Angle Regulatory News (AGL)

24 Jan 2006 07:01

Angle PLC24 January 2006 For Immediate release 24 January 2006 ANGLE plc ('ANGLE' or the 'Group') Interim Results for the six months ended 31 October 2005 ANGLE plc, the intellectual property and technology commercialisation company,today announces its interim results for the six months ended 31 October 2005.For the first time, ANGLE is reporting its interim results under InternationalFinancial Reporting Standards (IFRS). Financial Highlights • The value of investments (1) on the balance sheet increased by 83% to £5.2 million (2004: £2.9 million). • The flotation of Provexis in June 2005 delivered a gain in valuation of £2.0 million at the placing price over the cost of investment. The Provexis share price at close of business on 23 January 2006 values ANGLE's investment at £6.3 million, a further gain in valuation of £3.2 million since the period end. • Operating costs to establish, develop and create value in Progeny(R) companies were increased by 107% to £1.8 million (2004: £0.8 million). This included expenditure on controlled investments (2) of £0.8 million (2004: £nil). • Turnover for the half year increased 16% to £2.0 million (2004: £1.7 million). • Loss before tax reduced by 49% to £0.8 million (2004: £1.6 million). • Loss per share reduced by 51% to 4.7p (2004: 9.8p). • Consulting and Management entered the second half with a strong order book of £8.7 million (2004: £2.8 million) as a result of major new contracts. Operational Highlights • Aberro Founded company with experienced management team. Developed and launched automated software testing product. Revenues expected in Q1 2006. • Acolyte Biomedica BacLite(R) Rapid MRSA product launched in May 2005 followed by the improved BacLite(R) flex product, launched in January 2006. • Geomerics Prototype developed demonstrating dramatic speed and capability improvements for computer games graphics. Building relationships with major games industry players. High level management team appointed. • Novocellus Successful development work lead to multi-site clinical trials being launched in November 2005. Progressed discussions with major medical diagnostics companies regarding trade partnership. • Provexis Completed reverse acquisition of Nutrinnovator, flotation on the Alternative Investment Market, negotiation of distribution agreements, preparation of Sirco product with launch into the retail stores of Sainsbury's and Waitrose in January 2006. • Synature Prototype customer classification technology delivered good first stage results, moving the technology towards full scale commercial software. Senior management appointed. • Negotiations in progress with major technology corporates, research establishments and universities for commercialisation of their intellectual property and several additional Progeny(R) companies under development. Hance Fullerton, Chairman, commented: "ANGLE has made excellent progress in the development of its Progeny(R)companies during the first half of the year. The flotation of Provexis was afurther demonstration of the value created by ANGLE's Progeny(R) process. Weare continuing to make strong progress with our Progeny(R) portfolio and expectto announce additional Progeny(R) companies in the second half." Enquiries:ANGLE plc 01483 295830Andrew Newland, Chief ExecutiveIan Griffiths, Finance Director Buchanan Communications 020 7466 5000Richard Darby, Suzanne Brocks, James Strong A presentation for analysts will take place today at 10.00am at the offices ofBuchanan Communications, 45 Moorfields, London, EC2Y 9AE. Please call BuchananCommunications for more details. Notes to Editors Founded in 1994, ANGLE is an international venture management and consultinggroup focusing on the commercialisation of technology and the development oftechnology-based industry. ANGLE creates, develops and advises technologybusinesses on its own behalf and for its clients. ANGLE is listed on AIM(AGL.L); further information can be found on www.ANGLEplc.com Investments are Progeny(R) companies where the Group does not own a controllingequity position. These consist of both non-current assets and current assetsand are described Note 6. (1) Controlled investments are Progeny(R) companies where the Groupowns a controlling equity position. Under IFRS, these are consolidated and therelevant costs are charged to the income statement rather than placed on thebalance sheet as under the previous UK GAAP accounting policy. (2) Controlled investments are Progeny(R) companies where the Groupowns a controlling equity position. Under IFRS, these are consolidated and therelevant costs are charged to the income statement rather than placed on thebalance sheet as under the previous UK GAAP accounting policy. CHAIRMAN'S STATEMENT Introduction ANGLE has made strong progress in the development of its business during thefirst half of the year. The business was reorganised during the period throughthe creation of an Executive Management Board to strengthen regional leadershipand position the Group for future growth. The flotation of Provexis was afurther demonstration of the value created by ANGLE's Progeny(R) process. Weare continuing to make strong progress with our Progeny(R) portfolio and expectto announce additional Progeny(R) companies and commercialisation deals in thesecond half. Adoption of International Financial Reporting Standards (IFRS) The results for the Group for the six months to 31 October 2005, and forcomparative periods, have been prepared for the first time on the basis of theRecognition and Measurement requirements of International Financial ReportingStandards (IFRS). The impact on the Group's results for the financial yearended 30 April 2005 of the transition to IFRS is detailed below. The most significant changes involved in the adoption of IFRS that affect thefinancial results are as follows: • controlled investments - under UK GAAP accounting policies, controlled investments were previously accounted for as investments and held at cost on the balance sheet. Under IFRS no similar treatment exists and controlled investments are now consolidated as subsidiaries. Costs incurred are expensed and the fair value of controlled investments is not shown on the balance sheet. • investments - with the exception of controlled investments, the Group's investments in Progeny(R) companies are now held on the balance sheet at fair value. Changes in fair value will be recognised in the income statement. Under UK GAAP, investments were held at cost subject to impairment. • share based payments - under IFRS, a charge is required in the income statement relating to share based payments, primarily in relation to the fair value of share options granted to staff. Under UK GAAP, no such charge was required, although under FRS 20 this would have been required in the future. Results For the half year ended 31 October 2005, ANGLE: • increased the value of its investments in Progeny(R) companies by 83% to £5.2 million (2004: £2.9 million). • incurred expenditure on controlled investments to establish, develop and create value in Progeny(R) companies where the Group owns a controlling equity position of £0.8 million (2004: £nil) • increased turnover for the half year by 16% to £2.0 million (2004: £1.73 million). • reduced the loss before tax by 49% to £0.8 million (2004: £1.6 million). The loss before controlled investments and tax reduced by 97% to £0.1 million (2004: £1.6 million). The loss before tax for the half year of £0.8 million (2004: £1.6 million) ismade up of: • profit from increase in fair value of investments (non-controlled Progeny(R) companies) of £1.2 million (2004: loss £1.2 million); • expenditure to establish, develop and create value in Progeny(R) companies of £1.8 million (2004: £0.8 million), including expenditure on controlled investments £0.8 million (2004: £nil); • loss on the Consulting and Management business of £0.1 million (2004: profit £0.3 million). The Consulting and Management business is expected to be profitable for the full year; • other net costs of £0.1 million (2004: profit £0.1 million) comprising Ventures turnover, share based payments, restructuring costs and net finance income. The basic loss per share reduced by 51% to 4.7p (2004: 9.8p). Progeny(R) companies A highlight of the first half was the successful flotation of Provexis. Thisdelivered a gain in valuation of £2.0 million at the placing price compared tothe cost of investment and demonstrated the value of the Progeny(R) process indelivering value from the commercialisation of intellectual property. TheProvexis share price at close of business on 23 January 2006 values ANGLE'soriginal Progeny(R) investment at in excess of 8.5x cost. At close of businesson 23 January 2006 the share price had risen 105% since the half year endincreasing the value of ANGLE's investment by a further £3.2 million to £6.3million. During the period, we also made strong progress against the commercialmilestones for our other Progeny(R) companies. We expect to see this successreflected in the future. Outlook for the full financial year Overall the Board are very positive about the outlook for the Progeny(R)companies, both existing and new, continuing to develop at a positive rate andthe Consulting and Management business is also going well in the second half ofthe financial year. The existing Progeny(R) companies are expected to make strong commercialprogress. In addition to progressing the current Progeny(R) portfolio, it isexpected that further new Progeny(R) companies will be established in the secondhalf of the year as opportunities currently under development are delivered. During the first half, we have worked closely in the UK and the US with severalmajor corporates and universities to agree the basis for commercialisation oftheir intellectual property. We expect that this will lead to a number ofcommercialisation framework deals with major research organisations. We will continue to invest in developing existing and new Progeny(R) companies.Much of the investment in the second half year will be in controlled investments(controlled Progeny(R) companies) and therefore, under IFRS, the costs will beexpensed in the consolidated income statement. This will lead to an increasedloss for the year from controlled investments. Set against this, there areexpected to be profits from increases in fair value of investments(non-controlled Progeny(R) companies). Whilst the timing is uncertain the Boardis confident that the Progeny(R) portfolio has the potential to deliver strongreturns to shareholders. The Consulting and Management businesses entered the second half with a strongorder book of £8.7 million (2004: £2.8 million) as a result of major newcontracts. The £6.0 million Qatar Science & Technology Park contract is now fullyoperational and making an impact. Since the half year end, ANGLE has won acontinuation of the SME Innovation Support Project with the London DevelopmentAgency, as announced today, for a further two years. The project extension isworth £0.8 million in fees to ANGLE and runs from January 2006 for 27 months. Improved trading is delivering increased turnover and we expect to see a profitfor the full year from the Consulting and Management business. Hance Fullerton Chairman OPERATIONS SUMMARY During the half year, good progress was made with ANGLE's Progeny(R) companies. Life Sciences investments • Acolyte Biomedica Founded by ANGLE in 2000, Acolyte Biomedica was the first spinout company to be based on intellectual property originally developed by the Defence Science and Technology Laboratory (Dstl) at Porton Down, a division of the UK Ministry of Defence. Acolyte develops proprietary diagnostic systems and research reagents for clinical microbiology and life sciences. Acolyte's technology uses AK rapid technology developed by Dstl. Since formation, Acolyte has raised £6.4 million and ANGLE retains a 11.5% stake. Acolyte has made major progress towards the roll-out of its products across Europe. The BacLite(R) Rapid MRSA product, which targets the five million MRSA tests currently conducted in UK hospitals each year, was launched in May 2005 and dramatically reduces the diagnostic delay for MRSA from two days to five hours. This has been followed closely by the improved BacLite(R) flex product, launched in January 2006 which provides enhanced capability in test sites, throughput and accuracy. www.acolytebiomedica.com • NeuroTargets NeuroTargets was founded by ANGLE in 1999 to commercialise original research at the University of Bristol. NeuroTargets is a discovery-led biotechnology development company specialising in diseases of nerve injury, especially relating to diabetes. NeuroTargets has raised £1.3 million and ANGLE retains a 25.1% stake. During the period NeuroTargets has continued with its own development programme and with collaborative deals to develop other related compounds. NeuroTargets' overall development programme has now reached the point where it requires significant additional funding to take it into clinical trials. During the half year, the company has been working towards raising this, supported by ANGLE. Several options are currently being pursued which would deliver the financial support NeuroTargets is seeking. Pending the outcome of this activity, ANGLE's investment in NeuroTargets is being carried at nil value. www.neurotargets.co.uk • Provexis Following the flotation of Provexis during the half year, ANGLE retains a holding of 24.8% in Provexis plc. Founded by ANGLE in 2000, Provexis is a product development and licensing company developing a range of scientifically proven products based on naturally occurring food bioactive ingredients to help prevent major killers such as cardiovascular disease and cancer. Its first product a heart health drink named Sirco was launched in Sainsbury's in January 2006. During the half year, Provexis completed the reverse acquisition of Nutrinnovator Holdings plc bringing retail expertise to the company to support the launch of products in the market. This was followed by flotation on the Alternative Investment Market delivering ANGLE a gain in valuation of £2.0 million at the placing price compared to the cost of investment. ANGLE also invested at pre-IPO and in the flotation itself. The share price at close of business on 23 January 2006 values ANGLE's original Progeny(R) investment at in excess of 8.5x cost. At close of business on 23 January 2006 the share price had risen 105% since the half year end increasing the value of ANGLE's investment by a further £3.2 million to £6.3 million. www.provexis.com Life Sciences controlled investments • Novocellus Novocellus was founded by ANGLE in 2004 to commercialise intellectual property from the University of York. Novocellus aims to dramatically boost IVF (in vitro fertilisation) success rates by developing an innovative and non-invasive diagnostic technique to assess the viability of fertilised embryos before transfer back to the mother. Novocellus was a wholly owned subsidiary of ANGLE at the period end. During the half year, intensive effort has been devoted to multi-site clinical trials, which started in November 2005. These are progressing well, with strong patient recruitment, and are due to conclude in the second quarter of 2006. In parallel, Novocellus has progressed discussions with a number of major medical diagnostics companies regarding trade partnership. www.novocellus.com Physical Sciences investments • Corpora Following the sale of our Progeny(R) Company Exago in April 2004 to Corpora plc in a share for share exchange, ANGLE retains a holding of 10% at the period end in Corpora. Corpora is an AIM listed information management company supporting users of data to find, distil and learn the information they need, when they need it. The company's software solutions address geographically dispersed, information intensive organisations such as government, finance, legal and pharmaceutical. The share price at close of business on 23 January 2006 values ANGLE's original Progeny(R) investment at 3.0x cost. www.corporaplc.com Physical Sciences controlled investments • Aberro ANGLE founded and launched Aberro Software Inc. (previously known as ContraSoft) in 2005 to commercialise software IP in the area of automated software testing. Aberro launched with a top tier management. Currently 57% owned by ANGLE, Aberro uses patent-pending technology to deliver Adaptive Automated Testing. The market for automated testing tools is projected to be over $1.0 billion in 2006 according to IDC. Aberro first introduced its products and techniques in November 2005 at STARWest, a leading testing trade show. AberroTest was made available for General Availability in December 2005 and the Company should begin generating revenue in Q1 2006. www.aberrosoftware.com. • Geomerics Formed in 2005 by ANGLE in collaboration with academics from Cambridge University and the United States, Geomerics develops commercial applications for geometric algebra; a sophisticated form of mathematics which vastly simplifies geometric operations. Geomerics' capability has the potential to revolutionise fields as diverse as computer gaming and electromagnetic modelling. Geomerics is currently a wholly owned subsidiary of ANGLE and began its commercialisation plan during the first half. Early software development work reinforces the expectation of dramatic speed and capability improvements expected for applications such as computer games graphics and electro-magnetic modelling. Using this work Geomerics is now building relationships with major games industry players with a view to incorporating Geomerics' technology in new games releases. In electro-magnetic modelling the first generation of tools have also been completed and discussions with leading tools users started in January 2006. www.geomerics.com • Synature Synature (previously known as Customiser Group) was established in 2005 by ANGLE to further develop and exploit the IP generated by a Cambridge-based team of psychologists and world-class pattern recognition experts. Synature offers a sophisticated approach to customer segmentation on the basis of insight into people's perceptions. Synature is currently a wholly owned subsidiary of ANGLE. Synature has progressed well during the period. The programme to demonstrate the preference engine behind Synature's customer classification technology in real world applications has delivered good first stage results, moving the technology towards full scale commercial software. In addition the scope for offline applications of Synature's technology, for example market research and campaigns, has increased alongside the primary application targeted at online vendors of products and internet advertising. www.synature.com Pipeline and Progeny(R) companies under development Following a phase of intensive work to establish Aberro, Geomerics, Novocellusand Synature, the Progeny(R) team has identified a wealth of strong IP forpotential commercialisation via the Progeny(R) process. The pipeline is now atits strongest since flotation and we expect to establish further Progeny(R)companies before the end of the full financial year. Furthermore, we will closethe year with a strong pipeline of opportunities promising more new Progeny(R)companies in the next financial year. In the UK, we have many established relationships with leading science andtechnology research universities where we maintain a close association withtheir technology transfer offices and high profile academics. Theserelationships have led to discussions about strategic, long-term relationshipsbetween ANGLE and the relevant University in a number of cases, which areprogressing well. In the US, we have also expanded our university and national laboratoryrelationships and recently signed an exclusive option on medical informatics IPwith a leading US university. Details of this will be announced once therelationship is not commercially sensitive. Opportunities under examinationinclude intellectual property from University of Maryland, New York University,Columbia University, Drexel University, Carnegie Mellon University, SBCCorporation, and MITRE Corporation. Consulting and Management Whilst fees for consulting and management services increased 20% in the halfyear to £2.0 million (2004: £1.6 million), it was disappointing that a defermentof business in the UK during the General Election period and planned investmentin geographic expansion in the US combined to reduce profitability in the halfyear resulting in a loss of £0.1 million (2004: profit £0.3 million). However anumber of major contracts have now been secured and the order book at the halfyear end is strong at £8.7 million (2004: £2.8 million). As a result turnoverhas increased and we expect the Consulting and Management business to beprofitable for the full year. Key developments include: • In the UK, securing in excess of £2.3 million of new work in the management of innovation and product development programmes to be delivered over the next two to three years. These include provision of services on: • innovation management for the National Health Service in Wales; • embedding innovation within SMEs in London; and • hands on incubation of companies for the Carbon Trust. • In the US, new contracts in Minnesota, Pennsylvania, Vermont and Canada and the renewal of the contract for the management of the Fairfax BioAccelerator for a further two year period to June 2007. • In the Middle East, the first contract to manage Qatar Science & Technology Park was successfully completed at the end of November 2005. A new contract commenced in October 2005 and is expected to run until March 2009, with a value of over £6.0 million. ANGLE PLC CONSOLIDATED INTERIM INCOME STATEMENTFOR THE SIX MONTHS ENDED 31 OCTOBER 2005 Note Six months ended Year ended 31 October 31 October 30 April 2005 2004 2005 (Unaudited) (Unaudited) (Unaudited) (Restated) (Restated) £ £ £ TurnoverConsulting and Management 1,965,152 1,642,682 3,897,714Ventures 50,884 88,612 234,437 _________ _________ _________ 2,016,036 1,731,294 4,132,151InvestmentsChange in fair value 6 1,226,768 (1,151,554) (1,583,636) Operating costsConsulting and Management (2,058,582) (1,356,211) (3,389,197)Ventures (978,832) (849,191) (1,804,138)Controlled investments (777,957) - (247,691)Share based payments (173,120) (135,370) (283,490)Restructuring charges 3 (200,221) - - _________ _________ _________ (4,188,712) (2,340,772) (5,724,516) Operating profit / (loss) (945,908) (1,761,032) (3,176,001) Net finance income 110,539 130,094 242,184 _________ _________ _________Profit / (loss) before tax (835,369) (1,630,938) (2,933,817) Tax 4 43,297 - 47,890 _________ _________ _________ Profit / (loss) for the period (792,072) (1,630,938) (2,885,927) ========== ========== ==========Earnings / (loss) per share 5Basic (pence per share) (4.75) (9.77) (17.28)Diluted (pence per share) (4.75) (9.77) (17.28) ANGLE PLC CONSOLIDATED BALANCE SHEETAS AT 31 OCTOBER 2005 Note Six months ended Year ended 31 October 31 October 30 April 2005 2004 2005 (Unaudited) (Unaudited) (Unaudited) (Restated) (Restated) £ £ £ASSETSNon-current assets Investments 6 1,465,749 1,650,238 2,515,517Property, plant and equipment 165,228 54,516 81,250Intangible assets 3,875 4,693 4,763Trade and other receivables - 239,570 239,570 _________ _________ _________Total non-current assets 1,634,852 1,949,017 2,841,100Current assetsInvestments 6 3,787,629 1,214,267 818,819Trade and other receivables 1,112,285 754,607 857,741Cash and cash equivalents 3,266,363 7,247,827 5,534,888 _________ _________ _________Total current assets 8,166,277 9,216,701 7,211,448 _________ _________ _________Total assets 9,801,129 11,165,718 10,052,548 ========== ========== ==========EQUITY AND LIABILITIESEquityIssued capital 1,670,648 1,669,648 1,670,648Share premium account 7,381,864 7,372,864 7,381,864Share based payment reserve 710,112 388,872 536,992Other reserves 2,553,356 2,553,356 2,553,356Translation reserve (14,377) 756 (42,990)Retained earnings (3,579,310) (1,532,249) (2,787,238)Own shares (20,000) - - _________ _________ _________Total equity 8,702,293 10,453,247 9,312,632 _________ _________ _________LiabilitiesNon-current liabilitiesObligations under finance leases 36,485 2,446 1,316Current liabilitiesTrade and other payables 1,041,666 701,795 733,562Obligations under finance leases 20,685 8,230 5,038 _________ _________ _________Total current liabilities 1,062,351 710,025 738,600 _________ _________ _________Total liabilities 1,098,836 712,471 739,916 _________ _________ _________Total equity and liabilities 9,801,129 11,165,718 10,052,548 ========== ========== ========== ANGLE PLC CONSOLIDATED CASH FLOW STATEMENTFOR THE SIX MONTHS ENDED 31 OCTOBER 2005 Six months ended Year ended 31 October 31 October 30 April 2005 2004 2005 (Unaudited) (Unaudited) (Unaudited) (Restated) (Restated) £ £ £Operating activitiesOperating profit / (loss) (945,908) (1,761,032) (3,176,001)Depreciation of property, plant and equipment 21,308 11,363 25,652Amortisation of intangible assets 1,707 427 2,202Exchange differences 28,210 - (42,664)(Increase) / decrease in trade and other receivables 47,473 (131,232) (223,574)Increase / (decrease) in trade and other payables 307,635 (383,535) (237,526)Change in fair value of investments (1,226,768) 1,151,554 1,583,636Share based payments 173,120 135,370 283,490 ________ ________ ________Net cash from operating activities (1,593,223) (977,085) (1,784,785) Investing activitiesPurchase of property, plant and equipment (50,155) (34,068) (76,093)Purchase of intangible assets (820) (5,120) (6,964)Purchase of investments (592,016) (106,122) (508,036)Provision of convertible loans (100,000) - (500,000)Purchase of own shares (ESOT) (20,000) - -Net interest received 91,600 132,221 243,674 ________ ________ ________Net cash used in investing activities (671,391) (13,089) (847,419) Financing activitiesNet proceeds from issue of share capital - (2,654) (69,241)Capital elements of finance lease contracts (3,911) (6,216) (10,538) ________ ________ ________Net cash from financing activities (3,911) (8,870) (79,779) Net increase / (decrease) in cash & cash equivalents (2,268,525) (999,044) (2,711,983) Cash and cash equivalents at start of period 5,534,888 8,246,871 8,246,871 ________ ________ ________Cash and cash equivalents at end of period 3,266,363 7,247,827 5,534,888 ========= ========= ========= ANGLE PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 31 OCTOBER 2005 Attributable to equity holders of the Group Share based Issued Share payment Other Translation Retained Own Total capital premium reserve reserves reserve earnings shares equity (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) £ £ £ £ £ £ £ £ At 1 May 2004 1,669,648 7,375,518 253,502 2,553,356 - 98,689 - 11,950,713(restated)For the period to 31October 2004Consolidated profit / 756 (1,630,938) (1,630,182)(loss)Share based payments 135,370 135,370Issue of share capital - (2,654) (2,654)(net) ________ ________ ________ ________ ________ ________ ________ ________ At 31 October 2004 1,669,648 7,372,864 388,872 2,553,356 756 (1,532,249) - 10,453,247(restated)For the period to 30April 2005Consolidated profit / (43,746) (1,254,989) (1,298,735)(loss)Share based payments 148,120 148,120Issue of share capital 1,000 9,000 10,000(net) ________ ________ ________ ________ ________ ________ ________ ________ At 30 April 2005 1,670,648 7,381,864 536,992 2,553,356 (42,990) (2,787,238) - 9,312,632(restated)For the period to 31October 2005Consolidated profit / 28,613 (792,072) (763,459)(loss)Share based payments 173,120 173,120Own shares (20,000) (20,000) ________ ________ ________ ________ ________ ________ ________ ________ At 31 October 2005 1,670,648 7,381,864 710,112 2,553,356 (14,377) (3,579,310) (20,000) 8,702,293 ========= ========= ========= ========= ========= ========= ========= ========= Share based payment reserve The share based payment reserve account is used for the corresponding entry tothe share based payments charged through the income statement. Transfers aremade from this reserve to retained earnings as the related share options areexercised, lapse or expire. Translation reserve The translation reserve account comprises cumulative exchange differencesarising on consolidation from the translation of the financial statements ofinternational operations. Under IFRS this is separated from retained earnings. Own shares The own shares account relates to shares purchased by the ANGLE Employee ShareOwnership Trust. ANGLE PLC NOTES TO THE FINANCIAL INFORMATIONFOR THE SIX MONTHS ENDED 31 OCTOBER 2005 1 Basis of preparation and accounting policies The financial information in this document does not constitute statutoryfinancial statements for the purposes of s240 of the Companies Act 1985. A copyof the statutory financial statements for the year ended 30 April 2005 has beendelivered to the Registrar of Companies. The auditor's report on thosefinancial statements, which were prepared under United Kingdom GenerallyAccepted Accounting Principles (UK GAAP), was unqualified and did not containstatements under sections 237 (2) or (3) of the Companies Act 1985. The European Union (EU) regulation 1606/2002 requires European Companies withsecurities traded on an EU regulated market to prepare their consolidatedfinancial statements in accordance with EU endorsed International FinancialReporting Standards (IFRS) for accounting periods beginning on or after 1January 2005. On 7 October 2004, the Alternative Investment Market (AIM) of theLondon Stock Exchange announced that it was to become an exchange regulatedmarket instead of an EU regulated market, which became effective from 12 October2004. This change of status brings the market outside the scope of the EUdirective on IAS adoption although the London Stock Exchange announced that itintended to mandate International Accounting Standards for all AIM companies forfinancial years commencing on or after 1 January 2007 (confirmed 21 December2005). As such, IFRS is not mandatory for AIM listed companies until accountingperiods beginning on or after 1 January 2007. The Directors have decided to adopt IFRS for the year ending 30 April 2006, aspermitted by the Companies Act 1985 (International Accounting Standards andOther Accounting Amendments) Regulations that became law on 11 November 2004. This interim financial information has been prepared on the basis of therecognition and measurement requirements of IFRS in issue that are endorsed orexpected to be endorsed by the EU and effective (or available for earlyadoption) at 30 April 2006, the Group's first annual reporting date under IFRS.Based on these IFRS, the Directors have made assumptions about the accountingpolicies expected to be applied when the first annual IFRS financial statementsare prepared for the year ending 30 April 2006. The accounting policies are consistent with those that the Directors intend touse in the next annual financial statements. There is, however, a possibilitythat the Directors may determine that some changes to these policies arenecessary when preparing the full annual financial statements for the first timein accordance with those IFRS adopted for use by the EU. Accordingly, theaccounting policies for the year ending 30 April 2006 will be determined finallyonly when the annual financial statements for that period are prepared. The Group's results were prepared in accordance with UK GAAP and on the basis ofthe accounting policies set out in the statutory accounts until the year ended30 April 2005. IFRS differs in a number of areas from UK GAAP. In preparingthe Group's interim results for the period to 31 October 2005, the Directorshave amended certain accounting, valuation and consolidation methods applied inthe UK GAAP financial statements to comply with IFRS. The comparative figuresin respect of 2005 were restated to reflect these adjustments. The effect of the transition from UK GAAP to IFRS on the Group's profit, netassets and cash flows for the six months to 31 October 2004 and the year ended30 April 2005 are provided in the numerical reconciliation and narrativestatements in note 7. These financial statements have been prepared under the historical costconvention, as modified by the revaluation of certain financial assets at fairvalue, as required by IAS 39. The basis of consolidation is set out below. The interim financial statements of ANGLE plc (the "Group") for the six monthsended 31 October 2005, which were approved by the Directors on 23 January 2006,are unaudited but have been reviewed in accordance with Auditing Practices BoardBulletin 1999/4 "Review of Interim Financial Information" by the auditors. Presentation of financial statements The financial information, in the form of the primary statements contained inthis report, is presented in accordance with International Accounting Standard(IAS) 1, "Presentation of Financial Statements". IAS 1 provides no definitiveguidance as to the format of the income statement, but states key items shouldbe disclosed. It also encourages additional line items to be added and there-ordering of items presented on the face of the income statement whenappropriate for a proper understanding of the entity's financial performance.ANGLE has reviewed the items disclosed separately on the face of the incomestatement and the components of financial performance considered by managementto be significant or for which separate disclosure would assist both in a betterunderstanding of financial performance and in making projections of futureresults. This has been done taking into account the materiality, nature andfunction of components of income and expense. Changes to accounting policies These financial statements have been prepared in accordance with existing Groupaccounting policies, set out in the Group's 2005 annual report and accounts,with certain amendments required in order to comply with the requirements ofIFRS. The principal accounting policies where adjustments have been made in order totransition the Group's financial statements from UK GAAP to IFRS are set outbelow. Basis of consolidation Subsidiaries Subsidiary undertakings are consolidated on the basis of the acquisition methodof accounting. Under this method of accounting the results of subsidiaries soldor acquired are included in the profit and loss account up to, or from the datecontrol passes. Intra-group transactions and balances are eliminated fully onconsolidation and the consolidated accounts reflect external transactions only. Subsidiaries are all entities over which the Group has the power to govern thefinancial and operating policies generally accompanying a shareholding of morethan half of the voting rights. The existence and effect of potential votingrights are considered when assessing whether the Group controls an entity. Subsidiaries' accounting policies are amended where necessary to ensureconsistency with the policies adopted by the Group. Under UK GAAP the Group had elected to apply a true and fair override to treatcontrolled investments as investments held exclusively with a view forsubsequent resale. Controlled investments were therefore held on the balancesheet at cost. IFRS does not allow a similar treatment of such investments. Associates Associates are entities over which the Group has significant influence, but doesnot control, generally accompanied by a shareholding of between 20% to 50% ofthe equity or voting rights. The Group has elected to treat such investments inassociates as accounted for in accordance with IAS 39 Financial Instruments:Recognition and Measurement, and upon initial recognition these investments aredesignated as at fair value through profit or loss. Other investments Other investments are generally investments where the Group owns less than 20%of the equity or voting rights. In accordance with IAS 39 Financial Instruments: Recognition and Measurement,upon initial recognition such investments are designated as at fair valuethrough profit or loss. Investments The Directors consider that a substantial measure of the performance of theGroup is assessed through changes in fair value arising from the investmentactivity of the Group. Consequently the Group classifies all its investmentsthat are not controlled investments as being designated on initial recognitionas financial assets at fair value through profit or loss. Treatment of gains and losses arising on fair value Investments that are not controlled investments are shown on the balance sheetat their fair value and any associated changes in fair value are included in theincome statement in the period they arise. Valuation policy In determining fair value, investments have been valued by the Directors incompliance with the principles of the International Private Equity and VentureCapital Guidelines, updated and effective 1 January 2005, as recommended by theBritish Venture Capital Association (BVCA). Listed investments - the fair values of quoted investments are based on bidprices at the balance sheet date. In accordance with IFRS no marketabilitydiscount is applied for either the size of the Group's holding relative tonormal trading volumes or for any formal restrictions on trading. Unlisted investments - the valuation methodology used most commonly by the Groupis the "price of recent investment", reflecting the early stage nature of theinvestments. The following considerations are used when calculating the fairvalue using the "price of recent investment" guidelines: • Where the investment being valued was itself made recently, its cost will generally provide a good indication of fair value; and • Where there has been any recent investment by third parties, the price of that investment will provide a basis of the valuation. Where a fair value cannot be estimated reliably the investment is reported atthe carrying value at the previous reporting date unless there is evidence thatthe investment has since been impaired. Convertible loan notes As well as direct investment into Progeny(R) companies the Group uses otherfinancial instruments such as convertible loans. Under IAS 28 financial instruments that are presently exercisable are taken intoaccount in determining control and significant influence and this may affect thebasis of consolidation. Under IAS 39 convertible loan notes are financial assets and are defined ascompound financial instruments consisting of a liability component and an equitycomponent. At the date of issue there is a requirement to split the instrumentbetween its debt and equity components. The debt component is classified under investments as "Loans and receivables"and subsequently carried in the balance sheet at cost less any impairment. The equity component is classified under investments and subsequently carried inthe balance sheet at fair value. The right to convert the loan into equityrepresents an embedded derivative (the option) and as such needs to be re-measured to fair value at each reporting date with any changes in fair value ofthis right taken through profit or loss. Convertible loans issued in a different functional currency to the issuingentity are treated the same, however, there may also be an associated financialinstrument (see policy below) to manage the risks associated with foreigncurrency fluctuations. Intangible assets Computer software Under IAS 38, acquired computer software should be capitalised as an intangible asset unless it is an integral part of the related hardware (such as the operating system) where it remains as a tangible fixed asset. Certain assets have been reclassified accordingly. Internally developed computer software will be capitalised in accordance with the research and development accounting policy. If the software is developed for in-house use the capitalised amount is reclassified from research and development to computer software. Amortisation is calculated using the straight line method to allocate the cost of the software over its estimated useful economic life. Research and development Research expenditure is written off as incurred. Development expenditure is also written off, except where the Directors are satisfied that a new or significantly improved product or process results and other relevant IAS 38 criteria are met as to the technical, commercial and financial viability of individual projects that would allow such costs to be capitalised. In such cases, the identifiable expenditure is capitalised and amortised over the period during which benefits are expected. Intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. Employee benefits (other than share based payments) Pension costs are charged against profits as they fall due and represent theamount of contributions payable to a defined contribution scheme in the US or toemployee personal pension schemes on an individual basis. The Group has nofurther payment obligations once the contributions have been paid. A liability for short-term compensated absences, such as holiday, is recognisedfor the amount the Group may be required to pay as a result of the unusedentitlement that has accumulated at the balance sheet date. Share based payments Share based incentive arrangements are provided to staff which allow Groupemployees to acquire shares of the Company. The fair value of options grantedis recognised as an employee expense with a corresponding increase in equity. In accordance with IFRS 2, Share options granted after 7 November 2002 which hadnot vested by 1 May 2005 are valued at the date of grant using an appropriateoption pricing model and are charged to operating costs over the vesting periodof the award. The annual charge is modified to take account of options grantedto employees who leave the Group during the performance or vesting period andforfeit their rights to the share options and in the case of non-market relatedperformance conditions, where it becomes unlikely they will vest. The fairvalue of options granted to professional advisors as part consideration forservices in connection with fund raising is recognised as an expense againstshare premium account with a corresponding increase in equity. Such options vestand are expensed on successful completion of the services. Income taxes Full provision is made for deferred tax on all temporary timing differencesresulting from the carrying value of an asset or liability and its tax base. Deferred tax is determined using tax rates (and laws) that have been enacted orsubstantially enacted by the balance sheet date and are expected to apply whenthe related deferred tax liability is settled or deferred tax asset realised. Deferred tax liabilities are recognised on any increase in the fair value ofinvestments to the extent that substantial shareholdings relief may beunavailable. Deferred tax assets are only recognised to the extent to whichthey are expected to be recovered in the near future. IAS 12 requires theseparate disclosure of deferred tax assets and liabilities on the Group'sbalance sheet. Employee Share Ownership Trust The Group has an Employee Share Ownership Trust (ESOT) for assisting with theobligations under share option and other employee remuneration schemes. The ESOTis consolidated as if it were a subsidiary. Shares in the Group held by theESOT are stated at cost and presented in the balance sheet as a deduction fromequity under the heading of Own Shares. Finance and administration costsrelating to the ESOT are charged to operating costs. Foreign currency The consolidated financial statements are presented in pounds sterling, which isthe Company's functional and presentation currency. The Group determines thefunctional currency of each entity and items included in the financialstatements of each entity are measured using that functional currency. Thefunctional currencies of the Group's operations are sterling and US dollars. Transactions denominated in foreign currencies are recorded at the rate rulingat the date of the transaction. Monetary assets and liabilities denominated inforeign currencies are translated at the rates of exchange ruling at the balancesheet date. Non-monetary assets and liabilities denominated in foreign currencies and heldat cost use the exchange rate at the date of the initial transactions.Non-monetary assets and liabilities denominated in foreign currencies and heldat fair value use the exchange rate at the date that the fair value wasdetermined. Profits and losses on both the individual transactions during the period andmonetary assets and liabilities are dealt with in the income statement. On consolidation, the income statements of the foreign subsidiaries aretranslated at the average exchange rates for the period and the balance sheetsat the exchange rates at the balance sheet date. The exchange differencesarising as a result of translating income statements at average rates andrestating opening net assets at closing rates are taken to the translationreserve. On disposal of a foreign operation, the deferred cumulative amountrecognised in equity relating to that particular foreign operation is recognisedin the income statement. The Group has elected to apply the exemption in IFRS 1 'First time adoption ofInternational Financial Reporting Standards' which allows the cumulativetranslation differences for all foreign operations to be deemed to be zero atthe date of transition to IFRS. The Group has similarly elected that the profitor loss on any subsequent disposal of any foreign operation shall excludetranslation differences that arose before the date of transition. Financial instruments Financial assets and liabilities are recognised in the Group's balance sheetwhen the Group becomes a party to the contractual provisions of the instrument. The Group uses derivative financial instruments as appropriate to manage therisks associated with foreign currency fluctuations from its activities andchanges in interest rates on borrowings. This is achieved by the use of foreigncurrency contracts, currency swaps and interest rate swaps. All derivativefinancial instruments are held at fair value. The Group does not use derivativefinancial instruments for speculative purposes. Derivative financial instruments are recognised initially at fair value on thecontract date and subsequently re-measured to fair value at each reporting date. The fair value of forward exchange contracts is calculated by reference tocurrent forward exchange contracts for contracts with similar maturity profiles. The fair value of currency swaps and interest rate swaps is determined withreference to future cash flows and current interest and exchange rates. Allchanges in the fair value of derivative financial instruments are taken throughprofit or loss. Derivatives embedded in other financial instruments or other non-financial hostcontracts are treated as separate derivatives when their risks andcharacteristics are not closely related to those of the host contract and thehost contract is not carried at fair value with unrealised gains or lossesreported in profit or loss. Restructuring charges Restructuring charges are accrued against operating income in the period inwhich management has committed to a plan and in which the liability has beenincurred and the amount can be reasonably estimated. Critical accounting estimates and judgements The preparation of financial statements requires the use of estimates andassumptions that affect the reported amounts of assets and liabilities at thedate of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Although these estimates and assumptionsare based on management's best knowledge of the amount, event or actions, actualresults ultimately may differ from those estimates. The estimates and assumptions that have a significant risk of causing a materialadjustment to the carrying amounts of assets and liabilities relate to thevaluation of unlisted investments held at fair value, which are valued on thebasis noted above. 2 Summary segmental analysis The Group's business is technology wealth creation through the commercialisationof intellectual property and the development of technology industry. Theprimary business segments are: • Ventures - activities to establish, develop and create value in technology companies. The Group uses a proprietary process Progeny(R) to develop these companies, which are referred to as Progeny(R) companies. ANGLE's unique business model means that it actually creates new companies that it owns during the critical early stages of development, before it secures third party funding to move it to the next stage of development. Under IFRS, the accounting for Progeny(R) companies divides into Controlled Investments and Investments. • Controlled investments - are Progeny(R) companies where the Group has control, typically as a result of owning in excess of 50% of the equity. These are consolidated and the Group's investment costs are expensed in the income statement. • Investments - are Progeny(R) companies where the Group does not have control, typically as a result of owning less than 50% of the equity. These investments are held on the balance sheet at fair value, with changes in fair value passing through the income statement. • Consulting and Management - provision of consulting and management services to clients including research organisations, corporate and governmental organisations on a fee-for-service basis. This business segment provides a platform for the Ventures activities. 3 Restructuring charges Restructuring charges relate to the cost of reorganising the business during theperiod to strengthen the regional leadership and position the Group for futuregrowth. 4 Tax The Group is eligible for the substantial shareholdings relief UK corporationtax exemption. This results in the gain from any disposals of UK investmentswhere the Group has an equity stake greater than 10%, subject to certain othertests, being free of corporation tax. Tax is therefore based on the profits inthe Consulting and Management businesses as relieved by losses incurred in theestablishment and development of new Ventures. 5 Earnings / (loss) per share The basic and fully diluted earnings / (loss) per share is calculated on anafter tax loss of £0.79 million (6 months to 31 October 2004: loss £1.63million, year to 30 April 2005: loss £2.89 million). The basic and fully diluted earnings / (loss) per share are based on16,688,884 (16,706,484 less 17,600 shares held in ANGLE Employee Share Ownershiptrust) weighted average ordinary 10p shares (6 months to 31 October 2004:16,696,484, year to 30 April 2005: 16,697,500). Share options are non-dilutivefor the period. 6 Investments The Group's investment portfolio comprises investments in Progeny(R) companies. Where the Group has control of a Progeny(R) company (typically owning more than50% of the equity), these are Controlled Investments and they are consolidatedas subsidiaries until such time as control no longer exists. At the pointcontrol no longer exists a deemed profit arises and the investment is held atfair value on the consolidated balance sheet In the six months to 31 October2005 costs relating to Controlled Investments of £777,957 were charged to theincome statement (2004: £nil). Where the Group does not control a Progeny(R) company (typically owning lessthan 50% of the equity), these are held on the balance sheet at fair value, asset out in the table below: Current assets Non-current assets Total Quoted Unquoted Investments (Unaudited) (Unaudited) (Unaudited) £ £ £ At 1 May 2005 818,819 2,515,517 3,334,336Investments 500,024 192,250 692,274Reclassifications 1,041,219 (1,041,219) -Change in fair value 1,427,567 (200,799) 1,226,768 _________ _________ _________At 31 October 2005 3,787,629 1,465,749 5,253,378 ========== ========== ========== ANGLE PLC NOTES TO THE FINANCIAL INFORMATION (Continued)FOR THE SIX MONTHS ENDED 31 OCTOBER 2005 7 Impact of the first time adoption of IFRS / IAS Application of IFRS 1 The Group's financial statements for the year ended 30 April 2006 will be thefirst annual financial statements that comply with IFRS. These interimfinancial statements have been prepared on the basis set out in Note 1. The Group's transition date is 1 May 2004 (the start of its 2005 financialyear). The Group prepared its opening balance sheet at that date. The reportingdate of these interim financial statements is 31 October 2005. In preparing the consolidated financial statements the Group has applied themandatory exceptions, as applicable, and the following exemptions: • The Group has elected to apply the share-based payment exemption. The Group has not applied IFRS 2 to either those options granted before 7 November 2002 or those which had vested by 1 May 2005. • The Group has elected to apply the foreign exchange exemption and set cumulative foreign exchange translation differences to zero at the date of transition. The main changes from preparing the results under IFRS rather than UK GAAP thataffect the Group loss and net asset position are: • Changes in the scope of consolidation of subsidiaries - Under UK GAAP Controlled Investments were accounted for as investments and held at cost on the balance sheet. Under IFRS Controlled Investments are consolidated. • Changes to fair value of investments - Under UK GAAP investments were held at cost subject to impairment. Under IFRS investments which are not controlled are revalued to fair value at each balance sheet date with the movement in fair value being recorded through the income statement. • Expensing of share-based payments - Under IFRS share based payments are measured at fair value and charged over the vesting period. Under UK GAAP such a charge was not required, although under FRS 20 this would have been required in the future. IFRS also results in a number of other minor changes such as holiday payaccruals, the reclassification of certain computer software from tangible tointangible assets and the definition of cash and cash equivalents. The adoption of IFRS does not impact the amount of cash previously disclosedunder UK GAAP in any of the periods of account in the interim results. ANGLE plc will continue to produce its company-only accounts under UK GAAP andtherefore none of the IFRS adjustments impacts on its balance sheet or reserves. The reconciliations below provide an explanation of the effect of the transitionto IFRS 1) Balance sheet reconciliation at 1 May 2004 (transition balancesheet) 2) Reconciliation of Income Statement for 6 months to 31 October 2004 3) Balance sheet reconciliation at 31 October 2004 4) Reconciliation of Income Statement for year to 30 April 2005 5) Balance sheet reconciliation at 30 April 2005 Balance sheet reconciliation at 1 May 2004 (Transition Date) UK GAAP Effect of transition to IFRS Reported in IFRS Non IAS 27 IAS 27 (A) Under format adjustments adjustments IFRS Note £ £ £ £ASSETSNon-current assetsInvestments B 516,782 1,025,337 (3) 1,542,116Property, plant and equipment 31,959 - - 31,959Trade and other receivables 239,570 - - 239,570 _________ _________ _________ _________Total non-current assets 788,311 1,025,337 (3) 1,813,645 Current assetsInvestments B 2,398,177 (30,356) - 2,367,821Trade and other receivables 625,503 - - 625,503Cash and cash equivalents 8,246,871 - - 8,246,871 _________ _________ _________ _________Total current assets 11,270,551 (30,356) - 11,240,195 _________ _________ _________ _________Total assets 12,058,862 994,981 (3) 13,053,840 ========== ========== ========== ========== EQUITY AND LIABILITIESEquityIssued capital 1,669,648 - - 1,669,648Share premium account C 7,537,331 (161,813) - 7,375,518Share based payment reserve C - 253,502 - 253,502Other reserves 2,553,356 - - 2,553,356Translation reserve - - - -Retained earnings D (770,943) 869,632 - 98,689 _________ _________ _________ _________Total equity 10,989,392 961,321 - 11,950,713 _________ _________ _________ _________ LiabilitiesNon-current liabilitiesObligations under finance leases 6,354 - - 6,354 Current liabilitiesTrade and other payables 1,052,578 33,660 (3) 1,086,235Obligations under finance leases 10,538 - - 10,538 _________ _________ _________ _________Total current liabilities 1,063,116 33,660 (3) 1,096,773 _________ _________ _________ _________Total liabilities 1,069,470 33,660 (3) 1,103,127 _________ _________ _________ _________ _________ _________ _________ _________Total equity and liabilities 12,058,862 994,981 (3) 13,053,840 ========== ========== ========== ========== The major contributors to the difference between UK GAAP and IFRS were: A Changes in the scope of consolidation (IAS 27) means that investments thatare controlled entities must be consolidated, however, there were no significantadjustments in the period. B Non-current asset investments previously carried at cost have been statedat fair value (IAS 39). Current asset investments of £2,398,177 (UK GAAP) havebeen amended to bid price. C Share based payment reserve has been adjusted for share option charges -£253,502 (IFRS 2). Share premium account reflects the share based paymentcharge arising from options issued as part consideration for the placing. D Other adjustments relate to items described in A to C above and some otherminor adjustments. Reconciliation of Income Statement for 6 months to 31 October 2004 UK GAAP Effect of transition to IFRS Reported in IFRS Non IAS 27 IAS 27 Under format adjustments adjustments IFRS Note £ £ £ £ TurnoverConsulting and Management 1,642,682 - - 1,642,682Ventures 88,612 - - 88,612 _________ _________ _________ _________ 1,731,294 - - 1,731,294 InvestmentsProvision for diminution in value E (1,032,127) 1,032,127 - -Change in fair value E - (1,151,554) - (1,151,554) _________ _________ _________ _________ (1,032,127) (119,427) - (1,151,554) Operating costsConsulting and Management (1,355,025) (1,186) - (1,356,211)Ventures (839,838) (9,353) - (849,191)Share based payments F - (135,370) - (135,370) _________ _________ _________ _________ (2,194,863) (145,909) - (2,340,772) Operating profit / (loss) (1,495,696) (265,336) - (1,761,032) Net finance income 130,094 - - 130,094 _________ _________ _________ _________ Profit / (loss) for the period (1,365,602) (265,336) - (1,630,938) ========== ========== ========== ========== The major contributors to the difference between UK GAAP and IFRS were: E A provision for diminution in value recognised under UK GAAP belowoperating profit or loss has been reclassified to changes in fair value ofinvestments - £1,032,127 and amended to bid-price, along with some other minorfair value adjustments. F Operating costs have been adjusted for a share option charge in theperiod of £135,370. Balance sheet reconciliation at 31 October 2004 UK GAAP Effect of transition to IFRS Reported in IFRS Non IAS 27 IAS 27 (G) Under format adjustments adjustments IFRS Note £ £ £ £ASSETSNon-current assetsInvestments H 622,904 1,027,337 (3) 1,650,238Property, plant and equipment 59,209 (4,693) - 54,516Intangible assets - 4,693 - 4,693Trade and other receivables 239,570 - - 239,570 _________ _________ _________ _________Total non-current assets 921,683 1,027,337 (3) 1,949,017 Current assetsInvestments H 1,366,050 (151,783) - 1,214,267Trade and other receivables 754,607 - - 754,607Cash and cash equivalents 7,247,827 - - 7,247,827 _________ _________ _________ _________Total current assets 9,368,484 (151,783) - 9,216,701 _________ _________ _________ _________Total assets 10,290,167 875,554 (3) 11,165,718 ========== ========== ========== ========== EQUITY AND LIABILITIESEquityIssued capital 1,669,648 - - 1,669,648Share premium account I 7,534,677 (161,813) - 7,372,864Share based payment reserve I - 388,872 - 388,872Other reserves 2,553,356 - - 2,553,356Translation reserve J - 756 - 756Retained earnings J (2,135,789) 603,540 - (1,532,249) _________ _________ _________ _________Total equity 9,621,892 831,355 - 10,453,247 _________ _________ _________ _________ LiabilitiesNon-current liabilitiesObligations under finance leases 2,446 - - 2,446 Current liabilitiesTrade and other payables 657,599 44,199 (3) 701,795Obligations under finance leases 8,230 - - 8,230 _________ _________ _________ _________Total current liabilities 665,829 44,199 (3) 710,025 _________ _________ _________ _________Total liabilities 668,275 44,199 (3) 712,471 _________ _________ _________ _________Total equity and liabilities 10,290,167 875,554 (3) 11,165,718 ========== ========== ========== ========== The major contributors to the difference between UK GAAP and IFRS were: G Changes in the scope of consolidation (IAS 27) means that investments thatare controlled entities must be consolidated, however, there were no significantadjustments in the period. H Non-current asset investments previously carried at cost have been statedat fair value. Current asset investments of £1,366,050 (UK GAAP) have beenamended to bid price. I Share based payment reserve has been adjusted for share option chargesbrought forward - £253,502, together with the charge in the period - £135,370(IFRS 2). Share premium account reflects the share based payment charge arisingfrom options issued as part consideration for the placing. J Other adjustments relate to items described in G to I above and someother minor adjustments. Cumulative exchange differences arising onconsolidation are reclassified from retained earnings to translation reserve. Reconciliation of Income Statement for year to 30 April 2005 UK GAAP Effect of transition to IFRS Reported in IFRS Non IAS 27 IAS 27 (K) Under format adjustments adjustments IFRS Note £ £ £ TurnoverConsulting and Management 3,897,714 - - 3,897,714Ventures 234,437 - - 234,437 _________ _________ _________ _________ 4,132,151 - - 4,132,151 InvestmentsProvision for diminution in value L (1,566,372) 1,566,372 - -Change in fair value L - (1,583,636) - (1,583,636) _________ _________ _________ _________ (1,566,372) (17,264) - (1,583,636) Operating costsConsulting and Management (3,375,944) (13,253) - (3,389,197)Ventures (1,785,400) (18,738) - (1,804,138)Controlled investments - - (247,691) (247,691)Share based payments M - (283,490) - (283,490) _________ _________ _________ _________ (5,161,344) (315,481) (247,691) (5,724,516) Operating profit / (loss) (2,595,565) (332,745) (247,691) (3,176,001) Net finance income 242,184 - - 242,184 _________ _________ _________ _________ Profit / (loss) before tax (2,353,381) (332,745) (247,691) (2,933,817) Tax 37,850 - 10,040 47,890 _________ _________ _________ _________ Profit / (loss) for the period (2,315,531) (332,745) (237,651) (2,885,927) ========== ========== ========== ========== The major contributors to the difference between UK GAAP and IFRS were: K Changes in the scope of consolidation (IAS 27) means that investments thatare controlled entities must be consolidated. The adjustments here representsthe consolidation of the results or investment subsidiaries previously notconsolidated but treated as a fixed asset investment and held on the balancesheet at cost. L A provision for diminution in value recognised under UK GAAP belowoperating profit or loss has been reclassified to changes in fair value ofinvestments - loss £1,566,372 and amended to bid-price, along with some otherminor fair value adjustments. M Operating costs have been adjusted for a share option charge in the periodof £283,490. Balance sheet reconciliation at 30 April 2005 UK GAAP Effect of transition to IFRS Reported in IFRS Non IAS 27 IAS 27 (N) Under format adjustments adjustments IFRS Note £ £ £ASSETSNon-current assetsInvestments O 1,755,779 1,040,703 (280,965) 2,515,517Property, plant and equipment 52,742 (4,763) 33,271 81,250Intangible assets - 4,763 - 4,763Trade and other receivables 239,570 - - 239,570 _________ _________ _________ _________Total non-current assets 2,048,091 1,040,703 (247,694) 2,841,100Current assetsInvestments O 881,805 (62,986) - 818,819Trade and other receivable 847,584 - 10,157 857,741Cash and cash equivalents 5,548,638 (13,750) - 5,534,888 _________ _________ _________ _________Total current assets 7,278,027 (76,736) 10,157 7,211,448 _________ _________ _________ _________Total assets 9,326,118 963,967 (237,537) 10,052,548 ========== ========== ========== ==========EQUITY AND LIABILITIESEquityIssued capital 1,670,648 - - 1,670,648Share premium account P 7,543,677 (161,813) - 7,381,864Share based payment reserve P - 536,992 - 536,992Other reserves 2,553,356 - - 2,553,356Translation reserve Q - (42,990) - (42,990)Retained earnings Q (3,129,464) 579,876 (237,650) (2,787,238) _________ _________ _________ _________Total equity 8,638,217 912,065 (237,650) 9,312,632 _________ _________ _________ _________ LiabilitiesNon-current liabilitiesObligations under finance leases 1,316 - - 1,316 Current liabilitiesTrade and other payables 681,547 51,902 113 733,562Obligations under finance leases 5,038 - - 5,038 _________ _________ _________ _________Total current liabilities 686,585 51,902 113 738,600 _________ _________ _________ _________Total liabilities 687,901 51,902 113 739,916 _________ _________ _________ _________ Total equity and liabilities 9,326,118 963,967 (237,537) 10,052,548 ========== ========== ========== ========== The major contributors to the difference between UK GAAP and IFRS were: N Changes in the scope of consolidation (IAS 27) means that investments thatare controlled entities must be consolidated. The adjustments here representthe consolidation of the results or investment subsidiaries previously notconsolidated, together with the removal of investments previously treated as afixed asset investment and held on the balance sheet at cost - £280,965. O Non-current asset investments previously carried at cost have been statedat fair value comprising the brought forward adjustment together with the fairvalue uplift in the period. Current asset investments of £881,805 (UK GAAP)have been amended to bid price. P Share based payment reserve has been adjusted for share option chargesbrought forward - £253,502, together with the charge in the period - £283,490(IFRS 2). Share premium account reflects the share based payment charge arisingfrom options issued as part consideration for the placing. Q Other adjustments relate to items described in N to P above and some otherminor adjustments. Cumulative exchange differences arising on consolidation arereclassified from retained earnings to translation reserve. 7 Shareholder communications The announcement is being sent to all shareholders on the register on 19 January2006. Copies of this announcement are posted on the Company's websitewww.ANGLEplc.com and are available from Buchanan Communications and theCompany's registered office: Surrey Technology Centre, Surrey Research Park,Guildford, GU2 7YG. ANGLE PLC INDEPENDENT REVIEW REPORT TO ANGLE PLCFOR THE SIX MONTHS ENDED 31 OCTOBER 2005 Introduction We have been instructed by the company to review the financial information forthe six months ended 31 October 2005 and we have read the other informationcontained in the interim report and considered whether it contains any apparentmisstatements or material inconsistencies with the financial information. This report, including the conclusion, has been prepared for and only for thecompany for the purpose of their interim report and for no other purpose. We donot, therefore in producing this report, accept or assume responsibility for anyother purpose or to any other person to whom this report is shown or into whosehands it may come save where expressly agreed by our prior consent in writing. Directors' Responsibilities The interim statement, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the Interim Statement in accordance with theAlternative Investment Market Rules which require that the accounting policiesand presentation applied to the interim figures must be consistent with thosethat will be adopted in the company's annual accounts. As disclosed in Note 1, the next annual financial statements of the Group willbe prepared in accordance with those International Financial Reporting Standardsadopted for use by the European Union. The accounting policies used are consistent with those the directors intend touse in the next annual financial statements. There is, however, a possibilitythat the directors may determine that some changes to these policies arenecessary when preparing the full annual financial statements for the first timein accordance with those IFRSs adopted for use by the European Union. This isbecause, as disclosed in Note 1, the directors have anticipated that certainstandards, which have yet to be formally adopted for use in the EU, will be soadopted in time to be applicable to the next annual financial statements. Review Work Performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board as if that Bulletin applied. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with Auditing Standards and therefore provides a lowerlevel of assurance than an audit. Accordingly we do not express an audit opinionon the financial information. Review Conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 October 2005. BAKER TILLYChartered AccountantsGuildford This information is provided by RNS The company news service from the London Stock Exchange