RNS Number:6910E
SerVision plc
28 September 2007
SerVision Plc
("SerVision" or "the Company")
Unaudited Interim Results for Six Months to 30 June 2007
Highlights in the period:
• Turnover up 60% to US$2.5 million (US$1.56 million for same period 2006)
• Gross profit up 94% to US$1.165 million (US$600,000 for same period 2006)
• Distribution agreements signed in the period to supply products in USA,
France and Benelux
• Contract wins in the period:
- Turkey - to equip TEB Bank and Istanbul Water Authority
- Brazil - to protect public buses across Rio de Janeiro
- Mexico - to supply Unixa with entire range of SerVision products
Since period end:
• Letter of Intent signed with Orange Israel to provide its business
customers with SerVision products
• Exclusive distribution agreement with GIT to supply SerVision products
in South Africa
Gidon Tahan, Chairman and CEO, commented:
"We have made significant achievements during this period, not only in
generating good growth in our headline figures but also breaking into new
territories through contract wins and distribution agreements. In addition, we
have updated our product range, allowing us to enter the SME and retail markets
through a notable agreement with Orange Israel to offer our products to its
business customers.
"The Board is pleased that the Company continues to make steady progress towards
achieving its goals and we look forward to the future with confidence."
For further information:
Servision plc +972 2535 0015
Gidon Tahan, Chairman and CEO
Eitan Yanuv, Finance Director
HB Corporate 020 7510 8598
Jim McGeever
Threadneedle Communications 020 7936 9605
Graham Herring
Alex White
CHAIRMAN'S STATEMENT
REPORT AND FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2007
I am pleased to announce the Company's Interim results for the first six months
of 2007.
Turnover for the year period increased to US$2.5 million compared to US$1.56
Million for the same period last year. Gross profit improved to US$1.165 million
compared with US$600,000 for the same period last year and US$1.3 million for
the whole year of 2006. As a result of cost cutting measures, gross profit
margins have increased to 45% compared with 37% for 2006.
During the period and since my last chairman's statement three months ago we
have signed a distribution agreement in South Africa and our recently announced
contracts are starting to bear fruit. The distribution agreements that we signed
in the period are bedding down effectively and the Company is receiving orders
from all our new distributors that were signed during the first half of the
year.
Our R&D team has continued to improve our HVG (Home Video Gateway) series. This
enhanced professional cost effective product, will now have four video channels
and a new and exciting bidirectional audio feature. The fact that we have
managed to develop this very professional product and sell it with a competitive
price tag, has allowed us to enter the lucrative SME and retail markets through
a distribution scheme with Orange Il and Hashmira group (G4S Israel). Our HVG
systems will be offered to all of Orange Israel business cellular customers. An
ongoing training program for the Orange sales team is in progress and the
Company expects the first sales through this distribution channel to be
delivered in the near future.
In addition to our increased geographical reach into South Africa France, Brazil
and Mexico, we are continuing to widen our presence in the USA. Exclusive
agreements with key distributors are enabling the Company to enter into
additional territories on which we expect to update the market in greater detail
in the upcoming weeks.
The Board is pleased that the Company continues to make steady progress towards
achieving its goals and we look forward to the future with confidence. On a
personal note, I would like to thank all of our dedicated staff for their
loyalty and hard work throughout the period that was essential for our
significant progress and growth.
Gidon Tahan
Chairman and Chief Executive Officer
28 September 2007
GROUP INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Six months to Six months to Year to 31
30 June 2007 30 June 2006 December 2006
Note $'000 $'000 $'000
TURNOVER 2 2,540 1,559 3,534
Cost of sales (1,375) (959) (2,236)
------------- ------------- -------------
GROSS PROFIT 1,165 600 1,298
Administrative expenses (1,664) (1,615) (3,843)
------------- ------------- -------------
OPERATING LOSS (499) (1,015) (2,545)
Net finance expense (13) (29) (75)
-------------- -------------- -------------
LOSS ON ORDINARY
ACTIVITIES BEFORE
TAXATION (512) (1,044) (2,620)
Tax on loss on ordinary
activities 3 - - -
------------- ------------- -------------
RETAINED LOSS (512) (1,044) (2,620)
====== ====== ======
Loss per share
Basic and diluted 4 (2.23c) (5.45c) (13.39c)
====== ====== ======
GROUP BALANCE SHEET
AT 30 JUNE 2007
Notes As at 30 June As at 30 June As at 31
2007 2006 December 2006
$'000 $'000 $'000
ASSETS
Non-current assets
Intangible assets 3,488 3,251 3,236
Property, plant and
equipment 96 154 131
------------- ------------- ------------
3,584 3,405 3,367
Current assets
Inventories 187 315 323
Trade and other
receivables 1,400 714 989
Cash and cash equivalents 24 1,211 17
------------- ------------- ------------
1,611 2,240 1,329
------------- ------------- ------------
Total assets 5,195 5,645 4,696
====== ====== ======
EQUITY
Capital and reserves
attributable to the
Company's equity
shareholders
Called up share capital 5 429 426 429
Share premium account 5 7,101 7,046 7,101
Retained earnings and
translation reserves 5 (7,901) (6,418) (7,520)
Merger reserve 5 1,979 1,979 1,979
------------- ------------- ------------
Total equity 1,608 3,033 1,989
------------- ------------- ------------
LIABILITIES
Current liabilities
Short term credit from
banking institutions 464 653 256
Trade and other payables 1,713 670 1,107
------------- ------------- ------------
2,177 1,323 1,363
Non-current liabilities
Long term loan from bank
institution 266 292 279
Loan from Office of the
Chief Scientist 941 893 917
Post employment benefits 203 104 148
------------- ------------- ------------
Total liabilities 3,587 2,612 2,707
-------------- --------------- ------------
Total equity and
liabilities 5,195 5,645 4,696
====== ======= ======
GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Six months to Six months to Year to 31
30 June 2007 30 June 2006 December 2006
$'000 $'000 $'000
Cash flows from operating
activities
Loss before taxation (512) (1,044) (2,620)
Adjustments for:
Net finance expense 13 29 75
Net interest paid (13) (29) (75)
Depreciation and
amortisation 614 615 1,367
Movement in trade and
other receivables (411) (13) (288)
Movement in inventories 136 286 278
Movement in grant from
chief scientist 24 24 48
Movement in post
retirement benefits 55 38 82
Movement in trade and
other payables 606 (122) 315
-------------- -------------- ---------------
Net cash inflow/(outflow)
from operating activities 512 (216) (818)
Cash flow from investing
activities
Purchase of property,
plant and equipment and
intangibles (831) (890) (1,604)
-------------- -------------- ---------------
Net cash outflow from
investing activities (831) (890) (1,604)
Cash flows from financing
activities
Issue of shares in
Servision Plc - 1,892 1,950
Net loans
(repaid)/received (13) 13 -
-------------- -------------- ---------------
Cash inflow from
financing activities (13) 1,905 1,950
Cash and cash equivalents
at beginning of period (239) (621) (621)
Net cash outflow from all
activities (332) 799 (472)
Non-cash movement arising
on foreign currency
translation 131 380 854
--------------- -------------- ---------------
Cash and cash equivalents
at end of period (440) 558 (239)
======= ====== ======
Cash and cash equivalents
comprise
Cash (excluding
overdrafts) and cash
equivalents 24 1,211 17
Overdrafts (464) (653) (256)
--------------- -------------- ---------------
(440) 558 (239)
======= ====== ======
SERVISION PLC
NOTES TO THE REPORT AND FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2007
1. ACCOUNTING POLICIES
The accounting policies, applied on a consistent basis in the preparation of the
financial information, are as follows:
(a) Basis of Preparation
These half year 2007 interim consolidated financial statements of Servision Plc
are for the six months ended 30 June 2007. The information included within this
document has been prepared on the basis of the recognition and measurement
requirements of IFRS standards, IAS standards and IFRIC interpretations in issue
that are endorsed by the European Commission and effective at 27 September 2007.
In preparing these consolidated interim financial statements, management has
amended certain accounting and valuation methods applied in the 2006 report and
financial statements to comply with IFRS.
The Group accounting policies as set out in the 2006 report and financial
statements have been revised where applicable to conform to IFRS. The restated
accounting policies as set out on pages 14 to 15 of this report, together with
the remaining Group accounting policies detailed in the 2006 report and
financial statements, comprise the Group's complete accounting policies under
IFRS. These policies have been consistently applied to all years presented. The
adopted IFRS that will be effective in the annual financial statements for the
year ended 31 December 2007 are still subject to the possibility of change and
to additional interpretations. As a result of such changes the accounting
policies cannot be determined with certainty and therefore may require updating
when the annual financial statements are prepared for the year ending 31
December 2007.
The comparative figures in respect of 2006 have been restated to reflect these
adjustments. Reconciliations and descriptions of the effect of the transition of
UK GAAP to IFRS are provided in note 7.
2. BUSINESS SEGMENT ANALYSIS
Class of business
The turnover, loss on ordinary activities before taxation and net assets of the
Group are attributable to one class of business, that of developing and selling
video surveillance equipment.
Geographical areas
Turnover by location of customer
Six months to Six months to Year to 31
30 June 2007 30 June 2006 December 2006
$'000 $'000 $'000
UK and Continental Europe 1,163 841 1,569
North America 277 233 325
Latin America 625 112 867
Asia and Middle East 225 339 694
Africa 250 34 79
--------------- ------------ ----------------
2,540 1,559 3,534
======= ====== ========
3. TAXATION
The Company is controlled and managed by its Board in Israel. Accordingly, the
interaction of UK domestic tax rules and the taxation agreement entered into
between the U.K. and Israel operate so as to treat the Company as solely
resident for tax purposes in Israel. The Company undertakes no business activity
in the UK such as might result in a Permanent Establishment for tax purposes and
accordingly has no liability to UK corporation tax.
4. LOSS PER SHARE
The loss per share of 2.23c (31 December 2006: 13.39c; 30 June 2006: 5.45c) has
been calculated on the weighted average number of share in issue during the year
namely 22,890,304 (31 December 2006: 19,568,894; 30 June 2006: 19,168,196) and
losses of US$512,202 (31 December 2006: US$2,620,785; 30 June 2006:
US$1,044,566).
Due to the immaterial number of options in issue there is no material difference
between the diluted and basic loss per share.
5. RECONCILIATION Share Share Merger Retained Translation Total
OF CLOSING Capital Premium Reserve earnings reserve
EQUITY $'000 $'000 $'000 $'000 $'000 $'000
As at 31 339 5,241 1,979 (7,723) - (164)
December
2005
IFRS - - - 2,592 (623) 1,969
transition
adjustments
------------- ------------- ----------------- ---------------------- ----------------------
As at 1 339 5,241 1,979 (5,131) (623) 1,805
January 2006
Total - - - (1,044) 380 (664)
recognised
income and
expense
Share issued 87 1,805 - - - 1,892
in the
period
------------- ------------- ----------------- ---------------------- ----------------------
As at 30 June 426 7,046 1,979 (6,175) (243) 3,033
2006
====== ====== ======== ========= ========= =========
As at 31 429 7,101 1,979 (7,751) 231 1,989
December
2006
Total - - - (512) 131 (381)
recognised
income and
expense
------------- ------------- ----------------- ---------------------- ----------------------
At 30 June 429 7,101 1,979 (8,263) 362 1,608
2007
====== ====== ======== ========= ======== =========
6. RELATIONSHIP TO STATUTORY ACCOUNTS AND AUDIT STATUS
The financial information included in this document is unaudited and does not
comprise statutory accounts within the meaning of section 240 of the Companies
Act 1985. The comparative figures for the financial year ended 31 December 2006
are not the Group's statutory accounts for that financial year. Those accounts,
which were produced under UK Generally Accepted Accounting Practices, have been
reported on by the Group's auditors and delivered to the Registrar of Companies.
The report of the auditors was unqualified and did not contain statements under
section 237 (2) or (3) of the Companies Act 1985.
7. COMPARATIVE DATA RESTATED IN ACCORDANCE WITH THE TRANSITION TO IFRS
From 1 January 2007, the Group has been reporting its results in accordance with
International Financial Reporting Standards ("IFRS").
To comply with the requirements of reporting the first set of interim results
following transition to IFRS, a reconciliation of the loss under UK GAAP for the
six months to June 2006 to the expenses under IFRS for the six months to 30 June
2006 is set out on pages 7 to 8. A detailed analysis of these adjustments and a
summary of the differences between UK GAAP and IFRS that led to the adjustments
are given on pages 7 to 8 of this report.
A reconciliation is also required between the loss under UK GAAP for the year
ended 31 December 2006 to the profit under IFRS for the year ended 31 December
2006. This is shown on pages 11 to 12 of this report.
IFRS also requires a reconciliation of equity under UK GAAP at 30 June 2006 to
equity under IFRS at 30 June 2006. This is set out on page 9 of this report.
A reconciliation is also required between the equity at 1 January 2006 under UK
GAAP to 1 January 2006 under IFRS, which is shown above and a reconciliation
between the equity at 31 December 2006 under UK GAAP to 31 December 2006 under
IFRS, which is shown on page 13 of this report.
SERVISION PLC
NOTES TO THE REPORT AND FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2007
7. COMPARATIVE DATA RESTATED IN ACCORDANCE WITH THE TRANSITION TO IFRS
(continued)
Group income statement for the first half 2006
UK GAAP IFRS
Six months to Total IFRS Six months to
30 June 2006 Adjustments 30 June 2006
$'000 $'000 $'000
TURNOVER 1,559 - 1,559
Cost of sales (967) 8 (959)
------------- ------------- -----------
GROSS PROFIT 592 8 600
Administrative expenses (1,956) 341 (1,615)
------------- ------------- -----------
OPERATING LOSS (1,364) 349 (1,015)
Net finance expense (48) 19 (29)
-------------- -------------- ----------
LOSS ON ORDINARY (1,412) 368 (1,044)
ACTIVITIES BEFORE
TAXATION
Tax on loss on ordinary - - -
activities
------------- ------------- ----------
RETAINED LOSS (1,412) 368 (1,044)
====== ====== ======
Loss per share
Basic and diluted 7 (7.37c) (1.92c) (5.45c)
====== ====== ======
A summary of the principal differences between UK GAAP and IFRS as applicable to
Servision Plc is as follows:-
a) Employee benefits
Under UK GAAP, liabilities for severance pay for employees employed in the State
of Israel were accounted for under FRS 12 "Provisions, contingent liabilities
and assets". Under IFRS, the Group is required to account for such liabilities
using an actuarial valuation in accordance with IAS 19 "Employee benefits".
b) Development costs
Under UK GAAP, development costs incurred by the group were written off to the
profit and loss account as allowed by SSAP 13 "Accounting for research and
development costs". Under IFRS, the Group is required to capitalise such
expenditure and amortise the costs over the useful economic life in accordance
with IAS 38 "Intangible Assets".
c) Grants
Under UK GAAP, grants from the Office of the Chief Scientist in Israel were
accounting for under FRS 12 "Provisions, contingent liabilities and assets".
Under IFRS, the Group is required to account for the full liability of such
grants, as and when they are received in accordance with IAS 19, "Accounting for
Government Grants and Disclosure of Government Assistance".
d) Software
Under UK GAAP, software was capitalised as a tangible fixed assets in accordance
with FRS 15 "Tangible fixed assets". Under IFRS, the Group is required to
account for such expenditure as a Intangible Assets in order to comply with IAS
38 "Intangible Assets".
SERVISION PLC
NOTES TO THE REPORT AND FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Analysis of IFRS adjustments to the Group income statement for the first half of 2006
Employee Capitalisation of development Amortisation of development Total IFRS
benefits costs costs Grants Adjustments
$'000 $'000 $'000 $'000 $'000
TURNOVER - - - - -
Cost of 8 - - - 8
sales
------------- ------------- ------------- ------------- -------------
GROSS PROFIT 8 - - - 8
Administrative
expenses 68 842 (555) (14) 341
------------- ------------- ------------- ------------- -------------
OPERATING LOSS 76 842 (555) (14) 349
Net finance
expense - 19 - - 19
------------- ------------- -------------- -------------- -------------
LOSS ON
ORDINARY 76 861 (555) (14) 368
ACTIVITIES
BEFORE
TAXATION
Tax on loss on - - - - -
ordinary
activities
------------- ------------- ------------- ------------- -------------
RETAINED LOSS 76 861 (555) (14) 368
====== ====== ====== ====== ======
7. COMPARATIVE DATA RESTATED IN ACCORDANCE WITH THE TRANSITION TO IFRS
(continued)
Group balance sheet as at 30 June 2006
Under UK GAAP Under
IFRS
As at 30 June Total IFRS As at 30 June
2006 adjustments 2006
$'000 $'000 $'000
ASSETS
Non-current assets
Intangible assets - 3,251 3,251
Property, plant and
equipment 169 (15) 154
------------- ------------- ------------
169 3,236 3,405
Current assets
Inventories 315 - 315
Trade and other
receivables 714 - 714
Cash and cash equivalents 1,211 - 1,211
------------- ------------- ------------
2,240 - 2,240
------------- ------------- ------------
Total assets 2,409 3,236 5,645
====== ====== ======
EQUITY
Capital and reserves
attributable to the Company's
equity shareholders
Called up share capital 426 - 426
Share premium account 7,046 - 7,046
Retained earnings and
translation reserves (8,838) 2,420 (6,418)
Merger reserve 1,979 - 1,979
------------- ------------- ------------
Total equity 613 2,420 3,033
------------- ------------- ------------
LIABILITIES
Current liabilities
Trade and other payables 1,504 (181) 1,323
Non-current liabilities
Other creditors 292 997 1,289
------------- ------------- ------------
Total liabilities 1,796 816 2,612
-------------- --------------- ------------
2,409 3,236 5,645
====== ======= ======
7. COMPARATIVE DATA RESTATED IN ACCORDANCE WITH THE TRANSITION TO IFRS
(continued)
Analysis of IFRS adjustments to the Group Balance Sheet as at 30 June
2006
Capitalisation Amortisation
of of
Employee development development
benefits costs costs Grants Reclassification Total
$'000 $'000 $'000 $'000 $'000 $'000
ASSETS
Non-current
assets
Intangible
assets - 3,791 (555) - 15 3,251
Property,
plant and
equipment - - - - (15) (15)
------------- ------------- ------------- ------------- ------------- ------------
- - - - - 3,236
Current
assets
Inventories - - - - - -
Trade and - - - - - -
other
receivables
Cash and cash - - - - - -
equivalents
------------- ------------- ------------- ------------- ------------- ------------
- - - - - -
------------- ------------- ------------- ------------- ------------- ------------
Total assets - 3,791 (555) - - 3,236
====== ====== ====== ====== ====== ======
EQUITY
Capital and
reserves
attributable
to the
Company's
equity
shareholders
Called up - - - - - -
share
capital
Share premium - - - - - -
account
Retained
earnings and
translation
reserves 76 3,791 (555) (893) 1 2,420
Merger - - - - - -
reserve
------------- ------------- ------------ ------------- ------------- ------------
Total equity 76 3,791 (555) (893) 1 2,420
------------- ------------- ------------ ------------- ------------- ------------
LIABILITIES
Current
liabilities
Trade and
other payables (76) - - - (105) (181)
Non-current
liabilities
Other
creditors - - - 893 104 997
------------- ------------- ------------ ------------- ------------- ------------
Total
liabilities (76) - - 893 (1) 816
------------- ------------- ------------ -------------- --------------- ------------
Total equity
and
liabilities - 3,791 (555) - - 3,236
====== ====== ====== ====== ======= ======
7. COMPARATIVE DATA RESTATED IN ACCORDANCE WITH THE TRANSITION TO IFRS
(continued)
Group income statement for the year ended 31 December 2006
UK GAAP IFRS
Year to Year to
31 December 2006 Total IFRS 31 December 2006
adjustments
$'000 $'000 $'000
TURNOVER 3,534 - 3,534
Cost of sales (2,240) 4 (2,236)
------------- ------------- -------------
GROSS PROFIT 1,294 4 1,298
Administrative
expenses (4,019) 176 (3,843)
------------- ------------- -------------
OPERATING LOSS (2,725) 180 (2,545)
Net finance
expense (77) 2 (75)
-------------- -------------- -------------
LOSS ON ORDINARY
ACTIVITIES BEFORE
TAXATION (2,802) 182 (2,620)
Tax on loss on ordinary - - -
activities
------------- ------------- -------------
RETAINED LOSS (2,802) 182 (2,620)
====== ====== ======
Loss per share
Basic and diluted 7 (14.32c) (0.93c) (13.39c)
====== ====== ======
Analysis of IFRS adjustments to the Group income statement for the year ended 31 December 2006
Employee Capitalisation of development Amortisation of development Total IFRS
benefits costs costs Grants Adjustments
$'000 $'000 $'000 $'000 $'000
TURNOVER - - - - -
Cost of 4 - - - 4
sales
------------- ------------- ------------- ------------- -------------
GROSS PROFIT 4 - - - 4
Administrative
expenses 55 1,581 (1,309) (151) 176
------------- ------------- ------------- ------------- -------------
OPERATING LOSS 59 1,581 (1,309) (151) 180
Net finance
expense - 2 - - 2
------------- ------------- -------------- -------------- -------------
LOSS ON
ORDINARY 59 1,583 (1,309) (151) 182
ACTIVITIES
BEFORE
TAXATION
Tax on loss on - - - - -
ordinary
activities
------------- ------------- ------------- ------------- -------------
RETAINED LOSS 59 1,583 (1,309) (151) 182
====== ====== ====== ====== ======
7. COMPARATIVE DATA RESTATED IN ACCORDANCE WITH THE TRANSITION TO IFRS
(continued)
Group balance sheet as at 31 December 2006
Under UK GAAP Under
IFRS
As at 31 December Total IFRS As at 31 December
2006 adjustments 2006
$'000 $'000 $'000
ASSETS
Non-current assets
Intangible assets - 3,236 3,236
Property, plant and
equipment 147 (16) 131
------------- ------------- ------------
147 3,220 3,367
Current assets
Inventories 323 - 323
Trade and other
receivables 989 - 989
Cash and cash
equivalents 371 (354) 17
------------- ------------- ------------
1,683 (354) 1,329
------------- ------------- ------------
Total assets 1,830 2,866 4,696
====== ====== ======
EQUITY
Capital and reserves
attributable to the
Company's equity
shareholders
Called up share
capital 429 - 429
Share premium account 7,101 - 7,101
Retained earnings and
translation reserves (9,882) 2,362 (7,520)
Merger reserve 1,979 - 1,979
------------- ------------- ------------
Total equity (373) 2,362 1,989
------------- ------------- ------------
LIABILITIES
Current liabilities
Trade and other
payables 1,924 (561) 1,363
Non-current liabilities
Other creditors 279 1,065 1,344
------------- ------------- ------------
Total liabilities 2,203 504 2,707
-------------- --------------- ------------
Total equity and
liabilities 1,830 2,866 4,696
====== ======= ======
7. COMPARATIVE DATA RESTATED IN ACCORDANCE WITH THE TRANSITION TO IFRS
(continued)
Analysis of IFRS adjustments to the Group Balance Sheet as at 31 December
2006
Capitalisation Amortisation
of of
Employee development development
benefits costs costs Grants Reclassification Total
$'000 $'000 $'000 $'000 $'000 $'000
ASSETS
Non-current
assets
Intangible
assets - 4,529 (1,309) - 16 3,236
Property,
plant and
equipment - - - - (16) (16)
------------- ------------- ------------- ------------- ------------- ------------
- 4,529 (1,309) - - 3,220
Current
assets
Inventories - - - - - -
Trade and - - - - - -
other
receivables
Cash and cash
equivalents - - - - (354) (354)
------------- ------------- ------------- ------------- ------------- ------------
- - - - (354) -
------------- ------------- ------------- ------------- ------------- ------------
Total assets - 4,529 (1,309) - (354) 2,866
====== ====== ====== ====== ====== ======
EQUITY
Capital and
reserves
attributable
to the
Company's
equity
shareholders
Called up - - - - - -
share
capital
Share premium - - - - - -
account
Retained
earnings and
translation
reserves 59 4,529 (1,309) (917) - 2,362
Merger - - - - - -
reserve
------------- ------------- ------------ ------------- ------------- ------------
Total equity 4,529 (1,309) (917) - 2,362
------------- ------------- ------------ ------------- ------------- ------------
LIABILITIES
Current
liabilities
Trade and
other payables (59) - - - (502) (561)
Non-current
liabilities
Other
creditors - - - 917 148 1,065
------------- ------------- ------------ ------------- ------------- ------------
Total
liabilities (59) - - 917 (354) 504
------------- ------------- ------------ -------------- --------------- ------------
Total equity
and
liabilities - 4,529 (1,309) - (354) 2,866
====== ====== ====== ====== ======= ======
8. IFRS RESTATED ACCOUNTING POLICIES
These half year 2007 interim consolidated financial statements of Servision Plc are for the six months
ended 30 June 2007. The information included within this document has been prepared on the basis of the
recognition and measurement requirements of IFRS standards, IAS standards and IFRIC interpretations in
issue that are endorsed by the European Commission and effective at 27 September 2007.
The adopted IFRS that will be effective in the annual financial statements for the year ended 31 December
2007 are still subject to the possibility of change and to additional interpretations. As a result of such
changes the accounting policies cannot be determined with certainty and therefore may require updating then
the annual financial statements are prepared for the year ending 31 December 2007.
The following paragraphs describes the main accounting policies that have been revised on transition to
IFRS and hence supersede the previous accounting policy detailed in the 2006 report and financial
statements.
Employee benefits
The group accounts for pensions and similar benefits under IAS 19 (revised) "Employee Benefits". The
Group's net obligation in respect of the defined benefit plans is calculated by independent, qualified
actuaries and updated at least annually. Additional updates are performed when one-time events or market
fluctuations indicate that the benefit obligation and pension assets differ significantly from the most
recent valuation.
Obligations are measured at discount present value whilst plan assets are recorded at fair value. The
operating and financing costs of such plans are recognised separately in the income statement; service
costs are spread systematically over the lives of the employees and financing costs are recognised in the
period in which they arise.
8. IFRS RESTATED ACCOUNTING POLICIES (continued)
Employee benefits (continued)
Actuarial gains and losses are recognised in full in the period in which they
occur and presented in the statement of recognised income and expense.
Research and development
Research expenditure is charged to income in the year in which it is
incurred.
Development expenditure is charged to income in the year in which it is
incurred unless it meets the recognition criteria of IAS 38 "Intangible
Assets". Regulatory and other uncertainties generally mean that such criteria
are not met. Such intangible assets, if capitalised are amortised on a
straight line basis over the period of the expected benefit and reviewed for
impairment at each balance sheet.
INDEPENDENT REVIEW REPORT TO SERVISION PLC
We have been instructed by the company to review the financial information for
the six months ended 30 June 2007, which comprise the Group Income Statement,
the Group Balance Sheet, the Group Cash Flow statement and the related notes. We
have read the other information contained in the interim report and considered
whether it contains any apparent misstatements or material inconsistencies with
the financial information.
This report is made solely to the company in accordance with guidance contained
in Bulletin 1999/4 'Review of interim financial information' issued by the
Auditing Practices Board. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company, for our work,
for this report, or for the conclusions we have formed.
Respective responsibilities of directors
The interim report, including the financial statements contained therein, is the
responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the AIM Rules of
the London Stock Exchange which require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board. A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data and based thereon, assessing whether
the accounting policies and presentation have been consistently applied and
adequately 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 performed in accordance with Auditing
Standards and therefore provides a lower level of assurance than an audit.
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 June 2007.
haysmacintyre Fairfax House
Chartered Accountants 15 Fulwood Place
Registered Auditors London
WC1V 6AY
28 September 2007