.7 million (2004: £2.8 million) as a result of major new
contracts.
Operational Highlights
• Aberro Founded company with experienced management team. Developed
and launched automated software testing product. Revenues expected in
Q1 2006.
• Acolyte Biomedica BacLite(R) Rapid MRSA product launched in May 2005
followed by the improved BacLite(R) flex product, launched in
January 2006.
• Geomerics Prototype developed demonstrating dramatic speed and
capability improvements for computer games graphics. Building
relationships with major games industry players. High level
management team appointed.
• Novocellus Successful development work lead to multi-site
clinical trials being launched in November 2005. Progressed
discussions with major medical diagnostics companies regarding trade
partnership.
• Provexis Completed reverse acquisition of Nutrinnovator, flotation on
the Alternative Investment Market, negotiation of distribution
agreements, preparation of Sirco product with launch into the retail
stores of Sainsbury's and Waitrose in January 2006.
• Synature Prototype customer classification technology delivered good
first stage results, moving the technology towards full scale
commercial software. Senior management appointed.
• Negotiations in progress with major technology corporates, research
establishments and universities for commercialisation of their
intellectual property and several additional Progeny(R) companies
under development.
Hance Fullerton, Chairman, commented:
'ANGLE has made excellent progress in the development of its Progeny(R)
companies during the first half of the year. The flotation of Provexis was a
further demonstration of the value created by ANGLE's Progeny(R) process. We
are continuing to make strong progress with our Progeny(R) portfolio and expect
to announce additional Progeny(R) companies in the second half.'
Enquiries:
ANGLE plc 01483 295830
Andrew Newland, Chief Executive
Ian Griffiths, Finance Director
Buchanan Communications 020 7466 5000
Richard Darby, Suzanne Brocks, James Strong
A presentation for analysts will take place today at 10.00am at the offices of
Buchanan Communications, 45 Moorfields, London, EC2Y 9AE. Please call Buchanan
Communications for more details.
Notes to Editors
Founded in 1994, ANGLE is an international venture management and consulting
group focusing on the commercialisation of technology and the development of
technology-based industry. ANGLE creates, develops and advises technology
businesses on its own behalf and for its clients. ANGLE is listed on AIM
(AGL.L); further information can be found on www.ANGLEplc.com
Investments are Progeny(R) companies where the Group does not own a controlling
equity position. These consist of both non-current assets and current assets
and are described Note 6.
(1) Controlled investments are Progeny(R) companies where the Group
owns a controlling equity position. Under IFRS, these are consolidated and the
relevant costs are charged to the income statement rather than placed on the
balance sheet as under the previous UK GAAP accounting policy.
(2) Controlled investments are Progeny(R) companies where the Group
owns a controlling equity position. Under IFRS, these are consolidated and the
relevant costs are charged to the income statement rather than placed on the
balance sheet as under the previous UK GAAP accounting policy.
CHAIRMAN'S STATEMENT
Introduction
ANGLE has made strong progress in the development of its business during the
first half of the year. The business was reorganised during the period through
the creation of an Executive Management Board to strengthen regional leadership
and position the Group for future growth. The flotation of Provexis was a
further demonstration of the value created by ANGLE's Progeny(R) process. We
are continuing to make strong progress with our Progeny(R) portfolio and expect
to announce additional Progeny(R) companies and commercialisation deals in the
second half.
Adoption of International Financial Reporting Standards (IFRS)
The results for the Group for the six months to 31 October 2005, and for
comparative periods, have been prepared for the first time on the basis of the
Recognition and Measurement requirements of International Financial Reporting
Standards (IFRS). The impact on the Group's results for the financial year
ended 30 April 2005 of the transition to IFRS is detailed below.
The most significant changes involved in the adoption of IFRS that affect the
financial results are as follows:
• controlled investments - under UK GAAP accounting policies, controlled
investments were previously accounted for as investments and held at
cost on the balance sheet. Under IFRS no similar treatment exists
and controlled investments are now consolidated as subsidiaries.
Costs incurred are expensed and the fair value of controlled
investments is not shown on the balance sheet.
• investments - with the exception of controlled investments, the
Group's investments in Progeny(R) companies are now held on the
balance sheet at fair value. Changes in fair value will be recognised
in the income statement. Under UK GAAP, investments were held at cost
subject to impairment.
• share based payments - under IFRS, a charge is required in the income
statement relating to share based payments, primarily in relation to
the fair value of share options granted to staff. Under UK GAAP, no
such charge was required, although under FRS 20 this would have been
required in the future.
Results
For the half year ended 31 October 2005, ANGLE:
• increased the value of its investments in Progeny(R) companies by 83%
to £5.2 million (2004: £2.9 million).
• incurred expenditure on controlled investments to establish, develop
and create value in Progeny(R) companies where the Group owns
a controlling equity position of £0.8 million (2004: £nil)
• increased turnover for the half year by 16% to £2.0 million (2004:
£1.73 million).
• reduced the loss before tax by 49% to £0.8 million (2004:
£1.6 million). The loss before controlled investments and tax reduced
by 97% to £0.1 million (2004: £1.6 million).
The loss before tax for the half year of £0.8 million (2004: £1.6 million) is
made up of:
• profit from increase in fair value of investments (non-controlled
Progeny(R) companies) of £1.2 million (2004: loss £1.2 million);
• expenditure to establish, develop and create value in Progeny(R)
companies of £1.8 million (2004: £0.8 million), including expenditure
on controlled investments £0.8 million (2004: £nil);
• loss on the Consulting and Management business of £0.1 million (2004:
profit £0.3 million). The Consulting and Management business is
expected to be profitable for the full year;
• other net costs of £0.1 million (2004: profit £0.1 million) comprising
Ventures turnover, share based payments, restructuring costs and net
finance income.
The basic loss per share reduced by 51% to 4.7p (2004: 9.8p).
Progeny(R) companies
A highlight of the first half was the successful flotation of Provexis. This
delivered a gain in valuation of £2.0 million at the placing price compared to
the cost of investment and demonstrated the value of the Progeny(R) process in
delivering value from the commercialisation of intellectual property. The
Provexis share price at close of business on 23 January 2006 values ANGLE's
original Progeny(R) investment at in excess of 8.5x cost. At close of business
on 23 January 2006 the share price had risen 105% since the half year end
increasing the value of ANGLE's investment by a further £3.2 million to £6.3
million.
During the period, we also made strong progress against the commercial
milestones for our other Progeny(R) companies. We expect to see this success
reflected in the future.
Outlook for the full financial year
Overall the Board are very positive about the outlook for the Progeny(R)
companies, both existing and new, continuing to develop at a positive rate and
the Consulting and Management business is also going well in the second half of
the financial year.
The existing Progeny(R) companies are expected to make strong commercial
progress. In addition to progressing the current Progeny(R) portfolio, it is
expected that further new Progeny(R) companies will be established in the second
half of the year as opportunities currently under development are delivered.
During the first half, we have worked closely in the UK and the US with several
major corporates and universities to agree the basis for commercialisation of
their intellectual property. We expect that this will lead to a number of
commercialisation framework deals with major research organisations.
We will continue to invest in developing existing and new Progeny(R) companies.
Much of the investment in the second half year will be in controlled investments
(controlled Progeny(R) companies) and therefore, under IFRS, the costs will be
expensed in the consolidated income statement. This will lead to an increased
loss for the year from controlled investments. Set against this, there are
expected to be profits from increases in fair value of investments
(non-controlled Progeny(R) companies). Whilst the timing is uncertain the Board
is confident that the Progeny(R) portfolio has the potential to deliver strong
returns to shareholders.
The Consulting and Management businesses entered the second half with a strong
order book of £8.7 million (2004: £2.8 million) as a result of major new
contracts.
The £6.0 million Qatar Science & Technology Park contract is now fully
operational and making an impact. Since the half year end, ANGLE has won a
continuation of the SME Innovation Support Project with the London Development
Agency, as announced today, for a further two years. The project extension is
worth £0.8 million in fees to ANGLE and runs from January 2006 for 27 months.
Improved trading is delivering increased turnover and we expect to see a profit
for the full year from the Consulting and Management business.
Hance Fullerton
Chairman
OPERATIONS SUMMARY
During the half year, good progress was made with ANGLE's Progeny(R) companies.
Life Sciences investments
• Acolyte Biomedica Founded by ANGLE in 2000, Acolyte Biomedica was the
first spinout company to be based on intellectual property originally
developed by the Defence Science and Technology Laboratory (Dstl) at
Porton Down, a division of the UK Ministry of Defence. Acolyte
develops proprietary diagnostic systems and research reagents for
clinical microbiology and life sciences. Acolyte's technology uses AK
rapid technology developed by Dstl. Since formation, Acolyte has
raised £6.4 million and ANGLE retains a 11.5% stake. Acolyte has made
major progress towards the roll-out of its products across Europe. The
BacLite(R) Rapid MRSA product, which targets the five million MRSA
tests currently conducted in UK hospitals each year, was launched in
May 2005 and dramatically reduces the diagnostic delay for MRSA from
two days to five hours. This has been followed closely by the improved
BacLite(R) flex product, launched in January 2006 which provides
enhanced capability in test sites, throughput and accuracy.
www.acolytebiomedica.com
• NeuroTargets NeuroTargets was founded by ANGLE in 1999 to
commercialise original research at the University of Bristol.
NeuroTargets is a discovery-led biotechnology development company
specialising in diseases of nerve injury, especially relating to
diabetes. NeuroTargets has raised £1.3 million and ANGLE retains a
25.1% stake. During the period NeuroTargets has continued with its
own development programme and with collaborative deals to develop
other related compounds. NeuroTargets' overall development programme
has now reached the point where it requires significant additional
funding to take it into clinical trials. During the half year, the
company has been working towards raising this, supported by ANGLE.
Several options are currently being pursued which would deliver the
financial support NeuroTargets is seeking. Pending the outcome of this
activity, ANGLE's investment in NeuroTargets is being carried at nil
value. www.neurotargets.co.uk
• Provexis Following the flotation of Provexis during the half year,
ANGLE retains a holding of 24.8% in Provexis plc. Founded by ANGLE
in 2000, Provexis is a product development and licensing company
developing a range of scientifically proven products based on
naturally occurring food bioactive ingredients to help prevent major
killers such as cardiovascular disease and cancer. Its first product a
heart health drink named Sirco was launched in Sainsbury's in January
2006. During the half year, Provexis completed the reverse
acquisition of Nutrinnovator Holdings plc bringing retail expertise to
the company to support the launch of products in the market. This
was followed by flotation on the Alternative Investment Market
delivering ANGLE a gain in valuation of £2.0 million at the placing
price compared to the cost of investment. ANGLE also invested at
pre-IPO and in the flotation itself. The share price at close of
business on 23 January 2006 values ANGLE's original Progeny(R)
investment at in excess of 8.5x cost. At close of business on 23
January 2006 the share price had risen 105% since the half year end
increasing the value of ANGLE's investment by a further £3.2 million
to £6.3 million. www.provexis.com
Life Sciences controlled investments
• Novocellus Novocellus was founded by ANGLE in 2004 to commercialise
intellectual property from the University of York. Novocellus aims
to dramatically boost IVF (in vitro fertilisation) success rates by
developing an innovative and non-invasive diagnostic technique to
assess the viability of fertilised embryos before transfer back to the
mother. Novocellus was a wholly owned subsidiary of ANGLE at the
period end. During the half year, intensive effort has been devoted
to multi-site clinical trials, which started in November 2005. These
are progressing well, with strong patient recruitment, and are due
to conclude in the second quarter of 2006. In parallel, Novocellus has
progressed discussions with a number of major medical diagnostics
companies regarding trade partnership. www.novocellus.com
Physical Sciences investments
• Corpora Following the sale of our Progeny(R) Company Exago in April
2004 to Corpora plc in a share for share exchange, ANGLE retains
a holding of 10% at the period end in Corpora. Corpora is an AIM
listed information management company supporting users of data to
find, distil and learn the information they need, when they need it.
The company's software solutions address geographically dispersed,
information intensive organisations such as government, finance, legal
and pharmaceutical. The share price at close of business on 23
January 2006 values ANGLE's original Progeny(R) investment at 3.0x
cost. www.corporaplc.com
Physical Sciences controlled investments
• Aberro ANGLE founded and launched Aberro Software Inc. (previously
known as ContraSoft) in 2005 to commercialise software IP in the
area of automated software testing. Aberro launched with a top tier
management. Currently 57% owned by ANGLE, Aberro uses patent-pending
technology to deliver Adaptive Automated Testing. The market for
automated testing tools is projected to be over $1.0 billion in 2006
according to IDC. Aberro first introduced its products and techniques
in November 2005 at STARWest, a leading testing trade show. AberroTest
was made available for General Availability in December 2005 and the
Company should begin generating revenue in Q1 2006.
www.aberrosoftware.com.
• Geomerics Formed in 2005 by ANGLE in collaboration with academics
from Cambridge University and the United States, Geomerics develops
commercial applications for geometric algebra; a sophisticated form of
mathematics which vastly simplifies geometric operations. Geomerics'
capability has the potential to revolutionise fields as diverse as
computer gaming and electromagnetic modelling. Geomerics is currently
a wholly owned subsidiary of ANGLE and began its commercialisation
plan during the first half. Early software development work reinforces
the expectation of dramatic speed and capability improvements expected
for applications such as computer games graphics and electro-magnetic
modelling. Using this work Geomerics is now building relationships
with major games industry players with a view to incorporating
Geomerics' technology in new games releases. In electro-magnetic
modelling the first generation of tools have also been completed and
discussions with leading tools users started in January 2006.
www.geomerics.com
• Synature Synature (previously known as Customiser Group) was
established in 2005 by ANGLE to further develop and exploit the IP
generated by a Cambridge-based team of psychologists and world-class
pattern recognition experts. Synature offers a sophisticated approach
to customer segmentation on the basis of insight into people's
perceptions. Synature is currently a wholly owned subsidiary of ANGLE.
Synature has progressed well during the period. The programme to
demonstrate the preference engine behind Synature's customer
classification technology in real world applications has delivered
good first stage results, moving the technology towards full scale
commercial software. In addition the scope for offline applications of
Synature's technology, for example market research and campaigns, has
increased alongside the primary application targeted at online vendors
of products and internet advertising. www.synature.com
Pipeline and Progeny(R) companies under development
Following a phase of intensive work to establish Aberro, Geomerics, Novocellus
and Synature, the Progeny(R) team has identified a wealth of strong IP for
potential commercialisation via the Progeny(R) process. The pipeline is now at
its strongest since flotation and we expect to establish further Progeny(R)
companies before the end of the full financial year. Furthermore, we will close
the year with a strong pipeline of opportunities promising more new Progeny(R)
companies in the next financial year.
In the UK, we have many established relationships with leading science and
technology research universities where we maintain a close association with
their technology transfer offices and high profile academics. These
relationships have led to discussions about strategic, long-term relationships
between ANGLE and the relevant University in a number of cases, which are
progressing well.
In the US, we have also expanded our university and national laboratory
relationships and recently signed an exclusive option on medical informatics IP
with a leading US university. Details of this will be announced once the
relationship is not commercially sensitive. Opportunities under examination
include intellectual property from University of Maryland, New York University,
Columbia University, Drexel University, Carnegie Mellon University, SBC
Corporation, and MITRE Corporation.
Consulting and Management
Whilst fees for consulting and management services increased 20% in the half
year to £2.0 million (2004: £1.6 million), it was disappointing that a deferment
of business in the UK during the General Election period and planned investment
in geographic expansion in the US combined to reduce profitability in the half
year resulting in a loss of £0.1 million (2004: profit £0.3 million). However a
number of major contracts have now been secured and the order book at the half
year end is strong at £8.7 million (2004: £2.8 million). As a result turnover
has increased and we expect the Consulting and Management business to be
profitable for the full year.
Key developments include:
• In the UK, securing in excess of £2.3 million of new work in the
management of innovation and product development programmes to be
delivered over the next two to three years. These include provision
of services on:
• innovation management for the National Health Service in Wales;
• embedding innovation within SMEs in London; and
• hands on incubation of companies for the Carbon Trust.
• In the US, new contracts in Minnesota, Pennsylvania, Vermont and
Canada and the renewal of the contract for the management of the
Fairfax BioAccelerator for a further two year period to June 2007.
• In the Middle East, the first contract to manage Qatar Science &
Technology Park was successfully completed at the end of November
2005. A new contract commenced in October 2005 and is expected to run
until March 2009, with a value of over £6.0 million.
ANGLE PLC
CONSOLIDATED INTERIM INCOME STATEMENT
FOR THE SIX MONTHS ENDED 31 OCTOBER 2005
Note Six months ended Year ended
31 October 31 October 30 April
2005 2004 2005
(Unaudited) (Unaudited) (Unaudited)
(Restated) (Restated)
£ £ £
Turnover
Consulting and Management 1,965,152 1,642,682 3,897,714
Ventures 50,884 88,612 234,437
_________ _________ _________
2,016,036 1,731,294 4,132,151
Investments
Change in fair value 6 1,226,768 (1,151,554) (1,583,636)
Operating costs
Consulting and Management (2,058,582) (1,356,211) (3,389,197)
Ventures (978,832) (849,191) (1,804,138)
Controlled investments (777,957) - (247,691)
Share based payments (173,120) (135,370) (283,490)
Restructuring charges 3 (200,221) - -
_________ _________ _________
(4,188,712) (2,340,772) (5,724,516)
Operating profit / (loss) (945,908) (1,761,032) (3,176,001)
Net finance income 110,539 130,094 242,184
_________ _________ _________
Profit / (loss) before tax (835,369) (1,630,938) (2,933,817)
Tax 4 43,297 - 47,890
_________ _________ _________
Profit / (loss) for the period (792,072) (1,630,938) (2,885,927)
========== ========== ==========
Earnings / (loss) per share 5
Basic (pence per share) (4.75) (9.77) (17.28)
Diluted (pence per share) (4.75) (9.77) (17.28)
ANGLE PLC
CONSOLIDATED BALANCE SHEET
AS AT 31 OCTOBER 2005
Note Six months ended Year ended
31 October 31 October 30 April
2005 2004 2005
(Unaudited) (Unaudited) (Unaudited)
(Restated) (Restated)
£ £ £
ASSETS
Non-current assets
Investments 6 1,465,749 1,650,238 2,515,517
Property, plant and equipment 165,228 54,516 81,250
Intangible assets 3,875 4,693 4,763
Trade and other receivables - 239,570 239,570
_________ _________ _________
Total non-current assets 1,634,852 1,949,017 2,841,100
Current assets
Investments 6 3,787,629 1,214,267 818,819
Trade and other receivables 1,112,285 754,607 857,741
Cash and cash equivalents 3,266,363 7,247,827 5,534,888
_________ _________ _________
Total current assets 8,166,277 9,216,701 7,211,448
_________ _________ _________
Total assets 9,801,129 11,165,718 10,052,548
========== ========== ==========
EQUITY AND LIABILITIES
Equity
Issued capital 1,670,648 1,669,648 1,670,648
Share premium account 7,381,864 7,372,864 7,381,864
Share based payment reserve 710,112 388,872 536,992
Other reserves 2,553,356 2,553,356 2,553,356
Translation reserve (14,377) 756 (42,990)
Retained earnings (3,579,310) (1,532,249) (2,787,238)
Own shares (20,000) - -
_________ _________ _________
Total equity 8,702,293 10,453,247 9,312,632
_________ _________ _________
Liabilities
Non-current liabilities
Obligations under finance leases 36,485 2,446 1,316
Current liabilities
Trade and other payables 1,041,666 701,795 733,562
Obligations under finance leases 20,685 8,230 5,038
_________ _________ _________
Total current liabilities 1,062,351 710,025 738,600
_________ _________ _________
Total liabilities 1,098,836 712,471 739,916
_________ _________ _________
Total equity and liabilities 9,801,129 11,165,718 10,052,548
========== ========== ==========
ANGLE PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 OCTOBER 2005
Six months ended Year ended
31 October 31 October 30 April
2005 2004 2005
(Unaudited) (Unaudited) (Unaudited)
(Restated) (Restated)
£ £ £
Operating activities
Operating profit / (loss) (945,908) (1,761,032) (3,176,001)
Depreciation of property, plant and equipment 21,308 11,363 25,652
Amortisation of intangible assets 1,707 427 2,202
Exchange differences 28,210 - (42,664)
(Increase) / decrease in trade and other receivables 47,473 (131,232) (223,574)
Increase / (decrease) in trade and other payables 307,635 (383,535) (237,526)
Change in fair value of investments (1,226,768) 1,151,554 1,583,636
Share based payments 173,120 135,370 283,490
________ ________ ________
Net cash from operating activities (1,593,223) (977,085) (1,784,785)
Investing activities
Purchase of property, plant and equipment (50,155) (34,068) (76,093)
Purchase of intangible assets (820) (5,120) (6,964)
Purchase of investments (592,016) (106,122) (508,036)
Provision of convertible loans (100,000) - (500,000)
Purchase of own shares (ESOT) (20,000) - -
Net interest received 91,600 132,221 243,674
________ ________ ________
Net cash used in investing activities (671,391) (13,089) (847,419)
Financing activities
Net proceeds from issue of share capital - (2,654) (69,241)
Capital elements of finance lease contracts (3,911) (6,216) (10,538)
________ ________ ________
Net cash from financing activities (3,911) (8,870) (79,779)
Net increase / (decrease) in cash & cash equivalents
(2,268,525) (999,044) (2,711,983)
Cash and cash equivalents at start of period 5,534,888 8,246,871 8,246,871
________ ________ ________
Cash and cash equivalents at end of period 3,266,363 7,247,827 5,534,888
========= ========= =========
ANGLE PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 OCTOBER 2005
Attributable to equity holders of the Group
Share based
Issued Share payment Other Translation Retained Own Total
capital premium reserve reserves reserve earnings shares equity
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
£ £ £ £ £ £ £ £
At 1 May 2004 1,669,648 7,375,518 253,502 2,553,356 - 98,689 - 11,950,713
(restated)
For the period to 31
October 2004
Consolidated profit / 756 (1,630,938) (1,630,182)
(loss)
Share based payments 135,370 135,370
Issue of share capital - (2,654) (2,654)
(net)
________ ________ ________ ________ ________ ________ ________ ________
At 31 October 2004 1,669,648 7,372,864 388,872 2,553,356 756 (1,532,249) - 10,453,247
(restated)
For the period to 30
April 2005
Consolidated profit / (43,746) (1,254,989) (1,298,735)
(loss)
Share based payments 148,120 148,120
Issue of share capital 1,000 9,000 10,000
(net)
________ ________ ________ ________ ________ ________ ________ ________
At 30 April 2005 1,670,648 7,381,864 536,992 2,553,356 (42,990) (2,787,238) - 9,312,632
(restated)
For the period to 31
October 2005
Consolidated profit / 28,613 (792,072) (763,459)
(loss)
Share based payments 173,120 173,120
Own shares (20,000) (20,000)
________ ________ ________ ________ ________ ________ ________ ________
At 31 October 2005 1,670,648 7,381,864 710,112 2,553,356 (14,377) (3,579,310) (20,000) 8,702,293
========= ========= ========= ========= ========= ========= ========= =========
Share based payment reserve
The share based payment reserve account is used for the corresponding entry to
the share based payments charged through the income statement. Transfers are
made from this reserve to retained earnings as the related share options are
exercised, lapse or expire.
Translation reserve
The translation reserve account comprises cumulative exchange differences
arising on consolidation from the translation of the financial statements of
international operations. Under IFRS this is separated from retained earnings.
Own shares
The own shares account relates to shares purchased by the ANGLE Employee Share
Ownership Trust.
ANGLE PLC
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 OCTOBER 2005
1 Basis of preparation and accounting policies
The financial information in this document does not constitute statutory
financial statements for the purposes of s240 of the Companies Act 1985. A copy
of the statutory financial statements for the year ended 30 April 2005 has been
delivered to the Registrar of Companies. The auditor's report on those
financial statements, which were prepared under United Kingdom Generally
Accepted Accounting Principles (UK GAAP), was unqualified and did not contain
statements under sections 237 (2) or (3) of the Companies Act 1985.
The European Union (EU) regulation 1606/2002 requires European Companies with
securities traded on an EU regulated market to prepare their consolidated
financial statements in accordance with EU endorsed International Financial
Reporting Standards (IFRS) for accounting periods beginning on or after 1
January 2005. On 7 October 2004, the Alternative Investment Market (AIM) of the
London Stock Exchange announced that it was to become an exchange regulated
market instead of an EU regulated market, which became effective from 12 October
2004. This change of status brings the market outside the scope of the EU
directive on IAS adoption although the London Stock Exchange announced that it
intended to mandate International Accounting Standards for all AIM companies for
financial years commencing on or after 1 January 2007 (confirmed 21 December
2005). As such, IFRS is not mandatory for AIM listed companies until accounting
periods beginning on or after 1 January 2007.
The Directors have decided to adopt IFRS for the year ending 30 April 2006, as
permitted by the Companies Act 1985 (International Accounting Standards and
Other Accounting Amendments) Regulations that became law on 11 November 2004.
This interim financial information has been prepared on the basis of the
recognition and measurement requirements of IFRS in issue that are endorsed or
expected to be endorsed by the EU and effective (or available for early
adoption) at 30 April 2006, the Group's first annual reporting date under IFRS.
Based on these IFRS, the Directors have made assumptions about the accounting
policies expected to be applied when the first annual IFRS financial statements
are prepared for the year ending 30 April 2006.
The accounting policies are consistent with those that the Directors intend to
use in the next annual financial statements. There is, however, a possibility
that the Directors may determine that some changes to these policies are
necessary when preparing the full annual financial statements for the first time
in accordance with those IFRS adopted for use by the EU. Accordingly, the
accounting policies for the year ending 30 April 2006 will be determined finally
only when the annual financial statements for that period are prepared.
The Group's results were prepared in accordance with UK GAAP and on the basis of
the accounting policies set out in the statutory accounts until the year ended
30 April 2005. IFRS differs in a number of areas from UK GAAP. In preparing
the Group's interim results for the period to 31 October 2005, the Directors
have amended certain accounting, valuation and consolidation methods applied in
the UK GAAP financial statements to comply with IFRS. The comparative figures
in respect of 2005 were restated to reflect these adjustments.
The effect of the transition from UK GAAP to IFRS on the Group's profit, net
assets and cash flows for the six months to 31 October 2004 and the year ended
30 April 2005 are provided in the numerical reconciliation and narrative
statements in note 7.
These financial statements have been prepared under the historical cost
convention, as modified by the revaluation of certain financial assets at fair
value, as required by IAS 39. The basis of consolidation is set out below.
The interim financial statements of ANGLE plc (the 'Group') for the six months
ended 31 October 2005, which were approved by the Directors on 23 January 2006,
are unaudited but have been reviewed in accordance with Auditing Practices Board
Bulletin 1999/4 'Review of Interim Financial Information' by the auditors.
Presentation of financial statements
The financial information, in the form of the primary statements contained in
this report, is presented in accordance with International Accounting Standard
(IAS) 1, 'Presentation of Financial Statements'. IAS 1 provides no definitive
guidance as to the format of the income statement, but states key items should
be disclosed. It also encourages additional line items to be added and the
re-ordering of items presented on the face of the income statement when
appropriate for a proper understanding of the entity's financial performance.
ANGLE has reviewed the items disclosed separately on the face of the income
statement and the components of financial performance considered by management
to be significant or for which separate disclosure would assist both in a better
understanding of financial performance and in making projections of future
results. This has been done taking into account the materiality, nature and
function of components of income and expense.
Changes to accounting policies
These financial statements have been prepared in accordance with existing Group
accounting policies, set out in the Group's 2005 annual report and accounts,
with certain amendments required in order to comply with the requirements of
IFRS.
The principal accounting policies where adjustments have been made in order to
transition the Group's financial statements from UK GAAP to IFRS are set out
below.
Basis of consolidation
Subsidiaries
Subsidiary undertakings are consolidated on the basis of the acquisition method
of accounting. Under this method of accounting the results of subsidiaries sold
or acquired are included in the profit and loss account up to, or from the date
control passes. Intra-group transactions and balances are eliminated fully on
consolidation and the consolidated accounts reflect external transactions only.
Subsidiaries are all entities over which the Group has the power to govern the
financial and operating policies generally accompanying a shareholding of more
than half of the voting rights. The existence and effect of potential voting
rights are considered when assessing whether the Group controls an entity.
Subsidiaries' accounting policies are amended where necessary to ensure
consistency with the policies adopted by the Group.
Under UK GAAP the Group had elected to apply a true and fair override to treat
controlled investments as investments held exclusively with a view for
subsequent resale. Controlled investments were therefore held on the balance
sheet at cost. IFRS does not allow a similar treatment of such investments.
Associates
Associates are entities over which the Group has significant influence, but does
not control, generally accompanied by a shareholding of between 20% to 50% of
the equity or voting rights. The Group has elected to treat such investments in
associates as accounted for in accordance with IAS 39 Financial Instruments:
Recognition and Measurement, and upon initial recognition these investments are
designated as at fair value through profit or loss.
Other investments
Other investments are generally investments where the Group owns less than 20%
of the equity or voting rights.
In accordance with IAS 39 Financial Instruments: Recognition and Measurement,
upon initial recognition such investments are designated as at fair value
through profit or loss.
Investments
The Directors consider that a substantial measure of the performance of the
Group is assessed through changes in fair value arising from the investment
activity of the Group. Consequently the Group classifies all its investments
that are not controlled investments as being designated on initial recognition
as financial assets at fair value through profit or loss.
Treatment of gains and losses arising on fair value
Investments that are not controlled investments are shown on the balance sheet
at their fair value and any associated changes in fair value are included in the
income statement in the period they arise.
Valuation policy
In determining fair value, investments have been valued by the Directors in
compliance with the principles of the International Private Equity and Venture
Capital Guidelines, updated and effective 1 January 2005, as recommended by the
British Venture Capital Association (BVCA).
Listed investments - the fair values of quoted investments are based on bid
prices at the balance sheet date. In accordance with IFRS no marketability
discount is applied for either the size of the Group's holding relative to
normal trading volumes or for any formal restrictions on trading.
Unlisted investments - the valuation methodology used most commonly by the Group
is the 'price of recent investment', reflecting the early stage nature of the
investments. The following considerations are used when calculating the fair
value using the 'price of recent investment' guidelines:
• Where the investment being valued was itself made recently, its
cost will generally provide a good indication of fair value; and
• Where there has been any recent investment by third parties, the
price of that investment will provide a basis of the valuation.
Where a fair value cannot be estimated reliably the investment is reported at
the carrying value at the previous reporting date unless there is evidence that
the investment has since been impaired.
Convertible loan notes
As well as direct investment into Progeny(R) companies the Group uses other
financial instruments such as convertible loans.
Under IAS 28 financial instruments that are presently exercisable are taken into
account in determining control and significant influence and this may affect the
basis of consolidation.
Under IAS 39 convertible loan notes are financial assets and are defined as
compound financial instruments consisting of a liability component and an equity
component. At the date of issue there is a requirement to split the instrument
between its debt and equity components.
The debt component is classified under investments as 'Loans and receivables'
and subsequently carried in the balance sheet at cost less any impairment.
The equity component is classified under investments and subsequently carried in
the balance sheet at fair value. The right to convert the loan into equity
represents an embedded derivative (the option) and as such needs to be re-
measured to fair value at each reporting date with any changes in fair value of
this right taken through profit or loss.
Convertible loans issued in a different functional currency to the issuing
entity are treated the same, however, there may also be an associated financial
instrument (see policy below) to manage the risks associated with foreign
currency fluctuations.
Intangible assets
Computer software
Under IAS 38, acquired computer software should be capitalised as an
intangible asset unless it is an integral part of the related hardware (such
as the operating system) where it remains as a tangible fixed asset. Certain
assets have been reclassified accordingly.
Internally developed computer software will be capitalised in accordance with
the research and development accounting policy. If the software is developed
for in-house use the capitalised amount is reclassified from research and
development to computer software.
Amortisation is calculated using the straight line method to allocate the
cost of the software over its estimated useful economic life.
Research and development
Research expenditure is written off as incurred.
Development expenditure is also written off, except where the Directors are
satisfied that a new or significantly improved product or process results and
other relevant IAS 38 criteria are met as to the technical, commercial and
financial viability of individual projects that would allow such costs to be
capitalised. In such cases, the identifiable expenditure is capitalised and
amortised over the period during which benefits are expected.
Intangible assets are reviewed for impairment when events or changes in
circumstances indicate that the carrying amount may not be recoverable.
Employee benefits (other than share based payments)
Pension costs are charged against profits as they fall due and represent the
amount of contributions payable to a defined contribution scheme in the US or to
employee personal pension schemes on an individual basis. The Group has no
further payment obligations once the contributions have been paid.
A liability for short-term compensated absences, such as holiday, is recognised
for the amount the Group may be required to pay as a result of the unused
entitlement that has accumulated at the balance sheet date.
Share based payments
Share based incentive arrangements are provided to staff which allow Group
employees to acquire shares of the Company. The fair value of options granted
is recognised as an employee expense with a corresponding increase in equity.
In accordance with IFRS 2, Share options granted after 7 November 2002 which had
not vested by 1 May 2005 are valued at the date of grant using an appropriate
option pricing model and are charged to operating costs over the vesting period
of the award. The annual charge is modified to take account of options granted
to employees who leave the Group during the performance or vesting period and
forfeit their rights to the share options and in the case of non-market related
performance conditions, where it becomes unlikely they will vest. The fair
value of options granted to professional advisors as part consideration for
services in connection with fund raising is recognised as an expense against
share premium account with a corresponding increase in equity. Such options vest
and are expensed on successful completion of the services.
Income taxes
Full provision is made for deferred tax on all temporary timing differences
resulting from the carrying value of an asset or liability and its tax base.
Deferred tax is determined using tax rates (and laws) that have been enacted or
substantially enacted by the balance sheet date and are expected to apply when
the related deferred tax liability is settled or deferred tax asset realised.
Deferred tax liabilities are recognised on any increase in the fair value of
investments to the extent that substantial shareholdings relief may be
unavailable. Deferred tax assets are only recognised to the extent to which
they are expected to be recovered in the near future. IAS 12 requires the
separate disclosure of deferred tax assets and liabilities on the Group's
balance sheet.
Employee Share Ownership Trust
The Group has an Employee Share Ownership Trust (ESOT) for assisting with the
obligations under share option and other employee remuneration schemes. The ESOT
is consolidated as if it were a subsidiary. Shares in the Group held by the
ESOT are stated at cost and presented in the balance sheet as a deduction from
equity under the heading of Own Shares. Finance and administration costs
relating to the ESOT are charged to operating costs.
Foreign currency
The consolidated financial statements are presented in pounds sterling, which is
the Company's functional and presentation currency. The Group determines the
functional currency of each entity and items included in the financial
statements of each entity are measured using that functional currency. The
functional currencies of the Group's operations are sterling and US dollars.
Transactions denominated in foreign currencies are recorded at the rate ruling
at the date of the transaction. Monetary assets and liabilities denominated in
foreign currencies are translated at the rates of exchange ruling at the balance
sheet date.
Non-monetary assets and liabilities denominated in foreign currencies and held
at cost use the exchange rate at the date of the initial transactions.
Non-monetary assets and liabilities denominated in foreign currencies and held
at fair value use the exchange rate at the date that the fair value was
determined.
Profits and losses on both the individual transactions during the period and
monetary assets and liabilities are dealt with in the income statement.
On consolidation, the income statements of the foreign subsidiaries are
translated at the average exchange rates for the period and the balance sheets
at the exchange rates at the balance sheet date. The exchange differences
arising as a result of translating income statements at average rates and
restating opening net assets at closing rates are taken to the translation
reserve. On disposal of a foreign operation, the deferred cumulative amount
recognised in equity relating to that particular foreign operation is recognised
in the income statement.
The Group has elected to apply the exemption in IFRS 1 'First time adoption of
International Financial Reporting Standards' which allows the cumulative
translation differences for all foreign operations to be deemed to be zero at
the date of transition to IFRS. The Group has similarly elected that the profit
or loss on any subsequent disposal of any foreign operation shall exclude
translation differences that arose before the date of transition.
Financial instruments
Financial assets and liabilities are recognised in the Group's balance sheet
when the Group becomes a party to the contractual provisions of the instrument.
The Group uses derivative financial instruments as appropriate to manage the
risks associated with foreign currency fluctuations from its activities and
changes in interest rates on borrowings. This is achieved by the use of foreign
currency contracts, currency swaps and interest rate swaps. All derivative
financial instruments are held at fair value. The Group does not use derivative
financial instruments for speculative purposes.
Derivative financial instruments are recognised initially at fair value on the
contract date and subsequently re-measured to fair value at each reporting date.
The fair value of forward exchange contracts is calculated by reference to
current forward exchange contracts for contracts with similar maturity profiles.
The fair value of currency swaps and interest rate swaps is determined with
reference to future cash flows and current interest and exchange rates. All
changes in the fair value of derivative financial instruments are taken through
profit or loss.
Derivatives embedded in other financial instruments or other non-financial host
contracts are treated as separate derivatives when their risks and
characteristics are not closely related to those of the host contract and the
host contract is not carried at fair value with unrealised gains or losses
reported in profit or loss.
Restructuring charges
Restructuring charges are accrued against operating income in the period in
which management has committed to a plan and in which the liability has been
incurred and the amount can be reasonably estimated.
Critical accounting estimates and judgements
The preparation of financial statements requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Although these estimates and assumptions
are based on management's best knowledge of the amount, event or actions, actual
results ultimately may differ from those estimates.
The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities relate to the
valuation of unlisted investments held at fair value, which are valued on the
basis noted above.
2 Summary segmental analysis
The Group's business is technology wealth creation through the commercialisation
of intellectual property and the development of technology industry. The
primary business segments are:
• Ventures - activities to establish, develop and create value in
technology companies. The Group uses a proprietary process
Progeny(R) to develop these companies, which are referred to as
Progeny(R) companies. ANGLE's unique business model means that it
actually creates new companies that it owns during the critical
early stages of development, before it secures third party funding
to move it to the next stage of development. Under IFRS, the
accounting for Progeny(R) companies divides into Controlled
Investments and Investments.
• Controlled investments - are Progeny(R) companies where the Group
has control, typically as a result of owning in excess of 50% of the
equity. These are consolidated and the Group's investment costs are
expensed in the income statement.
• Investments - are Progeny(R) companies where the Group does not
have control, typically as a result of owning less than 50% of the
equity. These investments are held on the balance sheet at fair
value, with changes in fair value passing through the income
statement.
• Consulting and Management - provision of consulting and management
services to clients including research organisations, corporate and
governmental organisations on a fee-for-service basis. This
business segment provides a platform for the Ventures activities.
3 Restructuring charges
Restructuring charges relate to the cost of reorganising the business during the
period to strengthen the regional leadership and position the Group for future
growth.
4 Tax
The Group is eligible for the substantial shareholdings relief UK corporation
tax exemption. This results in the gain from any disposals of UK investments
where the Group has an equity stake greater than 10%, subject to certain other
tests, being free of corporation tax. Tax is therefore based on the profits in
the Consulting and Management businesses as relieved by losses incurred in the
establishment and development of new Ventures.
5 Earnings / (loss) per share
The basic and fully diluted earnings / (loss) per share is calculated on an
after tax loss of £0.79 million (6 months to 31 October 2004: loss £1.63
million, year to 30 April 2005: loss £2.89 million).
The basic and fully diluted earnings / (loss) per share are based on
16,688,884 (16,706,484 less 17,600 shares held in ANGLE Employee Share Ownership
trust) weighted average ordinary 10p shares (6 months to 31 October 2004:
16,696,484, year to 30 April 2005: 16,697,500). Share options are non-dilutive
for the period.
6 Investments
The Group's investment portfolio comprises investments in Progeny(R) companies.
Where the Group has control of a Progeny(R) company (typically owning more than
50% of the equity), these are Controlled Investments and they are consolidated
as subsidiaries until such time as control no longer exists. At the point
control no longer exists a deemed profit arises and the investment is held at
fair value on the consolidated balance sheet In the six months to 31 October
2005 costs relating to Controlled Investments of £777,957 were charged to the
income statement (2004: £nil).
Where the Group does not control a Progeny(R) company (typically owning less
than 50% of the equity), these are held on the balance sheet at fair value, as
set out in the table below:
Current assets Non-current assets Total
Quoted Unquoted Investments
(Unaudited) (Unaudited) (Unaudited)
£ £ £
At 1 May 2005 818,819 2,515,517 3,334,336
Investments 500,024 192,250 692,274
Reclassifications 1,041,219 (1,041,219) -
Change in fair value 1,427,567 (200,799) 1,226,768
_________ _________ _________
At 31 October 2005 3,787,629 1,465,749 5,253,378
========== ========== ==========
ANGLE PLC
NOTES TO THE FINANCIAL INFORMATION (Continued)
FOR THE SIX MONTHS ENDED 31 OCTOBER 2005
7 Impact of the first time adoption of IFRS / IAS
Application of IFRS 1
The Group's financial statements for the year ended 30 April 2006 will be the
first annual financial statements that comply with IFRS. These interim
financial statements have been prepared on the basis set out in Note 1.
The Group's transition date is 1 May 2004 (the start of its 2005 financial
year). The Group prepared its opening balance sheet at that date. The reporting
date of these interim financial statements is 31 October 2005.
In preparing the consolidated financial statements the Group has applied the
mandatory exceptions, as applicable, and the following exemptions:
• The Group has elected to apply the share-based payment exemption.
The Group has not applied IFRS 2 to either those options granted
before 7 November 2002 or those which had vested by 1 May 2005.
• The Group has elected to apply the foreign exchange exemption and
set cumulative foreign exchange translation differences to zero at
the date of transition.
The main changes from preparing the results under IFRS rather than UK GAAP that
affect the Group loss and net asset position are:
• Changes in the scope of consolidation of subsidiaries - Under UK
GAAP Controlled Investments were accounted for as investments and
held at cost on the balance sheet. Under IFRS Controlled
Investments are consolidated.
• Changes to fair value of investments - Under UK GAAP investments
were held at cost subject to impairment. Under IFRS investments
which are not controlled are revalued to fair value at each balance
sheet date with the movement in fair value being recorded through
the income statement.
• Expensing of share-based payments - Under IFRS share based
payments are measured at fair value and charged over the vesting
period. Under UK GAAP such a charge was not required, although
under FRS 20 this would have been required in the future.
IFRS also results in a number of other minor changes such as holiday pay
accruals, the reclassification of certain computer software from tangible to
intangible assets and the definition of cash and cash equivalents.
The adoption of IFRS does not impact the amount of cash previously disclosed
under UK GAAP in any of the periods of account in the interim results.
ANGLE plc will continue to produce its company-only accounts under UK GAAP and
therefore none of the IFRS adjustments impacts on its balance sheet or reserves.
The reconciliations below provide an explanation of the effect of the transition
to IFRS
1) Balance sheet reconciliation at 1 May 2004 (transition balance
sheet)
2) Reconciliation of Income Statement for 6 months to 31 October 2004
3) Balance sheet reconciliation at 31 October 2004
4) Reconciliation of Income Statement for year to 30 April 2005
5) Balance sheet reconciliation at 30 April 2005
Balance sheet reconciliation at 1 May 2004 (Transition Date)
UK GAAP Effect of transition to IFRS Reported
in IFRS Non IAS 27 IAS 27 (A) Under
format adjustments adjustments IFRS
Note £ £ £ £
ASSETS
Non-current assets
Investments B 516,782 1,025,337 (3) 1,542,116
Property, plant and equipment 31,959 - - 31,959
Trade and other receivables 239,570 - - 239,570
_________ _________ _________ _________
Total non-current assets 788,311 1,025,337 (3) 1,813,645
Current assets
Investments B 2,398,177 (30,356) - 2,367,821
Trade and other receivables 625,503 - - 625,503
Cash and cash equivalents 8,246,871 - - 8,246,871
_________ _________ _________ _________
Total current assets 11,270,551 (30,356) - 11,240,195
_________ _________ _________ _________
Total assets 12,058,862 994,981 (3) 13,053,840
========== ========== ========== ==========
EQUITY AND LIABILITIES
Equity
Issued capital 1,669,648 - - 1,669,648
Share premium account C 7,537,331 (161,813) - 7,375,518
Share based payment reserve C - 253,502 - 253,502
Other reserves 2,553,356 - - 2,553,356
Translation reserve - - - -
Retained earnings D (770,943) 869,632 - 98,689
_________ _________ _________ _________
Total equity 10,989,392 961,321 - 11,950,713
_________ _________ _________ _________
Liabilities
Non-current liabilities
Obligations under finance leases 6,354 - - 6,354
Current liabilities
Trade and other payables 1,052,578 33,660 (3) 1,086,235
Obligations under finance leases 10,538 - - 10,538
_________ _________ _________ _________
Total current liabilities 1,063,116 33,660 (3) 1,096,773
_________ _________ _________ _________
Total liabilities 1,069,470 33,660 (3) 1,103,127
_________ _________ _________ _________
_________ _________ _________ _________
Total equity and liabilities 12,058,862 994,981 (3) 13,053,840
========== ========== ========== ==========
The major contributors to the difference between UK GAAP and IFRS were:
A Changes in the scope of consolidation (IAS 27) means that investments that
are controlled entities must be consolidated, however, there were no significant
adjustments in the period.
B Non-current asset investments previously carried at cost have been stated
at fair value (IAS 39). Current asset investments of £2,398,177 (UK GAAP) have
been amended to bid price.
C Share based payment reserve has been adjusted for share option charges -
£253,502 (IFRS 2). Share premium account reflects the share based payment
charge arising from options issued as part consideration for the placing.
D Other adjustments relate to items described in A to C above and some other
minor adjustments.
Reconciliation of Income Statement for 6 months to 31 October 2004
UK GAAP Effect of transition to IFRS Reported
in IFRS Non IAS 27 IAS 27 Under
format adjustments adjustments IFRS
Note £ £ £ £
Turnover
Consulting and Management 1,642,682 - - 1,642,682
Ventures 88,612 - - 88,612
_________ _________ _________ _________
1,731,294 - - 1,731,294
Investments
Provision for diminution in value E (1,032,127) 1,032,127 - -
Change in fair value E - (1,151,554) - (1,151,554)
_________ _________ _________ _________
(1,032,127) (119,427) - (1,151,554)
Operating costs
Consulting and Management (1,355,025) (1,186) - (1,356,211)
Ventures (839,838) (9,353) - (849,191)
Share based payments F - (135,370) - (135,370)
_________ _________ _________ _________
(2,194,863) (145,909) - (2,340,772)
Operating profit / (loss) (1,495,696) (265,336) - (1,761,032)
Net finance income 130,094 - - 130,094
_________ _________ _________ _________
Profit / (loss) for the period (1,365,602) (265,336) - (1,630,938)
========== ========== ========== ==========
The major contributors to the difference between UK GAAP and IFRS were:
E A provision for diminution in value recognised under UK GAAP below
operating profit or loss has been reclassified to changes in fair value of
investments - £1,032,127 and amended to bid-price, along with some other minor
fair value adjustments.
F Operating costs have been adjusted for a share option charge in the
period of £135,370.
Balance sheet reconciliation at 31 October 2004
UK GAAP Effect of transition to IFRS Reported
in IFRS Non IAS 27 IAS 27 (G) Under
format adjustments adjustments IFRS
Note £ £ £ £
ASSETS
Non-current assets
Investments H 622,904 1,027,337 (3) 1,650,238
Property, plant and equipment 59,209 (4,693) - 54,516
Intangible assets - 4,693 - 4,693
Trade and other receivables 239,570 - - 239,570
_________ _________ _________ _________
Total non-current assets 921,683 1,027,337 (3) 1,949,017
Current assets
Investments H 1,366,050 (151,783) - 1,214,267
Trade and other receivables 754,607 - - 754,607
Cash and cash equivalents 7,247,827 - - 7,247,827
_________ _________ _________ _________
Total current assets 9,368,484 (151,783) - 9,216,701
_________ _________ _________ _________
Total assets 10,290,167 875,554 (3) 11,165,718
========== ========== ========== ==========
EQUITY AND LIABILITIES
Equity
Issued capital 1,669,648 - - 1,669,648
Share premium account I 7,534,677 (161,813) - 7,372,864
Share based payment reserve I - 388,872 - 388,872
Other reserves 2,553,356 - - 2,553,356
Translation reserve J - 756 - 756
Retained earnings J (2,135,789) 603,540 - (1,532,249)
_________ _________ _________ _________
Total equity 9,621,892 831,355 - 10,453,247
_________ _________ _________ _________
Liabilities
Non-current liabilities
Obligations under finance leases 2,446 - - 2,446
Current liabilities
Trade and other payables 657,599 44,199 (3) 701,795
Obligations under finance leases 8,230 - - 8,230
_________ _________ _________ _________
Total current liabilities 665,829 44,199 (3) 710,025
_________ _________ _________ _________
Total liabilities 668,275 44,199 (3) 712,471
_________ _________ _________ _________
Total equity and liabilities 10,290,167 875,554 (3) 11,165,718
========== ========== ========== ==========
The major contributors to the difference between UK GAAP and IFRS were:
G Changes in the scope of consolidation (IAS 27) means that investments that
are controlled entities must be consolidated, however, there were no significant
adjustments in the period.
H Non-current asset investments previously carried at cost have been stated
at fair value. Current asset investments of £1,366,050 (UK GAAP) have been
amended to bid price.
I Share based payment reserve has been adjusted for share option charges
brought forward - £253,502, together with the charge in the period - £135,370
(IFRS 2). Share premium account reflects the share based payment charge arising
from options issued as part consideration for the placing.
J Other adjustments relate to items described in G to I above and some
other minor adjustments. Cumulative exchange differences arising on
consolidation are reclassified from retained earnings to translation reserve.
Reconciliation of Income Statement for year to 30 April 2005
UK GAAP Effect of transition to IFRS Reported
in IFRS Non IAS 27 IAS 27 (K) Under
format adjustments adjustments IFRS
Note £ £ £
Turnover
Consulting and Management 3,897,714 - - 3,897,714
Ventures 234,437 - - 234,437
_________ _________ _________ _________
4,132,151 - - 4,132,151
Investments
Provision for diminution in value L (1,566,372) 1,566,372 - -
Change in fair value L - (1,583,636) - (1,583,636)
_________ _________ _________ _________
(1,566,372) (17,264) - (1,583,636)
Operating costs
Consulting and Management (3,375,944) (13,253) - (3,389,197)
Ventures (1,785,400) (18,738) - (1,804,138)
Controlled investments - - (247,691) (247,691)
Share based payments M - (283,490) - (283,490)
_________ _________ _________ _________
(5,161,344) (315,481) (247,691) (5,724,516)
Operating profit / (loss) (2,595,565) (332,745) (247,691) (3,176,001)
Net finance income 242,184 - - 242,184
_________ _________ _________ _________
Profit / (loss) before tax (2,353,381) (332,745) (247,691) (2,933,817)
Tax 37,850 - 10,040 47,890
_________ _________ _________ _________
Profit / (loss) for the period (2,315,531) (332,745) (237,651) (2,885,927)
========== ========== ========== ==========
The major contributors to the difference between UK GAAP and IFRS were:
K Changes in the scope of consolidation (IAS 27) means that investments that
are controlled entities must be consolidated. The adjustments here represents
the consolidation of the results or investment subsidiaries previously not
consolidated but treated as a fixed asset investment and held on the balance
sheet at cost.
L A provision for diminution in value recognised under UK GAAP below
operating profit or loss has been reclassified to changes in fair value of
investments - loss £1,566,372 and amended to bid-price, along with some other
minor fair value adjustments.
M Operating costs have been adjusted for a share option charge in the period
of £283,490.
Balance sheet reconciliation at 30 April 2005
UK GAAP Effect of transition to IFRS Reported
in IFRS Non IAS 27 IAS 27 (N) Under
format adjustments adjustments IFRS
Note £ £ £
ASSETS
Non-current assets
Investments O 1,755,779 1,040,703 (280,965) 2,515,517
Property, plant and equipment 52,742 (4,763) 33,271 81,250
Intangible assets - 4,763 - 4,763
Trade and other receivables 239,570 - - 239,570
_________ _________ _________ _________
Total non-current assets 2,048,091 1,040,703 (247,694) 2,841,100
Current assets
Investments O 881,805 (62,986) - 818,819
Trade and other receivable 847,584 - 10,157 857,741
Cash and cash equivalents 5,548,638 (13,750) - 5,534,888
_________ _________ _________ _________
Total current assets 7,278,027 (76,736) 10,157 7,211,448
_________ _________ _________ _________
Total assets 9,326,118 963,967 (237,537) 10,052,548
========== ========== ========== ==========
EQUITY AND LIABILITIES
Equity
Issued capital 1,670,648 - - 1,670,648
Share premium account P 7,543,677 (161,813) - 7,381,864
Share based payment reserve P - 536,992 - 536,992
Other reserves 2,553,356 - - 2,553,356
Translation reserve Q - (42,990) - (42,990)
Retained earnings Q (3,129,464) 579,876 (237,650) (2,787,238)
_________ _________ _________ _________
Total equity 8,638,217 912,065 (237,650) 9,312,632
_________ _________ _________ _________
Liabilities
Non-current liabilities
Obligations under finance leases 1,316 - - 1,316
Current liabilities
Trade and other payables 681,547 51,902 113 733,562
Obligations under finance leases 5,038 - - 5,038
_________ _________ _________ _________
Total current liabilities 686,585 51,902 113 738,600
_________ _________ _________ _________
Total liabilities 687,901 51,902 113 739,916
_________ _________ _________ _________
Total equity and liabilities 9,326,118 963,967 (237,537) 10,052,548
========== ========== ========== ==========
The major contributors to the difference between UK GAAP and IFRS were:
N Changes in the scope of consolidation (IAS 27) means that investments that
are controlled entities must be consolidated. The adjustments here represent
the consolidation of the results or investment subsidiaries previously not
consolidated, together with the removal of investments previously treated as a
fixed asset investment and held on the balance sheet at cost - £280,965.
O Non-current asset investments previously carried at cost have been stated
at fair value comprising the brought forward adjustment together with the fair
value uplift in the period. Current asset investments of £881,805 (UK GAAP)
have been amended to bid price.
P Share based payment reserve has been adjusted for share option charges
brought forward - £253,502, together with the charge in the period - £283,490
(IFRS 2). Share premium account reflects the share based payment charge arising
from options issued as part consideration for the placing.
Q Other adjustments relate to items described in N to P above and some other
minor adjustments. Cumulative exchange differences arising on consolidation are
reclassified from retained earnings to translation reserve.
7 Shareholder communications
The announcement is being sent to all shareholders on the register on 19 January
2006. Copies of this announcement are posted on the Company's website
www.ANGLEplc.com and are available from Buchanan Communications and the
Company's registered office: Surrey Technology Centre, Surrey Research Park,
Guildford, GU2 7YG.
ANGLE PLC
INDEPENDENT REVIEW REPORT TO ANGLE PLC
FOR THE SIX MONTHS ENDED 31 OCTOBER 2005
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 October 2005 and we have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report, including the conclusion, has been prepared for and only for the
company for the purpose of their interim report and for no other purpose. We do
not, therefore in producing this report, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.
Directors' Responsibilities
The interim statement, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the Interim Statement in accordance with the
Alternative Investment Market Rules which require that the accounting policies
and presentation applied to the interim figures must be consistent with those
that will be adopted in the company's annual accounts.
As disclosed in Note 1, the next annual financial statements of the Group will
be prepared in accordance with those International Financial Reporting Standards
adopted for use by the European Union.
The accounting policies used are consistent with those the directors intend to
use in the next annual financial statements. There is, however, a possibility
that the directors may determine that some changes to these policies are
necessary when preparing the full annual financial statements for the first time
in accordance with those IFRSs adopted for use by the European Union. This is
because, as disclosed in Note 1, the directors have anticipated that certain
standards, which have yet to be formally adopted for use in the EU, will be so
adopted in time to be applicable to the next annual financial statements.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board as if that Bulletin applied. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly we do not express an audit opinion
on the financial information.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 October 2005.
BAKER TILLY
Chartered Accountants
Guildford
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