CDOG.L Regulatory News (CDOG)

21 April 2015

CDialogues plc

("CDialogues" or the "Company")

Final Results for the year ended 31 December 2014

- Announcement of maiden dividend

CDialogues plc (AIM: CDOG), the provider of mobile marketing solutions to Mobile Network Operators ("MNOs"), is pleased to announce its audited final results for the year ended 31 December 2014. This was a pivotal year for the Company, which successfully built on its Admission to AIM by diversifying its geographical footprint as well as growing revenues, pre-tax profits and cash balances.

Financial highlights

· Revenues up 117% to €9.92m (2013: €4.58m)

o Subscription revenues accounted for 76% of total revenues (2013:79%)

· EBITDA up 87% to €2.94m (2013: €1.57m)

· Profit before tax up 89% to €2.61m (2013: €1.38m)

· Earnings per share up 77% to €0.43 (2013: €0.24)

· Free Cash Flow* up 108% to €1.22m (2013: €0.59m)

· Net cash as of 31 December 2014 of €2.42m (2013: €0.64m)

· Maiden dividend of 2p subject to AGM approval

* After development costs and capital expenditure and excluding one-off items relating to AIM listing

Operational highlights

· Successful admission to trading on AIM on 27 June 2014

· Significant diversification of revenue base both by number of clients and geographical sources

· During 2014, the Company operated a total of eight mobile marketing projects in five countries across the Middle East

· Delivery of Mobile Marketing projects to a total subscriber base of 35 million customers (2013:15 million) which attracted more than 5.5 million unique subscribers and gross billings in excess of €50m

· Continuous and successful implementation of subscription-based recurring revenue model

The Board is proposing a final dividend for the year ended 31 December 2014 of 2 pence per share. Subject to shareholder approval at the Company's AGM to be held in June 2015 (separate notice of which will be published in due course), this dividend will be paid on 1 July 2015 to shareholders on the register on 5 June 2015. The shares will go ex-dividend on 4 June 2015.

Pale Spanos, Chief Executive Officer, commented: "This was an extremely important year for the Company. We joined AIM in June 2014 and since then we have seen our Company further diversify its geographical footprint and sources of revenue, while it continued to deliver strong financial results.

"We started this year well and have good revenue visibility based on our current contracts. Our pipeline remains strong and by adding new geographies and customers we continue to further diversify our client base. We remain committed to continuing the expansion trend seen during 2014 by further expanding our geographical footprint and investing in our core technology.

We continue to generate strong levels of free cash flow increasing considerably our capacity for further growth. We are confident that we will maintain the momentum and further strengthen our balance sheet. As such, the Board is delighted to have announced today the Company's first dividend."

Enquiries:

CHAIRMAN'S STATEMENT

This has been a transformational year for the Company. With a proven, profitable business model and proprietary technology platform already in place, we spent considerable time during the first half of the year preparing for our Initial Public Offering ("IPO") on AIM in London, which completed successfully in June 2014 raising £1.25m gross proceeds.

Our subscription-based recurring revenue model, which has underpinned growth to date, differentiates us notably from the competition, and we believe our strategic focus across the emerging markets of the Middle East, Africa and Asia provides an attractive investment proposition to both existing and potential shareholders of the Company.

Following our successful IPO, we turned our focus towards generating new project opportunities with existing and new clients across our target territories. We are pleased to report that during 2014 we have successfully increased the number of our Mobile Network Operators ("MNOs") clients and diversified our revenue streams by geography.

Prior to our IPO, we were principally active across the Middle East. Today, with additional territories in the Middle East, we are also active across Southeast Asia with further scope to grow our subscriber base as we focus on larger markets with a wider number of MNOs.

During the year, we continued to expand our client base and sources of revenue thereby reducing the level of customer concentration from that at the beginning of the year.

We are pleased with the advancement of the data analytics and language engineering engines that drive our mobile offering. This allows us to enter new overseas markets with confidence, and by targeting regions where pre-pay mobile device penetration and usage are growing rapidly, we believe that the Company can maintain its strong margins and profitability.

This year was also about enhancing our investment profile within the London capital markets and demonstrating that there is significant demand for our services. The full year results show how far we have come with strong growth in subscriber and client numbers, revenues, profits and cash generation.

Furthermore, with our strong and growing cash balance, the Board is proposing to pay a final dividend, subject to approval at the Company's AGM to be held in June 2015.

Looking ahead, the pipeline of opportunities for our services should deliver further financial growth for the Company and we will remain focussed on enhancing shareholder value during the coming financial year.

Mark Horrocks

Non-Executive ChairmanCHIEF EXECUTIVE OFFICER REVIEW

We are pleased to report our financial results for the 12 months ended 31 December 2014. The Company successfully completed its listing on AIM and raised gross funds of £1.25m on 27 June 2014.

We took the decision to join AIM in order to accelerate our growth strategy and build on our strong performance since founding the Company in 2011. Since IPO, we have further improved our performance based on the benefits derived from the Company's strong relationships across a growing number of key geographical regions. We have kept delivering increasingly profitable and cash generative turn-key solutions with low fixed overheads and high operating margins.

Revenues for the period increased 117% to €9.92m (2013:€4.58m).This revenue growth was achieved despite the cessation of operations in Iraq in early December 2014, and demonstrates the successful outcome of the Company's drive to grow and diversify revenues which continues in 2015. More than 75% of revenues in 2014 were derived from subscription-based charging.

During 2014, CDialogues delivered a total of eight mobile marketing projects in five countries to a total subscriber base of 35 million customers (2013: 15 million) in the Middle East. These projects attracted more than 5.5 million unique subscribers and generated total gross billings in excess of $50 million.

We also utilised a growing number of regional representatives to establish relationships with new MNOs, enabling us to increase subscriber numbers at a low marginal cost and increase average revenue per user ("ARPU").

The potential target market remains strong with the number of global mobile connections forecast to grow from 6.9 billion in 2014 to 8.1 billion in 2018 and annual mobile service revenue forecast to grow from US$968 billion in 2014 to US$1.1 trillion in 2018. Our growth strategy is therefore focused on expanding our contract base, extending our regional clients relationships and investing in our technology platform.

I would like to thank our staff and shareholders for their support during 2014 which was a transformational year for the Company.

Outlook

The Company's business model is highly scalable given that our proprietary technology can be readily deployed. We have started the current year well and the nature of our model means that we already have good visibility on revenues based on current contracts. We are well placed to continue to grow customer numbers under existing contracts and also to add new customers in new geographies.

We are increasingly investing on our core Platform capacity on mobile data analytics and marketing language engineering, with the strategy of further expanding our Services Portfolio. We continue to generate strong levels of free cash flow to support profitable growth and, are confident that we will further strengthen our balance sheet.

Given the results for 2014, good revenue visibility and high levels of cash conversion, the Board proposes to commence the payment of dividends by the Company, subject to shareholder approval at the forthcoming AGM.

Pale Spanos

Chief Executive Officer 

CHIEF FINANCIAL OFFICER REVIEW

During the 12 month period ending 31 December 2014, the Company consolidated its market position by growing its customer base and diversifying its revenue by both client numbers and geography. The Company's high margin, low fixed-cost model resulted in both significant profit before tax and earnings per share growth during the period while the high level of cash conversion and free cash flow ensured the Company finished the period with a significantly strengthened balance sheet.

Revenues for the period increased 117% to €9.92m (2013:€4.58m) as a result of our focus on building relationships with an increasing number of MNOs in a number of regions, and further diversify our revenue sources.

Gross profit was up by 90% to €3.52m (2013: €2.05m) representing a gross margin of 35.5% (2013: 44.6%). The reduction in gross margin resulted from increased cost of sales as new projects came on stream. Administration and selling & distribution costs were €0.93m (2013:€0.64) representing 9.3% of revenues (2013:14%).

Operating Profit (after depreciation and amortisation) was up by 87% to €2.63m (2013: €1.40m) representing a margin of 26.5% (2013:30.6%). While variable costs increase with each new project, due to marketing and associated incentive costs, our subscription revenue model and 'opt-in' nature of our service ensures we have high revenue visibility as the number of participants in each project increases.

EBITDA increased by 87% to €2.94m (2013:€1.57m) representing a margin of 29.6% (2013:34.3%).

Profit before tax increased by 90% to €2.61m (2013: €1.38m) with a margin of 26.3% (2013: 30.2%) while basic earnings per share grew by 76% to €0.43 (2013: €0.24) despite the dilutive effects of the new shares issued at IPO.

Operating cash flow remained strong with net cash flows, before changes in working capital, increasing by 87% to €2.94m (2013: €1.57m) representing approximately 100% of EBITDA. After taking into account working capital movements and cash flows used in investing activities, which comprise primarily of capitalised investment in software development, Free Cash Flow was €1.22m (2013:€0.59m).

At the year-end we had accrued income of €3.85m and related accrued expenses of €2.26m which represents income earned during the last months of 2014 (and its associated costs), the vast majority of which has already been invoiced and collected/settled since the year end.

Having raised net proceeds of €0.57m via the IPO in June 2014, we have consistently delivered strong levels of cash conversion. Net cash as of 31 December 2014 was €2.42m (2013: €0.64m) and provides a firm foundation for further growth into new territories. The Company (and its subsidiaries) maintain over 90% of its cash in banks in the United Kingdom. The Group does not generate any revenues in the Greek market.

Finally, the current financial year has started well with strong levels of free cash flow and we have a strong pipeline in place for us to build on the momentum achieved to date.

George Karakovounis

Vice Chairman & Chief Financial Officer

STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2014

The Directors present the Strategic Report of CDialogues Plc for the year ended 31 December 2014.

· Review of the Business in the year

The Group provides mobile analytics solutions, being offered in the format of marketing loyalty activities that enable brands, mobile network operators and media companies to implement targeted, interactive and measurable loyalty programs by engaging with and entertaining mobile network subscribers via their mobile devices.

The Group has developed internally a technology platform (C/Profiler Software Platform), which is used for the provision of mobile marketing solutions. The Group's Technology platform is offered as either a fully managed or as Software-as-a-Service (SAAS) product.

The core services supported by the Group's platform include the use of any channel that is based on linguistic and text communication such as SMS, MMS, IVR and mobile internet services. Furthermore, the Group's platform supports recurring user subscription and mobile billing services in cooperation with the mobile network operators on either a pre-paid or post-paid basis.

The Group's technical infrastructure is connected directly with Mobile Network Operators in the territories in which it operates and, in most cases, transacts with its business partners through revenue sharing arrangements under which the net revenues generated from the relevant mobile marketing initiatives are divided. In several cases, those mobile marketing initiatives are devised in cooperation with the operators themselves. In other instances, campaigns are instigated by the Group and may be rolled out concurrently across several mobile operator networks and in a number of different countries.

More specifically, through the use of its mobile analytics and linguistic engineering platform, the Group tries to attract as many mobile subscribers to participate in any given service and then seeks to engage and maintain them within the service with relevant content offering and reward programs. To attract potential mobile subscribers, the Group employs promotional seeding techniques which include the use of traditional media and the use of text via mobile or online. Once mobile subscribers are initially attracted, the Group tries to make them engage by providing exciting mobile utilities or providing incentives. The pool of mobile subscribers that eventually engage is analysed and profiled into categories in order for the Group to design the appropriate loyalty building programs and reward schemes.

The ongoing management of mobile marketing solutions provides the Group with a growing database of behavioral and customer engagement analytics. The knowledge and experience of these Service iterations provides important feedback for the Group's future performance and is also reflected in improvements to the Group's technology platform in order to maximise its efficiency.

The Group is currently focusing its operations on emerging markets. Countries in which it has operated since establishment are Iraq, Vietnam, Ivory Coast, Russia, Kuwait, Lebanon, Jordan and Oman. It is a Group target to grow market share in existing geographies and also expand its business in other territories.

A summary of the key financial results for the relevant year end are set out in the table below:

Group revenue grew by 117% from €4.6m in 2013 to €9.9m in 2014. This result, which is ahead of budget, was achieved despite reduced revenues from Iraq in fourth quarter of 2014 as a result of the cessation of these operations in early December 2014. The loss of revenues from of operations in Iraq (which accounted for approximately 15% of Group revenues in November 2014) is being more than compensated by growth in other countries and demonstrates the success of the Group in growing and diversifying revenue streams. This substantial growth was aided by a number of new campaigns that were launched in the year.

Group EBITDA for the year shows strong growth to €2.94m (2013:€1.57), representing a growth of 87 per cent. Free cash flow, after development costs and capital expenditure and excluding one-off items relating to the AIM listing, reached €1.22m further enhancing the Group's cash position to €2.4m as of 31 December 2014.

· Position of the Company's business at the end of the year

In addition to the strong financial performance during the 12 months to 31 December 2014, the Group also successfully completed a number of strategic milestones. In particular, the Group managed to significantly diversify its revenue base both by number of clients and geographical sources of revenue.

CDialogues also completed its AIM listing in June 2014 raising £1.25m and further strengthening its balance sheet. The Group's statement of Financial Position at 31 December 2014 set out in the table below:

Subscription-based recurring revenues, which provide greater scalability and visibility for the business, accounted for more than 75 per cent of the total revenues during 2014 as a whole and therefore provide the Group with a strong basis for the year ending 31 December 2015.

The Group has identified a pipeline of potential new contracts, a number of which are currently undergoing preparations for launch in the coming months and the Board remains confident that these will result in further growth opportunities during 2015.

· Principal risks and uncertainties facing the business

In addition to the financial risks discussed in Note 29 to the accounts, the Directors set out below the principal risks and uncertainties facing the Group and a summary of the key measures taken to mitigate those risks:

Contract duration and non-renewal of contracts

The Group enters into contracts with its customers which are typically short term in nature (three/four months) but are normally renewed at the end of each term, though this cannot be guaranteed. The Board seeks to ensure that the Group's relationships with its customers and level of service minimises the risk of contracts not being renewed.

Concentration of customer base

The Group is a young business and has not yet achieved a diverse customer base. However, CDialogues has been successful in reducing customer concentration during 2014 and the current business pipeline for 2015, if delivered, will reduce this customer concentration further.

Credit risk

The Group provides services and receives revenues under agreements entered into with a local partner in the territories in which it provides services. Whilst the Group endeavours to diversify its sources of revenue, it is reliant on this relationship which may result in a greater level of credit risk than if the Group was contracted directly with the MNOs. However, such credit risk has not affected the business adversely in the past and the Group manages this risk by negotiating and enforcing appropriate contract terms.

Countries in which CDialogues operates

CDialogues operates in countries where there may be risks associated with the political or economic environment. The Group seeks to mitigate these risks by (i) undertaking its own risk analysis of each territory in which it operates; and (ii) operating with local partners with detailed knowledge of the prevailing environment.

Attracting and retaining talented staff and motivating key people

The Group has competitive remuneration packages in place to secure the services of talented staff and key employees.

Significant failure or interruption to the network or IT Systems

The Group has rigorous controls to maintain and secure its operations, including multi-site back up of key systems. In addition, the Group implements a standardised disaster recovery plan.

Failure to keep up to date with fast evolving technology

The Group is constantly developing its software platform ensuring it is evolving in line with the latest technology and in line with its clients' expectations and demands. Management regularly communicates with the Company's clients ensuring the mobile marketing campaigns are meeting their needs.

Failure to comply with local laws and regulations

Management mitigate this risk by assessing the regulatory environment and legal system before entering a new market. The Group also implements a strong code of conduct across all of its operations.

In addition to the principal risks and uncertainties above, the Group faces other risks that include but are not limited to:

· Increased competition

· Failure to retain, or loss of, customer contracts

Corporate Responsibility

CDialogues Plc takes its responsibilities as a corporate citizen seriously in the territories in which the company operates. The Board's primary goal is to create shareholder value but in a responsible way which serves all stakeholders. Furthermore, Cdialogues seeks to continually enhance and extend its contribution to society through the work the Group undertakes with its clients and in areas where the Group decides to operate.

Governance

The Board considers sound governance as a critical component of the success of CDialogues and this is given the highest priority. The Group has an effective and engaged Board, with a strong non-executive presence from diverse backgrounds, and well-functioning governance committees. The Audit Committee receives and reviews reports from management and from the Company's auditors. It is responsible for ensuring that the financial performance of the Group is properly reported with particular regard to legal requirements, accounting standards and the AIM Rules. Through the Group's compensation policies and variable components of employee remuneration, the Remuneration Committee of the Board seeks to ensure that the Company's values are reinforced in employee behaviour and that effective risk management is promoted.

Going Concern

The Board considers that the Group has sufficient financial and other resources to manage its business risks successfully and it has a diverse range of businesses across different geographical areas to maintain its strong financial position. Furthermore, the Board consider that there are no material uncertainties that may cast significant doubt about the Group's ability to continue as a going concern.

Current Trading

The current year has started well and is in line with the Board's expectations.

Approved by the Board on 20 April 2015

Pale Spanos

Chief Executive Officer

Statement of comprehensive income

For the years ended 31 December 2014 and 2013

Statement of financial position

For the years ended 31 December 2014 and 2013

Statement of changes in equity

For the years ended 31 December 2014 and 2013

Statement of cash flows

For the years ended 31 December 2014 and 2013

1. Corporate information

The consolidated financial information of Cdialogues Plc and its subsidiaries (collectively, the "Group") for the year ended 31 December 2014 has been prepared on the basis set out below.

Cdialogues Plc (the "Company") was incorporated in England and Wales as a Limited Liability Company in June 2011 and during this financial year as a consequence of its listing on AIM became a public company limited by shares.

2. Basis of preparation

The consolidated financial information of the Group has been prepared using accounting policies which are consistent with those adopted in Part 3 of the AIM Admission Document of the Company dated 24 June 2014, as well as applying the following accounting policy in respect of the basis of consolidation as extracted from the financial statements.

The consolidated financial information has been prepared on a historical cost basis, except for, available-for-sale (AFS) financial assets that have been measured at fair value. The consolidated financial information is presented in Euros, except when otherwise indicated.

The financial information does not constitute the Company's statutory financial statements for the year ended 31 December 2014 but is derived from those financial statements. The statutory financial statements will be delivered following the Company's Annual General Meeting. The Auditors have reported on those financial statements; their reports were unqualified and did not contain any statements under Companies Act 2006 section 498 (2) or (3).

The directors recommend the payment of a dividend of 2 pence per ordinary share.

The financial information set out in this announcement was approved and authorised for issue by the board of directors on 20 April 2015.

Copies of this financial information will be available on the Company's website.

3. Basis of consolidation

The consolidated financial information comprises the financial statements of the Group and its subsidiaries as at 31 December 2014. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:

Ø Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)

Ø Exposure, or rights, to variable returns from its involvement with the investee; and

Ø The ability to use its power over the investee to affect its returns

Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

Ø The contractual arrangement with the other vote holders of the investee;

Ø Rights arising from other contractual arrangements; and

Ø The Group's voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value at the date when control is lost.

4. Segmental reporting

Based on management information there is only one operating segment. The Directors of the Company consider the principal activity of the Group to be that of a provider of Mobile Marketing services.

In this context there is no obligation to prepare and publish financial results by segment, according to the requirements of IFRS 8 "Operating Segments". As far as geographical segment the Group operates mainly (95%) in the area of Middle East and therefore is considered as one geographical segment. 

5. Group information

Information about subsidiaries

The consolidated financial statements of the Group include:

The principal activity of each company is analysed as follows:

Cdialogues Plc was incorporated in England and Wales as a Limited Liability Company on June 2011 and it is the Group holding entity.

Telilea Ltd was incorporated in Cyprus on March 2012. Its principal activities are the provision of mobile marketing services.

CDIALOGUES S.A. was established in Greece on July 2011 and acquired by the Group on July 2012. Its principal activities include software development services as well as support and maintenance services related to the software.

Cdialogues LLC was established in Russia on March 2012 as Benastipik LLC and acquired by the Group on March 2013 (20%) and on April 2013 (80%). Its name changed to C Dialogues LLC on June 2013. The C Dialogues LLC activities are general trading.

CDIALOGUES MEA JLT was established in Dubai U.A.E. on October 2013 and its principal activities are the provision of IT services and solutions.

6. Revenue

Revenue in the accompanying income statements of the Group and the Companyare analysed as follows:

7. Income tax

The amounts of income taxes which are reflected in the accompanying income statements are analysed as follows:

The reconciliation of income taxes reflected in statements of comprehensive income and the amount of income taxes determined by the application of the United Kingdom statutory tax rate to pre-tax income is summarised as follows:

The "10% additional charge" amount of €2,353 (2013 €895) and the "Defence contribution" amount of €491 (2013 €334) is related to Telilea Ltd. More specific is the 10% of the year's tax liability as calculated in the tax computation of corporation tax. According to the Cyprus Tax legislation companies have to pay temporary tax on the 75% of their estimated taxable profits for the year otherwise there is a surcharge of 10% on the final tax liability for the year.

The Company is obliged to file its tax returns in accordance with the applicable tax law in England and Wales. No income tax is payable on the net income deriving from subsidiaries with foreign operations.

The Group's subsidiaries file their tax returns in the countries in which they are established and/or operate. The tax rates at 31 December 2014 of the countries where the operations of the Group are located are the following:

Greece 26.0 %. (2013: 26.0 per cent)

Cyprus 12.5 %. (2013: 12.5 per cent.)

Russia 20.0 %. (2013: 20.0 per cent.)

United Arab Emirates. The income tax is not applicable.

Greek subsidiary (CDIALOGUES S.A.)

Greek tax laws and regulations are subject to interpretations by the tax authorities. Tax returns are filed annually but the profits or losses declared for tax purposes remain provisional until such time, as the tax authorities examine the returns and the records of the taxpayer and a final assessment is issued. Tax losses, to the extent accepted by the tax authorities, can be used to offset profits of the five fiscal years following the fiscal year to which they relate.

Tax Compliance certificate

From the financial year 2011 and onwards, all Greek Societe Anonyme and Limited Liability Companies that are required to have their statutory financial statements audited must in addition obtain an "Annual Tax Certificate" as provided for by paragraph 5 of Article 82 of L.2238/1994. This "Annual Tax Certificate" must be issued by the same statutory auditor or audit firm that issues the audit opinion on the statutory financial statements.

The tax compliance certificate for the financial year 2013 was concluded by its auditors, based on the provisions of §5, article 82 of L.2238/1994. No significant additional tax liabilities arose, in excess of those provided for and disclosed in the financial statements.

The tax compliance certificate for the financial year 2014 is still in progress based on the provisions of §5, article 82 of L.2238/1994. No significant additional tax liabilities are expected to arose, in excess of those provided for and disclosed in the financial statements.

Cyprus subsidiary (Telilea Ltd)

The corporation tax rate is 12.5% (2013:12.5%).

Under certain conditions interest income may be subject to defence contribution at the rate of 30% (2013:30%). In such cases this interest will be exempt from corporation tax. In certain cases, dividends received from abroad may be subject to defence contribution at the rate of 20% for the tax year 2013 and 17% for 2014 and thereafter.

The company has utilised tax relief incentives provided by the Cyprus tax legislation. These incentives allow for special treatment on intellectual property.

The Cyprus tax law on Intellectual Property gives rise to the following tax treatment.

Ø The cost of the acquisition or development of Intellectual Property of a capital nature is amortised over a period of five years, starting in the year of purchase / development.

Ø A statutory reduction of 80% of the profit arising from the use of the Intellectual Property, as well as from any gain on the sale of the Intellectual Property.

Ø The 80% deduction applies to profit after deducting any direct expenses including amortisation and interest.

8. Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

The following reflects the income and share data used in the basic and diluted earnings per share computations:

9. Property plant and equipment

Property, plant and equipment of the Group are analysed as follows:

There is no property, plant and equipment that have been pledged as security.

10. Intangible assets

Intangible assets of the Group are analysed as follows:

11. Trade and other receivables

Trade receivables in the accompanying financial statements are analysed as follows:

The ageing analysis of trade receivables is as follows:

12. Cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash in the accompanying financial statements are analysed as follows:

Cash at bank earns interest at floating rates based on monthly bank deposit rates. Interest earned on cash at bank and time deposits is accounted for on an accrual basis and for the year ended December 31, 2014, amounted to €1,660 (2013 €1,100) and are included in financial income in the accompanying statements of comprehensive income.

The restricted cash represents time deposits of nine and twelve months with Bank of Cyprus created as a result of the recapitalisation of Bank of Cyprus. The nine month time deposit of an amount of € 26,893 expired on 30 April 2014 and the twelve month time deposit of an amount of € 26,894 expired on 30 July 2014. Bank of Cyprus has the option to renew both deposits once with the same duration of nine and twelve months respectively.

Cash and cash equivalents are analysed in the following currencies:

13. Share capital and share premium

The movement of the Company's share capital and share premium is analysed as follows:

On 16 April 2013, pursuant to a written resolution of the Founders the 5,000 issued ordinary shares of €1.00 each were re-designated A Ordinary Shares of €1.00 each.

On 16 April 2013 10,000 A ordinary shares of €1.00 each were issued to the Founders.

On 11 June 2014, pursuant to written resolutions of the Founders:

Ø each of the issued existing A ordinary shares of €1.00 in the capital of the Company was redesignated as an ordinary share of €1.00 each;

Ø the sum of €51,000 (being part of the Company's distributable reserves) was capitalised and appropriated as capital to the Founders and the Directors were to authorised to apply such sum in paying up in full 51,000 new ordinary shares in the Company (the "Bonus Shares") and to allot and issue such Bonus Shares, credited as fully paid up, to the Founders at the rate of 3.4 Bonus Shares for every 1 existing ordinary share of €1.00 each held by them;

Ø the entire issued share capital of the Company was redenominated from Euros (€) to Pounds Sterling (£) at a then prevailing exchange rate of € 1.2 to £1

Ø the issued existing ordinary shares of €1.00 in the capital of the Company were consolidated on the basis of 1 new ordinary share of £1.00 each in the capital of the Company for every 1.2 existing ordinary shares of €1.00 previously held; and each of the issued existing ordinary shares of £1.00 in the capital of the Company arising from the consolidation was subdivided into 100 new ordinary shares of £0.01 each in the capital of the Company for every 1 existing ordinary share of £1.00 previously held.

On 11 June 2014 152,550 ordinary shares of £0.01 each were allotted and fully paid in cash by certain employees and consultants of the Group resulting in a total net increase of €1,950.

On 27 June 2014, 588,000 ordinary shares of £0.01 each were allotted and fully paid in cash at a price of £2.12 resulting in a total net increase of €572,835 (after transactions costs of €967,208).

The company issued a total of 182,947 warrants over ordinary shares to advisers and non-executive directors at the date of its admission to AIM. The warrants are exercisable at a price of £2.12 per ordinary share for a period of five years. The directors no not consider the intrinsic value of the services provided in exchange for the issue of the warrants to be material.

14. Trade & other payables

Trade and other accounts payable in the accompanying financial statements are analysed as follows:

15. Commitments

The Greek subsidiary CDIALOGUES S.A. has entered into commercial operating lease agreements for the lease of office space and car. These lease agreements have an average life of 3 to 12 years with renewal terms included in certain contracts. Future minimum rentals payable under non-cancellable operating leases as at 31 December 2014 and 2013, are as follows: