LWRF.L Regulatory News (LWRF)

RNS Number : 1775I

JSJS Designs PLC

05 March 2010

 

JSJS DESIGNS PLC

 

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE 14 MONTHS ENDED

30 SEPTEMBER 2009

 

CHAIRMAN'S STATEMENT

FOR THE 14 MONTHS ENDED 30 SEPTEMBER 2009

 

Review of Activities

Our first year has seen the JSJS Designs Group working hard to develop the products and technologies required to create a world-class range of home control devices. We set ourselves a number of product development targets. I am therefore happy to announce that we are on track to meet all our development and pre-sales targets, with early-production models of our first twenty-five products set to be shown at the Homebuilding and Renovating Show at the NEC on March 18th to 21st, 2010.

 

Commercially the Group received its second order in October 2009 from Electrium Sales Limited, the UK subsidiary of Siemens AG. It is for door chime products containing the LightwaveRF1 protocol with an order value is $2.4m and is a major endorsement of the company's technology. The products will carry the Siemens brand name and we expect deliveries to commence against this order in June 2010.

 

Group Strategy

During this financial period the Group has concentrated on developing its range of home control devices. Turnover has been minimal and has only provided a small contribution towards the costs incurred. This has proved a strain on working capital. The original investment on floatation has been reinforced with a bank loan and a convertible loan facility agreement. The directors have prepared budgets and cash flow forecasts and despite receiving a major order in October 2009, it is anticipated that the Group will require continuing financial support until Autumn 2010.

 

The directors recognise that the above issues could cast doubt on the Company's ability to continue as a going concern and that the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. For this reason the directors are taking significant actions to resolve this matter.

 

During October 2009, the Company received £160,000 under the terms of a convertible loan agreement with Centaur Financial Services Limited. The loan was subsequently settled on 20 November 2009, through the issue of 16,000,000 ordinary shares of 0.1p each at a price of 1p.

 

The directors are currently in the midst of a second fundraising drive. The directors are also at an advanced stage of negotiation with a major client to obtain research and development funding for the development of the home control products. An initial amount of £75k has already been agreed and billed. Furthermore, cash levels are monitored and managed daily and several key personnel have agreed to draw a reduced remuneration. In the meantime the development program continues to advance rapidly. This puts the company in an excellent position to provide major retailers with a unique modular range of power and lighting controllers. There is already interest from several major players.

 

Financial Overview

The strategy to concentrate solely on developing a brand new product range brings with it a financial burden. The initial investment of funds on floatation has provided the working capital to date and this has been reinforced with a bank loan of £100k and a convertible loan of £160k. Sales for the 14 month period ended 30 September 2009 totalled £157k but costs totalled £1,094k leaving a loss before income tax for the period of £936k. There is a need to have a further funding drive to guarantee working capital to enable the Group to fulfil anticipated orders in the short term and the cash projections of the Group show that the Group should be self financing by the end of the current financial period ending 30 September 2010.

 

Outlook

Discussions are well advanced with other major customers for home automation products. These products will include both room automation and "eco" heating automation. There is growing confidence that more volume business will be secured during this financial year. 2010 will be a busy year and I look forward to reporting more successful progress.

 

Howard Marshall

Chairman

 

1LightwaveRF is a registered trademark of JSJS Designs (Europe) Limited.

CONSOLIDATED INCOME STATEMENT

FOR THE 14 MONTHS ENDED 30 SEPTEMBER 2009

 

	Notes	14 Months ended 30 September 2009 £	12 Months ended 31 July 2008 £
CONTINUING OPERATIONS
REVENUE	2	157,519	857,306
Cost of sales		(105,871)	(632,032)
		_________	_________
GROSS PROFIT		51,648	225,274
Administrative expenses		(793,864)	(135,573)
One-off listing costs Charge in respect of share based payments		(167,362)  (26,887)	- -
		_________	_________
(LOSS)/PROFIT FROM OPERATIONS		(936,465)	89,701
Net finance revenue	6	242	4,505
		_________	_________
(LOSS)/PROFIT BEFORE INCOME TAX Income tax credit (expense)	7	(936,223) 26,500	94,206 (26,500)
		_________	_________
(LOSS)/PROFIT FOR THE PERIOD		(909,723) _________	67,706 _________
Basic (loss)/profit per share   Diluted (loss)/profit per share	8   8	(0.54)p   (0.53)p	0.07p   0.07p
All amounts relate to continuing operations.

 

CONSOLIDATED BALANCE SHEET

AS AT 30 SEPTEMBER 2009

 

	Notes	30 September 2009	31 July 2008
		£	£
ASSETS
Property, plant and equipment	11	13,250	12,000
		_______	_________
Current Assets		13,250 _______	12,000 _________
Inventories	12	-	58,643
Trade and other receivables	13	38,823	5,968
Cash and cash equivalents	17	5,462	154,787
		_______	_________
TOTAL ASSETS		44,285 _______   57,535 _______	219,398 _________   231,398 _________
Equity and Liabilities Equity Issued share capital Unissued share capital Share premium account Reverse acquisition reserve Retained (losses)/profits	15 16	200,000 20,000 411,800 (100,616) (815,130)	4 - - - 67,706
		________	_________
Total equity		(283,946)	67,710
		________	_________
Current liabilities Trade and other payables Short term borrowings Corporation tax	14 14	241,481 100,000 - ________	137,188 - 26,500 _________
Total liabilities		341,481	163,688
		________	_________
Total equity and liabilities		57,535	231,398
		________	________

 

COMPANY BALANCE SHEET

AS AT 30 SEPTEMBER 2009

 

 

 

	Notes	30 September 2009
		£
ASSETS
Investments	10	100,620
		_______
Current Assets		100,620 _______
Trade and other receivables	13	315,341
Cash and cash equivalents	17	296 _________
TOTAL ASSETS		315,637 _______   416,257 _______
Equity and Liabilities Equity Issued share capital Unissued share capital Share premium account Retained losses	15 16	200,000 20,000 411,800  (249,117)
		________
Total equity		382,683
		________
Current liabilities Trade and other payables	14	33,574 ________
Total liabilities		33,574
		________
Total equity and liabilities		416,257
		________

 

CONSOLIDATED CASH FLOW STATEMENT

FOR THE 14 MONTHS ENDED 30 SEPTEMBER 2009

 

 

 

	Notes	14 Months ended 30 September 2009	12 Months ended 31 July 2008
		£	£
Cash flow from operating activities
(Loss)/profit before interest and income tax		(936,465)	89,701
Adjusted for:
Depreciation		4,750	-
Charge in respect of share based payments		26,887
Decrease/(increase) in inventories		58,643	(58,643)
(Increase) in trade and other receivables		(28,927)	(5,964)
Increase in trade and other payables Unissued share capital		204,293 20,000 _________	137,188 - _________
Cash absorbed by operations Finance costs		(650,819) (656)	162,282 -
Finance revenue Income tax paid		898 (3,928)	4,505 -
		________	________
		(654,505)	166,787
		________	________
Cash flows from investing activities
Purchase of property, plant & equipment Purchase of subsidiary undertakings		(6,000) (620) ________ (6,620)	(12,000) - ________ (12,000)
		________	________
Cash flows from financing activities
Proceeds from issue of shares Expenses of share issues		550,000  (38,200) _______	- - ________
		511,800	-
		_______	________
Net (decrease)/increase in cash and cash equivalents   Cash and cash equivalents at 1 August 2008     Cash and cash equivalents at 30 September 2009	17	(149,325)   154,787 _______   5,462 _______	154,787   - ________   154,787 ________
Major non cash transactions
During the year the Company issued share capital to the value of £100,000 to acquire its shareholding in JSJS Designs (Europe) Limited.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE 14 MONTHS ENDED 30 SEPTEMBER 2009

 

GROUP

		Issued Share Capital	Unissued Share Capital	Share Premium	Share Based Payments	Reverse Acquisition Reserve	Retained Earnings/ Losses	Total Equity
		£	£	£	£	£	£	£
	At 5 July 2008	-	-	-	-	-	-	-
	Shares issued	4	-	-	-	-	-	4
	Profit for the period	-	-	-	-	-	67,706	67,706
		________	________	________	________	________	________	________
	At 1 August 2008	4	-	-	-	-	67,706	67,710
	Shares issued Shares unissued	200,000 -	- 20,000	450,000 -	- -	- -	- -	650,000 20,000
	Expenses of issue	-	-	(38,200)	-	-	-	(38,200)
	Reverse acquisition Share based payments Loss for the period Transfer to P & L reserve	(4) - - -	- - - -	- - - -	- 26,887 - (26,887)	(100,616) - - -	- - (909,723) 26,887	(100,620) 26,887 (909,723) -
		________	________	________	________	________	________	________
	At 30 Sept 2009	200,000	20,000	411,800	-	(100,616)	(815,130)	(283,946)
		________	________	________	________	________	________	________

 

Share Premium Account

On admission to the Alternative Investment Market of the London Stock Exchange the company issued 50,000,000 Ordinary shares of 0.1p each at 1p per share, generating a premium on issue of £450,000. Costs directly associated with the issue of the new shares totalled £38,200 and have been set off against the premium generated on issue of new shares.

 

Reverse acquisition reserve

The reverse acquisition reserve arises as a result of the method of accounting for the acquisition of JSJS Designs (Europe) Limited by the company. In accordance with IFRSs the acquisition has been accounted for as a reverse acquisition.

 

Share based payment reserve

The share based payments reserve represents the fair value of options and warrants granted for compensation of goods or services received. The cost of granting share based payments is recognised through the income statement.

 

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE 14 MONTHS ENDED 30 SEPTEMBER 2009

 

COMPANY

 

		Issued Share Capital	Unissued Share Capital	Share Premium	Share Based Payments	Accumulated Losses	Total Equity
		£	£	£	£	£	£
	At 5 September 2008	-	-	-	-	-	-
	Shares issued Shares unissued Expenses of issue Share based payments	200,000 - - -	- 20,000 - -	450,000 - (38,200) -	- - - 26,887	- - - -	650,000 20,000 (38,200) 26,887
	Loss for period Transfer to P & L reserve	- -	- -	- -	- (26,887)	(276,004) 26,887	(276,004) -
		_______	________	_______	_______	_______	_______
	At 30 Sept 2009	200,000	20,000	411,800	-	(249,117)	382,683
		________	________	________	________	________	________

 

Share Premium Account

On admission to the Alternative Investment Market of the London Stock Exchange the company issued 50,000,000 Ordinary shares of 0.1p each at 1p per share, generating a premium on issue of £450,000. Costs directly associated with the issue of the new shares totalled £38,200 and have been set off against the premium generated on issue of new shares.

 

Reverse acquisition reserve

The reverse acquisition reserve arises as a result of the method of accounting for the acquisition of JSJS Designs (Europe) Limited by the company. In accordance with IFRSs the acquisition has been accounted for as a reverse acquisition.

 

Share based payment reserve

The share based payments reserve represents the fair value of options and warrants granted for compensation of goods or services received. The cost of granting share based payments is recognised through the income statement.

 

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 14 MONTHS ENDED 30 SEPTEMBER 2009

 

1. GENERAL INFORMATION

 

BCOMP 369 Limited was incorporated on 5 September 2008 in the United Kingdom under the Companies Act 2006 (Registration Number 06690180).

 

On 5 November 2008, BCOMP 369 Limited changed its name to JSJS Designs Limited and on 10 November 2008 it re-registered as JSJS Designs plc (the "Company").

 

As disclosed in the Report of the Directors, the principal activity of the Group is that of the design and manufacture of equipment to remotely control domestic devices and systems.

 

FIRST TIME ADAPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

 

These financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and their interpretations issued or adopted by the International Accounting Standards Board as adopted by the European Union ("IFRS"). The adoption of these standards has not resulted in any changes to the Group's accounting policies and has not affected amounts reported in prior years.

 

ACCOUNTING POLICIES

 

(a) Basis of preparation of the financial statements

 

At the year end the group has net liabilities of £283,946with a cash balance of £5,462.

 

During this financial period the Group has concentrated on developing its range of home control devices. Turnover has been minimal and has only provided a small contribution towards the costs incurred. This has proved a strain on working capital. The original investment on floatation has been reinforced with a bank loan and a convertible loan facility agreement. The directors have prepared budgets and cash flow forecasts and despite receiving its first major order it is anticipated that the Group will require continuing financial support until Autumn 2010.

 

The directors recognise that the above issues could cast doubt on the Company's ability to continue as a going concern and that the Company may be unable to realise its assets and discharge its liabilities in the normal course of business. For this reason the directors are taking significant actions to resolve this matter.

 

During October 2009, the Company received £160,000 under the terms of a convertible loan agreement with Centaur Financial Services Limited. The loan was subsequently settled on 20 November 2009, through the issue of 16,000,000 ordinary shares of 0.1p each at a price of 1p.

 

The directors are currently in the midst of a second fundraising drive. The directors are also at an advanced stage of negotiation with a major client to obtain research and development funding for the development of the home control products. An initial amount of £75k has already been agreed and billed. Furthermore, cash levels are monitored and managed daily and several key personnel have agreed to draw a reduced remuneration. In the meantime the development program continues to advance rapidly. This puts the company in an excellent position to provide major retailers with a unique modular range of power and lighting controllers. There is already interest from several major players.

 

In light of the actions being taken the directors continue to adopt the going concern basis of accounting in preparing the annual financial statements and expect to receive significant new orders in 2010.

 

The directors have prepared cashflow forecasts for the next 18 months which show that the group is able to meet its liabilities as they fall due.

 

The directors are confident that the results of the business since the year end provide a strong indication that forecasts are achievable and on this basis consider that the group has sufficient resources to continue in operational existence for the foreseeable future and that it is appropriate to prepare these financial statements on a going concern basis.

 

The financial statements have been prepared in accordance with International Financial Reporting Standards including standards and interpretations as issued by the International Accounting Standards Board and adopted by the EU, and have been prepared using the historical cost convention unless as otherwise stated below. The financial statements are prepared in Pounds Sterling, which is the functional currency of the United Kingdom, rounded to the nearest pound.

 

(b) Basis of consolidation

 

The financial statements have been prepared using the reverse accounting provisions of International Financial Reporting Standard 3.

 

Reverse accounting has been determined to be required in accounting for the business combination of the Company and JSJS Designs (Europe) Limited because following the business combination, the Parent company is effectively controlled by the Board and the former shareholders of JSJS Designs (Europe) Limited. In effect, the transaction is accounted for as though JSJS Designs (Europe) Limited was the acquiring company rather than the acquired and JSJS Designs plc has been treated as a subsidiary. The reverse acquisition reserve consists of amounts arising from the adjustment made to the equity instruments of the legal acquiree in reverse acquisition accounting.

 

The Group has calculated the Goodwill arising on the business combination as being the fair value of the consideration deemed to have been paid by JSJS Designs (Europe) Limited, as calculated in accordance with IFRS 3 Appendix B, less the fair value of the Parent company's assets and liabilities at the date of the business combination.

 

The fair value of the consideration has been calculated based on the fair value of the shares in JSJS Designs (Europe) Limited at the date of the business combination, as determined with reference to the fair value of the shares upon admission to trading on the Alternative Investment Market that was linked to the acquisition.

 

As a consequence of applying reverse acquisition accounting, the results for the period ended 30 September 2009 comprise those of JSJS Designs (Europe) Limited plus those of the Company. The comparative figures are those of JSJS Designs (Europe) Limited for the period from incorporation on 5 July 2007 to 31 July 2008. The Consolidated balance sheet comprises the combined balances of JSJS Designs (Europe) Limited and the Company at 30 September 2009 and the comparative is that of JSJS Designs (Europe) Limited alone at 31 July 2008.

 

(c) Goodwill

 

Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary recognised at the date of acquisition. When the excess is negative (negative goodwill), it is recognized immediately in the income statement. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.

 

(d) Revenue

 

Revenue is stated net of returns. The Directors use their judgement to estimate the amount of provision needed in the financial statements for returns.

 

(e) Segmental Information

 

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments.

 

Based on an analysis of risks and returns, the Directors consider that the Group has only one identifiable business segment which is geographical.

 

(f) Accounting estimates and judgements

 

The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. Estimates and judgements 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. 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 period are discussed below.

 

The group estimates the useful life of property, plant and equipment and reviews this estimate at each financial period end. The Group also tests for impairment whenever a trigger event occurs.

 

Self developed intangible assets are recognised where the Group can estimate that it is probable that future economic benefits will flow to the entity.

 

Inventories are made to order. Nevertheless judgement is required with respect to the valuation of inventories in hand. Estimates are also made regarding "normal activity" for assessing the amount of direct materials, labour, and overheads to be attributed to the cost of inventory.

 

Revenue is stated net of returns. The directors use their judgement to estimate the amount of provision needed in the financial statements for returns.

 

(g) Impairment

 

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are vested annually for impairment. Assets that are subject to amortisation and depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

 

An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

 

 (h) Property, plant and equipment

 

Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is charged on a straight line basis over four years.

 

The gain or loss arising from disposal or retirement of an asset is determined as the difference between sales proceeds and the carrying amount of the asset and is recognised in the income statement.

 

(i) Financial assets

 

The Group classifies its financial assets as loans and receivables which include trade and other receivables, loans and cash at bank, which are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (trade receivables) and also incorporate other types of contractual monetary assets. The Group considers that there are no significant differences between the historical value and fair value of its financial assets.

 

(j) Inventories

 

Inventories are valued at the lower of cost and net realisable value on a first-in-first-out basis. Cost comprises purchase cost of goods, directlabour and those overheads related to manufacture and distribution based on normal activity levels. It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of the business, less applicable variable selling expenses.

 

(k) Trade and other receivables

 

Trade receivables are not interest-bearing and are stated at their historical value, reduced by appropriate allowances for estimated recoverable amounts. The fair value of the Group's trade and other receivables is equivalent to their book values as set out in the financial information.

 

(l) Cash and cash equivalents

 

Cash and cash equivalents comprise current and deposit account bank balances which are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value. This definition is also used for the cash flow statement

 

(m) Financial liabilities

 

The Group classifies its financial liabilities as other financial liabilities which include trade and other payables issued by the Group. The Company considers that there are no significant differences between the historical value and fair value of its financial liabilities.

 

(n) Interest bearing loans and borrowings

 

Interest bearing loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently carried at amortised cost using the effective interest rate method.

 

(o) Trade and other payables

 

Trade payables are not interest-bearing and are stated at their historical value. The fair value of the Group's trade and other payables is equivalent to their book values as set out in the financial information.

(p) Taxation

 

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

 

(i) Current tax

The tax currently payable is based on taxable profit for the previous year. Taxable profit differs from 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 using tax rates that have been enacted or substantively enacted by the balance sheet date.

 

(ii) Deferred tax

Deferred tax is recognised on differences between the carrying amounts 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 generally recognised for all taxable temporary differences, and deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

 

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interest 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 assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

 

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

 

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

 

(iii) Current and deferred tax for the period

Current and deferred tax are recognised as an expense or income in the income statement, except when they relate to items credited or debited directly to equity, in which case tax is also recognised directly in equity, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or in determining the excess of the acquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over the cost of the business combination.

 

(q) Provisions

 

A provision is recognised in the balance sheet when the Group has 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. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessment of the time value of money and, where appropriate, the risks specific to the liability.

 

(r) Equity instruments

 

Equity instruments issued by the company are recorded at the proceeds received net of direct costs of issue.

 

(s) Share-based payments

 

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.

 

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of equity instruments that will eventually vest. At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the remaining vesting period, with a corresponding adjustment to the profit and loss reserve. Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods or services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.

 

(t) Foreign Currency

 

Transactions in currencies in currencies other than the Group's functional currency (Pounds Sterling) are recorded at the rates of exchange prevailing at the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the balance sheet date.

 

Exchange differences arising on the settlement of monetary items and on the retranslation of monetary items is included in the income statement for the period.

 

(u) Contingent deferred consideration payments

 

Contingent deferred consideration payments are not included in the cost of acquisition at the time of initially accounting for the investment where the deferred consideration payment is not probable or cannot be measured reliably. If the contingent consideration subsequently becomes probable and can be measured reliably, the additional consideration is treated as an adjustment to the cost of the initial investment.

 

 (v) Standards, interpretations and amendments to published standards that are not yet effective

 

Certain new standards, amendments and interpretations have been issued by the IASB that are not yet effective. The Group has not adopted any of these standards, amendments or interpretations early.

 

§ IFRS 1 (revisions) First time adoption of International Financial Reporting Standards (effective 1 January 2009 and 1 July 2009)

§ IFRS 2 (amendments) Share-based payments (effective 1 January 2009, 1 July 2009 and 1 January 2010)

§ IFRS 3 (revised) Business combinations (effective 1 July 2009)

§ IFRS 7 (revised) Financial instruments: Disclosures (effective 1 January 2009)

§ IFRS 8 (amendments) Operating segments (effective 1 January 2009 and 1 January 2010)

§ IFRS 9 Financial instruments: Classification and measurement (effective 1 January 2013)

§ IAS 1 (amendments) Presentation of financial statements (effective 1 January 2009)

§ IAS 7 (amendments) Statement of cash flows (effective 1 January 2010)

§ IAS 16 (amendments) Property, plant and equipment (effective 1 January 2009)

§ IAS 17 (amendments) Leases (effective 1 January 2010)

§ IAS 19 (amendments) Employee benefits (effective 1 January 2009)

§ IAS 23 Borrowing costs (effective 1 January 2009)

§ IAS 24 (revised) Related party disclosures (effective 1 January 2011)

§ IAS 27 (amendments) Consolidated and separate financial statements (effective 1 January 2009 and 1 July 2009)

§ IAS 32 (amendments) Financial instruments: Presentation (effective 1 January 2009 and 1 February 2010)

§ IAS 36 (amendments) Impairment of assets (effective 1 January 2009 and 1 January 2010)

§ IAS 38 (amendments) Intangible assets (effective 1 January 2009 and 1 July 2009)

§ IAS 39 (amendments) Financial instruments: Recognition and measurement (effective 1 January 2009, 30 June 2009, 1 July 2009 and 1 January 2010)

 

2. REVENUE

 

	Geographical analysis of revenue is as follows:	14 Months ended 30 September 2009	12 Months ended 31 July 2008
		£	£
	United Kingdom	111,165	857,306
	Europe	46,354	-
		_______	_______
	Total revenue	157,519	857,306
		_______	_______

3. EMPLOYEES AND DIRECTORS

		14 Months ended 30 September 2009	12 Months ended 31 July 2008
		£	£
	Wages and salaries Social security cost	179,146 68,357	64,340 5,322
	Other benefits	12,000	-
		_______	_______
		259,503	69,662
		_______	_______

 

The Directors have service agreements, which require not more than 12 months notice of termination. The remuneration packages consist of basic salary or fees.

 

		14 Months ended 30 September 2009	12 Months ended 31 July 2008
		£	£
	The remuneration of the Directors was as follows:
	Wages and salaries Social security cost	156,267 17,635	46,000 5,322
	Other benefits	12,000	-
		_______	_______
		185,902	51,322
		_______	_______

 

The aggregate emoluments of the highest paid director was £64,400 (2008 - £46,000).

 

	The average monthly number of employees was as follows:	14 Months ended 30 September 2009	12 Months ended 31 July 2008
	Directors and employees	5	3
		_______	_______

 

4. COMPANY PROFIT AND LOSS ACCOUNT

 

As permitted by section 408 Companies Act 2006, the income statement of the Parent Company is not presented as part of these financial statements. The Company made a loss for the period of £276,004.

 

5. OPERATING LOSS

 

The operating loss is stated after charging or crediting:

		14 Months ended 30 September 2009	12 Months ended 31 July 2008
		£	£
	Auditors remuneration: - fees paid to former auditors for the audit of the subsidiary's Annual accounts	11,250	-
	- fees payable to the Company's auditors for the audit of the Company's annual accounts	3,750	-
	- fees payable to the Company's auditors for the audit of the subsidiary's annual accounts	6,750	-
	-fees payable to Company's auditors for the review of tax  Computations	1,000	-
	Research and development costs	24,897
	Depreciation	4,750	-
		_______	_______

 

Costs relating to the Company's admission to the Alternative Investment Market of the London Stock Exchange amounted to £205,000 and included taxation and restructuring advice, legal and professional fees and other advisory services relating to printing costs, marketing and public relations all of which related to admission. £38,000 of these fees has been set off against the share premium account and the remainder has been charged as an administrative expense.

 

6. NET FINANCE COSTS

		14 Months ended 30 September 2009	12 Months ended 31 July 2008
		£	£
	Finance expenses Other loan interest Finance income Bank interest	(656)   898 _______	-   4,505 _______
		242 _______	4,505 _______

 

 

7. INCOME TAXATION

		14 Months ended 30 September 2009	12 Months ended 31 July 2008
		£	£
	Tax expense comprises:
	Current tax	-	26,500
	Tax in respect of prior periods	(26,500)	______-
	Current tax charge	(26,500)	26,500
		_______	_______

 

	Profit/(loss) from continuing operations	(936,223)	94,206
		_______	_______
	Income tax expense calculated at 28% (2008 - 21% - reduced from 1 April 2008)	(262,142)	19,783
	Effect of expenses that are not deductible in determining taxable profit	54,420	7,657
	Effect of capital allowances	360	(37)
	Effect of tax reclaimed in respect of prior periods	(26,500)	-
	Effect of change in tax rates	-	(903)
	Effect of unused tax losses and tax offsets	207,362	-
		_______	_______
	Current tax charge	(26,500)	26,500
		_______	_______

 

The total amount of unused tax losses for which no deferred tax asset is recognised in the balance sheet is £679,041 (2008 - £nil). This asset has not been recognised due to uncertainties over the availability of sufficient future profits to recover the asset.

 

8. LOSS PER SHARE

 

The basic loss per share is calculated by dividing the loss for the financial period attributable to shareholders by the weighted average number of shares in issue. The remaining securities in issue are not dilutive as at 30 September 2009.

 

		14 Months ended 30 September 2009	12 Months ended 31 July 2008
	The weighted average number of shares were:	Number	Number
	Weighted average number of ordinary shares Effect of outstanding options shares   Adjusted weighted average number of ordinary shares	169,294,228  1,352,941 _______ 170,647,169	100,000,000 - _______ 100,000,000
		________	________
	Basic loss per share   Diluted loss per share	(0.54)p   (0.53)p	0.07p   0.07p

 

Details of equity instruments which could potentially dilute basic earnings in future but which are not included because they are anti-dilutive for the period under review are stated in Note 15.

 

The comparative number of shares for 2008 reflects the shares that would have been in issue had JSJS Designs (Europe) Limited been acquired by JSJS Designs plc on 5 July 2007 ("JSJS Acquisition Shares"). The number of shares for the 14 month period ended 30 September 2009 assumes that the JSJS Acquisition Shares were in issue throughout the period.

 

9. BUSINESS COMBINATION

 

On 24 October 2008, the Company acquired the entire share capital of JSJS Designs (Europe) Ltd by means of a share exchange whereby the shareholders in JSJS Designs (Europe) Ltd received shares in the Company. In preparing the consolidated financial statements, JSJS Designs (Europe) Ltd has been deemed to be the acquirer and the Company, the legal parent, has been deemed to be acquiree.

 

In accordance with IFRS 3 "Business Combinations" this transaction has been accounted as a reverse acquisition. The key features of this basis of consolidation are:

 

·; The consolidated IFRS financial statement is a continuation of the financial statement of JSJS Designs (Europe) Ltd and the retained earnings recognised are a continuation of those of JSJS Designs (Europe) Ltd immediately before the business combination.

·; The consolidated income statement for the 14 months ended 30 September 2009 includes the results of JSJS Designs (Europe) Ltd for the 14 months ended 30 September 2009 and of JSJS Designs plc from 5 September 2008, the date of incorporation.

·; The assets and liabilities of JSJS Designs (Europe) Ltd are measured based on their pre-combination carrying amounts.

·; The equity structure appearing in the consolidated financial statements reflects the equity structure of the legal parent, JSJS Designs plc. However, the total issued equity instruments reflect that of the legal subsidiary, JSJS Designs (Europe) Ltd. To achieve this a reverse acquisition reserve of £100,616 has been created, being the difference between the required Group equity instruments and the reported equity of the parent.

·; JSJS Designs plc has been consolidated from the date of the reverse acquisition using the fair value of its assets and liabilities at that date.

 

The net assets of JSJS Designs plc were:

 

Cash		Net book and fair value £
Cost of combination		50,000
		(50,000)
Goodwill
		-

 

 

10. INVESTMENTS IN SUBSIDIARIES

						Company
						30 September 2009
	Cost					£
	As at 1 August 2008					-
	Additions					100,620
						_______
	As at 30 September 2009					100,620
						_______

 

The Company owns 100% of the issued share capital of JSJS Designs (Europe) Limited, a company registered in the UK.

 

11. PROPERTY, PLANT AND EQUIPMENT

 

 

GROUP - PERIOD ENDED 31 JULY 2008		Motor Vehicles £	Total   £
Cost
As at 5 July 2007		-	-
Additions		12,000	12,000
		_______	_______
As at 31 July 2008		12,000	12,000
		_______	_______
Depreciation
As at 1 August 2007 and 31 July 2008		-	-
		_______	_______
Net book value at 31 July 2008		12,000	12,000
		_______	_______

 

 

GROUP - PERIOD ENDED 30 SEPTEMBER 2009		Motor Vehicles	Total
		£	£
Cost
As at 1 August 2008		12,000	12,000
Additions		6,000	6,000
		_______	_______
As at 30 September 2009		18,000	18,000
		_______	_______
Depreciation
As at 1 August 2008		-	-
Charge for the period		(4,750)	(4,750)
		_______	_______
As at 30 September 2009		(4,750)	(4,750)
		_______	_______
Net book value at 30 September 2009		13,250	13,250
		_______	_______

 

The Company had no property, plant and equipment during either period.

 

12. INVENTORIES

 

		Group	Group	Company
		30 September 2009	31 July 2008	30 September 2009
		£	£	£
Raw Materials		-	11,648	-
Finished Goods		-	46,995	-
		_______	_______	_______
		-	58,643	-
		_______	_______	_______

 

 

13. TRADE AND OTHER RECEIVABLES

 

		Group	Group	Company
		30 September 2009	31 July 2008	30 September 2009
		£	£	£
Amounts falling due within one year:
Trade receivables		19,721	-	-
Amounts owed by Group Companies Other debtors		- 6,841	- 5,968	303,345 28
Prepayments		12,261	-	11,968
		_______	_______	_______
		38,823	5,968	315,341
		_______	_______	_______

 

 

	Group	Group
	30 September 2009	31 July 2008
	£	£
The ageing analysis of trade receivables is given as follows:
Less than one month past due	19,721	-
	_______	_______
	19,721	-
	_______	_______

The Group does not hold any collateral as security. At the year end, the carrying amounts of the Group's trade and other receivables were denominated in Pounds Sterling.

 

The average credit period on sales is 53 days (2008 - 0 days). No interest is charged on overdue receivables. There is no material difference between the fair value of receivables and their book value.

 

14. TRADE AND OTHER PAYABLES

 

		Group	Group	Company
		30 September 2009	31 July 2008	30 September 2009
		£	£	£
Trade payables		118,381	57,836	25,554
Other taxes and social security		27,588	1,919	-
Other payables		80,553	77,433	-
Accruals		14,959	-	8,020
		_______	_______	_______
		241,481	137,188	33,574
EFG Loan		100,000	-	-
		_______	_______	_______
		341,481	137,188	33,574
		_______	_______	_______

 

At the year end, the carrying amounts of the Company's trade and other payables were denominated in Pounds Sterling.

 

The average credit taken for trade purchases is 62 days (2008: 40 days). The directors consider that the carrying amount of trade payables approximate their fair value.

 

The purpose of the loan was for working capital and was taken out under the government backed Enterprise Finance Guarantee scheme and is repayable in full on 24 June 2010. The interest rate is 3% over the Bank's base rate.

 

15 (i) CALLED UP SHARE CAPITAL

 

			Group	Group	Company
			30 September 2009	31 July 2008	30 September 2009
			£	£	£
Authorised:
1,000,000,000 ordinary shares 0.1p each (2008 : 100 ordinary shares of £1 each)			1,000,000	100	1,000,000
			_______	_______	_______
Allotted, called up & fully paid:
200,000,000 ordinary shares of 0.1p each (2008 : 4 ordinary shares of £1 each)			200,000	4	200,000
			_______	_______	_______

 

The authorised and issued share capital for 2008 includes only that of JSJS Designs (Europe) Limited.

 

BCOMP 369 Limited was incorporated on 5 September 2008 with an authorised share capital of £100 represented by 100 ordinary shares of £1 each, of which one ordinary share was issued, nil paid.

 

On 22 October 2008, the authorised and issued share capital was increased to £1,000,000, and sub-divided into 10,000,000 ordinary shares of 10p each. On the same date 499,990 ordinary shares of 10p each were issued at par and paid up as to one quarter of their nominal value and were subsequently paid up in full.

 

On 24 October 2008, the company issued 1,000,000 ordinary shares of 10p each at par credited as fully paid upon the acquisition of JSJS Designs (Europe) Limited.

 

On 11 November 2008 the authorised share capital was subdivided into 1,000,000,000 ordinary shares of 0.1p each.

 

On 18 November 2008, the company issued 50,000,000 ordinary shares at a price of 1p each credited as fully paid.

 

All issued shares rank pari passu for the purposes of dividends, voting, and any return of capital.

 

The Company has issued the following options convertible into New Ordinary shares as shown on exercise. The options carry neither rights to dividends nor voting rights. The first option may be exercised at any time after 7 April 2009 and thereafter in two equal stages in January and July of each subsequent year. The second option may be exercised at any time from the date of vesting to the date of their expiry. None were exercised during the year.

 

Options	Number	Period	Exercise price	Fair value at date of grant
			(pence)	£
Issued 20/11/08	533,333 per annum	Ongoing	3.75p	20,000
Issued 20/11/08	2,000,000	5 years	1.00p	20,000

 

The 533,333 options with a fair value of 3.75 pence at date of grant have been priced using an estimate of the fair value of the services performed and for which they have been issued as full consideration.

 

The 2,000,000 options with a fair value of 1 pence at date of grant have been priced using the Black-Scholes method. The inputs into the Black-Scholes model were as follows:

 

	2008
Weighted average share price (pence)	3
Weighted average exercise price (pence)	1
Expected volatility	77%
Risk free rate	3.4%
Expected dividends	None
Weighted average remaining contractual life (years)	2.5

 

Where relevant, the expected life used in the model has been adjusted based on management's best estimate for the effects of non-transferability, exercise restrictions (including the probability of meeting market conditions attached to the warrants), and behavioural considerations. Expected volatility is based on management's best estimate of the historic volatility of similar shares in the market.

 

The charge to the income statement for share based payments during the period ended 30 September 2009 was £26,887 (2008 : nil).

 

At the year end the average exercise price was 3.375 pence and the average remaining life of the options was 4.2 years.

 

(ii) Deferred Consideration Shares

 

In connection with the acquisition of JSJS Designs (Europe) Limited on 24 October 2008, is a deferred consideration of 50,000,000 ordinary shares which will only become payable in the event that:

(i) the closing mid year net price of the ordinary shares has, prior to the fifth anniversary of the date of admission to AIM, increased by 50% or more, or

(ii) the net profit of JSJS Designs (Europe) Limited exceeds £500,000in any of the five financial years ending 2009 to 2013 inclusive.

 

16 UNISSUED SHARE CAPITAL

 

The unissued share capital of £20,000 relates to the Shareholder Agreement between the Company and the Chairman whereby the Chairman can receive 533,333 ordinary shares of 0.1p each at a fair value purchase price of 3.75p in lieu of his first year's fee. This option, not yet taken, may be exercised any time after 7 April 2009.

 

17. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of balances with banks and comprise the following balance sheet amounts:

 

		Group	Group	Company
		30 September 2009	31 July 2008	30 September 2009
		£	£	£
Cash and cash equivalents		5,462	154,787	296
		_______	_______	_______

 

The Company's cash and cash equivalents totalling £5,462, are all held at institutions rated by international credit agencies as at least A+ or equivalent.

 

18. Directors Loans

 

Included within other debtors is a director's loan of £419. This was repaid post year end.

 

19. Capital Commitments

 

There were no capital commitments at the year end.

 

20. Related Parties

 

The Company does not have a controlling party. The following transactions were carried out with related parties:

 

Purchases of goods and services
			30 September 2009	31 July 2008
			£	£
Entities controlled by key management personnel			22,500	364,599
			_______	_______

 

The entity controlled by key management personnel is a company, Tetra Systems Limited, owned by Mr John Sinclair, a director and shareholder of the company. The amounts purchased in 2009 related to consultancy fees prior to Mr Sinclair joining the company payroll and have been charged to overheads.

 

During the period the group purchased a car from John Shermer, a director of the Company, for £6,000.

 

There are no year end balances arising from sales and purchases of goods and services to related parties.

 

David Griffiths, whose brother is a shareholder in the Company, received consultancy fees of £65,000 during the period ended 30 September 2009 (2008: £nil).

 

Directors			30 September 2009	31 July 2008
			£	£
Aggregate emoluments			168,267	46,000
			_______	_______

 

21. Operating Lease Commitments

 

There are no operating lease commitments.

 

22. FINANCIAL INSTRUMENTS

 

(a) Financial instruments by category

	30 September 2009	31 July 2008
	£	£
Financial assets - Group
Trade and other receivables, excluding prepayments	26,562	5,968
Cash and cash equivalents	5,462	154,787
	_______	_______
	32,024	160,755
	_______	_______
Financial assets - Company
Loans and receivables	303,373	-
Cash and cash equivalents	296	-
	_______	_______
	303,669	-
	_______	_______
Other financial liabilities - Group
Trade and other payables, excluding statutory liabilities	313,893	135,269
	_______	_______
Other financial liabilities - Company
Trade and other payables, excluding statutory liabilities	33,574	-
	_______	_______

 

(b) Market risk

The main risk arising from the Group's financial instruments are liquidity risk and changes in market values. The Group has not entered into any derivative transactions.

 

(c) Currency risk

The Group is subject to foreign exchange risk in respect of some of its normal trading activities.

 

(d) Price risk

The Directors do not consider price risk to be significant.

 

(e) Credit risk

The company obtained payment in advance on most of its orders and the cash is deposited with a reputable bank. At the period end the group did not have any significant trade receivables and it is therefore the opinion of the directors that there is no requirement for a provision for doubtful debts.

 

(f) Liquidity risk

The directors regularly review both short and medium term cash flow projections in order to manage the Company's cash flow.

 

The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. The principle liabilities of the Group and Company arise in respect of administrative expenditure, trade, and other payables. Trade and payables are all payable within three months.

 

The Board receives cash flow projections on a regular basis as well as information on cash balances.

 

(g) Interest Rate Risk

The Group and the Company are exposed to interest rate risk in respect of an interest bearing Enterprise Finance Guarantee loan which is a variable rate instrument. The Group and Company are also exposed to interest rate risk in respect of surplus funds held on deposit.

 

(h) Interest Rate Table

The following table demonstrates the sensitivity to a reasonable and possible change in interest rates, with all other variables held constant of the group's profit before tax (although the impact on floating rate borrowings) and cash flows. There is no impact on the Group's equity.

 

	Change in rate	30 Sept 2009	Change in rate	31 July 2008
		£		£
Sterling	-0.5%	500	-0.5%	-
	-1.0%	1,000	-1.0%	-
	-1.5%	1,500	-1.5%	-
Sterling	0.5%	(500)	0.5%	-
	1.0%	(1,000)	1.0%	-
	1.5%	(1,500)	1.5%	-

 

(i) Fair value of financial assets and liabilities

The directors consider that there is no significant difference between the book value and fair value of the Group's financial assets and liabilities.

 

(j) Cash flow interest rate risk

Interest rate changes may affect the Group's ability to raise funds for future projects by influencing the amount to which investors are willing to commit.

 

(k) Capital risk

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders. The directors regularly review both short and medium term forecasts to achieve this.

 

23. Post Balance Sheet Events

 

On 7 September 2009 the Company entered into a convertible loan agreement with Centaur Financial Services Limited. The terms of the convertible loan agreement is that a loan of £160,000 is made available to the Company on or before 30 September 2009. In return, Centaur Financial Services Limited have the option to buy 16,000,000 ordinary shares of 0.1p each at 1p per share in full and final settlement of the loan. The agreement is valid for one year. If at this time Centaur has not taken up its option, the loan is repayable in full together with interest which is calculated at 5% per annum.

 

The loan monies was received by the Company during the first week of October 2009.

 

On 20 November 2009 the Company issued 16,000,000 ordinary shares of 0.1p each at a price of 1p per share in settlement of this loan.

 

24. Explanation of transition to IFRS

 

The Group financial statements have been prepared in accordance with the recognition and measurement principles of IFRS. The following disclosures are required in the principle of transition. For the purposes of this financial information, under IFRS, the acquisition of JSJS Designs (Europe) Limited ("JSJS Europe") on 24 October 2008 is treated as a reverse acquisition, and therefore, the comparative balance sheet is that of JSJS Europe at 31 July 2008. The date of transition to IFRS was 5 July 2007, being the date of incorporation of JSJS Europe.

 

IFRS 1 "First-Time Adoption of International Financial Reporting Standards" sets out the transition rules which must be applied when IFRS is adopted for the first time. IFRS 1 provides a number of optional exemptions to the general principles of full retrospective application of IFRS.

 

In its first financial statements, a first-time adopter need not restate its comparative information in compliance with IAS 32 and IAS 39. The group has elected to take advantage of this exemption. The Group has adopted IAS 32 and IAS 39 with effect from 1 August 2008.

 

Reconciliation of equity and profit : there were no adjustments required to either net assets or profit under UK GAAP in order to arrive at net assets and profit under IFRS.

 

Reconciliation of the consolidated income statement : there were no adjustments required to consolidated income statement under UK GAAP in order to arrive at consolidated income statement under IFRS.

This information is provided by RNS

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