CBUY.L Regulatory News (CBUY)

@UK PLC

("@UK" or the "Company")

Audited Results for the year ended 31 December 2010

@UK PLC (AIM:ATUK.L), the cloud ecommerce marketplace, today announces its audited results for the year ended 31 December 2010.

The 2010 Annual Report and Accounts will be sent to shareholders shortly and will be available from the company's website www.uk-plc.net/invest along with the latest research.

Key Financial Points:

·; Results marginally ahead of market expectations

·; Turnover down 11% to £2,051,000 (2009: £2,295,000)

·; Cash outflow before finance down 42% to £299,000 (2009: £515,000)

·; Adjusted loss before tax down 26% to £592,000 (2009: £799,000)

·; Costs reduced by 19% to £1,967,000 (2009: £2,421,000)

Key Operational Points:

·; Launch of Green Marketplace by Richard Benyon the Minister for the Natural Environment

·; Google support for new Green Marketplace launch

·; National Audit Office use of SpendInsight to identify £500 million in savings for the NHS

·; SpendInsight growth of spend analysed by 290% from £15.9 billion to £62 billion

Commenting on the results, Ronald Duncan, Chairman of @UK, said:

"@UK PLC is now in a position to profit from its investment in technology that allows customers to both quickly identify and deliver savings, through our SpendInsight software and ecommerce Marketplace.

While the General Election caused some delays at the start of the year, we have made strong progress since the results of the Comprehensive Spending Review were announced in October. Despite the 11% drop in reported turnover, @UK made significant reductions in costs, down 19%, loss, down 26% and cash outflow, down 42% providing us with a strengthened financial position and no requirement to raise further funds.

We launched our new Green Marketplace in October with support from Google and Richard Benyon the Minister for the Natural Environment, and are now the leaders with a 97.5% market share in the emerging area of product carbon footprints.

Our SpendInsight spend analysed is up 290% on last year giving us a strong pipeline of customers for our ecommerce Marketplace and we look forward to a year of growth."

Enquiries:

Notes to Editors

@UK PLC provides secure cloud based eCommerce, eProcurement, startup and email services to over 1 million users, that enable efficient trading in a sustainable manner.

@UK's secure eCommerce Marketplace enables buyers such as local authorities, schools and hospitals to buy online from commercial suppliers ranging from large corporations to small to medium enterprises. This allows buying and selling to take place at the correct price with no paperwork and the elimination of transposition errors, achieving major savings throughout the supply chain.

@UK has 5 key competitive advantages

·; SpendInsight uses unique artificial intelligence to automatically identify savings and is available on a national framework contract

·; eCommerce Marketplace realises the savings through correct pricing vs catalogue marketplaces which are unable to support carriage, or complex pricing

·; GreenInsight provides unique sustainability analysis and Hybrid Carbon Footprints enabling universal carbon footprints at a price break through of £4 per item

·; High performance cloud technology underpinning the system

@UK is included in the Software and Computer Services Sector (9530).

For further information please visit the @UK PLC websites

Main Site http://www.uk-plc.net

Investor Site http://www.uk-plc.net/invest

SpendInsight Site http://www.spendinsight.com

GreenInsight Site http://www.green-insight.com

Hybrid Carbon Footprint Site http://www.hybridcarbonfootprint.com

Chairman's Statement:

Introduction

@UK PLC's business is built around a leading cloud technology platform. This system allows us to quickly build highly complex secure internet applications that are pre-integrated into most major financial systems. The result is a large number of leading solutions which partners help us take to market.

The core solutions that we have built on our cloud platform are:-

·; Spend Analysis - SpendInsight

·; Green Analysis - GreenInsight

·; Eprocurement - Ecommerce Marketplace and p2p

·; Ecommerce - SiteGenerator

·; Email - CloudEmail4Business

We have 3 key themes for taking these to market

·; Austerity and transparency

·; Green and social responsibility

·; Cloud services

Austerity and transparency

The world is in the midst of a global austerity program, and @UK PLC helps deliver the back office savings required through its SpendInsight Artificial Intelligence system that has the unique ability to deliver line item information from complex free text purchasing data. The potential savings identified by SpendInsight requires an ecommerce marketplace to realise the savings. @UK PLC is the only ecommerce marketplace. The other marketplaces are catalogue driven, because @UK PLC is a cloud solution the entire process from providing the data to having the marketplace live can take as little as 3 weeks.

Recovery from austerity requires innovation and growth which is normally delivered by small businesses. @UK PLC has streamlined the process of setting up and running small businesses. The next step is to help them to take their products and services more quickly to market, which @UK PLC delivers through its public ecommerce marketplace.

Less obvious is the requirement for transparency. The UK is a mature society that has low levels of corruption. Transparency along with a free press, are the two keys to reducing corruption. @UK PLC can deliver transparent procurement, whilst streamlining the process. There is an ongoing requirement for transparent procurement in the mature economies and an urgent requirement for transparent procurement throughout the developing world economies.

Green and social responsibility

Green and corporate and social responsibilities have both been subjective areas, because the cost of accurate carbon footprinting has been prohibitive. @UK PLC in conjunction with CenSA have made a significant breakthrough that now makes product level carbon footprints affordable. @UK PLC has slashed the cost of product carbon footprints to £4 per item and quickly established a 97.5% market share from a baseline of zero. We expect to extend this into the other areas of sustainability and corporate and social responsibility. This is a growing market area and @UK PLC has quickly established a significant position.

Cloud services

Cloud is a major shift in computing. @UK PLC has a significant lead in this area having been a cloud platform for over 10 years, and has built a number of highly complex applications on its cloud platform. Our ecommerce marketplace is significantly more complex than most ERP systems, like SAP and Oracle, since it handles the entire source to pay cycle in real time with accurate pricing across multiple systems. The reason that we have been able to build a better application with significantly less resources is the speed at which applications can be created on our platform. We believe that demand will increase for secure cloud based applications in the fields of ecommerce and eprocurement that can be rapidly deployed and are pre-integrated with the leading on premise systems.

A year of transformation

2010 has been a year of transformation for @UK, during which, against a difficult economic backdrop, we have created new solutions while cutting costs and ensuring the financial stability of the business. Revenues during the first half of the year were negatively impacted by various factors outside of our control, such as the cessation of our contract with the London Procurement Program the previous November following a change of management, the standstill across the public sector caused by the General Election and the phony war from the time of the Election until the announcement of the Comprehensive Spending Review in October, where no public sector bodies wanted to make any savings before the cuts were negotiated. The general economic downturn also impacted the level of business we saw in our Company Formation business which remained at the lower level seen in 2009.

As a response to these circumstances we implemented cost-cutting procedures, reducing operating costs by £444,000 to £1,967,000 and reducing our cash outflow before financing from £515,000 to £299,000.

Against this negative backdrop, @UK PLC managed to deliver significantly ahead of initial market expectations and marginally ahead of the enhanced expectations which were raised after the Comprehensive Spending review and the launch of our Green Marketplace.

We are pleased to report that since the Comprehensive Spending Review we have seen a marked strengthening of our market, and have been encouraged by the initial response to initiatives launched in the year such as our Green Marketplace and entry into the Universities sector.

Our focus during the year was on the strict control of costs, while supporting future growth through the launch of innovative green spin offs of our core Spend Analysis software and public Marketplace.

Our green highlights were the launch of:

·; GreenInsight at the Global Business of Biodiversity Symposium on 13 July 2010, and

·; GreenMarketplace by Richard Benyon, the Minister for the Natural Environment, on 7 October 2010.

We believe the University sector represents a strong growth opportunity for us going forward. In the second half of the year, we began actively targeting the sector in tandem with our partner, Barclaycard, Initial feedback is that we are now a leading provider going forward thanks to our unique ability to provide an ecommerce rather than a catalogue marketplace. This has required a large amount of education for the sector of the differences between ecommerce and catalogue marketplaces, along with establishing our solution as the solution of choice moving forward. We were delighted to announce on 28 February 2011 that we were providing a Spend Analysis service and ecommerce Marketplace to the University of Huddersfield.

Our belief is that other areas within the Public Sector will now move to a similar understanding. While as ever the timing is uncertain, the NHS recently announced that it would be looking to put in place an ecommerce marketplace by 2012.

We have several opportunities, which with a reduced cost base and funding from our share placing in January we are well placed to realise.

Financial Results

In the year ended 31 December 2010, @UK PLC reduced its loss before taxation to £592,000 (2009: £799,000). This reduction was achieved despite a drop in revenue of £244,000 to £2,051,000, a decrease of 11% (2009: £2,295,000). The cash outflow before financing was significantly reduced to £299,000 (2009: £515,000). Careful cash management saw a reduction in the outflow from £182,000 in the first 6 months of the year to £117,000 in the second.

Revenue from company formation services increased by 2% to £1,208,878 in the year (2209: £1,182,000). This was due to improved commission arrangements with partners and an increase in the sales of ancillary products and services.

Sales of web and eCommerce services, including coding, recorded a decrease of 24% in the year to £842,000 (2009: £1,132,000). This reflects the halt of the London Procurement Program spend analysis service and a significant coding project in 2009 which did not recur at the same level in 2010. As a result of the decrease in web and ecommerce, gross margin fell to 67% (2009: 73%).

Continued attention to costs achieved a reduction in the year in operating expenses before exceptional items and share based payments to £1,962,000 (2009: £2,421,000). £5,000 was charged as the "cost" calculated under IFRS 2 of share options granted to employees (2009: Credit £10,000).

At 31 December 2010 the Group had cash of £29,000 (2009: £225,000). Since the year end £265,000 has been raised in a placing of ordinary shares at 5p per share to provide additional funds for sales, marketing and working capital.

Operational review

Our top down pipeline is

SpendInsight > Contract management > ecommerce marketplace > supplier ecommerce sites

SpendInsight

SpendInsight has taken off in terms of the number of organisations analysed and the savings potential.

These translated into revenues with London Procurement Program and it has not yet translated into significant revenues with NHS Shared Business Services. NHS SBS have identified significant savings across their member trusts, but experienced some reluctance amongst trusts to purchase the information. Following the issue of National Audit Office report we expect this reluctance to reduce over the coming year as trusts seek to achieve the savings identified in the NAO report.

There are opportunities for SpendInsight across all the sectors with Universities looking the next most positive after health, followed by Local and Central Government.

Contract Management

We developed a new contract management system to address the requirements of our group purchasing customers so that they could roll out line item contract management to all their members in a fully integrated format with our ecommerce marketplace. This addressed a significant gap in the market, because the existing contract management systems were diaries of when contracts needed to be let and managed the process of letting contracts rather than delivering the results of contract negotiations to purchasers to use and make savings.

SpendInsight provides the data for line item contract management and line item contract management populates our marketplace with the information for improved purchasing.

Ecommerce marketplace

Private ecommerce marketplaces

Our private ecommerce marketplace sales have started to grow and our pipeline is now at its best state since the 2005 rush to sign up for eprocurement prior to the deadline. So far only the higher education sector has put in place an eprocurement program, however the other major change is that customers today want to quickly roll out and implement the program whereas in 2005 there was no drive to use the system.

This has a significant effect on our revenues, since in 2005 our revenue split was 10x Supplier vs 1x buyer, because we assumed that we would sign up 1,000 supplier ecommerce sites out of 10-20,000 suppliers and the 1,000 supplier ecommerce sites at an average of £200 each were worth £200,000 per year vs our £20,000 per year for the buyside.

We now provide free ecommerce sites to the suppliers. However about one-third use paying sites and we expect this percentage to increase as they see more revenues coming from our ecommerce sites.

Public/Green ecommerce marketplace

We made significant improvements to our ecommerce marketplace during the year. The key change is that we now actively promote the public face of our marketplace in order to capture more of the 'uncontrolled' public sector spend (i.e. spend which is not directed through a public body's official procurement channel). Results from our Spend Analysis have identified that the majority (65%) of spend in public sector is currently still uncontrolled, and we expect this to be the case until such time there is widespread adoption of systems such as our ecommerce marketplace which make the implementation of 'controlled' procurement more easy to achieve. In the meantime there is a requirement for suppliers to maximise their sales into this uncontrolled spend, and we now offer that route via the public side of our marketplace, thereby enabling our suppliers to have access to both controlled and uncontrolled public sector spend

An analysis of the organisations purchasing through our system showed that we already have over 5,000 public sector bodies purchasing via our system in an uncontrolled manner. The launch of our new public marketplace in conjunction with Google Adwords for our ecommerce suppliers to help them maximise the traffic to our system, is a major step towards increasing the spend through our system, along with new cost per sale and carbon neutral revenue streams.

Supplier ecommerce sites

As we increase traffic and sign up more buyers we are increasing the uptake of our supplier ecommerce sites. We have also significantly increased the price range from our 2005 pricing of £48 to £960 per year. This is now our core range of ecommerce sites with a professional range from £2,500 and an Enterprise range from £35,000 per annum.

Ecommerce is now a major part of our suppliers turnover, and they expect to pay for a first class ecommerce offering that we are able to provide, covering B2B, B2C and B2G product sets.

Our bottom up pipeline

Start up > Domain name > email > ecommerce > purchasing group

We have a strong position in the company formation market, and we want to extend this into sole traders and other start-ups. In the past year, we have put a significant investment into our email services to make them fully cloud based, so that we can provide the same level of security and reliability on email as we do on ecommerce.

Our public ecommerce marketplace will help our startups to start selling more quickly and then we plan to provide them with group purchasing so that they can buy more effectively from the beginning.

Startups and Company Formations

Our company formation service continued to perform well during the year and although the number of new companies formed during the year was similar to the 2009 numbers, there was an increase in the take up of ancillary products and services leading to increased revenues from this sector in 2010. The launch of a new Company Formations website in the latter part of the year has resulted not only in increased traffic but also an increase in the spend per client going forward into 2011.

Domain Names and Emails

We rewrote our domain name registration system, and put significant effort into our new Cloud Email 4 Business solution, which now has a number of large business email features, and we expect to be able to cross sell to our larger customers.

SiteGenerator ecommerce

We made significant progress with our ecommerce software, and had a number of major account wins including our first Fortune 500 Company.

We rewrote the front end of our system making it much more efficient, and providing us with more resources for our email services. We also improved its capability with our six new sites created as path finders for the new technology.

During the year we rewrote our Investor relations site, our Company Formation site and our main website converting this to our public marketplace, SpendInsight.com, Green-Insight.com and HybridCarbonFootprint.com.

These are all running on the new platform.

Share issue

On 31 August 2010 4,803,842 ordinary shares in the Company were issued in a placing at 1p per share. On 16 September 2010 a further 2,333,333 shares were issued at 3p per share. The funds raised from both these placings were for additional working capital.

Since the year end, on 12 January 2011, the Company announced that it had placed 5,305,000 new ordinary shares in the Company at an issue price of 5p per share, raising £262,250 to provide additional working capital. We were delighted with the support shown by our long term institutional investors during the fundraising.

People

On behalf of the Board I would like to thank all our employees for their hard work and effort during the year.

Dividend policy

The Board is not recommending the payment of a dividend for 2010. In the immediate future, the Board is committed to building the Group's business and accordingly all the Group's financial resources are being applied to this end. In the longer term, the Directors intend to adopt a progressive dividend policy appropriate to the Group's financial performance.

Outlook

We have a number of exciting opportunities which we are starting to convert into revenues. Whilst the public sector is slow moving and can be frustrating, there is now a real impetus to deliver savings. We have proven solutions to quickly identify these savings via our SpendInsight artificial intelligence and can then deliver the savings via our ecommerce marketplace.

Our investment in technology, where our competitors have struggled for survival, means that we are well placed to maximise this opportunity with our partners Barclaycard Commercial and NHS Shared Business Services.

The opportunity is large, and we believe that our patience will now be rewarded, with the National Audit Office Report highlighting the case for using our solutions, and delivering the Government's objective of sustainable savings.

Ronald Duncan

Chairman

22 March 2011

Revenue and operating loss for the year all derive from continuing operations.

The Group had no other comprehensive income in 2009 or 2010 consequently the loss for the year is equal to the total comprehensive income for the year.

The loss attributable to the owners of the parent company is £551,864 (2009 - loss of £720,874). Total comprehensive income attributable to owners of the parent company is (£551,864) (2009 - (£720,874)).

STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2010

The other reserve arises because shares issued on the acquisition of subsidiaries have been recorded at par value and no share premium recognised.

EXTRACTS FROM THE NOTES TO THE FINANCIAL STATEMENTS

1. General information

@UK PLC ("the Company") and its subsidiaries (together "the Group)" provides an integrated software platform for eProcurement and eCommerce the trading of goods and services between purchasers such as public sector bodies and their suppliers, along with the analysis and coding of spend and product data. The Group also provides services to new businesses, including incorporation, company secretary services and filing annual returns, using its software platform. The Company is a public limited company which is listed on the Alternative Investment Market of the London Stock Exchange and is incorporated and operates in the UK. The address of the registered office is 5 Jupiter House, Calleva Park, Aldermaston, Berkshire RG7 8NN.

2. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been applied consistently to all the years presented, unless otherwise stated.

1.1. Basis of accounting

These financial statements have been prepared in accordance with IFRS as adopted by the European Union, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts in the financial statements. The areas involving a higher degree of judgement or complexity, or areas where assumptions or estimates are significant to the financial statements are disclosed in note 3.

As permitted under the Companies Act 2006 a separate statement of comprehensive income for the parent company has not been presented .

1.2. Going concern

The Group had a loss attributable to shareholders for the year of £551,864. The directors have taken steps to take the group to profitability, and more importantly to reduce cash consumption given the remaining cash levels available to the group.

Recognising the requirement to maintain cash the following actions have taken place:

·; The directors have kept the Group's businesses under review and reduced the cost base without significantly impacting future revenues.

·; The Company has invested in a new website to maximise market share in Company Formations. Improved commission arrangements have been put in place with partners and work continues to increase the sales of ancillary products and services.

·; The SpendInsight business area has had very positive publicity around achievable savings in the public sector and this is generating significant sales interest.

·; The Company raised additional working capital through placements of ordinary shares in 2010 and again since the year end. Whilst there are no current plans to raise further funds, there may be a requirement to raise additional working capital and this may need to be raised at short notice. The Directors' believe that this would achievable given current circumstances.

·; The company has invested in new product areas in the form of email, green products, a new company formation website, and an improvement in efficiency of existing operations. That allow for growth without the requirement for any additional purchases of IT equipment.

The directors of the Group have prepared detailed projections and cash flow forecasts through to 31 December 20121. In considering these cash flow forecasts, the directors have carefully considered the assumptions and sensitivities and have concluded that the Group can remain within the level of available finance. However, in arriving at this view, the directors are cognisant of the fact that given the nature of the Group's business and in the current economic climate there are inherent risks surrounding the achievability of the Group's forecast sales and margins and the timing of cash flows, including, inter alia, when projected sales will occur and the timing of receipts relating thereto.

These uncertainties are reduced because the group has a dependable forward income stream based on renewable income from public sector buyers and suppliers, and that this income is counter cyclical since it is driven by the requirement for both sides to improve efficiency and cut costs. The income from company formations is cyclical, however since it is paid by credit card, it is reasonably reliable and does not attract credit risk.

The directors of the Group have concluded that the combination of these circumstances does mean the Group is able to continue trading within its current working capital position. Having considered these uncertainties, and given the potential to raise additional finance and or make additional cost savings, they have a reasonable expectation that the Group has adequate resources to continue in operational existence for a period of 12 months from the date the accounts were signed and as such have prepared the accounts on the going concern basis.

2. Summary of significant accounting policies (continued)

1.3. Consolidation

Subsidiary undertakings are all entities over which the Group has the power to govern the financial and operating policies so as to obtain benefit from their activities. Subsidiaries are fully consolidated from the date on which control is transferred until the date control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The investment in subsidiaries in the Company's statement of financial position are shown at cost less provision for diminution in value.

Inter-company transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated.

1.4. Goodwill

Goodwill arising on acquisitions represents the excess of the consideration given plus any associated costs for investments in subsidiary undertakings over the fair value of the identifiable assets and liabilities acquired. Adjustments are made to fair values to bring the accounting policies of acquired businesses into alignment with those of the Group. Provision is made for any impairment in the value of goodwill. The costs of integrating and reorganising acquired businesses are charged to the post acquisition statement of comprehensive income.

In accordance with IFRS1, the Group has applied the exemption from retrospectively recalculating goodwill which arose on acquisitions prior to 1 January 2006. This goodwill is included at its deemed cost, being the amount recorded under UK GAAP as at 1 January 2006. Goodwill is carried at cost less accumulated impairment losses. Any impairment is recognised immediately in the statement of comprehensive income and is not subsequently reversed. Goodwill is allocated to cash generating units for the purpose of impairment testing. Each of these cash generating units represents the group's investment in each country of operation by primary reporting segment. Goodwill is tested for impairment annually. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

1.5. Other intangible assets

Other intangible assets are shown at historical cost less accumulated amortisation and impairment losses.

Amortisation is charged to administrative expense in the statement of comprehensive income on a straight-line basis over the estimated useful lives of the intangible asset unless such lives are indefinite. Intangible assets with an indefinite useful life are tested for impairment at each balance sheet date. Other intangible assets are amortised from the date they are available for use. The useful lives are as follows:

• Software - 3 years

Amortisation periods and methods are reviewed annually and adjusted if appropriate.

Research and development expenditure is written-off to the statement of comprehensive income in the year in which it is incurred unless the costs are directly associated with the development of identifiable and unique software products controlled by the Group and that will probably generate economic benefits exceeding costs beyond one year, when they are recognised as intangible assets and amortised over their estimated useful lives.

1.6. Property, plant and equipment

All are stated at cost less accumulated depreciation.

Depreciation of property, plant and equipment is provided to write each asset down to its estimated residual value on a straight-line basis over its estimated useful life, as follows:

Computer equipment 3 years

Fixtures, fittings and equipment 3 to 5 years

Residual values, remaining useful lives and depreciation methods are reviewed annually and adjusted if appropriate.

Gains or losses on disposal are included in the statement of comprehensive income.

1.7. Impairment of assets

The Group assess at each statement of financial position date whether there is any indication that any of its assets have been impaired. If such indication exists, the asset's recoverable amount is estimated and compared to its carrying value.

For goodwill and intangible assets that have an indefinite life and intangible assets not yet available for use, the recoverable amount is estimated at each statement of financial position date and whenever there is an indication of impairment.

An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. Impairment losses are recognised in the statement of comprehensive income.

1.8. Financial instruments

Financial assets and financial liabilities are recognised on the group's statement of financial position when the group has become a party to the contractual provisions of the instrument.

1.8.1. Trade receivables

Trade receivables are initially recognised at fair value and then subsequently measured at amortised cost using the effective interest rate method. Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts.

1.8.2. Trade payables

Trade payables are initially recognised at fair value and then subsequently measured at amortised cost using the effective interest rate method. Trade payables are not interest bearing and are stated at their nominal value.

1.8.3. Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the statement of comprehensive income over the period of the borrowings on an effective interest rate basis.

1.8.4. Equity Instruments

Equity instruments are recorded at the proceeds received, net of direct issue costs.

2. Summary of significant accounting policies (continued)

1.9. Share based payments

The group has applied the requirements of IFRS 2: Share-based Payments.

The group issues equity-settled share-based payments to its employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the group's estimate of shares that will eventually vest.

Fair value is measured by use of a Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effect of non-transferability, exercise restrictions, and behavioural considerations.

1.10. Pensions

All pension schemes operated by the Group are defined contribution schemes. The costs are charged to the statement of comprehensive income in the year in which they are incurred.

1.11. Revenue

Revenue is measured at fair value of consideration received or receivable for goods sold and services provided to customers outside the Group, net of Value Added Tax and any discounts. Where invoices are raised in advance of the income being earned through the performance of the service, the unearned portion is included in the accounts as deferred income, and released to the Profit and Loss Account as earned.

1.12. Leases

Rentals payable under operating leases are charged against income on a straight line basis over the lease term. The Group does not hold any assets under hire purchase contracts or finance leases and has not received any benefits as an incentive to sign a lease of whatever type.

1.13. Current and deferred taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The current tax is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group's liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the tax profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in jointly controlled entities, except where the group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax is calculated at the tax rates (and tax laws) that have been enacted or substantively enacted by the statement of financial position date. Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.

1.14. Provisions

Provisions are recognised in the statement of financial position when there is a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation.

1.15. Standards and interpretations not applied

At that date of authorisation of these Financial Statements, the following Standards and Interpretations (International Financial Reporting Interpretation Committee - IFRIC), which have not been applied in these Financial Statements, were in issue but not yet effective:

IFRS 3 Business Combination (effective 1 July 2010)

IFRS 9 Financial Instruments (effective 1 January 2013)

IFRS 7 Financial Instruments Disclosures (effective 1 January 2011 and 1 July 2011)

Amendments to IAS 32 Classification of Rights Issues (effective 1 February 2010)

IAS 1 Presentation of Financial Statements (effective 1 January 2011)

IAS 24 Related Party Transactions (revised) (effective 1 January 2011)

IAS 27 Consolidated and Separate Financial Statements (effective 1 July 2010)

IAS 34 Interim Financial Reporting (effective 1 January 2011)

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (effective 1 July 2010)

Amendment to IFRIC 14 Prepayments of a Minimum Funding Requirement (effective 1 January 2011)

The Directors have considered the above new standards, interpretations and amendments to published standards that are not yet effective and concluded that they are either not relevant to the Group or that they would not have a material impact on the Group's financial statements.

3. Accounting estimates and judgements

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

3.1 Critical accounting estimates and judgments

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

·; Goodwill has been tested for impairment by comparing the amount of goodwill against future forecast results including cash flows expected to be generated in the future by the appropriate asset, cash-generating unit, or business segment.

·; The fair value of share-based payments is measured using a binomial model which inherently makes use of significant estimates and assumptions concerning the future applied by the directors.

4. Revenue- Segmental analysis

The Groups operating segments under IFRS have been determined with reference to the information presented in the management accounts reviewed by the Board of Directors. The Group's main reportable segments are Company Formation and web and eCommerce services. These are managed from one operating platform and cannot be readily separated, so all management decisions in connection with these segments are taken to ensure the relevant skill sets are in place to maximise the return from these resources.

The Chief Operating Decision Maker, which is taken to be the Board of Directors, evaluates the performance and resource requirements of these segments in unison to ensure maximum efficiencies within the business. Resources are shared; in particular technical support and research and development advances are shared between the two in the form of improvements and refinements being made to the underlying platform that hosts them.

The Directors consider the most beneficial method of splitting these segments to provide useful information to users of the accounts is to provide details down to the Gross Profit level only. From then on any further detail would necessitate arbitrary cost allocation that they do not use in managing the business and is not considered meaningful in terms of how resources are actually utilised. Similarly, any split of the statement of financial positionassets would involve arbitrary allocation.

Coding International is the Company's 100% trading subsidiary and so these results are extracted from that company's own accounts that are published separately and consolidated into these results in accordance with statutory requirements. Details of the statement of financial position for Coding International Limited can be obtained from those accounts.

The revenue recognised and Gross profit attributable between reportable segments is shown below:

All of the revenue derives from services provided in the United Kingdom and no single customer is responsible for greater than 10% of the Group's revenues.

5. Operating loss

Reorganisation costs represent the costs incurred in reducing staff numbers and in 2009 the loss on disposal of assets when vacating offices.

6. Auditors remuneration

Amounts payable to Menzies LLP in respect of audit and non-audit services

7. Employees

Directors remuneration

All of the payments above relate to salary or fees. None of the Directors receives any benefits or is accruing benefits under a Company pension scheme.

8. Investment income

9. Finance costs

10. Taxation

The Group has estimated tax losses of £10,600,000 (2009: £10,100,000) available for carry forward against future trading profit. No deferred tax asset has been recognised in respect of the losses given the uncertainty regarding available future taxable profits.

11. Loss per share

The calculations for loss per share are based on the weighted average number of shares in issue during the year 60,063,115 (2009: 51,245,575) and the following losses:

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The company has one category of dilutive potential ordinary shares: share options. The company has made a loss and the potential share options are therefore anti-dilutive.

The basic and diluted loss per share calculated on the adjusted earnings is 0.9p (2009: 1.3p).

12. Goodwill

13. Other intangible assets

14. Property, plant and equipment

14. Property, plant and equipment (continued)

15. Investments

The investments represent the Company's 100% holding in the ordinary shares of @Software PLC and its wholly owned subsidiary Software Limited (incorporated in the United Kingdom; non-trading) and Coding International Limited (incorporated in the United Kingdom; provides coding services for use in procurement). As Coding International Limited's balance sheet showed net liabilities provision was made for impairment in the value of the investment in 2008.

16. Trade and other receivables

The Group's financial assets are fairly short term in nature. The directors consider that the carrying value of trade and other receivables approximates to the fair value.

A provision of £149,552 (2009: £96,733) has been made against amounts due from Coding International Limited included within amounts owed by related undertakings above.

17. Notes to the cash flow statement

Analysis of changes in net funds/debt

Cash and cash equivalents (which are presented as a single class of asset on the face of the statement of financial position) comprise cash at bank and other short term highly liquid investments with a maturity of three months or less.

18. Trade and other payables

The Group's financial liabilities are fairly short term in nature. In the opinion of the directors the book values equate to their fair value.

19. Borrowings

The bank loan is repayable by instalments until 2013 and bears interest at a rate of 2½% over the banks base rate. The bank loan is secured by a fixed and floating charge over the Company's assets. The amount owed to Group undertakings has no fixed repayment schedule.

20. Share capital and share premium

The total authorised number of ordinary shares is 250 million (2009: 250 million) with a par value of 1p each.

On 31 August 2010 4,803.842 ordinary shares in the Company were issued in a placing at 1p per share. On 16 September 2010 a further 2,333,333 shares were issued at 3p per share. The £118,038 (£115,879 net of expenses) was raised to provide additional working capital.

Subscribers to the share issues in August 2009 were granted warrants to subscribe for a total of 10 million new ordinary shares at 2p per share. The warrants are exercisable up to five years after issue.

During 2010 the number of options granted under the @UK PLC Share Option Scheme to subscribe for ordinary shares in the Company changed as follows:

The options at 31 December 2010 are as follows:

Number of options under grant Subscription price per share Exercise period

500,000 45p December 2008 to December 2015

202,460 63p January 2009 to January 2016

2,299,080 1.75p August 2012 to August 2019

3,150,000 3.5p October 2013 to October 2020

Share based payments

The Group has a share option scheme under which the Remuneration Committee can grant options over shares in the Company to employees of the Group. Options are granted with a fixed option price equal to the market price of the shares under option at the date of grant. The contractual life of an option is 10 years. The scheme allows for performance criteria or market conditions to be attached to the options, but this has not generally been done. Options are valued using the Black Scholes option pricing model. The fair value of options granted and the assumptions used in the calculations are as follows:

No dividends were assumed. The expected volatility is based on the historical volatility of the Company's shares to the extent information was available and of the shares of similar entities. In addition to the grant above on 8 December 2005, options over 500,000 shares were also granted to former directors of the Company at an exercise price of 45p per share. As part of the terms of their compensation for loss of office in 2006 they were allowed to retain those options. These were valued at the date on which the directors ceased to be employees and the value written off as it was in respect of past services.

21. Financial instruments

Cash is held in current or short term deposit account. All other finance assets are non-interest bearing.

Financial liabilities

There is no material difference between the book value of financial assets and liabilities noted above, and the fair value.

The main objective of the Groups treasury policy is to protect post-tax cash flows of the business from the adverse effects of financial risks.

The Groups financial assets and liabilities comprise cash and liquid resources, and various items, such as trade receivables and trade payables that arise directly from its operations. The Group has no undrawn borrowing facilities. The Group is not exposed to significant foreign exchange risk.

The Group does not enter into instruments for speculative purposes. The Group is exposed to credit risk predominantly from trade receivables and cash and cash equivalents held with banks. The group's exposure to bad debts is reduced as its major customers tend to be public sector bodies.

The Group finances its operations through funds raised from share issues.

22. Financial commitments

23. Related party transactions

Mr RJ Duncan and Mrs HL Duncan are the landlords of a property which is occupied by the Group. The annual rent is currently £24,000. Isabella M Deas Limited, a company owned by Mr Duncan's parents and in which he has a minority interest, is the landlord of a second property which is occupied by the Group. The annual rent is currently £24,000.

At the end of the year Mr RJ Duncan owed £4,838 in respect of services provided by the Company. This balance, which represents principal, was also the maximum balance outstanding.

There is no party which has Ultimate control of the Group.

Key management compensation

Share based payment remuneration represents the value of options granted to key management valued as described in note 20.

NOTE TO THE ANNOUNCEMENT

The extracts set out above do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2009 which contained an unqualified audit report and which did not make any statements under Section 498 of the Companies Act 2006 have been, and accounts for the year ended 31 December 2010 will be, delivered to the Registrar of Companies.

ENDS