Interactive Prospect TargetingHdgs
11 September 2006
Interactive Prospect Targeting Holdings plc
Restatement of financial information for the year ended 31 December 2005 under
International Financial Reporting Standards ('IFRS')
Interactive Prospect Targeting Holdings plc has adopted International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards
Board (IASB) with effect from 1 January 2006. The first full-year reporting
period will be for the year ending 31 December 2006. The first results to be
prepared by the Group under IFRS will be the announcement of interim results for
the six-month period ended 30 June 2006.
The financial results of the Group previously published for the year ended 31
December 2005 and for the six months ended 30 June 2005 were prepared under
United Kingdom Generally Accepted Accounting Practice (UK GAAP). These results
have been restated in accordance with IFRS. The restated information will be
included as non-statutory comparative information in the interim results for the
six months ended 30 June 2006.
The purpose of this document is to:
• provide an overview of the impact of IFRS;
• summarise the basis of preparation of financial information
restated under IFRS;
• describe the principal differences between UK GAAP and IFRS that
impact the Group;
• detail the significant accounting policies of the Group under IFRS; and
• provide a reconciliation of financial information restated for IFRS
to that previously reported under UK GAAP.
Overview of impact of IFRS
Whilst the introduction of IFRS has no impact on the underlying cash flows of
the business, the areas of accounting that will have the most significant impact
on the Group's financial statements are as follows:
• The treatment of goodwill
• The recognition of other intangibles on acquisition, and their subsequent
• Employee share based payment arrangements
• Other employee benefits - compensated absences
• Income tax deduction for share options exercised
• Reclassification of software from property, plant and equipment to
• Revaluation of assets held for sale to market value at balance sheet date
• Deferred tax
The following table summarises the impact of the adoption of IFRS on the Group's
profit after tax for the 6 months ended 30 June 2005 and year ended 31 December
Reconciliation of profit for the period 6 months Year 6 months Year
ended ended ended ended
30 June 2005 31 December 30 June 31 December
2005 2005 2005
£'000 £'000 Basic EPS
Profit after tax under UK GAAP 926 2,312 3.0p 7.2p
Goodwill amortisation 2 118 - 0.4p
Other intangibles amortisation - (36) - (0.1p)
Share based payments (15) (37) - (0.1p)
Employee benefits: compensated absences 23 (21) - (0.1p)
Profit on disposal of available for sale (152) (218) (0.5p) (0.7p)
Reclassification of income tax deduction to equity - (525) - (1.7p)
Deferred taxation 149 246 0.5p 0.8p
7 (473) - (1.5p)
Profit after tax under IFRS 933 1,839 3.0p 5.7p
See comments on pages 3 to 4 for explanation of the transition adjustments to
Basis of preparation
For the year ended 31 December 2006, the Group will prepare consolidated
financial statements under IFRS as adopted by the European Commission. These
will be those International Accounting Standards, International Financial
Reporting Standards and related interpretations (SIC-IFRIC interpretations),
subsequent amendments to those standards and related interpretations, future
standards and related interpretations issued or adopted by the IASB that have
been endorsed by the European Commission. This process is ongoing and the
Commission has yet to endorse certain standards issued by the IASB.
The preliminary restated financial information has been prepared by management
using its best knowledge of the expected standards and interpretations of the
IASB, facts and circumstances, and accounting policies that will be applied when
the Group prepares its first complete set of IFRS financial statements as at 31
December 2006. Therefore, until such time, the possibility cannot be excluded
that the accompanying preliminary restated financial information may require
adjustment before constituting the final restated financial information.
Moreover, under IFRS, only a complete set of financial statements comprising a
balance sheet, income statement, statement of changes in equity, cash flow
statement, together with comparative financial information and explanatory
notes, can provide a fair presentation of the Group's financial position,
results of operations and cash flow.
First time adoption exemptions
The requirements for the first time adoption of IFRS are set out in IFRS 1 First
Time Adoption of International Financial Reporting Standards. Generally, IFRS 1
requires that accounting policies be adopted that are compliant with IFRS and
that these policies be applied retrospectively to all periods presented.
However, under IFRS 1, a number of exemptions are permitted to be taken in
preparing the balance sheet as at the date of transition to IFRS on 1 January
2005. The exemptions which the Group has taken advantage of are explained below:
o The Group has elected not to apply IFRS 3 Business Combinations to
business combinations that took place before 1 January 2005.
o The Group has elected not to apply the provisions of IFRS 2 Share-based
Payment to options and awards that were granted on or before 7 November
2002 or which had vested by 1 January 2005.
o The Group has elected to designate shares held in companies that are not
part of the Group as available for sale under IAS39 Financial Instruments:
recognition and measurement.
Principal differences between UK GAAP and IFRS that impact the Group
The appendix to this report reconciles the results and net assets of the Group
as reported under UK GAAP to the information restated under IFRS. The principal
differences between UK GAAP and IFRS as shown in the appendix are described
Under UK GAAP, the charges for the Group's share option schemes are based on the
difference between the market price of the share on the date of the grant and
the exercise price to be paid. As all option prices equated to the market price
at the date of the grant, no charge was required in the income statement.
IFRS 2 Share-based payment requires the fair value of the awards to be
calculated. This fair value is assessed at the date of the grant and is
recognised over the vesting period.
As a result, a charge of £15,000 for share-based payments has been recognised
within administrative expenses for the six months ended 30 June 2005. Similarly,
the charge recognised for the year ended 31 December 2005 was £37,000.
Goodwill arising on business combinations
Under UK GAAP, the difference between the consideration paid for an acquisition
and the fair value of the net assets acquired was recognised as goodwill. IFRS 3
requires that the intangible assets of an acquired business are recognised
separately from goodwill and are then amortised over their useful lives.
Under the IFRS 1 transition rules, the Group has elected not to identify any
acquired intangible assets for acquisitions made before 1 January 2005.
The Postal Preference Service Limited (PPS) was acquired by the Group in August
2005 giving rise to goodwill on acquisition of £2,928,000 under UK GAAP. In
applying IFRS 3 the Group has reclassified intangible assets arising on
acquisition of £766,000 out of goodwill, representing the values placed on the
PPS trade name and customer relationships. Amortisation charged on these
intangible assets of £37,000 was recognised from the date of acquisition to 31
Under UK GAAP, goodwill arising from business combinations was amortised over
its estimated useful economic life.
IFRS 3 Business combinations prohibits the amortisation of goodwill, instead
requiring the goodwill to be tested for impairment.
As a result, amortisation of goodwill resulting from the acquisition of
Newsletters Online Limited of £2,000 for the six months ended 30 June 2005 and
£5,000 for the year ended 31 December 2005 has been released to the income
Similarly the amortisation of goodwill resulting from the acquisition of The
Postal Preference Service Limited is decreased by £114,000 for the period from
date of acquisition to 31 December 2005.
Employee benefits: compensated absences
Under UK GAAP, the Group made no accrual for compensated absences. Under IAS 19
Employee benefits, the expected costs of short-term accumulating compensated
absences are accrued as earned by employees.
At the transition date of 1 January 2005, the balance sheet has been adjusted to
reflect liabilities not recognised under UK GAAP in respect of these compensated
absences of £52,000. In the six months to 30 June 2005, due to a reversal of
previously accrued costs, a credit of £23,000 was recorded within expenses.
However, in the year ended 31 December 2005, an increase in the accrued costs
results in an additional cost of £21,000 since 1 January 2005.
Under UK GAAP, Software licences were capitalised as property, plant and
equipment as part of computer equipment and depreciated over their useful
economic life. Under IFRS, IAS38 requires that software licences, which are not
an integral part of the related hardware, are capitalized as an intangible asset
and amortised over their useful economic life.
The impact of this change was to reclassify such software licenses which do not
form the integral part of the hardware, such as the operating system, from
property, plant and equipment to intangible assets. The related depreciation was
reclassified to amortisation expense in the income statement. The amounts
transferred were £72,000 as at 1 January 2005, £66,000 as at 30 June 2005 and
£307,000 as at 31 December 2005.The net impact on the income statement is £nil.
Assets held for sale
Under UK GAAP, assets held for sale were stated at cost. Under IFRS assets held
for sale are measured at fair value, with fair value gains or losses recognised
directly in equity, and recycled into the income statement on sale or impairment
of the asset at which time the cumulative gain or loss previously recognised in
equity is recognised in profit or loss for the period.
The impact of this change is to revalue assets held for sale at 1 January 2005
at their market value of £673,000, where previously they had been stated at cost
of £30,000. The difference of £643,000 was taken to revaluation reserve. A
deferred tax liability of £193,000 was also recognized on the revaluation
reserve at that date.
At 30 June 2005, after the disposal of some of these assets, the market value of
remaining assets was £186,000 and the resulting revaluation reserve was
£117,000. The net impact on the income statement is £nil.
Income tax deduction for share options exercised
Under UK GAAP, the Group recognised an income tax deduction for the excess of
market value of share options over their exercise price when share options were
IAS 12 Income Taxes requires deferred tax to be calculated based upon the number
of share options outstanding at the balance sheet date by reference to the
difference between the grant price and the market value of the shares at that
date. Changes to the amount of deferred tax in excess of the charge reported in
the income statement are recognised in equity not in income tax.
The impact of this change was to reclassify a tax deduction of £525,000 in the
year ended 31 December 2005 from income tax to equity. The net impact on the
income statement is £525,000.
Deferred tax was recognised in respect of all timing differences, with a few
exceptions that have originated but not reversed at the balance sheet date.
Timing differences arise when the profit or loss is recognised in a different
period in the tax computation from that in the financial statements.
Under IFRS the Group is required to adopt a balance sheet approach under which
temporary differences are identified for each asset and liability rather than
accounting for the effects of timing and permanent differences between taxable
and accounting profit.
The impact of this is to recognise deferred tax on the estimated future tax
deduction arising in relation to the exercise of UK employee share options and
adjustments to qualifying goodwill, holiday pay liabilities and intangible
assets and the related amortisation, following the different accounting
treatment of these items under IFRS.
At 31 December 2005 a deferred tax asset of £341,000 was reported in the UK GAAP
balance sheet. The IFRS balance sheet at that date includes a deferred tax asset
of £1,139,000 (the increase mainly arising as a result of the deferred tax asset
on share options) and a deferred tax liability of £219,000 (arising as a result
of the recognition of intangible assets on the PPS acquisition in accordance
with IFRS 3). Deferred tax adjustments arising on the transition to IFRS have
been offset only to the extent that this offset is permitted under IAS 12.
There is also a presentational change that includes classifying deferred tax
liabilities and assets as non-current and reporting them separately on the face
of the balance sheet.
There are no material differences between the cash flow statement prepared under
UK GAAP and that prepared under IFRS for each of the periods presented, other
than presentational changes.
Significant accounting policies
Basis of accounting
The financial statements have been prepared in accordance with International
Financial Reporting Standards for the first time, with a transition date of 1
January 2005. The financial statements have also been prepared in accordance
with IFRS adopted for use in the European Union and therefore comply with
Article 4 of the EU IAS Regulation.
The financial statements have been prepared on the historical cost basis. The
principal accounting policies adopted are set out below.
Basis of consolidation
The Group's consolidated financial statements incorporate the financial
statements of Interactive Prospect Targeting Holdings plc ('the Company') and
entities controlled by the Company (its 'subsidiaries'). 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.
The results of subsidiaries acquired or disposed of during the year are included
in the consolidated income statement 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
All intra-Group transactions, balances, income and expenses are eliminated on
The acquisition of subsidiaries is accounted for using the purchase method. The
cost of the acquisition is measured at the aggregate of the fair values, at the
date of exchange, of assets given, liabilities incurred or assumed, and equity
instruments issued by the Group in exchange for control of the acquiree, plus
any costs directly attributable to the business combination. The acquiree's
identifiable assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS 3 are recognised at their fair value at
the acquisition date, except for non-current assets that are classified as held
for resale in accordance with IFRS 5 Non-current assets held for sale and
discontinued operations, which are recognised and measured at fair value less
costs to sell.
Goodwill arising on acquisition is recognised as an asset and initially measured
at cost, being the excess of the cost of the business combination over the
Group's interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities recognised. If, after reassessment, the Group's
interest in the net fair value of the acquiree's identifiable assets,
liabilities and contingent liabilities exceed the cost of the business
combination, the excess is recognised immediately in profit or loss.
Non-current assets held for sale
Non-current assets classified as held for sale are measured at the lower of
carrying amount and fair value less costs to sell.
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the Group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary, associate or jointly controlled entity
at the date of acquisition. 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.
For the purpose of impairment testing, goodwill is allocated to each of the
Group's cash-generating units expected to benefit from the synergies of the
combination. Cash-generating units to which goodwill has been allocated are
tested for impairment annually, or more frequently when there is an indication
that the unit may be impaired. If the recoverable amount of the cash-generating
unit is less than the carrying amount of the unit, the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the
unit and then to the other assets of the unit pro-rata on the basis of the
carrying amount of each asset in the unit. An impairment loss recognised for
goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, associate or jointly controlled entity, the
attributable amount of goodwill is included in the determination of the profit
or loss on disposal.
Goodwill arising on acquisitions before the date of transition to IFRS has been
retained at the previous UK GAAP amounts subject to being tested for impairment
at that date.
Other intangible assets
Other intangible assets are held at cost less accumulated amortisation and any
recognised impairment loss.
Amortisation is charged so as to write off the cost of assets, less their
estimated residual value, on a straight-line basis over their estimated useful
lives as follows:
Data acquisition costs 3 years
Licences 1-5 years
Capitalised computer software 2 years
Property, plant and equipment
Property, plant and equipment are stated at cost, net of depreciation and any
recognised impairment loss.
Depreciation is charged so as to write off the cost or valuation of assets, over
the estimated useful lives, using the straight-line method, on the following
Computer equipment 33% on cost
Fixtures and fittings 20% on cost
Assets held under finance leases are depreciated over their expected useful
lives on the same basis as owned assets or, where shorter, over the term of the
Internally-generated intangible assets - research and development expenditure
Expenditure on research activities is recognised as an expense in the period in
which it is incurred.
An internally-generated intangible asset arising from the Group's website
developments is recognised only if all of the following conditions are met:
• an asset is created that can be identified (such as software and new
• it is probable that the asset created will generate future economic
• the development costs of the asset can be measured reliably.
Internally-generated intangible assets are amortised on a straight-line basis
over their useful lives. Where no internally-generated intangible asset can be
recognised, development expenditure is recognised as an expense in the period in
which it is incurred.
Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other
leases are classified as operating leases.
Assets held under finance leases are recognised as assets of the Group at their
fair value or, if lower, at the present value of the minimum lease payments,
each determined at the inception of the lease. The corresponding liability to
the lessor is included in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance charges and reduction of the
lease obligation so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged directly against income.
Rentals payable under operating leases are charged to income on a straight-line
basis over the term of the relevant lease. Benefits received and receivable as
an incentive to enter into an operating lease are also spread on a straight line
basis over the lease term.
The Group does not operate any pension plans, but does administer a stakeholder
pension scheme on behalf of any employees wishing to participate.
Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for goods and services provided in
the normal course of business, net of discounts, VAT and other sales related
Sales of goods are recognised when goods are delivered and title has passed.
Sales of services are recognised with reference to the stage of completion.
The individual financial statements of each Group company are presented in the
currency of the primary economic environment in which it operates (its
functional currency). For the purpose of the consolidated financial statements,
the results and financial position of each Group company are expressed in pounds
sterling, which is the functional currency of the Company, and the presentation
currency for the consolidated financial statements.
In preparing the financial statement of the individual companies, transactions
in currencies other than the entity's functional currency (foreign currencies)
are recorded at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary assets and liabilities that
are denominated in foreign currencies are retranslated at the rates prevailing
on the balance sheet date. Non-monetary items carried at fair value that are
denominated in foreign currencies are translated at the rates prevailing at the
date when the fair value was determined. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in profit or loss for the period.
Exchange differences arising on the retranslation of non-monetary items carried
at fair value are included in profit or loss for the period except for
differences arising on the retranslation of non-monetary items in respect of
which gains and losses are recognised directly in equity. For such non-monetary
items, any exchange component of that gain or loss is also recognised directly
For the purpose of presenting consolidated financial statements, the assets and
liabilities of the Group's foreign operations are translated at exchange rates
prevailing on the balance sheet date. Income and expense items are translated
at the average exchange rates for the period. Exchange differences arising are
classified as equity and transferred to the Group's translation reserve. Such
translation differences are recognised as income or as 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 closing rate.
Operating profit is stated after charging restructuring costs but before
investment income and finance costs.
The tax expense represents the sum of the tax currently payable and deferred
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or 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 balance sheet 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, and is accounted for using the balance sheet liability method. 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 the initial recognition of goodwill or from the
initial recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the tax profit nor the
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, 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.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it related to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities
and whey they relate to income taxes levied by the same taxation authority and
the Group intends to settle its current tax assets and liabilities on a net
Impairment of tangible and intangible assets excluding goodwill
At each balance sheet 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. Where the asset does not generate cash flows
that are independent from other assets, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs. An intangible
asset with an indefinite useful life is tested for impairment annually and
whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset or cash-generating unit is estimated to be
less than its carrying amount, the carrying amount of the asset or
cash-generating unit is reduced to its recoverable amount and the impairment
loss is recognised as an expense immediately.
When an impairment loss subsequently reverses, the carrying amount of the asset
or cash-generating unit 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 or cash-generating unit in prior years. A reversal of an
impairment loss is recognised as income immediately.
Financial assets and financial liabilities are recognised on the Group's balance
sheet when the Group becomes a party to the contractual provisions of the
Trade receivables do not carry any interest and are measured at their nominal
value as reduced by any appropriate allowances for irrecoverable amounts.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other
short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements 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.
Interest-bearing bank loans and overdrafts are recorded at the proceeds
received, net of direct issue costs. Finance charges are accounted for on an
accruals basis in profit or loss using the effective interest rate method and
are added to the carrying amount of the instrument to the extent that they are
not settled in the period in which they arise.
Trade payables are not interest bearing and are stated at their nominal value.
Equity instruments issued by the Company are recorded at the proceeds received,
net of direct issue costs.
Provisions are recognised when the Group has a present obligation as a result of
a past event, and it is probable that the Group will be required to settle that
obligation. Provisions are measured at the directors' best estimate of the
expenditure required to settle the obligation at the balance sheet date, and are
discounted to present value where the effect is material.
The Group has applied the requirements of IFRS 2 Share-based payment. In
accordance with the transitional provisions, IFRS 2 has been applied to all
grants of equity instruments after 7 November 2002 that were unvested at 1
The Group operates a number of equity-settled share-based payment schemes under
which share options are issued to certain employees. Equity-settled share-based
payments are measured at fair value (excluding the effect of non market-based
vesting conditions) at the date of grant. The fair value determined at the
grant date of the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Group's estimate of
shares that will eventually vest and adjusted for the effect of non market-based
Fair value is measured by use of the Black Scholes model. The expected life
used in the model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions, and behavioural
Consolidated income statement for the year ended 31 December 2005 restated for
UK GAAP Share-based Share-based Business Employee Assets Restated
in IFRS payment payment tax combinations benefits held for under
format IFRS 2 deduction sale
IAS 12 IFRS 3 IAS 19 IAS39 IFRS
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 13,560 - - - - - 13,560
Cost of sales (2,381) - - - - - (2,381)
Gross profit 11,179 - - - - 11,179
Administrative expenses (9,139) (37) - - (21) - (9,197)
Costs of restructuring (230) - - - - - (230)
Amortisation of goodwill / (118) - - 82 - - (36)
Total administrative expenses (9,487) (37) - 82 (21) - (9,463)
Operating profit 1,692 (37) - 82 (21) - 1,716
Profit on disposal of available - - - - (218) 509
for sale investments 727
Interest on bank deposits 190 - - - - - 190
Profit on ordinary activities
before tax 2,609 (37) - 82 (21) (218) 2,415
Tax (297) 11 (525) 11 6 218 (576)
Profit for the period after tax 2,312 (26) (525) 93 (15) - 1,839
Earning per share from continuing
Basic (pence) 7.2 (0.1) (1.6) 0.3 (0.0) - 5.7
Consolidated income statement for the 6 months ended 30 June 2005 restated for
UK GAAP Share-based Business Employee Assets Restated
in IFRS payment combinations benefits held for under
format IFRS 2 IFRS 3 IAS 19 IAS39 IFRS
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 5,669 - - - - 5,669
Cost of sales (1,109) - - - - (1,109)
Gross profit 4,560 - - - - 4,560
Administrative expenses (3,854) (15) - 23 - (3,846)
Costs of restructuring - - - - - -
Amortisation of goodwill / intangibles (2) - 2 - - -
Total administrative expenses (3,856) (15) 2 23 - (3,846)
Operating profit 704 (15) 2 23 - 714
Profit on disposal of available for sale 506 - - - (152) 354
Interest on bank deposits 119 - - - - 119
Profit on ordinary activities before tax 1,329 (15) 2 23 (152) 1,187
Tax (403) 4 - (7) 152 (254)
Profit for the period after tax 926 (11) 2 16 - 933
Earning per share from continuing operations
Basic (pence) 3.0 - - - - 3.0
Consolidated balance sheet at 31 December 2005 restated for IFRS
UK GAAP Share-based Business Employee Intangible Restated
assets IAS under IFRS
in IFRS payment combinations benefits 38
format IFRS 2 IFRS 3 IAS 19
£'000 £'000 £'000 £'000 £'000 £'000
Goodwill 2,855 - (417) - - 2,438
Other intangible assets 1,520 - 729 - 307 2,556
Property, plant and 756 - - - (307) 449
Deferred tax asset 341 776 - 22 - 1,139
5,472 776 312 22 - 6,582
Trade and other receivables 5,212 - - - - 5,212
Cash and cash equivalents 5,414 - - - - 5,414
10,626 - - - - 10,626
Total assets 16,098 776 312 22 - 17,208
Trade and other payables (4,190) - - (73) - (4,263)
Current tax liabilities (187) - - - - (187)
Obligations under finance (5) - - - - (5)
(4,382) - - (73) - (4,455)
Deferred tax liability - - (219) - - (219)
- - (219) - - (219)
Total liabilities (4,382) - (219) (73) - (4,674)
Net assets 11,716 776 93 (51) - 12,534
Share capital 143 - - - - 143
Share premium account 6,747 - - - - 6,747
Own shares (72) - - - - (72)
Share options reserve - 62 - - - 62
Other reserves 2,372 - - - - 2,372
Retained earnings 2,526 714 93 (51) - 3,282
Total equity 11,716 776 93 (51) - 12,534
Consolidated balance sheet at 30 June 2005 restated for IFRS
UK GAAP Share-based Business Employee Intangible Assets Restated
assets IAS held for under
in IFRS payment combinations benefits 38 sale IFRS
format IFRS 2 IFRS 3 IAS 19 IAS 39
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Goodwill 42 - 2 - - - 44
Other intangible assets 583 - - - 66 - 649
Property, plant and 471 - - - (66) - 405
Investments 2 - - - - (2) -
Deferred tax asset 8 650 - 9 - - 667
1,106 650 2 9 - - 1,765
Trade and other receivables 3,301 - - - - - 3,301
Cash and cash equivalents 5,461 - - - - - 5,461
8,762 - - - - - 8,762
Assets held for sale 17 - - - - 169 186
Total assets 9,885 650 2 9 - 167 10,713
Trade and other payables (1,781) - - (29) - (50) (1,860)
Current tax liabilities (538) - - - - - (538)
Obligations under finance (8) - - - - - (8)
(2,327) - - (29) - (50) (2,406)
Deferred tax liability - - - - - - -
- - - - - - -
Total liabilities (2,327) - - (29) - (50) (2,406)
Net assets 7,558 650 2 (20) - 117 8,307
Share premium account 3,915 3,915
Own shares (2) (2)
Share options reserve - 40 40
Revaluation reserve - - - - 117 117
Other reserves 2,372 2,372
Retained earnings 1,140 610 2 (20) 1,732
Total equity 7,558 650 2 (20) - 117 8,307
Consolidated balance sheet at 1 January 2005 restated for IFRS
UK GAAP Share-based Business Employee Intangible Assets Restated
assets IAS held for under IFRS
in IFRS payment combinations benefits 38 sale
format IFRS 2 IFRS 3 IAS 19 IAS 39
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Goodwill 45 - - - - - 45
Other intangible assets 403 - - - 72 - 475
Property, plant and 385 - - - (72) - 313
Investments 2 - - - - (2) -
Deferred tax asset 11 659 - 16 - - 686
846 659 - 16 - (2) 1,519
Trade and other 2,462 - - - - - 2,462
Cash and cash equivalents 5,204 - - - - - 5,204
7,666 - - - - - 7,666
Assets held for sale 28 - - - - 645 673
Total assets 8,540 659 - 16 - 643 9,858
Trade and other payables (1,731) - - (52) - (193) (1,976)
Current tax liabilities (152) - - - - - (152)
Obligations under finance (11) - - - - - (11)
(1,894) - - (52) - (193) (2,139)
Obligations under finance (3) - - - - - (3)
(3) - - - - - (3)
Total liabilities (1,897) - - (52) - (193) (2,142)
Net assets 6,643 659 - (36) - 450 7,716
Share capital 133 - - - - - 133
Share premium account 3,926 - - - - - 3,926
Own shares (2) - - - - - (2)
Share options reserve - 25 - - - - 25
Revaluation reserve - - - - - 450 450
Other reserves 2,372 - - - - - 2,372
Retained earnings 214 634 - (36) - - 812
Total equity 6,643 659 - (36) - 450 7,716
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