Final Results

Glen Group PLC
28 March 2008


28 March 2008
                                 Glen Group plc
                        ('Glen Group' or 'the Company')
                                        
                                  Final Results

Glen Group, the Edinburgh based provider of telecommunication solutions to the
SME market, is pleased to announce its final results for the year ended 30
September 2007.

Operating Highlights:

   • Pinnacle Telecom Group, acquired in June 2007, provides stable recurring
     income and is now at the heart of the business.
   • Major downsizing of Glen Communications in the second half, resulting in
     exceptional costs of £305k, strengthens the business going forward
   • Since the year end, the businesses of Eclectic Group Limited
     ('Eclectic') and its wholly owned subsidiary I G Software Limited
     ('inGroup') sold to Maxima Holdings plc for a net cash consideration of
     £2.7m. Carrying value of assets reduced to estimated realisation
   • All bank debt eliminated post year end

Financial Highlights:

   • Turnover increases 80% from £3.7m to £6.7m (under IFRS the turnover from
     the continuing business increases from £965k to £1.01m)
   • Operating loss before goodwill impairment, intangible amortisation and
     exceptionals widens from £597k to £1.2m under IFRS treatment
   • A prudent approach taken to the carrying value of goodwill and intangible
     assets with £1.06m written off

Eric M Hagman, Chairman of Glen Group commented:

'The company has come to a crossroads. Its size is small in the public arena,
particularly in the present climate and the profits generated by the remaining
business, focused around Pinnacle, are not sufficient to cover all the costs of
the holding company, Glen Group plc. However, following the disposal of Eclectic
and inGroup, we have a debt free balance sheet with cash in hand.

Your Board continues to explore all possible options to return the business to a
profitable and cash generative model. Whilst we review our options, our
operational focus is the communications business which continues to meet our
financial targets. We expect to complete the review by the summer 2008, and I
can assure all shareholders that the agreed approach will meet our cash and
profit criteria from commencement.'

Enquiries:

Glen Group plc
Graham J Duncan, Chief Executive Officer                 Tel: [phone]

Jonathan Wright
Seymour Pierce                                           Tel: [phone]

Pelham PR
Alex Walters                                             Tel: [phone]


CHAIRMAN'S STATEMENT

Overview

We have had a disappointing year. Our operating loss, before IFRS adjustments
and exceptional costs as more fully explained in the Business Review, was £1.2m
compared to £597k last year. Although the first half saw us trading in line with
expectations, the second half has been coloured by several major events.
On the positive side we acquired the Pinnacle Telecom Group of companies early
in June 2007, giving us valuable recurring income and a move into mainstream
telecommunications.

We also acquired I G Software Limited ('inGroup') in August as an add-on to the
service portfolio of Eclectic, a provider of business intelligence solutions to
the corporate and middle market space.

Eclectic was the biggest company in the group and sat at the heart of the
business in terms of turnover and profit. However, Eclectic performed below
expectations, particularly in the second half, and when the opportunity arose we
elected to dispose of Eclectic and inGroup and completed the sale in early
January 2008.

During the year we also materially downscaled the activities of Glen
Communications.

Eclectic and inGroup

In the first half, Eclectic reported a strong operating profit of £191k. This
was after an investment of £76k incurred in that period to develop Oracle and
Microsoft consultancy practices. In the second half Eclectic experienced an
operating loss of £116k making the full year operating profit a most
disappointing £75k. Although part of this was caused by an increasing investment
in the new practices, which resulted in further costs of £136k in the second
half, the result was significantly below expectations resulting in your Board
immediately having to consider the future of this business.

The Eclectic business was also augmented at the beginning of August with the
acquisition of inGroup. From the date of acquisition this company performed
poorly and contributed a very modest £6k to operating profit over the two month
period from acquisition to the year end. Although its performance picked up
after the year end, the operating result for the year fell well below our
expectations.

Given the economic climate, particularly in respect of the credit markets and
our significant involvement with the financial services industry, your Board
felt that the risk of continuing in this business could overwhelm the group.
Accordingly, we moved quickly to dispose of these businesses, and completed the
sale in early January 2008. We believe that it was a timely sale.

Glen Communications

Since our original AIM admission in December 2004, we have invested significant
sums in developing the Glen Communications business using a direct sales team.
This company was our prime SME focussed business, but much of its income was
non-recurring. The acquisition last year of ExploreIT allowed us to have a more
rounded portfolio of integrated services to the SME market, as well as
contributing some recurring income. As outlined to shareholders in our interim
statement, we started to reduce the size of the sales team and concentrate on
IT-centric services which could give us higher revenues and margins from each
sale. However, we found that the transition to IT was developing at a slower
pace than we expected.
The acquisition of Pinnacle in June 2007 gave us the impetus to abandon both the
direct selling and the project driven business, allowing us to concentrate on
recurring income streams. Although we firmly believe that there was nothing
fundamentally wrong with a direct sales strategy, it was expensive and becoming
increasingly difficult to fund. We also believe that the time scale to
profitability was too long and difficult to sustain, given our size. We have
incurred material costs in downsizing this business, which included the
departure of the Managing Director and all the employees of that company.

Pinnacle Group

The acquisition of this company in June 2007 has proven to be a success story.
With stable recurring income, and an increasing customer base, Pinnacle has
performed well and the various companies in the Pinnacle group have contributed
operating profit of £41k since acquisition. Your Board has given approval to
expand this business, in a manner consistent with a prudent approach. The
development of this business maximises the skill set of our highly experienced
team. Our CEO, Graham Duncan, has 25 years of experience in the telecom business
and Alan Bonner, who co-founded Pinnacle and is its MD, has been in the business
over 10 years.

Summary

The company has come to a crossroads. Its size is small in the public arena,
particularly in the present climate and the profits generated by the remaining
business, focused around Pinnacle, are not sufficient to cover all the costs of
the holding company, Glen Group plc. However, following the disposal of Eclectic
and inGroup, we have a debt free balance sheet with cash in hand.

Your Board continues to explore all possible options to return the business to a
profitable and cash generative model. Whilst we review our options, our
operational focus is the communications business which continues to meet our
financial targets. We expect to complete the review by the summer 2008, and I
can assure all shareholders that the agreed approach will meet our cash and
profit criteria from commencement.

In order to strengthen our Board, I was delighted a few weeks ago to welcome to
the Board David Hewitt, a sales specialist of considerable experience, as an
additional non-executive director His skill set will give Graham Duncan, our
CEO, valuable support as we seek to move the business forward. David Hewitt will
come up for election at our Annual General Meeting. I would also like to pay
tribute to Peter Ford who retires by rotation at the AGM and is not seeking
re-election. Peter has made a major contribution to the Company over a six year
period but now feels that the time is right to move on. On behalf of all members
of the Board, I wish him well.

This has been a year of immense change, the funding of which has had a major
impact on our operating costs. This, coupled with the requirements of IFRS
accounting, has had a profound effect on our results. With these changes, and
costs, behind us we anticipate a period of stability and sustainable growth
going forward.

Full details of the financial performance for the full year are contained in the
Business Review.

Eric M Hagman CBE

CHAIRMAN

28 March 2008




BUSINESS REVIEW

Introduction

The year can be characterised as one of significant change. Following the
acquisition on 7 June 2007 of Pinnacle Group Limited and its related companies
Pinnacle Telecom plc, Pinnacle Mobile Limited and Sports Club Telecom Limited
(collectively 'Pinnacle Group') the integrated communications business was
redefined around the telecom operations of Pinnacle Group. Glen Communications
Limited and its wholly owned subsidiary Explore IT Limited stopped active
selling of project based IT services to the SME market and its Managing Director
left following a material downscaling of this business which included the
withdrawal of the direct sales team. As outlined in the Chairman's Statement,
major changes have also been actioned since the year end with the sale on 7
January 2008 of Eclectic and inGroup to Maxima Holdings plc. The transaction
took the form of a sale of the assets and undertaking of the businesses of
Eclectic and inGroup, including its people, supply agreements, customer
contracts, the Eclectic and inGroup names and other related data, all with
effect as at close of business on 31 December 2007. Glen Group plc has
guaranteed the obligations of Eclectic and inGroup under the agreement. The
practical effect of selling the business undertakings, rather than the share
capital of the companies, is that Glen is left with the two legal entities to
wind down. This is currently in progress and is expected to take several months
to complete.

The total cash consideration received was £2.72m.
These actions have left the retained businesses operating with fewer than 10
employees out of a single office in Edinburgh, and the cost structures have been
completely overhauled.

Since 7 January 2008, the Glen Group has consisted of five operating companies
all addressing the SME market. Following a strategic review of our SME focused
businesses conducted after the acquisition of Pinnacle Group in June 2007 the
entire business was refocused on services that can generate recurring income
streams.
The retained businesses are as follows:

   • Pinnacle Telecom plc and Sports Club Telecom Limited, which provide line
     rental and calls, utilising the group's own in-house billing system;
   • Pinnacle Mobile Limited which provides a range of mobile voice and data
     services;
   • Glen Communications Limited, which principally provides voice-based
     hosted broadband services (hosted 'VoIP') and will in the future provide a
     range of application-based hosted solutions; and
   • Explore IT Limited, which provides external IT support services and
     internal technical support for our IP (Internet Protocol) solutions.

Our customer acquisition strategy is now focused on generating customers for our
telecom solutions business where we package line rental and calls for business
customers. This service is at the core of the Pinnacle Group and the strategy
going forward is to cross sell our other services into this customer base. Our
customer acquisition strategy is being driven by the use of an offshore call
centre under the control of an experienced consultant with several years of
success in this area. The use of an offshore call centre has been introduced
since the year end and has recently been up-scaled following a successful trial
period. It is our intention to introduce other indirect channels to market
during 2008.

These changes were designed to a) significantly lower our costs, b) deliver
services and cross selling opportunities into business areas which we perceive
to be the fastest growing in the integrated communications space, c) deliver
regular recurring income to our business and d) provide a much more focused
approach to the marketplace.

As an innovative company, we constantly examine the application of new
technologies to our market as the market moves away from traditional
telecommunication technologies to those that use IP technology, the language of
the Internet. We see rapid change, and therefore opportunities, in introducing
IP based solutions to customers in this fast moving market and are currently
examining a number of initiatives in this area.

Accounting under the IFRS rules requires us to treat the sale of Eclectic and
inGroup, which took place after the year end, as a single line item headed
'discontinued operations' in the consolidated income statement to 30 September
2007 and as 'assets included in disposal groups' in the consolidated balance
sheet at 30 September 2007. Moreover, the 2006 comparative figures in the
consolidated income statement have also been similarly adjusted. In the
consolidated balance sheet at 30 September 2007, there is also an adjustment
which writes down the carrying value of the disposal groups to the anticipated
realisable value of the assets and businesses sold.

This presentation, in our view, makes comparison against the previously
published figures for 2006 and the half year to 31 March 2007 very difficult.
Accordingly, we have shown below the results for 2007 in a format which we
believe makes for a simpler understanding and an easier comparison against the
published results for 2006.

1) Revised Presentation

The consolidated income statement for the year ended 30 September 2007 and the
2006 figures, as published in the prior year, are as follows:

CONSOLIDATED INCOME STATEMENT                   12 Months           12 Months
                                        30 September 2007   30 September 2006
Revenue:                                                £                   £

Eclectic                                        5,499,844           2,733,144
inGroup                                           171,091                   -
Glen Communications, including 
Explore IT                                        638,044             965,101
Pinnacle Group                                    376,826                   -

Totals                                          6,685,805           3,698,245

Cost of Sales                                  (4,917,696)         (2,365,896)

Gross Profit                                    1,768,109           1,332,349

Administration expenses                        (2,894,803)         (1,921,571)

Operating loss before amortisation,
impairment and fundamental
reorganisation                                 (1,126,694)           (589,222)

Amortisation of intangibles                       (65,741)                  -
Impairment of goodwill                         (1,444,111)                  -
Exceptional cost of fundamental
reorganisation                                   (305,415)                  -

Operating loss                                 (2,941,961)           (589,222)
Finance costs                                     (62,195)            (20,566)

Loss before taxation                           (3,004,156)           (609,788)
Taxation                                           (1,221)             (3,803)

Loss for the year                              (3,005,377)           (613,591)



2)  Revenue

Revenue for the full year was £6,685,805 compared to £3,698,245 in the
equivalent period last year, a rise of approximately 80%, due largely to the
impact of acquisitions. An analysis of revenue is as follows:

CONSOLIDATED INCOME STATEMENT                12 Months               12 Months

                                     30 September 2007       30 September 2006
Revenue:                                             £                       £

Eclectic                                     5,499,844               2,733,144
In Group                         1             171,091                       -
Glen Communications, including
Explore IT Limited                             638,044                 965,101
Pinnacle Group                   2             376,826                       -

Totals                                       6,685,805               3,698,245


Notes:

1.  From date of acquisition on 10 August 2007
2.  From date of acquisition on 7 June 2007

Revenue in the first half of the financial year was reported at £2,924,819. The
second half revenue therefore amounts to £3,760,986, an increase of 28.5% in the
second half, which can be mainly explained by the impact of acquisitions in the
second half, coupled with a rising revenue from Eclectic mainly due to the
effect of licence sales.
The revenue in Glen Communications, including Explore IT, has been adversely
affected by the removal of the direct sales team coupled with a significant
reduction in other staff numbers including the closure of the office in
Rotherham and the abandonment of project based IT solutions aimed at the SME
market and sold through Explore IT.

3) Gross Margins

The overall gross profit for the full year was £1,768,109, representing a gross
margin of 26.4%. This compares to a gross margin of 36.0% for last year. The
margin has been adversely affected by a changing mix of services, but more
materially by costs of £212,467 incurred by Eclectic in establishing Oracle and
Microsoft practices, which have had little impact on the top line in the current
year. Without these costs, the margin would have been 29.6%. In addition,
Eclectic's licence sales represent 26.6% of Eclectic's overall revenue, and
historically sold on low margins, compared to just 13.3% of revenue last year.
These factors have adversely affected the overall margin.

4) Exceptional Reorganisation Costs

As well as the development costs of £212,467 mentioned above which are included
in cost of sales, the operating result for the year has also been very
materially affected by the costs of a fundamental reorganisation totalling
£305,415. These costs relate to specific moves taken to eliminate the direct
sales team, close the Rotherham office, release people and abandon the IT
project business. The majority of these costs relate to contractual termination
and benefits paid to senior managers and others who have left the business.

5) Operating Loss before amortisation, impairment and fundamental reorganisation

In the full year we have incurred an operating loss of £1,126,694 (2006:
£589,222). Without the development costs, noted above, the operating loss would
have been £914,227. In the first half of the financial year, the operating loss
was reported as £565,350. In the second half, the operating loss has reduced
marginally to £561,344.

An analysis of the operating profit and loss by company and/or business unit is
as follows:
      

CONSOLIDATED INCOME STATEMENT                       12 Months        12 Months
                                                 30 September     30 September
                                                         2007             2006
Operating profit/(loss) before exceptional                  £                £
costs:

Eclectic                                   1           75,030          147,941
In Group                                   2            6,337                -
Glen Communications, including
Explore IT Limited                                   (681,888)        (365,894)
Pinnacle Group                             3           41,302                -
Glen Group plc                                       (567,475)        (371,269)
Totals                                             (1,126,694)        (589,222)

Notes:

1  2006 figures cover a seven and a half month period
2  From date of acquisition on 10 August 2007
3. From date of acquisition on 7 June 2007

The overall performance for the year has been disappointing and major steps have
been taken to fundamentally change the structure of the business. Comments on
the individual performance by business unit are as follows:

a) Eclectic

The result has been coloured by the investment made to develop Oracle and
Microsoft practices during the year which totalled £212,467, without the
generation of any corresponding material income. With these development costs
excluded, Eclectic would have delivered a profit of £287,497. It was anticipated
that the development costs would self fund over a 12 month period and, because
this did not materialise, the actual performance fell well short of our internal
budgets. This business was sold on 7 January 2008.

b) inGroup

InGroup was acquired less than two months before the year end and its initial
trading was disappointing, delivering a profit of £6,337 over that period. In
the short period under which we owned the business, we had taken material steps
to integrate its operations with that of Eclectic, a process which had been
largely completed by the time we sold the business on 7 January 2008.

c) Glen Communications/Explore IT

In the first half of the year, Glen Communications, together with Explore IT,
returned an operating loss of £276,420 before reorganisation costs. In the
second half the losses have been reduced to £168,590. Since acquiring Pinnacle
in June 2007, we have reduced Glen Communications to a near shell. It no longer
has any employees and much of the loss for the year to 30 September 2007 is
taken up by salary and benefit costs, employee termination costs, office closure
costs and costs associated with running a direct sales team, all of which has
now been eliminated.

Explore IT has also been slimmed down but it carries an important skill set for
our business going forward and has a solid base of recurring income.

d) Pinnacle Group

Since acquisition, Pinnacle has delivered a performance in line with our
expectations and it is running profitably on a base of mainly recurring income.
Since acquisition the Pinnacle companies have delivered an operating profit of
£41,302. Apart from its people, its key assets are its billing system, which we
are continuing to develop, and its customer base which delivers a steady stream
of recurring income.

e) Glen Group plc

The holding company carries all the costs of the Board and the AIM listing
costs. Although the costs have increased from £371,269 last year to £567,475
this year, an increase of £196,206, much of this cost can be attributed to the
accounting group which we created inside the holding company structure following
the acquisition of Eclectic. This group was disbanded in late September when the
accounting costs were transferred back to the operating companies.

f) Financing

During the year, the earn-out provisions associated with the acquisition of
Eclectic in February 2006 crystallised. Eclectic delivered the maximum level of
profits under the terms of the earn-out conditions and, accordingly, Glen Group
issued 73,825,818 shares at 1.067p per share to satisfy the deferred
consideration payable to the vendors, all in accordance with the earn-out
formula contained in the sale and purchase agreement.

On 27 February 2007, following shareholder approval, the company's share capital
was reorganised. Holders of each ordinary share of nominal one penny each
received one ordinary share of nominal one-tenth of a penny and one deferred
share of nominal nine-tenths of a penny. The conditions attaching to the
deferred shares render them worthless and the practical effect is to lower the
nominal value of the shares to one-tenth of a penny to allow the company to
issue shares in the future. This had not been possible throughout most of 2006
as the market price of the shares had fallen below the original nominal value of
one penny per share, and the issue of shares at a discount to the nominal value
is unlawful.

At the same time as the reorganisation became effective, the company raised a
further £500,000 (before expenses) in new equity, applied to expanding working
capital, by the issue of 100,000,000 new ordinary shares at 0.50 pence per
share. The company has also issued further equity during the year as follows:

  • On 14 May 2007 the company raised £350,000 (before expenses) by the
    issue of 100,000,000 new ordinary shares at 0.35 pence per share in order to
    assist acquisitions, particularly the costs of due diligence, and provide
    further working capital,
  • On 6 June 2007 the company announced the acquisition of Pinnacle Group
    Limited for a consideration of £700,000 satisfied by the issue of
    122,727,273 shares at 0.55 pence per share and £25,000 in cash. The shares
    were issued at a premium of 15.8% to the then mid-market price.
  • On 25 June 2007, the company issued 3,863,636 new ordinary shares at
    0.55 pence per share to acquire certain minority interests in Sports Club
    Telecom Limited and 1,000,000 new ordinary shares at 0.55 pence per share to
    acquire 50% of the shares in Pinnacle Mobile Limited, giving the group 100%
    ownership of both companies. These shares were issued at a premium of 15.8%
    to the then mid-market price.
  • On 9 August 2007, the company announced the acquisition of I G Software
    Limited ('inGroup') for a consideration of £1,350,000 satisfied by the issue
    of 200,000,000 new ordinary shares at 0.55 pence per share and £250,000 in
    cash. The shares were issued at a premium of 100% to the then mid-market
    price.
  • On 23 August 2007 the company raised £400,000 (before expenses) by the
    issue of 200,000,000 new ordinary shares at 0.20 pence per share in order to
    provide further working capital.
  • On 19 September 2007 the company completed a follow-on fund raising of
    £130,000 (before expenses) by the issue of 65,000,000 new ordinary shares at
    0.20 pence per share in order to provide further working capital.

Where shares are issued at a premium to the mid-market price, a fair value
adjustment is processed in the financial statements which recognises the
difference between the value of shares issued at a premium and the value of the
relevant shares had they been issued at the prevailing mid-market price. In the
year to 30 September 2007 the fair value adjustment was £646,909 (2006:
£417,221)

6) Amortisation of intangibles, impairment of goodwill and exceptional
cost of fundamental reorganisation

In accordance with IFRS, we have reviewed the assets acquired on the acquisition
of Pinnacle Group Limited (consisting of Pinnacle Telecom plc and Sports Club
Telecom Limited), and have allocated the net goodwill that was created,
totalling £717,109, as follows:

  Billing system £150,000
  Customer base £567,109

We are amortising these intangible assets over five years. Along with the
amortisation of intangibles in ExploreIT, this has resulted in a charge to the
consolidation income statement of £65,741. The Board has also reviewed the
carrying cost of the goodwill relating to Glen Communications and ExploreIT and
have determined that it is prudent to write it off. This has resulted in a
charge of £994,111 in the consolidated income statement.
The costs of fundamental reorganisation are commented on at 4) above.

7) Discontinued operations

This consists of the profits of Eclectic and inGroup which have been retained
for the period, totalling £28,219, less a write down of £450,000 relating to the
estimated realisable value of the assets retained, following the sale of the
business of these companies in January 2008.

Graham J Duncan MA CA

CHIEF EXECUTIVE

28 March 2008


CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 30 SEPTEMBER 2007

                                                       Year                    Year
                                                      ended                   ended
                                                       2007                    2006
                                                          £                       £

Revenue                                           1,014,870                 965,101

Cost of sales                                      (777,911)               (550,532)

Gross profit                                        236,959                 414,569

Administration expenses                          (1,445,020)             (1,011,732)

Operating loss before amortisation,
impairment of goodwill and                       (1,208,061)               (597,163)
exceptional cost

Amortisation of intangibles                         (65,741)                      -
Impairment of goodwill                             (994,111)                      -
Exceptional cost of fundamental
reorganisation                                     (305,415)                      -

Operating loss                                   (2,573,328)               (597,163)

Interest receivable                                   2,771                   3,054
Interest payable                                    (12,600)                (10,170)

Finance costs                                        (9,829)                 (7,116)

Loss before tax                                  (2,583,157)               (604,279)

Taxation                                               (439)                 (3,803)

Loss for the year from continuing
operations                                       (2,583,596)               (608,082)

Discontinued operations
Loss for the year from discontinued
operations                                         (421,781)                 (5,509)

Loss for the year                                (3,005,377)               (613,591)

Loss per share
- Loss per share basic and diluted -
continuing                                            (0.46)p                 (0.28)p
- Loss per share basic and diluted -
discontinued                                          (0.07)p                 (0.00)p
- Loss per share basic and diluted -              
total                                                 (0.53)p                 (0.28)p

There are no other gains or losses other than the loss for the year.




CONSOLIDATED BALANCE SHEET

AS AT 30 SEPTEMBER 2007

                                              2007          2006
                                                 £             £
Assets
Non-current assets
Goodwill                                         -     3,562,740
Intangible assets                          751,368       100,000
Property, plant and equipment              105,132       112,667

                                           856,500     3,775,407

Current assets
Inventories                                 22,524        26,752
Trade and other receivables              1,729,599     1,571,471
Cash and cash equivalents                  157,361         1,075

Total current assets                     1,909,484     1,599,298
Assets included in disposal groups       2,749,005

Total assets                             5,514,989     5,374,705

Short term borrowings                     (587,308)     (578,731)
Trade payables                          (1,234,194)     (939,817)
Other taxes and social
security costs                            (442,776)     (160,213)
Accruals and other payables               (384,987)     (242,173)

Total current liabilities               (2,649,265)   (1,920,934)
Non-current liabilities                   
Long-term borrowings                       (65,155)      (87,557)

Total liabilities                       (2,714,420)   (2,008,491)

Net assets                               2,800,569     3,366,214


Equity attributable to equity holders of the parent

Share capital                            4,807,680     3,276,831
Share premium account                    3,207,593       860,817
Shares to be issued                              -       787,500
Other reserve                               16,544        20,028
Fair value adjustment                   (1,064,130)     (417,221)
Profit and loss account                 (4,167,118)   (1,161,741)

Total equity                             2,800,569     3,366,214



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2007

                                 Share       Share    Shares to       Other       Fair       Retained          
                               Capital     Premium    be issued     Reserve      Value       Earnings         Total  
                                     £           £            £           £          £              £             £

At 1 October 2005              600,000     957,541            -         815          -        (548,150)       1,010,206
Loss for the year                    -           -            -           -          -        (613,591)        (613,591)

Recognised directly in
equity

Share issue                  2,676,831           -            -           -   (417,221)              -        2,259,610
Shares to be issued as
part of acquisition                  -           -      787,500           -          -               -          787,500
Premium on share issue               -     335,669            -           -          -               -          335,669
Expenses incurred
on share issue                       -    (432,393)           -           -          -               -         (432,393)
Share-based payments                 -           -            -      19,213          -               -           19,213

Net change
directly in equity           2,676,831     (96,724)     787,500      19,213   (417,221)              -        2,969,599

Total movements              2,676,831     (96,724)     787,500      19,213   (417,221)       (613,591)       2,356,008

Equity at 30 September 2006  3,276,831     860,817      787,500      20,028   (417,221)     (1,161,741)       3,366,214

At 1 October 2006            3,276,831     860,817      787,500      20,028   (417,221)     (1,161,741)       3,366,214
Loss for the year                    -           -            -           -          -      (3,005,377)      (3,005,377)

Recognised directly in
equity

Share issue                  1,530,849           -            -           -   (646,909)               -         883,940
Shares issued as part
of acquisition                       -           -     (787,500)          -          -                -        (787,500)
Premium on share issue               -   2,438,401            -           -          -                -       2,438,401
Share based payments                 -           -            -       8,272          -                -           8,272
Lapse of share options               -           -            -     (11,765)         -                -         (11,765)
Expenses incurred
on share issue                             (91,625)                                                             (91,625)

Net change directly
in equity                    1,530,849   2,346,776    (787,500)      (3,484)  (646,909)               -       2,439,732

Total movements              1,530,849   2,346,776    (787,500)      (3,484)  (646,909)      (3,005,377)       (565,645)

Equity at 30 September 2007  4,807,680   3,207,593           -       16,544 (1,064,130)      (4,167,118)      2,800,569



CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 30 SEPTEMBER 2007
                                                           2007         2006
                                                              £            £
Cash flows from operating activities
Operating loss (including discontinued operations)   (2,491,961)    (589,222)
Adjustments for:
Depreciation                                             93,778       49,596
Amortisation                                             65,741            -
Impairment of goodwill                                  994,110            -
Release of negative goodwill                             (9,557)           -
Other non-cash items                                     (3,484)      19,213
Payment of corporation tax                               (8,712)           -
Decrease/(increase) in inventories                       11,228      (16,639)
Decrease/(increase) in trade and other receivables      331,844   (1,362,845)
Increase in trade payables, accruals and other
creditors                                                70,872    1,099,760

Net cash outflow from operating activities             (946,141)    (800,137)

Cash flows from investing activities
Purchase of property, plant and equipment              (135,220)     (56,573)
Sale of property, plant and equipment                         -          474
Acquisition of subsidiaries, net of cash                 25,292   (2,412,993)
acquired

Net cash used in investing activities                  (109,928)  (2,469,092)

Cash flows from financing activities
Interest paid (net)                                     (62,195)     (20,556)
Issue of shares                                       1,380,000    3,012,500
Receipt of bank finance                                       -       84,215
Repayment of bank borrowing                             (28,716)     (32,612)
Repayment of directors' and shareholder loans                 -      (40,000)
Former subsidiary director's loan notes less
repayments                                              (50,000)      50,000
Receipt of finance leases less repayments                34,695        9,547
Expenses paid in connection with share issues           (91,625)    (432,393)

Net cash from financing activities                    1,182,159    2,630,701

Net (decrease)/increase in cash                         126,090     (638,538)
Cash and cash equivalents at beginning of period       (475,547)     162,991

Cash and cash equivalents at end of period             (349,457)    (475,547)

Cash and cash equivalents comprise:
Cash and cash equivalents                               157,361        1,075
Bank overdrafts                                        (506,818)    (476,622)

                                                       (349,457)    (475,547)

Note:
The report and accounts of the company for the year ended 30 September 2007 will
be despatched to shareholders on 31 March 2008 and will be available from that
date to be viewed on the company's website at www.glengroup.co.uk.



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