Feedback Regulatory News (FDBK)

28 Feb 2008 08:06

Feedback PLC28 February 2008 FEEDBACK PLC INTERIM REPORT FOR THE SIX MONTHS ENDED 30 NOVEMBER 2007 CHAIRMAN'S STATEMENT Core operating profits show a welcome improvement over those for the previouscomparable period. Total operating profits were substantially impacted by anumber of extraordinary items consequent upon the placing in July last year andthe arrangements with the PPF and the sale of the company's freehold property inPark Road, Crowborough. With a number of legacy issues behind us, management is now able to focus ondeveloping our two principal businesses, Feedback Instruments and Feedback Data,both of which enjoy significant market positions. Although much remains to bedone these results are encouraging and your board looks forward to the futurewith optimism. Michael G. BurtChairman 28 February 2008 Enquiries: Philip Davies 020 7149 6000Charles Stanley Securities(Nominated Adviser) UNAUDITED CONSOLIDATED INCOME STATEMENT Restated Restated 6 months to 6 months to 30 14 months to 30 November 2007 September 2006 31 May Note 2007 £'000 £'000 £'000 Revenue 4,704.7 4,177.9 9,639.4Cost of sales (2,778.5) (2,548.4) (5,534.8) ------------- ------------- -------------Gross profit 1,926.2 1,629.5 4,104.6 Other operating expenses (1,582.4) (1,530.8) (3,782.0) ------------- ------------- -------------Operating profit 343.8 98.7 322.6Profit on sale of fixed asset 87.2 - 307.6Reorganisation costs (142.4) (153.0) (763.9)Gain on cancellation of loan 402.7 - - ------------- ------------- ------------- 691.3 (54.3) (133.7) Finance costs (5.1) (232.4) (391.2) ------------- ------------- -------------Profit / (loss) before tax 686.2 (286.7) (524.9) Tax expense 592.4 (0.3) (2.9) ------------- ------------- -------------Profit /(loss) for the period attributable to the 1,278.6 (287.0) (527.8)equity shareholders of the parent ====== ====== ======Basic earnings/(loss) per share 2 1.80p (2.32)p (3.46)pDiluted earnings/(loss) per share 2 1.73p (2.32)p (3.46p) All activities are classed as continuing. UNAUDITED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE Restated Restated 6 months to 6 months to 30 14 months to 30 November September 2006 31 May 2007 2007 £'000 £'000 £'000 Fair value gains net of tax: - actuarial (loss)/gain on retirement benefit - (102.0) 20.0obligationsCurrency translation differences (39.7) 50.4 22.9Profit / (loss) for the period 1,278.6 (287.0) (527.8) ------------- ------------- -------------Total recognised income/(expense) for the periodattributable to the company's equity shareholders 1,238.9 (338.6) (484.9) ====== ====== ====== UNAUDITED CONSOLIDATED BALANCE SHEET Restated Restated 30 November 2007 30 September 2006 31 May 2007 £'000 £'000 £'000 ASSETS Non-current assets Property, plant and equipment 35.0 39.7 59.9 Intangible assets 1,065.5 1,077.3 1,086.2 Deferred tax asset 564.9 - - ------------- ------------- ------------- 1,665.4 1,117.0 1,146.1 ------------- ------------- ------------- Current assets Inventories 1,279.3 885.9 1,179.5 Trade and other receivables 2,809.8 2,464.5 2,630.9 Cash and cash equivalents 1,276.9 96.2 486.4 ------------- ------------- ------------- 5,366.0 3,446.6 4,296.8 ------------- ------------- ------------- Non current asset held for sale - 658.2 - ------------- ------------- ------------- Total assets 7,031.4 5,221.8 5,442.9 ====== ===== ===== EQUITY Capital and reserves attributable to theCompany's equity shareholders Called up share capital 206.2 1,234.5 1,761.2 Share premium account - 409.8 936.6 Revaluation reserve - 595.6 - Capital reserve 299.9 299.9 299.9 Retained earnings (3,530.1) (9,379.3) (8,906.0) ------------- ------------ ------------ Total equity (3,024.0) (6,839.5) (5,908.3) ------------- ------------ ------------ LIABILITIES Non-current liabilities Borrowings - 535.3 505.5 Deferred tax liabilities 298.3 323.2 325.8 Retirement benefit obligations 6,794.1 8,257.0 7,974.4 ------------- ------------ ------------ 7,092.4 9,115.5 8,805.7 ------------- ------------ ------------ Current liabilities Borrowings 385.0 1,070.8 414.8 Trade and other payables 2,578.0 1,875.0 2,130.7 ------------- ------------ ------------ 2,963.0 2,945.8 2,545.5 ------------- ------------ ------------ Total liabilities 10,055.4 12,061.3 11,351.2 ------------- ------------ ------------ Total equity and liabilities 7,031.4 5,221.8 5,442.9 ====== ====== ===== UNAUDITED CONSOLIDATED CASH FLOW STATEMENT Restated Restated 6 months to 6 months to 30 14 months to September 2006 30 November 2007 31 May 2007 £'000 £'000 £'000 Cash flows from operating activities Profit / (loss) before tax 686.2 (286.7) (524.9) Adjustments for: Cash flows in respect of exceptional reorganisation - - 30.7costs Finance charges 5.1 232.4 391.2 Depreciation and amortisation 230.6 243.8 557.6 Foreign exchange difference (39.7) - (46.8) Increase in inventories (99.8) 114.4 (179.3) Increase in trade and other receivables (178.9) (848.2) (110.0) Increase in trade and other payables 448.3 424.7 345.3 Pension contributions paid (734.9) (209.0) (486.6) Share option charge 10.5 - - Loan written back (402.7) - - -------------- -------------- -------------- Cash generated in operations (75.3) (328.6) (22.8) Tax paid - - - -------------- -------------- -------------- Net cash used in operating activities (75.3) (328.6) (22.8) -------------- -------------- -------------- Cash flows from investing activities Interest received - - 3.7 Purchase of tangible fixed assets (9.1) - (32.2) Proceeds from sale of tangible fixed assets - - 50.0 Purchase of intangible assets (175.9) (227.7) (504.4) -------------- -------------- -------------- Net cash used in investing activities (185.0) (227.7) (482.9) -------------- -------------- -------------- Cash flows from financing activities Issue of ordinary shares 1,085.7 - - Interest paid (5.1) (17.4) (50.9) Repayments bank and other loans - (15.0) (32.5) Capital element of finance leases and rental payments (16.1) - (8.1) -------------- -------------- -------------- Net cash used in financing activities 1,064.5 (32.4) (91.5) -------------- -------------- -------------- Net decrease in cash and cash equivalents 804.2 (588.7) (597.2) Cash and cash equivalents at beginning of period 87.7 684.9 684.9 -------------- -------------- -------------- Cash and cash equivalents at end of period 891.9 96.2 87.7 ======= ======= ======= NOTES TO THE UNAUDITED INTERIM REPORT 1. SUMMARY OF ACCOUNTING POLICIES As explained below the group will be presenting its financial statements in accordance with IFRS for the first time in the 31 May 2008 full year financial statements. Set out below are the accounting policies that differ from the full financial statements prepared at 31 May 2007 that management expect to apply in the 31 May 2008 IFRS-compliant full year financial statements. (a) Basis of preparation These interim consolidated financial statements are for the six months ended 30 November 2007. These interim financial statements have been prepared in accordance with those IFRS standards and IFRIC interpretations issued and effective or issued and early adopted for the year ended 31 May 2008, with the exception of IAS 19 "Employee Benefits". As disclosed in the May 2007 Annual Report and Accounts, an actuarial valuation of the Feedback Pension Scheme (a defined benefit scheme) was carried out as at 28 February 2007 and that valuation, amended to reflect payments made between February and May 2007, was used to represent the liability in the balance sheets of the Group and of the Company. The directors are of the opinion that this treatment gives a true valuation at the balance sheet date of 30th November 2007, given the successful negotiation of an agreement with the Pension Regulator and the Pension Protection Fund. Consequently, the actuarial valuation at 28 February 2007 has been used, amended to reflect payments made to the Scheme after that date, including those made under the terms of the Company Voluntary Arrangement which was approved by shareholders on 2 July 2007. Feedback plc's consolidated financial statements were prepared in accordance with UK Generally Accepted Accounting Principles (UK GAAP) until 31 May 2007. UK GAAP differs in some areas from IFRS. In preparing the consolidated interim financial statements, management has amended certain accounting methods applied in the UK GAAP financial statements to comply with IFRS. The comparative figures were restated to reflect these adjustments. Reconciliations and descriptions of the effect of the transition from UK GAAP to IFRS on the Group's equity and its net income and cash flows are provided in Note 4. These consolidated interim financial statements have been prepared under the historical cost convention. The Group changed its Accounting Reference Date from 31 March to 31 May with effect from 31 May 2007. Consequently the period under review is for the six months ended 30 November 2007, whilst the comparative figures are for the six months ended 30 September 2006 and the fourteen months ended 31 May 2007. It was not considered necessary to restate the comparative interim period to 30 November 2006 as it was impracticable to do so and given the business is not cyclical, the period to 30 November 2006 was not considered to be any more comparable. The information set out in this interim report for the six months ended 30 November 2007 does not comprise statutory accounts within the meaning of section 240 of The Companies Act 1985. The results for the period ended 31 May 2007 are based on the published accounts for that period on which the auditors gave a report which did not contain statements under section 237(2) or (3) of the Companies Act 1985. The auditors included an emphasis of matter paragraph in relation to going concern in their report but their opinion was not qualified in this respect. The accounts for the period ended 31 May 2007 have been filed with the Registrar of Companies. This interim report was approved by the directors on 27 February 2008. Research and development (b) Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally-generated intangible asset arising from the Group's business development is recognised only if all of the following conditions are met: • an asset is created that can be identified; • it is probable that the asset created will generate future economic benefits; • the development cost of the asset can be measured reliably; • the product or process is technically and commercially feasible; and • sufficient resources are available to complete the development and to either sell or use the asset. Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred. Internally-generated intangible assets are amortised on a straight-line basis over a period of 36 months. (c) Taxation The tax expense represents the sum of the current tax expense and deferred tax expense. The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the income statement 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 balance sheet 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 joint ventures, 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 that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. (d) Employee share options The Group has applied the requirements of IFRS 2 Share-based Payment. The Group issues equity-settled share-based payment transactions to certain employees. Equity-settled share-based payment transactions 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 binomial 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. 2. EARNINGS/(LOSS) PER SHARE The calculation of the earnings/(loss) per share is based on the following earnings/(loss) and number of shares: Six months to Six months to Fourteen months to 30 November 2007 30 September 2006 31 May 2007 Earnings/(loss) for the period (£'000) 1,278.6 (287.0) (527.8) ======= ======= ======= Weighted average number of shares (000s) 71,198,631 12,344,986 15,263,305 Dilutive potential ordinary shares: Share options (000s) 2,525,833 - - Preference share conversion - 3,891,195 - -------------------- -------------------- ------------------------- Diluted weighted average number of shares 73,724,463 16,236,091 15,263,305 (000s) ========== ========== ========== Six months to Six months to Fourteen months to 30 November 2007 30 September 2006 31 May 2007 Basic Diluted Basic Diluted Basic Diluted Earnings/(loss) per share 1.80p 1.73p (2.32)p (2.32)p (3.46)p (3.46)p ====== ====== ====== ====== ====== ====== 3. TRANSITION TO IFRS The Group's financial statements for the year ending 31 May 2008 will be the first annual financial statements that comply with IFRS. These interim financial statements have been prepared as described in Note 1. The Group has applied IFRS 1 in preparing these consolidated interim financial statements. Feedback plc's transition date is 1 April 2006. The Group prepared its opening IFRS balance sheet at that date. The reporting date of these interim consolidated financial statements is 30 November 2007. The Group's IFRS adoption date is 1 June 2007. 4. EXPLANATION OF THE EFFECT OF THE TRANSITION TO IFRS The following explains the material adjustments on the transition to IFRS. Intangible assets IAS 38, Intangible Assets, requires the capitalisation of development expenditure that meets certain criteria. Under UK GAAP such treatment was optional and the Group had previously written off such expenditure. At the transition date the Group has now recognised an asset of £1,076.3k. Deferred tax The adoption of IAS 38 creates a temporary timing difference between the accounting and the tax treatment relating to the development expenditure. This timing difference gives rise to a deferred tax liability under IAS 12, Income Taxes. At the transition date the Group has now recognised a liability of £322.9k. 4(a). RECONCILIATION OF EQUITY AT 1 APRIL 2006 UK GAAP Adjustments IFRS £'000 £'000 £'000ASSETS Non-current assets Property, plant and equipment 714.9 (664.9) 50.0 Intangible assets - 1,076.3 1,076.3 ------------- ------------- ------------- 714.9 411.4 1,126.3 ------------- ------------- ------------- Current assets Inventories 1,000.3 - 1,000.3 Trade and other receivables 1,616.3 - 1,616.3 Cash and cash equivalents 805.7 - 805.7 ------------- ------------- ------------- 3,422.3 - 3,422.3 ------------- ------------- ------------- Non-current asset held for sale - 664.9 664.9 ------------- ------------- ------------- Total assets 4,137.2 1,076.3 5,213.5 ====== ====== ===== EQUITY Capital and reserves attributable to theCompany's equity shareholders Called up share capital 1,234.5 - 1,234.5 Share premium account 409.9 - 409.9 Revaluation reserve 595.6 - 595.6 Capital reserve 299.9 - 299.9 Retained earnings (9,794.2) 753.4 (9,040.8) ------------- ------------- ------------ Total equity (7,254.3) 753.4 (6,500.9) ------------- ------------- ------------ LIABILITIES Non-current liabilities Borrowings 579.0 - 579.0 Deferred tax liabilities - 322.9 322.9 Retirement benefit obligations 8,233.0 - 8,233.0 ------------- ------------- ------------ 8,812.0 322.9 9,134.9 ------------- ------------- ------------ Current liabilities Borrowings 1,132.1 - 1,132.1 Trade and other payables 1,447.4 - 1,447.4 ------------- ------------- ------------ 2,579.5 - 2,579.5 ------------- ------------- ------------ Total liabilities 11,391.5 322.9 11,714.4 ------------- ------------- ------------ Total equity and liabilities 4,137.2 1,076.3 5,213.5 ====== ====== ===== 4(b). RECONCILIATION OF NET INCOME FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006 UK GAAP Adjustments IFRS £'000 £'000 £'000 Revenue 4,177.9 - 4,177.9Cost of sales (2,548.4) - (2,548.4) ------------- ------------- -------------Gross profit 1,629.5 - 1,629.5 Other operating expenses (1,509.8) (21.0) (1,530.8) ------------- ------------- -------------Operating profit before reorganisation costs 119.7 (21.0) 98.7Reorganisation costs (153.0) - (153.0) ------------- ------------- -------------OPERATING PROFIT (33.3) (21.0) (54.3) Finance costs (232.4) - (232.4) ------------- ------------- -------------Loss before tax (265.7) (21.0) (286.7) Tax expense - (0.3) (0.3) ------------- ------------- -------------Loss for the period (265.7) (21.3) (287.0) ====== ====== ====== 4(c). RECONCILIATION OF EQUITY AT 30 SEPTEMBER 2006 UK GAAP Adjustments IFRS £'000 £'000 £'000 ASSETS Non-current assets Property, plant and equipment 697.9 (658.2) 39.7 Intangible assets - 1,077.3 1,077.3 ------------- ------------- ------------- 697.9 419.1 1,117.0 ------------- ------------- ------------- Current assets Inventories 885.9 - 885.9 Trade and other receivables 2,464.5 - 2,464.5 Cash and cash equivalents 96.2 - 96.2 ------------- ------------- ------------- 3,446.6 - 3,446.6 ------------- ------------- ------------- Non-current asset held for sale - 658.2 658.2 ------------- ------------- ------------- Total assets 4,144.5 1,077.3 5,221.8 ====== ====== ===== EQUITY Capital and reserves attributable to theCompany's equity shareholders Called up share capital 1,234.5 - 1,234.5 Share premium account 409.8 - 409.8 Revaluation reserve 595.6 - 595.6 Capital reserve 299.9 - 299.9 Retained earnings (10,111.5) 732.2 (9,379.3) ------------- ------------- ------------ Total equity (7,571.7) 732.2 (6,839.5) ------------- ------------- ------------ LIABILITIES Non-current liabilities Borrowings 535.3 - 535.3 Deferred tax liabilities - 323.2 323.2 Retirement benefit obligations 8,257.0 - 8,257.0 ------------- ------------- ------------ 8,792.3 323.2 9,115.5 ------------- ------------- ------------ Current liabilities Borrowings 1,070.8 - 1,070.8 Trade and other payables 1,853.1 21.9 1,875.0 ------------- ------------- ------------ 2,923.9 21.9 2,945.8 ------------- ------------- ------------ Total liabilities 11,716.2 345.1 12,061.3 ------------- ------------- ------------ Total equity and liabilities 4,144.5 1,077.3 5,221.8 ====== ====== ===== 4(d). RECONCILIATION OF NET INCOME FOR THE PERIOD ENDED 31 MAY 2007 UK GAAP Adjustments IFRS £'000 £'000 £'000 Revenue 9,639.4 - 9,639.4Cost of sales (5,534.8) - (5,534.8) ------------- ------------- -------------Gross profit 4,104.6 - 4,104.6 Other operating expenses (3,779.0) (3.0) (3,782.0) ------------- ------------- -------------Operating profit 325.6 (3.0) 322.6Profit on sale of fixed asset 307.6 - 307.6Reorganisation costs (763.9) - (763.9) ------------- ------------- ------------- (130.7) (3.0) (133.7) Finance costs (391.2) - (391.2) ------------- ------------- -------------Loss before tax (521.9) (3.0) (524.9) Tax expense - (2.9) (2.9) ------------- ------------- -------------Loss for the period (521.9) (5.9) (527.8) ====== ====== ====== 4(e). RECONCILIATION OF EQUITY AT 31 MAY 2007 UK GAAP Adjustments IFRS £'000 £'000 £'000 ASSETS Non-current assets Property, plant and equipment 59.9 - 59.9 Intangible assets - 1,086.2 1,086.2 ------------- ------------- ------------- 59.9 1,086.2 1,146.1 ------------- ------------- ------------- Current assets Inventories 1,179.5 - 1,179.5 Trade and other receivables 2,630.9 - 2,630.9 Cash and cash equivalents 486.4 - 486.4 ------------- ------------- ------------- 4,296.8 - 4,296.8 ------------- ------------- ------------- Total assets 4,356.7 1,086.2 5,442.9 ====== ====== ===== EQUITY Capital and reserves attributable to the Company'sequity shareholders Called up share capital 1,761.2 - 1,761.2 Share premium account 936.6 - 936.6 Revaluation reserve - - - Capital reserve 299.9 - 299.9 Retained earnings (9,653.5) 747.5 (8,906.0) ------------- ------------- ------------ Total equity (6,655.8) 747.5 (5,908.3) ------------- ------------- ------------ LIABILITIES Non-current liabilities Borrowings 505.5 - 505.5 Deferred tax liabilities - 325.8 325.8 Retirement benefit obligations 7,974.4 - 7,974.4 ------------- ------------- ------------ 8,479.9 325.8 8,805.7 ------------- ------------- ------------ Current liabilities Borrowings 414.8 - 414.8 Trade and other payables 2,117.8 12.9 2,130.7 ------------- ------------- ------------ 2,532.6 12.9 2,545.5 ------------- ------------- ------------ Total liabilities 11,012.5 338.7 11,351.2 ------------- ------------- ------------ Total equity and liabilities 4,356.7 1,086.2 5,442.9 ====== ====== ===== 4(f). RECONCILIATION OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006 UK GAAP Adjustments IFRS £'000 £'000 £'000 Cash flows from operating activities Loss before tax (265.7) (21.0) (286.7) Adjustments for: Finance charges 232.4 - 232.4 Depreciation and amortisation 17.0 226.8 243.8 Decrease in inventories 114.4 - 114.4 Increase in trade and other receivables (848.2) - (848.2) Increase in trade and other payables 402.8 21.9 424.7 Pension contributions paid (209.0) - (209.0) -------------- -------------- -------------- Cash used in operations (556.3) 227.7 (328.6) Tax paid - - - -------------- -------------- -------------- Net cash used in operating activities (556.3) 227.7 (328.6) -------------- -------------- -------------- Cash flows from investing activities Purchase of intangible assets - (227.7) (227.7) -------------- -------------- -------------- Net cash used in investing activities - (227.7) (227.7) -------------- -------------- -------------- Cash flows from financing activities Interest paid (17.4) - (17.4) Repayments bank and other loans (15.0) - (15.0) -------------- -------------- -------------- Net cash used in financing activities (32.4) - (32.4) -------------- -------------- -------------- Net decrease in cash and cash equivalents (588.7) - (588.7) Cash and cash equivalents at beginning of period 684.9 - 684.9 -------------- -------------- -------------- Cash and cash equivalents at end of period 96.2 - 96.2 ======= ======= ======= 4(g). RECONCILIATION OF CASH FLOWS FOR THE PERIOD ENDED 31 MAY 2007 UK GAAP Adjustments IFRS £'000 £'000 £'000 Cash flows from operating activities Loss before tax (521.9) (3.0) (524.9) Adjustments for: Cash flows in respect of exception reorganisation costs 30.7 - 30.7Finance charges 391.2 - 391.2 Depreciation and amortisation 63.1 494.5 557.6 Foreign exchange difference (46.8) - (46.8) Increase in inventories (179.3) - (179.3) Increase in trade and other receivables (110.0) - (110.0) Increase in trade and other payables 332.4 12.9 345.3 Pension contributions paid (486.6) - (486.6) -------------- -------------- -------------- Cash used in operations (527.2) 504.4 (22.8) Tax paid - - - -------------- -------------- -------------- Net cash used in operating activities (527.2) 504.4 (22.8) -------------- -------------- -------------- Cash flows from investing activities Interest received 3.7 - 3.7 Purchase of tangible fixed assets (32.2) - (32.2) Proceeds from sale of tangible fixed assets 50.0 - 50.0 Purchase of intangible assets - (504.4) (504.4) -------------- -------------- -------------- Net cash used in investing activities 21.5 (504.4) (482.9) -------------- -------------- -------------- Cash flows from financing activities Interest paid (50.9) - (50.9) Repayments bank and other loans (32.5) - (32.5) Capital element of finance leases and rentalpayments (8.1) - (8.1) -------------- -------------- -------------- Net cash used in financing activities (91.5) - (91.5) -------------- -------------- -------------- Net decrease in cash and cash equivalents (597.2) - (597.2) Cash and cash equivalents at beginning of period 684.9 - 684.9 -------------- -------------- -------------- Cash and cash equivalents at end of period 87.7 - 87.7 ======= ======= ======= 5. UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Restated Restated 6 months to 6 months to 30 14 months to September 2006 30 November 2007 31 May 2007 £'000 £'000 £'000 Profit attributable to shareholders 1,278.6 (287.0) (527.8) Other recognised gains and losses relating to the (39.7) (51.6) 42.9 period Issue of shares 1,634.9 - - Conversion of preference shares - - 1,053.4 Preference share issue costs - - 24.1 Change in share-based payment reserve 10.5 - - ------------- ------------- ------------- Movement in period 2,884.3 (338.6) 592.6 Opening shareholders' funds (5,908.3) (6,500.9) (6,500.9) ------------- ------------- ------------- Closing shareholders' funds (3,024.0) (6,839.5) (5,908.3) ====== ====== ====== 6. POST BALANCE SHEET EVENTS As noted in the 31 May 2007 accounts, after lengthy and complex negotiationswith the Trustees of the Feedback Pension Scheme, The Pensions Regulator and thePension Protection Fund (PPF) an agreement was reached whereby responsibilityfor the deficit was assumed by the PPF in return for certain conditions beingmet. A formal Company Voluntary Arrangement (CVA) was announced under which allcreditors other than the PPF were to be paid in full. As part of thisagreement, the Group would pay the PPF £1,200,000 (£700,000 from the proceeds ofa £1,400,000 placing and £500,000 after vacation of the Park Road premises) plusprovide shares totalling 18% of the enlarged share capital after restructuring.The CVA and restructuring was agreed at meetings of shareholders and creditorsheld on 2 July 2007. The £700,000 payment and the issue of shares was made tothe PPF during July 2007. Legal completion of the sale of the Park Road premises took place on 21 December2007 and on the same day the final payment of £500,000 was made to the PensionProtection Fund (PPF). The company was formally released from the CVA on 11February 2008. The following pro-forma Balance Sheet is for illustrativepurposes only. If the above events had taken place on 30 November 2007 the tableshows how the Balance Sheet would have changed. Unaudited Unaudited Actual Pro-forma 30 November 2007 30 November 2007 £'000 £'000 ASSETS Non-current assets Property, plant and equipment 35.0 35.0 Intangible assets 1,065.5 1,065.5 Deferred tax asset 564.9 564.9 ------------- ------------- 1,665.4 1,665.4 ------------- ------------- Current assets Inventories 1,279.3 1,279.3 Trade and other receivables 2,809.8 1,817.6 Cash and cash equivalents 1,276.9 1,413.3 ------------- ------------- 5,366.0 4,510.2 ------------- ------------- Total assets 7,031.4 6,175.6 ------------- ------------- LIABILITIES Non-current liabilities Deferred tax liabilities 298.3 298.3 Retirement benefit obligations 6,794.1 - ------------- ------------- 7,092.4 298.3 ------------- ------------- Current liabilities Borrowings 385.0 29.2 Trade and other payables 2,578.0 2,578.0 ------------- ------------- 2,963.0 2,607.2 ------------- ------------- Total liabilities 10,055.4 2,905.5 ------------- ------------- NET (LIABILITIES)/ASSETS (3,024.0) 3,270.1 ====== ====== INDEPENDENT REVIEW REPORT TO FEEDBACK PLC Introduction We have been engaged by the Company to review the condensed set of financialstatements in the interim financial report for the six months ended 30 November2007 which comprises the Consolidated Income Statement, the ConsolidatedStatement of Total Recognised Income and Expense, the Consolidated BalanceSheet, the Consolidated Cash Flow Statement and the Notes to the UnauditedInterim Report. We have read the other information contained in the interimfinancial report and considered whether it contains any apparent misstatementsor material inconsistencies with the information in the condensed set offinancial statements. This report, including the conclusion, has been prepared for and only for theCompany for the purpose of meeting the requirements of the AIM Rules forCompanies and for no other purpose. We do not, therefore, in producing thisreport, accept or assume responsibility for any other purpose or to any otherperson to whom this report is shown or into whose hands it may come save whereexpressly agreed by our prior consent in writing. Directors' Responsibilities The interim financial report, is the responsibility of, and has been approved bythe directors. The directors are responsible for preparing and presenting theinterim financial report in accordance with the AIM Rules for Companies. As disclosed in note 1, the annual financial statements of the Group areprepared in accordance with International Financial Reporting Standards andInternational Financial Reporting Interpretations Committee ("IFRIC")pronouncements as adopted by the European Union. The condensed set of financialstatements included in this interim financial report has been prepared inaccordance with the measurement and recognition criteria of InternationalFinancial Reporting Standards and International Financial ReportingInterpretations Committee ("IFRIC") pronouncements, as adopted by the EuropeanUnion. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the interim financial report based on our review. Scope of Review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the interim financial reportfor the six months ended 30 November 2007 is not prepared, in all materialrespects, in accordance with the measurement and recognition criteria ofInternational Financial Reporting Standards and International FinancialReporting Interpretations Committee ("IFRIC") pronouncements as adopted by theEuropean Union, and the AIM Rules for Companies. Baker Tilly UK Audit LLPChartered AccountantsHanover House18 Mount Ephraim RoadTunbridge WellsKentTN1 1ED 27 February 2008 This information is provided by RNS The company news service from the London Stock Exchange