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VTR plc

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007

Highlights

The Board of VTR plc, the media services group, is pleased to announce its results for the six months to 30 September 2007 which are presented under International Financial Reporting Standards (IFRS) for the first time.

Overview

• Adjusted pre tax profits of £527,000 on turnover of £9,280,000
• Second consecutive set of profitable figures
• Successful integration of businesses into Prime Focus London and Blue
• VTR plc in London now benefits from a truly global offering – drawing on the strengths and resources of the Prime Focus Group of companies in Los Angeles, New York, Vancouver and Mumbai
VTR plc to continue to identify investment opportunities to strengthen creative talent and facilities offering in London

Namit Malhotra comments, "I am pleased to be able to report our second consecutive set of profitable figures since I became chairman. Our business is starting to fulfill its potential. We at VTR are working harder and are beginning to experience the benefits of having a truly global offering. The creative talent and capabilities within the Prime Focus Group put VTR in a strong position to deliver sustained value to its shareholders."

For further information, please contact

Ryszard Bublik     - Parys Communications    020 7622 9951

Neil Lane     - Managing director     020 7437 0026

Philip Davies     - Charles Stanley Securities (Nominated Adviser)      020 7149 6000

VTR plc

UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS
ENDED 30 SEPTEMBER 2007

VTR plc

Unaudited Interim Results for the six months ended 30 September 2007

Chairman’s Statement

The Board of VTR plc is pleased to announce its unaudited results for the six months to 30 September 2007 which are presented under International Financial Reporting Standards (IFRS) for the first time.

VTR plc changed its accounting year end from August to March in 2007 and the first period under the new year end was the seven months to 31 March 2007. As a result of this change no interim accounts were produced and the comparatives in this statement are for the seven month accounting period to 31 March 2007.

In addition the comparative figures are the restated figures under IFRS rather than those reported under UK GAAP at the end of last year. Full disclosure of the effects of the transition to IFRS are included in the body of the Interim Report.

In September the Group made a profit before tax of £527,000 on a turnover of £9,280,000 compared to a profit before tax of £646,000 on turnover of £10,604,000 for the 7 months to March 2007. Earnings per share were 1.5p per ordinary share (7 months to 31 March 2007: 2.3p).

Net debt fell from £3,558,000 at 31 March 2007 to £2,959,000 at 30 September 2007 and gearing subsequently fell from 38% to 29% for the same period ends. Capital expenditure in the period was £613,000.

I am pleased to be able to report our second consecutive set of profitable figures since I became chairman. I regard the six months to 30 September 2007 as being the finalisation of phase 1 of the Group’s return to profitability and growth.

The period saw the completion of some significant aspects of VTR’s restructuring which will allow the company to maximise the potential created by a series of acquisitions completed by its parent company Prime Focus India. These acquisitions create a global post-production and visual effects powerhouse enabling VTR to attract and manage larger scale business.

The merger of Video Tape Recording Limited, The Hive Animation Limited and Clear (Post Production) Limited into a new division has now been completed and rebranded as Prime Focus London (PFL), Soho’s premier VFX, commercials and Digital Intermediate facility. The building at 37 Dean Street has been completely refurbished and redesigned to be more client and user friendly and the reaction from our customers has been extremely positive. PFL has upgraded the major editing suites to the latest revision of software and added a 4K telecine, for high definition film grading, and a new projection suite for their Digital Intermediate operations.

The merger of The Machine Room Limited and Blue Post Production Limited has also been completed and both companies are now operating under the “blue” banner in one building. Blue has gone from strength to strength in its market and client perception, winning the Promax best Broadcast Post Production Facility 2007. It has also expanded considerably by doubling both its on-line and off-line editing capacity and upgrading its audio suites with the addition of a 5.1 Dolby suite.

K< POST, the in-house facility based in JWT’s premises, continues to work well in the agency and has increased capacity through adding a Flame editing licence and a 3D CGI capability in the period under review. Among other developments during the period, VTR recently entered into an agreement with I-Lab UK Limited, only the second film processing laboratory in Soho. VTR has installed a telecine into the laboratory to work on film rushes and film grading.

VTR’s parent company, Prime Focus Ltd in India, recently announced the acquisition of Post Logic Inc. and Frantic Films Inc., two leading US/Canadian-based post production facilities. These acquisitions will give VTR access to offices in New York, Los Angeles and Vancouver, in addition to those in Mumbai, enabling the company to attract and manage larger scale international business opportunities.

Market conditions in September and October, traditionally the best trading months of the year, have been challenging. However, I believe VTR is well placed to exploit the opportunities created by a global film and television industry and will continue to grow.

We will continue to identify new opportunities to strengthen the talent and facilities we have to offer and I look forward to reporting back in the New Year on progress made.

Namit Malhotra

21 December 2007

Comparative information

VTR plc changed its accounting year end from August to March in 2007 and the first period under the new year end was the seven months to 31 March 2007. As a result of this change no interim accounts were produced and the comparatives in this statement are for the seven month accounting period to 31 March 2007.

Adoption of IFRS

VTR plc will be adopting International Financial Reporting Standards (IFRS) as its primary accounting basis for the year ending 31 March 2008. As part of this transition, VTR plc is presenting unaudited financial information prepared in accordance with IFRS for the 7 months ended 31 March 2007.

The principle changes to the Group’s reported financial information under UK GAAP*** arising from the adoption of IFRS are as a result of:

• The recognition of intangible assets from business combinations;
• The related impairment of these intangible assets; and
• Changing the valuation basis for certain classes of fixed assets to ‘fair value’ rather than historical cost.

For the six months ended 30 September 2007 the expected impact of the adoption of IFRS is to increase profit attributable to equity shareholders by £36,000, comprising principally the amortisation of intangible assets, the reduction in holiday pay accrual from March 2007 and the reclassification of items that would previously be considered exceptional items under GAAP.

***throughout this statement ‘UK GAAP’ means the accounting standards and framework in issue at 31 March 2007, which were applied to the financial statements of the Group for the seven months ended 31 March 2007.

Notes to the interim results

1. Basis of preparation

The financial information presented in this statement has been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) as adopted by the European Union and International Financial Reporting Interpretations Committee (IFRIC) interpretations that are expected to be applicable for the year ending 31 March 2008. These are subject to ongoing review and endorsement by the European Commission, and possible amendment by the International Accounting Standards Board (IASB), and are therefore subject to possible change. Further standards or interpretations may also be issued that could be applicable for the year ending 31 March 2008. These potential changes could result in the need to change the basis of accounting or presentation of certain financial information from that presented in this document.

The Group may need to review some accounting treatments used for the purpose of this document as a result of emerging industry consensus on the practical application of IFRS and further technical opinions. This could mean that the financial information in this statement may require modification when the Group prepares its first complete set of IFRS financial statements for the year ending 31 March 2008.

The comparative figures for the 7 months ended 31 March 2007 are not statutory accounts as defined by s240 of the Companies Act 1985. Those accounts which were prepared under UK GAAP have been reported on by the Group’s auditors and delivered to the Registrar of Companies. The audit report was qualified due to a limitation in its audit scope.

The disclosures required by IFRS1 concerning the transition from UK GAAP to IFRS are given at the end of these notes to the interim results.

2. First time adoption of International financial reporting standards

The rules for first time adoption of IFRS are set out in IFRS1, which requires that the Group establishes its IFRS accounting policies at its date of transition, 1 September 2006, and applies these prospectively. The standard allows a number of operational exemptions on transition to help companies simplify the move to IFRS. The exemptions selected by the Group are set out below:

a) Business combinations – The Group has elected to apply IFRS3 prospectively from the date of transition to IFRS rather than to restate previous business combinations.

b) Presentation of financial information – The layout of the primary information has been amended in accordance with IAS1 'Presentation of financial information' from that presented under UK GAAP. This format and presentation may require modification as practice and industry consensus develops.

3. Significant accounting policies

a) Basis of consolidation

The consolidated interim financial statements incorporate the financial elements of the Company and its subsidiaries for the six months ended 30 September 2007. Control is achieved where VTR has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

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 and expenses are eliminated on consolidation.

b) Purchase method of accounting

The cost of an acquisition is measured at the aggregate of the fair values, at the date of exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS3 are recognised at their fair value at the acquisition date.

c) Merger method of accounting

Although IFRS3 does not permit merger accounting, under IFRS1, the Group is not required to restate acquisitions or business combinations prior to the date of transition. Therefore the Group is permitted to retain its historical merger accounting position in the consolidated accounts.

d) Goodwill

Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable assets and liabilities of a subsidiary. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed.

For the purpose of impairment testing, Goodwill is allocated to each of the Group’s cash generating units expected to benefit from the synergies of the combination. Cash generating units to which Goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any Goodwill allocated to the unit and then to any other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for Goodwill is not reversed in a subsequent period.

e) Revenue recognition

Revenue is measured at fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts and VAT.

f) Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any provision for impairment. Cost comprises all costs that are directly attributable to bringing the asset into working condition for its intended use. Depreciation is calculated to write down the cost of fixed assets to their residual values on a reducing balance basis over the following estimated useful economic lives:

Leasehold improvements are depreciated on a straight line basis over the unexpired period of the lease.

g) Hire purchase and leased assets

Assets held under finance leases and hire purchase contracts are capitalised in the balance sheet and depreciated over their expected useful lives at the rates set out in (f) above. The interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to the profit and loss account over the period of the lease.

All other leases are operating leases which have annual rentals charged to the profit and loss on a straight line over the lease term.

h) Impairment

Fixed assets are reviewed 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 carrying value exceeds its recoverable amount. The recoverable amount is the higher of an assets fair value (less disposal costs) and value in use.

Value in use is based on the present value of the future cash flows relating to the asset.

i) Investments

Long term investments are classified as investments available for sale and non current assets.

All non-quoted investments are stated at cost. Provision is made for any impairment in the value of fixed asset investments.

Quoted investments are revalued at each period end according to the movement in the share price at the time. The change in value of the investment is charged or credited to the fair value reserve in the balance sheet.

j) Inventory

Inventory is included at the lower of cost and net realisable value less any provision for impairment.

k) Cash and cash equivalents

For the purpose of preparation of the cash flow statement, cash and cash equivalents include cash at bank and in hand and short-term deposits with a maturity period of less than 12 months.

l) Trade receivables and trade payables

Trade receivables are recognised initially at fair value and subsequently measured less provision for impairment. A provision for impairment of trade receivables is established where there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in payments are considered indicators that the trade receivable is impaired.

When a trade receivable is uncollectible, it is written off against the provision for trade receivables. Subsequent recoveries of amounts previously written off are credited to the profit and loss account.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost.

m) Taxation

Corporation tax expense represents the sum of corporation tax currently payable and deferred tax.

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

Deferred tax is recognised on all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax have occurred.

Timing differences are differences between the Group’s taxable results and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.

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

n) Foreign currency translation

Assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date.

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to the profit and loss account.

o) Pensions

The Group operates a defined contribution pension scheme for executive directors. The assets are held separately from the Group in an independently administered fund.

The costs of providing pensions for the executive directors charged to the profit and loss account represent the amounts payable in respect of the accounting period.

p) Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation. Provisions are measured at the directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.

q) Going concern

The Group has net current liabilities. The directors, having reviewed the Group’s budget for the year to 31 March 2008, are confident that the Group has adequate financial resources to continue in operational existence for the foreseeable future. The directors have, therefore, continued to adopt the going concern basis in preparing these accounts.

r) Adoption of new and revised International Financial Reporting Standards

At the date of approval of these financial statements the following standards, interpretations and amendments thereto were issued but not yet mandatory for adoption by the Group:

• IFRS 8 'Operating Segments'
• Amendment to IAS 1 'Presentation of Financial Statements' – Capital disclosures
• Amendments to IAS19 'Employee benefits’ – Actuarial Gains and Losses' Group Plans and Disclosures
• Amendments to IAS21 'The Effects of Changes in Foreign Exchange Rates' – Net Investments in Foreign Operations
• Amendments to IAS30 'Financial instruments: Recognition and Measurement' – Cash Flow Hedge Accounting of Forecast Intra-Group Transactions, The Fair Value Option

The directors anticipate that the future adoption of these standards, interpretations and amendments listed above that have not been adopted early will not have a material impact on the Consolidated Financial Statements.

s) Critical accounting estimates and judgements

In preparing the Consolidated Financial Statements the directors have to make judgements on how to apply the Group’s accounting policies and make estimates about the future. The critical judgements that have been made in arriving at the amounts recognised in the Consolidated Financial Statements and the key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying value of assets and liabilities in the next financial year are discussed below:

Acquisitions

When acquiring a business the directors have to make judgements and best estimates about the fair value allocation of the purchase price. They seek appropriate competent and professional advice before making such allocations. They test the valuation of Goodwill at each financial period and whenever such events or changes to circumstances indicate that the carrying amounts may not be recoverable. These tests require the use of estimates.

Impairment reviews

The Group tests at each financial period whether Goodwill has suffered any impairment in accordance with the accounting policy stated above. The recoverable amounts of cash generating units have been determined based on value-in-use calculations. These calculations require the use of estimates.

Provisions

From time to time the directors have to make provisions based on present obligations as a result of past events. The directors have to make judgements and best estimates and, where applicable, seek appropriate competent and professional advice before making such provisions. These provisions require the use of estimates.

Corporation tax

The Group is subject to corporation tax. Judgement is required in determining the provision for these taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of the matters is different from the amounts initially recorded, such amounts can materially impact the corporation tax and deferred tax provisions in the period in which the determination is made.

4. Segmental reporting

The Group’s primary segment is geographical. The Group’s sole activity is the provision of post production and related services.

5. Holiday pay accrual

IAS19 requires the recording of a holiday pay accrual. This has been included in the opening IFRS balance sheet and, although it is expected to be relatively stable in magnitude from one year to another, when comparing the year end and interim periods there is a balance sheet movement and income statement impact.

6. Legal proceedings

In the accounts for the seven month period ended 31 March 2007, it was reported that Mr. John Banks, the former Managing Director of the Company had issued legal proceedings claiming £358,363 by way of damages for breach of his Contact of Employment. These proceedings are still in progress and an appropriate provision has been included in these accounts.

7. Discounted contingent liability

	Unaudited	Unaudited
	6 months	7 months
	ended 30	ended 31
	September 2007	31 March 2007
	£000	£000
Difference in bid price and guarantee price of shares
issued to vendors of Clear (Post Production) Ltd.	160	601
Discounting for the period to 25 July 2008 at the
Company's cost of capital (base rate + 1.6%)	7.35%	6.35%
Discounted contingent liability	150	531

As part of the acquisition of Clear (Post Production) Limited, Prime Focus Limited, the Company's parent company gave a guarantee to the vendors that VTR's ordinary shares will have a mean closing bid price of not less than 60 pence per share over the three month period ending 25 July 2008, being two years from the date of completions of the acquisition. In consideration of the guarantee, VTR has agreed to issue 1,225,000 new equity shares to Prime Focus Limited. The movement in the year is charged or credited to the revaluation reserve.

8. Earnings per share

	Unaudited	Unaudited
	6 months	7 months
	ended 30	ended
	September 2007	31 March 2007
	No.	No.
Weighted average number of 5p ordinary
Shares in issue during the period	27,756,276	27,756,276
For basic earnings per share:
Share options	0	0
	27,756,276	27,756,276
Profit for the financial period	£000	£000
Profit for the year (31 March 2007 restated)	427	644
Profit for earnings per share	427	644
Basic and diluted earnings per share	1.5p	2.3p

Basic earnings per share has been calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period, determined in accordance with IAS33 Earnings per share. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of conversions of all the potentially dilutive ordinary shares for which all the condition have been met. At 31 March 2007 and 30 September 2007 there were no outstanding stock options.

9. Dividend

The directors do not propose the payment of a dividend (Period to 31 March 2007: £nil).

10. Analysis of net funds

				At 30
			Other non	September
Analysis of net funds	At 31 March 2007	Cash flow	cash changes	2007
	£000	£000	£000	£000
Bank overdrafts	(1,643)	86	(383)	(1,940)
Bank loan	(1,150)		383	(767)
Amounts owed on leases	(909)	486		(423)
Cash in hand and at bank	144	27		171
	(3,558)	599	0	(2,959)

11. Date of approval of the interim statement

The interim financial statement was approved by the Board of Directors on 21 December 2007 and is unaudited but has been reviewed by Sterling Chartered Accountants, the Group’s auditors.

Copies of the interim financial statement are being sent to shareholders and will be available from the Company at 64 Dean Street, London W1D 4QQ.

INDEPENDENT REVIEW REPORT TO VTR PLC

Introduction

We have been instructed by the company to review the financial information, which has been prepared using International Financial Reporting Standards (IFRS) for the first time, set out on pages 2 to 24 and we have read the other information in the interim statement and considered whether it contains any apparent misstatements or material inconsistencies with the financial information.

This report, including the conclusion, has been prepared for and only for the company for the purpose of their interim statement and for no other purpose. We do not, therefore, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Directors’ responsibilities

The interim statement, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the Interim Statement in accordance with the AIM Market Rules which require that the accounting policies and presentation applied to the interim figures must be consistent with those that will be adopted in the company’s annual accounts.

Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom, as if that Bulletin applied. A review consists principally of making enquiries of Group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the disclosed accounting policies and the transition to IFRS, have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit and therefore provides a lower level of assurance. Accordingly, we do not express an audit opinion on the financial information.

Review conclusion

On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 September 2007.

STERLING
Chartered Accountants & Registered Auditors
505 Pinner Road
Harrow
Middlesex
HA2 6EH                 21 December 2007

Explanatory notes to the UK GAAP to IFRS reconciliations

The Group financial statements have been prepared using accounting policies consistent with IFRS. The main differences between the Group financial statements prepared according to UK GAAP and those under IFRS are that goodwill is no longer amortised but is subject to an annual impairment review, that investments are now shown as ‘available for sale’ and are fair valued and that provision is made for a vacation accrual at each period end. The consolidated financial statements have been prepared on a historical cost basis.

Transition date and first time adoption of IFRS: The Group’s transition date to IFRS is 1 September 2006. All adjustments on first time adoption were recorded in shareholders’ equity on the date of transition.

IFRS1, 'First Time Adoption of IFRS' set's out the transition rules which must be applied when IFRS is adopted for the first time. As a result, certain of the requirements and options in IFRS1 may result in a different application of accounting policies in the 2006 restated financial information from that which would apply in the 2006 financial statements were the first financial statements.

The standard sets out certain mandatory exemptions to retrospective application and certain optional exemptions.

The most significant optional exemption available that has been taken by the Group is for business combinations effected prior to 1 September 2006, including those that were accounted for using the merger method of accounting under UK accounting standards, have not been restated. The carrying amount of capitalised goodwill at 31 August 2006 that arose on business combinations accounted for using the acquisition method under UK GAAP was frozen at this amount and tested for impairment at 1 September 2006.

Goodwill amortisation and impairment: under UK GAAP Goodwill was amortised through the income statement on a straight-line basis and impairment reviews were carried out periodically or when a specific event occurred. Under IAS38, Goodwill is not amortised through the income statement but is instead subject to a test for impairment at the end of each financial period which may result in adjustments in the income statement and the balance sheet.

Explanation of principal differences between the cash flow statements presented under UK GAAP and IFRS. The cash flow statement has been prepared in conformity with IAS 7 ‘Cash Flow Statements’. The principal differences between the 2006 cash flow statement presented in accordance with UK GAAP and IFRS are as follows:

a) Under UK GAAP, net cash flow from operating activities was determined before considering (i) cash outflows from returns on investments and servicing of finance and (ii) taxes paid. Under IFRS, these two sections of the cash flow statement do not exist and the related cash flows are categorised as operating, investing or financing as appropriate.

b) Under UK GAAP, acquisitions are separately classified, while under IFRS, they are included within investing activities.

Reconciliation of consolidated income statement

For the seven months ended 31 March 2007

	Reported	IFRS3	IAS19	Total effect of
	Under UK	Business	Employee	transition to	Restated
	GAAP	Combinations	benefits	IFRS	under IFRS
	£000	£000	£000	£000	£000
Revenue	10,604			0	10,604
Less: Cost of sales	(799)			0	(799)
Gross Profit	9,805	0	0	0	9,805
Administration expenses	(8,564)	42	(400)	(358)	(8,922)
Group operating profit	1,241	42	(400)	(358)	883
Finance costs	(237)			0	(237)
Profit before taxation	1,004	42	(400)	(358)	646
Taxation	(2)			0	(2)
Profit on ordinary activities after taxation	1,002	42	(400)	(358)	644
Basic and diluted earnings per share	3.6p				2.3p

Reconciliation of consolidated balance sheet
As at 31 March 2007

	Reported	IFRS3	IAS39	IAS19	Total
	Under UK	Business	Financial	Employee	transition	Restated
	GAAP	combinations	assets	benefits	IFRS	IFRS
	£000	£000	£000	£000	£000	£000
Non current assets
Goodwill	1,396	42			42	1,438
Property, plant and equipment	10,881				0	10,881
Available for sale investments	0		647		647	647
Investments	259		(259)		(259)	0
	12,536	42	388	0	430	12,966
Current assets
Trade and other receivables	6,484				0	6,484
Inventory	27				0	27
Cash and cash equivalents	144				0	144
	6,655	0	0	0	0	6,655
Current liabilities
Bank loans and overdrafts	1,643				0	1,643
Hire purchase creditors	740				0	740
Trade and other payables	5,359			600	600	5,959
Current tax liabilities	38				0	38
	7,780	0	0	600	600	8,380
Net current liabilities	(1,125)	0	0	(600)	(600)	(1,725)
Non-current liabilities					0	0
Long term bank loans	1,150				0	1,150
Hire purchase obligation falling due after one year	169				0	169
Deferred tax liability	106				0	106
Discounted contingent liability	531				0	531
	1,956	0	0	0	0	1,956
Net assets	9,455	42	388	(600)	(170)	9,285
Capital and reserves
Share capital	1,388				0	1,388
Share premium	8,557				0	8,557
Capital redemption reserve	270				0	270
Fair value reserve	0		388		388	388
Retained earnings	(1,762)			(200)	(200)	(1,962)
Current year retained profit	1,002	42		(400)	(358)	644
Total equity	9,455	42	388	(600)	(170)	9,285

Reconciliation of consolidated cash flow statement
As at 31 March 2007

	Reported	IFRS3	IAS19	Total effect	Unaudited
	Under UK	Business	Employee	transition	7 months
	GAAP	combinations	benefits	IFRS	Ended
	£000	£000	£000	£000	March 2007
Cashflow from operating activities
Operating profit before taxation	1,241	42	(400)	(358)	883
Profit on disposal of tangible assets	9			0	9
Depreciation	792			0	792
(increase) in trade and other receivables	(873)			0	(873)
Increase in trade and other payables	2,026		400	400	2,426
Decrease in inventories	5			0	5
Impairment of goodwill	42	(42)		(42)	0
Net cash inflow from operations	3,242	0	0	0	3,242
Net interest paid	(237)			0	(237)
Net cash inflow from operations	3,005	0	0	0	3,005
Taxation	(2)			0	(2)
Cashflows from investing activities
Purchase of tangible fixed assets	(2,528)			0	(2,528)
Purchase of investments available for sale	(200)			0	(200)
Repayment of debt and lease financing	(720)			0	(720)
Net cash inflow from investing activities	(3,448)	0	0	0	(3,448)
Cash flows from financing activities
Cashflow from decrease in debt and lease financing	720			0	720
Net cash inflow from financing activities	720	0	0	0	720
Net cash inflow	275	0	0	0	275
Cash and cash equivalents at the start of the period	(3,833)			0	(3,833)
Cash and cash equivalents at the end of the period	(3,558)	0	0	0	(3,558)

Reconciliation of the consolidated balance sheet
As at 1 September 2006

	Reported	IAS39	IAS19	Total effect
	Under UK	Financial	Staff	of transition	Restated
	GAAP	assets	benefits	to IFRS	under IFRS
	£000	£000	£000	£000	£000
Non current assets
Goodwill	1,438			0	1,438
Property, plant and equipment	9,155			0	9,155
Available for sale investments	0	101		101	101
Investments	59	(59)		(59)	0
	10,652	42	0	42	10,694
Current assets
Trade and other receivables	5,642			0	5,642
Inventory	31			0	31
Cash and cash equivalents	588			0	588
	6,261	0	0	0	6,261
Current liabilities
Bank loans and overdrafts	2,777			0	2,777
Hire purchase creditors	1,194			0	1,194
Trade and other payables	3,353		200	200	3,553
Current tax liabilities	47			0	47
	7,371	0	200	200	7,571
Net current assets liabilities	(1,110)	0	(200)	(200)	(1,310)
Non-current liabilities
Long term bank loans	0			0	0
Hire purchase obligation falling due after one year	451			0	451
Deferred tax liability	107			0	107
Discounted contingent liability	531			0	531
	1,089	0	0	0	1,089
Net assets	8,453	42	(200)	(158)	8,295
Capital and reserves
Share capital	1,388			0	1,388
Share premium	8,557			0	8,557
Capital redemption reserve	270			0	270
Fair value reserve	0	42		42	42
Retained earnings	(1,762)		(200)	(200)	(1,962)
Total equity	8,453	42	(200)	(158)	8,295

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