TIDMTSEG
RNS Number : 3789O
TSE Group PLC
29 June 2010
Embargoed for 7.00am on 29 June 2010
TSE GROUP PLC (the 'Company' or 'TSE')
AUDITED RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2009
The Board of TSE is pleased to announce its audited results for the year ended
31 December 2009. The Report and Accounts are being posted to shareholders today
and a copy is available from the Company's website, www.tsegroupplc.com.
Chairman's Statement
Group revenues increased by 43% in the year to GBP1,577,617 (2008:
GBP1,103,053); in this difficult economic climate your Board considers this a
very strong performance. Unfortunately, the margins associated with this revenue
stream were not as high as expected and hence a loss before taxation of
GBP165,885 (2008: profit GBP31,904) was generated. It is worth noting that
during 2009 the Group decided to write off almost all of its development and
start up costs relating to its international offices; this amounted to GBP77,000
(2008: nil).
During the year we set up and opened a new wholly owned office in Istanbul in
Turkey and further associate offices in Cairo, Warsaw, and Dubai. Also during
the year we set up four new business lines; 'Sports Performance', run out of
TSE's new office in Colorado Springs, USA; 'Event Appraisal', which is being run
out of our TSE Scandinavia office; 'Digital PR and Marketing', a joint venture
with Washington DC based Chong + Koster; and 'Environmental Services', a joint
venture with Indianapolis-based August Mack.
Revenues within all the international offices have grown during the period,
despite the poor global economy, and 2010 has started very positively;
importantly, we are also seeing an improvement in the margins associated with
these revenues. We have won a number of high profile new clients this year,
particularly in the area of Sports Performance and in April we announced that
TSE Consulting SA had been appointed by the Russian Olympic Committee to conduct
an in-depth internal review of Russia's winter Olympic sports performance. This
major contract follows previous assignments from Saudi Arabia, Brazil and
Turkey.
Over the past few months we have been approached by a number of sports related
companies with a view to acquiring or merging with TSE Consulting SA and it is
our opinion that TSE Consulting would benefit substantially by being part of a
larger sports focused group. All shareholders will be kept fully informed on
developments.
Adam Reynolds
Chairman
Consolidated statement of Comprehensive Income for the year ended 31 December
2009
+-------+----------------------+-------+--+----------+------+-----+-+---+------+----+-+-------+
| | Notes | | 2009 | | 2008 | |
| | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| | | | GBP | | GBP | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| | | | | | | |
+-------+---------------------------------+-----------------+-----+------------+----+---------+
| Revenue | 2 | | 1,577,617 | | 1,103,053 | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| Operating costs | | | (1,741,712) | | (1,073,650) | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| Operating (loss)/profit | 4 | | (164,095) | | 29,403 | |
| | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| Finance revenue | | | 691 | | 3,811 | |
| | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| Finance costs | 5 | | (2,481) | | (1,310) | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| (Loss)/ profit before | | | (165,885) | | 31,904 | |
| taxation | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| Taxation | 6 | | 45 | | (9,242) | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| (Loss)/profit for the year | | | (165,840) | | 22,662 | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| Other comprehensive | | | | | | |
| (losses)/income | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| Exchange differences on | | | (199,698) | | 820,355 | |
| translating foreign | | | | | | |
| operations | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| Total comprehensive | | | (365,538) | | 843,017 | |
| (losses)/income for the year | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| (Loss)/earnings per share | | | | | | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| Basic | 13 | | (0.002p) | | 0.004p | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| Diluted | 13 | | (0.002p) | | 0.003p | |
+------------------------------+-------+-------------+--------------+---+-------------+-------+
| | | | | | | | | | | | | |
+-------+----------------------+-------+--+----------+------+-----+-+---+------+----+-+-------+
Consolidated Statement of Financial Position as at 31 December 2009
+----------------------------------+-------+-------------+--+-------------+
| | Notes | 2009 | | 2008 |
+----------------------------------+-------+-------------+--+-------------+
| | | GBP | | GBP |
| Non-current assets | | | | |
+----------------------------------+-------+-------------+--+-------------+
| Intangible assets | 7 | 2,312,269 | | 2,482,721 |
+----------------------------------+-------+-------------+--+-------------+
| Property, plant, and equipment | 8 | 54,925 | | 38,219 |
+----------------------------------+-------+-------------+--+-------------+
| | | 2,367,194 | | 2,520,940 |
+----------------------------------+-------+-------------+--+-------------+
| | | | | |
+----------------------------------+-------+-------------+--+-------------+
| Current assets | | | | |
+----------------------------------+-------+-------------+--+-------------+
| Trade and other receivables | 9 | 441,534 | | 552,460 |
+----------------------------------+-------+-------------+--+-------------+
| Cash and cash equivalents | | 48,997 | | 155,523 |
+----------------------------------+-------+-------------+--+-------------+
| | | 490,531 | | 707,983 |
+----------------------------------+-------+-------------+--+-------------+
| Current liabilities | | (371,615) | | |
| Trade and other payables | 10 | | | (394,727) |
+----------------------------------+-------+-------------+--+-------------+
| Net current assets | | 118,916 | | 313,256 |
+----------------------------------+-------+-------------+--+-------------+
| Total assets less current | | 2,486,110 | | 2,834,196 |
| liabilities | | | | |
+----------------------------------+-------+-------------+--+-------------+
| | | | | |
+----------------------------------+-------+-------------+--+-------------+
| Equity | | | | |
+----------------------------------+-------+-------------+--+-------------+
| Issued share capital | 12 | 1,457,600 | | 1,457,600 |
+----------------------------------+-------+-------------+--+-------------+
| Shares to be issued reserve | | 136,000 | | 136,000 |
+----------------------------------+-------+-------------+--+-------------+
| Share premium account | | 2,791,920 | | 2,791,920 |
+----------------------------------+-------+-------------+--+-------------+
| Retained losses | | (2,520,067) | | (2,371,679) |
+----------------------------------+-------+-------------+--+-------------+
| Translation reserve | | 620,657 | | 820,355 |
+----------------------------------+-------+-------------+--+-------------+
| | | | | |
+----------------------------------+-------+-------------+--+-------------+
| Total Equity | | 2,486,110 | | 2,834,196 |
+----------------------------------+-------+-------------+--+-------------+
Consolidated Statement of Cash Flows for the year ended 31 December 2009
+--------------------------------------+----------+-----------+----------+-----------+
| | | 2009 | | 2008 |
+--------------------------------------+----------+-----------+----------+-----------+
| | | GBP | | GBP |
+--------------------------------------+----------+-----------+----------+-----------+
| Cash flow from operating activities | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Operating (loss)/profit | | (164,095) | | 29,403 |
+--------------------------------------+----------+-----------+----------+-----------+
| | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Adjusted for: | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Depreciation | | 41,336 | | 13,012 |
+--------------------------------------+----------+-----------+----------+-----------+
| Decrease/(increase)in trade and | | 110,926 | | (97,171) |
| other receivables | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| (Decrease)/increase in trade and | | (23,112) | | 5,213 |
| other payables | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Share based payments | | 17,452 | | 19,506 |
+--------------------------------------+----------+-----------+----------+-----------+
| Decrease in provisions | | - | | (35,114) |
+--------------------------------------+----------+-----------+----------+-----------+
| Foreign exchange loss | | - | | 7,912 |
+--------------------------------------+----------+-----------+----------+-----------+
| | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Tax refunded / (paid) | | 45 | | (50,983) |
+--------------------------------------+----------+-----------+----------+-----------+
| | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Net cash generated from/(used in) | | (17,448) | | (108,222) |
| operating activities | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Cash flows from investing activities | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Purchase of property, plant and | | (60,645) | | (28,171) |
| equipment | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Acquisition of subsidiary, net of | | - | | (17,432) |
| cash acquired | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Interest received | | 691 | | 3,811 |
+--------------------------------------+----------+-----------+----------+-----------+
| Interest paid | | (2,481) | | (1,310) |
+--------------------------------------+----------+-----------+----------+-----------+
| | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Net cash used in investing | | (62,435) | | (43,102) |
| activities | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Cash flows from financing activities | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Proceeds from the issue of shares | | - | | 341,235 |
| (net of issue costs) | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Repayment of deferred cash | | - | | (155,000) |
| consideration relating to the | | | | |
| acquisition of Wilton International | | | | |
| Consulting Limited | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Net cash generated from financing | | - | | 186,235 |
| activities | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| | | (79,883) | | |
| Net (decrease)/increase in cash & | | | | 34,911 |
| cash equivalents | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Cash & cash equivalents at 1 January | | 155,523 | | 97,945 |
| 2009 | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Effect of exchange rate changes | | (26,643) | | 22,667 |
+--------------------------------------+----------+-----------+----------+-----------+
| | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| Cash & cash equivalents at 31 | | 48,997 | | 155,523 |
| December 2009 | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
| | | | | |
+--------------------------------------+----------+-----------+----------+-----------+
Notes to the Financial Statements
Accounting Policies
1. Basis of preparation of the financial statements
Financial information in this final announcement does not comprise statutory
accounts for the purpose of section 435 of the Companies Act 2006 and has been
extracted from the audited consolidated accounts for the period to 31 December
2009 which were approved by the Board of Directors on 29 June 2010. The
statutory accounts of TSE Group Plc for the year to 31 December 2008 have been
filed with the Registrar of Companies and those for the year to 31 December 2009
will be filed on or before 30 June 2010. The auditor's report on the 2009
statutory accounts is unqualified.
Whilst the information in this final announcement has been prepared in
accordance with the recognition and measurement criteria of International
Financial Reporting Standards(IFRS), this statement in itself does not give
sufficient information to comply with IFRS.
2. Segmental Reporting
The board considers that the Group has a single business segment which delivers
international sports consultancy services. The revenue, expenditure and result
reported in the income statement and the assets and liabilities reported in the
balance sheet all relate to this single segment. An analysis of turnover by
geographical destination is given below.
+----------------------------------+-----------+----------+-----------+
| | 2009 | | 2008 |
+----------------------------------+-----------+----------+-----------+
| | GBP | | GBP |
+----------------------------------+-----------+----------+-----------+
| Europe (including Cayman Islands | 690,787 | | 624,011 |
| and Switzerland) | | | |
+----------------------------------+-----------+----------+-----------+
| Africa | 265,747 | | 17,826 |
+----------------------------------+-----------+----------+-----------+
| America | 286,001 | | 209,145 |
+----------------------------------+-----------+----------+-----------+
| Asia | 335,082 | | 252,071 |
+----------------------------------+-----------+----------+-----------+
| | | | |
+----------------------------------+-----------+----------+-----------+
| | 1,517,617 | | 1,103,053 |
+----------------------------------+-----------+----------+-----------+
3. Staff Costs
+----------------------------------+----------+----------+---------+
| | 2009 | | 2008 |
+----------------------------------+----------+----------+---------+
| | GBP | | GBP |
+----------------------------------+----------+----------+---------+
| | | | |
+----------------------------------+----------+----------+---------+
| Wages and Salaries | 287,942 | | 191,741 |
+----------------------------------+----------+----------+---------+
| Directors Remuneration and Fees | 260,058 | | 231,000 |
+----------------------------------+----------+----------+---------+
| Social Security costs | 45,799 | | 39,364 |
+----------------------------------+----------+----------+---------+
| Share based payment | 17,452 | | 19,506 |
+----------------------------------+----------+----------+---------+
| | | | |
+----------------------------------+----------+----------+---------+
| | 611,251 | | 481,611 |
+----------------------------------+----------+----------+---------+
| | | | |
+----------------------------------+----------+----------+---------+
The remuneration of the highest paid Director included
above was GBP119,000 (2008: GBP96,000).
The average monthly number of employees was as follows:
+----------------------------------+----------+----------+--------+
| | 2009 | | 2008 |
| | No. | | No. |
+----------------------------------+----------+----------+--------+
| | | | |
+----------------------------------+----------+----------+--------+
| Administration (including | 10 | | 12 |
| Directors) | | | |
+----------------------------------+----------+----------+--------+
| | | | |
+----------------------------------+----------+----------+--------+
The directors are considered to be the key management personnel. Directors'
remuneration and fees comprises the whole of the compensation for these
individuals. The directors hold no share options.
4. Operating (Loss)/Profit
The operating (loss)/profit is stated after charging:
+----------------------------------+----------+----------+---------+
| | 2009 | | 2008 |
+----------------------------------+----------+----------+---------+
| | GBP | | GBP |
+----------------------------------+----------+----------+---------+
| Depreciation of owned tangible | 41,336 | | 13,012 |
| fixed assets | | | |
+----------------------------------+----------+----------+---------+
| Staff costs (See note 3) | 611,251 | | 481,611 |
+----------------------------------+----------+----------+---------+
| Foreign currency loss | 22,531 | | 7,411 |
+----------------------------------+----------+----------+---------+
| Auditors remuneration | | | |
+----------------------------------+----------+----------+---------+
| - Audit of the parent company | 16,251 | | 13,500 |
| and consolidated financial | | | |
| statements | | | |
+----------------------------------+----------+----------+---------+
| - Audit of subsidiary company | 10,151 | | 4,550 |
| financial statements | | | |
+----------------------------------+----------+----------+---------+
| - Tax compliance services | 1,000 | | 1,000 |
+----------------------------------+----------+----------+---------+
5. Finance Costs
+----------------------------------+----------+----------+--------+
| | 2009 | | 2008 |
+----------------------------------+----------+----------+--------+
| | GBP | | GBP |
+----------------------------------+----------+----------+--------+
| | | | |
+----------------------------------+----------+----------+--------+
| | 2,481 | | 1,310 |
+----------------------------------+----------+----------+--------+
6. Taxation
+----------------------------------+----------+----------+--------+
| | 2009 | | 2008 |
+----------------------------------+----------+----------+--------+
| | GBP | | GBP |
+----------------------------------+----------+----------+--------+
| Analysis of charge in the year: | | | |
+----------------------------------+----------+----------+--------+
| Current tax | (45) | | 9,242 |
+----------------------------------+----------+----------+--------+
| | | | |
+----------------------------------+----------+----------+--------+
The tax assessed for the year differs from the standard rate of corporation tax
in the UK at 28%.The differences are explained below:
+------------+------------------------+------------+----------+----------+----------+
| | (165,885) | | | |
| (Loss)/profit before tax | | | 31,904 | |
+-------------------------------------+------------+----------+----------+----------+
| | | | | |
+-------------------------------------+------------+----------+----------+----------+
| (Loss)/profit before tax multiplied | | | | |
| by the standard rate of corporation | (46,448) | | 8,933 | |
| tax in the UK of 28% | | | | |
+-------------------------------------+------------+----------+----------+----------+
| | | | | |
+-------------------------------------+------------+----------+----------+----------+
| | | | | |
+-------------------------------------+------------+----------+----------+----------+
| Tax losses carried forward and | 46,403 | | 309 | |
| disallowable items | | | | |
+-------------------------------------+------------+----------+----------+----------+
| | | | | |
+-------------------------------------+------------+----------+----------+----------+
| | (45) | | 9,242 | |
+-------------------------------------+------------+----------+----------+----------+
| | | | |
+------------+-------------------------------------+---------------------+----------+
| | | | | | |
+------------+------------------------+------------+----------+----------+----------+
The total amount of unused tax losses for which no deferred tax asset is
recognised in the balance sheet is approximately GBP500,000 (2008 - GBP373,000).
7. Intangible Fixed Assets - Group
+------+----------------------------+----------------+------+------+
| | | Goodwill |
+------+---------------------------------------------+-------------+
| | GBP | |
+-----------------------------------+-----------------------+------+
| | | |
| Cost | | |
| At 1 January 2008 | 1,737,158 | |
| | 17,432 | |
| Additions | 728,131 | |
| Translation difference | | |
| | | |
+-----------------------------------+-----------------------+------+
| At 31 December 2008 | 2,482,721 | |
+-----------------------------------+-----------------------+------+
| Translation difference | (170,452) | |
+-----------------------------------+-----------------------+------+
| At 31 December 2009 | 2,312,269 | |
+-----------------------------------+-----------------------+------+
| | | |
+-----------------------------------+-----------------------+------+
| | | | | |
+------+----------------------------+----------------+------+------+
Impairment tests of goodwill
No impairment losses in respect of goodwill have been recognised in 2009 or
2008. An annual goodwill impairment review is performed as at 31 December. This
review compares the carrying value of goodwill with the present value of future
cash flows arising from TSE Consulting SA, the Swiss subsidiary and main
operating unit. If the present value is less than the carrying value of the
goodwill, an impairment loss is recognised immediately in the income statement.
Key assumptions used in the value in use calculations are as follows:
Cash flow projections are derived from financial plans approved by the Board and
cover a twelve month period. They reflect management's expectations of revenue
growth, operating cost and margin for TSE Consulting SA based on past
experience.
A post-tax discount rate of 10% to 15% has been applied to cash flow projections
reflecting management's view that this range of discount rates are suitable for
the year.
8. Property, Plant and Equipment - Group
+--------------------+-----------+----------+-----------+----------+---------+
| | Office | | IT | | |
| | Furniture | | Equipment | | |
| | and | | | | |
| | machinery | | | | Total |
+--------------------+-----------+----------+-----------+----------+---------+
| | GBP | | GBP | | GBP |
+--------------------+-----------+----------+-----------+----------+---------+
| Cost | | | | | |
| At 1 January 2008 | 28,937 | | 11,723 | | 40,660 |
| Translation | 11,872 | | 4,809 | | 16,681 |
| difference | 19,471 | | 8,700 | | 28,171 |
| Additions | | | | | |
+--------------------+-----------+----------+-----------+----------+---------+
| At 31 December | 60,280 | | 25,232 | | 85,512 |
| 2008 | | | | | |
+--------------------+-----------+----------+-----------+----------+---------+
| Translation | (4,106) | | (1,718) | | (5,824) |
| difference | 51,361 | | 9,284 | | 60,645 |
| Additions | | | | | |
+--------------------+-----------+----------+-----------+----------+---------+
| At 31 December | 107,535 | | 32,798 | | 140,333 |
| 2009 | | | | | |
+--------------------+-----------+----------+-----------+----------+---------+
| | | | | | |
| Depreciation | | | | | |
| At 1 January 2008 | 11,428 | | 10,278 | | 21,706 |
| | 6,182 | | 6,393 | | 12,575 |
| Translation | 5,296 | | 7,716 | | 13,012 |
| difference | | | | | |
| Charge for the | | | | | |
| year | | | | | |
+--------------------+-----------+----------+-----------+----------+---------+
| At 31 December | 22,906 | | 24,387 | | 47,293 |
| 2008 | | | | | |
+--------------------+-----------+----------+-----------+----------+---------+
| Translation | (1,559) | | (1,662) | | (3,221) |
| difference | 37,453 | | 3,883 | | 41,336 |
| Charge for the | | | | | |
| year | | | | | |
+--------------------+-----------+----------+-----------+----------+---------+
| At 31 December | 58,800 | | 26,608 | | 85,408 |
| 2009 | | | | | |
+--------------------+-----------+----------+-----------+----------+---------+
| | | | | | |
+--------------------+-----------+----------+-----------+----------+---------+
| Net Book Value | | | | | |
| At 31 December | 37,374 | | 845 | | 38,219 |
| 2008 | | | | | |
+--------------------+-----------+----------+-----------+----------+---------+
| At 31 December | 48,735 | | 6,190 | | 54,925 |
| 2009 | | | | | |
+--------------------+-----------+----------+-----------+----------+---------+
9. Trade and other Receivables - Group
+------------------------------------+-----------+----------+------------+
| | 2009 | | 2008 |
+------------------------------------+-----------+----------+------------+
| | GBP | | GBP |
+------------------------------------+-----------+----------+------------+
| Trade debtors: Gross | 633,613 | | 528,608 |
| | (199,382) | | (52,879) |
| Less: provision for bad debts | | | |
+------------------------------------+-----------+----------+------------+
| | 434,231 | | 475,729 |
+------------------------------------+-----------+----------+------------+
| Other debtors | 5,661 | | 53,971 |
+------------------------------------+-----------+----------+------------+
| Prepayments and accrued income | 1,642 | | 22,760 |
+------------------------------------+-----------+----------+------------+
| | 441,534 | | 552,460 |
+------------------------------------+-----------+----------+------------+
| | | | |
+------------------------------------+-----------+----------+------------+
10. Trade and Other Payables - Group
+-------------------------------------------+---------------+----------+------------+
| | 2009 | | 2008 |
+-------------------------------------------+---------------+----------+------------+
| | GBP | | GBP |
+-------------------------------------------+---------------+----------+------------+
| Trade creditors | 196,907 | | 151,267 |
| Taxes and social security costs | 1,564 | | |
| Other creditors | 15,004 | | - |
| Accrued expenses | 158,140 | | 243,460 |
| | | | |
| | | | - |
+-------------------------------------------+---------------+----------+------------+
| | 371,615 | | 394,727 |
+-------------------------------------------+---------------+----------+------------+
| | | | |
+-------------------------------------------+---------------+----------+------------+
| | | | |
+-------------------------------------------+---------------+----------+------------+
Trade and other creditors principally comprise amounts outstanding for trade
purchases and on-going costs. The Directors
11. Provision for Liabilities & Charges - Group & Company
+------------------------------------------+-------+----------+----------+
| | 2009 | | 2008 |
+------------------------------------------+-------+----------+----------+
| | GBP | | GBP |
+------------------------------------------+-------+----------+----------+
| Provision for claim for breach of | | | |
| contract (see below): | | | |
| | - | | 35,114 |
| Balance brought forward at 1 January | - | | (12,910) |
| 2009 | - | | (22,204) |
| Legal charges incurred in year | | | |
| Provision released in year | | | |
| | | | |
+------------------------------------------+-------+----------+----------+
| Balance carried forward at 31 December | - | | - |
| 2009 | | | |
+------------------------------------------+-------+----------+----------+
In 2007 a provision was made to allow for a potential claim for breach of
contract relating to J E Farmer, a former director of the company. In 2008 the
provision wasreleased after Mr Farmer withdrew his request for a hearing.
12. Share Capital
+-------------------------------------+-----------+----------+-----------+
| | 2009 | | 2008 |
+-------------------------------------+-----------+----------+-----------+
| | GBP | | GBP |
+-------------------------------------+-----------+----------+-----------+
| Authorised: | | | |
+-------------------------------------+-----------+----------+-----------+
| 1,352,000,000 Ordinary shares of | 1,352,000 | | 1,352,000 |
| 0.1p each | | | |
+-------------------------------------+-----------+----------+-----------+
| 72,000,000 Deferred shares of 0.9p | 648,000 | | 648,000 |
| each | | | |
+-------------------------------------+-----------+----------+-----------+
| | | | |
+-------------------------------------+-----------+----------+-----------+
| | 2,000,000 | | 2,000,000 |
+-------------------------------------+-----------+----------+-----------+
| | | | |
+-------------------------------------+-----------+----------+-----------+
| Allotted, called up & fully paid: | | | |
+-------------------------------------+-----------+----------+-----------+
| 809,600,000 Ordinary shares of 0.1p | 809,600 | | 809,600 |
| each | | | |
+-------------------------------------+-----------+----------+-----------+
| 72,000,000 Deferred shares of 0.9p | 648,000 | | 648,000 |
| each | | | |
+-------------------------------------+-----------+----------+-----------+
| | | | |
+-------------------------------------+-----------+----------+-----------+
| | 1,457,600 | | 1,457,600 |
+-------------------------------------+-----------+----------+-----------+
| | | | |
+-------------------------------------+-----------+----------+-----------+
Deferred Shares
The special rights, privileges, restrictions and limitations attached to the
Deferred shares are as follows:
a) A holder of Deferred shares shall have no right to receive notice of or
to attend or vote at any General meeting of the company.
b) A holder of Deferred shares shall have no right to receive any dividend or
distribution
c) A holder of Deferred shares shall on a return of capital in a
liquidation, but not otherwise, be entitled to receive only the amount credited
as paid up on each share but only after the holder of each Ordinary share shall
have received the amount paid up or credited as paid up on such share, together
with a payment of 0.1 pence per share but the holders of Deferred shares shall
not be entitled to any further participation in the assets or profits of the
Company.
Warrants
Neil McClure, a former Director of the Company, holds 8,800,000 Warrants. Each
Warrant entitles Neil McClure to receive, upon exercise of the Warrants, one
Ordinary Share at an exercise price of 0.1p per Ordinary Share. These warrants
have expired since the year end.
Beaumont Cornish Limited currently holds 7,500,000 Warrants. Each Warrant
entitles Beaumont Cornish to receive, upon exercise of the Warrants, one
Ordinary Share at an exercise price of 0.85p per Ordinary Share. The Warrants
may be exercised at anytime before the expiry of a five year period from the
date of grant.
13. (Loss)/Earnings per Share
The basic earnings per share is calculated by dividing the profit for the
financial year attributable to shareholders by the weighted average number of
shares in issue.
+----------------------------------+-------------+----------+-------------+
| | 2009 | | 2008 |
+----------------------------------+-------------+----------+-------------+
| | Number | | Number |
+----------------------------------+-------------+----------+-------------+
| Weighted average number of | 809,600,000 | | 645,685,714 |
| shares (ordinary) | | | |
+----------------------------------+-------------+----------+-------------+
| Weighted average number of | 809,600,000 | | 682,985,714 |
| shares (dilutive) | | | |
+----------------------------------+-------------+----------+-------------+
| | | | |
+----------------------------------+-------------+----------+-------------+
| | | | |
+----------------------------------+-------------+----------+-------------+
| | GBP | | GBP |
+----------------------------------+-------------+----------+-------------+
| (Loss)/profit for the year | (165,840) | | 22,662 |
+----------------------------------+-------------+----------+-------------+
| Basic (loss)/earnings per share | (0.002p) | | 0.004p |
+----------------------------------+-------------+----------+-------------+
| Diluted (loss)/earnings per | (0.002p) | | 0.003p |
| share | | | |
+----------------------------------+-------------+----------+-------------+
| | | | |
+----------------------------------+-------------+----------+-------------+
In the current year the basic and diluted loss per share is the same, as the
exercise of share options and warrants would increase the loss per share and is
therefore, anti-dilutive. Details of the options and warrants which are
outstanding and potentially dilutive are given in note 19.
14. Share Based Payments
As at 31 December 2009, the following share options and warrants were
outstanding over the ordinary shares of the Company.
+------------+----------+----------+----------+------------+----------+--------+
| | Date | Vesting | Expiry | Balance | Exercise | Fair |
| | of | date | date | at | price | value |
| | grant | | | 31 | Pence | of |
| | | | | December | | option |
| | | | | 2009 | | at |
| | | | | Number | | grant |
| | | | | | | date |
| | | | | | | Pence |
+------------+----------+----------+----------+------------+----------+--------+
| Warrants | | | | | | |
+------------+----------+----------+----------+------------+----------+--------+
| 2007 | 28/02/07 | 28/02/07 | 28/02/10 | 8,800,000 | 0.10p | 0.0p |
| Warrants | | | | | | |
+------------+----------+----------+----------+------------+----------+--------+
| 2007 | 26/07/07 | 26/07/07 | 26/07/12 | 7,500,000 | 0.85p | 0.0p |
| Warrants | | | | | | |
+------------+----------+----------+----------+------------+----------+--------+
| Total warrants | | 16,300,000 | | |
| outstanding | | | | |
+----------------------------------+----------+------------+----------+--------+
| Share option scheme: | | | | |
+----------------------------------+----------+------------+----------+--------+
| 2007 | 21/08/07 | 21/08/09 | 21/08/17 | 4,500,000 | 1.00p | 0.325p |
| Options | | | | | | |
+------------+----------+----------+----------+------------+----------+--------+
| 2009 | 18/02/09 | 18/02/11 | 18/02/14 | 26,000,000 | 0.23p | 0.735p |
| Options | | | | | | |
+------------+----------+----------+----------+------------+----------+--------+
| Total share options | | 30,500,000 | | |
| outstanding | | | | |
+----------------------------------+----------+------------+----------+--------+
| Total equity instruments | | 46,800,000 | | |
| outstanding | | | | |
+------------+----------+----------+----------+------------+----------+--------+
In February 2009, the Company cancelled the existing options held by certain key
employees over 16.5 million shares at an exercise price of 1p per Ordinary Share
which had been previously awarded in 2007. At the same time, the Company awarded
in aggregate options over 26 million New Ordinary Shares to key employees of its
wholly owned subsidiary, TSE Consulting SA, in accordance with the terms of the
Company's share option scheme. The options will vest on 18 February 2011 and
must be exercised on or before 18 February 2014 at an exercise price of 0.23p
per ordinary share.
The exercise price of the warrants is the lowest average closing price for a
preceding quarter or the current exercise price, whichever is the lower.
The fair value of share options and warrants at grant date has been determined
using the Black-Scholes formula. The assumptions and other inputs used in the
models in respect of share options issued during the year were as follows:
+------------------------------------------+--------+--------+
| | Share | Share |
| | option | option |
| | scheme | scheme |
| | 2007 | 2009 |
+------------------------------------------+--------+--------+
| Share price on date of grant | 0.395p | 0.20p |
+------------------------------------------+--------+--------+
| Exercise price | 1.00p | 0.23p |
+------------------------------------------+--------+--------+
| Expected volatility | 30% | 30% |
+------------------------------------------+--------+--------+
| Expected dividends | Nil | Nil |
+------------------------------------------+--------+--------+
| Option life | 3 | 5 |
| | years | years |
+------------------------------------------+--------+--------+
| Risk free interest rate | 5.0% | 5.0% |
+------------------------------------------+--------+--------+
At the dates of issue of shares under the various share option schemes, there
was insufficient historical data to calculate a reliable estimate of expected
share volatility in respect of the Company itself and accordingly expected
volatility has been based on the average volatility of a range of similar UK
listed companies operating in similar markets.
The following tables reconcile the outstanding warrants and share options
granted under the employee share option schemes at the beginning and end of the
financial year.
+-------------------------+--------------+----------+------------+----------+
| | | Weighted | | Weighted |
| | | average | | average |
| | | exercise | | exercise |
| | Number | price | Number | price |
| | 2009 | 2009 | 2008 | 2008 |
+-------------------------+--------------+----------+------------+----------+
| Balance at beginning of | 37,300,000 | 0.76p | 37,300,000 | 0.76p |
| the financial year | | | | |
+-------------------------+--------------+----------+------------+----------+
| Granted during the year | 32,000,000 | 0.23p | - | - |
+-------------------------+--------------+----------+------------+----------+
| Cancelled | (22,500,000) | 0.79p | - | - |
+-------------------------+--------------+----------+------------+----------+
| Balance at end of the | 46,800,000 | 0.38p | 37,300,000 | 0.76p |
| financial year | | | | |
+-------------------------+--------------+----------+------------+----------+
| Exercisable at end of | 20,800,000 | 0.56p | 16,300,000 | 0.45p |
| the financial year | | | | |
+-------------------------+--------------+----------+------------+----------+
No warrants were exercised during the year and 8,800,000 unexercised warrants
expired since the year end.
End
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BLGDLLBDBGGI
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