TIDMRUBI
RNS Number : 0073X
Rubicon Software Group PLC
30 November 2010
RUBICON SOFTWARE GROUP PLC
(AIM: RUBI)
Final results for the year ended 30 June 2010
30 November 2010
Rubicon Software Group plc ("Rubicon" or "the Group"; AIM:
RUBI), a leading provider of smart customer relationship management
IT solutions, announces its audited results for the year ended 30
June 2010.
Highlights
-- Total revenues up 32% to GBP1.15m (2009: GBP0.87m) after
recognition of perpetual licence income of GBP625,000 from First
Response Finance Limited
-- Earnings before interest, tax, depreciation and amortisation
("EBITDA") of GBP285,000 (2009: EBITDA loss GBP2,000)
-- Pre-tax profit for the year of GBP44,000 (2009: loss
GBP194,000)
-- Achieved Microsoft Gold Certified Partner status
-- Launch of iAccel personal productivity tools
-- Business re-structuring now completed
For further information, please contact:
Contacts:
Rubicon Software Group PLC www.rubiconsoftware.com
Alistair Hancock, Chief Executive
Officer +44 (0) 1276 706 900
WH Ireland Limited www.wh-ireland.co.uk
John Wakefield / Marc Davies +44 (0) 117 945 3470
Chairman's statement
Financial results
In the year to 30 June 2010, Rubicon generated revenue of
GBP1,147,000, 32% higher than the previous year of GBP874,000. This
increase includes the one-time revenue associated with the
conversion of a five year annual licence deal with First Response
Finance Limited ("FRF") to a perpetual licence for a total
consideration of GBP625,000 and reflects the maturing nature of the
relationship with FRF. This non-recurring income item somewhat
masks the low underlying revenue that has been generated in the
year due, as reported in the interim statement, to both the
strategic alliance with Information Systems Associates Inc ("ISA")
and the consultancy project that was won in the early part of the
year not delivering the levels of business that we had been led to
believe would be forthcoming.
However, with this increased revenue we are pleased to announce
an EBITDA profit of GBP285,000 (2009: EBITDA loss GBP2,000), a
pre-tax profit of GBP44,000 (2009: Loss GBP194,000) and a retained
profit for the year of GBP43,000 (2009: Loss GBP194,000).
Reconciliation of retained losses to EBITDA 2010 2009
GBP'000 GBP'000
Retained profit / (loss) 43 (194)
Tax 1 -
-------------------------------------------- ------- -------
Profit / (loss) from continuing activities
before tax 44 (194)
Net interest 1 (15)
-------------------------------------------- ------- -------
Operating profit / (loss) 45 (209)
Impairment of intangible assets 166 -
Depreciation and amortisation 74 207
-------------------------------------------- ------- -------
EBITDA 285 (2)
============================================ ======= =======
Net cash inflow for the year was GBP61,000 (2009: outflow
GBP32,000).
Operational review
Existing clients
On 29 June 2009 we announced a 5 year extension to the licence,
support and maintenance agreement with First Response Finance
Limited ("FRF") worth GBP1million. Subsequently, on 2 August 2010
we announced that, on 30 June 2010, we had agreed with FRF to
convert the annual licence agreement to a perpetual licence. This
enabled us to recognise fully the value of the sale relating to
licence income of GBP625,000 in these accounts. The remaining
GBP375,000 relates to support and maintenance income to be
recognised in accordance with the revenue recognition policies
contained in this report. FRF will continue to pay for the licence
under the previous five year plan and have initiated further
consultancy projects at the start of the new financial year.
We continue to enjoy excellent relationships with our clients,
for whom our software plays an integral part in the success of
their business operations.
Non-recurring items
Following the conversion of the FRF licence from annual to
perpetual and the continued downturn in the economy, the Board
considered the value of the intangible assets to be in excess of
the economic benefits anticipated over the remaining economic life.
As such the Board considered it prudent to write off the remaining
value of the assets in the current financial year. The value of
intangible assets written off in the year was GBP166,000.
In addition to this, the Board has considered the shape and size
of the business and has executed a plan that reduces the on-going
overheads of the business by 25% which should enable the business
to operate profitably from a reduced revenue base following the FRF
licence transaction. In order to deliver these savings it has been
necessary to provide for restructuring costs totalling
GBP91,000.
New business
During the year we have focused on our relationship with
Microsoft, obtaining Gold Certified Partner status for our
Accelerator platform and accreditation as a SharePoint Deployment
Planning Services ("SDPS") provider. By obtaining this benchmark
accreditation we have been able to engage with a variety of
businesses, all of whom are interested in deploying Microsoft
SharePoint. Through these developing relationships we have also
identified a number of personal productivity tools that are a
logical evolution of Accelerator and we believe these will prove
attractive to businesses in this time of austerity. We are branding
this as the iAccel Productivity Suite and we are just launching a
beta program at www.iAccel.com.
We have an improving sales pipeline based around SDPS
consultancy, SharePoint development and our new iAccel product.
Management
As previously announced, David Webber, one of Rubicon's
Non-executive Directors, resigned with effect from the Company's
yearend having served a 4 year term since flotation. The Board
wishes to record its appreciation to David for his contribution and
counsel during that period.
Andrew Kirby, Rubicon's Group Finance Director, left the Group
on 26 November 2010. The Board would like to thank Andrew
wholeheartedly for his support and conscientious work through the
difficult trading conditions of the last 3 years and wish him every
success in the future.
On 19 April 2010, Nicklas Blanchard was appointed to the Board
having been with Rubicon for over 15 years in a variety of software
engineering and management roles.
Staff
On behalf of the Board, I would like to thank all of our staff
for their loyalty, support and professionalism in what have
continued to be very difficult trading conditions.
Dividends
The Directors do not propose to pay a dividend for the year
(2009: GBPnil).
Current trading and outlook
With a growing sales pipeline, centred on Microsoft technology
and our iAccel Productivity Suite, along with the re-structuring,
the Board believes that Rubicon can trade profitably and grow its
revenues.
Robert Burnham
Chairman
29 November 2010
Report of the Directors
The Directors present their report and the financial statements
of the Group for the year ended 30 June 2010.
Principal activity and business review
The Group is principally engaged in consultancy and design,
development and provision of computer software. The Group's
services and solutions are sold to customers in a variety of
sectors to automate business processes relating to client
interaction, workflow management, Internet, Intranet and Local Area
Network based solutions.
During the year the Group continued to concentrate on the sale
and distribution of its products whilst maintaining an appropriate
level of product development to ensure the future success of the
business.
Strategy
During the course of the year, we have continued to review our
strategy in order to maximise our opportunities, researching new
markets, products and services to enable the business to grow
profitably.
Business review
A review of the Group's performance in the year to 30 June 2010
and its current trading and outlook is contained in the Chairman's
Statement.
The Key Performance Indicators used by the Group during the year
were:
Revenue
Revenue increased 32% from GBP874,000 in 2009 to GBP1,147,000 in
2010. As outlined in the Chairman's statement, the 2010 figure
includes the one-time up front recognition of a GBP625,000
perpetual licence for FRF. Underlying revenue fell by 40% as a
consequence of the continuing economic downturn.
Operating costs
Operating costs in the year, excluding depreciation,
amortisation and re-structuring costs, were reduced by GBP105,000
(11%) to GBP784,000. This decrease was largely as a result of
reduced headcount, consultancy and property costs. There was a
total of GBP5,000 of bad debts expense in the year (2009:
GBP17,000) arising from customers who were unable to pay for work
undertaken.
Profit / (loss) for the year
The Group profit for the year ended 30 June 2010 was GBP44,000
(2009: loss GBP194,000) with the improvement relating to higher
revenue, lower operating costs and a lower amortisation charge.
Intangible assets
During the year the Group capitalised GBPnil (2009: GBP39,000)
of development costs. Furthermore, it was agreed that all
intangible assets be fully impaired due to a permanent diminution
in value.
Cash and treasury
The Group generated net cash outflows of GBP66,000 in the second
half of 2010 having generated net inflows of GBP127,000 in the
first half. The net inflow for the year was GBP61,000 (2009:
outflow GBP32,000).
These inflows include the proceeds of the fundraising activities
announced on 28 April 2010.
Results and dividends
The trading results for the year and the Group's and Company's
financial position at the end of the year are shown in the attached
financial statements.
The Directors do not propose the payment of a dividend, (2009:
GBPnil).
Principal risks and uncertainties
The Directors consider the following to be the principal risks
facing the business:
Risk / Uncertainty Mitigation
-- Going concern / cash -- Rolling forecasts, increased
sales, reduced cost base and/or
loan finance if required
-- New sales -- Lead generation and new products
-- New products / intangible -- On-going product innovation and
assets fair value evaluation of existing
products
-- Loss of key personnel -- Competitive salaries and share
based remuneration
Financial risk management objectives and policies
The Group's financial risk management objectives are detailed in
note 14.
Directors
The Directors who served the Company during the year were:
Robert Burnham (Non-executive Chairman)
Alistair Hancock (Chief Executive Officer)
Richard Blakesley (Non-executive Director)
David Webber (Non-executive Director) (resigned 28 July
2010)
Andrew Kirby (Finance Director) (resigned 26 November 2010)
Nicklas Blanchard (Operations Director) (appointed 19 April
2010)
Directors' interests
The beneficial interests of the Directors holding office at 30
June 2010 in the shares of the Company at that date are set out
below, together with their holdings at 1 July 2009 or date of
appointment if later.
30 June 2010 1 July 2009
Ordinary shares Ordinary shares
Issued Options Issued Options
number number number number
Robert Burnham 1,260,556 375,000 635,556 375,000
Alistair Hancock 11,438,572 - 11,438,572 -
Richard Blakesley 11,950,041 - 11,950,041 -
David Webber 547,214 - 547,214 -
Andrew Kirby 195,000 - - -
Nicklas Blanchard 100,000 525,000 100,000 525,000
Substantial shareholders
At 11 November 2010 the Company has been notified that the
following held or were beneficially interested in three per cent of
more of the issued share capital of the Company.
% of current
issued share
Ordinary shares capital
Richard Blakesley 11,950,041 27.42
Alistair Hancock 11,438,572 26.25
Mark Peters 3,682,720 8.45
David Cover and Son Limited 3,000,000 6.88
Rupert Green 2,565,971 5.89
Gavin Jones 1,429,821 3.28
Employees
Where appropriate, the Directors keep all employees informed of
strategic, commercial, financial and human resource matters.
In order to help align the aspirations of our employees to the
objectives of the Group, the majority are either shareholders or
have share options enabling them to benefit from long term equity
growth.
The Group recognises its responsibility to ensure the fair
treatment of all employees, regardless of any physical disability,
gender, religion, race or nationality.
Payment policy and practice
It is the Group's policy to agree the terms of payment with
suppliers when entering into a transaction and to pay suppliers
within these terms. Average creditor days for the financial year
were 66 days (2009: 58 days).
Environment
The Group aims to maintain good environmental practices in all
of its activities. Although there are no formal environmental
policies, all employees are encouraged to conduct themselves in an
environmentally considerate manner.
Qualifying third party indemnity provision
During the financial year, a qualifying third party indemnity
provision for the benefit of all of the Directors was in force.
Going concern
The Board has reviewed the performance for the current year and
forecasts for future periods. These forecasts contain a number of
new business assumptions that are dependent upon the finalisation
of commercial terms, the completion of contracts and new business
wins. Consequently an element of uncertainty surrounds the size and
timing of certain cash inflows.
Based on current information, the Board has a reasonable
expectation that these contracts will be signed as planned, but
have also begun investigating funding options for spring 2011 in
order to ensure that liabilities are met as they fall due.
The Directors have concluded that the combination of these
circumstances represents a material uncertainty that might cast
doubt upon the Group's ability to continue as a going concern and
that, therefore, the Group may be unable to realise its assets and
discharge its liabilities in the normal course of business.
Nevertheless, after making enquiries and considering the
uncertainties described above, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. For these
reasons, they continue to adopt the going concern basis of
accounting in preparing the financial statements.
Annual General Meeting
The Notice convening the Annual General Meeting ("AGM") together
with the proposed resolutions is contained in the document
accompanying this report. The AGM will be held on 21 December
2010.
Auditor
A resolution to re-appoint Grant Thornton UK LLP as auditor for
the ensuing year will be proposed at the AGM in accordance with
section 489 of the Companies Act 2006.
BY ORDER OF THE BOARD
Nicklas Blanchard
Secretary
29 November 2010
Company registration number: 5701801
Statement of Directors' Responsibilities in respect of the
Annual Report and financial statements
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law they are
required to prepare Group financial statements in accordance with
International Financial Reporting Standards as adopted by the
European Union (IFRSs) and applicable law. The Directors have
elected to prepare the Company financial statements in accordance
with United Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice - UK GAAP).
The financial statements are required by law to give a true and
fair view of the state of affairs of the Group and the Company and
of the profit or loss of the Group for that period. In preparing
these financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them
consistently;
-- make judgments and estimates that are reasonable and
prudent;
-- for the Group financial statements, state whether they have
been prepared in accordance with IFRSs as adopted by the EU,
subject to any material departures disclosed and explained in the
financial statements;
-- for the Company financial statements, state whether
applicable UK 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 and the
Company will continue in business.
The Directors are responsible for keeping adequate accounting
records which disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
have a general responsibility for taking such steps as are
reasonably open to then to safeguarding the assets of the Group and
to prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the Group's
website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
In so far as each of the Directors are aware; there is no
relevant audit information of which the Group's auditor is unaware;
and the Directors have taken all the steps that they ought to have
taken to make themselves aware of any relevant audit information
and to establish that the auditor is aware of that information.
Corporate governance
The Directors recognise the importance of sound corporate
governance, whilst taking into account the size and nature of the
Company.
The Company has two Non-executive Directors. Richard Blakesley
and Robert Burnham are considered to be 'independent' within the
definition contained in the Combined Code. The Board retains full
and effective control over the Company. The Company holds regular
Board meetings at which financial, operational and other reports
are considered and, where appropriate, voted on. Apart from regular
meetings, additional meetings will be arranged when necessary to
review strategy, planning, operations financial performance, risk,
capital expenditure, human resource and environmental management.
The Board is also responsible for monitoring the activities of the
executive management. To enable the Board to perform its duties,
all Directors will have full access to all relevant information. If
necessary the Non-executive Directors may take independent
professional advice at the Group's expense.
The Board met on fifteen occasions in the current financial year
including attendance by telephone.
The Directors have an audit committee and a remuneration
committee with formally delegated duties and responsibilities. The
Directors have not established a nominations committee as all new
appointments will require the approval of all Directors.
The audit committee
The audit committee which comprises Robert Burnham and Richard
Blakesley is chaired by Robert Burnham and meets at least twice a
year. The committee reviews the Group's annual and interim
financial statements, including meeting with the auditor before
submission to the Board for approval. The committee also reviews
regular reports from management on accounting and internal control
matters. Where appropriate, the committee monitors the progress of
action taken in relation to such matters. The committee also
recommends the appointment of, reviews the fees of, and monitors
the independence of the external auditor and their provision of
non-audit services.
The committee met twice during the year, all members were
present.
The remuneration committee
The remuneration committee which comprises Richard Blakesley and
Robert Burnham, is chaired by Richard Blakesley and usually meets
twice a year. It is responsible for reviewing the performance of
the Executive Directors and for setting the scale and structure of
their remuneration, paying due regard to the interests of
Shareholders as a whole and the performance of the Group. The
remuneration committee also determines allocations of any warrants
or options granted under any share option scheme adopted by the
Company in the future and is responsible for setting any
performance criteria relevant to such warrants or options.
The Directors comply with Rule 21 of the AIM Rules relating to
Directors' dealings and take all reasonable steps to ensure
compliance by the Company's applicable employees. The Company has
adopted and operates a share dealing code for Directors and
employees in accordance with the AIM Rules.
The committee met twice during the year, all members were
present.
Internal control
The Board is responsible for maintaining a sound system of
internal control to safeguard Shareholders' investment and the
Group's assets and for reviewing its effectiveness. Such a system
is designed to manage, but not eliminate, the risk of failure to
achieve business objectives. There are inherent limitations in any
control system and accordingly even the most effective system can
provide only reasonable, not absolute assurance against material
misstatement or loss.
The Board reviews the effectiveness of the Group's systems of
internal control on an ongoing basis. Annual budgets are prepared
and detailed monthly management reports are presented to the Board
and used to monitor financial performance and compliance with the
Group's policies and procedures. All controls are covered including
financial, operational and controls to manage risk. The monthly
Board meetings are also used to consider the Group's major
risks.
Internal audit
The Board reviews from time to time the need for an internal
audit function and remains of the opinion that the systems of
internal financial control are appropriate to the Group's size and
present activities and an internal audit function is not
necessary.
Going concern
The Board has reviewed the performance for the current year and
forecasts for future periods. Based on this current information,
the Board believes that the Group will continue in operational
existence for the foreseeable future. On these grounds, the Board
has continued to adopt the going concern basis for the preparation
of the financial statements. Further details can be found in the
Report of the Directors.
Report of the independent auditor to the members of Rubicon
Software Group plc.
We have audited the Group financial statements of Rubicon
Software Group plc for the year ended 30 June 2010 which comprise
the principal accounting policies, the consolidated statement of
comprehensive income, the consolidated balance sheet, the
consolidated cash flow statement, the consolidated statement of
changes in equity and the related notes. The financial reporting
framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union.
This report is made solely to the Group's members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the
Group's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Group and the Group's members as a body, for
our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of directors and auditor
As explained more fully in the Statement of Directors'
Responsibilities on page 10 the Directors are responsible for the
preparation of the Group financial statements and for being
satisfied that they give a true and fair view. Our responsibility
is to audit the Group financial statements in accordance with
applicable law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing
Practices Board's (APB) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the APB's website at
www.frc.org.uk/apb/scope/UKNP.
Opinion on financial statements
In our opinion the group financial statements:
-- give a true and fair view of the state of the Group's affairs
as at 30 June 2010 and of its profit for the year then ended;
-- have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
-- have been prepared in accordance with the requirements of the
Companies Act 2006.
Emphasis of matter - Going concern
In forming our opinion, which is not qualified, we have
considered the adequacy of the disclosure made in the principal
accounting policies concerning the company's ability to continue as
a going concern.
As explained in the principal accounting policies there are
factors that indicate the existence of a material uncertainty which
may cast significant doubt about the group's ability to continue as
a going concern. The financial statements do not include the
adjustments that would result if the group was unable to continue
as a going concern.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Report of the
Directors for the financial year for which the Group financial
statements are prepared is consistent with the Group financial
statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- certain disclosures of Directors' remuneration specified by
law are not made; or
-- we have not received all the information and explanations we
require for our audit.
Other matter
We have reported separately on the parent company financial
statements of Rubicon Software Group plc for the year ended 30 June
2010.
James Rogers
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Slough
29 November 2010
Principal accounting policies
General information
Rubicon Software Group plc is the Group's ultimate parent
company. It is incorporated and domiciled in England and Wales.
Rubicon Software Group plc's shares are quoted on the AIM Market of
the London Stock Exchange. The address of the registered office and
principal place of business is found on page 45 of this report.
Basis of Group accounting
The consolidated financial statements have been prepared in
accordance with applicable International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board (IASB) as adopted by the EU.
The financial statements have been prepared under the historical
cost convention. The measurement bases and principal accounting
policies of the Group are set out below.
The accounting policies that have been applied in the opening
balance sheet have also been applied throughout all periods
presented in these financial statements. These accounting policies
comply with each IFRS that is mandatory for accounting periods
ending on 30 June 2010.
Note 14 to the financial statements include details of the
financial instruments and exposure to credit risk and liquidity
risk.
Going concern
The Board has reviewed the performance for the current year and
forecasts for future periods. These forecasts contain a number of
new business assumptions that are dependent upon the finalisation
of commercial terms, the completion of contracts and new business
wins. Consequently an element of uncertainty surrounds the size and
timing of certain cash inflows.
Based on current information, the Board has a reasonable
expectation that these contracts will be signed as planned, but
have also begun investigating funding options for spring 2011 in
order to ensure that liabilities are met as they fall due.
The Directors have concluded that the combination of these
circumstances represents a material uncertainty that might cast
doubt upon the Group's ability to continue as a going concern and
that, therefore, the Group may be unable to realise its assets and
discharge its liabilities in the normal course of business.
Nevertheless, after making enquiries and considering the
uncertainties described above, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. For these
reasons, they continue to adopt the going concern basis of
accounting in preparing the financial statements.
New standards, interpretations and amendments having an impact
on the Consolidated Financial Statements
IAS 1:"Presentation of Financial Statements" (Revised 2007) is
mandatory for accounting periods commencing on or after 1 January
2009. IAS 1 permits the components of the income statement to
continue to be presented in a separate income statement. As there
are not considered to be any items of other comprehensive income a
separate statement of comprehensive income has been included which
also reflects the income statement for the year. Additionally, IAS
1 now requires the presentation of the statement of changes in
equity within a separate primary statement.
IAS 1 requires two comparative periods to be presented for the
statement of financial position when the Group:
1. applies an accounting policy retrospectively,
2. makes a retrospective restatement of items in its financial
statements, or
3. re-classifies items in the financial statements.
As none of the above apply the directors have not included a
balance sheet for the year ended 30 June 2008.
IFRS 8:"Operating segments" (effective from 1 January 2009)
requires an entity to adopt a "management approach" to segment
reporting such that segmental information is in the form which
management uses internally for assessing segment performance and
deciding how to allocate resources to operating segments. This
information may be different from that used to prepare the
statement of comprehensive income and statement of financial
position. The adoption of this standard has not affected the
identified operating segments for the Group.
IFRS 7:"Financial instruments: disclosures" (Amendment),
(effective from 1 January 2009) requires all financial instruments
that are measured at fair value in the balance sheet to be
classified into a three-level fair value hierarchy. The amendments
are designed to assist understanding of the determination of fair
value measurements. The revised standard has no impact on the Group
as there are no financial assets or liabilities measured at fair
value.
Basis of consolidation
The Group financial statements consolidate those of the Company
and its subsidiary companies drawn up to 30 June 2010. Subsidiaries
are entities over which the Group has the power to control the
financial and operating policies so as to obtain benefits from its
activities. The Group obtains and exercises control through voting
rights.
Unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure
consistency with the accounting policies adopted by the Group.
The results and net assets of subsidiary companies acquired in
June 2006 are included in the consolidated statement of
comprehensive income and consolidated balance sheet using the
merger method of accounting, as explained subsequently in the
principal accounting policies.
Reverse acquisition accounting
In June 2006 the Company became the legal parent of Rubicon
Software Limited and its subsidiaries in a share for share
transaction. The Company's continuing operations and executive
management were those of Rubicon Software Limited. Accordingly, the
substance of the combination was that Rubicon Software Limited had
acquired Rubicon Software Group plc in a reverse acquisition.
Under reverse acquisition accounting an adjustment within
shareholders funds is required to eliminate the cost of acquisition
in the issuing company's books, and introduce a notional cost of
acquiring the smaller issuing company based on the fair value of
its shares. A further adjustment is required to show the share
capital of the legal parent in the consolidated balance sheet
rather than that of the acquirer. The resulting differences have
been debited to the Merger Reserve.
Revenue
Revenue is measured by reference to the fair value of
consideration received or receivable by the Group for goods
supplied and services provided, excluding VAT and trade
discounts.
Revenue is recognised as set out below:
Consultancy and software development contracts
Consultancy and software development contracts are recognised in
line with the performance of the contract, typically:
-- For time and materials contracts, the number of days worked
in the period at the contracted rates and any materials consumed in
the period.
-- Where a contract involves delivery of several different
elements and is not fully delivered or performed by the year end,
revenue is recognised based on the proportion of the fair value of
the elements delivered to the fair value of the overall
contract.
Licence income - perpetual
If the sale is unconditional and the revenue earned is
non-refundable, the value of software licence income is taken to
the statement of comprehensive income in full upon delivery of the
software to the client as this point represents full performance of
the sale. If the sale is conditional then the value of the software
licence income is taken to the statement of comprehensive income
once user acceptance has been achieved, which binds the transaction
as non-refundable.
Licence income - Annual or any other term
The value of software licence income is recognised evenly over
the contracted licence period.
Support and maintenance
Support and maintenance income is recognised evenly over the
contract term.
Deferred income
Deferred income represents work performed in respect of
customers not yet billed.
Share-based payment
The Company operates equity-settled share-based remuneration
plans for certain employees (including Directors). Equity-settled
share-based payments are measured at fair value at the date of
grant. The fair value determined at the grant date of the
equity-settled share-based payments is expensed to the statement of
comprehensive income on a straight-line basis over the vesting
period, together with a corresponding increase in equity (via a
credit to the share option reserve), based upon the Company's
estimate of the shares that will eventually vest.
Fair value is measured using the Black-Scholes pricing 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 considerations. Where
employees are rewarded using share-based payments, the fair values
of employees' services are determined indirectly by reference to
the fair value of the instrument granted to the employee.
Upon exercise of share options, the proceeds received net of
attributable transaction costs are credited to share capital, and
where appropriate to share premium.
Property, plant and equipment
Property, plant and equipment are stated at cost, net of
accumulated depreciation and any provision for impairment.
Depreciation
Depreciation is calculated so as to write off the cost of an
asset, less its estimated residual value, over the useful economic
life of that asset as follows:
Leasehold improvements 10%
Office equipment 25%
Material residual value estimates are updated as required, but
at least annually, whether or not the asset is revalued. The useful
economic life of the asset is also reviewed regularly.
Software research and development costs
Expenditure on research (or the research phase of an internal
project) is recognised as an expense in the period in which it is
incurred.
Development costs incurred on specific projects are capitalised
when they can be reliably measured and the projects to which they
are attributable are separately identifiable, are technically
feasible, demonstrate future economic benefit, and will be used or
sold by the Group once completed. Development costs not meeting the
criteria for capitalisation are expensed as incurred. Following
completion of the development the capitalised cost is amortised on
a straight line basis over the period during which the Group is
expected to benefit, typically three years. This is shown
separately in the statement of comprehensive income.
The cost of internally generated software comprises all directly
attributable costs necessary to create, produce, and prepare the
asset to be capable of operating in the manner intended by
management. Directly attributable costs include; third party costs
and employee costs incurred on software development, along with an
appropriate portion of relevant overheads.
Impairment of goodwill, other intangible assets and property,
plant and equipment
For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are largely independent cash
inflows (cash-generating units). As a result, some assets are
tested individually for impairment and some are tested at
cash-generating unit level.
All individual assets or cash-generating units are tested for
impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the
asset's or cash-generating unit's carrying amount exceeds its
recoverable amount. To determine the recoverable amount, management
estimates expected future cash flows from each cash-generating unit
and determines a suitable interest rate in order to calculate the
present value of those cash flows. The data used for impairment
testing procedures are directly linked to the Group's latest
approved budget, adjusted as necessary to exclude the effects of
future reorganisations and asset enhancements. Discount factors are
determined individually for each cash-generating unit and reflect
their respective risk profiles as assessed by management.
Impairment losses for cash-generating units reduce the assets in
the cash-generating unit. All assets are subsequently reassessed
for indications that an impairment loss previously recognised may
no longer exist. An impairment charge is reversed if the
cash-generating unit's recoverable amount exceeds its carrying
amount.
Leased assets
The economic ownership of a leased asset is transferred to the
lessee if the lessee bears substantially all the risks and rewards
related to the ownership of the leased asset. The related asset is
recognised at the inception of the lease at the fair value of the
leased asset or, if lower, the present value of the minimum lease
payments plus incidental payments, if any, to be borne by the
lessee. A corresponding amount is recognised as a finance leasing
liability.
The interest element of leasing payments represents a constant
proportion of the capital balance outstanding and is charged to the
statement of comprehensive income over the period of the lease.
All other leases are regarded as operating leases and the
payments made under them are charged to the statement of
comprehensive income on a straight line basis over the lease term.
Lease incentives are spread over the term of the lease.
Rental income in respect of operating leases is recognised on a
straight line basis over the lease term.
Pension costs
The Group provides a defined contribution pension scheme for all
Directors and employees.
A defined contribution scheme is a pension scheme under which
the Group pays fixed contributions to an independent entity. The
Group has no legal or constructive obligations to pay further
contributions after its payment of the fixed contribution.
The assets of the scheme are held separately from those of the
Group. The annual contributions payable are charged to the
statement of comprehensive income.
Taxation
Current tax is the tax currently payable or receivable based on
the result for the period.
Deferred income taxes are calculated using the liability method
on temporary differences. Deferred tax is generally provided on the
difference between the carrying amounts of assets and liabilities
and their tax bases. However, deferred tax is not provided on the
initial recognition of goodwill, nor on the initial recognition of
an asset or liability unless the related transaction is a business
combination or affects tax or accounting profit. Deferred tax on
temporary differences associated with shares in subsidiaries is not
provided if reversal of these temporary differences can be
controlled by the Group and it is probable that reversal will not
occur in the foreseeable future. In addition, tax losses available
to be carried forward as well as other income tax credits to the
Group are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no
discounting. Deferred tax assets are recognised to the extent that
it is probable that the underlying deductible temporary differences
will be able to be offset against future taxable income. Current
and deferred tax assets and liabilities are calculated at tax rates
that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at
the balance sheet date.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the statement of comprehensive
income, except where they relate to items that are charged or
credited directly to equity in which case the related deferred tax
is also charged or credited directly to equity.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits.
Equity
Equity comprises the following:
-- "Share capital" represents the nominal value of equity shares
that have been issued.
-- "Share premium" represents the excess over nominal value of
the fair value of consideration received for equity shares, net of
expenses of the share issue.
-- "Share options reserve" represents equity-settled share-based
employee remuneration until such share options are exercised.
-- "Merger reserve" represents the difference between the
nominal and fair value of shares issued for the acquisition of
subsidiary undertakings in June 2006, in accordance with the
Companies Act 1985.
-- "Retained earnings" include all current and prior period
results as disclosed in the statement of comprehensive income.
Financial assets
All financial assets are recognised when the Group becomes a
party to the contractual provisions of the instrument. The Group
currently only has loans and receivables in these financial
statements.
Loans and receivables are initially measured at fair value.
Loans receivable are measured subsequent to initial recognition at
amortised cost using the effective interest method, less provision
for impairment. Any change in their value through impairment or
reversal of impairment is recognised in the statement of
comprehensive income.
Provision against trade receivables is made when there is
objective evidence that the Group will not be able to collect all
amounts due to it in accordance with the original terms of those
receivables. The amount of the write-down is determined as the
difference between the assets' carrying amount and the present
value of estimated future cash flows.
An assessment for impairment is undertaken on each financial
asset at least at each balance sheet date.
Financial liabilities
Financial liabilities are obligations to pay cash or other
financial assets and are recognised when the Group becomes a party
to the contractual provisions of the instrument. Financial
liabilities are categorised as at 'fair value' through profit or
loss and 'amortised cost'. The Group currently has no liabilities
categorised as 'fair value' through profit or loss.
Other financial liabilities are initially recognised at fair
value, net of transaction costs, and are subsequently recorded at
amortised cost using the effective interest method, with
interest-related charges recognised as an expense in financial cost
in the statement of comprehensive income. Finance charges,
including premiums payable on settlement or redemption and direct
issue costs, are charged to the statement of comprehensive income
on the accruals basis using the effective interest 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.
A financial liability is derecognised only when the obligation
is extinguished, that is, when the obligation is discharged or
cancelled or expires.
The Group's financial liabilities include borrowings, trade and
other payables.
Management of capital
The Group's objectives when managing capital are:
-- to safeguard the entity's ability to continue as a going
concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders, and
-- to provide an adequate return to shareholders by pricing
products and services commensurately with the level of risk.
The Group sets the level of capital in proportion to risk. The
Group manages the capital structure and makes adjustments to it in
the light of changes in economic conditions and the risk
characteristics of the underlying assets.
Significant judgements and estimates
-- The Directors have considered the recent trading activity of
the Group in conjunction with detailed forecasts for the 12 month
period following the date of these accounts. The financial
statements are being prepared on a going concern basis which the
Directors believe to be appropriate. Further details can be found
in the Report of the Directors.
-- The useful life assumption of intangible assets is disclosed
in the software development accounting policy.
-- Revenue is recognised in accordance with the accounting
policy noted previously
-- Careful judgement by the Directors is applied when deciding
whether the recognition requirements for development costs have
been met. This is necessary as the economic success of any product
development is uncertain and may be subject to future technical
problems at the time of recognition. Judgments are based on the
information available at each balance sheet date. In addition, all
internal activities related to the research and development of new
software products are continuously monitored by the Directors.
Standards in issue but not yet effective
New standards and interpretations currently in issue but not
effective for accounting periods commencing on 1 July 2010 are:
-- IFRS 9 Financial Instruments (effective 1 January 2013)
-- IAS 24 (Revised 2009) Related Party Disclosures (effective 1
January 2011)
-- Prepayments of a Minimum Funding Requirement - Amendments to
IFRIC 14 (effective 1 January 2011)
-- Improvements to IFRS issued May 2010
-- Disclosures - Transfers of Financial Assets - Amendments to
IFRS 7 (effective 1 July 2011)
The above new standards and interpretations are not considered
to have a material impact on the financial statements
Consolidated statement of comprehensive income
2010 2009
Notes GBP'000 GBP'000
Revenue 1 1,147 874
Other operating income 2 15 -
Depreciation, amortisation and impairment (240) (207)
Other operating charges (877) (876)
Operating profit / (loss) 3 45 (209)
Operating profit / (loss) before non-recurring
items 302 (209)
Impairment of intangible assets (166) -
Re-organisation costs (91) -
------------------------------------------------- -------- --------
Operating profit / (loss) after non-recurring
items 45 (209)
Finance income - 18
Finance charges 6 (1) (3)
Profit / (loss) from continuing activities before
tax 44 (194)
Tax charge 7 (1) -
Profit / (loss) and total comprehensive income
for the year 43 (194)
=============================================== ===== =====
Profit / (loss) per share Pence Pence
Basic and diluted 8 0.1 (0.5)
All of the activities of the Group are classed as
continuing.
The accompanying accounting policies and notes form part of
these financial statements.
Consolidated balance sheet
Notes 2010 2009
GBP'000 GBP'000
Assets
Non-current assets
Trade and other receivables due after one
year 11 328 -
Property, plant and equipment 10 9 18
Intangible assets 9 - 226
337 244
---------------------------------------------- --- ---
Current assets
Cash 7 -
Trade and other receivables due within one
year 11 190 198
197 198
----------------------------------------------- --- ---
Total assets 534 442
=============================================== === ===
Equity
Called up equity share capital 18 436 402
Share premium account 414 413
Share option reserve 17 15
Merger reserve 596 596
Retained earnings 20 (1,238) (1,281)
Total equity 225 145
------------------------------- ------- -------
Liabilities
Non-current liabilities
Trade and other payables 13 4 1
4 1
------------------------------- ------- -------
Current liabilities
Trade and other payables 12 305 296
305 296
------------------------------- ------- -------
Total liabilities 309 297
------------------------------- ------- -------
Total liabilities and equity 534 442
=============================== ======= =======
These financial statements were approved and authorised by the
Directors on 29 November 2010 and are signed on their behalf
by:
A Hancock
Director
The accompanying accounting policies and notes form part of
these financial statements.
2010 2009
Consolidated cash flow statement GBP'000 GBP'000
Operating activities
Result for the period before tax and finance
costs 45 (209)
Impairment of intangible assets 166 -
Amortisation of intangible assets 60 193
Depreciation of property, plant and equipment 14 14
Change in trade and other receivables (320) 55
Change in trade and other payables 4 (153)
Share option charges 2 2
Taxes received - 33
---------------------------------------------- -------- --------
Cash flows from operating activities (29) (65)
Investing activities
Purchase of property, plant and equipment (3) -
Additions to intangible assets - (39)
Interest received (2) 18
---------------------------------------------- -------- --------
Net cash used in investing activities (5) (21)
Financing activities
Proceeds from the issue of shares 35 45
Directors loan - 15
Other loan 61 -
Finance lease payments - (3)
Interest paid (1) (3)
---------------------------------------------- -------- --------
Net cash movement from financing 95 54
Net movement in cash 61 (32)
Opening cash balance (54) (22)
---------------------------------------------- -------- --------
Closing cash balance 7 (54)
============================================== ======== ========
The accompanying accounting policies and notes form part of
these financial statements.
Consolidated statement of changes in equity
Share
Share Share options Merger Retained Total
capital premium reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
July 2008 377 393 13 596 (1,087) 292
Share issue 25 20 - - - 45
Share options - - 2 - - 2
Transactions
with owners 25 20 2 - - 47
Loss for the
year and
total
comprehensive
income - - - - (194) (194)
--------------- -------- -------- --------- --------- --------- --------
Balance at 30
June 2009 402 413 15 596 (1,281) 145
=============== ======== ======== ========= ========= ========= ========
Balance at 1
July 2009 402 413 15 596 (1,281) 145
Share issue 34 1 - - - 35
Share options - - 2 - - 2
--------------- -------- -------- --------- --------- --------- --------
Transactions
with owners 34 1 2 - - 37
Profit for the
year and
total
comprehensive
income - - - - 43 43
--------------- -------- -------- --------- --------- --------- --------
Balance at 30
June 2010 436 414 17 596 (1,238) 225
=============== ======== ======== ========= ========= ========= ========
The accompanying accounting policies and notes form part of
these financial statements.
Notes to the financial statements
1 Segment reporting
The revenue and profit / (loss) before tax are attributable to
the one principal activity of the Group being software development
in the United Kingdom. An analysis of revenue is given below:
2010 2009
GBP'000 GBP'000
United Kingdom 1,147 874
============ ============
Of this figure, GBP746,000 relates to customers who individually
contribute more than 10% of total revenue (2009: GBP594,000).
2 Other operating income
2010 2009
GBP'000 GBP'000
Other operating income 15 -
============ ============
Other operating income consists of GBP15,000 of rent receivable
in respect of operating leases. This agreement commenced in
September 2009. There was no tenant during the year ended 30 June
2009, so there is no other operating income shown in that
period.
3 Operating result
This is stated after charging: 2010 2009
GBP'000 GBP'000
Share-based payment 2 2
Amortisation of intangible assets 60 193
Impairment of intangible assets 166 -
Depreciation of owned property, plant and equipment 11 11
Depreciation of assets held under finance leases
and hire purchase agreements 3 3
Fees payable to the Company's auditor for:
- the audit of the Group's annual accounts 19 17
- Tax services 4 3
- Other accounting services - 2
Operating lease costs:
- Land and buildings 49 49
============ ============
4 Directors and employees
The average number of staff employed by the
Group during the financial year amounted to: 2010 2009
Number Number
11 12
============ ============
The aggregate payroll costs of the above
were: 2010 2009
GBP'000 GBP'000
Wages and salaries 462 519
Social security costs 49 54
Other pension costs 9 14
----------------- -----------------
520 587
Capitalised development costs - (39)
----------------- -----------------
520 548
============ ============
5 Directors and key management
Alistair Andrew Mark Nicklas Robert Richard David
Hancock Kirby Peters Blanchard Burnham Blakesley Webber Total
2010 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- --------- -------- -------- ---------- --------- ---------- -------- --------
Salary 94 45 - 56 - - - 195
Fees - - - - 17 10 10 37
Bonus - - - 3 - - - 3
Compensation
for loss of
office - - - - - - - -
Benefits 6 2 - 1 3 - - 12
Pension 2 1 - 1 - - - 4
Total 102 48 - 61 20 10 10 251
============== ========= ======== ======== ========== ========= ========== ======== ========
Alistair Andrew Mark Nicklas Robert Richard David
Hancock Kirby Peters Blanchard Burnham Blakesley Webber Total
2009 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- --------- -------- -------- ---------- --------- ---------- -------- --------
Salary 92 45 13 59 - - - 210
Fees - - - - 27 12 12 51
Bonus 15 10 - - - - - 25
Compensation
for loss of
office - - 30 - - - - 30
Benefits 5 2 - 1 5 - - 12
Pension 3 1 - 2 - - - 4
Total 115 58 44 62 32 12 12 335
============== ========= ======== ======== ========== ========= ========== ======== ========
Details of share options held by the Directors can be found in
the Report of the Directors.
Emoluments of highest paid Director: 2010 2009
GBP'000 GBP'000
Emoluments receivable 100 112
Value of Group pension contributions to
money purchase schemes 2 3
----------------- -----------------
102 115
============ ============
The number of Directors who are accruing benefits
under Group pension schemes is as follows: 2010 2009
Number Number
Money purchase schemes 3 2
============ ============
Remuneration in respect of key
management including Directors was as
follows: 2010 2009
GBP'000 GBP'000
Emoluments receivable 247 329
Value of Group pension contributions to
money purchase schemes 4 6
----------------- -----------------
Sub-total 251 335
Share based payments 2 2
----------------- -----------------
253 337
=========== ===========
6 Finance charges
2010 2009
GBP'000 GBP'000
Interest payable on bank borrowing - 2
Interest payable on other borrowing 1 -
Finance charges - 1
----------------- -----------------
1 3
============ ============
7 Income tax
2010 2009
GBP'000 GBP'000
Adjustment to tax in respect of previous periods 1 -
============ ============
Factors affecting current tax charge
2010 2009
GBP'000 GBP'000
Profit / (loss) on ordinary activities before
taxation 44 (194)
============ ============
Profit / (loss) on ordinary activities
multiplied by the small company rate of
corporation tax in the UK of 21% (2009:
21%) 12 (41)
Expenses not deductible for tax purposes 61 42
Other temporary differences not
recognised - 3
Adjustment to tax in respect of previous
periods 1 -
Increased tax losses (73) (4)
----------------- -----------------
Total current tax charge 1 -
============ ============
8 Profit / (loss) per share
2010 2009
GBP'000 GBP'000
Profit / (loss) attributable to ordinary
shareholders 43 (194)
============ ============
Weighted average number of shares (basic) 40,581,537 37,962,092
Weighted average number of shares (diluted) 42,595,287 39,475,842
Basic and diluted earnings / (loss) per share 0.1p (0.5)p
At 30 June 2010, the Company had 1,513,750 share options and
2,000,000 warrants outstanding. No options or warrants were
exercised in the period.
Development expenditure
9 Intangible assets
GBP'000
Cost at 1 July 2008 1,201
Additions 39
----------------------
Cost at 30 June 2009 1,240
Additions -
----------------------
Cost at 30 June 2010 1,240
==============
Amortisation at 1 July 2008 821
Amortisation 193
----------------------
Amortisation at 30 June 2009 1,014
Amortisation 60
Impairment 166
----------------------
Amortisation at 30 June 2010 1,240
==============
Net book value at 1 July 2008 380
==============
Net book value at 30 June 2009 226
==============
Net book value at 30 June 2010 -
==============
Amortisation charged on intangible assets is included within
depreciation and amortisation in the consolidated statement of
comprehensive income.
On 30 June 2010, Rubicon agreed to convert the annual licence
agreement with First Response Finance Limited to a perpetual
licence. With the increase in near term, and reduction of future,
Accelerator licence revenue, the Board recognised a permanent
diminution in value of this asset and have therefore impaired its
value.
10 Property, plant and Leasehold
equipment improvements Office equipment Total
GBP'000 GBP'000 GBP'000
Cost at 1 July 2008 60 204 264
Additions - - -
---------------- ----------------- -----------------
Cost at 30 June 2009 60 204 264
Additions - 5 5
---------------- ----------------- -----------------
Cost at 30 June 2010 60 209 269
========== ========== ==========
Depreciation at 1 July
2008 48 184 232
Charge for the year 6 8 14
---------------- ---------------- ----------------
Depreciation at 30 June
2009 54 192 246
Charge for the year 6 8 14
---------------- ---------------- ----------------
Depreciation at 30 June
2010 60 200 260
========== ========== ==========
Net book value at 1 July
2008 12 20 32
========== ========== ==========
Net book value at 30
June 2009 6 12 18
========== ========== ==========
Net book value at 30
June 2010 - 9 9
========== ========== ==========
Included within the net book value of GBP9,000 is GBP4,000
(2009: GBP5 000) relating to assets held under finance leases and
hire purchase agreements. The depreciation charged to the financial
statements in the year in respect of such assets amounted to
GBP3,000 (2009: GBP3,000).
11 Trade and other receivables
2010 2009
GBP'000 GBP'000
Trade and other receivables due within
one year
Trade receivables 54 63
Prepayments and accrued income 135 64
Other receivables 1 71
----------------- -----------------
190 198
============ ============
Trade and other receivables due after
one year
Accrued income 328 -
----------------- -----------------
328 -
============ ============
Some of the unimpaired trade receivables are past due as at the
reporting date. Financial assets past due but not impaired can be
shown as follows:
2010 2009
Past due Past due
but not but not
impaired impaired
GBP'000 GBP'000
Trade receivables
Less than 60 days 54 58
More than 60 days - 5
----------------- -----------------
54 63
=========== ===========
All amounts are short term. The carrying value of trade
receivables is considered a reasonable approximation of fair
value.
The Directors consider all receivables to be recoverable, except
for an amount of GBP5,237 which has been provided for in the
current year for specific work that has been completed but remains
unpaid (2009: GBP4 100).
12 Trade and other payables - current
2010 2009
GBP'000 GBP'000
Bank overdraft - 54
Trade payables 49 51
Other taxation and social security 25 57
Amounts due under finance leases and
hire purchase agreements - 3
Other payables 61 15
Deferred income 110 31
Accruals 60 85
----------------- -----------------
305 296
=========== ============
The other payables of GBP61,000 (2009: GBPnil) were secured by a
floating charge over the assets of the Group. The loan was repaid
in full on 23 July 2010 at which point the security was
extinguished. The loan carried a rate of interest of 1% per
calendar month.
13 Trade and other payables - Non current
2010 2009
GBP'000 GBP'000
Amounts due under finance leases and hire
purchase agreements 4 1
=========== ============
14 Financial instruments and derivatives
The Group's principal financial instruments comprise cash and
bank overdrafts. The purpose of these financial instruments is to
finance the Group's operations. The Group has other financial
assets and liabilities that arise directly from its operations,
such as trade and other receivables and payables.
The Group does not enter into derivative transactions such as
forward foreign currency contracts.
The main risks arising from the Group's financial instruments
are credit risk and liquidity risk. The Board reviews and agrees
policies for managing each of these risks and they are summarised
below.
Credit risk
The credit risk is the carrying amount of the financial assets
as shown in note 11.
The Group's trade and other receivables are actively monitored
to avoid a significant concentration of credit risk.
Liquidity risk
The Group monitors its liquidity position actively to ensure the
business has sufficient resources to meet its requirements and to
invest cash assets safely and profitably.
Market risk
The Group considers its exposure to interest rate and foreign
exchange to be immaterial.
Fair values
The Directors consider that the fair value of all the financial
assets and liabilities is the same as the carrying value in the
financial statements.
The financial asset categorisation is presented as follows:
Non- financial Loans and
assets receivables Total
2009 GBP'000 GBP'000 GBP'000
Trade and other
receivables 64 134 198
Other
non-financial
assets 244 - 244
----------------- ----------------- -----------------
Total 308 134 442
=========== =========== ===========
Non- financial Loans and
assets receivables Total
2010 GBP'000 GBP'000 GBP'000
Trade and other
receivables 463 55 518
Other
non-financial
assets 9 - 9
Cash - 7 7
----------------- ----------------- -----------------
Total 472 62 534
=========== =========== ===========
The disclosure of the carrying value in respect of IAS39
categorisation of financial liabilities is as follows:
Other financial
liabilities Liabilities
at amortised not within
cost scope of IAS39 Total
2009 GBP'000 GBP'000 GBP'000
Trade and other
payables 167 72 239
Bank overdraft 54 - 54
Finance lease
liability -
current - 4 4
----------------- ----------------- -----------------
Total 221 76 297
============ ============ ============
Other financial
liabilities Liabilities
at amortised not within
cost scope of IAS39 Total
2010 GBP'000 GBP'000 GBP'000
Trade and other
payables 219 25 244
Loan 61 - 61
Finance lease
liability -
current - 4 4
----------------- ----------------- -----------------
Total 280 29 309
============ ============ ============
Contractual un-discounted cash flows in respect of financial
liabilities are as follows:
91 days to 13 months
0-90 days 12 months to 3 years Total
GBP'000 GBP'000 GBP'000 GBP'000
Trade
payables 23 26 - 49
Loan 61 - - 61
Finance
lease
liabilities - 3 2 5
----------------- ----------------- ----------------- -----------------
Total 84 29 2 115
============ ============ ============ ============
15 Commitments under finance leases and hire purchase
agreements
The total minimum finance lease payments equal their present
value.
Amounts due under finance leases and hire purchase agreements
are secured on the assets to which they relate.
16 Leasing commitments
At 30 June 2010 the Group had commitments under non-cancellable
operating leases as set out below:
2010 2009
Buildings Buildings
GBP'000 GBP'000
Operating leases which
expire:
Within 1 year - 56
Within 2 to 5 years 45 -
------------------- -------------------
45 56
============ ============
17 Deferred taxation
The amounts unprovided for deferred taxation are set out
below:
2010 2009
Provided Unprovided Provided Unprovided
GBP'000 GBP'000 GBP'000 GBP'000
Tax losses available - 293 - 552
============ ============ ============ ============
18 Share capital 2010 2009
Authorised share capital: GBP'000 GBP'000
100,000,000 Ordinary shares of 1p each 1,000 1,000
============ ============
2010 2009
Allotted, called up
and fully paid: Number GBP'000 Number GBP'000
Ordinary shares of 1p
each 43,582,495 436 40,199,995 402
============ ============ ============ ============
On 27 November 2009, the Company issued 195,000 new ordinary
shares to Andrew Kirby at a price of 3p per share. Proceeds
received in excess of the nominal value of the shares, net of
associated issue expenses totalling GBP3,900, are included in share
premium.
On 1 June 2010, following shareholder approval of a re-financing
exercise, the Company issued David Cover and Son Limited and Rupert
Green 3,000,000 and 187,500 new ordinary shares respectively at
par. Issue expenses totalling GBP2,798 are included in share
premium.
19 Share options
The Group adopted the Rubicon Software Group EMI Scheme 2006 on
8 June 2006.
An aggregate of 3,278,000 options have been granted to employees
of the Group, in return for such employees releasing certain
earlier EMI schemes options which were granted to them by Rubicon
Software Limited. This is the only share incentive scheme of the
Group currently in place.
Weighted
average Weighted
exercise average
price 30 June exercise 30 June
(p) 2010 price (p) 2009
Outstanding at 1 July 2.2 1,513,750 2.1 1,763,750
Lapsed during the year - - 0.1 (250,000)
------------------------ ---------- ---------- ----------- ----------
Number of outstanding
options at 30 June 2.2 1,513,750 2.2 1,513,750
------------------------ ---------- ---------- ----------- ----------
As at 30 June 2010, there were 1,513,750 share options
outstanding (2009: 1,513,750). Of these, 756,875 were capable of
being exercised (2009: 756,875). The Black-Scholes valuation
methodology was used for the valuation of all options.
During the year the Group issued warrants in respect of
2,000,000 ordinary shares. The warrants are exercisable at any time
within five years of issue at an exercise price of GBP0.012 per
share. The Directors have calculated the fair value of the warrant
instrument in accordance with International Financial Reporting
Standard 2 'Share-based Payment' and consider any charge to the
statement of comprehensive income to be immaterial to the financial
statements.
20 Retained earnings 2010 2009
GBP'000 GBP'000
Balance brought forward (1,281) (1,087)
Profit / (loss) for the financial year 43 (194)
----------------- ----------------
Balance carried forward (1,238) (1,281)
=========== ===========
21 Related party transactions
Director's fees of GBP20,000 were paid to David Webber and
Richard Blakesley in respect of their non-executive duties (2009:
GBP24,000).
22 Annual Report and Annual General Meeting
The Annual Report will be available from the Company's website
www.rubiconsoftware.com from 30 November 2010 and will be posted to
shareholders on or around 30 November 2010. The Annual Report
contains notice of the Annual General Meeting of the Company which
will be held at 1.00 p.m. on 21 December 2010 at Rubicon House,
Guildford Road, West End, Surrey GU24 9PW
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAXFNAANEFFF
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