OPP.L Regulatory News (OPP)

22 Jun 2007 07:01

Origo Sino-India PLC22 June 2007 Not for release or distribution before 0700, JUNE 22, 2007 RNS & MEDIA RELEASE ORIGO SINO-INDIA PLC Audited results for the year ending 31st December 2006 Financial highlights Revenue £42,000Gross profit £16,000Loss before & after tax £7,398,000Basic & diluted loss per share 22.9pIssue of Ordinary shares £10,291,000Cash & cash equivalents at YE £9,175,000 • Initial Public Offering on AIM in December 2006 raised £12.8 million. • One time IFRS 2 imposed goodwill right down of £4.8 million in respect of AVL and the admission costs of £1.2 million contributed to the loss of £7.4 million. • In first 6 months of 2007 Origo has made key investments in Rising Technology, Rong Run Media, PSI and Fans Media and has continued its funding of ISAK, Spiced Bits, Dragon Ports and OS Consulting. • In 2007 Origo is focussed on increasing investments, building the strategic consultancy practice and expanding the private equity portfolio in India. Commenting, Wang Chao Yong, chairman of Origo said: "2007 will be an important year for Origo as we seek to capitalise on ourachievements. We have started the year well with several prime private equityinvestments and several transactional support initiatives." END For further information, please call: Chris Rynning, Origo Sino-India PLC +86 1390 124 6417Christopher Joll, MJ2 Ltd +44 20 7491 7776 THE CHAIRMAN'S STATEMENT I am delighted to present our Annual Report and Accounts for 2006. This has beena very challenging year for Origo. We have transformed a private venture capitalfirm into a publicly listed private equity group and strategic consultancyspecialized on the Chinese and Indian markets. The company's successful introduction to the Alternative Investment Market ofthe London Stock Exchange, during difficult market conditions, was a significantachievement by the company's management, backed up by committed advisors andshareholders. We are grateful for the wide spread geographical institutional support of ourinvestors who have provided the basis and funds to support our expansion. 2007will be an important year for Origo as we seek to capitalize on ourachievements. We have started the year well with several prime private equityinvestments and several transactional support initiatives. I would like to thank my fellow Board Directors, along with the Executive team,for their hard work and dedication during the year. Wang Chao YongChairman CHIEF EXECUTIVE'S STATEMENT At the end of 2006, Origo was admitted to the Alternative Investment Market ofthe London Stock Exchange, as the only private equity group exclusively focusingon the China and Indian markets. The initial public offering raised a total of£12.8m for investment pipelines in China and India. The admission, carried outunder difficult market conditions, is a testament to the skill sets andcommitment of Origo's executives, board of directors and shareholders. For sound commercial reasons the Board has decided to make the acquisition ofAVL and consolidate its portfolio of companies into Origo before its IPO.However, under the IFRS requirements as advised by our auditors, BDO, we arehaving to write down a one time goodwill impairement charge of £4.8million as amatter of compliance. In addition, as you know we have also incurred the costsof completing the IPO of Origo which amounted to £1.2 million. Therefore theyear ended with a cumulative loss of £7.4 million and a net cash position of£9.2 milion. The management and the Board continue to be confident about theperformance and the growth of the acquired portfolio companies and are aware ofno reason that could affect such performance or growth. The first half of 2007 has seen the Origo stock price rise and fall. The factthat major institutions such as Wellington, British Steel, Progressive andBritish Gas, among others, have been increasing their shareholding in Origo isvery encouraging to us. My primary concern is to improve Origo stock performanceand shareholder value. In the first months of 2007, Origo have made several key investments includingRising Technology (China's leading anti virus and software security firm); RongRun Media (a screen media advertising company comparable to NASDAQ listed FocusMedia); PSI (an online game and technology developer); and Fans Media (thecompany operating one of China's largest, privately held entertainment portals,ifensi.com). Origo has also continued to fund and strengthen the performance ofour portfolio companies like ISAK, Spiced Bits, Dragon Ports and OS Consulting. Origo's portfolio companies continued to make operational progress in 2006. Withnew, quality investments and realizations being a key driver of value, Origowill continue to increase investments, build the strategic consulting practiceand in particular expand the private equity portfolio in India. I would like to thank all our staff for their skill, effort and teamwork in2006. Chris Andre RynningChief Executive Officer Origo Sino-India Plc Directors' Report Report of the directors for the period ended 31 December 2006 The directors present their report together with the audited financialstatements for the period ended 31 December 2006, the company was incorporatedon 31 March 2006. Results and dividends The result of the Group for the period is set out on page 8 and shows a loss forthe period of £7,398,000. It is proposed that the retained loss of £7,398,000 be transferred to reserves. The limited trading history of the group neither justifies nor allows thepayment of a dividend. The directors are therefore not able to recommend thepayment of a dividend. Principal activities, review of business and future developments The Group strategy is to focus on investment and provision of consultancyservices in fast growing, profitable private companies across various sectors ofthe Chinese and Indian economies. The review of business and future developmentsis covered in the Chairman's Report and Chief Executive's Report. Directors At 31 December 2006 Options and similar interests Ordinary Shares Mr. Wang Chao Yong 4,000,000 1,047,500Mr. Chris A Rynning 1,000,000 12,125,000Mr. Lou Lin 800,000 400,000Mr. Vinay Ganga 800,000 6,690,000Mr. Christopher Jemmett 100,000 50,000Mr. Dipankar Basu 100,000 50,000Mr.Stockton Birthisel - 25,000 Directors' responsibilities The directors are responsible for keeping proper accounting records whichdisclose with reasonable accuracy at any time the financial position of thecompany, for safeguarding the assets of the company, for taking reasonable stepsfor the prevention and detection of fraud and other irregularities and for thepreparation of a Directors' Report which complies with the requirements of theIsle of Man Companies Acts 1931-2004. The directors are responsible for preparing the annual report and the financialstatements in accordance with the Isle of Man Companies Acts 1931-2004. Thedirectors have chosen to prepare financial statements for the group inaccordance with International Financial Reporting Standards as adopted by theEuropean Union (IFRSs) and have chosen to prepare the parent company accounts inaccordance with UK Generally Accepted Accounting Practice. Group financial statements International Accounting Standard 1 requires that financial statements presentfairly for each financial year the group's financial position, financialperformance and cash flows. This requires the faithful representation of theeffects of transactions, other events and conditions in accordance with thedefinitions and recognition criteria for assets, liabilities, income andexpenses set out in the International Accounting Standards Board's 'Frameworkfor the preparation and presentation of financial statements'. In virtually allcircumstances, a fair presentation will be achieved by compliance with allapplicable IFRSs. A fair presentation also requires the Directors to: • Consistently select and apply appropriate accounting policies; • Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; and • Provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance. Parent company financial statements Company law requires the directors to prepare financial statements for eachfinancial year which give a true and fair view of the state of affairs of thecompany and of the profit or loss of the company for that period. In preparingthese financial statements, the directors are required to: • Select suitable accounting policies and then apply them consistently;- • Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. • Make judgements and estimates that are reasonable and prudent; and • State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements. Auditors and disclosure of information to auditors As far as each director is aware, there is no relevant audit information ofwhich the Company's auditors are unaware. Financial statements are published on the group's website in accordance withlegislation in the Isle of Man governing the preparation and dissemination offinancial statements, which may vary from legislation in other jurisdictions.The maintenance and integrity of the Group's website is the responsibility ofthe directors. The Directors responsibility also extends to the ongoingintegrity of the financial statements contained therein. Each of the Directors has taken all the steps they ought to have takenindividually as a Director in order to make themselves aware of any relevantaudit information and to establish that the Company's auditors are aware of thatinformation. Auditors A resolution to reappoint BDO Stoy Hayward LLP as auditors will be proposed atthe forth coming Annual General Meeting. By order of the BoardStockton BirthiselCompany secretary Audit Report Independent auditor's report to the shareholders of Origo Sino-India Plc We have audited the group and parent company financial statements ("thefinancial statements") of Origo Sino-India Plc for the period ended 31 December2006 which comprise the Group Income Statement, the Group and Parent CompanyBalance Sheets, the Group and Parent Company Cash Flow Statements, the GroupStatement of Recognised Income and Expense and the related notes. Thesefinancial statements have been prepared under the accounting policies set outtherein. Respective responsibilities of directors and auditors The directors' responsibilities for preparing the Annual Report and the groupfinancial statements in accordance with applicable law and InternationalFinancial Reporting Standards (IFRSs) as adopted by the European Union and forpreparing the parent company financial statements in accordance with applicablelaw and United Kingdom Accounting Standards (United Kingdom Generally AcceptedAccounting Practice) are set out in the Statement of Directors'Responsibilities. Our responsibility is to audit the financial statements in accordance withrelevant legal and regulatory requirements and International Standards onAuditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a trueand fair view and have been properly prepared in accordance with the Isle of ManCompanies Acts 1931 to 2004 and whether the information given in the DirectorsReport is consistent with those financial statements. We also report to you if,in our opinion, the company has not kept proper accounting records, if we havenot received all the information and explanations we require for our audit, orif information specified by law regarding directors' remuneration and othertransactions is not disclosed. We read other information contained in the Annual Report and consider whether itis consistent with the audited financial statements. The other informationcomprises only the Directors Report, the Chairman's Statement and the ChiefExecutive's Report. We consider the implications for our report if we becomeaware of any apparent misstatements or material inconsistencies with thefinancial statements. Our responsibilities do not extend to any otherinformation. Our report has been prepared pursuant to the requirements of section 15 of theIsle of Man Companies Act 1982 and for no other purpose. No person is entitledto rely on this report unless such a person is a person entitled to rely uponthis report by virtue of and for the purpose of the Isle of Man Companies Act1982 or has been expressly authorised to do so by our prior written consent.Save as above, we do not accept responsibility for this report to any otherperson or for any other purpose and we hereby expressly disclaim any and allsuch liability. Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing(UK and Ireland) issued by the Auditing Practices Board. An audit includesexamination, on a test basis, of evidence relevant to the amounts anddisclosures in the financial statements. It also includes an assessment of thesignificant estimates and judgments made by the directors in the preparation ofthe financial statements, and of whether the accounting polices are appropriateto the group's and company's circumstances, consistently applied and adequatelydisclosed. We planned and performed our audit so as to obtain all the information andexplanations which we considered necessary in order to provide us withsufficient evidence to give reasonable assurance that the financial statementsare free from material misstatements, whether caused by fraud or otherirregularity or error. In forming our opinion we also evaluated the overalladequacy of the presentation of information in the financial statements. Opinion In our opinion: • the group financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union, of the state of the group's affairs as at 31 December 2006 and of its loss for the period then ended; • the parent company financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice of the state of the parent company's affairs as at 31 December 2006; • the financial statements have been properly prepared in accordance with the Isle of Man Companies Acts 1931 to 2004;and • the information given in the directors report is consistent with the financial statements. BDO STOY HAYWARD LLPChartered AccountantsGuildford Consolidated income statement for the period ended 31 December 2006 Note 2006 £'000 Revenue 42Cost of sales (26) Gross profit 16Distribution costs (1) Impairment of goodwill (4,795)Share based payments (1,043)AIM flotation fees (1,184)Other administrative expenses (398) Total administrative expenses (7,420) Loss from operations 2 (7,405) Finance costs 6 (4)Share of profits/(losses) of Associates/joint ventures (1)Finance income 6 12 Loss before and after tax (7,398) Attributable to:- Equity holders of the parent (7,398) (7,398) Basic and diluted loss per share (22.9p) Consolidated statement of recognised income and expense for the period ended 31December 2006 Note 2006 £'000 Loss for the year (7,398) Total recognised income and expense for the year (7,398) Attributable to: - Equity holders of the parent (7,398) (7,398) The notes on pages 11-29 form part of these financial statements. Consolidated balance sheet at 31 December 2006 Assets Note 2006 £'000Non-current assetsProperty, plant and equipment (PPE) 9 12Investments in associates 12 26Available for sale investments 14 132 170Current assetsTrade and other receivables 13 2,996Cash and cash equivalents 9,175 12,171 Total assets 12,341 Current liabilitiesTrade and other payables 15 880 880 Total liabilities 880 Total net assets 11,461 Equity attributable to equity holders of the companyShare capital 19 7Share premium reserve 20 6,998Share based payment reserve 20/21 1,043Retained earnings 20 (7,398)Merger reserve 20 4,649Warrant reserve 20 6,162 Total equity 11,461 Total equity and liabilities 12,341 The financial statements were approved by the Board of Directors and authorisedfor issue. They were signed on its behalf by: Wang Chao Yong Chris Andre Rynning Lou LinChairman Chief Executive Officer Chief Financial Officer The notes on pages 11-29 form part of these financial statements. Consolidated cash flow statement for the period ended 31 December 2006 Period ended 31 Dec 2006 £'000 Net loss from operating activities (7,398) Adjustments for:Depreciation 2Share-based payment 1,043Share of results from associates 1Impairment of goodwill 4,795Finance income (12)Finance costs 4 Operating loss before changes in working capital and provisions (1,565) Decrease in trade and other receivables (5)Increase in trade and other payables 349 Cash outflow from operations (1,221) Finance cost paid (4) Net cash outflow from operating activities (1,225) Investing activitiesAcquisition of subsidiary, net of cash acquired 106Purchases of Property,Plant and (9) EquipmentFinance income received 12 109 Financing activities Issue of ordinary shares 10,291 Increase in cash and cash equivalents 9,175Cash and cash equivalents at beginning of period - Cash and cash equivalents at end of period 9,175 The notes on pages 11-29 form part of these financial statements. Notes forming part of the financial statements for the period ended 31 December2006 1 Accounting policies General Origo Sino-India Plc ("the Company") and its subsidiaries (together "the Group")provide financial and the operational consultancy and equity investmentsservices. The company is a limited liability company incorporated and domiciledin Isle of Man. Basis of preparation The principal accounting policies applied in the preparation of the consolidatedfinancial information are set out below. These policies have been consistentlyapplied to all the periods presented, unless otherwise stated. (a) The financial information set out below, is based on financial statementsof the company and its subsidiaries and associates for the period ended 31December 2006 and all values rounded to the nearest £'000 except whereindicated. (b) The consolidated financial information has been prepared under thehistorical cost convention except for certain financial instruments, which aremeasured at fair value and in accordance with International Financial ReportingStandards and International Financial Reporting Interpretations Committee'sinterpretations ("IFRIC") (collectively, "IFRSs") issued by the InternationalAccounting Standards Board ("IASB"). The preparation of consolidated financial information in conformity with IFRSsrequires the use of certain critical accounting estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosures ofcontingent assets and liabilities at the date of the consolidated financialinformation and the reported amounts of revenue and expenses during thereporting period. Although these estimates are based upon management's bestknowledge of current event and actions, actual results may differ from thoseestimates. The following is a list of accounting policies which cover areas that thedirectors consider require estimates and judgements which have a significantrisk of causing a material adjustment to the carrying amount of assets andliabilities within the next financial year: • Share based payments and equity settled transactions The Group has applied the requirements of IFRS2 Share based payments in thesefinancial statements. The Group has issued equity-settled share payments to certain directors andemployees, and to its advisors for services provided in respect to theadmission. Equity-settled share-based payments are measured at fair value at thedate of grant. The fair value at the grant date of the equity-settled, share-based payments is expensed to the income statement on a straight line basis overthe vesting period, based on the Group's estimate of shares that will eventuallyvest. Fair value is measured by use of the Black-Scholes model. The expected life usedin the model has been adjusted based on management's best estimate. • Impairment of assets The carrying amounts of non-current assets are reviewed at each balance sheetdate to determine whether there is any indication of impairment. If any suchindication exists, the asset's recoverable amount is estimated. An impairmentloss is recognised whenever the carrying amount of the asset or itscash-generating unit exceeds its recoverable amount. Impairment losses arerecognised in administrative expenses in the income statement. The recoverable amount is the higher of an asset's net selling price and valuein use. The net selling price is the amount obtainable from the sale of an assetin an arm's length transaction. Value in use is the present value of estimatedfuture cash flows expected to arise from the continuing use of an asset and fromits disposal at the end of its useful life. Recoverable amounts are estimatedfor individual assets or, if it is possible, for the cash generating unit. An impairment loss is reversed if there has been a change in the estimate usedto determine the recoverable amount. An impairment loss is reversed only to theextent that the asset carrying amount does not exceed the carrying amount thatwould have been determined, net of depreciation, if no impairment loss had beenrecognised. Reversals of impairment losses are recognised in the incomestatement. The following principal accounting policies have been applied consistentlythroughout the year in dealing with items which are considered material inrelation to the financial information: Measurement Convention Assets and liabilities in the financial statements have been valued at historiccost except where otherwise indicated in these accounting policies. Theprincipal accounting policies for the purposes of adopting IFRS unless statedotherwise applied consistently to all period. (a) Basis of consolidation Subsidiaries Subsidiaries are all entities over which the Group has the power to govern thefinancial and operating policies generally accompanying a shareholding of morethan one half of the voting rights. The existence and effect of potential votingrights that are currently exercisable or convertible are considered whenassessing whether the Group controls another entity. Subsidiaries are fullyconsolidated from the date on which control is transferred to the Group. Theyare excluded from the consideration from the date that control ceases. The purchase method of accounting is used to account for the acquisition ofsubsidiaries by the Group except as detailed below. The cost of an acquisitionis measured as the fair value of the assets given, equity instruments issued andliabilities incurred or assumed at the date of exchange, plus costs directlyattributable to the acquisition. Identifiable assets acquired and liabilitiesand contingent liabilities assumed in a business combination are measuredinitially at their fair values at the acquisition date, irrespective of theextent of any minority interest. The excess of the cost of acquisition over thefair value of the Group's share of the identifiable net assets acquired isrecorded as goodwill. If the cost of acquisition is less than the fair value ofthe net assets of the subsidiary acquired, the difference is recognised directlyin the income statement. Inter-company transactions, balances and unrealised gains on transactionsbetween group companies are eliminated. Unrealised losses are also eliminatedbut considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensureconsistency with the policies adopted by the Group. Transactions with minority interests The Group applies a policy of treating transactions with minority interests astransactions with parties external to the Group. Disposals to minority interestsresult in gains and losses for the Group that are recorded in the incomestatement. Purchases from minority interests result in goodwill, being thedifference between any consideration paid and the relevant share acquired of thecarrying value of net assets of the subsidiary. (b) Associates Associates are all entities over which the Group has significant influence butnot control, generally accompanying a shareholding of between 20% and 50% of thevoting rights. Investments in associates are accounted for using the equitymethod of accounting and are initially recognised at cost. The Group'sinvestment in associates includes goodwill (net of any accumulated impairmentloss) identified on acquisition. The Group's share of its associates' post-acquisition profits or losses isrecognised in the income statement, and its share of post-acquisition movementsin reserves is recognised in reserves. The cumulative post-acquisition movementsare adjusted against the carrying amount of the investment. When the Group'sshare of losses in an associate equals or exceeds its interest in the associate,including any other unsecured receivables, the Group does not recognise furtherlosses, unless it has incurred obligations or made payments on behalf of theassociate. Unrealised gains on transactions between the Group and its associates areeliminated to the extent of the Group's interest in the associate. Unrealisedlosses are also eliminated unless the transaction provides evidence of animpairment of the asset transferred. Accounting policies of associates have beenchanged where necessary to ensure consistency with the policies adopted by theGroup. (c) Impairment of non-financial assets Impairment tests on goodwill and other intangible assets with indefinite usefuleconomic lives are undertaken annually on 31 December. Other non-financialassets are subject to impairment tests whenever events or changes incircumstances indicate that their carrying amount may not be recoverable. Wherethe carrying value of an asset exceeds its recoverable amount (i.e. the higherof value in use and fair value less costs to sell), the asset is written downaccordingly. Where it is not possible to estimate the recoverable amount of an individualasset, the impairment test is carried out on the asset's cash-generating unit(i.e. the lowest group of assets in which the asset belongs for which there areseparately identifiable cash flows). Impairment charges are included in the administrative expenses line item in theincome statement, except to the extent they reverse gains previously recognisedin equity. (d) Warrant reserve The difference between the fair value of warrants issued and the exercise priceis credited to the warrant reserve. When the underlying warrants are exercisedthe premium is transferred to the share premium account. (e) Foreign currencies Functional and presentation currency Items included in the financial statements of each of the Group's entities aremeasured using the currency of the primary economic environment in which theentity operates ('the functional currency"). The consolidated financialstatements are presented in sterling, which is the Group's presentationalcurrency. Transactions and balances Foreign currency transactions are translated into the functional currency usingthe exchange rates prevailing at the dates of the transactions. Foreign exchangegains and losses resulting from the settlement of such transactions and from thetranslation at year-end exchange rates of monetary assets and liabilitiesdenominated in foreign currencies are recognised in the income statement, exceptwhen deferred in equity as qualifying cash flow hedges and qualifying netinvestment hedges. Changes in the fair value of monetary securities denominated in foreign currencyclassified as available for sale are analysed between translation differencesresulting from changes in the amortized cost of the security, and other changesin the carrying amount of the security. Translation differences are recognisedin profit or loss, and other changes in the carrying amount are recognised inequity. Translation differences on non-monetary financial assets and liabilities arereported as part of the fair value gain or loss. Translation differences onnon-monetary financial assets and liabilities such as equities held at fairvalue through profit or loss are recognised in profit or loss as part of thefair value gain or loss. Translation differences on non-monetary financialassets, such as equities classified as available for sale, are included in thefair value reserve in equity. Group companies The results and financial position of all group entities (none of which has thecurrency of a hyperinflationary economy) that have a functional currencydifferent from the presentation currency are translated into the presentationcurrency as follows: (i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet; (ii) income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and (iii) all resulting exchange differences are recognised as a separate component of equity. On consolidation, exchange differences arising from the translation of the netinvestment in foreign operations, and of borrowings and other currencyinstruments designated as hedges of such investments, are taken to shareholders'equity. When a foreign operation is sold, exchange differences that are recordedin equity are recognised in the income statement as part of the gain or loss onsale. Goodwill and fair value adjustments arising on the acquisition of a foreignentity are treated as assets and liabilities of the foreign entity andtranslated at the closing rate. Transactions entered into by group entities in a currency other than thecurrency of the primary economic environment in which it operates ("thefunctional currency") are recorded at the rates ruling when the transactionsoccur. Foreign currency monetary assets and liabilities are translated at therates ruling at the balance sheet date. Exchange differences arising on theretranslation of unsettled monetary assets and liabilities are similarlyrecognised immediately in the income statement, except for foreign currencyborrowings qualifying as a hedge of a net investment in a foreign operation. (f) Financial assets The Group classifies its financial assets into one of the following categories,depending on the purpose for which the asset was acquired. The Group'saccounting policy for each category is as follows: Loans and receivables: These assets are non-derivative financial assets withfixed or determinable payments that are not quoted on an active market. Theyarise principally through the provision of goods and services to customers(trade debtors), but also incorporate other types of contractual monetary asset. At each balance sheet date subsequent to initial recognition, they are carriedat amortised cost using the effective interest rate method less any identifiedimpairment losses. Available-for-sale: Non-derivative financial assets not included in the abovecategories are classified as available-for-sale and comprise the Group'sstrategic investments in entities not qualifying as subsidiaries, associates orjointly controlled entities. Investments that do not have a quoted market priceand whose fair value cannot be reliably measured are held at cost. Whereinvestments are carried at fair value, any changes are recognised directly inequity. Where a decline in the fair value of an available-for-sale financialasset constitutes objective evidence of impairment, the amount of the loss isremoved from equity and recognised in the income statement. (g) Financial liabilities Financial liabilities comprise trade payables and other short-term monetaryliabilities, which are initially recognised at fair value and subsequentlycarried at amortised cost. (h) Share-based payments Where share options are awarded to employees, the fair value of the options atthe date of grant is charged to the income statement over the vesting period.Non-market vesting conditions are taken into account by adjusting the number ofequity instruments expected to vest at each balance sheet date so that,ultimately, the cumulative amount recognised over the vesting period is based onthe number of options that eventually vest. Market vesting conditions arefactored into the fair value of the options granted. As long as all othervesting conditions are satisfied, a charge is made irrespective of whether themarket vesting conditions are satisfied. The cumulative expense is not adjustedfor failure to achieve a market vesting condition. Where equity instruments are granted to persons other than employees, the incomestatement is charged with the fair value of goods and services received or thefair value of consideration given for those goods and services. (i) Leased assets Where substantially all of the risks and rewards incidental to ownership of aleased asset have been transferred to the Group (a "finance lease"), the assetis treated as if it had been purchased outright. The amount initiallyrecognised as an asset is the present value of the minimum lease paymentspayable over the term of the lease. The corresponding lease commitment is shownas a liability. Lease payments are analysed between capital and interest. Theinterest element is charged to the income statement over the period of the leaseand is calculated so that it represents a constant proportion of the leaseliability. The capital element reduces the balance owed to the lessor. Where substantially all of the risks and rewards incidental to ownership areretained by the lessor (an "operating lease"), the total rentals payable underthe lease are charged to the income statement on a straight-line basis over thelease term. The land and buildings elements of property leases are considered separately forthe purposes of lease classification. (j) Employee benefits Obligations for contributions to defined contribution retirement plans arerecognised as an expense in the income statement as incurred. ( k) Property, plant and equipment Property, plant and equipment is stated at historical cost less depreciation.Historical cost includes expenditure that is directly attributable to theacquisition of the items. Subsequent costs are included in the asset's carrying amount or recognised as aseparate asset, as appropriate, only when it is probable that future economicbenefits associated with the item will flow to the Group and the cost of theitem can be measured reliably. All other repairs and maintenance are charged tothe income statement during the financial period in which they are incurred. Depreciation is calculated using the straight-line method to allocate cost orrevalue amounts to their residual values over their estimated useful lives, asfollows: - Furniture, fittings and equipment 3-8 years The assets' residual values and useful lives are reviewed, and adjusted ifappropriate, at each balance sheet date. An asset's carrying amount is written down immediately to its recoverable amountif the asset's carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carryingamount. These are included in the income statement. When revalued assets aresold, the amounts included in other reserves are transferred to retainedearnings. (l) Goodwill In accordance with IFRS 3 Business Combinations, goodwill is no longer amortisedbut stated at cost less any provision for impairment in value. Goodwill isreviewed annually for any impairment in its value or at such time that there isan indication that its value has been reduced if sooner. Goodwill on an acquisition is initially measured at cost, being the excess ofthe cost of the business combination over the acquirer's interest in the netfair value of the identifiable assets, liabilities and contingent liabilities.Following initial recognition, goodwill is measured at cost less any accumulatedimpairment losses. (m) Income taxes Income taxes for the year comprise current tax and deferred tax. Current tax is based on the profit or loss from ordinary activities adjusted foritems that are non-assessable or disallowable for income tax purposes and iscalculated using tax rates that have been enacted or substantively enacted atthe balance sheet date. Deferred income tax is provided in full on temporary differences arising betweenthe tax bases of assets and liabilities and their carrying amounts in theconsolidated financial statements. However, deferred income tax is not accountedfor if it arises from initial recognition of an asset or liability in atransaction other than a business combination that at the time of thetransaction affects neither accounting profit nor taxable profit. Deferredincome tax is determined using tax rates (and laws) that have been enacted orsubstantially enacted by the balance sheet date and are expected to apply whenthe related deferred income tax asset is realised or the deferred income taxliability is settled. Deferred income tax assets are recognised to the extent that it is probable thatfuture taxable profit will be available against which the temporary differencescan be utilised. Deferred income tax is provided on temporary differences arising on investmentsin subsidiaries and associates, except where the timing of the reversal of thetemporary difference is controlled by Group and it is probable that thetemporary difference will not reverse in the foreseeable future. Income taxes are recognised in the income statement except when they relate toitems directly recognised in equity in which case the taxes are also directlyrecognised in equity. (n) Revenue recognition Revenue comprises the fair value of the consideration received or receivable forthe sale of goods and services in the ordinary course of the Group's activities.Revenue is shown, net of sales taxes, rebates and discounts and aftereliminating sales within the Group. Revenue is recognised as follows: Sales of goods - wholesale Sales of goods are recognised when a group entity has delivered products to thecustomer, the customer has accepted the products and ability to collect therelated receivables is reasonable assured. Sales of goods - retail Sales of goods are recognised when a group entity sells a product to thecustomer. Retail sales are usually in cash or by credit card. The recordedrevenue includes credit card fees payable for the transaction. Such fees areincluded in distribution costs. It is Group's policy to sell its products to the end customer with a right ofreturn. Accumulated experience is used to estimate and provide for such returnsat the time of sale. Sales of services and subscription revenue Sales of services and subscription revenue are recognised in the accountingperiod in which the services are rendered, by reference to completion of thespecific transaction assessed on the basis of the actual service provided as aproportion of the total services to be provided. (o) Provisions and contingent liabilities Provisions are recognised for liabilities of uncertain timing or amount whenGroup has a legal or constructive obligation arising as a result of a pastevent, which will probably result in an outflow of economic benefits that can bereasonably estimated. Where it is not probable that an outflow of economic benefits will be required,or the amount cannot be estimated reliably, the obligation is disclosed as acontingent liability, unless the probability of outflow of economic benefits isremote. Possible obligations, the existence of which will only be confirmed bythe occurrence or non-occurrence of one or more future events, are alsodisclosed as contingent liabilities unless the probability of outflow ofeconomic benefits is remote. (p) Segment reporting A business segment is a group of assets and operations engaged in providingproducts or services that are subject to risks and returns that are differentfrom those of other business segments. A geographical segment is engaged inproviding products or services within a particular economic environment whichare subject to risks and returns that are different from those of segmentsoperating in other economic environments. (q) New standard and interpretations not applied During the year the International Accounting Standard Board ("IASB") andInternational Financial Reporting Interpretations Committee ("IFRIC") haveissued the following standards and Interpretation with an effective date afterthe date of these financial statements. International Accounting Standards("IAS"/"IFRS"s) Effective date IFRS 7 Financial Instruments Disclosures 1 January 2007IFRS 8 Operating Segments 1 January 2009IAS 1 Amendment-Presentation of Financial Statements: Capital Disclosures 1 January 2007IAS 23 Borrowing costs 1 January 2009 International Financial Reporting Interpretations Committee("IFRIC") IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting 1 March 2006 In Hyperinflationary EconomiesIFRIC 8 Scope of IFRS 2 1 May 2006IFRIC 9 Re-assessment of Embedded Derivatives 1 June 2006IFRIC 10 Interim Financial Reporting and Impairment 1 November 2006IFRIC 11 IFRS 2-Group and Treasury Share Transactions 1 March 2007IFRIC 12 Services Concession Arrangements 1 January 2008 The following had not been endorsed by the EU as at 15 March 2007:IFRS 8Operating Segments, IFRIC 10 Interim Financial Reporting and Impairment IFRIC 11IFRS 2 Group and Treasury Share: Transactions, IFRIC 12 Services ConcessionArrangements. These are expected to be endorsed in June or July 2007. The Directors do not anticipate that the adoption of these standards andinterpretations will have a material impact on the Group's financial statementsin the period of initial application. Upon adoption of IFRS 7, the Group will have to disclose additional informationabout its financial instruments, their significance and the nature and extent ofrisks to which they give rise. More specifically the Group will need to disclosethe fair value of its financial instruments and its risk exposure in greaterdetail. There will be no effect on reported income or net assets 2 Loss from operations Note 2006 £'000This has been arrived at after charging: Depreciation of property, plant and equipment 9 2Foreign exchange differences 23Impairment of goodwill 4,795Operating lease expense -Plant and machinery 32 -Other 3Audit fees -Audit services 29 -Other assurance services 277Share-based payment -Equity settled 1,043AIM flotation fees 1,184 3 Information regarding directors and employees Period ended 31 December 2006Average number of employees of the group Number Management 6Investment Accounting 5Administration 8HR 1Design and IT 14 34 The aggregate payroll costs of these employees were as follows: £'000Wages and salaries 263Share-based payment expense 740Social security costs 8 1,011 4 Directors' remuneration 2006 £'000Directors' emoluments 88Share-based payment expense 442 530 Directors' remuneration for the period and number of options held was asfollows: Name Salaries Benefits Share based Total 2006 £'000 £'000 payment Number of options £'000 Mr. Wang Chao Yong - - 93 93 4,000,000 Mr. Chris A Rynning 46 10 186 242 1,000,000 Mr. Lou Lin 32 - 114 146 800,000 Mr. Vinay Ganga - - 9 9 800,000 Mr. Christopher Jemmett - - 26 26 100,000 Mr. Dipankar Basu - - 1 1 100,000 Stockton Birthisel - - 13 13 - 78 10 442 530 6,800,000 5 Segment information The group's primary reporting format for reporting segment information isgeographical location. The segments are defined as Isle of Man, Mauritius,Malaysia, China and other. The Group operates in a single business segment. Isle of Mauritius Malaysia China Other Total Man £'000 £'000 £'000 £'000 £'000 £'000RevenueExternal - - - 32 10 42Finance income 12 - - - - 12 ExpensesCost of sales - - - (20) (6) (26)Continuing operations (2,490) (10) (88) (30) (8) (2,626)Finance costs (4) - - - - (4)Impairment of goodwill (4,795) - - - - (4,795) OtherShare of associate result - - (1) - - (1) Total profit/(loss) before (7,277) (10) (89) (18) (4) (7,398)taxation Balance sheetAssets 11,735 27 403 135 41 12,341(Liabilities) (175) (11) (610) (13) (71) (880)Net assets 11,560 16 (207) 122 (30) 11,461 6 Finance income and expense 2006 £'000Finance incomeBank interest 12 12Finance expenseBank charges (4) (4) 7 Tax expense No provision for current tax was made as the Group had no assessable profit. The tax expense for the period can be reconciled to the loss per the incomestatement as follows: 2006 £'000(Loss) before tax (7,398)Expected tax charge based on the Isle of Man statutory income tax rate of 0% -Tax effect of non deductible expenses -Tax effect of unutilised tax losses - Total tax charge - 8 Earnings per share Numerator 2006 £'000 Loss for the year (7,398) Earnings used in basic EPS and diluted EPS (7,398) Denominator 2006 number Weighted average number of shares used in basic and diluted EPS 32,333,027 Basic and diluted earnings per share (22.9p) The effect of the grant of options is anti-dilutive and hence basic and dilutedearnings per share are the same. 9 Property, plant and equipment Fixtures Computer equipment Total and fittings £'000 £'000 £'000CostAdditions 3 6 9Business combinations 2 4 6At 31 December 2006 5 10 15 Accumulated depreciationCharge for the period 1 1 2Business combinations - 1 1At 31 December 2006 1 2 3 Net book valueAt 31 December 2006 4 8 12 10 Goodwill Note £'000Acquisition of Ascend Ventures Limited 4,795Impairment loss recognised (4,795) 31 December 2006 - Goodwill acquired through business combination has been allocated to thecash-generating unit of Ascend Venture Limited for impairment testing. This isthe lowest level of cash-generating unit that can be reliably and separatelyidentified. A goodwill impairment of £4,795,000 arising on acquisition of Ascend VenturesLimited was identified. The recoverable amount of this cash-generating unit has been determined based ona value in use calculation. The directors have based the calculation on currentbudgeted cash flows. The discount rate applied to cash flow projection is apre-tax rate of 10%. Key assumptions used in value in use calculation for the cash-generating unitfor 2007. Budgeted revenue - the basis used to determine budgeted revenue is long-runmarket growth forecasts. 11 Subsidiaries The principal subsidiaries of the Group, all of which have been included inthese consolidated financial statements, are as follows: Name Country of incorporation Proportion of ownership interest Ascend Beijing Consulting Ltd China 100%(Owned by Ascend Ventures Limited) Global Art Ventures Ltd British Virgin Islands 80.14% (Owned by Ascend Ventures Limited) ISAK International Holding Ltd British Virgin Islands 88.5% (Owned by Ascend Ventures Limited) Ascend Ventures Limited Malaysia 100% Origo Sino-India Mauritius Ltd Mauritius 100% 12 Investments in associates The following entities meet the definition of an associate and have been equityaccounted in the consolidated financial statements: Name Country of incorporation Proportion voting rights held OS Consulting Limited Malaysia 45% (Owned by Ascend Ventures Limited) Spiced Bits Limited British Virgin Islands 40% (Owned by Ascend Ventures Limited) M-IKON Limited Malaysia 30%(Owned by Ascend Ventures Limited) Dragon Ports Limited British Virgin Islands 25% (Owned by Ascend Ventures Limited) Aggregated amounts relating to associates are as follows: 2006(OS) 2006(SB) 2006(M-ikon) 2006(Dragon) £'000 £'000 £'000 £'000 Total assets 41 17 10 17 Total liabilities 8 16 - 26 Revenues - 72 14 18 Profit/(loss) (3) 1 (11) (37) 13 Trade and other receivables 2006 £'000 Trade debtors 58Other debtors 2,929Prepayments 9Total 2,996 14 Other financial assets 2006 £'000 Available-for-sale investments 132Total 132 Available for sale investments comprise a 0.46% investment in Boonty SA. The above investment is stated at cost as it is not quoted in an active marketand its fair value cannot be reliably measured. 15 Trade and other payables - current 2006 £'000 Other payables 880Total 880 16 Financial instruments - Risk Management The Group and company are exposed through it operations to one or more of thefollowing risks: - Fair value or cash flow interest rate risk - Foreign currency risk - Liquidity risk - Credit risk The policy for managing these risks is set by the board. The policy for each ofthe above risks is described in more detail below. Fair value and cash flow interest risk It is currently the Group and company policy that all external borrowings are atfixed interest rates. This policy is managed centrally. The board considersthat such measures minimise the exposure to interest rate risks. Foreign currency risk Foreign exchange risk arises where the Group and company make purchases in Chinaand the transactions are denominated in local currency. However, since theoverseas purchase amount accounts for an insignificant portion of totalpurchases, the foreign currency risk exposure is not significant. Liquidity risk The liquidity risk of each group entity is managed centrally by each company'smanagement. Cash budgets are set out in advance, enabling the Group andcompany's cash requirements to be anticipated. The Group and company maintaingood relationships with the major banks locally and foresee no difficulties inraising new bank borrowings, if needed, to meet planned future cash requirementsand short term cash shortages. Credit risk The Group and company are mainly exposed to credit risk from credit sales. Itis the Group and company policy, implemented centrally by each company'smanagement, to assess the credit risk of new customers before enteringcontracts. The Group and company closely monitor the credit worthiness of itsexisting customers and will terminate business with customers with a poor credithistory. The Group and company's management considers the above measures to besufficient to control the credit risk exposure. The Group and company do not enter into complex derivatives to manage creditrisk. 17 Fair value of financial assets and liabilities 2006 £'000Financial assetsTrade and other receivables 2,996 2,996Financial liabilitiesTrade and other payables 880 880 18 Financial assets and liabilities - Numerical information Maturity of financial liabilities The carrying amounts of financial liabilities, all of which are exposed to cashflow or fair value interest rate risk, are repayable as follows: 2006 £'000 In less than one year 880 880 19 Share capital Authorised 2006 2006 Number £'000 Ordinary shares of £ 0.0001 each 500,000,000 50,000 Issued and fully paid 2006 2006 Number £'000Ordinary shares of £ 0.0001 eachIssued on 31 March 2006 for cash 24,450,000 3Issued on 25 May 2006 for cash 5,770,000 -Issued on 23 October 2006 for acquisition of Ascend Ventures 9,300,000 1LimitedIssued on 21 December 2006 on placing for cash 25,673,238 3 At end of the year 65,193,238 7 WarrantsIssued on 21 December 2006 on placing 25,673,238Exercised during the year -At end of the year 25,673,238 OptionsIssued on 22 May 2006 1,170,000Issued on 23 October 2006 8,400,000Issued on 21 December 2006 651,932At end of the year 10,221,932 On Admission to AIM on 21 December 2006 the company issued 25,673,238 warrantsentitling each Warrantholder to subscribe for 1 Ordinary Share at a price perOrdinary Share of 55p.The Warrantholder may exercise the warrants held at sixmonthly intervals during the period of 3 years from the date of Admission orsubject to certain exceptions where a surplus would be available fordistribution amongst the holders of Ordinary Shares, on the winding up of theCompany. Subject to this the Warrantholder is entitled to participate in alldividends and other distributions in respect of the then current financialperiod of the Company pari passu in all respects with the Ordinary Shares inissue on the relevant subscription date. During the period from 27 April to 22 May 2006, pre-IPO investors were grantedoptions to subscribe for 1,170,000 ordinary shares at any time during the periodof two years following admission at a price of USD 0.50 per share if thevaluation of the group immediately prior to the admission is less USD 24,000,000or immediately following admission is less than USD 48,000,000. 20 Reserves Group Share based Share Merger Retained Warrant Total payment premium reserve earnings reserve reserve £'000 £'000 £'000 £'000 £'000 £'000 Proceeds on share issues for cash - 7,699 - - 6,162 13,861 Share issue costs - (701) - - - (701) Share-based payment expense 1,043 - - - - 1,043Share for share exchange* - - 4,649 - - 4,649 (Loss) for the year - - - (7,398) - (7,398) At 31 December 2006 1,043 6,998 4,649 (7,398) 6,162 11,454 * on acquisition of Ascend Ventures Limited The following describes the nature and purpose of each reserve within owners'equity Reserve Description and purpose Share premium Amount subscribed for share capital in excess of nominal value. Retained Cumulative net gains and losses recognised in the consolidated income statement.earnings Merger reserve Share premium arising on share for share acquisition. Share-based Equity created to recognise share based payment expense.payment Warrant reserve The warrant reserve comprises the fair value of warrants as measured at grant date and spread over the period which the Warrantholders become entitled to the warrants. 21 Share-based payment The company operates a share option scheme for employees. The current vestingcondition being that the individual remains an employee as at the vesting date.On 26 October 2006, options of 8,400,000 ordinary shares were granted todirectors at an exercise price of 50p per share. These options will not vest forthe first 12 months after grant date and will then vest over a three yearperiod. Seymour Pierce Limited (nominated advisers) were granted a total of 651,932share options at an exercise price of 50p per share. These options were grantedon 21 December 2006, these options are exercisable at any time until three yearsfrom admission. During the year 425,000 shares were issued to third parties in exchange forservices received. The directors consider that the fair value of the shares is areasonable approximation for the services received. As at 31 December 2006 Number of Grant date Exercise Vesting Option options price period period (pps) (yrs) (yrs) Employee option plans 8,400,000 26/10/06 50 4 4 Company nominated advisors 651,932 15/12/06 50 - 3 Total options 9,051,932 The following information is relevant in the determination of the fair value ofoptions granted during the year under remuneration schemes operated by thegroup. Equity-settled 2006 £'000 Option pricing model used Black-ScholesWeighted average share price at grant date(pence) 50Exercise price(pence) 50Weighted average contractual life(years) 5Expected volatility(%) 53Expected dividend growth rate -Risk-free interest rate 4.75 The volatility assumption, measured at the standard deviation of expected shareprice returns, is based on a statistical analysis of daily share prices over thelast three years of companies in a similar sector. The company did not enter into any share-based transactions with parties otherthan employees during the period, except as described above. All options of thesame class have been valued on the same basis. 22 Acquisitions during the period By a share exchange agreement dated 23 October 2006 made between AmalieInternational Holdings Limited, Bullfrog Holdings Limited, Summit GlobalHoldings Limited, Chee Lai Yong (together being "AVL" shareholders) and theCompany, the AVL shareholders agreed to transfer entire issued share capitalheld by them in AVL to the Company in exchange of 9,300,000 fully paid OrdinaryShares in aggregate in the capital of the Company. Following the transaction,AVL became a wholly owned subsidiary of the Company. Book value and fair value 23 October 2006 £'000Net assets acquiredProperty,plant and equipment 5Inventories 27Trade and other receivables 116Cash and cash equivalents 106Available for sale investments 132Trade and other payables (531)Goodwill 4,795 Total consideration 4,650 Satisfied by:Equity 4,650 For the year ended 31 December 2006, Ascend Ventures Limited incurred a loss of£894,000 and generated £496,000 of its revenues. From the date of acquisition, Ascend Ventures contributed a loss of £114,000 tothe loss before tax of the Group and £42,000 to its revenues. The remaining excess of purchase consideration over the fair value of net assetsacquired of £4,795,000 has been capitalised as goodwill. 23 Related party transactions Identification of related parties The Group has a related party relationship with it's subsidiaries, associatesand key management personnel.Transactions between the company and it's subsidiaries have been eliminated onconsolidation and are not disclosed in this note. Transactions with key management personnel The Group's key management personnel are the Executive and Non-Executivedirectors as identified in the directors' report. Other than disclosed above, inthe directors' report and in note 4, there were no other transactions with keymanagement personnel in the period. Trading transactions During the period group companies entered into the following transactions withrelated parties who are not members of the Group. Amounts owed Amounts owed by related parties to related parties 2006 2006 £'000 £'000DirectorChris Andre Rynning 15 37Sig Dugal - 13Vicky Lowes - 9Blackstone Holdings Limited 1Total 16 59 AssociatesDragon Ports Limited 10 -Spiced Bits Limited 8 -OS Consulting Limited - 32Total 18 32 Chris Andre Rynning is a director of Origo Sino-India Plc. Vicki Lowes is a director of Global Art Ventures Limited, a subsidiary of OrigoSino-India Plc. Blackstone Holdings Limited is under the control of Chris Andre Rynning. Origo Sino-India Plc became the parent of Ascend Ventures Limited on 23 October2006 by way of acquisition. The group has not made any provision for bad ordoubtful debts in respect of related party debtors nor has any guarantee beengiven or received during 2006 or 2005 regarding related party transactions. Sig Dugal is a director of Ascend Ventures Limited. 24 Post balance sheet transactions Origo Sino-India Plc entered into an agreement to make a US$2 million 50:50co-investment with China Equity in Beijing RongRun Ying Tong Media TechnologyCompany Limited in January 2007. In the same month, it further announced itssecond investment of a US$7 million equity investment in Rising TechnologyCorporation Limited. In 17 January 2007, Origo Sino-india Plc issued a total of4,068,140 ordinary share capital in connection with the equity componentconsideration for the investment in Rising Technology Corporation Limited. In February 2007, Origo Sino-India Plc announced its agreement to invest up toUS$1.5 million in Possibility Space Incorporated. It also entered into aconvertible loan agreement to invest US$0.4 million in ISAK InternationalHolding Ltd. In March 2007, an investment bridge note of US$0.5 million in Fans Media CompanyLimited was entered into while in May 2007, a convertible loan of USD80, 000 wasextended to Spiced Bits Limited. Origo Sino India Plc issued convertible notes to the value of US$115, 000 infavour of Dragon Ports Limited in May 2007. In June 2007, Origo Sino-India Plc entered into an agreement to invest USD2million in Fans Media Company Limited. Company balance sheet at 31 December 2006 Note 2006 £'000 Investments 4 27 27Current assetsDebtors 2 3,379Cash and bank 9,069 12,448 Creditors: amounts falling due within one year 3 745 Net current assets 11,703 Total assets less current liabilities 11,730 Capital and reservesCalled up share capital 7Share premium 5 13,160Share based payment reserve 5 1,043Profit and loss account 5 (2,480) Shareholders' funds 11,730 The financial statements were approved by the Board of Director and authorisedfor issue. They were signed on its behalf by: Wang Chao Yong Chris Andre Rynning Lou LinChairman Chief Executive Officer Chief Financial Officer Company cash flow statement for the period ended 31 December 2006 Period ended 31 Dec 2006 £'000 Operating loss (2,480) Share-based payment 1,043 Decrease in debtors (514)Increase in creditors 729 Net cash inflow from operating activities (1,222) FinancingIssue of ordinary shares 10,291 Increase in cash and cash equivalents 9,069 Cash and cash equivalents at beginning of period -Cash and cash equivalents at end of period 9,069 1. Principal accounting policies Basis of preparation The principal accounting policies applied in the preparation of the individualcompany accounts are set out below. These policies have been consistentlyapplied to all the periods presented, unless otherwise stated. The financial information has been prepared under the historical cost conventionand in accordance with UK applicable accounting standards. (a) Investments Investments are recorded at cost less any provision for impairment. (b) Share-based payments Where share options are awarded to employees, the fair value of the options atthe date of grant is charged to the income statement over the vesting period.Non-market vesting conditions are taken into account by adjusting the number ofequity instruments expected to vest at each balance sheet date so that,ultimately, the cumulative amount recognised over the vesting period is based onthe number of options that eventually vest. Market vesting conditions arefactored into the fair value of the options granted. As long as all othervesting conditions are satisfied, a charge is made irrespective of whether themarket vesting conditions are satisfied. The cumulative expense is not adjustedfor failure to achieve a market vesting condition. Where equity instruments are granted to persons other than employees, the incomestatement is charged with the fair value of goods and services received or thefair value of consideration given for those goods and services. 2 Debtors 2006 £'000 Other debtors 3,379Total 3,379 3 Creditors: amounts falling due within one year 2006 £'000Other payables 745Total 745 4 Subsidiaries The principal subsidiaries of the Company, all of which have been included inthese consolidated financial statements, are as follows: Name Country of incorporation Proportion of ownership interest Ascend Ventures Limited Malaysia 100%Origo Sino-India Mauritius Ltd Mauritius 100% 5 Reserves Share based Share premium Retained earnings Total paymentreserve £'000 £'000 £'000 £'000 Proceeds on share issues for cash - 13,861 - 13,861Share issue costs - (701) - (701) Share-based payment 1,043 - - 1,043(Loss) for the year - - (2,480) (2,480) At 31 December 2006 1,043 13,160 (2,480) 11,723 The share-based payment charge is further explained in Note 21 of theconsolidated accounts. 6 Related party transactions During the period company entered into the following transactions with relatedparties: Amounts owed Amounts owed by related to related parties parties 2006 2006 £'000 £'000AssociatesDragon Ports Limited 8 -Spiced Bits Limited 5 -Total 13 -Identification of related parties is included in Note 23 of the consolidated accounts. 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