Information  X 
Enter a valid email address

Weather Lottery plc (BOX)

  Print      Mail a friend

Wednesday 30 January, 2008

Weather Lottery plc

Final Results

                                      The Weather Lottery plc
                                           (the `Company')

                             FINAL RESULTS FOR THE YEAR ENDED 31 JULY 2007

30 January 2008

CHIEF EXECUTIVES STATEMENT

The financial statements accompanying this statement reflect our first full financial year whilst being quoted on the
AIM Market.  During the year, lottery lines played stayed level at approximately 28,500 however this does not reflect
the churn rate that was experienced.  Therefore whilst players opened 4,000 new lottery lines, the same number of lines
were lost due to normal attrition rates

In order to reduce the churn rate, our website was re-launched in December 07 creating clarity to the navigation and
fundraising element. One of the major benefits of the new website is a client can now register online directly from the
website   We also plan to introduce special £100,000 draws to enhance player growth. A Society must qualify for the
£100,000 draw by achieving additional lines.

We have been pleased by the number of new client enquiries that we received during the year.  This remains very healthy
but the translation of these enquiries to playing lines has proved more difficult.  We have taken a number of steps to
strengthen our sales and marketing effort with a view to converting more enquiries into new clients and lines in the
current financial year.

Recent operational developments include the employment of a new experienced marketing manager in December In addition, a
nationwide project to establish commissioned agents throughout the country has been implemented This will be
supplemented by county seminars to promote The Weather Lottery. Finally, email databases are being purchased to enhance
our presence in the field of Charities Sports and Education.

A major risk to the Company is the loss of clients and agents to attract future players Hence all the above efforts to
mitigate this risk.  In addition, new systems for converting enquiries into clients and lines are in place to increase
Society entry and linage increase.

Financial review

The year ended 31 July 2007 showed a loss after tax of £170,000 compared to a loss after tax of £82,000 in the year
ended 31 July 2006. The increased loss was due to the additional costs of being quoted on AIM.  The Company has taken
action and made cost savings by reducing the number of games from five to four per week.

Strategy and Outlook

The Weather Lottery's objective remains to build and expand its paper based and online entry for Society Lotteries in
the fields of Charity, Education and Sport. Whilst considerable progress has been made in establishing these services
much has still to be done to improve, expand and enhance them.

It is intended to enhance shareholder value by continued expansion of business both organically and by strategic
acquisition.

The Weather Lottery is registered and governed by the Gambling Commission without which we could not trade, under the
new Gaming Act 2005 and we do not anticipate any changes to the law which would affect our business.

I look forward to 2008 as being a pivotal year in the development of your Company. We now have in place the facilities
to allow it to take opportunities to grow to a higher level



K G Milhench
Chief Executive


CHAIRMAN'S STATEMENT

I am pleased to report the Annual Results of our Company for the 12 month period ending 31st July 2007.

Unfortunately the Company recorded a loss for the period of £170,000 as a result of static sales and the increased costs
of the AIM listing.

However we believe that recent marketing initiatives which are now being implemented will at last enable the Company to
move forward and begin to achieve significant sales momentum.

I would like to thank the staff and Directors for their endeavours and hard work in the continued development of the
business of The Weather Lottery plc.



A Moore
Non Executive Chairman

------

For further information:

The Weather Lottery plc                            0113 2750002
Keith Milhench
Website www.theweatherlottery.com

SVS Securities plc                                 020 7638 5600
Ian Callaway/Peter Manfield

Blomfield Corporate Finance Ltd                    020 7512 0191
Nick Harriss

------









DIRECTORS' REPORT

The directors present their report and the audited financial statements for the year ended 31 July 2007.

Principal activities and business review

The principal activity of the Group in the year under review was that of lottery administrators.

The results for the year are set out in the profit and loss account on page 12.  A review of the business and future
developments is provided in the Chief Executive's statement on page 4.

The loss for the financial year after tax amounted to £170,000 (2006: £82,000).

Proposed dividend

The directors do not recommend the payment of a dividend (2006: £Nil).

Directors and their interests

The beneficial interests of the directors of the Company at the end of the year in the issued ordinary share capital of
the Company were as follows:


                                                              Ordinary share capital
                                                               As at 31        As at 31
                                                              July 2007       July 2006
                                                                            (or date of
                                                                            appointment)
                                                                 No. of          No. of
                                                            0.1p shares     0.1p shares


K G Milhench                                                  7,500,000        7,500,000
N G McGowan                                                   1,850,000        1,850,000
A Moore                                                      13,700,000*      13,700,000*
M Mills (appointed 7 September 2006)                          5,537,500*       5,537,500*

* - The holding of A Moore includes 5,537,500 held on trust for M Mills, which are also disclosed above.

None of the directors have held or exercised any share options during the year, or held any other beneficial
interest.

MAJOR INTERESTS IN SHARES

As at 28 January 2008, the latest practical date before publication of this report, the following persons held interests
in excess of 3 per cent. of the issued ordinary share capital of the Company as at that date:

                                                                          Ordinary share capital
                                                                          Percentage
                                                                             holding    No of shares

SVS (Nominees) Limited*                                                       17.44%      14,529,087
Share Nominees Limited                                                        14.92%      12,430,995
A Moore                                                                        6.65%       5,537,500
M Mills                                                                        6.65%       5,537,500
Lunarbright Limited                                                            5.54%       4,611,165
J Green                                                                        4.82%       4,015,000

* include 7,500,000 shares held on behalf of K G Milhench

No other person has notified an interest in the ordinary shares of the Company required to be disclosed to the Company
in accordance with sections 198 to 208 of the Companies Act 1985.

REMUNERATION

It is intended that the Company will provide competitive remuneration packages to attract, retain and motivate high
quality people in competition with comparable companies.

Remuneration payable to the Company's directors during the year was as follows:

                                                Payee                           2007      2006
Director                                                                        £         £
K G Milhench                                                                    70,000    106,333
N G McGowan                                     Rangedetail Ltd                 18,000    17,290
A Moore                                         Central Associates Ltd          30,000    16,636
M Mills                                         Central Associates Ltd           6,000      -

In addition to the remuneration above, K G Milhench also received benefits-in-kind to the value of £31,814    (2006
£22,648).


Relations with shareholders

There is an opportunity, at the Company's Annual General Meeting, for individual shareholders to raise general business
matters with the full Board and notice of the Company's Annual General Meeting is circulated to all shareholders at
least twenty-one clear days before such meeting.

Financial instruments

The group's objectives, policies and strategies for the role of derivatives and other financial instruments in creating
and changing the risks of the Group in its activities are set out below.

 Treasury policies and financial risk - Procedures have been established to manage surplus funds and interest rate
risk.  Treasury policies are subject to Board approval and are implemented on a day to day basis by K G Milhench.

 Management of funds - Surplus funds are intended to finance the development and growth of the Group and the effective
management of the surpluses is based upon policies determined by the Board.  Surplus funds are invested through the use
of short-term deposits.  It is not the Group's policy to invest in financial derivatives, other than to effect a hedge
against an existing exposure.

Charitable and political donations

There were no charitable or political contributions during the year (2006: £Nil).

Employee involvement and disabled employees

The Group endeavours to keep its employees as fully informed as practicable about the Group's affairs.  Employees are
made aware of the Group's financial performance and are encouraged to contribute to the development of the business.

The Group gives full consideration to applications for employment from disabled persons where the requirements of the
job can be adequately fulfilled by a handicapped or disabled person.  It is Group's policy wherever practicable to
provide continuing employment under normal terms and conditions and to provide training and career development and
promotion to disabled employees wherever appropriate.

Payment to suppliers

It is the Group's policy to settle the terms of payment with suppliers when business is agreed, to ensure that suppliers
are made aware of them and to pay bills in accordance with these terms. The days purchases in trade creditors at 31 July
2007 were 62 days. (2006: 65 days).

Statement as to Disclosure of Information to Auditors

So far as the directors are aware, there is no relevant audit information (as defined by Section 234ZA of the Companies
Act 1985) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to
have taken as a director in order to make himself or herself aware of any relevant audit information and to establish
that the company's auditors are aware of that information.

Auditors

In accordance with Section 385 of the Companies Act 1985 a resolution to confirm the re-appointment of Rochesters as
auditors will be put to the members at the Annual General Meeting.

By order of the board


K G Milhench                                                                              29 January 2008
Chief Executive


Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable
law and United Kingdom Generally Accepted Accounting Practice.
Company law requires the directors to prepare financial statements for each financial period which give a true and fair
view of the state of affairs of the Company and the Group and of the Group's profit or loss for that period.  In
preparing those 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 the going concern basis unless it is inappropriate to presume that
   the Group 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 Company and Group to enable them to ensure that the financial statements comply with the
Companies Act 1985.  They have general responsibility for taking such steps as are reasonably open to them, to safeguard
the assets of the Group and to prevent and detect any fraud and other irregularities.

Independent auditors' report to the members of The Weather Lottery plc

We have audited the Group and parent company financial statements of The Weather Lottery plc for the year ended 31 July
2007 which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Total Recognised Gains and
Losses, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Cash Flows and the related notes 1
to 23.  These financial statements have been prepared on the basis of the accounting policies set out therein.

This report is made solely to the Company's members, as a body, in accordance with Section 235 of the Companies Act
1985.  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 auditors' 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 directors and auditors
The directors' responsibilities for preparing the Annual Report and group financial statements in accordance with
applicable United Kingdom law and accounting standards are set out in the Statement of Directors' Responsibilities.

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements
and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared
in accordance with the Companies Act 1985.  We also report to you whether, in our opinion, the Directors' Report is
consistent with the financial statements.  In addition we report to you if the Group has not kept proper accounting
records, if we have not received all the information and explanations we require for our audit, or if information
specified by law regarding directors' remuneration and transactions with the Group is not disclosed.

We read other information contained in the Annual Report and consider whether it is consistent with the audited
financial statements. This other information comprises the Chief Executive's Statement, Chairman's Statement,
information on Directors and the Directors' Report. We consider the implications for our report if we become aware of
any apparent misstatement of material inconsistencies with the financial statements. Our responsibilities do not extend
to any other information.

Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing
Practices Board.  An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in
the financial statements.  It also includes an assessment of the significant estimates and judgements made by the
directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the
Group's circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in
order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or other irregularity or error.  In forming our opinion we also evaluated
the overall adequacy of the presentation of information in the financial statements.

Opinion
In our opinion:
 - the financial statements give a true and fair view of the state of affairs of the Company and of the
   Group as at 31 July 2007 and of the loss of the Group for the year then ended;
 - the financial statements have been properly prepared in accordance with the Companies Act 1985; and
 - the information given in the Directors' Report is consistent with the financial statements.



Rochesters
Registered Auditors

No 3 Caroline Court
Caroline Street
Birmingham
B3 1TR

Date:  29 January 2008


Consolidated profit and loss account
for the year ended 31 July 2006

                                                             Note       Year ended      Year ended
                                                                           31 July         31 July
                                                                              2007            2006
                                                                              £000       £000

Turnover                                                      2              1,500           1,440

Cost of sales                                                                 (530)           (484)
                                                                            ______          ______

Gross profit                                                                   970             956

Administrative expenses                                                     (1,141)         (1,039)
                                                                            ______          ______

Operating (loss)                                              2, 3            (171)            (83)

Interest receivable and similar income                        6                  1               1
                                                                            ______          ______
(Loss)/profit on ordinary activities before taxation          3               (170)            (82)

Tax on profit on ordinary activities                          7                 -               -
                                                                            ______          ______

Retained (loss)/profit for the financial period                               (170)            (82)
                                                                            ======          ======

Earnings per ordinary share
Basic and fully diluted                                       8              (0.22)p         (0.51)p
                                                                            ======          ======

None of the Group's operations were acquired or discontinued during the current year.  All operations are considered to
be continuing.


Consolidated statement of total recognised gains and losses
for the year ended 31 July 2007

There are no recognised gains or losses for the current year or preceding period other than the loss shown in the profit
and loss account above.

                                                           Note               2007            2006
                                                                              £000       £000
Fixed assets
Intangible fixed assets                                     10                 190             212
                                                                            ______          ______
Current assets

Debtors                                                     12                  47              10
Cash at bank and in hand                                                       121             240
                                                                            ______          ______

                                                                               168             250

Creditors:amounts falling due within one year               13                (292)           (293)
                                                                            ______          ______

Net current assets/(liabilities)                                              (124)            (43)
                                                                            ______          ______

Total assets less current liabilities                                           66             169

Creditors: amounts falling due after more than one year                         -               -
                                                                            ______          ______

Net assets/(liabilities)                                                        66             169

                                                                            ======          ======

Capital and reserves
Called up share capital                                     15                  83              73
Share premium account                                       16                 302             245
Profit and loss account                                     16                (319)           (149)
                                                                            ______          ______

Equity shareholders' funds                              17                  66             169
                                                                            ======          ======

The financial statements were approved by the Board of Directors and authorised for issue on 29 January 2008.

They are signed on the Board's behalf by:

K G Milhench                                                                    A Moore
Director                                                                        Non-executive Chairman


Company balance sheet
at 31 July 2007


                                                            Note              2007            2006
                                                                              £000       £000

Fixed assets
Investments                                                  11                 14              14

Current assets
Debtors                                                      12                279             277
Cash at bank and in hand                                                         7              -
                                                                            ______          ______

                                                                               286             277
Creditors: amounts falling due within one year               13                (23)             -
                                                                            ______          ______

Net current assets/(liabilities)                                               263             277
                                                                            ______          ______

Total assets less current liabilities                                          277             291

Creditors: amounts falling due after more than one year                         -               -
                                                                            ______          ______

Net assets/(liabilities)                                                       277             291
                                                                            ======          ======

Capital and reserves
Called up share capital                                       15                83              73
Share premium account                                         16               302             245
Profit and loss account                                       16              (108)            (27)
                                                                            ______          ______

Equity shareholders' funds                                17               277             291

                                                                            ======          ======

The financial statements were approved by the Board of Directors and authorised for issue on 29 January 2008.

They are signed on the Board's behalf by:




K G Milhench                                                                    A Moore
Director                                                                        Non-executive Chairman




Consolidated cash flow statement
for the year ended 31 July 2006

                                                                         Year ended     Year ended
                                                                            31 July        31 July
                                                      Note                     2007           2006
                                                                               £000              £000

Net cash (outflow) from operating activities           18                      (187)           (60)

Returns on investments and servicing of finance        19                         1              1

Capital expenditure and financial investments          19                         -

Acquisitions and disposals                                                        -              -
                                                                             ______         ______

Cash (outflow) before financing                                                (186)           (59)

Financing                                              19                        67            268
                                                                             ______         ______

Increase/(decrease) in cash in the period              20                      (119)           209
                                                                             ======         ======



Reconciliation of net cash flow to movement in net funds
for the year ended 31 July 2007

                                                                          Year ended   Period ended
                                                                             31 July        31 July
                                                      Note                      2007           2006
                                                                                £000              £000

Increase/(decrease) in cash in the period                                       (119)           209
Repayment of capital element of finance leases                                    -              -
                                                                              ______         ______

Change in net debt resulting from cash flows                                    (119)           209
Other                                                                             -              -
                                                                              ______         ______

Movement in net debt in the period                                              (119)           209
Net funds at the start of the period                                             240             31
                                                                              ______         ______

Net funds at the end of the period                      20                       121            240
                                                                              ======         ======


Notes
(forming part of the financial statements)
1.      Accounting policies

Basis of accounting
Both the Company and Group financial statements have been prepared under the historical cost convention and in
accordance with applicable accounting standards.

Basis of consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings
made up to 31 July 2007.

Under section 230(4) of the Companies Act 1985 the Company is exempt from the requirement to present its own profit and
loss account.

Turnover
Turnover represents takings received for entry into the daily prize draws.  The revenue is recognised upon receipt of
the money for the period that the draws take place.

Fixed asset investments
Fixed asset investments are valued at the cost of investment less any write downs made for a considered permanent
diminution in value.

Goodwill
Goodwill arising on consolidation represents the excess of the purchase consideration over the Group's interest in the
fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition.

Goodwill is recognised as an asset and amortised over a period of 20 years, which the directors consider to be the
estimated useful life of the goodwill.

Intangible assets
Intangible assets relate to the software development of the lottery game.  The cost is being amortised over ten years,
which is the period over which the software is considered effective.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life
or, if held under a finance lease, over the lease term, whichever is the shorter.

Fixtures and fittings           - 25% on cost

Hire purchase and leasing commitments
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet.  Those held under
hire purchase contracts are depreciated over their estimated useful lives.  Those held under finance leases are
depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to the profit and loss account over the relevant period.  The
capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to the profit and loss account as incurred.


1.      Accounting policies (continued)

Deferred taxation
The charge for taxation is based on the profit or loss for the period and takes into account taxation deferred because
of timing differences between the treatment of certain items for taxation and accounting purposes.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance
sheet date where transactions or events that result in an obligation to pay more, or a right to pay less, tax in the
future have occurred at the balance sheet date, with the exception that deferred tax assets are recognised only to the
extent that the directors consider that it is more likely than not that there will be suitable taxable profits from
which the future reversal of the underlying timing differences can be deducted.

Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which
timing differences reverse, based on tax rates and laws enacted or substantially enacted at the balance sheet date.

2.      Segmental analysis
The operating profit/(loss) for the years ended 31 July 2007 and 31 July 2006 are entirely derived from its principal
activity, wholly undertaken in the UK.  Hence, no separate segmental analysis has been prepared.

3.      Profit/(loss) on ordinary activities before taxation
Profit/(loss) on ordinary activities before taxation is stated after charging:

                                                                      Year ended        Year ended
                                                                         31 July           31 July
                                                                            2007              2006
                                                                            £000         £000

Depreciation - owned assets                                                    -                 3
Amortisation of intangible assets                                             14                15
Amortisation of goodwill                                                       8                 9
Hire of plant and machinery                                                    -                11
Hire of other assets                                                          25                25
Auditors' remuneration:
        Audit fees                                                             8                 8
        Other fees paid to the auditors                                        -                 -
                                                                          ======            ======

4.      Directors' emoluments
                                                                      Year ended        Year ended
                                                                         31 July           31 July
                                                                            2007              2006
                                                                            £000         £000

Aggregate emoluments in respect of services                                  102               129
Compensation for loss of office                                                -                30
Sums paid to third parties for director services                              54                34
                                                                          ______            ______
                                                                             156               193
                                                                          ======            ======


None of the directors have accrued retirement benefits or held share options during the period to 31 July 2007 (2006
None).  There are no long-term incentive schemes in place.

5.      Employee costs

The average monthly number of employees (including Directors) was:
                                                                      Year ended        Year ended
                                                                         31 July           31 July
                                                                            2007              2006
                                                                             No.               No.

Directors                                                                     4                  3
Administration                                                                5                  3
                                                                          ______            ______
Total                                                                         9                  6
                                                                          ======            ======

Their aggregate remuneration comprised:
                                                                      Year ended        Year ended
                                                                         31 July           31 July
                                                                            2007              2006
                                                                            £000         £000

Wages and salaries                                                           149               151
Sums paid to third parties for services                                       54                34
Social security costs                                                         21                19
Termination payments                                                           -                30
                                                                          ______            ______
Total                                                                        224               234
                                                                          ======            ======


6.      Interest payable and receivable
                                                                      Year ended        Year ended
                                                                         31 July           31 July
                                                                            2007              2006
                                                                            £000         £000

Interest payable on hire purchase agreements                                  -                 -
                                                                          ______            ______
Interest payable                                                              -                 -
                                                                          ======            ======
Interest receivable on bank deposits                                           1                 1
                                                                          ______            ______
Interest receivable                                                            1                 1
                                                                          ======            ======

7.      Tax on loss on ordinary activities

a) Analysis of charge in the period
                                                                      Year ended        Year ended
                                                                         31 July           31 July
                                                                            2007              2006
                                                                            £000         £000

Current tax:
UK Corporation tax                                                            -                 -
                                                                          ______            ______
Total current tax (Note 7(b))                                                 -                 -

Deferred tax:
Origination and reversal of timing differences                                -                 -
                                                                          ______            ______
                                                                              -                 -
                                                                          ======            ======

b) Factors affecting the tax charge for the period
                                                                      Year ended       Period ended
                                                                         31 July            31 July
                                                                            2007               2006
                                                                            £000          £000

(Loss)/profit on ordinary activities                                        (170)              (83)
                                                                          ======            ======

(Loss)/profit on ordinary activities multiplied by standard rate of corporation
 tax in the UK of 20% (period ended 31 July 2006: 19%)                       (34)              (16)

Effects of:
Disallowed expenses and non-taxable income                                     1                 2
Depreciation in excess of capital allowances                                   1                 3
Taxable losses and excess charges carried forward                             32                11
                                                                          ______            ______
Current tax charge for the period (Note 8(a))                                 -                 -


A deferred tax asset has not been recognised in the periods ended 31 July 2007 or 31 July 2006 in respect of the taxable
losses carried forward of approximately £857,000 (2006 £700,000) as there is insufficient evidence that it will be
recoverable against taxable profits during the next 12 months.

8.      Earnings per ordinary share
The calculation of basic earnings per share is based on losses of £170,000 (2006: £82,000) and ordinary shares of
77,254,052 (2006: 16,042,083 shares) being the weighted average number of ordinary shares in issue during the period.


The profit for the period and the weighted average number of ordinary shares for the purposes of calculating the fully
diluted earnings per share are the same as for the basic earnings per share calculation.  This is because there are no
share options in place that would have a dilutive effect on the calculation.

9.      Company result for the financial period
The Weather Lottery plc has not presented its own profit and loss account as permitted by section 230(4) of the
Companies Act 1985.  The loss for the financial period as dealt with in the accounts of the Company is £81,000 (2006:
Loss of £26,000).


10.     Intangible fixed assets
Group
                                                                           Software
                                                          Goodwill      Development       Total
                                                              £000        £000           £000
COST:
As at 1 August 2006                                            176              154         330
Additions                                                        -                -           -
                                                            ______           ______      ______

As at 31 July 2007                                             176              154         330
                                                            ======           ======      ======

AMORTISATION:
As at 1 August 2006                                             18              100         118
Additions                                                        8               14          22
                                                            ______           ______      ______
As at 31 July 2007                                              26              114         140
                                                            ======           ======      ======

NET BOOK VALUE:
As at 31 July 2007                                             150               40         190
                                                            ======           ======      ======
As at 31 July 2006                                             158               54         212
                                                            ======           ======      ======


11.   Investments
                                                             Group      Company      Group      Company
                                                           31 July      31 July    31 July      31 July
                                                              2007         2007       2006         2006
                                                              £000    £000          £000    £000

Cost as at 1 August 2006 and 31 July 2007                       -            14         -            14
                                                            ======       ======     ======       ======
Shares in group undertakings                                    -            14         -            14
                                                            ======       ======     ======       ======

As at 31 July 2007, investments in which the Group or the Company held 20 percent or more of the nominal value of any
class of share capital are as follows:

                                           Principal activity          Class and percentage of
                                                                     shares held and voting rights
Subsidiary undertaking
Lottery Service Providers Limited          Lottery administrators          100% ordinary

Prize Provision Services Limited           Lottery management              100% ordinary

Both the subsidiary undertakings are incorporated in England and Wales and operate in England.  The results of the
subsidiary undertakings are consolidated in the Group financial statements.

12.     Debtors
                                                            Group       Company      Group      Company
                                                          31 July       31 July    31 July      31 July
                                                             2007          2007       2006         2006
                                                             £000     £000          £000    £000

Amounts due from subsidiary undertakings                        -           246          -          276
Other debtors                                                  32            24          3            1
Prepayments and accrued income                                 15             9          7            -
                                                           ______        ______     ______       ______
                                                               47           279         10          277
                                                           ======        ======     ======       ======

13.     Creditors: amounts falling due within one year
                                                            Group       Company      Group      Company
                                                          31 July       31 July    31 July      31 July
                                                             2007          2007       2006         2006
                                                             £000     £000          £000    £000

Trade creditors                                               263            15        229            -
Accruals and deferred income                                   18             8         23            -
Social security & other taxes                                      11             -         41            -
                                                           ______        ______     ______       ______
                                                              292            23        293            -
                                                           ======        ======     ======       ======
14.     Financial instruments
An explanation of the Group's objectives, policies and strategies for the role of derivatives and other financial
instruments in creating and changing the risks of the Group in its activities can be found on pages 7 and 8.  Disclosure
dealt with in this note excludes short-term debtors and creditors where permitted by FRS 13.

Interest rate risk profile of financial assets
The interest rate risk profile of the Group's financial assets was as follows:

                                       Fixed rate     Floating rate     Financial assets on
                                        financial         financial    which no interest is
                                           assets            assets                  earned     Total
Sterling                                     £000              £000                    £000      £000

As at 31 July 2007                              -               121                       -       121
                                           ======            ======                  ======    ======
As at 31 July 2006                              -               240                       -       240
                                           ======            ======                  ======    ======


Floating rate financial assets comprise:
                                                                                   31 July      31 July
                                                                                      2007         2006
                                                                                      £000         £000

Interest bearing bank accounts                                                         121          240
                                                                                    ______       ______
                                                                                       121          240
                                                                                    ======       ======

There were no financial liabilities at 31 July 2007 or 31 July 2006.

Fair values of financial assets and liabilities
The fair value based upon the market value or discounted cash flows of the financial instruments detailed above was not
materially different from the book values as at 31 July 2007 or 31 July 2006.


15.     Called up share capital
                                                                                   31 July      31 July
                                                                                      2007         2006
                                                                                      £000         £000

Authorised
100,000,000 ordinary shares of 0.1p each                                               100          100
                                                                                    ======       ======
Allotted, issued and paid
83,304,730 ordinary shares of 0.1p each                                                 83           73
(2006: 73,202,000 ordinary shares of 0.1p each)                                     ======       ======

On 7 September 2006 3,852,730 ordinary shares were issued at par . On 9 July 2007 a further 6,250,000 ordinary shares
were issued at 1.5p giving rise to a share premium of £87,500, less share issue expenses of £30,000.

16.     Share premium and reserves
                                                                                    Share        Profit
                                                                                  Premium      and loss
                                                                                  Account       account
Group                                                                                £000     £000

As at 1 August 2006                                                                   245          (149)
Premium on new share capital subscribed  less expenses                                 57             -
Bonus share issue                                                                       -             -
Retained profit for the year                                                            -          (170)
                                                                                   ______        ______
At 31 July 2007                                                                       302          (319)
                                                                                   ======        ======
Company                                                                              £000     £000

As at 1 August  2006                                                                  245           (27)
Premium on new share capital subscribed less expenses                                  57             -
Bonus share issue                                                                       -             -
Retained profit/(loss) for the year                                                     -           (81)
                                                                                   ______        ______
At 31 July 2007                                                                       302          (108)
                                                                                   ======        ======

17.     Reconciliation of shareholders' funds
                                                                               Year ended    Year ended
                                                                                  31 July       31 July
                                                                                     2007          2006
Group                                                                                £000          £000

Profit/(loss) for the financial period                                               (170)          (82)
New share capital subscribed (including premium and expenses)                          67           268
                                                                                   ______        ______
Total movements during the year                                                      (103)          186
Opening shareholders' funds                                                       169           (17)
                                                                                   ______        ______
Closing shareholders' funds                                                        66           169
                                                                                   ======        ======

                                                                               Year ended    Year ended
                                                                                  31 July       31 July
                                                                                     2007          2006
Company                                                                              £000     £000

Profit/(loss) for the financial period                                                (81)          (26)
New share capital subscribed (including premium and expenses)                          67           268
                                                                                   ______        ______
Total movements during the year                                                       (14)          242
Opening shareholders' funds                                                       291            49
                                                                                   ______        ______
Closing shareholders' funds                                                       277           291
                                                                                   ======        ======


18.     Reconciliation of operating loss to operating cash flows
                                                                      Year ended        Period ended
                                                                         31 July             31 July
                                                                            2007                2006
                                                                            £000           £000


Operating (loss)                                                            (171)                (83)
Depreciation and amortisation                                                 22                  27
Loss on disposal of fixed assets                                               -                   -
 (Increase)/decrease in debtors                                              (37)                  8
Increase/(decrease) in creditors                                              (1)                (12)
                                                                          ______              ______
Net cash inflow/(outflow) from operating activities                         (187)                (60)
                                                                          ======              ======

19.     Analysis of cash flows for headings netted in the cash flow statement
                                                                         Year ended     Year ended
                                                                            31 July        31 July
                                                                               2007           2006
                                                                               £000              £000

Returns on investments and servicing of finance
Interest payable                                                                  -              -
Interest received                                                                 1              1
                                                                             ______         ______

Net cash inflow from returns on investments and servicing of finance              1              1
                                                                             ======         ======

Capital expenditure and financial investment
Proceeds from disposal of fixed assets                                            -              -
Payments to acquire investments                                                   -              -
                                                                             ______         ______
Net cash outflow from capital expenditure and financial investment                -              -
                                                                             ======         ======
Financing
Issues of ordinary share capital (including premium/expenses)                    67            268
Repayment of hire purchase obligations                                            -              -
                                                                             ______         ______
Net cash inflow from financing                                                   67            268
                                                                             ======         ======

20.     Reconciliation of net funds to the amounts shown in the balance sheet
                                                  1 August               Non cash       31 July
                                                      2006   Cash flow   movement          2007
                                                      £000   £000          £000     £000

Cash at bank and in hand                               240        (119)         -           121
                                                         -           -
                                                    ______      ______     ______        ______
                                                       240        (119)         -           121
                                                    ======      ======     ======        ======


21.        Controlling party
No single individual has sole control of the Group or Company.

22.     Capital commitments
Amounts contracted for but not provided in the accounts amounted to £nil (2006: £Nil).

23.     Other financial commitments

At 31 July 2007 the Group had outstanding annual commitments under non-cancellable operating leases which fall due as
follows:.

                                                              Year ended        Period ended
                                                                 31 July             31 July
                                                                    2007                2006
                                                                    £000           £000

Within one year                                                        -                   -
Two to five years                                                      8                   8
Over five years                                                       25                  25
                                                                  ______              ______
                                                                      33                  33
                                                                  ======              ======

The report and accounts for the year to 31 July 2007 will be posted to shareholders on 30 January 2008.