Annual Financial Report

RNS Number : 0370J

Aurora Russia Limited

24 June 2011

Aurora Russia Limited ("Aurora Russia" or the "Company")

Results for the twelve months ended 31 March 2011

Aurora Russia implements change and moves forward

· Board has improved independence - two new independent non-executive Directors, Gilbert Chalk and Geoffrey Miller have been appointed. James Cook and John McRoberts have both stepped down

· New management contract signed with the manager - lower fee and new incentives

· The Manager continues to have discussions with a number of parties regarding strategic options for the investments

· Improved transparency - Aurora Russia undertakes to issue quarterly trading updates

Financial highlights

· Net asset value per share as at 31 March 2011 of 79.9p per share (Net asset value £89.8m) down from 88.0p per share at 31 March 2010.

· Cash and cash equivalents as at 31 March 2011 were £6.7m

Portfolio highlights

OSG

· OSG continued its expansion in Russia and internationally and it currently operates 42 warehouse facilities in 7 countries

· Revenues for the year ended 31 March 2011 were £14.8 million representing an increase of 31% compared to the prior year period

· EBITDA up 24% to £2.1m as at 31 March 2011

· Equity valuation of Aurora Russia's stake in OSG at 31 March 2011 was £28.8m, a 12% increase on the previous year

Unistream Bank

· Unistream's share in the Russia-outbound transfer market is estimated at 17.4% as at Q1 2011 compared to 18.7% in Q4 2010

· Revenues for year ended 31 December 2010 were RUR 2.1bn, a 10% decrease from 2009 due to lower commissions being charged as a result of increased competition in the Russian/CIS market

· EBITDA remained consistent with the prior year at RUR60m

· Q1 2011 volume and operating income (net commissions) grew 23.4% and 18.6% year-over-year respectively

· Equity valuation of Aurora Russia's stake in Unistream at 31 March 2011 was £18.7m, a 23% decrease on the previous year

Superstroy

· Superstroy is the leading DIY company in the Urals Region of Russia

· Revenues grew by 17% to RUR6.9 billion in 2010

· Company was profitable in 2010 with a 3.5% EBITDA margin

· Equity valuation of Aurora Russia's stake in Superstroy at 31 March 2011 was £24.5m, a 40% increase on the previous year

Flexinvest and Kreditmart

· Flexinvest has begun the development of a credit card product to be funded by short-term deposits with an aim to launch in Q4 2011

· After a strategic review, the decision has been taken to exit from Kreditmart's broker operations to stop its cash burn and as a result these have been written down to zero

· As at 31 March 2011, Flexinvest and Kreditmart had £17.6 million in net assets down from £19.7 million as at 31 March 2010.

· Equity valuation of Aurora Russia's stake in Kreditmart/ Flexinvest Bank at 31 March 2011 was £18.5m, a 17% decrease on the previous year

Commenting, Dan Koch, Chairman of Aurora Russia, said:

"Growth has now returned to Russia's economy, with GDP likely to grow by 4.5-5.0% this year. Credit growth is accelerating, in contrast to many high growth emerging markets. Our portfolio companies are well positioned to benefit from this improved environment. I am also encouraged to see that there is renewed activity in the Russian IPO and M&A market which suggests a better exit climate for our investments. This year Aurora Russia welcomed two new non-executive Directors onto the Board and implemented several important changes to improve transparency and returns to shareholders."

Enquiries:

Aurora Russia Limited

Dan Koch+44 (0) 207 839 7112

Numis Securities Limited

Nominated Adviser: Hugh Jonathan+44 (0)20 7260 1000

Corporate Broking: Rupert Krefting / Nathan Brown

Financial Dynamics

Ed Gascoigne-Pees+44 (0) 20 7269 7132

Jack Hickey

Chairman's Statement

Introduction

I am pleased to present to you the audited results of Aurora Russia Limited (the "Company" or "Aurora Russia") for the year ending 31 March 2011.

Growth has now returned to Russia's economy, with GDP likely to grow by 4.0-4.5% this year. Credit growth is accelerating, in contrast to some other high growth emerging markets. This credit growth, combined with the potential for falling inflation later this year and subsequent interest rate cuts, forms a good backdrop for continued growth and consumer demand. Our portfolio companies are well positioned to benefit from this improved environment I am also encouraged to see that there is renewed activity in the Russian IPO and M&A market which suggests a better exit climate for our investments.

Results

For the 12 months to 31 March 2011, Aurora Russia recorded a loss of £4.7 million or 4.2p per share, based on the audited consolidated statement of comprehensive income. The net asset value ("NAV") of the Company as at 31 March 2011 was £89.8 million or 79.9p per share. Cash and cash equivalents at 31 March 2011 were £6.7 million.

Administration and operating expenses of £21.7 million include Company costs of £4.0 million or 24% of the current NAV. Operating costs of the Company's wholly owned subsidiaries were £15.9 million.

The £4.0 million Company costs include costs of approximately £0.6 million incurred in relation to the non-cash accrual of up to £3.0 million for the options that may be issued to the Manager under the previous incentive arrangements. This arrangement has been cancelled and transferred to shareholders' reserves at the end of the current year.

The Annual General Meeting

I would also like to take this opportunity to thank our shareholders again for their support in the continuation vote at the AGM on 3 December 2010 and the re-election to the Board of John Whittle, Alexandr Dumnov and myself

Continuation of the Company

The Directors considered that it was in the best interests of the shareholders that the life of the Company be continued. The Directors have always been committed to crystallising value for shareholders through the sale of the Company's investments over a sensible period of time and believe that the continuation of the Company will enable the Company to achieve this in a controlled manner thereby maximizing shareholder value.

The Board has agreed that it will return all of the net cash proceeds from realisations of the Company's assets to shareholders, as long as the discount of the Company's share price is more than 20% of the latest published NAV of the Company. If for a period of six months immediately preceding the sale of an asset the share price discount to the NAV per share is less than 20%, then the Board will have the discretion to make additional investments in line with the strategy of the Company.

The Manager is focused on realising value from the Company's investments and is engaged in discussions with a number of parties regarding strategic options for its investments. The Company will update shareholders as and when appropriate.

Management Fees and Incentivisation Arrangements

The Board indicated in the circular relating to the AGM that it has agreed with the Manager to reduce the management fee from 2.0% to 1.5% of NAV per annum with effect after 31 March 2011 and to put in place a new incentive structure to better align its interests with shareholders, replacing the current option programme for the Manager. The new incentive structure would involve the payment of a performance fee to the Manager, calculated by reference to a percentage of the value of any disposals realised by the Company.

In the event that any follow on investments are made by the Company following the narrowing of the share price discount to NAV as described above, it is proposed that the Manager will receive a performance fee equal to 20% of the value of any amounts realised on the disposal of such further investments in excess of the amounts so invested. The 20% performance fee would be subject to a hurdle rate which is expected to be at 12% per annum (the same as the hurdle rate for the Manager's incentive arrangements under the Option Deed).

Composition of the Board

The Directors believe that it is right to strengthen the Board where possible and the Board has agreed to appoint two new Independent Directors. I am delighted to welcome Gilbert Chalk and Geoff Miller to the Board. I believe that their wealth of relevant experience in the listed funds market will bring a great deal of value to the Board of Aurora Russia. This year both John McRoberts and James Cook stepped down from the Board thereby keeping the board to its current size of seven.

Investment Review

Aurora Russia has invested a total of £73.9 million into its investee companies and has uncommitted funds of £3.8 million remaining in the Company to cover its ongoing expenses.

The Board resolved on 22 June 2011 that Aurora Russia would exit from Kreditmart as soon as is practicable. The Kreditmart brand has been written down to zero for the year ended 31 March 2011 (31 March 2010 to be confirmed), due to the fact that it continues to incur losses, and it is unclear when the mortgage brokerage market will return to a commercially viable level. It is uncertain at this stage exactly how we will dispose of the asset or what the cost of disposal will be, however we do not foresee this cost to be significant.

The remaining four investments are all in a good position and are already benefitting from the improvement in the Russian market and we expect them all to grow in value over the next period: In summary our investments are

• 94.5% of OSG, a regional market leader in records management;

• 24.3% of SuperStroy, one of the leading DIY retailers in Russia;

• 26% of Unistream Bank, a leading Russian money transfer company;

• 100% of Fleixinvest Bank which provides retail banking services; and

Portfolio Valuation

A valuation of the investment portfolio was performed at 31 March 2011, resulting in a decrease in value from £92.2 million to £90.5 million. This valuation, recommended by the Valuation Committee of the Board was prepared by an independent professional valuation firm and was formally adopted by the Board on 22 June 2011. These valuations are prepared for accounting purposes only and comply with International Private Equity and Venture Capital Association ("IPEVCA") guidelines. The valuations of investments included in the Company's financial statements will not necessarily reflect the market value that a third party would be prepared to pay for these businesses.

The current valuation of Aurora Russia's shareholdings reflects changes to the previous year's valuation performed as at March 2010 as follows:

• the value of our investment in OSG has increased by £0.7 million to £28.8 million, an increase of 2.5%;

• the value of our investment in SuperStroy has increased by £7.0 million to £24.5 million, an increase of 40%;

• the value of the Company's 26% stake in Unistream Bank has decreased by £5.7million to £18.7 million, a decrease of 23%; and

• the value of Kreditmart and Flexinvest Bank has decreased by £3.7 million to £18.5 million, a decrease of 16.7%, which includes the brand of Kreditmart being written down to zero;

In assessing these changes, one should take into consideration that over the period there was an approximately 3% unfavourable movement in the £/RUR exchange rate. Therefore the movement of values may be distorted by currency translation effects and may not be the best reflection of the performance of an underlying asset during the reporting period.

Outlook

I continue to hold the view that GDP growth over the next couple of years in the emerging markets will outperform growth in the developed world by some margin partly due to the heavy sovereign and consumer debt burden being carried by developing nations. Russia has little sovereign or consumer debt and economists expect GDP to grow at rates of around 4.0-4.5% in the next two years. Although in recent months inflation has been running high as a result primarily of the recent increase in the price of oil, I expect inflation to continue to decrease over the medium term. Industrial output is forecast to grow at around 5% in 2011 with investment growing 7%.

Consumer confidence continues to gather pace, with retail sales expanding at 5-6% y-o-y in the first few months of 2011. While this is less than the double-digit pre-crisis levels, this is an indication that growth has become more balanced, with increasing real disposable income linked to increasing labour productivity. Increased domestic spending will benefit all of our portfolio companies. High oil prices will continue to be a boon to the Russian economy and spur further investment in infrastructure.

As preparations for global events being held in Russia such as the 2014 Winter Olympics and the 2018 FIFA World Cup gather pace, many sectors of the Russian economy will grow strongly, with all of our investee companies standing to gain from these trends.

Dan Collinson Koch

Chairman of the Board

Aurora Russia Limited

23 June 2011

Investment Manager's Report

Overview

Russian GDP grew 4% in 2010 with the IMF predicting 4.8% growth in 2011. Q1 2011 saw GDP grow 4.1% according to Rosstat estimates. This shows some deceleration of growth versus 4.5% seen in Q4 2010 and economists believe that the recent rally in oil prices had a reduced impact on the Russian economy due to an increase in the social security tax and a strong rouble. The government is now considering cutting back employer's social security tax, particularly for mid-size companies which, if and when passed, will benefit all of Aurora Russia's portfolio investments.

During the last 6 months the manager has focused on working with its portfolio companies on ensuring they meet 2011 budgets, updating their long-term financial plans and working closely with the companies' management on their strategic initiatives. We continue to explore exit opportunities for all of our companies.

OSG Records Management

In 2010 and Q1 2011 OSG continued its expansion in Russia and internationally and it currently operates 42 warehouse facilities in 7 countries.

OSG's management estimates the entire vended market in Russia at approximately 3 million boxes and that this represents less than 1% penetration of outsourced storage based on the volume estimates of documents stored by businesses and the government in Russia. We believe that OSG, with its unmatched territorial coverage, is well positioned to tap into such a vast market opportunity.

OSG's audited accounts for the year ending 31st March, 2011 show an increase in revenues over the year ending 31st March 2010 of 31% from £11.3 million to £14.8 million. EBITDA grew to £2.1 million, up 24% year-over-year.

For Q1 2011, OSG reported revenues of £4.0 million compared to £3.0 million for the same period in 2010. This year OSG continues to see a strong rebound in services which grew at 52% year-over-year in Q1 2011.

The equity valuation of Aurora Russia's stake in OSG at 31 March, 2011 was £28.8 million. This is net of the liability associated with the management options in OSG valued at £1.2 million and net of third party debt less cash of £3.0 million.

Unistream Bank

According to the Central Bank of Russia ("CBR") the volume of Russia-outbound transfers in Q1 2011 grew 37% over Q1 2010. Adjusted for the difference in RUR/USD average rates, Q1 2011 volume grew by approximately 34%. Based on these statistics, Unistream had approximately 17.4% of the outbound Money Transfer ("MT") market compared to the approximately 18.7% it had in Q4 2010.

Signing up new agent banks with strong distribution capacities is one of Unistream's strategic priorities in 2011. It has recently signed 3 major agent banks in Russia: Otkrytie, Uralsib and Bin Bank, which together expand Unistream's distribution network by more than 500 locations.

Unistream's loyalty programme, launched in 2010, has become an increasingly important Customer Relationship Management ("CRM") tool at Unistream. Cardholders subscribe to a free text messaging service which informs them of the status of their transfer, while Unistream benefits from having up-to-date customer contact information. By the end of May 2011, there were approximately 600,000 such cards distributed, and statistics show that approximately 80% of those who received a card between August and October last year used Unistream to transfer money on at least one occasion by the end of May 2011. Unistream will also begin offering loyalty cards to the recipients of money transfers.

Unistream's mobile money transfers continue to show strong growth rates month-over-month with volume reaching RUR 272m in May 2011; this is approximately twice the volume transferred by this channel in August 2010. Volume transferred through self-operated QIWI payment terminals reached RUR 89m in May, up from approximately RUR 20m transferred monthly at the end of 2010.

Unistream's year-end management accounts to 31 December 2010 show that the company transferred RUR119.4 billion in 2010, 2% more than in 2009. Revenues for the same period were RUR2.1 billion, a 10% decrease compared to 2009 due to lower commissions being charged as a result of increased competition in the Russian/CIS market. However, despite the difficult market conditions, Unistream had similar EBITDA as in 2009; RUR 60m.

Unistream's Q1 2011 volume and operating income (net commissions) grew 23.4% and 18.6% year-over-year respectively. The money transfer market has strong seasonality with Q1 volume typically representing approximately 17% of the total annual volume.

Although Unistream's recent performance looks encouraging as it is tracking its budget well both in terms of revenue and EBITDA, it is still below the expectations on which Unistream was valued last year. Therefore the equity valuation of Aurora Russia's stake in Unistream at 31 March, 2011 was marked down to £18.7million, a decrease of 23% on the valuation at 31 March 2010 of £24.4 million.

Superstroy

Superstroy is the leading DIY company in the Urals Region of Russia with 47 stores and a total trade space of approximately 110 thousand m2.

RosBusinessConsulting ("RBC") estimates that the overall DIY market across Russia grew by 18% in USD terms or 13% in RUR in 2010. SuperStroy showed a 17% sales growth in RUR with like-for-like growth in sales from the same stores of approximately 11%.

In 2010 the company opened 3 new stores increasing its trade space by 10%. The company's revenues grew by 17% to RUR6.9 billion with 11% like-for-like sales growth while new space contributed a further 6% growth. In 2010 the company was profitable with a 3.5% EBITDA margin.

Based on the unaudited management accounts, in Q1 2010 Superstroy reported revenues of RUR1.6 billion or 30% higher than in the same period in 2010.

Recognizing Superstroy's ability to execute on its plans, the equity valuation of Aurora Russia's stake in Superstroy at 31 March 2011 was marked up to £24.5 million, an increase of 40% on the valuation at 31 March 2010 of £17.5 million.

Kreditmart

Kreditmart, a wholly owned subsidiary of Aurora Russia, distributes mortgages, equity release loans and consumer loans.

Kreditmart was originally established as a distributor of mortgages. While the Russian market for mortgages was robust with triple digit growth up to the end of 2008, the mortgage market took a severe hit in Russia during the financial crisis with new volumes contracting by 77%. Kreditmart adapted to these adverse market conditions by shifting its focus to insurance and consumer loans while downsizing to reduce costs. During 2010 Kreditmart began to focus on mortgages again as the market improved. The mortgage market has started to recover, but unfortunately the brokerage market has not developed at the rate that was anticipated. Having explored a number of options to get Kreditmart to profitability we can not see this happening in the near term and therefore have taken the difficult decision to exit from Kreditmart's broker operations immediately in order to stop its cash burn.

Kreditmart's broker operations as at 31 March 2011 have been written down to zero however Kreditmart does hold a small mortgage portfolio and cash which are included in the valuation of the combined Flexinvest / Kreditmart business as detailed below.

Flexinvest Bank

As was announced in Aurora Russia's recently published trading update, Flexinvest Bank has begun the development of a credit card product to be funded by short-term customer deposits.

The bank is now implementing the card project and has recently been approved by Mastercard as an issuer of its cards. The main feature of its future credit card product is its dual use: it can be used as both a credit card with a limit of RUR50k to RUR200k and a prepaid card with deposit features for those who require a savings account with a card to access funds when needed.

Experian-Interfax has helped the bank to develop a scorecard to be used in underwriting. The management aims to pilot its first cards in August with the necessary infrastructure and business processes fully underway by then. In preparation for the sales and marketing effort due to start in Q4 2011, the new trademark "Flex Bank" has been created.

Principal assets as at 31 March 2011 include: 1) a mortgage book net of provisions of approximately £7.7 million yielding 11.9% p.a.; 2) gross cash of £2.7 million; 3) investments in highly liquid fixed income securities of £2.6 million; 4) the premium paid for the banking licence of £2.8 million; and 5) approximately £0.7 million as foreclosed properties held for sale.

The equity valuation of the combined Kreditmart/Flexinvest Bank business at 31 March 2011 was £18.5 million, down 17% on the valuation at 31 March 2010 of £22.2 million.

Conclusion

We are confident that the four companies that will remain in our portfolio will continue to develop well in the next period, helped by the improvement in the Russian economy. The financial crisis hit Russia hard but business has rebounded robustly and we are confident that the growth in the business and consumer services sectors in which we have invested will outstrip GDP growth in the medium term by some margin. We also believe that investor appetite will be skewed towards the non-resource sector.

Aurora Investment Advisors

June 2011

Directors

Dan Collinson Koch - Non-executive Chairman

Mr Koch retired as Chairman of Deloitte & Touche CIS (Deloitte,the Firm) in May 2009. He lived and worked in Russia for 11 years having been CEO and Managing Partner and latterly Chairman of Deloitte during that period. Under Mr Koch's leadership Deloitte in Russia and the CIS experienced unprecedented success, growing from a small predominantly audit practice with approximately 150 professionals into a full service, multi functional, multi office practice with approximately 3,000 professionals.

Mr Koch has over 30 years of public accounting and international executive experience having been based in Canada prior to his Russian experience. In Russia Mr Koch had direct overall responsibility for the Firm's major clients including Norilsk Nickel, AFK Sistema and MTS.

Grant Cameron - Non-executive Director

Mr Cameron is Managing Director of Investec Asset Management Guernsey Limited. He is a member of the South African Institute of Chartered Accountants and the Financial Planners Association of South Africa. In 1988 Mr Cameron joined KPMG South Africa and was transferred in 1991 to KPMG's Miami office, where he held the position of Manager of Financial Services. Mr Cameron moved to Investec Group in 1996 and was Operations Director of Investec Fund Managers SA Limited from January 1996 until February 2001. Mr Cameron acts as a Director of a number of investment funds, and was previously chairman of the Guernsey Investment Funds Association. He graduated with a B.Comm in 1987 and a B.Acc in 1989 from the University of Witwatersrand.

James Cook - Past Non-executive Director

Mr Cook is a Director and joint founder of Aurora Russia Limited. He is also a Partner and owner of Aurora Investment Advisors Limited which manages Aurora Russia Limited. In addition, James has non-executive Directorships at ZAO Forus Bank and ICICI Bank in Russia. He has over 17 years experience in advising, founding and managing companies in Russia's consumer finance, residential mortgage lending and leasing sectors. James was one of Russia's pioneers in consumer finance in Russia and is credited with being the Father of Mortgage Lending in Russia. Prior to setting up Aurora Russia, James served as Chairman and CEO of GE Money Bank in Russia. Before moving to GE, James was Executive Vice President of Delta Capital where he worked from 1996 to 2004. Whilst at Delta Capital, James served as Chairman of the Delta Financial Services Group. He was the founder, Chairman and CEO of ZAO DeltaCredit, Russia's first mortgage bank and was co-founder and Chairman of ZAO DeltaLeasing (now known as Europlan), a major provider of equipment and automobile fleet leasing in Russia. In addition, he served as Chairman and CEO of ZAO DeltaBank which he built into a major provider of VISA credit cards in Russia and which was later sold to GE and renamed GE Money Bank. James was a Merit Scholar at Hampden-Sydney College and holds a B.S. in Finance from Virginia Tech.

John McRoberts - Past Non-executive Director

Mr McRoberts is one of the founders of Aurora Russia Limited. John is a Director of Aurora Russia Limited and a partner and owner of Aurora Investment Advisors Limited which manages Aurora Russia Limited. John has been working in Russia for over 14 years. Prior to setting up Aurora Russia, he worked as a corporate financier completing numerous transactions including the sale of Darial TV to Modern Times Group, the first acquisition of a Russian TV channel by a foreign strategic buyer, the sale of an outdoor advertising company to News Corporation and the sale of two property companies to Raven Russia, the AIM listed property company focusing on Russian commercial real estate. John first began working in Russia in 1996 with a petrochemical and petroleum product trading company advising on upstream acquisitions to secure the source of supply of their traded products. In 1998, John set up Altium Capital's corporate finance business (formerly Apax Partners & Co. Corporate Finance) in Russia and ran the business until 2003.

In December 2003, John accepted the position to set up and lead the Corporate Finance Advisory business of Deloitte & Touche in Moscow. John left Deloitte to set up Aurora Russia. John holds an MBA in Finance from the American Graduate School of International Management in Arizona and a BSC in Finance from Arizona State University.

Ben Morgan - Non-executive Director

Mr Morgan is a partner with Carey Olsen in Guernsey in the Corporate Group. He qualified as a solicitor in 1992 and practised with the City law firm Norton Rose, during which time he spent time in Russia, before joining Carey Olsen in 1999. Mr Morgan is a Director of a number of Guernsey investment funds.

John Whittle - Non-executive Director

Mr Whittle is a Chartered Accountant and holds the IOD Diploma in Company Direction. After qualifying in 1978 he joined Price Waterhouse in London before embarking on a career in business services, predominantly telecoms. He co-led the business turnaround of Talkland International (now Vodafone Retail) and was directly responsible for the strategic shift into retail distribution and its subsequent implementation; he subsequently worked on the £20 million private equity acquisition of Ora Telecom. He has served on the boards of 3 listed companies. He was until May 2009 Finance Director of Close Fund Services where he successfully initiated a restructuring of client financial reporting services and was a key member of the business transition team.

Alexandr Dumnov - Non-executive Director

Mr Dumnov is a Russian national and has considerable experience working for and advising Russian companies. He also has strong experience serving on the boards of both UK and Russian companies. Most recently, Mr Dumnov was a member of the Board of Deloitte & Touche CIS from 1998 to 2007, after which he became a Non Executive Director of Trans-Siberian Gold plc, until 2009. He also served as a Non Executive Director of Siberian Mining and Metallurgical Alliance from 2003 until May 2010 and is presently a Non Executive Director of MDM Bank.

Geoff Miller - Non-executive Director

Mr. Miller is an investment professional with over twenty years experience in the investment company industry, and has also worked in Russia. Now an Executive Director of Greenwich Loan Income Fund Limited, a Guernsey-based investment company, he has been an analyst, fund manager and non-executive director of investment companies since 1987. He has worked in many other areas of financial services, having been a director of both private client wealth manager Brewin Dolphin and asset manager Exeter Asset Management. In the investment banking arena he was Director, Research of London-based Bridgewell Securities Limited and Head of Research Marketing at Russian investment bank Troika Dialog in Moscow. Mr. Miller now sits on the advisory board of silkroutefinancial, the first emerging markets focused merchant banking firm dedicated exclusively to the financial services sector. Mr Miller is a resident of Guernsey.

Gilbert Chalk - Non-executive Director

Gilbert Chalk is Chairman of Castle Private Equity AG a leading Private Equity and Venture Capital Fund of Funds that is managed by LGT Capital Partners and listed on the Zurich Stock Exchange. In addition he is a Director of Constantine Group Plc, a substantial Private Group with interests in Logistics, Manufacturing, Property and Alternative Energy and Vantage Goldfields Limited, a South African Gold producing company, listed on the ASX. From 2000 to 2010 he was Chairman of the Baring English Growth Fund and its Investment Committee. The Fund invested in small and mid cap buy-outs in the UK. Previously he was the Founder and Managing Director of Hambro European Ventures, subsequently named Duke Street Capital. He has served as a Council Member of the British Venture Capital Association and as Chairman of its Taxation Committee conceived and formulated Venture Capital Trusts. He has also worked as Head of Corporate Finance at ABSA Bank (UK) and as a Corporate Finance executive at Hill Samuel Bank and Brandts Limited. He holds an M.B.A. from Columbia University, New York.

Directors' Report

The Directors of Aurora Russia Limited ('the Company') present the annual report and audited financial statements of the Company and the Group for the year ended 31 March 2011.

Background

The Company was incorporated in Guernsey on 22 February 2006 and commenced activities on 20 March 2006. The Company is a closed-ended investment company and is registered in Guernsey.

Principal activity

The principal activity of the Company is private equity investment in Russia in the financial, business and consumer services sectors with the objective of providing Ordinary Shareholders with an attractive level of capital growth from investing in a diversified private equity portfolio.

Listing

The Company is traded on the Alternative Investment Market of the London Stock Exchange ('AIM'), and has complied with the relevant provisions of the rules governing the admission to and operation of a company traded on the AIM.

Substantial shareholdings

The Company has been notified that the following shareholders had a beneficial interest of 3% or more of the Company's issued share capital as at 1 April 2011:

	Number of shares held	Percentage held

Standard Life Investments	16,853,488	14.98%
Mr Tim James Slesinger ESQ	15,560,977	13.83%
Metage Capital	8,107,254	7.21%
Scottish Widows	7,832,490	6.96%
Aurora Investment Advisors	7,310,000	6.50%
South Yorkshire Pension Authority	5,750,000	5.11%
M&G Investment Management	5,300,000	4.71%
UBS Global Asset Management	3,373,994	3.00%

Business review

The Group's risk exposure, management objectives and policies are disclosed in note 29 to these financial statements.

A review of the business during the year is contained in the Chairman's Statement.

Details of significant events since the reporting date are contained in note 33 to the financial statements.

Results and dividends

The results for the year are set out in the attached financial statements.

The Company has not proposed or declared a dividend for the year ended 31 March 2011 (2010: £nil).

Incorporation

The Company was registered in Guernsey, Channel Islands on 22 February 2006, with registered number 44388.

Directors

The Directors during the year and to date were as follows:

	Date of Appointment	Date of resignation
Dan Koch - Chairman from 8 September 2008	11 August 2008
Grant Cameron	24 February 2006
James Cook	22 February 2006	17 June 2011
John McRoberts	22 February 2006	22 December 2010
Ben Morgan	24 February 2006
John Whittle	17 January 2008
Alexandr Dumnov	17 June 2010
Geoff Miller	22 June 2011
Gilbert Chalk	22 June 2011

Directors' and other interests

Directors who held office during the year had the following interests in the shares of the Company as at 1 May 2011:

				Number of ordinary shares
Dan Koch				850,000
James Cook				299,999

The Directors have interests in the contracts with the Company as follows:

James Cook is a Director of Aurora Investment Advisors Limited (the 'Manager') and at the year end he owned 45% of the ordinary shares and 33.75% of the preference shares of the Manager.

The Company had granted an option to the Manager to subscribe for Ordinary Shares representing 20% of the issued share capital of the Company after the exercise of the option provided that certain performance criteria are met. During the year the share options were cancelled (refer to note 22 and 26).

John McRoberts and James Cook are shareholders and Directors of Aurora Russia (Cyprus) Limited, which is Investment Advisor to the Manager.

Administration agreement: John Whittle was, until 31 May 2009, a Director of the administrator, Close Fund Services Limited.

Legal services: Ben Morgan is a partner of Carey Olsen in Guernsey, which provides legal services to the Company.

	Fees	Other compensation	Total	Annualised total
Dan Koch	95,000	-	95,000	95,000
Grant Cameron	20,000	-	20,000	20,000
James Cook	-	-	-	-
John McRoberts	-	-	-	-
Alexandr Dumnov	15,778		15,778	15,778
John Whittle	28,944	-	28,944	28,944
Ben Morgan	20,000	-	20,000	20,000
Total	£179,722	£0	£179,722	£179,722

Dan Koch receives remuneration of £95,000 per annum. This will be reduced to £50,000 per annum with effect from 1 April 2011.

Alexandr Dumnov, who was appointed on 17 June 2010, receives remuneration of £20,000. It was also resolved by the Remuneration Committee that John Whittle's remuneration would increase to £30,000 effective on the same date.

There are no service contracts in existence between the Company and any Director but each of the Directors was appointed by letter of appointment which sets out the main terms of his appointment.

Statement of Directors' responsibilities

The Directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.

The Companies (Guernsey) Law, 2008, as amended (the "New Law") requires the Directors to prepare financial statements for each financial year. Under that New Law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards and applicable law.

The financial statements are required by law to give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group and the Company for that period.

In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and the Company and to enable them to ensure that the financial statements comply with The New Law. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and the Company and to prevent and detect fraud and other irregularities.

Disclosure of information to the auditor

The Directors who held office at the date of this Directors' report confirm that, so far they are each aware, there is no relevant audit information of which the Group's Auditor is unaware; and each Director has taken all the steps that he ought to have taken as a Director to make himself aware of any relevant audit information and to establish that the Group's Auditor is aware of that information.

Going concern

The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's Statement on pages 4 to 5 as well as the financial position of the Company, its cash flows, liquidity position and borrowing facilities. In addition, note 29 to the financial statements include the company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.

The Company has considerable financial resources across different geographic areas and industries. As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook.

Having made appropriate enquiries, the Directors have reasonable expectation that the Group and the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the Group and the Company financial statements.

Auditor

A resolution for the re-appointment of KPMG Channel Islands Limited will be proposed at the forthcoming annual general meeting.

By order of the Board,

John Whittle	Ben Morgan
Director	Director

23 June 2011

Corporate Governance

Combined Code

The Directors' report on corporate governance is detailed on pages 15 and 16 of these financial statements. As a Company incorporated in Guernsey, the Company was not for the year under review required to comply with the Combined Code on Corporate Governance issued by the Financial Reporting Council (the "Code"). However, it is the Company's policy to comply with best practice on good corporate governance that is applicable to closed-ended investment companies which are traded on AIM. The Board believes that the Company complied throughout the year under review with the provisions set out in the Code, subject to the explanations of non-compliance given in the Corporate Governance Report on pages 15 and 16. As the Code has been replaced with the UK Corporate Governance Code (the "New Code") for accounting periods beginning on or after 29 June 2010, the Company will as far as is in the Directors' opinion appropriate comply with the provisions of the New Code for the financial year ended 31 March 2012.

The Board and Board Committees

All the Directors of the Company are non-executive Directors. The Board does not feel it is appropriate to appoint a chief executive or senior independent Director as day-to-day management of the Company's assets is delegated to the Manager.

The Chairman is Dan Koch. The Directors consider that the Chairman is independent for the purposes of the New Code. The Board considers that, with the exception of James Cook, the Directors are independent of the Manager. Mr James Cook resigned as a director on 17 June 2011.

The full Board meets at least four times a year to consider, as appropriate, such matters as overall strategy, investment performance, share price performance, the shareholder profile of the Company, communications with shareholders, transactional and other general matters affecting the Company. The Board considers that it meets sufficiently regularly to discharge its duties effectively.

During the year the Audit Committee comprised Ben Morgan, Grant Cameron and John Whittle. The Committee is responsible for ensuring that the financial performance of the Company is properly reported on and monitored. The Audit Committee reviews the annual and interim accounts, results, announcements, internal control systems and procedures and accounting policies of the Company. It meets a minimum of twice a year but where appropriate the meetings shall coincide with key dates in the Company's financial reporting cycle. John Whittle is the Chairman of the Audit Committee. Alexandr Dumnov was appointed to the Audit Committee on 17 June 2010.

During the year the Valuation Committee comprised Ben Morgan, John Whittle, Grant Cameron and Dan Koch. It is responsible for valuing proposed investments and revaluing investments on an ongoing basis. It meets at least twice a year. John Whittle is the Chairman of the Valuation Committee. Alexandr Dumnov was appointed to the Valuation Committee on 17 June 2010.

The Remuneration Committee comprises Ben Morgan, John Whittle and Dan Koch. It is responsible for reviewing the performance of Directors, the scale and structure of remuneration and Directors' letters of appointment. It meets a minimum of twice a year. Ben Morgan is the Chairman of the Remuneration Committee.

The number of meetings of the full Board and those committees attended by each Director from 1 April 2010 up to the date of this report is set out below.

	Full Board		Audit Committee		Valuation Committee		Remuneration Committee
	Held	Attended	Held	Attended	Held	Attended	Held	Attended
Dan Koch	12	9	N/A	N/A	3	2	3	3
John McRoberts	8	4	N/A	N/A	N/A	N/A	N/A	N/A
James Cook	12	9	N/A	N/A	N/A	N/A	N/A	N/A
Ben Morgan	12	9	2	1	3	2	3	2
Grant Cameron	12	8	2	1	3	2	N/A	N/A
John Whittle	12	11	2	2	3	3	3	3
Alexandr Dumnov	9	8	N/A	N/A	2	1	N/A	N/A

The Board receives information that it considers to be appropriate to enable it to discharge its duties. Directors usually receive board papers several days in advance of board meetings and are able to consider in detail any issues to be discussed at the relevant meeting.

All the Directors are entitled to have access to independent professional advice at the Company's expense where they deem it necessary to discharge their responsibilities as Directors.

The Board has delegated day-to-day management of the Company's assets to the Manager. All decisions relating to the Company's investment policy, investment objectives, investment decisions, dividend policy, gearing, corporate governance procedures and strategy in general are, however, reserved for the Board. The Board evaluates the Manager's performance on an annual basis and monitors the Manager to ensure that the Company's assets are being managed in accordance with the guidelines set out by the Board.

Performance of Board and proposal for re-election

The performance of each Director will be appraised by the Remuneration Committee prior to the convening of the Annual General Meeting for each year. The performance of each Board committee will be appraised by the Board as a whole. In accordance with the UK Corporate Governance Code and the Company's articles of association (the "Articles"), one third, or the number nearest to but not fewer than one third, of the Directors will retire and stand for re-election at the annual general meeting each year, provided that each Director shall retire and stand for re-election at intervals of no more than three years. Accordingly, Mr Cameron and Advocate Morgan will retire and, being eligible, offer themselves for re-election at the forthcoming annual general meeting.

On 22 June 2011 Mr Miller and Mr Chalk, biographies of whom can be found on page 11, were appointed non-executive directors of the Company. These appointments were made after extensive research and consideration of suitable candidates. As they were co-opted by the Board of Directors and in accordance with the Articles, Mr Miller and Mr Chalk will retire at the forthcoming annual general meeting and, being eligible, offer themselves for re-election.

Each Director is appointed subject to the provisions of the articles of incorporation in relation to retirement as described above.

The Directors believe that the Board has a balance of skills and experience which enables it to provide effective strategic leadership and proper governance of the Company. The Board believes that each Director's performance continues to be effective and to demonstrate commitment to the role and therefore supports the re-election of the Chairman and each of the other Directors per the articles of association of the Company. Information on the Directors, including their relevant experience, is set out on pages 10 to 11.

Audit and internal controls

The Board reviewed the effectiveness of the Company's system of internal controls, including financial, operational and compliance controls and risk management systems and has put in place procedures for the review of such controls on an annual basis. Risk is managed by the Directors rather than eliminated and can only provide reasonable assurance against material misstatement or loss.

The Audit Committee meets at least twice a year and considers reports from the independent auditors, the Manager and the administrator. The main responsibilities of the Audit Committee include monitoring the integrity of the Company's financial statements and appropriateness of its accounting policies, reviewing the effectiveness of the internal control systems and making recommendations to the Board regarding the appointment and independence of the external auditor and the objectivity and effectiveness of the audit process, with particular regard to the level of non-audit fees, if any. Shareholders have the opportunity at each annual general meeting to vote on the election of the independent auditors for the forthcoming year.

In view of the small number of transactions to date the Company has not yet considered it necessary to establish an internal audit function. The Board considers that the systems and procedures put in place by the Manager and the administrator have been adequate to safeguard shareholders' interests. The Board annually reviews an internal controls and risks monitoring report both for the Company and its subsidiaries. The Board will continue to keep this matter under review.

Relations with shareholders

The Board welcomes correspondence from shareholders, addressed to the Company's registered office. All shareholders have the opportunity to put questions to the Board at the Annual General Meeting.

The Board believes that sustainable financial performance and delivering on the objectives of the Company are indispensable measures in order to build trust with the Company's shareholders. In order to promote a clear understanding of the Company, its objectives and financial results, the Board aims to ensure that information relating to the Company is disclosed in a timely manner and in a format suitable to the shareholders of the Company.

The Board has also encouraged the Manager to identify a sample of investors for periodic meetings to encourage communication and to ensure the concerns of shareholders are addressed.

The Articles of Incorporation state that a Continuation Vote via an Ordinary resolution will be held proposing the extension of the life of the Company at the 2015 Annual General Meeting and every 5 years thereafter. The last such Continuation Vote was passed at the 2010 Annual General Meeting.

Independent auditor's report to the members of Aurora Russia Limited

We have audited the Group and Company financial statements (the "financial statements") of Aurora Russia Limited (the "Company") for the year ended 31 March 2011 which comprise the Consolidated and Company Statements of Comprehensive Income, the Consolidated and Company Statements of Financial Position, the Consolidated and Company Statements of Changes in Equity and the Consolidated and Company Statements of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').

This report is made solely to the Company's members, as a body, in accordance with section 262 of the Companies (Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the Directors and Auditors

As explained more fully in the Statement of Directors' Responsibilities set out on page 14, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group's and Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Board of Directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion

In our opinion the financial statements:

• give a true and fair view of the state of the Group's and Company's affairs as at 31 March 2011 and of Group's and Company's loss for the year then ended;

• are in conformity with International Financial Reporting Standards as issued by the IASB; and

• comply with the Companies (Guernsey) Law, 2008.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies (Guernsey) Law, 2008 requires us to report to you if, in our opinion:

• the Company has not kept proper accounting records; or

• the financial statements are not in agreement with the accounting records; or

• we have not received all the information and explanations, which to the best of our knowledge and belief are necessary for the purpose of our audit."

KPMG Channel Islands Limited

Chartered Accountants

PO Box 20

20 New Street

St Peter Port

Guernsey

GY1 4AN

23 June 2011

Consolidated Statement of Comprehensive Income

For the year ended 31 March 2011

		Year	Year
		ended	ended
		31 March 2011	31 March 2010
	Notes	£'000	£'000

Revenue:		16,952	5,193
- Fees		684	323
- Storage		6,939	1,575
- Warehousing, transport, data processing and other		7,979	1,420
- Interest on long term mortgages and other loans		943	1,062
- Loan interest income		-	321
- Interest income		220	245
- Dividend income		187	247
Administration and operating expenses	4	(21,656)	(10,066)
Fair value movements on revaluation of investments	13	1,273	5,629
Exchange losses		(548)	(8)


Operating (loss)/income		(3,979)	748

Interest expense		(585)	(95)

(Loss)/profit before income tax		(4,564)	653

Income tax (expense)/ credit	5	(119)	3

(Loss)/profit for the year		(4,683)	656

Other comprehensive income

Foreign currency translation differences for foreign operations		300	337

Total comprehensive (loss)/income for the year		(4,383)	993


(Loss)/profit attributable to:
Owners of the Company	23	(4,676)	665
Non-controlling interest		(7)	(9)
(Loss)/profit for the year		(4,683)	656

Total comprehensive (loss)/income attributable to:
Owners of the Company		(4,382)	1,012
Non-controlling interest		(1)	(19)
Total comprehensive (loss)/income for the year		(4,383)	993


Basic and diluted (loss)/earnings per share	6	(4.16p)	0.80p


All items in the above statement derive from continuing operations.


The accompanying notes on pages 26 to 57 form an integral part of these financial statements.

Company Statement of Comprehensive Income

For the year ended 31 March 2011

		Year	Year
		ended	ended
		31 March 2011	31 March 2010
	Notes	£'000	£'000

Revenue		210	659
- Loan interest income		-	399
- Interest income		23	13
- Dividend income		187	247
Administration and operating expenses	4	(3,984)	(3,341)
Fair value movements on revaluation of investments	13	(1,700)	7,656
Exchange losses		(4)	(146)


Operating (loss)/income before tax		(5,478)	4,828

Income tax (expense)/ credit	5	-	-

Profit and total comprehensive (loss)/profit for the year	23	(5,478)	4,828


Basic and diluted (loss)/profit per share	6	(4.87p)	5.78p


All items in the above statement derive from continuing operations.

The accompanying notes on pages 26 to 57 form an integral part of these financial statements.

Consolidated Statement of Financial Position

As at 31 March 2011

		31 March2011	31 March2010
	Notes	£'000	£'000
Non-current assets
Goodwill	7	14,164	14,164
Intangible assets	8	10,793	11,078
Property, plant and equipment	10	8,782	6,444
Investments - at fair value through profit and loss	13	45,805	43,085
Loans and advances to customers	14	7,787	8,618
Deferred tax asset	5	236	190

		87,567	83,579
Current assets
Trade and other receivables	15	4,404	4,450
Corporate Loans		434	-
Cash and cash equivalents	16	6,739	13,242
Assets classified as held for sale	9	657	845

		12,234	18,537

Total assets		99,801	102,116

Non-current liabilities
Finance leases	17	1,777	1,567
Deferred tax liability	5	1,792	1,699
		3,569	3,266

Current liabilities
Finance leases	17	1,016	719
Tax payable		74	-
Trade and other payables	19	5,297	4,602

		6,387	5,321

Total liabilities		9,956	8,587

Equity
Share capital	20	1,125	1,125
Special reserve	21	84,073	84,073
Share options reserve	22	128	2,437
Retained earnings	23	4,015	5,857
Non-controlling interest		673	500
Translation reserve	24	(169)	(463)

Total equity		89,845	93,529


Total equity and liabilities		99,801	102,116

Net asset value per share - Basic and Diluted	25	79.9p	83.1p

The accounts on pages 18 to 57 were approved by the Board of Directors on 23 June 2011 and signed on its behalf by:



Director	Director

The accompanying notes on pages 26 to 57 form an integral part of these financial statements.

Company Statement of Financial Position

As at 31 March 2011

					31 March 2011		31 March 2010
		Notes			£'000		£'000
Non-current assets
Investment in subsidiaries - at fair value through profit and loss		11			47,300		50,300
Investments - at fair value through profit and loss		13			43,200		41,900

					90,500		92,200
Current assets
Trade and other receivables		15			30		1,171
Cash and cash equivalents		16			3,794		5,704

					3,824		6,875

Total assets					94,324		99,075

Current liabilities
Trade and other payables		19			236		89

Total liabilities					236		89


Equity
Share capital		20			1,125		1,125
Special reserve		21			84,073		84,073
Share options reserve		22			-		2,420
Retained earnings		23			8,890		11,368

Total equity					94,088		98,986


Total equity and liabilities					94,324		99,075

Net asset value per share - Basic and Diluted		25			83.6p		88.0p




Director		Director


Consolidated Statement of Changes in Equity For the year ended for 31 March 2011
		Share	Special	Share Options		Retained		Translation		Non-controlling
		Capital	Reserve	Reserve		Earnings		Reserve	Total	Interest	Total
	Notes	£'000	£'000	£'000		£'000		£'000	£'000	£'000	£'000

For the year 1 April 2009 to 31 March 2010

Balance as at 1 April 2009		750	70,750	1,820		5,320		(810)	77,830	-	77,830

Total comprehensive income for the year
Profit for the year			-	-		665		-	665	(9)	656

Other comprehensive income for the year
Foreign currency translation gain			-	-		-		347	347	(10)	337

Transactions with owners, recorded directly in equity

Contributions and distributions to owners

Issue of ordinary shares		375	13,825	-		-		-	14,200	-	14,200

Share issue costs on Placement Shares issued			(502)	-		-		-	(502)	-	(502)

Acquisition of subsidiary			-	-		-		-	-	390	390

Recognition of share-based payments	22		-	617		-		-	617	1	618

Changes in ownership interests in subsidiaries
that do not result in a loss of control
Acquisition of non-controlling interests in subsidiary	11,23		-	-		(128)		-	(128)	128	-

At 31 March 2010		1,125	84,073	2,437		5,857		(463)	93,029	500	93,529

For the year 1 April 2010 to 31 March 2011

Balance as at 1 April 2010		1,125	84,073	2,437		5,857		(463)	93,029	500	93,529

Total comprehensive loss for the year
Loss for the year		-	-	-		(4,676)		-	(4,676)	(7)	(4,683)

Other comprehensive income for the year
Foreign currency translation gain		-	-	-		-		294	294	6	300

Transactions with owners, recorded directly in equity



Recognition of share-based payments	22	-			691	-		-	691	8	699

Cancellation of Share options in Company	26	-			3,000	3,000		-	-	-	-

Changes in ownership interests in subsidiaries
that do not result in a loss of control
Dilution of controlling interest in subsidiary	11,23				-	(166)		-	(166)	166	-
		-
At 31 March 2011		1,125 84,073			128	4,015		(169)	89,172	673	89,845

Company Statement of Changes in Equity

For the year ended 31 March 2011

					Share
			Share	Special	Options	Retained
		Notes	Capital	Reserve	Reserve	Earnings	Total
			£'000	£'000	£'000	£'000	£'000

For the year 1 April 2009 to 31 March 2010

Balance as at 1 April 2009			750	70,750	1,820	6,540	79,860

Total comprehensive profit for the year
Profit for the year			-	-	-	4,828	4,828


Transactions with owners, recorded directly in equity

Contributions and distributions to owners

Issue of ordinary shares			375	13,825	-	-	14,200

Share issue costs on Placement shares issued			-	(502)	-	-	(502)
Recognition of share-based payments		22	-	-	600	-	600

At 31 March 2010			1,125	84,073	2,420	11,368	98,986

For the year 1 April 2010 to 31 March 2011

Balance as at 1 April 2010			1,125	84,073	2,420	11,368	98,986

Total comprehensive loss for the year
Loss for the year			-	-	-	(5,478)	(5,478)

Transactions with owners, recorded directly in equity


Recognition of share-based payments		22	-	-	580	-	580

Cancellation of share options			-	-	(3,000)	3,000	-

At 31 March 2011			1,125	84,073	-	8,890	94,088




	The accompanying notes on pages 26 to 57 form an integral part of these financial statements.

Consolidated Statement of Cash Flows

For the year ended 31 March 2011

		Year	Year
		ended	ended
	Notes	31 March 2011	31 March 2010
Cash flows from operating activities		£'000	£'000

(Loss)/profit before tax		(4,564)	653
Loan interest		-	(321)
Bank interest		(220)	(245)
Dividend income		(187)	(247)
		(4,971)	(160)
Adjustments for movements in working capital:
Decrease/(increase) in operating trade and other receivables		180	(554)
Increase in operating trade and other payables		69	1,422
Increase in loans		661	-
Decrease in interbank loans		(439)	-

Adjust for:
Revaluation of investments	13	(1,273)	(5,628)
Recognised share based payments	22	691	617
Depreciation and amortisation		1,701	635
Loss on property, plant and equipment written off		45	61
Provision for loan losses		(257)	(370)
Allowance for doubtful debts		25	92
Other interest income		(929)	(1,061)
Increase in non-current assets held for sale		246	-
Interest paid		-	(83)
Taxation paid		(156)	(62)
Dividend income		187	247
Interest received		1,148	1,404
Exchange gains		548	8
Loss on forex contract closed out		-	(46)
Loans advanced to customers		-	527

Net cash outflow from operating activities		(2,524)	(2,951)

Cash flows from investing activities
Acquisition of subsidiary net of cash acquired	12	-	(567)
Acquisition of investments (bonds)		(1,475)	(1,098)
Acquisition of intangible assets		(81)	-
Acquisition of property, plant and equipment		(2,097)	(549)
Loans advanced to associated company		-	(307)
Deposits		123	200

Net cash outflow from investing activities		(3,530)	(2,321)

Cash flows from financing activities
Proceeds from issue of ordinary share capital		-	7,000
Share issue costs	21	-	(502)
Net proceeds from borrowing of short term loans		433	-
Interest income - long term loans		(19)	-
Financial lease payments - principal		(1,003)	(284)

Net cash (outflow)/inflow from financing activities		(589)	6,214

Net (decrease)/increase in cash and cash equivalents		(6,643)	942

Opening cash and cash equivalents		13,242	12,022
Effect of exchange rate changes		140	278

Closing cash and cash equivalents	16	6,739	13,242



The accompanying notes on pages 26 to 57 form an integral part of these financial statements.

Company Statement of Cash Flows

For the year ended 31 March 2011

		Year	Year
		ended	ended
	Note	31 March 2011	31 March 2010
		£'000	£'000
Cash flows from operating activities
(Loss)/profit before tax		(5,478)	4,828
Loan interest		-	(399)
Bank interest		(23)	(13)
Dividend income		(187)	(247)
		(5,688)	4,169
Adjustments for movements in working capital:
Decrease/(increase) in operating trade and other receivables		1,143	(75)
Increase/(decrease) in operating trade and other payables		147	(39)

Adjust for:
Revaluation of investments		1,700	(7,656)
Recognised share based payments	22	580	600
Exchange losses		4	146
Loss on forex contract closed out		-	(46)
Dividend income		187	247
Bank interest received		21	29

Net cash outflow from operating activities		(1,906)	(2,625)

Cash flows from investing activities
Acquisition of subsidiary		-	(1,985)
Loans advanced to associated company		-	(307)

Net cash outflow from investing activities		-	(2,292)

Cash flows from financing activities
Proceeds from issue of ordinary share capital		-	7,000
Issue costs	21	-	(502)

Net cash inflow from financing activities		-	6,498

Net (decrease)/increase in cash and cash equivalents		(1,906)	1,581

Opening cash and cash equivalents		5,704	4,123

Effect of foreign exchange movements		(4)	-

Closing cash and cash equivalents	16	3,794	5,704

Notes to the Financial statements

For the year ended 31 March 2011

1. Reporting entity

Aurora Russia Limited (the 'Company') is a closed-ended investment fund that was incorporated in Guernsey on 22 February 2006, and was admitted to the Alternative Investment Market of the London Stock Exchange ('AIM') on 20 March 2006. The Company was established to acquire interests in small and mid-sized private companies in Russia, focusing on the financial, business and consumer services sectors.

The consolidated financial statements of the Company as at and for the year ended 31 March 2011 comprise the Company and its subsidiaries (together referred to as the "Group" and individually as "Group entities").

2. Basis of preparation

2.1 Statement of compliance

The financial statements give a true and fair view and are prepared in accordance with International Financial Reporting Standards which comprise standards and interpretations approved by the International Accounting Standards Board and International Accounting Standards and Standing Interpretations Committee interpretations approved by the International Accounting Standards Committee that remain in effect and applicable legal and regulatory requirements of Guernsey Law and per ('AIM'). These financial statements comply with The Companies (Guernsey) Law, 2008, as amended.

2.2 Basis of Measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following:

· derivative financial instruments are measured at fair value

· financial instruments at fair value through profit or loss are measured at fair value

The significant accounting policies adopted are set out in note 3.

2.3 New standards and interpretations adopted during the year

The following standards, amendments and interpretations are effective for periods beginning 1 January 2010 but had no impact on the financial position or performance of the Group:

IFRS 2: Share-based payments (Amendment)

IFRS 5: Non-Current Assets Held for Sale and Discontinued Operations (Amendment)

IAS1: Presentation of Financial Statements (Revised)

IAS7: Statement of Cash Flows (Revised)

IAS17: Leases (Amendment)

IAS 32 Financial Instruments: Presentation (Amendment)

IAS36: Impairment of Assets (Amendment)

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

2.4 New standards and interpretations not yet adopted

Other than those explained in note 2.3, a number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31 March 2011, and have not been applied in preparing these consolidated financial statements. None of these will have a significant effect on the consolidated financial statements of the Group:

· IFRS 9 Financial Instruments- for accounting periods commencing on or after 1 January 2013

IFRS 9 deals with classification and measurement of financial assets and its requirements represent a significant change from the existing requirements in IAS 39 in respect of financial assets: amortised cost and fair value. Financial assets are measured at amortised cost when the business model is to hold assets in order to collect contractual cash flows. All other financial assets are measured at fair value with changes recognised in profit or loss. For an investment in an equity instrument that is not held for trading, an entity may on initial recognition elect to present all fair value changes from the investment in other comprehensive income. IFRS 9 will be adopted for the first time for the year ending 31 March 2014 and will be applied retrospectively, subject to certain transitional provisions. The company is currently in the process of evaluating the potential effect of this standard. The standard is not expected to have a significant impact on the financial statements since all of the company's financial assets are designated at fair value through profit and loss.

· IAS 24 Related Party Transactions (Revised) - for accounting periods commencing on or after 1 January 2011

The definition of related party has been clarified to simplify the identification of related party relationships, particularly in relation to significant influence and joint control. However, the company has taken advantage of the exemption available to it under IAS 28 and the standard is not expected to have a significant impact on the financial statements. This standard will be adopted retrospectively for the first time for the year ending 31 March 2012.

2.5 Critical accounting judgements and key sources of estimation uncertainty

The preparation of Financial Statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years.

The following areas are a key source of estimated uncertainty for the Group and are included within the relevant accounting policy note:

· Investments (see note 3.12.2)

· Loans and advances to customers (see note 3.12.4)

· Goodwill (see note 3.2.2)

· Depreciation of property, plant and equipment (see note 3.15)

· Intangible assets (see note 3.16)

The preparation of the Group's financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and contingencies at the time of the Group's financial statements, and revenue and expenses during the reporting period. Actual results could differ from those estimated. Significant estimates in the Group's financial statements include the amounts recorded for the fair value of the investments. By their nature, these estimates and assumptions are subject to measurement uncertainty and the effect on the Group's financial statements of changes in estimates in future periods could be significant.

2.6 Functional and presentation currencies

The Directors have selected Sterling as the presentation currency of the Group which is also the functional currency of the Company as it is the currency its shares are issued in and the currency in which the Company has received all of its funding. All information presented in sterling has been rounded to the nearest thousand unless otherwise stated.

3. Significant Accounting Policies

The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by Group entities.

3.1 Accounting for business combinations

The Group has applied the acquisition method for the business combination disclosed in note 12.

Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable. The acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining the acquisition date and determining whether control is transferred from one party to another.

Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group to the previous owners of the acquiree, and equity interests issued by the Group. Consideration transferred also includes the fair value of any contingent consideration and share-based payment awards of the acquiree that are replaced mandatorily in the business combination (see below). If a business combination results in the termination of pre-existing relationships between the Group and the acquiree, then the lower of the termination amount, as contained in the agreement, and the value of the off-market element is deducted from the consideration transferred and recognised in other expenses.

When share-based payment awards exchanged (replacement awards) for awards held by the acquiree's employees (acquiree's awards) relate to past services, then a part of the market-based measure of the awards replaced is included in the consideration transferred. If they require future services, then the difference between the amount included in consideration transferred and the market-based measure of the replacement awards is treated as post-combination compensation cost.

A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present obligation and arises from a past event, and its fair value can be measured reliably.

The Group measures any non-controlling interest at its proportionate interest in the identifiable net assets of the acquiree.

Transaction costs that the Group incurs in connection with a business combination, such as finder's fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred.

3.2 Basis of consolidation

3.2.1 Subsidiaries

The consolidated financial statements incorporate the financial statements of the Company and any entities controlled by the Company (the 'Group') as at 31 March each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable are taken into account.

On acquisition the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to the profit or loss in the period of acquisition.

The results of subsidiaries acquired or disposed of during the period are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

3.2.2 Goodwill

The Group measures goodwill as the fair value of the consideration transferred including the recognised amount of any non-controlling interest in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in profit or loss and is not subsequently reversed.

3.2.3 Associates

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50 percent of the voting power of another entity.

The Group has taken advantage of the exemption available to it under IAS 28, 'Investments in associates' and is accounting for the investments in Unistream and Grindelia at fair value through profit or loss, which normally as a result of the size of the stake in these two companies would potentially qualify as associated companies and would be required to be equity accounted.

3.3 Accounting for acquisitions of non-controlling interests

The Group early adopted IFRS 3 Business Combinations (2008) and IAS 27 Consolidated and Separate Financial Statements (2008) for acquisitions of non-controlling interests occurring in the financial year starting 1 April 2009. The Group applied IAS 27 (2008) for the acquisition of non-controlling interests as explained in note 12.

The amendments to IAS 27 required changes in the parent's ownership interest in a subsidiary after control is obtained that do not result in a loss of control to be accounted for as transactions with equity holders in their capacity as equity holders. As a result no gain or loss on such changes was recognised in profit or loss. Also, no change in the carrying amounts of assets (including goodwill) or liabilities was recognised as a result of such transactions. This approach is consistent with treating non-controlling interest as a component of equity.

The carrying amounts of the controlling and non-controlling interest were adjusted to reflect the relative change in their interests in the subsidiary's net assets. Any differences between the amount by which the non-controlling interest was adjusted and the fair value of the consideration paid or received, if any, was recognised directly in equity and attributed to equity holders of the parent. The change in accounting policy was applied prospectively and had no material impact on earnings per share.

3.4 Determination and presentation of operating segments

From 1 April 2009 the Group determined and presented operating segments based on the information that internally is provided to the Board of Directors of the Company, who is the Group's chief operating decision maker. This change in accounting policy in the prior year was due to the adoption of IFRS 8 Operating Segments. Previously operating segments were determined and presented in accordance with IAS 14 Segment Reporting. The new accounting policy in respect of segment operating disclosures is presented as follows:

The prior year change in accounting policy only impacted presentation and disclosure aspects, there was no impact on earnings per share.

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. An operating segment's operating results are reviewed regularly by the Board of Directors of the Company to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

3.5 Presentation of financial statements

The Group applied revised IAS 1 Presentation of Financial Statements (2007), which became effective for years beginning on or after 1 January 2009 and was applied by the Group from 1 April 2009. As a result, the Group presents in the consolidated statement of changes in equity all owner changes in equity, whereas all non-owner changes in equity are presented in the consolidated statement of comprehensive income.

Since the change in accounting policy in the previous year only impacted presentation aspects, there was no impact on earnings per share.

3.6 Foreign currency transactions

Transactions in currencies other than sterling are translated at the foreign exchange rates ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into sterling at the exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the profit or loss. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated into sterling at foreign exchange rates ruling at the dates the fair value was determined.

On consolidation, the assets and liabilities of the Group's overseas operations are translated at exchange rates prevailing on the reporting date. Income and expenses are translated at the average exchange rates for the period unless exchange rates fluctuate significantly. Exchange differences arising, if any, are recognised in other comprehensive income and transferred to the Group's translation reserve. Such translation differences are recognised as income or expenses in the period in which the operation is disposed of.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the rate prevailing on the reporting date.

3.7 Revenue

Revenue from the sale of services is measured at the fair value of the consideration received or receivable, net of returns, allowances and trade discounts. Revenue from services rendered is recognised in the statement of changes of comprehensive income when it is probable that the economic benefits associated with the transaction will flow to the Group and the amount of revenue can be measured reliably. Revenue from services are recognised in the accounting period in which the services are rendered, by reference to stage of completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

Brokerage fees received from services provided to the banks are recognised in the month when the act of service is rendered with the bank and the loan agreement signed by the client.

Dividend income from investments is recognised when the Company's right to receive payment has been established, which is the last date of registration.

3.8 Expenses

All expenses are accounted for on an accruals basis through profit or loss.

3.9 Set up expenses

The preliminary expenses directly attributable to the issuance and listing of equity instruments of the Company that would otherwise have been avoided are deducted from the share premium account.

3.10 Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker. The Chief Operating Decision Maker, who is responsible for allocating resources, assessing performance of the operating segments and making strategic decisions, has been identified as the Board of Directors of the Company.

3.11 Taxation

The Company is exempt from Guernsey taxation on income derived outside Guernsey and bank interest earned in Guernsey under the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989, for which it pays an annual fee of £600. With effect from 1 January 2008, Guernsey abolished the exempt Company regime. As a publicly available fund, it is eligible to apply for exempt status however, and liable to the annual exempt fee if it chooses to do so.

The Group is liable to pay tax at a rate of 20% (2010: 20%) arising on its activities in Russia.

The Group is liable to pay tax at a rate of 10% (2010: 10%) arising on its activities in Cyprus.

The Group is liable to pay tax at a rate of 19% (2010: 19%) arising on its activities in Poland.

The Group is liable to pay tax at a rate of 25%, 20%, 20% and 10% arising on its activities in Ukraine, Kazakhstan, Armenia and Bulgaria respectively.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in profit or loss because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred tax asset is recognised to the extent that is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

3.12 Financial Instruments

Financial assets and financial liabilities are recognised on the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument, including unconditional commitments to make investments. The Group offsets financial assets and liabilities if the Group has a legally enforceable right to set off the recognised amounts and interests and intends to settle on a net basis.

3.12.1 Forward exchange contracts

The Group's activities expose it to financial risks of changes in foreign currency exchange rates. The Group uses forward foreign exchange contracts to hedge net monetary assets denominated in foreign currencies, where practicable, other than the Russian Rouble, and not for speculative purposes. At the reporting date outstanding forward exchange contracts are measured at their marked to market price, and are included in the financial statements as either a derivative asset or liability. Gains or losses arising on forward foreign exchange contracts are taken to profit or loss. Hedge accounting is not applied.

3.12.2 Investments

Unquoted investments, including investments in subsidiaries, as well as loans receivable from associated companies are designated as fair value through profit and loss. Investments are initially recognised at cost on a trade date basis. The investments are subsequently re-measured at fair value, which is determined by the Directors on the recommendation of the Valuation Committee. Unrealised gains and losses arising from the revaluation of investments are taken directly to profit or loss. Investments deemed to be denominated in a foreign currency are revalued in Pounds Sterling terms even if there is no revaluation of the investment in its currency of denomination. Acquisition of investments is recorded on the trade date or when substantially all the risks and rewards of ownership transfer to the Group.

Investments are held in Russian Roubles, which the Directors believe best reflect the underlying nature of the currency exposure of the investee companies. The investments are translated into Sterling at period end, which is the functional currency of the Group and the presentation currency of the consolidated financial statements. Unrealised gains and losses arising from the revaluation of investments are taken directly to profit or loss.

The fair value of the investments is arrived at on the basis of the recommendation of the Company's Valuation Committee, based on independent professional advice. Fair value is determined as follows:

Unquoted securities are valued based on the realisation value which is estimated by the Valuation Committee with prudence and good faith. The Valuation Committee will take into account the guidelines and principles for valuation of Portfolio Companies set out by the International Private Equity and Venture Capital Association (IPEVCA), with particular consideration of the following factors:

· Fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction.

· The valuation methodology applied uses reasonable assumptions and estimations and takes account of the nature, facts and circumstances of the investment and its materiality in the context of the total portfolio.

· An appropriate methodology incorporates available information about all factors that are likely material to affect the fair value of the investment. The valuation methodologies are appliedconsistently from period to period, except where a change would result in a better estimate of fair value. Any changes in valuation methodologies will be clearly disclosed in the financial statements.

The most widely used methodologies are listed below (discussed further in note 11). In assessing which methodology is appropriate, the Valuation Committee is predisposed towards those methodologies that draw upon market-based measures of risk and return.

· Market Approach

· Income Approach

· Net Assets Approach

Investments made by the Group are generally considered to be long term investments and are not intended to be disposed of on a short term basis. Accordingly valuations do not necessarily represent the amounts which may eventually be realised from sales or other disposals of investments. Values of unlisted investments may differ significantly from the values that would have been used had a ready market for these assets existed. The fair value of financial assets traded in active markets are based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the group is the current bid price.

3.12.3 Impairment of financial assets

At each reporting date the Group assesses whether there is objective evidence that financial assets not carried at fair value through profit or loss are impaired. Financial assets are impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the asset, and that the loss event has an impact on the future cash flows of the asset that can be estimated reliably.

Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a borrower, restructuring of a loan or advance by the Group on terms that the Group would not otherwise consider, indications that a borrower or issuer will enter bankruptcy, the disappearance of an active market for a security, or other observable data relating to a group of assets such as adverse changes in the payment status of borrowers or issuers in the group, or economic conditions that correlate with defaults in the group. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

The Group considers evidence of impairment for loans and advances at both a specific asset and collective level. All individually significant loans and advances and held-to-maturity investment securities are assessed for specific impairment. All individually significant loans and advances and held-to-maturity investment securities found not to be specifically impaired are then collectively assessed for any impairment by grouping together loans and advances and held-to-maturity investment securities with similar risk characteristics.

In assessing collective impairment the Group uses statistical modelling of historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for the management's judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical modelling. Default rates, loss rates and the expected timing of future recoveries are regularly benchmarked against actual outcomes to ensure that they remain appropriate.

Impairment losses on assets carried at amortised cost are measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the asset's original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against loans and advances. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

3.12.4 Loans and advances to customers

Loans granted by the Group are initially recognised at fair value plus related transaction costs on the date they originated. Where the fair value of consideration given does not equal the fair value of the loan, for example where the loan is issued at lower than market rates, the difference between the fair value of consideration given and the fair value of the loan is recognised as a loss on initial recognition of the loan and included in the consolidated statement of comprehensive income according to the nature of these losses. Subsequently, loans are carried at amortised cost. Loans to customers are carried net of any impairment losses.

All loans are secured against the property of the borrower, with adequate provisions calculated and managed by the Risk Management Department.

The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or when it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

The Group enters into transactions whereby it transfers assets recognised on its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets or a portion of them. If all or substantially all risks and rewards are retained, then the transferred assets are not derecognised from the statement of financial position. Transfers of assets with retention of all or substantially all risks and rewards include, for example, securities lending and repurchase transactions.

In transactions in which the Group neither retains nor transfers substantially all the risks and rewards of ownership of a financial asset, it derecognises the asset if it does not retain control over the asset. The rights and obligations retained in the transfer are recognised separately as assets and liabilities as appropriate. In transfers in which control over the asset is retained, the Group continues to recognise the asset to the extent of its continuing involvement, determined by the extent to which it is exposed to changes in the value of the transferred asset.

3.12.5 Cash and cash equivalents

Cash held with banks and short term deposits that are held to maturity are carried at amortised cost. Cash and cash equivalents consist of cash on hand and short term deposits in banks with an original maturity of three months or less.

3.12.6 Trade receivables

Trade receivables do not carry any interest and are short-term in nature. Trade receivables are recognised and carried at the lower of their original invoiced value and recoverable amount. Where the time value of money is material, receivables are carried at amortised cost. Allowance is made when there is objective evidence that the Group will not be able to recover balances in full. Balances are written off when the probability of recovery is assessed as being remote. They are accordingly stated at amortised cost as reduced by appropriate allowances for estimated irrecoverable amounts.

3.12.7 Trade payables

Trade payables are not interest bearing and are recognised and carried at amortised cost less repayments.

3.12.8 Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangement entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Financial liabilities and equity instruments are recorded at the proceeds received, net of issue costs.

The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group has the following non-derivative financial liabilities: loans and borrowings, and trade and other payables.

Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.

3.13 Earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group and Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees.

3.14 Lease payments

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

3.15 Property, plant and equipment

Property, plant and equipment are carried at historical cost less accumulated depreciation and any recognised impairment loss, if any. Depreciation is charged on the carrying value of property, plant and equipment and is designed to write off assets on a straight line basis over their useful economic lives. The estimated useful lives for the current and comparative periods are as follows:

Vehicles:

Trucks (included under Vehicles) 7 years

Cars (included under Vehicles) 5 years

Fixtures & fittings 3-4 years

Warehouse equipment & racks 5 to 20 years

Furniture & equipment:

Office equipment 5 to 10 years

Furniture 5 years

Equipment 3 years

Hardware 2 to 5 years

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located and capitalised borrowing costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The carrying amounts of property, plant and equipment and intangible assets are reviewed at each reporting date to assess whether they are recorded in excess of their recoverable amounts, and where carrying values exceed this estimated recoverable amount, assets are written down to their recoverable amount.

Gains and losses on disposal of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net within "operating income" in the statement of comprehensive income.

Impairment is recognised in the respective period and is included in operating expenses.

After the recognition of an impairment loss the depreciation charge for property, plant and equipment is adjusted in future periods to allocate the assets' revised carrying value, less its residual value (if any), on a systematic basis over its remaining useful life.

Depreciation methods, useful lives and residual values are reviewed each financial year -end and adjusted if appropriate.

3.16 Intangible assets

Goodwill

Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. For measurement of goodwill at initial recognition, see note 3.2.2.

Acquisitions of non-controlling interests

Acquisitions of non-controlling interests are accounted for as transactions with equity holders in their capacity as equity holders and therefore no goodwill is recognised as a result of such transactions.

Subsequent measurement

Goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity accounted investee.

Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

Amortisation

Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less its residual value.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

The estimated useful lives for the current and comparative periods are as follows:

Software10 years

Customer base - large customers15 years

Customer base - small customers10 years

Trademark and banking licenceIndefinite

Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

An intangible asset is regarded as having an indefinite useful life when, based of all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the company. Amortisation is not provided for these intangible assets. Intangible assets with indefinite useful lives are tested for impairment at each reporting date by determining the recoverable amount of the assets either individually or at the cash-generating unit level. Where this assessment is performed at the cash-generating unit level, the impairment is determined by assessing the recoverable amount of the cash-generating unit to which the intangible asset relates. In such instances, the recoverable amount is determined as the value in use of the cash-generating unit by estimating the expected future cash flows in the unit and choosing a suitable discount rate in order to calculate the present value of those cash flows.

Where the recoverable amount is less than the carrying amount of the asset or the cash-generating unit, an impairment loss is recognised in profit or loss.

The useful life of an intangible asset with an indefinite life is reviewed at each reporting date to determine whether the indefinite life assessment continues to be supportable. If not, the change in the useful life assessment is made prospectively.

3.17 Assets held for Sale

Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. Immediately before classification as held for sale, the assets, or components of a disposal group, are remeasured in accordance with the Group's accounting policies.

Thereafter generally the assets, or disposal group, are measured at the lower of their carrying amount and fair value less cost to sell. A non-current asset is not depreciated (or amortised) while it is classified as held for sale, or while it is part of a disposal group classified as held for sale. Any impairment loss on a disposal group first is allocated to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, and deferred tax assets, which continue to be measured in accordance with the Group's accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.

3.18 Impairment of tangible and intangible assets excluding goodwill

At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Recoverable amount is the higher of fair value less costs to sell and value in use. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Impairment losses and reversals of impairment losses are recognised immediately in profit or loss.

3.19 Provisions

A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation, and the obligation can be reliably measured. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

3.20 Employee benefits

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan that are due more than 12 months after the end of the period in which the employees render the service are discounted to their present value.

Share based payments

Share options granted to the manager in respect of ongoing services are conditional upon the achievement of certain performance conditions.

The share options have been valued by an independent valuer in the financial statements as at the date the options were granted. The grant date fair value of options granted to the manager is recognised as an expense, with a corresponding increase in equity, over the period that the manager becomes unconditionally entitled to the options. The resulting value is amortised in the profit or loss over the expected life of the options. The options may have a dilutive effect upon the Earnings per Share and the Net Asset Value of the Group.

The cancellation of share options was accounted for as an acceleration of vesting, and therefore recognised the amount that would otherwise have been recognised for services rendered over the remainder of the vesting period immediately.

3.21 Share capital and equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Ordinary shares are classified as equity.

If the company reacquires its own equity instruments, the consideration paid, including any directly attributable incremental costs (net of income taxes) on those instruments are deducted from equity until the shares are cancelled or reissued. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the company's own equity instruments. Consideration paid or received shall be recognised directly in equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

3.22 Finance costs

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method. Foreign currency gains and losses are reported on a net basis.

In respect of borrowing costs relating to qualifying assets for which the commencement date for capitalisation is on or after 1 April 2009, the Group capitalises borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset.

3.23 Fair Value

The Directors consider the carrying value of all financial assets and liabilities to approximate their fair value except for "Loans and advances to customers" which are at a fixed rate. Where the difference is significant, note disclosure is provided.

4. Administration and operating expenses

The net profit/(loss) for the year/period has been arrived at after charging the following items of expenditure:





		Year ended 31 March 2011	Year ended 31 March 2010
		£'000	£'000
	Company
	Investment management fee	1,980	1,677
	Auditors' remuneration	401	37
	Directors' remuneration	180	174
	Share based payments	580	600
	Other operating and administrative expenses:
	- Administration fees	73	94
	- Marketing costs	92	98
	- Professional fees	280	292
	- Other	398	369

		3,984	3,341
	Kreditmart
	Auditors' remuneration	-	41
	Directors' remuneration	77	67
	Other operating and administrative expenses:
	- Marketing costs	323	345
	- Professional fees	13	10
	- Depreciation and amortisation	165	268
	- Personnel	1,278	1,428
	- Premises expenses	279	445
	- Credit losses and LLP	(304)	(424)
	- Other	201	368

		2,032	2,548
	Flexinvest Limited
	Auditors' remuneration	56	99
	Directors' remuneration	145	149
	Other operating and administrative expenses:
	- Marketing costs	30	5
	- Professional fees	24	12
	- Depreciation and amortisation	61	51
	- Personnel	635	431
	- Premises expenses	208	168
	- Credit losses and LLP	49	49
	- Other	187	196
		1,395	1,160

	OSG Records Management (Europe) Limited
	Auditors' remuneration	-	28
	Directors' remuneration	525	104
	Share based payments	118	18
	Other operating and administrative expenses:
	- Marketing expenses	216	33
	- Professional fees	213	84
	- Depreciation and amortisation	1,474	317
	- Personnel	5,497	1,242
	- Operating lease expenses	3,626	717
	- Allowance for doubtful debts	25	92
	- Other	2,551	382
		14,245	3,017

	Total for the Group	21,656	10,066


5	Tax

	Group
	5.1 Income tax expense	Year ended 31 March 2011	Year ended 31 March 2010
		£'000	£'000

	Kreditmart
	Current tax charge	-	-
	Deferred tax expense*	64	75

		64	75
	Flexinvest Limited
	Current tax charge	-	-
	Deferred tax (credit*)	(109)	(62)
		(109)	(62)

	OSG Records Management (Europe) Limited
	Current tax charge	74	29
	Deferred tax charge/ (credit*)	90	(45)
		164	(16)

	Deferred tax charge/ (credit):	45	(32)

	Net tax charge/ (credit) to profit or loss	119	(3)

			Year ended 31 March 2011	Year ended 31 March 2010
			£'000	£'000
* Deferred tax expense comprises of:
Origination and reversal of temporary differences			95	64
Temporary differences on fair value adjustment			(114)	(29)
Utilisation of tax losses			64	(1,145)
Change in unrecognised deductible temporary differences			-	1,078
			45	(32)

Group and Company

Tax rate reconciliation:
	Year ended 31 March 2011	Year ended 31 March 2011	Year ended 31 March 2010	Year ended 31 March 2010
	£'000	£'000	£'000	£'000
	Group	Company	Group	Company

Profit/(loss) for the year	(4,564)	(5,478)	653	4,828
Aurora Consolidated profit exempt from tax	2,478	-	(2,806)	-
	(2,086)	(5,478)	(2,153)	4,828

Tax at nominal rate (Cyprus)	(15)	-	92	-
Tax at nominal rate (Russia)	447	-	(615)	-
Tax effect of income and expenses not deductable in taxable profit	(256)	-	49	-
Effect of deferred tax asset not recognised	(295)	-	470	-
Foreign currency differences	-	-	1	-
	(119)	-	(3)	-


5.2 Group deferred tax assets and liabilities

Group

2011
Kreditmart and Flexinvest		Year ended 31 March 2011	Year ended 31 March 2011	Year ended 31 March 2011
Deferred tax asset/(liability) comprises:		£'000	£'000	£'000
		Assets	Liabilities	Net

Loans to customers		9	-	9
Other assets		45	-	45
Other liabilities		21	(14)	7
Tax loss carry-forwards		175	-	175

		250	(14)	236


OSG Records Management (Europe) Limited		Year ended 31 March 2011	Year ended 31 March 2011	Year ended 31 March 2011
Deferred tax asset/(liability) comprises:		£'000	£'000	£'000
		Assets	Liabilities	Net

Finance leases		-	(300)	(300)
Intangibles		-	(1,492)	(1,492)

		-	(1,792)	(1,792)

Group deferred tax asset				236

Group deferred tax liability				(1,792)

2010
Kreditmart and Flexinvest		Year ended 31 March 2010	Year ended 31 March 2010	Year ended 31 March 2010
Deferred tax asset/(liability) comprises:		£'000	£'000	£'000
		Assets	Liabilities	Net

Loans to customers		5	-	5
Other assets		48	-	48
Other liabilities		34	(20)	14
Tax loss carry-forwards		123	-	123

		210	(20)	190

OSG Records Management (Europe) Limited (for 3 month period)		Year ended 31 March 2010	Year ended 31 March 2010	Year ended 31 March 2010
Deferred tax asset/(liability) comprises:		£'000	£'000	£'000
		Assets	Liabilities	Net

Finance leases		-	(94)	(94)
Intangibles		-	(1,605)	(1,605)

		-	(1,699)	(1,699)

Group deferred tax asset				190

Group deferred tax liability				(1,699)


	5.3 Unrecognised deferred tax assets			Year ended 31 March 2011	Year ended 31 March 2010
				£'000	£'000

	Group

	Tax losses			(295)	470

				(295)	470


	A deferred tax asset has not been recognised in respect of the above tax losses because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom.


	Due to the presence in Russian commercial legislation, and tax legislation in particular, of provisions allowing more than one interpretation, and also due to the practice developed by the tax authorities of making arbitrary judgement of taxpayer activities, if a particular treatment based on Management's judgement of the Subsidiary's business activities was to be challenged by the tax authorities, Kreditmart Finance Limited ("Kreditmart"), Flexinvest Limited ("Flexinvest") and OSG Records Management (Europe) Limited ("OSGRME") may be assessed for additional taxes, penalties and interest. Such uncertainty may relate to valuation of financial instruments, loss and impairment provisions and market level for deals' pricing. The Entity believes that it has already made all tax payments, and therefore no allowance has been made in the financial statements. Tax years remain open to review by the tax authorities for three years.

	The Group's principal business activities are within the Russian Federation. Laws and regulations affecting the business environment in the Russian Federation are subject to rapid changes and Kreditmart and OSGRME's assets and operations could be at risk due to negative changes in the political and business environment.


6	Earnings/(loss) per share
		31 March 2011	31 March 2011	31 March 2010	31 March 2010
		£'000	£'000	£'000	£'000
		Group	Company	Group	Company
	The calculation of the basic and diluted earnings/(loss) per share is based on the following data:

	Profit for the purposes of basic and diluted loss per share being net profit/(loss) attributable to equity holders of the parent	(4,676)	(5,478)	665	4,828

	Weighted average number of ordinary shares for the purpose of basic and diluted profit/(loss) per share (in thousands):	112,500	112,500	83,491	83,491

	Effect of dilutive potential ordinary shares:
	Options	-	-	-	-

	Weighted average number of ordinary shares for the purpose of diluted profit/(loss) loss per share (in thousands):	112,500	112,500	83,491	83,491

	Earnings/(loss) per share - Basic and Diluted	(4.16)	(4.87)	0.80	5.78

	The potential shares as identified in note 26, are anti-dilutive and as such have not been included in the calculation of diluted earnings per share for the years ended 31 March 2011 and 31 March 2010.


7	Goodwill
				31 March 2011	31 March 2010
	Group			£'000	£'000

	Cost:

	At beginning of the year			14,164	-
	Recognised on acquisition of OSG Records Management (Europe) Limited			-	14,164


				14,164	14,164


	No impairment of goodwill on acquisition of OSGRME is necessary at 31 March 2011 based on the valuation of OSGRME. Refer to note 11 and 12 for further details in this regard.
	In accordance with the valuation at 31 March 2011 performed in respect of Kreditmart by an independant valuer (see note 11), the goodwill acquired on acquisition was impaired in full in the year following acquisition. This was as a result of significant decreases in the Russian mortgage market which has resulted in the reduction in value of loans.

8.	Intangible assets					31 March 2011	31 March 2010
						£'000	£'000
	Group

	Cost:
	Opening balance in respect of FIB (see note 12)					11,078	2,273

	Currency revaluation - FIB					284	203

	Recognised on acquisition of OSGRME (see note 12)					-	8,744

	Amortisation of intangibles in OSGRME					(569)	(142)

	Closing balance					10,793	11,078


	Reconciliation of intangibles

		Banking	Internally	OSGRME	Customer	Customer
	2011	licence	generated	Trademark	base - large	base - small	Total
			software

		£'000	£'000	£'000	£'000	£'000	£'000
	Group

	Cost:
	At 1 April 2010	2,476	146	598	7,258	600	11,078

	Exchange movements	284	-	-	-	-	284

	At 31 March 2011	2,760	146	598	7,258	600	11,362

	Amortisation:
	At 1 April 2010	-	-	-	-	-	-

	Charge for the period	-	(15)	-	(492)	(62)	(569)

	At 31 March 2011	-	(15)	-	(492)	(62)	(569)

	Carrying amount:
	At 31 March 2011	2,760	131	598	6,766	538	10,793

	The valuation of the licence was considered by the Valuation Committee and an independent reputable valuer (see note 11) and based on fair market values less costs to sell, it was determined that no impairment was required.

	The fair valuation of the intangibles at acquisition date of OSGRME was determined by an independent 3rd party using various valuation methods: the Cost Approach (using historcial costs and consumer price inflation), and the Income Approach (using the Multiple Excess Earnings method and Discounted Cash Flow Analysis).

	The banking licence and the trademark are both considered by the Directors to have an indefinite useful life. They are expected to generate value indefinitely. The banking licence is registered in Moscow and the OSGRME trademark is registered in Russia, Poland and Ukraine. Furthermore, there were no impairment indicators identified by the Directors in respect of the other intangibles that were subject to amortisation.

9	Assets classified as held for sale					31 March 2011	31 March 2010
	Group					£'000	£'000

	Balance at 1 April 2010					845	-

	Additions					43	914
	Disposals					(231)	(69)


	Balance at 31 March 2011					657	845

	Assets classified as held for sale are the property (flat, cottage and land plot) received after mortgage foreclosure. The assets are available for immediate sale in their present condition. A potential buyer has been found for the flat, and Kreditmart expects to sell the other assets within one year. The assets are recognised at fair value less costs to sell.

10	Plant and equipment
		Vehicles	Fixtures &	Furniture &
	2011		fittings	equipment	Total
		£'000	£'000	£'000	£'000
	Group

	Cost:
	At 1 April 2010	752	4,608	1,958	7,318

	Additions	546	2,922	272	3,740
	Disposals	(75)	(171)	(298)	(544)
	Exchange movements	(16)	(85)	(56)	(157)

	At 31 March 2011	1,207	7,274	1,876	10,357

	Depreciation:
	At 1 April 2010	(53)	(305)	(516)	(874)

	Charge for the period	(242)	(501)	(389)	(1,132)
	Disposals	48	160	223	431

	At 31 March 2011	(247)	(646)	(682)	(1,575)

	Carrying amount:
	At 31 March 2011	960	6,628	1,194	8,782
	2010

	Cost:
	At 1 April 2009	-	429	1,153	1,582

	Additions - Kreditmart and Flexinvest	-	-	50	50
	At acquisition of OSGRME (see note 12)	655	3,199	619	4,473
	Exchange movements on additions	-	-	-	-
	Additions - OSGRME	65	843	162	1,070
	Disposals	-	(204)	(92)	(297)
	Exchange movements	32	341	67	440

	At 31 March 2010	752	4,608	1,958	7,318

	Depreciation:
	At 1 April 2009	-	(259)	(304)	(563)
					-
	Charge for the period	(53)	(163)	(277)	(493)
	Disposals	-	116	65	181

	At 31 March 2010	(53)	(305)	(516)	(874)

	Carrying amount:
	At 31 March 2010	699	4,303	1,442	6,444



	See note 17 for property,plant and equipment held under finance leases.

11	Investment in subsidiaries - at fair value through profit and loss
	Company	31 March 2011	31 March 2010
		£'000	£'000

	OSG Records Management (Europe) Limited
	At 1 April 2010, and 1 April 2009	28,100	-
	Reclassification for investments at fair value through profit or loss	-	13,600
	Acquisition of subsidiary as per note 12	-	8,584
	Additions	-	600
	Fair value revaluation	700	5,316
	At 31 March 2011, and 31 March 2010*	28,800	28,100

	Kreditmart & Flexinvest Limited
	At 1 April 2010, and 1 April 2009	22,200	16,549
	Fair value revaluation **	(3,700)	(800)
	At 31 March 2011, and 31 March 2010	18,500	22,200



		47,300	50,300

	* OSG Records Management (Europe) Limited was treated as an investment at fair value through profit or loss until a controlling interest was obtained on 12 January 2010 as per note 12.

	** The revaluation calculations performed on Kreditmart included the value of Flexinvest as at 31 March 2011, and as such, no revaluation was performed on the individual subsidiary companies.

	The valuation of the subsidiaries and investments at 31 March 2011 and 31 March 2010 was performed by an independant reputable valuer with the necessary experience in valuing investments of this nature, and was approved by the Valuation Committee.

	Methodologies and assumptions used in valuing investments and investments in subsidiaries:


	1) Market Approach:

	The market comparable method indicates the market value of the ordinary shares of a business by comparing it to publicly traded companies in similar lines of business. The conditions and prospects of companies in similar lines of business depend on common factors such as overall demand for their products and services. An analysis of the market multiples of companies engaged in similar businesses yields insight into investor perceptions and, therefore, the value of the subject company.
	In the market approach, recent sales and listings of comparable assets are gathered and analysed. After identifying and selecting the comparable publicly traded companies, their business and financial profiles are analysed for relative similarity. Price or EV multiples of the publicly traded companies are calculated and then adjusted for factors such as relative size, growth, profitability, risk, and return on investment. The adjusted multiples are then applied to the relevant element of the subject company's business.

	All valuations of unquoted investments and investments in subsidiaries (collectively referred to as the "portfolio") were performed using either an enterprise value/revenue or enterprise value/EBITDA multiple (except for Kreditmart and Flexinvest where a Net Asset Assets Approach ie a price/book value approach was used). 20%, by value at year-end, of the portfolio was valued using a price/book valuation approach (2010: 24%) with the remaining 80% (2010: 76%) of the portfolio being valued using an enterprise value/revenue multiple and enterprise value/EBITDA multiple approach.

	The key assumptions in the valuations were as follows:
	- Liquidity discount: 15%-20% (31 March 2010: 15%-20%)


	2) Income Approach:

	The income approach methodology is used as a cross-check for the Market Approach and indicates the market value of a business enterprise based on the present value of the cash flows that the business can be expected to generate in the future. Such cash flows are discounted at a discount rate that reflects the time value of money and the risks associated with the cash flows.

The financial statements of the Group consolidate the results, assets and liabilities of the subsidiary companies listed below:

Name of subsidiary undertaking

Country of incorporation

Class of share

% of class held at 31 March 2011

% of class held at 31 March 2010

Principal activity

OSG Records Management (Europe) Limited

Cyprus

Ordinary

94.4%

95.5%

Financing

OSG Records Management Center Limited Liability Company*

Russia

Ordinary

100.0%

Document storage, data security and records management services

OSG Polska Limited Liability Company*

Poland

Ordinary

100.0%

OSG Records Management Limited Liability Company*

Ukraine

Ordinary

100.0%

OSG Records Management Limited Liability Company*

Kazakhstan

Ordinary

100.0%

OSG Records Management Limited Liability Company*

Armenia

Ordinary

100.0%

OSG Records Management Limited Liability Company*

Bulgaria

Ordinary

100.0%

Kreditmart Finance Limited

Cyprus

Ordinary

100.0%

Consumer finance

Flexinvest Limited

Cyprus

Ordinary

100.0%

Investment holding

Flexinvest Bank ("FIB") Limited**

Russia

Ordinary

100.0%

Banking and finance

* Direct subsidiaries of OSG Records Management (Europe) Limited and indirect subsidiaries of the Company.

**FIB is held directly by Kreditmart and Flexinvest (see note 12) and is an indirectly held subsidiary of the Company.

Acquisition of subsidiaries and non-controlling interests

OSGRME

Fair value on acquisition at 12 January 2010

£'000

Non-current assets

Property, plant and equipment

4,473

Intangibles

8,744

Current assets

Trade and other receivables

2,245

Cash and cash equivalents

817

Non-current liabilities

Loans payable

(4,588)

Deferred tax

(1,738)

Current liabilities

Trade and other payables

(2,431)

Current taxation payable

(412)

7,110

Non-controlling interest

(390)

Parent's ownership interest at acquisition date

6,720

Goodwill on acquisition

14,164

20,884

Fair value of the Company's previously acquired non-controlling investment in OSGRME:

12,300

Purchase Price

8,584

20,884

Purchase consideration:

- Issue of 20 million ordinary shares in the Company

7,200

- Cash paid on acquisition of OSGRME

1,206

- Cash paid to terminate previous OSGRME management share options

178

8,584

Less: non-cash portion of purchase price

(7,200)

Less: Cash received on acquisition

(817)

Net Cash Paid on acquisition of OSGRME

567

Date of acquisition

12 January 2010

The Company acquired a controlling interest in OSGRME Records Management (Europe) Limited on 12 January 2010, being the effective date when all of the conditions relating to the OSGRME Purchase Agreement dated 17 December 2009 were satisfied. The OSGRME Investment increased the Company's interest in OSGRME from approximately 50% to approximately 93.6% (on a fully diluted basis including the conversion of all convertible loans at 28 February 2010), with the remaining 6.4 per cent of the equity owned by current and previous members of management of OSGRME. The carrying amounts of the assets and liabilities of the acquiree reflected above equal their fair values.

The amount of the acquiree's loss since the acquisition date which was included in the Consolidated profit in the prior year of the Group is £161,489.

If the acquisition had been at the beginning of the prior year, the Consolidated profit would have decreased by £265,146 in the prior year.

The Company applied acquisition accounting to account for its acquisition of OSGRME. Control was obtained in successive share purchases ("step acquisition"). The fair value of the Company's previously acquired non-controlling investment in OSGRME was used in the determination of goodwill.



	OSGRME is a leading records and information management service provider in CEE with a strong market presence in attractive markets (Russia, Poland, Ukraine, Kazakhstan and Bulgaria), has a rapidly growing and diverse client base and has shown resilience in the recent economic downturn. The Directors therefore are of the opinion that the increased investment in OSGRME represents a significant opportunity to take control of a high growth business and thereby increase its ability to receive a control premium in any future exit. Also the new investment in OSGRME will strengthen the Company's balance sheet which, the Directors believe, should facilitate further growth.

	On 30 March 2010, a £0.6 million share capital injection was made by the Company into OSGRME for "racking". 1,822 shares were issued by OSGRME in this regard, which thus increased the Company's overall holding in OSGRME to approximately 95.52%. In the first quarter of 2011, the option pool was increased by a further 938 shares, which reduced the Company's overall holding in OSGRME to approximately 94.41%

	The following summarises the effect of changes in the Group's (parent) ownership interest in OSGRME:
				31 March 2011	31 March 2010
				£'000	£'000
	Parent's ownership interest at acquisition date			10,668	6,720
	Effect of parent's (decrease)/increase in parent's ownership interest			(166)	4,259
	Share of comprehensive income			95	(311)
	Parent's ownership at the the end of the year			10,597	10,668



13	Investments - at fair value through profit and loss
		31 March 2011	31 March 2011	31 March 2010	31 March 2010
		£'000	£'000	£'000	£'000
		Group	Company	Group	Company


	Unistream Bank	18,700	18,700	24,400	24,400

	Grindelia Holdings	24,500	24,500	17,500	17,500

	Quoted investments	2,605	-	1,185	-

	Total investments at fair value through profit and loss	45,805	43,200	43,085	41,900



Change in fair value of investments at fair value through profit and loss
	Year ended 31 March 2011	Year ended 31 March 2011	Year ended 31 March 2010	Year ended 31 March 2010
	£'000	£'000	£'000	£'000
	Group	Company	Group	Company

OSG Records Management (Europe) Limited (see note 11)	-	700	1,934	4,756

Unistream Bank	(5,700)	(5,700)	(600)	(600)

Grindelia Holdings	7,000	7,000	4,300	4,300

Quoted investments	(27)	-	(5)	-

Kreditmart and Flexinvest (see note 11)	-	(3,700)	-	(800)

Total unrealised gains/(losses)	1,273	(1,700)	5,629	7,656



On the 8 December 2009, the OSG Group was restructured per a unanimous resolution in writing by the shareholders of Whitebrooks Investments Limited pursuant to the Whitebrooks' Articles of Association. Per the resolution, Whitebrooks Investments Limited redeemed all its issued share capital from its shareholders, and thereafter transferred the entire issued share capital of OSG Records Management (Europe) Limited ("OSGRME") to its shareholders in the same proportion.
The carrying value of the outstanding convertible loans to OSGRME (formerly Whitebrooks Investments Limited) at 28 February 2010 was converted into ordinary shares of OSGRME.
The OSGRME Investment as detailed in note 11, increased Aurora's interest in OSG from approximately 50% to approximately 93.6% (on a fully diluted basis including in both cases the conversion of all convertible loans outstanding), with the remaining 6.4 per cent of the equity owned by current and previous members of management of OSG. Furthermore, of the option pool of 6.4 per cent of OSG's shares, approximately 2% of the shares were held under options by previous employees of OSG. As a result of the restructuring, these options were terminated and the share option rights were purchased by the Company for a consideration of US$288,222 (£171,186). This additional 2% (which includes the conversion of all convertible loans outstanding by the Company at 28 February 2010) of OSGRME's potential shareholding acquired, resulted in the Company's overall holding in OSGRME increasing to approximately 95.4%. The further capital injection at as detailed in note 12 increased the Company's overall holding in OSGRME to approximately 95.52%. In the first quarter of 2011, the option pool was increased by a further 938 shares, which reduced the Company's overall holding in OSGRME to approximately 94.41%

The Company conducted a Placing of 17.5 million shares at 40 pence per share to satisfy the cash element of the consideration, enabling the Company to subscribe for the new ordinary OSG shares and to provide working capital for the Company.

The Company committed to acquire a 26% stake in Unistream Bank ('Unistream') on 30 November 2006, conditional upon Central Bank of Russia ('CBR') approval. At 30 June 2007 funds had been drawn down from this commitment to acquire a 17.7% stake. The remaining 8.3% stake was acquired on 26 July 2007 once the CBR had given its approval for the Company to own more than 20% of a Russian bank.

As a result of the size of the stakes in these two companies, Unistream (and OSGRME up to 12 January 2010 when a controlling interest was acquired) could potentially qualify as associated companies, which would normally require that they be equity accounted in the books of the Company. However, the Company has taken advantage of the exemption available to it under IAS 28, and hence accounts for these as investments at fair value through profit and loss.

In December 2007 the Company acquired a 24.3% shareholding in Grindelia Holdings Limited, which owns 99.5% of the retail chain that operate under the brands "SuperStroy" and "StroyArsenal".

On 30 June 2009, the Company entered into an agreement with Grindelia Holdings Limited to borrow RUR 5,832,000 on 20 February 2010 for 1 year with an interest rate of 1% per annum. The Company receives quarterly payments in advance of Grindelia Holdings Limited declaring a dividend.

The valuation of the investments at 31 March 2011 and 31 March 2010 was performed by an independant reputable valuer with the necessary experience in valuing investments of this nature, and was approved by the Valuation Committee. The methods and assumptions used in determining the valuations of investments are discussed in note 11.

In the view of the Valuation Committee, the value of the investment in OSGRME, Unistream Bank, and Grindelia Holdings Limited as at 31 March 2011 was estimated at £28.8 million (31 March 2010: £28.1 million), £18.7 million (31 March 2010: £24.4 million), and £24.5 million (31 March 2010: £17.5 million) respectively, resulting in a decrease of the value of total investments below historical cost in the Company accounts.

14	Loans and advances to customers

	Group			31 March 2011	31 March 2010
				£'000	£'000

	Residential mortgages			7,787	8,618

	Reconciliation of impairment loss allowance on loans to customers:

	Balance at beginning of the year/period			938	1,912
	Allowance for loan losses			(268)	(974)
				670	938

	The following table details the carrying value of assets that are impaired and the ageing of those that are past due but not impaired:

	2011	Neither past due nor impaired	Past due not impaired	Financial assets that have been impaired	Balance at 31 March 2011

	Loans to customers	6,016	674	1,721	8,411
	Interest	46	-	-	46
	Loan loss allowance	(37)	(4)	(629)	(670)
		6,025	670	1,092	7,787

	2010	Neither past due nor impaired	Past due not impaired	Financial assets that have been impaired	Balance at 31 March 2010

	Loans to customers	6,831	332	2,306	9,469
	Interest	40	2	45	87
	Loan loss allowance	(44)	(2)	(892)	(938)
		6,827	332	1,459	8,618

	The delinquent loans as determined by the Risk Management Department of Kreditmart and Flexinvest for the portfolio is as follows: 35 (2010: 26) Accounts comprising 68% (2010: 35%) of the balance of the loan portfolio. For these loans, a specific allowance was made of £630,935 (2010: £572,073). For the non-delinquent loans, a portfolio impairment of 0.6% (2010: 0.6%) of outstanding value is provided for. See note 25 "Credit Risk" for more in this regard.

	The mortgages are secured upon borrowers' private residences, are repayable in equal monthly instalments and mature between 2014 and 2038 (average maturity of 25.4 years). Interest is charged at fixed rates at an average annual interest rate of 11.86% (range between 10.5% and 14.9% depending on each borrower). Based on maximum exposure (carrying value of the loans), the collateral pledged in respect of these mortgages is £6,950,293 (2010: £8,189,157).

	The fair value of the loans to customers were determined using a market related 15.0% (2010: 14.9%) discount rate on the loans denominated in Roubles. The loans denominated in US Dollars were discounted at 13.3% (2010: 13.3%). Based on these criteria the fair value of the loans were determined to be £6,826,285 (2010:£7,482,554).

15	Trade and other receivables
		31 March 2011	31 March 2011	31 March 2010	31 March 2010
		£'000	£'000	£'000	£'000
		Group	Company	Group	Company

	Tax receivable	205	-	211	-
	Trade debtors	2,602	-	1,975	-
	Less: allowance for doubtful debts	(217)	-	(213)	-
	Sundry debtors and prepayments	1,492	30	2,477	980
	VAT receivable	322	-	-	-
	Amount receivable from related party	-	-	-	191

		4,404	30	4,450	1,171

	The related party balance is due from Flexinvest Limited and relates to the due diligence costs of the FIB transaction and is interest free, unsecured and repayable on demand.

	The breakdown of aged trade receivables in respect of the Group and the Company is as follows:
		31 March 2011	31 March 2011	31 March 2010	31 March 2010
		£'000	£'000	£'000	£'000
		Group	Company	Group	Company

	Current	-	-	992	-
	Receivables < 30 days	-	-	338	-
	Receivables > 30 days	-	-	136	-
	Receivables > 60 days	2,387	-	203	-
	Receivables > 90 days	215	-	306	-
		2,602	-	1,975	-

	Perfoming	2,387	-	1,669	-
	Past due	215	-	306	-
	Impaired	-	-	-	-
		2,602	-	1,975	-

16	Cash and cash equivalents

		31 March 2011	31 March 2011	31 March 2010	31 March 2010
		£'000	£'000	£'000	£'000
		Group	Company	Group	Company

	Bank balances	1,856	555	6,577	4,685
	Fixed Deposits	4,638	3,239	6,167	1,019
	Cash on hand	245	-	498	-
	Cash and cash equivalents in statement of cash flows	6,739	3,794	13,242	5,704

	The restricted cash balances for the current year, which are included in the above table, total £198,913

17	Finance leases

	The Group acquires the majority of its vehicles and racking systems for its warehouses through finance lease contracts. Such contracts are generally classified as finance leases because the rental period approximates to the estimated useful economic life of the assets; and the Group has the right to purchase the assets outright at the end of the minimum lease term. The Group have financial lease obligations in Russia, Poland and Kazakhstan. The average term of these finance leases are 36 months. The Group presents obligations under financial leases in its Statement of Financial Position at present value (less amounts representing finance charges related to future periods).

	The payment schedule of the present value of minimum lease payments is as follows:
	Group	31 March 2011	31 March 2011	31 March 2010	31 March 2010
		£'000	£'000	£'000	£'000
		Less than	Greater than	Less than	Greater than
		1 year	1 year	1 year	1 year


	Vehicles	199	378	108	237
	Fixtures and fittings	766	1,342	582	1,264
	Furniture and equipment	51	57	29	66
		1,016	1,777	719	1,567


	The carrying value of the property, plant and equipment held under finance leases at 31 March 2011 are:
	- Vehicles: £809,460 (2010: £514,593)
	- Fixtures and fittings: £3,465,319 (2010: £2,720,363)
	- Furniture and equipment: £96,290 (2010: £113,951)

18	Derivative liabilities

				Group and Company
				31 March 2011	31 March 2010
				£'000	£'000

	Derivative revaluation reconciliation

	Loss realised on forward exchange contracts			-	(46)

	Add: forward exchange liability at 31 March 2011, 31 March 2010			-	46

				-	-


	The Company's policy is to enter into forward foreign currency contracts on an ad hoc basis, to hedge the Company's exposure to currency risk. Fair values are calculated by reference to current forward exchange rates for contracts with similar maturity profiles. They are initially recognised at fair value on the date on which the derivative contract is entered into and subsequently remeasured to their fair value.

	Changes in fair values of derivatives and amounts realised on closure of contracts are included in profit or loss within (losses)/gains on derivatives.

	The Company has a balance of £Nil (2010: £Nil) included in cash and cash equivalents which is held as security by the counterparty for the forward exchange contracts oustanding at year end.

19.	Trade and other payables
		31 March 2011	31 March 2011	31 March 2010	31 March 2010
		£'000	£'000	£'000	£'000
		Group	Company	Group	Company

	Trade payables	-	-	380	-
	Vat & Social Tax payable	253	-	-	-
	Expense accruals and other creditors	3,422	236	2,789	89
	Income received in advance	1,622	-	1,433	-

		5,297	236	4,602	89

20	Share capital
				31 March 2011	31 March 2010
				£'000	£'000
	Authorised share capital:
	200,000,000 Ordinary Shares of 1p each:			2,000	2,000

	Issued share capital:
	75,000,000 fully paid Ordinary Shares of 1p each:			1,125	750

	Issued during the year:
	17,500,000 Ordinary Shares			-	175
	3,356,596 Ordinary Shares			-	34
	16,643,404 Ordinary Shares			-	166
	112,500,000 ordinary shares of 1p each:			1,125	1,125


	The Company has one class of ordinary shares which carry no right to fixed income.

	2 shares were issued on 24 February 2006 for a consideration of £1 each.

	74,999,998 shares were issued on 20 March 2006 for a cash consideration of £1 each.

	17,500,000 Consideration Shares were issued on 07 January 2010 at a fair value of 36p each.

	3,356,596 Placement Shares were issued on 06 January 2010 at 40 p each.

	16,643,404 Placement Shares were issued on 08 January 2010 at 40p each.

	The Share Premium balance was transferred to Special Reserve (see below).

	Shares previously reserved for issue under the share option scheme and cancelled during the year are detailed in note 26.

21.	Special reserve

	The Special reserve is a distributable reserve to be used for all purposes permitted under Guernsey company law, including the buy back of shares and the payment of dividends.
	Group and company			31 March 2011	31 March 2010
				£'000	£'000
	On conversion from share premium			84,073	70,750
	Pemium on issue of ordinary shares			-	13,825
	Share issue costs on Placement of shares			-	(502)

				84,073	84,073
22.	Share options reserve
		31 March 2011	31 March 2011	31 March 2010	31 March 2010
		£'000	£'000	£'000	£'000
		Group	Company	Group	Company

	Balance as at 1 April 2010, and 1 April 2009	2,437	2,420	1,820	1,820

	Recognised fair value of share options issued during the year	691	580	617	600

	Cancellation of share options	(3,000)	(3,000)

	Balance as at 31 March 2011, and 31 March 2010	128	-	2,437	2,420

	Details of share-based payments are shown in note 26.


23.	Retained earnings
		31 March 2011	31 March 2011	31 March 2010	31 March 2010
		£'000	£'000	£'000	£'000
		Group	Company	Group	Company

	Balance as at 1 April 2010, and 1 April 2009	5,857	11,368	5,320	6,540

	Net (loss)/ profit for the year attributable to owners	(4,676)	(5,478)	665	4,828

	Cancellation of share options	3,000	3,000	-	-

	Acquisition of non-controlling interest in subsidiary	-	-	(128)	-

	Dilution of controlling interest in subsidiary	(166)	-	-	-

	Balance as at 31 March 2010, and 31 March 2009	4,015	8,890	5,857	11,368

	Any surplus or deficit arising from net profits or losses after payment of dividends is taken to this reserve.

24.	Translation reserve

	The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations, as well as from the translation of liabilities that hedge the Company's net investment in a foreign subsidiary. Movements in the translation reserve are included under "Other comprehensive income" in the statement of comprehensive income.

25.

Net asset value per share

31 March 2011

31 March 2010

Group

Company

Group

Company

Net assets for the purposes of basic and diluted net asset value per share attributable to equity holders of the parent: (£'000)

89,845

94,088

93,529

98,986

Number of ordinary shares for the purpose of net asset value per share:(in thousands):

112,500

Net asset value per share

79.9p

83.6p

83.1p

88.0p

26.

Share based payments

Company

Terms

The Management Agreement currently provides that the Company shall pay to the Manager a semi-annual management fee of an amount equal to 1% of the net asset value of the Company as at each valuation date of 31 March and 30 September in each calendar year, payable in advance following such valuation date.

Additionally, the Manager currently has an Option to acquire new shares representing 20% of the share capital of the Company (on a fully diluted basis, i.e. post the issuance of the Option Shares), such Option to be exercised at a price of £1.00 per share in respect of 18,750,000 Option Shares and at a price of £0.40 per share in respect of 9,375,000 Option Shares (related to the additional Ordinary Shares issued in the December 2009 placing), provided that the relevant performance condition has been satisfied.

In consequence of the change to the management incentives, the non-cash provision for share based payments amounting to £600,000 per annum ceased to be made, reducing the reported expenses by this amount in addition to the reduction in management fees paid, and the historic provisions, totalling £2.42 million at 31 March 2010, were cancelled and transferred to shareholder's reserves during the year. The way this was effectively achieved was to expense in the current year, the remaining non-cash provision for share based payments of £579,863 up to the grant date value of £3 million, and then cancel and transfer the full £3 million share option reserve to shareholder's reserves through the statement of changes in equity.

Change in the year

31 March 2011

31 March 2010

Number

Exercise price

'000

Options as at 1 April 2010, and 1 April 2009

28,125

18,750

100p

Options granted during the year

9,375

40p

Reversal of options during the year

-28,125

Options as at 31 March 2011, and 31 March 2010

28,125

Exercisable options at the end of the year

Calculation of the fair value of equity settled share based payments

All share based payments were valued during 2010 at the date of issue using the Monte Carlo model. The key inputs to this model that drive the option value are:

Share price at grant of options

100p

Exercise price

100p

Expected volatility

20%

Risk free rate

4.39%

Effective dividend yield

Based on the above valuation the total value of the options granted at the date of grant was £3,000,000.

The charge for the year ended 31 March 2011 is £579,863 (2010: £600,000).

OSGRME

Terms

Under shareholders' approval a maximum of 4500 shares are available for issue to management of the OSGRME Group. This is representing a maximum of 5.98% of the OSGRME Group's equity as of 31 March 2011 (2010: 3324 shares representing a maximum of 4.48%). From this pool 4500 share options were actually granted to management of OSGRME as of 31 March 2011(1250 were granted in 2007 and are exercisable at grant date with a fair value at grant date of $406,998, 1000 were granted in 2008 with a 5 year vesting period with a fair value at grant date of $320,521, 1000 were granted in 2009 with a 5 year vesting period with a fair value at grant date of $186,140 and 1,250 were granted in 2011 with 5 year vesting period with a fair value at grant date of $406,018).

Change in the year

31 March 2011

31 March 2010

Number

Exercise
price

Options as at 31 March 2010, acquisition date

3,250

$160 - $434

Options granted during the year

1,250

$376 - $493

Options as at 31 March 2011

4,500

3,250

Exercisable options at the end of the year

1,250

The options outstanding at 31 March 2011 had a remaining contractual life of 5 years

All share based payments were valued at the date of issue using the Black-Scholes Model. The Directors have estimated that the hurdle rate will be achieved, and hence the options will vest, after 5 years. The value of the 3,250 options that were granted in 2008-2010 will be charged to profit or loss on a pro rata basis over the course of the 5 years ending December 2013. The charge arising for the 3 month ended 31 March 2011 is £118,360 (2010: £17,661).

27.

Interest expense

Group

31 March 2011

31 March 2010

£'000

Finance leases

547

Other

585

28.

Operating leases

Leases as lessee

Non-cancellable operating lease rentals are payable as follows:

Group

31 March 2011

31 March 2010

£'000

Less than 1 year

4,193

3,199

1 - 5 years

12,127

11,628

More than 5 years

3,657

19,977

14,827

The Group leases a number of premises including warehouse facilities and office buildings under operating leases. The leases typically run for a period of 1 - 5 years.

29.

Financial risk factors

The investment strategy of the Company is to make equity or equity-related investments in small and mid-sized private Russian companies focused on the financial, business and consumer services sectors with the objective to provide investors with an attractive level of capital growth from investing in a diversified private equity portfolio. Consistent with that objective, the Company's financial instruments mainly comprise of investments in private equity companies. In addition the Company holds cash and liquid resources as well as having debtors and creditors that arise directly from its operations. The main risks arising from the Company's financial instruments are credit risk, foreign currency risk, market price risk and interest rate risk.

Capital Management

The capital structure of the Group at year end consists of cash and cash equivalents and equity attributable to equity holders of the Company, comprising issued capital, reserves and retained earnings. The Group has no return on capital benchmark, but the Board continues to monitor the balance of the overall capital structure so as to maintain investor and market confidence. The Group is not subject to any external capital requirements.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The Group's liabilities are short-term in nature (apart from the finance leases as per note 17) and are payable in the normal operating cycle. Refer to the interest rate risk table in note 29 for the maturity analysis of the Group's liabilities.


Credit risk

The Group is exposed to credit risk in respect of its cash and cash equivalents, arising from possible default of the relevant counterparty, with a maximum exposure equal to the carrying value of those assets. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. Forward exchange contracts were held in the prior year with The Royal Bank of Scotland International, a highly reputable counterparty with a high credit rating. The Group monitors the placement of cash balances on an ongoing basis. No financial assets held by the group have had their credit rating graded by an internationally regarded agency.


Two subsidiaries of the Group, Kreditmart and Flexinvest, are exposed to credit risk in respect of mortgage loans, arising from possible default of its customers. The credit risk is mitigated by the Risk Department, who on a monthly basis compile a Portfolio Quality report, which analyse the key trends and highlights any risk areas, as well as a review of any delinquent and potentially delinquent accounts. The Risk Department also mitigate the credit risk through the calculation of the Value at Risk ('VAR') to forecast the level of estimated losses, calculate the Loan Loss Provisions ('LLP') on a monthly basis based on Central Bank of Russia Federation instructions and calculate the limits of insurance responsibilities of Insurance companies that provide the customers mortgage insurance.

The Financial Departments of OSG Records Management (Europe), Kreditmart and Flexinvest exercises control over the risk in the legislation and regulatory arena and assesses its influence on the Group's activity. This approach allows the Group to minimize potential losses from the investment climate fluctuations in the Russian Federation and Eastern Europe. The geographical concentration of the assets and liabilities of the Group are set out below:
	31 March 2011
	Russian Federation	United Kingdom	Poland	Cyprus	Other
ASSETS	%	%	%	%	%

Long term third party loans receivable	100	-	-	-	-
Trade and other receivables	77	1	13	-	9
Cash and cash equivalents	32	49	2	16	1


	31 March 2010
	Russian Federation	United Kingdom	Poland	Cyprus	Other
ASSETS	%	%	%	%	%

Long term third party loans receivable	100	-	-	-	-
Trade and other receivables	57	25	13	-	5
Cash and cash equivalents	44	49	1	5	1


Kreditmart and Flexinvest do not have any Sub-prime customers due to criteria guidelines which do not allow loans to be granted to borrowers without income confirmation documents. The Risk Department of Kreditmart and Flexinvest have determined that the value of delinquent loans are £2,356,868 (2010: £1,837,541). Loan payments are current except for £56,883 which is 60 days overdue as at 31 March 2011 (2010: £920,911: 60 days overdue) and £1,520,760 which is 90 and 120 days overdue as at 31 March 2011 (2010: £574,709: 120 days). At 31 March 2011, a Loan Impairment Provision in respect of these loans was raised of £630,935 (2010:£572,073). OSG Records Management (Europe) has no loan receivables. See note 15 for details of the ageing of trade receivables.

The maximum exposure to credit risk for the Group and Company at the end of the reporting period without taking into account any collateral held or credit enhancements is the following:
			31 March 2011	31 March 2011	31 March 2010	31 March 2010
			Group	Company	Group	Company
		Note	£'000	£'000	£'000	£'000
Cash and cash equivalents		16	6,739	3,794	13,242	5,704
Trade and other receivables		15	4,404	30	4,450	1,171
Corporate Loans			434	-	-	-
Loans to customers		14	7,787	-	8,618	-


			19,364	3,824	26,310	6,875



Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Company's reporting currency. The Group is exposed to foreign exchange risk arising from various currency exposures primarily with respect to Russian Roubles, Polish Zloty and the US Dollar. All of the Group's equity investments are denominated in Russian Roubles. The Group does not hedge its currency exposure on equity investments but has put in place hedges on monetary assets to mitigate its US Dollar exposure. The Group does not use such currency derivatives for speculative purposes. See note 18 for detail of currency derivative contracts entered into during the current year and prior year, as well as those outstanding at year end.

Currency Risk Table

An analysis of the Group's net currency exposure is as follows:

As at 31 March 2011:

Currency of denomination	Sterling	US Dollars	Russian Roubles	Polish Zloty	Other	Total
	£'000	£'000	£'000	£'000	£'000	£'000

Total assets	27,287	2,803	65,636	3,055	1,019	99,800
Total liabilities	(1,762)	(2)	(5,580)	(2,163)	(448)	(9,955)

Net currency exposure	25,525	2,801	60,056	892	571	89,845

As at 31 March 2010:

Currency of denomination	Sterling	US Dollars	Russian Roubles	Polish Zloty	Other	Total
	£'000	£'000	£'000	£'000	£'000	£'000

Total assets	31,753	4,009	63,045	2,284	1,025	102,116
Total liabilities	(1,564)	(39)	(4,833)	(1,581)	(570)	(8,587)

Net currency exposure	30,189	3,970	58,212	703	455	93,529


An analysis of the Company's net currency exposure is as follows:

As at 31 March 2011:

Currency of denomination		Sterling	US Dollars	Russian Roubles	Other	Total
		£'000	£'000	£'000	£'000	£'000

Total assets		3,333	-	90,991	-	94,324
Total liabilities		(236)	-	-	-	(236)

Net currency exposure		3,097	-	90,991	-	94,088


As at 31 March 2010:

Currency of denomination		Sterling	US Dollars	Russian Roubles	Other	Total
		£'000	£'000	£'000	£'000	£'000

Total assets		6,568	-	92,507	-	99,075
Total liabilities		(89)	-	-	-	(89)

Net currency exposure		6,479	-	92,507	-	98,986

Foreign Currency Sensitivity

The following table details the Group's sensitivity to a 20% (2010: 20%) strengthening of the Sterling against each of the relevant foreign exchange currencies. 20% (2010: 20%) is the sensitivity rate used when reporting foreign currency risk internally to management and represents management's assessment of the possible change in foreign exchange rates. This analysis assumes that all variables, in particular interest rates remain constant. The analysis is performed on the same basis for the prior period.

Increase/(decrease) in profit /loss:

31 March 2011

31 March 2010

£'000

Group

Company

Group

Company

Russian Rouble

(12,011)

(18,198)

(11,642)

(18,501)

US Dollar

(560)

(794)

Polish Zloty

(178)

(141)

Other

(114)

(91)

A 20% (2010: 20%) weakening of the Sterling against each of the relevant foreign exchange currencies at the year end would have had the equal but opposite effect, on the basis that all other variables remain the same.

Market risk

Market price risk arises principally from uncertainty concerning future values of financial instruments used in the Group's operations. It represents the potential loss the Group might suffer through holding interests in unquoted private companies whose value may fluctuate and which may be difficult to value and/or to realise. The Company seeks to mitigate such risk by assessing such risks as part of the due diligence process related to all potential investments, and by establishing a clear exit strategy for all potential investments. There is a rigorous due diligence process before an investment can be approved which will cover financial, legal and market risks. Following investment the Company/Manager will always have Board representation, the investee company is required to submit regular management information to an agreed standard and timeliness and the Manager undertakes regular monitoring. The Board receives and considers the most recent monitoring report prepared by the Manager at every Board meeting.

Pricing Risk Table

All security investments present a risk of loss of capital, the maximum risk resulting from instruments is determined by the fair value of the financial instrument. The following represents the Group and Company's market pricing exposure at year end:

At 31 March 2011:

Note

Fair Value £'000

% of Net Assets

Fair Value £'000

% of Net Assets

Group

Company

Investments at fair value through profit & loss:

- Unlisted Equities

13 & 11

43,200

48.08

90,500

96.19

- Quoted investments

13 & 11

2,605

2.90

At 31 March 2010:

Fair Value £'000

% of Net Assets

Fair Value £'000

% of Net Assets

Group

Company

Investments at fair value through profit & loss:

- Unlisted Equities

13 & 11

41,900

43.29

92,200

93.14

- Quoted investments

13 & 11

1,185

1.22

Derivative liabilities


Valuation of financial instruments

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

> Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.
> Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

> Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

The table below analyses financial instruments, measured at fair value at the end of the reporting period, by the level in the fair value hierarchy into which the fair value measurement is categorised:

Group
	Level 1	Level 2	Level 3	Total
At 31 March 2011:	£'000	£'000	£'000	£'000

Investments at fair value through profit & loss:
-Unlisted Equities	-	-	43,200	43,200
- Quoted investments	2,605	-	-	2,605
	2,605	-	43,200	45,805


At 31 March 2010:	Level 1	Level 2	Level 3	Total
	£'000	£'000	£'000	£'000

Investments at fair value through profit & loss:
-Unlisted Equities	-	-	41,900	41,900
- Quoted investments	1,185	-	-	1,185
	1,185	-	41,900	43,085


The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements in Level 3 of the fair value hierarchy of the Group:

2011			Level 3
			£'000

Opening balance			41,900
Total gains or losses in profit or loss			1,300
Closing balance			43,200


Company
	Level 1	Level 2	Level 3	Total
At 31 March 2011:	£'000	£'000	£'000	£'000

Investments at fair value through profit & loss:
-Unlisted Equities	-	-	90,500	90,500
	-	-	90,500	90,500


At 31 March 2010:	Level 1	Level 2	Level 3	Total
	£'000	£'000	£'000	£'000

Investments at fair value through profit & loss:
-Unlisted Equities	-	-	92,200	92,200
	-	-	92,200	92,200


The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements in Level 3 of the fair value hierarchy of the Company:

2011			Level 3
			£'000

Opening balance			92,200
Total gains or losses in profit or loss			(1,700)
Closing balance			90,500


Although the Group and Company believes that its estimates of fair values are appropriate, the use of different methodolgies or assumptions could lead to different measurements of fair value. For fair value measurements in Level 3 of the fair value hierarchy (as per note 11), changing one or more of the unobservable inputs used for either a conservative and optimistic approach would have the following effects:
Level 3 investments have been valued in accordance with the methodologies in Note 11. The value of the investments and the fair value movements are disclosed in note 13.



Price sensitivity
The sensitivity analysis below has been determined based on the exposure to equity price risks as at the reporting date.

At the reporting date, if the valuations had been 20% higher while all other variables were held constant net profit would increase by £8,269,000 (2010: £8,380,000) for the Group and £18,631,000 (2010: £18,440,000) for the Company. This sensitivity rate was determined by the Directors as reasonable taking market conditions into account.
If the valuation of investments had been 20% (2010: 20%) lower it would have had the equal but opposite effect, on the basis that all other variables remain the same.

Interest rate risk


Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Group is exposed to interest rate risk as a result of the cash and bank balances that are invested at floating interest rates. The Group monitors its interest rate exposure regularly and allocates its cash resources to an appropriate mix of floating and fixed rate instruments of varying maturities.


The following table details the Group and Company's exposure to interest rate risk as at period end by the earlier of contractual maturities or re-pricing:

Group
At 31 March 2011:	No contractual terms of repayment	Less than 1 month	1-3 months	3 months to 1 year	1 to 2 years	2 to 5 years	Greater than 5 years	Total
	£000	£000	£000	£000	£000	£000	£000	£000
Assets
Non-interest bearing	78,104	2,866	2,332	45	343	236	-	83,926
Floating interest rate instruments	64	-	-	-	-	-	-	64
Fixed interest rate instruments *	89	1,478	190	5,659	846	233	7,316	15,811
Total	78,257	4,344	2,522	5,705	1,189	469	7,316	99,801

Liabilities
Non-interest bearing	(1,792)	(2,383)	(2,656)	(1,347)	-	-	-	(8,178)
Fixed interest rate instruments	-	-	-	-	(1,095)	(682)	-	(1,777)
Total	(1,792)	(2,383)	(2,656)	(1,347)	(1,095)	(682)	-	(9,956)
Net Exposure	76,465	1,961	(134)	4,358	94	(213)	7,316	89,845

At 31 March 2010:	No contractual terms of repayment	Less than 1 month	1-3 months	3 months to 1 year	1 to 2 years	2 to 5 years	Greater than 5 years	Total
	£000	£000	£000	£000	£000	£000	£000	£000
Assets
Non-interest bearing	77,156	2,166	1,525	191	569	190	-	81,797
Floating interest rate instruments	4,379	-	-	-	-	-	-	4,379
Fixed interest rate instruments	682	3,415	1,293	2,192	187	217	7,954	15,940
Total	82,217	5,581	2,818	2,383	756	407	7,954	102,116

Liabilities
Non-interest bearing	(1,699)	(2,981)	(1,317)	(1,023)	-	-	-	(7,020)
Fixed interest rate instruments	-	-	-	-	(824)	(743)	-	(1,567)
Total	(1,699)	(2,981)	(1,317)	(1,023)	(824)	(743)	-	(8,587)
Net Exposure	80,518	2,600	1,501	1,360	(68)	(336)	7,954	93,529



Company
At 31 March 2011:	No contractual terms of repayment	Less than 1 month	1-3 months	3 months to 1 year	1 to 2 years	2 to 5 years	Greater than 5 years	Total
	£000	£000	£000	£000	£000	£000	£000	£000
Assets
Non-interest bearing	90,991	-	30	-	-	-	-	91,021
Floating interest rate instruments	64	-	-	-	-	-	-	64
Fixed interest rate instruments	-	-	-	3,239	-	-	-	3,239
Total	91,055	-	30	3,239	-	-	-	94,324

Liabilities
Non-interest bearing	-	(236)	-	-	-	-	-	(236)
Total	-	(236)	-	-	-	-	-	(236)
Net Exposure	91,055	(236)	30	3,239	-	-	-	94,088

At 31 March 2010:	No contractual terms of repayment	Less than 1 month	1-3 months	3 months to 1 year	1 to 2 years	2 to 5 years	Greater than 5 years	Total
	£000	£000	£000	£000	£000	£000	£000	£000
Assets
Non-interest bearing	92,607	-	980	-	-	-	-	93,587
Floating interest rate instruments	4,379	-	-	-	-	-	-	4,379
Fixed interest rate instruments	-	-	-	1,109	-	-	-	1,109
Total	96,986	-	980	1,109	-	-	-	99,075

Liabilities
Non-interest bearing	-	(89)	-	-	-	-	-	(89)
Total	-	(89)	-	-	-	-	-	(89)
Net Exposure	96,986	(89)	980	1,109	-	-	-	98,986

* The Group's fixed interest rate instruments represents cash accounts placed on deposit by the Company, Kreditmart and Flexinvest, and OSGRME, and the mortgages granted by Kreditmart and Flexinvest. The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does not designate derivatives (forward exchange contracts) as hedging instruments under a fair value hedge accounting model. Therefore a change in interest rates at the reporting date would not affect profit or loss.

The expected maturities of the undiscounted cash flows (including interest) of the mortgages granted by Kreditmart and Flexinvest at 31.03.11 and 31.03.10 is presented in the following table (note: there are no mortgage bonds in OSGRME):

Kreditmart and Flexinvest
		Less than 1 month	1-3 months	3 months to 1 year	1 to 2 years	2 to 5 years	Greater than 5 years	Total
		£000	£000	£000	£000	£000	£000	£000
At 31 March 2011:		108	217	885	1,097	3,293	21,715	27,315
At 31 March 2010:		120	240	1,079	1,276	3,420	24,846	30,981

Sensitivity analysis
The sensitivity analysis below has been determined based on the Group's exposure to interest rates for interest bearing assets and liabilities at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates.

If interest rates had been 50 basis points higher and all other variables were held constant, the Group's net profit for the year ended 31 March 2011 would have increased by £319 (2010: £21,896) and the Company's by £319 (2010: £21,896).

If interest rates had been 50 basis points lower it would have had the equal but opposite effect, on the basis that all other variables remain the same.

30.	Segmental information

	The Board of Directors of the Company decides on the strategic resource allocations of the Group. The operating segments of the Group are the business activities that earn revenue or incur expenses, whose operating results are regularly reviewed by the Board of Directors of the Company, and for which discrete financial information is available. The Board of Directors considers the Group to be made up of 3 segments, which are reflective of the business activities of the Group and the information used for internal decision-making:
	- Aurora Russia Limited (parent company)
	- Kreditmart Finance Limited, Flexinvest Limited and Flexinvest Bank ("FIB") Limited (subsidiaries)
	- OSG Records Management (Europe) Limited ("OSGRME") (subsidiary)

	The Group is engaged in investment in small and mid-sized companies in Russia and in one principal geographical area, being Russia.

	Kreditmart Finance Limited, Flexinvest Limited and Flexinvest Bank ("FIB") Limited (subsidiaries) disburse mortgage and consumer loans for private clients, place deposits, and render other services (money transfers, safe boxes). Kreditmart provides private clients with consultations on mortgage, consumer loans, vehicle insurance, and other financial services.

	The OSG Group consists of seven legal entities: OSG Records Management (Europe) Ltd (Cyprus), OSG Records Management Center (Russia), OSG Polska (Poland), OSG Records Management (Ukraine), OSG Records Management (Armenia), OSG Records Management (Bulgaria) and OSG Records Management (Kazakhstan). OSG Records Management (Europe) Ltd (Cyprus) is a parent company for OSG Group which owns 100% of shares of 6 operating units in Russia (being the largest operation), Poland, Ukraine, Kazakhstan, Armenia and Bulgaria. The OSG Group provides records management services (document storage and other services) through its 100% owned operating subsidiaries. More than half of sales revenues are earned through providing document storage services. The remaining revenues come from the following warehouse services, transportation of documents; archive services, data processing services and destruction of documents and tapes. Approximately 70% of the operating income is derived from Russia, with the bulk of the remaining portion being derived from Poland.

	The main customers of Kreditmart, Flexinvest and FIB are private clients and the main customers of OSGRME are financial institutions, telecom and other companies.

	The Investment Manager's Report provides more information on the Company's business and the operations of each investment.

	The parent company derives its revenues from its investments by way of interest and dividends.

		31 March 2011	31 March 2011	31 March 2011	31 March 2011	31 March 2010	31 March 2010	31 March 2010	31 March 2010
		£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000

		Aurora	Kreditmart/ Flexinvest/ FIB	OSGRME	Total	Aurora	Kreditmart/ Flexinvest/ FIB	OSGRME	Total


	Revenue	210	1,908	14,839	16,957	659	1,615	2,997	5,271
	- Fees	-	684	-	684	-	323	-	323
	- Storage	-	-	6,939	6,939	-	-	1,575	1,575
	- Warehousing, transport, data processing and other	-	86	7,893	7,979	-	-	1,420	1,420
	- Interest on long term mortgages and other loans	-	943	-	943	-	1,062	-	1,062
	- Loan interest	-	5	-	5	399	-	-	399
	- Bank interest	23	190	7	220	13	230	2	245
	- Dividend income	187	-	-	187	247	-	-	247
	Administration and operating expenses	(3,984)	(3,200)	(12,771)	(19,955)	(3,341)	(3,390)	(2,701)	(9,432)
	Depreciation and amortisation	-	(227)	(1,474)	(1,701)	-	(318)	(317)	(635)
	Interest expense	-	(38)	(552)	(590)	-	(12)	(161)	(173)
	Fair value movements on revaluation of investments	(1,700)	(27)	-	(1,727)	7,656	(5)	-	7,651
	- Kreditmart/Flexinvest/FIB	(3,700)	-	-	(3,700)	(800)	-	-	(800)
	- OSGRME	700	-	-	700	4,756	-	-	4,756
	- Unistream	(5,700)	-	-	(5,700)	(600)	-	-	(600)
	- Grindelia (SuperStroy)	7,000	-	-	7,000	4,300	-	-	4,300
	- Quoted investments	-	(27)	-	(27)	-	(5)	-	(5)
	Exchange (losses)/gains	(4)	(545)	1	(548)	(146)	134	4	(8)

	Operating profit/(loss) before tax	(5,478)	(2,129)	43	(7,564)	4,828	(1,976)	(177)	2,675

	Tax	-	45	(164)	(119)	-	(13)	16	3

	Net segment profit/(loss)	(5,478)	(2,084)	(121)	(7,683)	4,828	(1,989)	(162)	2,677



	Reconciliation of segment profit/(loss) to consolidated statement of comprehensive income							31 March 2011	31 March 2010
								£'000	£'000

	Total net segment income/(loss)							(7,683)	2,677

	Adjustment for fair value movements on
	Kreditmart/Flexinvest/FIB and OSGRME							3,000	(2,021)


	Net (loss)/ profit for the year for the Group							(4,683)	656



	31 March 2011	31 March 2011	31 March 2011	31 March 2011	31 March 2010	31 March 2010	31 March 2010	31 March 2010
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000

	Aurora	Kreditmart/ Flexinvest/ FIB	OSGRME	Total	Aurora	Kreditmart/ Flexinvest/ FIB	OSGRME	Total

Total segments assets include:

Investments in subsidiaries	47,300	-	-	47,300	50,300	-	-	50,300
Financial assets at fair value through profit or loss	43,200	2,605	-	45,805	41,900	1,185	-	43,085
- OSGRME	-	-	-	-	-	-	-	-
- Unistream	18,700	-	-	18,700	24,400	-	-	24,400
- Grindelia (SuperStroy)	24,500	-	-	24,500	17,500	-	-	17,500
- Quoted investments	-	2,605	-	2,605	-	1,185	-	1,185

Cash and cash equivalents	3,794	2,718	227	6,739	5,704	5,502	2,036	13,242
Intangible assets	-	2,760	22,198	24,958	-	2,680	-	2,680
Property, plant and equipment	-	418	8,364	8,782	-	689	5,755	6,444
Assets classified as held for sale	-	657	-	657	-	845	-	845
Loans and advances to customers	-	7,787	-	7,787	-	8,618	-	8,618
Other assets	30	1,430	3,613	5,073	1,171	949	2,711	4,831

Segment assets	94,324	18,375	34,402	147,101	99,075	20,468	10,502	130,045

Total segment liabilities	(236)	(760)	(7,469)	(8,465)	(89)	(760)	(6,324)	(7,173)



Reconciliation of segment assets and liabilities to consolidated statement of financial position							31 March 2011	31 March 2010
							£'000	£'000

Segment assets for reportable segments							147,101	130,045

Exchange loss on translation of intangibles							-	(204)

Investment in subsidiaries							(47,300)	(50,300)

Goodwill on acquisition of OSGRME							-	14,164

Fair value adjustment of Net Assets on acquisition of OSGRME							-	8,602

Intercompany debtors							-	(191)

Total assets for the Group							99,801	102,116

Segment liabilities for reportable segments							(8,465)	(7,173)

Deferred taxation adjustment on acquisition of OSGRME							(1,491)	(1,605)

Intercompany creditors							-	191

Total liabilities for the Group							(9,956)	(8,587)

31. Related party transactions

The Company has 4 subsidiaries, OSG Records Management (Europe) Limited, Kreditmart Finance Limited, Flexinvest Limited and Flexinvest Bank Limited (see note 11 and 12). Details of the investments in Unistream Bank and Grindelia Holdings are presented in note 13.

Balances owing between the Company and any subsidiaries which are related parties have been eliminated on consolidation. This includes a loan receivable from Flexinvest (see note 15).

The conversion of the loan to equity in respect of OSGRME is disclosed in notes 11 and 12. Interest received on this loan up to date of conversion of £nil (year ended 31 March 2010: £398,574) is separately disclosed on the face of the statement of comprehensive income.

Per the Amended and Restated Management Agreement, the management fee and performance fee payable to Aurora Investment Advisors Limited ('AIAL') are as follows:

(a) Management fee of an amount equal to I) for all Valuation Dates up to and including 31 March 2011, 1% of the net asset value of the Company; and ii) for all Valuation Dates after 31 March 2011, 0.75% of net asset value of the Company;

(b)Performance fee is calculated as follows:

- 2.5% of the value of any disposals realised by the Company would be payable to the Manager, calculated on the value of assets of the Company realised up to £45 million, i.e. £0.40 per share (the "2.5% Tranche");

- 7.5% of the value of any disposals realised by the Company would be payable to the Manager, calculated on the value of assets of the Company realised between £45 million and £99 million, i.e. £0.40 per share to £0.88 per share (NAV) (the "7.5% Tranche"); and

- 20% of the value of any disposals realised by the Company would be payable to the Manager, calculated on the value of assets of the Company realised over £99 million, i.e. over £0.88 per share (the "20% Tranche").

such performance fees to decline by 20% per annum from 1 January 2012 in respect of the 2.5% Tranche, and by 20% per annum from 1 January 2013 in respect of each of the 7.5% Tranche and the 20% Tranche.

The total fees charged, which are at arm's length, to the profit or loss during the year was £1,979,720 (2010: 1,677,216). There were no outstanding fees at year end.

John McRoberts and James Cook each hold 47.5% of the ordinary share capital and 36.25% of the non-voting preference share capital of AIAL at year end. In addition, John McRoberts and James Cook are both directors of Aurora (II) GP Limited, a wholly owned subsidiary of AIAL.

The Company pays fees to Close Fund Services Limited ('CFSL') for its services as administrator. The total charge to profit or loss during the year was £72,500 (2010: £93,839),of which £nil (2010: £5,000) was outstanding at the year end.

The Directors of the Company and of Kreditmart OOO other than John McRoberts and James Cook, received fees for their services. The total charge to the profit or loss during the year was £179,722 (2010: £174,279), of which £nil (2010: £3,330) was outstanding at the year end. Details of directors' remuneration are disclosed in the Directors' Report.

32. Contingencies and capital commitments

The Group had no contingencies and capital commitments outstanding at the reporting date.

33. Events after the reporting date

The Board resolved on 22 June 2011 to withdraw from Kreditmart as soon as is practicable. The Kreditmart brand has been fair valued at £nil for the year ended 31 March 2011 and has continually incurred losses. It is uncertain at this stage how the board intends to dispose of the asset or what the cost of disposal will be, however they do not foresee this cost to be significant.

James Cook resigned from the board of directors, effective 17 June 2011.

There were no further material post balance events to report.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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