Preliminary Results -6-

Tangent tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.

The recoverable amounts of the CGU's are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to forecast profitability. These assumptions have been revised in the year to take account of the current economic environment. Management estimates discount rates using pre-tax rates that reflect the current market assessments of the time value of money and the risks specific to each CGU.

Future cash flows are derived from the most recent financial budget approved by management for the next five years, beyond that period cash flows are extrapolated using a growth rate of 3% (2010: 3%).

The rate used to discount forecast future cash flows for both business segments is 13% (2010: 12.5%).

In 2011 no impairment charge has been made against goodwill for either of the amended CGU's (2010: GBPnil). Headroom in the Design and print CGU is GBP2.9million and GBP4.7million in the Software and communications CGU

Tangent has conducted a sensitivity analysis on the impairment test of each CGU's carrying value with the following results:

-- The discount rate would need to increase by 2.66% to 15.66% to remove the headroom in the Design and print impairment test and by 8.34% to 21.34% to remove the headroom in the Software and communications test.

-- Reducing the long term growth rate to 0% does not create an impairment charge in either CGU.

7. Share capital

 
                                Number of ordinary 
                                     1p shares          Nominal value 
                              ---------------------  ------------------- 
                                    2011       2010     2011        2010 
                                     000        000   GBP000      GBP000 
----------------------------  ----------  ---------  -------  ---------- 
 Authorised 
 At 1 March and 28 February      225,000    225,000    2,250       2,250 
----------------------------  ----------  ---------  -------  ---------- 
 
                                Number of ordinary 
                                     1p shares          Nominal value 
                                                     ------------------- 
                                    2011       2010     2011        2010 
                                     000        000   GBP000      GBP000 
----------------------------  ----------  ---------  -------  ---------- 
 Allotted and fully paid 
 At 1 March                      170,534   170,134    1,706   1,702 
 Issued in the year                4,158       400       42       4 
----------------------------  ----------  --------  -------  ------  --- 
 At 28 February                  174,692   170,534    1,748        1,706 
----------------------------  ----------  --------  -------  -----------

On 16 August 2010 Tangent issued 4,158,333 ordinary shares as part of the final payment of deferred consideration in respect of the acquisition of C360 UK Limited.

The company has one class of ordinary share which carries no right to fixed income, each share carries the right to one vote at general meetings of the company. At 28 February 2011 and at the date of this report the number of issued ordinary shares is 174,691,835.

8. Cash generated from operations

 
                                                          2011      2010 
 Group                                                  GBP000    GBP000 
-----------------------------------------------------  -------  -------- 
 Profit before tax for the year                          1,052       282 
 Depreciation and amortisation of non-current assets       732       621 
 Profit on sale of plant and equipment                     (3)       (9) 
 Net interest charge/(income)                                2       (4) 
 Net foreign exchange gain                                   4         2 
 Share-based payment charge                                 17        19 
                                                       -------  -------- 
                                                         1,804       911 
 Movements in working capital 
 Increase in inventories                                  (29)         - 
 Increase in trade and other receivables                  (72)   (1,675) 
 Increase in trade and other payables                      124     1,400 
-----------------------------------------------------  -------  -------- 
 Cash generated from operations                          1,827       636 
-----------------------------------------------------  -------  --------

This information is provided by RNS

The company news service from the London Stock Exchange

END

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