TIDMRAM
RNS Number : 0569T
RAM Investment Group PLC
21 September 2010
RAM INVESTMENT GROUP PLC
("RAM" of the "Company")
UNAUDITED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2010
CHAIRMAN'S STATEMENT
Business Overview
These interim results are the first results that consolidate the Group's
principal operating subsidiaries TrainFX Limited ("TrainFX") and Ram Vision
Limited ("Ram Vision") for a full period. The profit and loss account reflects
the start up of Ram Vision in a seasonally weaker half and the pre revenue start
up of the new contracts at TrainFX. The results also include some non recurring
corporate costs incurred during the process of acquiring the 50.1% of shares in
TrainFX not already owned. This constituted a reverse take over under AIM rules
and therefore necessitated the Group to complete an admission document.
Since 30 June 2010 the balance sheet of the Group has been significantly
strengthened with the completion of GBP2.5m gross of new capital raised,
comprising GBP1.0m of equity and GBP1.5m of senior debt in September. This
funding has enabled us to complete the acquisition of 50.1% of TrainFX, which
completed on the 17th September, discharge some bridging debt accumulated during
the first half of the year, discharge the exceptional admission costs and
provide sufficient working capital and capital expenditure for the Group going
forward.
When the Group made its initial investment in TrainFX in May 2009, it was
principally a research and development business in train technology. Your board
identified that the business had a considerable opportunity in the markets it
was targeting. There was also an opportunity to buy the business from a
distressed owner that subsequently went into administration. The process of
acquiring the whole of TrainFX required a reverse take-over process under AIM
rules that has required us to undertake an admission in order to complete the
100% purchase. . However, we are delighted that this process has now ended and
management can now focus on developing the business.
The Group has incurred circa GBP0.25m of non recurring cost in the first half of
the year. Considerable legal due diligence and external accounting work has been
paid for to enable us to complete the admission document. In addition,
substantial staff and management time at both Group and subsidiary level has
been deployed on this process. It is hoped that the work here has given a strong
platform for the Group going forward.
TrainFX
When the Company first acquired an interest in TrainFX it had almost negligible
revenue. From November 2009 until the current time, TrainFX has secured orders
worth GBP2.5m. The company recorded some maiden revenue against these contracts
in the first half but the second half of this year and into next year will show
more significant revenue streams being booked against completion of these
contracts. The business is expected to deliver a profit contribution from its
current work in progress in 2011. Encouragingly, the company is at this moment
tendering for a substantial amount of further work in advanced passenger
information systems, CCTV and train management information solutions. In
addition the company is ready to start installing its Digital Media Network on
trains and is negotiating on external Group funding arrangements to facilitate
this.
Ram Vision
Ram Vision made a loss in the first half of the year in its first full period of
trading with the Group. The company was newly formed in November 2009. This loss
was as expected as the business is seasonal and has required start up investment
in repositioning it. The company has been rebranded, all shopping mall contracts
have been renegotiated and the company has moved premises in the period. We
believe the business is now soundly based with a clear business plan and
following recent contract awards we are now selling off a substantially upgraded
estate from the business and assets that we acquired at the end of last year.
Much has been achieved in a relatively short period of time and the company is
now being applauded within the industry for service and technological lead. We
believe that the company is well placed to be a market leader in screen
advertising in shopping malls.
Outlook
The second half of 2010 is expected to show a significant rise in turnover on a
reduced overhead and as such the Group is anticipating a significantly improved
profit and loss account for the period, although this will not offset the first
half losses. We are expecting the Group as a whole to be profitable in 2011 as
the benefits from the investment made in the last 2 years start coming through.
The overall Group cost base is running at a reduced level going forward.
TrainFX's cost base is slightly higher as a result of a substantial rise in
contracted turnover and Ram Vision is slightly higher as more resource is going
in to sell a much larger network. But both subsidiaries have an ability to scale
up their business on a relatively fixed cost base and both businesses have good
gross margins.
The first half of this year has been challenging as a result of tight working
capital and the need to complete the admission document. Nonetheless we have
made big strides in both subsidiaries despite this distraction and both of these
issues are now behind us in the second half the year. Despite a generally flat
economy we are encouraged by the outlook for both subsidiaries into 2011 and
beyond.
T Baldwin
Chairman
RAM INVESTMENT GROUP PLC
CONSOLIDATED INCOME STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2010
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | 6 | | 6 | | Year |
| | | Months | | Months | | to |
| | | to | | to | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | 30 | | 30 | | 31 Dec |
| | | June | | June | | 2009 |
| | | 2010 | | 2009 | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | (Unaudited) | | (Unaudited) | | (Audited) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | GBP | | GBP | | GBP |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Continuing operations | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Revenue | | 685,884 | | - | | 360,733 |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Cost of sales | | (489,294) | | - | | (224,598) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | 196,590 | | - | | 136,155 |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Administrative expenses | | (1,484,362) | | (323,759) | | (1,682,179) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Loss on disposal of assets | | - | | - | | (148,997) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Operating Loss | | (1,287,772) | | (323,759) | | (1,695,021) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Finance income | | - | | 80 | | 85 |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Finance expense | | (142,944) | | (29,000) | | (127,281) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Net finance (expense)/income | | (142,944) | | (28,920) | | (127,196) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Share of loss of associate | | - | | - | | (29,048) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Loss before income tax | | (1,430,716) | | (352,679) | | (1,851,265) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Income tax expense | | - | | - | | - |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Loss for the period from | | (1,430,716) | | (385,679) | | (1,851,265) |
| continuing operations | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Loss attributable to: | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Owners of the parent | | (1,149,519) | | (352,679) | | (1,492,304) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Non-controlling interest | | (281,197) | | - | | (358,961) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | (1,430,716) | | (352,679) | | (1,851,265) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Earnings per share | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Basic earnings per share - | | (1.5)p | | (1.4)p | | (3.5)p |
| continuing operations | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Diluted earnings per share - | | (1.5)p | | (1.4)p | | (3.5)p |
| continuing operations | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
RAM INVESTMENT GROUP PLC
CONSOLIDATED STATEMENT COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2010
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | 6 | | 6 | | Year |
| | | Months | | Months | | to |
| | | to | | to | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | 30 | | 30 | | 31 Dec |
| | | June | | June | | 2009 |
| | | 2010 | | 2009 | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | (Unaudited) | | (Unaudited) | | (Audited) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | GBP | | GBP | | GBP |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Loss for the year | | (1,430,716) | | (352,679) | | (1,851,265) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Other comprehensive income: | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Changes in fair value of | | - | | (353,436) | | (225,243) |
| available-for-sale financial | | | | | | |
| assets | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Other comprehensive income, | | - | | (382,356) | | (225,243) |
| net of tax | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Total comprehensive income | | (1,430,716) | | (706,115) | | (2,076,508) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Loss attributable to: | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Owners of the parent | | (1,149,519) | | (706,115) | | (1,717,547) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| Non-controlling interest | | (281,197) | | - | | (358,961) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | (1,430,716) | | (706,115) | | (2,076,508) |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| | | | | | | |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
| |
+--------------------------------+----------+-------------+----------+-------------+----------+-------------+
RAM INVESTMENT GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2010
+--------------------------------------+--------------+--------------+----------+--------------+
| | 6 | 6 | | Year |
| | Months | Months | | to |
| | to | to | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| | 30 June | 30 June | | 31 Dec |
| | 2010 | 2009 | | 2009 |
+--------------------------------------+--------------+--------------+----------+--------------+
| | (Unaudited) | (Unaudited) | | (Audited) |
+--------------------------------------+--------------+--------------+----------+--------------+
| | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| | GBP | GBP | | GBP |
+--------------------------------------+--------------+--------------+----------+--------------+
| Assets | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| Non-current assets | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| Property, plant & equipment | 318,240 | - | | 277,133 |
+--------------------------------------+--------------+--------------+----------+--------------+
| Intangible assets | 2,392,007 | - | | 2,163,834 |
+--------------------------------------+--------------+--------------+----------+--------------+
| Available-for-sale financial assets | 365,650 | 1,390,097 | | 365,650 |
+--------------------------------------+--------------+--------------+----------+--------------+
| | 3,075,897 | 1,390,097 | | 2,806,617 |
+--------------------------------------+--------------+--------------+----------+--------------+
| Current assets | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| Trade and other receivables | 385,242 | 477,633 | | 608,143 |
+--------------------------------------+--------------+--------------+----------+--------------+
| Cash and cash equivalents | 145,359 | 83,375 | | 439,390 |
+--------------------------------------+--------------+--------------+----------+--------------+
| | 530,601 | 561,008 | | 1,047,533 |
+--------------------------------------+--------------+--------------+----------+--------------+
| | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| Total assets | 3,606,498 | 1,951,105 | | 3,854,150 |
+--------------------------------------+--------------+--------------+----------+--------------+
| | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| Equity | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| Capital and reserves attributable to | | | | |
| equity holders of the Company | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| Ordinary shares | 801,884 | 504,903 | | 759,884 |
+--------------------------------------+--------------+--------------+----------+--------------+
| Deferred shares | 9,983,447 | 9,983,447 | | 9,983,447 |
+--------------------------------------+--------------+--------------+----------+--------------+
| Share premium account | 15,202,691 | 13,330,425 | | 14,876,985 |
+--------------------------------------+--------------+--------------+----------+--------------+
| Merger reserve | 327,272 | | | 327,272 |
+--------------------------------------+--------------+--------------+----------+--------------+
| Shares to be issued reserve | 128,799 | | | 113,799 |
+--------------------------------------+--------------+--------------+----------+--------------+
| Retained earnings | (24,459,633) | (22,298,683) | | (23,310,115) |
+--------------------------------------+--------------+--------------+----------+--------------+
| Minority interest in equity | (640,158) | | | (358,961) |
+--------------------------------------+--------------+--------------+----------+--------------+
| Total equity | 1,344,302 | 1,520,092 | | 2,392,311 |
+--------------------------------------+--------------+--------------+----------+--------------+
| | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| Liabilities | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| Non current Liabilities | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| Borrowings | 375,000 | 200,000 | | 190,000 |
+--------------------------------------+--------------+--------------+----------+--------------+
| | 375,000 | 200,000 | | 190,000 |
+--------------------------------------+--------------+--------------+----------+--------------+
| | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| Current liabilities | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| Trade and other payables | 1,554,696 | 231,013 | | 1,056,839 |
+--------------------------------------+--------------+--------------+----------+--------------+
| Borrowings | 332,500 | - | | 215,000 |
+--------------------------------------+--------------+--------------+----------+--------------+
| | 1,887,196 | 231,013 | | 1,271,839 |
+--------------------------------------+--------------+--------------+----------+--------------+
| | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| Total liabilities | 2,262,196 | 431,013 | | 1,461,839 |
+--------------------------------------+--------------+--------------+----------+--------------+
| | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
| Total equity and liabilities | 3,606,498 | 1,951,105 | | 3,854,150 |
+--------------------------------------+--------------+--------------+----------+--------------+
| | | | | |
+--------------------------------------+--------------+--------------+----------+--------------+
RAM INVESTMENT GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| | | | Share | Retained | Shares | Merger | Total | Non-controlling | Total |
| | | Share | premium | earnings | to be | Reserve | | interest | equity |
| | | capital | | | issued | | | | |
| | | | | | reserve | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| | | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Balance at 1 | | 10,116,600 | 11,601,271 | (21,592,568) | - | - | 125,303 | - | 125,303 |
| January 2009 | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Loss for | | - | | (1,492,304) | - | - | (1,492,304) | (358,961) | (1,851,265) |
| year | | | - | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Other | | | | | | | | | |
| comprehensive | | | | | | | | | |
| income: | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Changes in | | | | (225,243) | - | - | (225,243) | - | (225,243) |
| fair value | | - | - | | | | | | |
| of available | | | | | | | | | |
| for sale | | | | | | | | | |
| financial | | | | | | | | | |
| assets | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Transactions | | | | | | | | | |
| with owners: | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Issue of | | 626,731 | 3,369,156 | | | 327,272 | 4,323,159 | - | 4,323,159 |
| share | | | | | | | | | |
| capital | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Cost of | | | (93,442) | | | | (93,442) | | (93,442) |
| share | | | | | | | | | |
| capital | | | | | | | | | |
| issue | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Share | | | | | 103,799 | | 103,799 | | 103,799 |
| options | | | | | | | | | |
| issued | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Convertible | | | | | 10,000 | - | 10,000 | - | 10,000 |
| loan-equity | | | | | | | | | |
| component | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Balance as | | 10,743,331 | 14,876,985 | (23,310,115) | 113,799 | 327,272 | 2,751,272 | (358,961) | 2,392,311 |
| at 31 | | | | | | | | | |
| December | | | | | | | | | |
| 2009 | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Loss for | | | | (1,149,519) | - | - | (1,149,519) | (281,197) | (1,430,716) |
| year | | - | - | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Other | | | | | | | | | |
| comprehensive | | | | | | | | | |
| income: | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Changes in | | | | - | - | - | - | - | - |
| fair value | | - | - | | | | | | |
| of available | | | | | | | | | |
| for sale | | | | | | | | | |
| financial | | | | | | | | | |
| assets | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Share of | | | | | | | | | |
| other | | | | | | | | | |
| comprehensive | | - | - | - | - | - | - | - | - |
| income/(loss) | | | | | | | | | |
| of associate | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Transactions | | | | | | | | | |
| with owners: | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Issue of | | 42,000 | 325,706 | | - | | 367,706 | - | 367,706 |
| share | | | | - | | | | | |
| capital | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Costs of | | | - | | - | - | - | - | - |
| issue of | | - | | - | | | | | |
| share | | | | | | | | | |
| capital | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Share | | | | - | - | - | - | - | - |
| options | | - | - | | | | | | |
| issued | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Convertible | | - | - | - | 15,000 | | 15,000 | - | 15,000 |
| loan-equity | | | | | | | | | |
| component | | | | | | - | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
| Balance as | | 10,785,331 | 15,202,691 | (24,459,634) | 128,799 | 327,272 | 1,984,459 | (640,158) | 1,344,301 |
| at 30 June | | | | | | | | | |
| 2010 | | | | | | | | | |
+---------------+----------+------------+------------+--------------+---------+---------+-------------+-----------------+-------------+
RAM INVESTMENT GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD ENDED 30 JUNE 2010
+---------------------------------+-------------+-------------+----------+-------------+
| | 6 | 6 | | Year |
| | Months | Months | | to |
| | to | to | | |
+---------------------------------+-------------+-------------+----------+-------------+
| | 30 | 30 June | | 31 Dec |
| | June | 2009 | | 2009 |
| | 2010 | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| | (Unaudited) | (Unaudited) | | (Audited) |
+---------------------------------+-------------+-------------+----------+-------------+
| | GBP | | | GBP |
+---------------------------------+-------------+-------------+----------+-------------+
| Cash flows from operating | | | | |
| activities | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Loss before tax | (1,430,716) | (706,115) | | (2,076,508) |
+---------------------------------+-------------+-------------+----------+-------------+
| Adjustments for: | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Depreciation | 85,400 | - | | 84,461 |
+---------------------------------+-------------+-------------+----------+-------------+
| Equity settled share based | - | 35,993 | | 178,149 |
| payment transactions | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Share of loss of associate | - | - | | 29,048 |
+---------------------------------+-------------+-------------+----------+-------------+
| Net finance expense recognised | 142,944 | 28,920 | | 127,197 |
| in profit or loss | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Change in value of available | - | 353,436 | | 225,243 |
| for sale financial assets | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Loss on disposal of financial | - | - | | 114,120 |
| assets | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| | (1,202,372) | (287,766) | | (170,649) |
+---------------------------------+-------------+-------------+----------+-------------+
| Changes in working capital: | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Decrease/(increase) in trade | 285,025 | (108,301) | | (199,348) |
| and other receivables | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Increase/(decrease) in trade | 435,734 | (13,886) | | (675,052) |
| and other payables | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Cash (used in) / generated from | (481,613) | (409,953) | | (2,192,690) |
| operations | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Interest paid | (142,944) | (29,000) | | (127,281)) |
+---------------------------------+-------------+-------------+----------+-------------+
| Net cash (used in) / generated | (624,557) | (438,953) | | (2,319,971) |
| from operating activities | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Cash flows from investing | | | | |
| activities | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Interest received | - | 80 | | 85 |
+---------------------------------+-------------+-------------+----------+-------------+
| Loans granted to associate | - | - | | (159,499) |
+---------------------------------+-------------+-------------+----------+-------------+
| Proceeds from sale of | - | - | | 157,915 |
| investment | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Acquisition of plant & | (90,753) | - | | (34,632) |
| machinery | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Acquisition of financial assets | - | (920,000) | | - |
+---------------------------------+-------------+-------------+----------+-------------+
| Acquisition of subsidiary net | (60,876) | 5,378 | | 10,121 |
| of cash | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Acquisition of intangibles | (10,345) | - | | (175,000) |
+---------------------------------+-------------+-------------+----------+-------------+
| Net cash from investing | (161,974) | (914,542) | | (201,010) |
| activities | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Cash flows from financing | | | | |
| activities | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Proceeds from issue of shares | - | 1,212,005 | | 2,590,506 |
+---------------------------------+-------------+-------------+----------+-------------+
| Proceeds from issue of | 200,000 | 200,000 | | 200,000 |
| convertible notes | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Proceeds from borrowings | 292,500 | 20,000 | | 335,000 |
+---------------------------------+-------------+-------------+----------+-------------+
| Repayment of other short term | - | (25,000) | | (195,000) |
| loans | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Net cash used in financing | 492,500 | 1,407,005 | | (2,930,506) |
| activities | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| (Decrease)/increase in cash | (294,031) | 53,510 | | 409,525 |
| equivalents | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Cash and cash equivalents at | 439,390 | 29,865 | | 29,865 |
| beginning of year | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| Cash and cash equivalents at | 145,359 | 83,375 | | 439,390 |
| end of year | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
| | | | | |
+---------------------------------+-------------+-------------+----------+-------------+
RAM INVESTMENT GROUP PLC
NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2010
ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have been
applied consistently to all the years presented unless otherwise stated.
1.1 Basis of preparation
These interim statements have been prepared on a basis consistent with
International Financial Reporting Standards (IFRS). They do not contain all of
the information required for full financial statements and should be read in
conjunction with the consolidated financial statements of the Group as at and
for the year ended 31 December 2009. These interim financial statements do not
constitute statutory accounts within the meaning of the Companies Act.
The interim financial information have not been reviewed nor audited by the
auditors. The interim financial information was approved by the Board of
Directors on 17 September 2010. The information for the year ended 31 December
2009 is extracted from the statutory financial statements for that year which
have been reported on by the Group's auditors and delivered to the Registrar of
Companies. The audit report was unqualified.
The accounting policies applied by the Group in these interim financial
statements are the same as those applied by the Group in its consolidated
financial statements for the year ended and as at 31 December 2009
The interim report is the responsibility of, and has been, approved by the
Directors. The Directors are responsible for preparing the interim financial
statements in accordance with the AIM rules for Companies.
1.1.1 Going concern
The financial statements have been prepared on the going concern basis which
assumes that the company and its subsidiaries will continue in operational
existence for the foreseeable future. The company has successfully raised
GBP2.5m from equity and debt finance hence the directors have reasonable
expectation that the Group has adequate resources to continue in operational
existence.
1.2 Consolidation
(a) Subsidiaries
Subsidiary undertakings are all entities over which the Group has the power to
govern the financial and operating policies of the subsidiary and therefore
exercise control. The existence and effect of both current voting rights and
potential voting rights that are currently exercisable or convertible are
considered when assessing whether control of an entity is exercised.
Subsidiaries are consolidated from the date at which the Group obtains relevant
level of control and are de-consolidated from the date at which control is
relinquished.
The acquisition method of accounting is used for all business combinations. On
acquisition, the assets, liabilities and contingent liabilities of the
subsidiary are measured at their fair values. The cost of the business
combination is measured at the fair value of the assets given, equity
instruments issued and liabilities incurred or assumed at the date of exchange,
plus costs directly attributable to the acquisition. Any excess of the cost of
the combination over the fair value of the group's share of the identifiable net
assets acquired is recorded as goodwill. If the cost of the combination is less
than the fair value of the group's share of the identifiable net assets
acquired, the difference is credited to the income statement in the period of
acquisition.
Where payment of part of the cost of the combination is contingent on future
events, for instance future profit streams of the subsidiary acquired, a
provision is recognised at the date of acquisition if it is thought probable
that such future events will be achieved, and the cost of the combination
increased accordingly. The provision is recognised at its fair value, discounted
to recognise the effect of the time value of money. The discount is released
over the period over which the future events are assessed such that at the date
of payment the provision is equal to the amount of deferred consideration to be
paid. The provision is assessed at each reporting date and adjusted if
expectations of the amount payable have changed.
Inter-company transactions and balances between group companies are eliminated
on consolidation.
Where a minority has retained an interest in a subsidiary, the group treats
transactions with the minority as transactions with parties external to the
group. Disposals to non-controlling interests result in gains and losses for the
group which are recognised in the income statement. Purchases from minority
interests result in goodwill which is calculated as the difference between the
consideration paid for the increase in stake and the relevant share acquired of
the carrying value of the net assets of the subsidiary at the date the increased
stake is obtained. The minority's share of profit or loss, comprehensive income
and assets are shown in the Income Statement, Statement of Comprehensive Income
and Statement of Financial Position as non-controlling interests.
(b) Associates
Associates are all entities over which the group exercises significant influence
but does not exercise control. Investments in associates are accounted for using
the equity method of accounting and are initially recognised at cost, which
includes goodwill identified on acquisition, net of any accumulated impairment
loss. The group's share of its associate's profits or losses after acquisition
of its interest is recognised in the income statement and cumulative
post-acquisition movements are adjusted against the carrying amount of the
investment. Where the group's share of losses of an associate equals or exceeds
the carrying amount of the investment, the group only recognises further losses
where it has incurred obligations or made payments on behalf of the associate.
1.3 Segment reporting
In accordance with IFRS 8, segmental information is presented based on the way
in which financial information is reported internally to the chief operating
decision maker. The group's internal financial reporting is organised along
product and service lines and therefore segmental information has been presented
about business segments. A business segment is a group of assets and operations
engaged in providing products and services that are subject to risks and returns
which are different from those of other business segments.
The group has determined its reportable segments in accordance with IFRS 8. In
accordance with that Standard the results of certain operating segments may be
aggregated if they are sufficiently similar in nature. Where a business segment
contributes in excess of either 10% of total revenue, 10% of total assets or 10%
of the absolute amount of reported profit or loss, it is disclosed as a separate
segment. Because the group has determined that its reportable segments are based
on products and services, the disclosures specifically required by IFRS 8 in
respect of products and services are not separately disclosed.
Information regarding geographical revenues and non-current assets is disclosed
in note 4 to the financial statements.
1.4 Property, plant and equipment
All property, plant and equipment is stated at historical cost less
depreciation. Historical cost includes expenditure that is directly attributable
to the acquisition of the items.
All assets are depreciated in order to write off the costs, less anticipated
residual values of the assets over their useful economic lives on a straight
line basis as follows:
· Plant and machinery: 5-10 years
· Fixtures and fittings: 5-10 years
· Motor vehicles: 4 years
· Computer equipment: 3 years
Items of property, plant and equipment held under finance leases are depreciated
over the shorter of the lease term and the useful economic life of the asset.
1.5 Intangible assets
Acquired intangible assets are shown at historical cost. Acquired intangible
assets have a finite useful life and are carried at cost, less accumulated
amortisation over the finite useful life.
(a) Goodwill
Goodwill relating to acquisitions occurring prior to the date of transition to
IFRS is carried at the net book value at that date as permitted by IFRS 1.
Goodwill arising on acquisitions subsequent to the date of transition is stated
at cost. In both cases, goodwill is not amortised, but is subject to an annual
test for impairment. Impairment testing is performed by the directors as set out
below. Where an impairment is identified, it is charged to the income statement
in that period.
(b) Concession rights
Concession rights are shown at historical cost. Concession rights in a business
combination at fair value at the acquisition date. Concession rights have a
finite useful life and are carried at cost less accumulated amortisation.
Amortisation is calculated using straight line method to allocate the cost of
the concession rights over the estimated useful life of 5 to 10 years.
1.6 Impairment of non-financial assets
Assets that have an indefinite useful life, for example goodwill, are not
subject to amortisation but are instead tested annually for impairment and are
subject to additional impairment testing if events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable.
Assets that are subject to depreciation or amortisation are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. A review for indicators of impairment is
performed annually. An impairment loss is recognised for the amount by which the
asset's carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an asset's fair value less costs to sell and value in use. Any
impairment charge is recognised in the income statement in the year in which it
occurs. When an impairment loss, other than an impairment loss on goodwill,
subsequently reverses due to a change in the original estimate, the carrying
amount of the asset is increased to the revised estimate of its recoverable
amount, up to the carrying amount that would have resulted, net of depreciation,
had no impairment loss been recognised for the asset in prior years.
1.7 Financial assets
The group classifies its financial assets as either at fair value through profit
and loss, or as available for sale financial assets. The group does not hold any
held to maturity financial assets, or financial assets classified as loans and
receivables.
The classification is dependent on the purpose for which the financial assets
are acquired and is determined by the directors on initial recognition.
Financial assets at fair value through profit or loss are financial assets which
are held for trading. A financial asset is classified as at fair value through
profit or loss if it is acquired principally for the purpose of selling in the
short term. Derivatives are also classified as held for trading unless they are
designated as effective hedges. Such assets are classified as current assets.
Financial assets at fair value through profit or loss are shown at fair value at
each reporting date with changes in fair value shown in the income statement.
Available for sale financial assets consist of equity investments in other
companies where the group does not exercise either control or significant
influence. Available for sale financial assets are shown at fair value at each
reporting date with changes in fair value being shown in the statement of
comprehensive income.
Where financial assets are quoted the fair value at each reporting date is based
on the quoted bid price at that date. Where an available for sale financial
asset consists of an equity investment in an unquoted company where a reliable
fair value cannot be determined, such investments are shown at cost less
impairment.
1.8 Trade and other receivables
Trade receivables are amounts due from customers for merchandise sold or
services performed in the ordinary course of business. If collection is expected
in one year or less, they are classified as current assets. If not, they are
presented as non-current assets.
Trade and other receivables are recognised at fair value subsequently measured
at amortised cost using effective interest method, less any appropriate
allowance for estimated irrecoverable amounts.
1.9 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and other short term
highly liquid deposits with original maturities of three months or less. Bank
overdrafts are shown within borrowings in current liabilities on the balance
sheet.
1.10 Share capital
Ordinary shares of the company are classified as equity. Mandatorily redeemable
preference shares and other classes of share where an obligation exists to
transfer economic benefits are classified as liabilities.
Costs directly attributable to issue of new shares are shown in equity as a
deduction.
1.11 Trade payables
Trade payables are recognised initially at fair value and are subsequently
measured at amortised cost using the effective interest method. As the payment
period of trade payables is short future cash payments are not discounted as the
effect is not material.
1.12 Borrowings
Interest-bearing borrowings are recognised initially at fair value, net of any
transaction costs incurred. Borrowings are subsequently stated at amortised cost
using the effective interest method with any difference between the proceeds
(net of transaction costs) and the redemption value being recognised over the
period of the borrowings.
Borrowing costs incurred which are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised as part of the
cost of that asset.
The fair value of the liability portion of convertible loan stock is determined
using a market interest rate for a comparable loan stock with no conversion
option. This amount is recorded as a liability on an amortised cost basis until
the loan stock is redeemed or converted. The remainder of the carrying amount of
the loan stock is allocated to the conversion option and shown within equity.
All borrowings are classified as current unless the group has an unconditional
right to defer payment of the borrowings until at least twelve months from the
balance sheet date.
1.13 Taxation
The tax expense for the year represents the total of current taxation and
deferred taxation. The charge in respect of current taxation is based on the
estimated taxable profit for the year. Taxable profit for the year is based on
the profit as shown in the income statement, as adjusted for items of income or
expenditure which are not deductible or chargeable for tax purposes. The current
tax liability for the year is calculated using tax rates which have either been
enacted or substantially enacted at the balance sheet date.
Deferred tax is provided in full, using the liability method on temporary
differences arising between the tax base of assets and liabilities and their
carrying values in the financial statements. The deferred tax is not accounted
for if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss. Deferred tax
is determined using tax rates which have been enacted or substantially enacted
at the balance sheet date and are expected to apply when the related deferred
tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future
taxable profits will be available against which the temporary differences can be
utilised.
1.14 Share-based payments
The cost of share-based payment arrangements, which occur when employees receive
shares or share options, is recognised in the income statement over the period
over which the shares or share options vest.
The expense is calculated based on the value of the awards made, as required by
IFRS 2 'Share-based Payment'. The fair value of the awards is calculated by
using the Black-Scholes option pricing model taking into account the expected
life of the awards, the expected volatility of the return on the underlying
share price, the market value of the shares, the strike price of the awards and
the risk-free rate of return. The charge to the income statement is adjusted for
the effect of service conditions and non-market performance conditions such that
it is based on the number of awards expected to vest. Where vesting is dependent
on market-based performance conditions, the likelihood of the conditions being
achieved is adjusted for in the initial valuation and the charge to the income
statement is not therefore adjusted so long as all other conditions are met.
Where an award is granted with no vesting conditions, the full value of the
award is recognised immediately in the income statement.
1.15 Provisions
Provisions are recognised in the balance sheet where there is a legal or
constructive obligation to transfer economic benefits as a result of a past
event. Provisions are discounted using a rate which reflects the effect of the
time value of money and the risks specific to the obligation, where the effect
of discounting is material.
Provisions are measured at the present value of expenditures expected to be
required to settle the obligation using a pre-tax that reflects current market
assessments of the time value of money and the risks specific to the obligation.
The increase in provision due to the passage of time is recognised as interest
expense.
1.16 Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for
the sale of goods and services in the ordinary course of the group's activities.
Revenue is shown net of value-added tax, returns, rebates and discounts and
after eliminating sales within the group.
The group recognises revenue when the amount of revenue can be reliably
measured, it is probable that future economic benefits will flow to the entity
and when specific criteria have been met for each of the group's activities. The
group bases its estimates on historical results, taking into consideration the
type of customer, the type of transaction and the specifics of each arrangement.
1.17 Leases
On inception of a lease of an item of property, plant and equipment, the terms
and conditions of the lease are reviewed to determine the appropriate
classification for the lease. Where the Group bears substantially all the risks
and rewards of ownership of the item, the lease is classified as a finance lease
and the item is capitalised within the appropriate class of property, plant and
equipment at the lower of the fair value of the leased item and the minimum
lease payments. Each lease payment is allocated between the liability and
finance charges so as to obtain a constant rate on the finance balance
outstanding. The outstanding capital element of the lease payments are included
within current and long-term payables as appropriate; the interest element of
the lease payments is charged to the income statement over the period of the
lease so as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period.
Leases where the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases, net of any
incentives received from the lessor, are charged to the income statement on a
straight line basis over the term of the lease.
Rental income received under operating leases is credited to the income
statement on a straight line basis over the lease term.
2. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit attributable to
equity holders of the company by the weighted average number of ordinary shares
in issue during the year.
+----------------------------------+-------------+-------------+-------------+
| | 6 Months | 6 | Year |
| | to | Months | to |
| | | to | |
+----------------------------------+-------------+-------------+-------------+
| | 30 June | 30 | 31 Dec |
| | 2010 | June | 2009 |
| | | 2009 | |
+----------------------------------+-------------+-------------+-------------+
| |(Unaudited) |(Unaudited) | (Audited) |
+----------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------+-------------+-------------+-------------+
| (Loss)/Profit attributable to | (1,149,519) | (352,679) | (1,492,304) |
| equity holders of the company | | | |
| (GBP) | | | |
+----------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------+-------------+-------------+-------------+
| Weighted average number of | 78,912,115 | 25,191,357 | 42,611,295 |
| ordinary shares in issue | | | |
+----------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------+-------------+-------------+-------------+
| | (1.5) | | |
| Basic earnings per share (pence | | (1.4) | (3.5) |
| per share) | | | |
+----------------------------------+-------------+-------------+-------------+
As at 30 June 2009, the potentially dilutive ordinary shares were anti-dilutive
because the group was loss-making.
3. BORROWINGS
On 4 March 2010, the company borrowed GBP292,500 from a consortium of lenders,
arranged by Eden Corporate Finance. This bridging loan was for working capital
purposes in advance of the reverse take over. The loan was secured at an
interest of 20% for three months.
On 27 April 2010, the company issued GBP200,000 unsecured convertible loan notes
to Boldhurst Properties Limited. The loan was secured for an 18 month period
with interest of 8% per annum.
4. BUSINESS COMBINATIONS
On 25 February 2010, the board resolved to capitalise the GBP175,000 loan taken
to acquire assets for RAM Vision Limited by issuance of 2,085,824 ordinary
shares at 8.5 pence per share in RAM Investment Group Plc. In addition, the
board resolved to acquire the remaining 50% of RAM Vision Limited. The
consideration was paid by issuance of 2,141,176 ordinary shares at 9 pence per
share in RAM Investment Group Plc.
Contact:
Edward Adams, RAM Investment Group plc on 07967 008448
Tim Baldwin, RAM Investment Group plc on 0207 518 4303
Sandy Jamieson, Libertas Capital Corporate Finance Limited on 0207 569 9650
This information is provided by RNS
The company news service from the London Stock Exchange
END
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