Bella Media PLC - Interim Results

RNS Number:1922R
Bella Media PLC
31 March 2008

For immediate release 31 March 2008

Bella Media PLC
("the Company" or "Bella Media")

HALF YEARLY REPORT

for the six months ended

31 December 2007

Chairman's Interim Statement

During the period under review, the Company made a loss before taxation of
£70,578 due mainly to professional fees on the sale of the Company's US
subsidiary, Bella Media Inc which was sold to the then executive directors for a
cash consideration of $650,000 (£325,243), marginally above book value. At the
same time, the Company raised £250,000 from the issue of new equity resulting in
an increase in net assets to £471,462. The sale and the fund raising resulted in
net cash at the half year of £556,060. These transactions, together with a
capital reorganisation, were subject to shareholder approval which was obtained
at a general meeting on 28 December 2007 with completion on 31 December 2007. As
indicated in the circular to shareholders convening the general meeting, failure
to complete this sale would have resulted in the Company going into liquidation.

Bella Media Inc, ("BMI") held the Company's 54% interest in the Monterey IMAX
project. At the time of its sale, BMI had an agreement with IMAX for the rental
of the necessary projection equipment, though not in the latest format,and the
Monterey project was "work-in-progress"; a lease had been entered into on a
disused fish cannery in Monterey, California, and work had commenced to turn it
into a large-format IMAX cinema. However, construction was running some months
behind schedule with substantial cost overruns against the original budget
estimates arising from additional site clearance costs, higher estimates for
electricity supply and other matters. Crucially, the project remained
under-funded, and management estimated at the time that a further $2.2m would be
required to complete the project.

A shortage of equity capital has been a problem for the Company since the
original project at Springfield, Illinois fell away. Shareholders will recall
that the Monterey project had only been able to go ahead thanks to the
willingness of the then executive directors, Fred Weinert and Steve Crisman, to
provide personal guarantees, without which negotiations over the building and
equipment rental leases (which had already lasted several months) would have
fallen away and the project would have been lost altogether. These guarantees
consisted of $3 million to Bank of Monterey and approximately $1 million to the
landlord of the premises. More recently, it had been anticipated that the
largest component of the additional funding requirement would come from the sale
of naming rights for the project - in effect sponsorship of the cinema - with
the balance from a mix of new equity and debt. From the outset of the project,
BMI had been seeking this additional finance by working with a professional
agency to secure a naming rights deal, negotiating directly with potential
naming rights sponsors and seeking new equity finance, again with the assistance
of specialist intermediaries, both in the USA and the UK.

The Company was in no position to provide funding for BMI as its cash resources
were little greater than its outstanding creditors. The Board did explore the
possibility of raising new equity capital, but there was no appetite in the UK
for raising new equity to finance a business which had already raised funds
twice without delivering a completed project or any revenue and, in the USA,
there was generally an unwillingness to invest in a small UK AIM quoted company.
The lack of interest from professional media investors in the US was also a
discouraging factor.

In view of the Company's financial position, the only viable option for the
Board was to dispose of BMI and the project. In any case, the Board had reached
the conclusion, in view of the history of the IMAX projects, the long gestation
period for such projects and the difficulty in raising development capital for
them, that the Company was unlikely to reach a scale in the foreseeable future
to enable it to provide worthwhile returns to shareholders.

Although other alternatives were investigated, the only firm and fully funded
offer received was from the then executive directors. Any alternative buyer
would have been required immediately to replace the $4 million of financial
guarantees given by them in a manner satisfactory to the Bank of Monterey and
the landlord as well as to provide the funding needed to complete the project.
No such offer was forthcoming in the time available to the Company for it to
complete its accounts on a going-concern basis, to retain its AIM quotation. and
to avoid the liquidation of the Company.

For these reasons, it was decided that the sale of the project to the executive
directors was in the best interest of the Company and, as stated above,
shareholder approval of the sale was granted at a general meeting on 28 December
2007. The Company was also obliged, as the transaction constituted a related
party transaction under the AIM Rules, to seek the opinion of the Company's
nominated adviser to confirm that the terms of the sale were fair and reasonable
in so far as shareholders were concerned. This was confirmed in the circular to
shareholders.

It is worth noting that, at this time, although the development of the Monterey
IMAX project is continuing under its new ownership, the construction work is not
yet complete, full funding has not yet been put in place and no firm date has
been fixed for its opening, which had originally been planned for January 2008.

Together with the disposal of its interest in Bella Media Inc, a reorganisation
of the Company's share capital took place and new equity funds of £250,000 were
raised, giving the Company the resources to investigate new developments or
acquisitions and to bring them to fruition, though it is likely that any reverse
acquisition will require additional working capital to be raised at the time of
the reverse. At the same time, Richard Armstrong and Antony Legge joined the
Board; together they have considerable experience in small company corporate
finance and in successfully identifying reverse acquisitions for such companies.

As I mentioned in my letter accompanying the disposal and reorganisation
circular, the present directors have decided primarily to seek opportunities in
the energy or resources sector and a number of possible acquisitions have been
identified. We look forward to making a further announcement to this end in due
course. In the meantime, expenses have been reduced to the minimum possible for
a company on AIM, with directors' remuneration being deferred in full until the
Company is in a stronger position to bear such costs.

For further information:

Peter Redmond Chairman, Bella Media Plc 020 7332 2200

Roland Cornish Beaumont Cornish Limited 020 7628 3396

Bella Media PLC Notes Six months Six months Year ended
CONSOLIDATED INCOME ended ended 30 June
STATEMENT 31 December 31 December
for the period ended 31
December 2007 2007 2006 2007
--------------------------- (Unaudited) (Unaudited) (Unaudited)
£ £ £

Administrative expenses (72,250) 11,625 (76,114)
Impairment of intangible - (153,280) -
fixed assets
Impairment of tangible (91,439) -
fixed assets
Other operating income - 102,187 -
project cancellation fee

LOSS FROM OPERATIONS (72,250) (130,907) (76,114)

Finance income 447 1,866 16,491
Finance cost - (1,523) -

LOSS BEFORE TAXATION (71,803) (130,564) (59,623)

Income Tax expense - - -
Profit on disposal of 2 1,225 - (139,058)
discontinued US business

LOSS FOR THE FINANCIAL (70,578) (130,564) (198,681)
PERIOD

LOSS PER SHARE
Basic and diluted 3 (0.31p) (0.006)p (0.01p)

CONSOLIDATED STATEMENT OF TOTAL RECOGNISED INCOME AND EXPENSES
For the period ended 31 December 2007

Six months Six months Year ended
ended ended 30 June
31 December 31 December
2007 2006 2007
(Unaudited) (Unaudited) (Unaudited)
£ £ £

Loss for the financial period (70,578) (130,564) (198,681)

Currency translation - (24,137) (34,516)
difference on foreign currency
net investments

Total recognised income and (70,578) (154,701) (233,197)
enpenses relating to the
period

CONSOLIDATED BALANCE SHEET Notes 31 December 31 December 30 June
as at 31 December 2007 2007 2006 2007
(Unaudited) (Unaudited) (Unaudited)
£ £ £
NON CURRENT ASSETS
Intangible assets - 613,126 598,181
Property, plant and - 83,530 387,595
equipment

- 696,656 985,776

CURRENT ASSETS
Trade and other 2,544 142,429 14,217
receivables
Cash and cash equivalents 556,060 81,550 53,631

558,604 223,979 67,848

TOTAL ASSETS 558,604 920,635 1,053,624

CURRENT LIABILITIES
Trade and other payables 87,142 629,056 412,707

NON CURRENT LIABILITIES
Construction loan and - - 390,348
other creditors

87,142 629,056 803,055

EQUITY AND RESERVES
Called up share capital 4 3,482,699 3,260,009 3,297,509
Share premium account 4,676,076 4,623,759 4,623,759
Foreign exchange reserve 6 - (24,137) (34,516)
Retained earnings (7,687,313) (7,568,665) (7,636,782)

Total Equity 5 471,462 290,966 249,970

Minority interests - 613 599

471,462 291,579 250,569

TOTAL LIABILITIES 558,604 920,635 1,053,624

Bella Media PLC Six months Six months Year ended
CONSOLIDATED CASHFLOW STATEMENT ended ended 30 June
for the period ended 31 31 December 31 December
December 2007
2007 2006 2007
(Unaudited) (Unaudited) (Unaudited)
£ £ £
Reconciliation of operating
loss to net cash flow from
operating activities
Operating loss (70,578) (130,907) (215,172)
Decrease/(increase) in trade 9,728 (4,702) 123,510
and other receivables
(Decrease)/increase in trade 1,309 (80,532) (45,764)
and other payables
Exchange difference on overseas - 61,949 (35,999)
subsidiaries
Impairment of intangible assets - 153,280 -
Impairment of property plant - 91,439 -
and equipment
(Profit)/Loss on discontinued (1,225) - 139,058
US business

Net cash flow from operating (60,766) 90,527 (34,367)
activities

Finance income 447 1,866 16,491
Finance cost - (1,523) -
Purchase of property, plant and - (65,614) (105,555)
equipment

Sale of subsidiaries 325,243 - -

Net cashflow from investing 325,690 (65,271) (89,064)
activities

Financing - (162,197) (33,743)

Proceeds of share issue 237,505 - -

Net cashflow from financing 237,505 (162,197) (33,743)
activities

Increase/(Decrease) in cash and 502,429 (136,941) (157,174)
cash equivalents

Cash and cash equivalents at 53,631 209,912 209,912
beginning of period
Foreign exchange adjustment in - 8,579 893
cash and cash equivalents

Cash and cash equivalents at 556,060 81,550 53,631
end of period

Bella Media PLC

NOTES TO THE HALF YEARLY REPORT
for the six month period ended 31 December 2007

1 BASIS OF PREPARATION

The transition date to International Financial Reporting Standard ("IFRS") for
Bella Media Plc is 1 July 2006. The Group will apply IFRS in its consolidated
financial statements for the first time for the year ended 30 June 2008.
Therefore, these interim statements for the six month period ended 31 December
2007 are prepared using accounting policies in accordance with IFRSs and IFRIC
(International Financial Reporting Interpretations Committee) interpretations
which are expected to be applicable to the consolidated financial statements for
the year ended June 30, 2008. These standards remain subject to ongoing
amendment and/or interpretation and therefore still subject to change.
Accordingly, the information contained in these interim financial statements may
need updating for subsequent amendments to IFRS required for the first time
adoption or for new standards issued post the balance date.

These interim financial statements and the comparative information for the
periods ended 31 December 2006 and 30 June 2007 do not constitute statutory
financial statements in accordance with Section 240 of the Companies Act 1985.
The financial statements have been prepared under the historical cost basis.
Information on the impact on accounting policies and financial results resulting
from the conversion from UK Generally Accepted Accounting Practice ('UK GAAP')
to IFRS is provided later in this report.

At the date of authorisation of this report the following Standards and
Interpretations which have not been applied in these financial statements were
in issue but not yet effective:

IFRS 8 Operating Segments
IFRIC 11 Group and Treasury Share Transactions
IFRIC 12 Service Concession Arrangements
IFRIC 13 Customer Loyalty Programmes
IFRIC 14 IAS19 The limit on a defined benefit asset, minimum funding
requirements of their interaction Amendment to IAS1 and IAS23

The directors anticipate that the adoption of these Standards and
Interpretations as appropriate in future periods will have no material impact on
the financial statements of the Group when the relevant standards come into
effect for periods commencing on or after 1 January 2008.

The comparative figures for the year ended 30 June 2007 were derived from the
statutory accounts for that year which have been delivered to the Registrar of
Companies adjusted to IFRS as explained later. Those accounts were audited in
accordance with UK GAAP and received an unqualified audit report which did not
contain statements under sections 237(2) or (3) (accounting record or returns
inadequate, accounts not agreeing with records and returns or failure to obtain
necessary information and explanations) of the Companies Act 1985.

The interim accounts were approved by the Directors on 31 March 2007.

Transitional arrangements

The group has taken the following optional exemptions contained in IFRS 1
'First-time Adoption of International Financial Reporting Standards' in
preparing the group's balance sheet on transition to IFRS at 1 July 2006:

Cumulative translation differences - the cumulative translation differences for
all foreign subsidiaries have been set to zero at 1 July 2006 and exchange
differences arising prior to this date will not be recycled to the income
statement.

Business combinations - the Group has elected not to apply IFRS 3 Business
Combinations retrospectively to past business combinations (business
combinations that occurred before the date of transition to IFRS).

Based on the above exemptions there are no transitional adjustments to the 1
July 2006 opening balance sheet and no UK GAAP to IFRS reconciliations for the
comparative periods are included for the Income statement or Cash flow. A UK
GAAP to IFRS reconciliation for the comparative periods for the Balance sheet is
included in this interim statement in Note 6.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of
Bella Media Plc ('the Company') and all of its subsidiary undertakings
(together, 'the Group').

Subsidiary undertakings are those entities controlled directly or indirectly by
the Company. Control arises when the Company has the ability to direct the
financial and operating policies of an entity so as to obtain benefits from its
activities.

On acquisition, the assets and liabilities and contingent liabilities of a
subsidiary are measured at their fair values at the date of acquisition. Any
excess of the cost of the acquisition over the fair values of the identifiable
net assets acquired is recognised as goodwill. Any deficiency of the cost of
acquisition below the fair values of the identifiable net assets acquired (i.e.
discount on acquisition) is credited to the income statement in the period of
acquisition.

The results of subsidiaries acquired or disposed of during the year are included
in the consolidated income statement from the effective date of acquisition or
up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those used by
the Group.

All intra-group transactions, balances, income, expenses and unrealised gains on
transactions between group companies are eliminated on consolidation.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation
and any accumulated impairment losses. The cost of an item of property, plant
and equipment comprises its purchase price and any costs directly attributable
to bringing the asset into use.

Depreciation is calculated on a straight-line basis to write down the assets to
their estimated residual value over their useful economic lives at the following
rates:

• Furniture 20%

• Computer equipment 33%

• Office equipment 20%

• Motor vehicles 25%

• Leasehold improvements are depreciated over the life of the lease

The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at each balance sheet date. The gain or loss arising on the
disposal or retirement of an asset is determined as the difference between the
sale proceeds and the carrying amount of the asset and is recognised in the
income statements.

Leases

Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other
leases are classified as operating leases.

The Group as lessee

Assets held under finance leases are initially recognised as property, plant and
equipment at an amount equal to the fair value of the leased assets or, if
lower, the present value of the minimum lease payments at the inception of the
lease, and then depreciated over their useful economic lives. Lease payments are
apportioned between repayment of capital and interest. The capital element of
future lease payments is included in the balance sheet as a liability. Interest
is charged to the income statement so as to achieve a constant rate of interest
on the remaining balance of the liability.

Rentals payable under operating leases are charged to the income statement on a
straight-line basis over the lease term. Operating lease incentives are
recognised as a reduction in the rental expense over the lease term.

Intangible assets

Intangible fixed assets are stated at cost less any provision for impairment.

Amortisation is provided on all intangible fixed assets at rates calculated to
write off the cost, less estimated residual value, of each asset over its
expected useful life as follows:

Trademark 5% straight line

Licence over the license period

As the licence has not yet been utilised for commercial purposes, no
amortisation has been provided in prior periods.

Impairment of tangible and intangible assets excluding goodwill

At each balance sheet date, the Group reviews the carrying amounts of its
tangible and intangible assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Group estimates the
recoverable amount of the cash generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to
be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised as an expense immediately, unless the relevant asset is carried at
a revalued amount, in which case the impairment loss is treated as a revaluation
decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset
(cash-generating unit) is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years. A reversal of an impairment
loss is recognised as income immediately, unless the relevant asset is carried
at a revalued amount, in which case the reversal of the impairment loss is
treated as a revaluation increase.

Foreign Currencies

Transactions in currencies other than pound sterling are recorded at the rates
of exchange prevailing on the dates of the transactions. At each balance sheet
date, monetary assets and liabilities that are denominated foreign currencies
are retranslated at the rates prevailing on the balance sheet date. Non-monetary
assets and liabilities carried at fair value that are denominated in foreign
currencies are translated at the rates prevailing at the date when the fair
value was determined. Gains and losses arising on retranslation are included in
the income statement for the period, except for exchange differences on
non-monetary assets and liabilities where the changes in fair value are
recognised directly in equity.

The income statement and balance sheet of foreign operations and foreign
entities are translated into the functional currency (pound sterling) on
consolidation at the average rates for the period and the rates prevailing at
the balance sheet dates respectively. Exchange gains and losses arising on the
translation of the Group's net investment in foreign operations and foreign
entities, are recognised as a separate component of shareholders' equity. On
disposal of foreign operations and foreign entities, the cumulative translation
differences are recycled to the income statement and recognised as part of the
gain or loss on disposal.

The most important foreign currencies for the Group is the US Dollar. The
relevant exchange rates for these currencies to sterling were:

+----------+----------+----------+----------+---------+---------+---------+
| | | | | | | |
| | | | | | | |
| | 31| 31 Dec| 31|31 Dec | 30 June| 30 June|
| | December| 2007| December|2006 | 2007| 2007|
| | | | | | average| closing|
| | 2007| closing| 2006|closing | | |
| | average| | average| | | |
+----------+----------+----------+----------+---------+---------+---------+
| | | | | | | |
+----------+----------+----------+----------+---------+---------+---------+
|US dollar |1.9920 |1.9906 |1.8561 |1.9621 |2.0010 |2.0061 |
+----------+----------+----------+----------+---------+---------+---------+

Segmental Reporting

A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments. A geographical segment is engaged in
providing products or services within a particular economic environment that are
subject to risks and returns that are different from those of segments operating
in other economic environments. Management considers the business segment to be
the primary segment and the geographical segment to be the secondary segment.

Critical Accounting Estimates and Assumptions

The Group makes estimates and assumptions concerning the future. Whilst the
directors believe that the estimates and assumptions used in the preparation of
the financial statements are reasonable, the resulting accounting estimates
will, by definition, seldom equal the related actual results. There are no
estimates that have a significant risk of causing material adjustment within the
period end results.

Financial instruments

The following policies for financial instruments have been applied in the
preparation of the Group's interim financial statements. Financial assets and
financial liabilities are recognised on the Group's balance sheet when the Group
becomes a party to the contractual provisions of the instrument.

Cash and cash equivalents

For the purpose of preparation of the cash flow statement, cash and cash
equivalents includes cash at bank and in hand, and short term deposits with an
original maturity period of three months or less.

Trade and other receivables

Trade and other receivables do not carry any interest and are stated at their
fair value as reduced by appropriate allowances for estimated irrecoverable
amounts.

Trade payables

Trade payables are not interest bearing and are stated at their fair value.

Financial and equity liability

Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument is
any contract that evidences a residual interest in the assets of the group after
deducting all of its liabilities.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received,
net of direct issue costs.

Borrowings

Interest-bearing loans and overdrafts are recorded at the proceeds received, net
of direct issue costs. Finance charges, including premiums payable on settlement
or redemption, are accounted for on an accrual basis 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 and recognised in profit and loss over the term of
the borrowing using the effective interest rate method.

Taxation

The tax expense represents the sum of the tax currently payable and deferred
tax. The tax currently payable is based on the taxable profit for the period.
Taxable profit differs from net profit as reported in the income statement
because it excludes items of income or expense that are taxable or deductible in
other years and it further excludes items that are never taxable or deductible.
The Group's liability for current tax is calculated using tax rates that have
been enacted or substantially enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities for financial statements
and the corresponding tax bases used in the computation of taxable profit, and
is accounted for using the balance sheet liability method. Deferred tax
liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that future
taxable profits will be available against which deductible temporary differences
can be utilised.

The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
profits will be available to allow all or part of the assets to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.

2 DISPOSAL OF US SUBSIDIARY BUSINESS

The Company received $650,000 (£325,423) consideration monies following the
disposal of its 100% interest in the shares of Bella Media Inc, a US subsidiary
holding company, approved by shareholders at the Extraordinary General Meeting
held on 28 December 2007, which was completed on 31 December 2007. This realised
a profit of £1,225 over the value of the Company's investment in Bella Media
Inc.

3 LOSS PER SHARE

The calculation of the basic and diluted loss per ordinary share is based on the
loss after taxation of £70,578 (31 December 2006: £130,564; 30 June 2007:
£198,681) and on the weighted average number of ordinary shares in issue during
the period of 22,428,097, as adjusted by the capital reorganisation approved by
shareholders at the Company's Extraordinary General Meeting held on 28 December
2007 (31 December 2006 : 2,200,235,970; 30 June 2007: 2,209,688,025).

4 SHARE CAPITAL 31 December 31 December 30 June
2007 2006 2007
(Unaudited) (Unaudited) (Unaudited)
£ £ £
Authorised:
192,000,000 ordinary 1,920,000 4,100,000 4,100,000
shares of 1p each
8,200 deferred shares of 3,690,000 - -
£450 each
1,000,000,000 deferred 24,000,000 24,000,000 24,000,000
shares of 2.4p each

29,610,000 28,100,000 28,100,000

Allotted, issued and
fully paid:
40,896,316 ordinary 408,963 2,200,235 2,237,735
shares of 1p each
4,475 deferred shares of 2,013,962 - -
£450 each
44,157,222 deferred 1,059,774 1,059,774 1,059,774
shares of 2.4p each

3,482,699 3,260,009 3,297,509

The 2,237,735,970 ordinary shares in issue prior to the reorganisation were
consolidated and subdivided into 22,377,360 Ordinary Shares of 1p each and 4,475
Deferred Shares of £450 each. A further 18,518,956 Ordinary Shares were then
issued pursuant to the placing.

5 STATEMENT OF CHANGES IN Six months to Six months to Year to
EQUITY 31 December 31 December 30 June
2007 2006 2007
£ £ £
Balance at beginning of 249,970 445,667 445,667
period

Loss for the period (70,578) (130,564) (198,681)
Exchange difference on - (24,137) (34,516)
overseas subsidiaries
Exchange differences 54,565 - -
restated on overseas
subsidiaries

Total recognised income (16,013) (154,701) (233,197)
and expenses
Issue of shares 237,505 - 37,500

Balance at end of 471,462 290,966 249,970
period

6 RECONCILIATION OF UK GAAP TO
IFRS

Balance Sheet at 30 June
2007 IFRS
UK GAAP adjustments Unaudited
£ £ £

NON CURRENT ASSETS
Intangible assets 598,181 598,181
Property, plant and 387,595 387,595
equipment

985,776 985,776

CURRENT ASSETS
Trade and other receivables 14,217 14,217
Cash and cash equivalents 53,631 53,631

67,848 67,848

TOTAL ASSETS 1,053,624 1,053,624

CURRENT LIABILITIES
Trade and other payables 412,707 412,707

NON CURRENT LIABILITIES
Construction loan and other 390,348 390,348
creditors

803,055 803,055
EQUITY AND RESERVES
Called up share capital 3,297,509 3,297,509
Share premium account 4,623,759 4,623,759
* Foreign exchange reserve - (34,516) (34,516)
Retained earnings (7,671,298) 34,516 (7,636,782)

Total Equity 249,970 249,970

Minority interests 599 599

250,569 250,569

TOTAL LIABILITIES 1,053,624 1,053,624

Balance Sheet at 31 December
2006 IFRS
UK GAAP adjustments Unaudited

£ £ £

NON CURRENT ASSETS
Intangible assets 613,126 613,126
Property, plant and 83,530 83,530
equipment

696,656 696,656

CURRENT ASSETS
Trade and other receivables 142,429 142,429
Cash and cash equivalents 81,550 81,550

223,979 223,979

TOTAL ASSETS 920,635 920,635

CURRENT LIABILITIES
Trade and other payables 629,056 629,056

NON CURRENT LIABILITIES
Construction loan and other - -
creditors

629,056 629,056
EQUITY AND RESERVES
Called up share capital 3,260,009 3,260,009
Share premium account 4,623,759 4,623,759
* Foreign exchange reserve - (24,137) (24,137)
Retained earnings (7,592,802) 24,137 (7,568,665)

Total Equity 290,966 290,966

Minority interests 613 613

291,579 291,579

TOTAL LIABILITIES 920,635 920,635

* Translation reserve
The translation reserve
results from exchange gains
and losses arising on the
translation of the Group's
net investment in its
overseas operating
subsidiaries.

This information is provided by RNS
The company news service from the London Stock Exchange

END
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