PIRI.L Regulatory News (PIRI)

Note

2010

2009

£

£

Revenue

1,260,851

761,784

Administrative expenses

(1,958,539)

(845,334)

Impairment of goodwill

(10,828,446)

 -

Release of liabilities

49,933

410,086

Operating (loss)/profit

(11,476,201)

326,536

Finance income

10

14

Finance costs

(5,869)

(732)

Finance costs - net

(5,859)

(718)

(Loss)/profit before taxation

(11,482,060)

325,818

Tax expense

 -

-

(Loss)/profit for the period attributable to equity holders of the Company

(11,482,060)

325,818

(Loss)/earnings per share

Equity holders

5

(27.2)p

2.2p

All activities are continuing.

Share capital

Share premium

Retained earnings

Capital redemption reserve

Merger reserve

Total

£

£

£

£

£

£

Group

Balance at 1 November 2008

7,565,067

3,017,818

(6,462,857)

164,667

5,197,319

9,482,014

Profit for the year ended 31 October 2009

-

-

325,818

-

-

325,818

Cost of share based awards

-

-

35,063

-

-

35,063

At 31 October 2009

7,565,067

3,017,818

(6,101,976)

164,667

5,197,319

9,842,895

Loss for the year ended 31 October 2010

 -

 -

(11,482,060)

 -

 -

(11,482,060)

Issue of shares

2,022,036

2,022,036

Cost of share based awards

 -

 -

43,106

 -

 -

43,106

Transfer of merger reserve on write down of associated goodwill

 -

 -

5,197,319

 -

(5,197,319)

 -

At 31 October 2010

9,587,103

3,017,818

(12,343,611)

164,667

 -

425,977

Share capital

Share premium

Retained earnings

Capital redemption reserve

Merger reserve

Total

£

£

£

£

£

£

Company

Balance at 1 November 2008

7,565,067

3,017,818

(4,659,728)

164,667

5,197,319

11,285,143

Profit for the year ended 31 October 2009

-

-

235,368

-

-

235,368

Cost of share based awards

-

-

35,063

-

-

35,063

At 31 October 2009

7,565,067

3,017,818

(4,389,297)

164,667

5,197,319

11,555,574

Loss for the year ended 31 October 2010

 -

 -

(12,971,657)

 -

 -

(12,971,657)

Issue of shares

2,022,036

2,022,036

Cost of share based awards

 -

 -

43,106

 -

 -

43,106

Transfer of merger reserve on write down of associated investment

 -

 -

5,197,319

 -

(5,197,319)

 -

At 31 October 2010

9,587,103

3,017,818

(12,120,529)

164,667

 -

649,059

Group

Company

Note

2010

2009

2010

2009

£

£

Non-current assets

Goodwill

6

 -

10,828,446

 -

-

Property, plant and equipment

1,687,608

1,409,417

1,321,040

1,279,071

Investments in subsidiaries

7

 -

-

203

10,436,059

Total non-current assets

1,687,608

12,237,863

1,321,243

11,715,130

Current assets

Inventories

8

579,783

56,230

15,000

-

Trade and other receivables

81,498

131,305

835,847

2,254,265

Cash at bank

1,645

32,050

52

-

Total current assets

662,926

219,585

850,899

2,254,265

Total assets

2,350,534

12,457,448

2,172,142

13,969,395

Equity

Issued share capital

9,587,103

7,565,067

9,587,103

7,565,067

Share premium

3,017,818

3,017,818

3,017,818

3,017,818

Retained earnings

(12,343,611)

(6,101,976)

(12,120,529)

(4,389,297)

Capital Redemption Reserve

164,667

164,667

164,667

164,667

Merger Reserve

 -

5,197,319

 -

5,197,319

Total equity

425,977

9,842,895

649,059

11,555,574

Liabilities

Non-current liabilities

Borrowings

9

18,237

534,267

-

503,212

Total non-current liabilities

18,237

534,267

 -

503,212

Current liabilities

Borrowings

9

1,038,871

1,011,103

1,003,667

1,001,935

Trade and other payables

867,449

1,069,183

519,416

908,674

Total current liabilities

1,906,320

2,080,286

1,523,083

1,910,609

Total liabilities

1,924,557

2,614,553

1,523,083

2,413,821

Total equity and liabilities

2,350,534

12,457,448

2,172,142

13,969,395

These financial statements were approved and authorised for issue by the board of directors on 28 April 2011 and were signed on its behalf by:

C J Yates

Director

Group

Company

Note

2010

2009

2010

2009

£

£

£

£

Cash flows from operating activities

Net cash absorbed by operations

10

(439,417)

(312,221)

(608,728)

(437,126)

Net interest paid

(5,859)

(718)

(718)

(731)

Net cash absorbed by operating activities

(445,276)

(312,939)

(609,446)

(437,857)

Cash flows from investing activities

Payments to acquire tangible fixed assets

(45,157)

(105,618)

(41,969)

-

Cash consideration for acquisitions

(85,000)

 -

(200)

 -

Net cash used in investing activities

(130,157)

(105,618)

(42,169)

-

Cash flows from financing activities

Net advances on directors' and other loans

98,600

446,712

98,600

433,212

Cash from subscriptions for new shares

650,000

 -

650,000

Net proceeds from advance of bank loan

-

251,935

251,935

Repayment of bank loans

(105,935)

 -

 -

Repayment of vendor mortgage loan

(100,000)

-

(100,000)

-

Repayments of obligations under hire purchase contracts

(14,054)

(750)

 -

-

Net cash from financing activities

528,610

697,897

648,600

685,147

Net increase/(decrease) in cash and bank balances

(46,823)

279,340

(3,015)

247,290

Cash and bank and bank overdrafts at beginning of year

32,050

(247,290)

 -

(247,290)

Cash and bank and bank overdrafts at end of year

(14,773)

32,050

(3,015)

-

1

GENERAL INFORMATION

Oak Holdings plc ("the Company") and its subsidiaries (together "the Group") were during the year property developers and consultants and the operators of leisure activities.

This preliminary announcement is authorised for issue by the Board on 28 April 2011. The financial information has been prepared in accordance with International Financial Reporting Standards adopted by the European Union and applying the same accounting policies and bases of calculation and estimation as applied in previous annual financial statements.

2

SIGNIFICANT ACCOUNTING POLICIES

Basis of accounting

The consolidated financial statements have been prepared under the historical cost convention and in accordance with applicable International Financial Reporting Standards (IFRS) as adopted by the European Union.

As permitted by section 408 of the Companies Act 2006, the Company has elected not to present its own profit and loss account for the year. Oak Holdings Plc reported a loss for the financial year of £12,971,657 (2009: profit of £235,368).

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 October 2010. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

The results of subsidiaries acquired during the year are included in the consolidated income statement from the effective date of acquisition. Where necessary, adjustments are made to the financial information of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations

The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS are recognised at their fair value at the acquisition date.

Goodwill

Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary, at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in profit or loss.

For the purpose of impairment testing, goodwill is allocated to each of the Group's cash generating units expected to benefit from the synergies of the combination. Cash generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit maybe impaired. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. Any impairment loss recognised for goodwill is not reversed in a subsequent period.

Depreciation

Freehold land is not depreciated and is included at its historical cost, which includes capitalised borrowing costs.

Plant and computer equipment and leasehold improvements are measured at cost less provision for depreciation. Depreciation is provided on these assets at rates calculated to write off the cost less estimated residual value of the assets over their expected useful lives at the following rates:-

Plant and equipment

25% to 50% of cost per annum

Leasehold improvements

Remaining life of the lease

Income recognition

Turnover represents the fair value of services provided during the year on business service assignments. Turnover is recognised as the assignment activity progresses and the right to consideration is earned. Fair value reflects the amounts expected to be recoverable from customers and is based on time spent and costs incurred to date as a percentage of total anticipated contract costs. Unbilled turnover is included within receivables.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

Deferred taxation

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

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, 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. 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 is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. 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.

Share based awards

The Group has applied the requirements of IFRS 2 Share based payment.

The Group issues equity settled payments to certain employees. Equity settled share based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. 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 shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.

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

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Investments in subsidiaries

Investments in subsidiaries are stated in the Company's balance sheet at cost less any attributable impairment losses.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company and the Group after deducting all of its liabilities.

Trade and other payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Equity instruments

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

3

LIQUIDITY RISK

At the balance sheet date, the Group had limited funds available. The directors have prepared forecasts for the coming 12 months and beyond in order to assess future funding requirements. These forecasts show that the Group is in need of further funding within the next 12 months, having particular regard to the seasonality of the Group's trading. The directors are currently negotiating with a potential investor regarding a placing of shares in order to provide the necessary funding. In addition, the Group has a number of creditors, including H M Revenue & Customs and the vendor of the A57 land, who are currently in arrears. Negotiations are currently ongoing with such creditors to agree settlement terms, some of which may involve a potential conversion into equity.

The directors are reasonably confident that funding will be secured and liabilities will be successfully negotiated in order to enable cash flow seasonality to be managed. On this basis, they have prepared the financial statements on the going concern basis.

4

SEGMENTAL ANALYSIS

Segmental information with regards to activity of each segment is presented below. All turnover and profits are generated in, and assets are located in, the UK.

RESULT

2010

2009

Consulting

Yes Project

Leisure

Consolidated

Consulting

Yes Project

Leisure

Consolidated

£

£

£

£

£

£

£

£

Revenue

30,690

 -

1,230,161

1,260,851

5,000

-

756,784

761,784

Segment operating (loss)/profit

 -

(11,101,411)

(133,873)

(11,235,284)

-

70,150

142,494

212,644

Unallocated corporate costs

(290,850)

(296,194)

Release of liabilities

49,933

410,086

Operating (loss)/profit

(11,476,201)

326,536

Net finance costs

(5,859)

(718)

(Loss)/profit before tax

(11,482,060)

325,818

Tax expense

 -

-

(Loss)/profit for the year

(11,482,060)

325,818

BALANCE SHEET

Goodwill

 -

 -

 -

 -

-

10,828,446

-

10,828,446

Other segment assets

34,002

1,321,092

995,440

2,350,535

5,000

1,298,271

325,731

1,629,002

Segment assets

34,002

1,321,092

995,440

2,350,535

5,000

12,126,717

325,731

12,457,448

Unallocated corporate assets

 -

-

Consolidated assets

2,350,535

12,457,448

Segment liabilities

(20,124)

(960,000)

(352,080)

(1,332,203)

-

(1,504,002)

(188,032)

(1,692,034)

Unallocated corporate liabilities

(592,354)

(935,489)

Consolidated liabilities

(1,924,557)

(2,627,523)

Unallocated assets include Group cash and VAT balances. Goodwill and other assets are allocated to the appropriate segment.

Unallocated liabilities include tax balances and trade and other payables attributable to corporate overhead costs.

5

(LOSS)/EARNINGS PER SHARE

The (loss)/earnings per share is based on a loss for the year of £11,482,060 (2009: profit of £325,818) and the weighted average number of ordinary shares in issue for the year of 42,164,479 (2009: 15,130,133).

The exercise of the outstanding options and warrants at 31 October 2010 would result in the Company issuing shares at a value in excess of the average market price, and are therefore not dilutive.

There are potentially 582,856 shares that could be issued under the terms of options and are also 2,021,791 pursuant to the exercise of warrants that will potentially reduce future earnings per share.

6

GOODWILL

Group

£

Cost

At 1 November 2008, 1 November 2009 & 31 October 2010

10,828,446

Provision for impairment

At 1 November 2008 & 1 November 2009

 -

Impairment charge (see below)

10,828,446

At 31 October 2010

10,828,446

Net book value

At 31 October 2010

 -

At 31 October 2009

10,828,446

At 31 October 2008

10,828,446

Goodwill arose on the acquisition of Oak Ventures Limited on 1 December 2003 and the issue by the Group of 490,313,015 Ordinary shares of the then nominal value of 1p each at a value of 2.06p per share in exchange for the whole of the issued share capital of Oak Ventures Limited.

The goodwill arising on the acquisition was attributable primarily to the fact that Oak Ventures Limited had been granted preferred developer status by Rotherham Metropolitan Borough Council ("RMBC") to develop a major entertainment and leisure complex (the "YES! Project").

In January 2011, RMBC gave notice that it was terminating the Development Agreement with effect from the end of January 2011. The directors have therefore concluded that the goodwill previously recognised has been fully impaired. The directors have consequently made an impairment provision against the whole of the carrying value of the goodwill with an appropriate charge being made in the statement of comprehensive income.

7

INVESTMENTS IN SUBSIDIARIES

Company

Total

£

Cost

At 1 November 2008

10,435,961

Additions during the year

100

At 31 October 2009

10,436,061

Additions during the year

103

At 31 October 2010

10,436,164

Provision for diminution in value

At 1 November 2008

2

Provision in the year

 -

At 31 October 2009

2

Provision in the year

10,435,959

At 31 October 2010

10,435,961

Net book value

At 31 October 2010

203

At 31 October 2009

10,436,059

At 1 November 2008

10,435,959

Subsidiary undertakings

The Company holds 100% of the ordinary share capital of Oak Ventures Limited . Oak Ventures Limited has been engaged in the pursuit of the development of a major investment property. Oak Ventures Limited holds 100% of the ordinary share capital in Yorkshire Entertainment Sensation Limited, a dormant company. The carrying value of the investment in Oak Ventures Limited is subject to the same impairment review considerations as the value of goodwill, as described in Note 6 above and accordingly has been impaired to nil value at the balance sheet date.

During the year ended 31 October 2010, the acquired the whole of the issued share capital of Ringwood Town & Country Experience Limited ("RTCE"), a then recently incorporated company which had acquired the business and assets of a trade previously carried on as a partnership. RTCE is the operator of a museum and restaurant.

During the year ended 31 October 2010, the Group also acquired the whole of the issued share capital of Oak Heritage Limited, a newly formed company which had not traded. Shortly after its acquisition, Oak Heritage Limited acquired certain historic motor vehicle assets of RTCE and commenced operations in the restoration and maintenance of historic motor vehicles.

8

INVENTORIES

Group

Company

2010

2009

2010

2009

£

£

£

£

Consumables

70,500

56,230

 -

 -

Work in progress

15,000

 -

15,000

 -

Memorabilia and vehicles

494,283

 -

 -

 -

579,783

56,230

15,000

 -

The Group acquired various items of memorabilia and vehicles as part of the acquisition of RTCE. The Group is holding these assets with the intention of trading them in the future as opportunities arise. Certain of these assets are used in the interim period as display items in its museum activities. The items are currently held within inventories as shown above, although it is not anticipated that the entire amount will be disposed of at any time in the near future.

9

BORROWINGS

Group

Company

2010

2009

2010

2009

£

£

£

£

Current liabilities

Bank loan

250,000

251,935

250,000

251,935

Bank overdraft

16,418

-

3,067

-

Hire purchase liabilities

21,854

9,168

-

-

Vendor mortgage loan

650,000

750,000

650,000

750,000

Other loans

100,600

-

100,600

-

1,038,871

1,011,103

1,003,667

1,001,935

Non-current liabilities

Directors' loans

-

451,858

-

438,358

Loans from related parties

-

64,854

-

64,854

Hire purchase liabilities

18,237

17,555

-

-

18,237

534,267

-

503,212

The vendor mortgage loan represents the amount payable to the vendor of freehold land purchased by the Group in the year ended 31 October 2007 and is secured on that land. During the year, the terms of this loan have been renegotiated requiring repayment in accordance with a schedule by 31 December 2012. As part of the renegotiation, shares were issued to the vendor in settlement of accrued interest and the loan became interest free so long as it was being repaid in accordance with the schedule. Upon any default, interest became payable at 4% over the NatWest Bank base rate from the date of such default. The Company has not made the repayments of principal due on this loan of £150,000 on 31 August 2010 and of £100,000 on 31 December 2010 and accordingly the loan is in default and is immediately repayable. Active negotiations are taking place with the lender to further amend the terms of this loan.

Of the other loans, £70,000 is secured on an historic motor vehicle owned by the Group, bears interest at 12% per annum and is repayable on 17 August 2011 and a further loan of £22,500 is secured on the spare parts associated with that motor vehicle, bears interest at 7% per annum and is repayable in instalments by 31 March 2012. The remaining loans have no formal terms and do not bear interest.

During the year the directors' loans were used to subscribe for new ordinary shares in the Company or waived or, in the case of accruals relating to a former director, reclassified as an accrual.

£21,854 of the hire purchase loans are repayable within 12 months, £14,077 in between one and two years from the balance sheet date and the balance of £4,160 is repayable in more than two years but less than five years from the balance sheet date.

10

CASH ABSORBED BY OPERATIONS

Group

Company

2010

2009

2010

2009

£

£

£

£

Operating (loss)/profit

(11,476,201)

326,536

(12,970,939)

236,099

Depreciation

36,682

2,745

 -

-

Impairment of goodwill and investment

10,828,446

 -

12,763,889

 -

Share based awards

43,106

35,063

43,106

35,063

Increase in inventories

(33,207)

(56,230)

(15,000)

-

Decrease/(increase) in receivables

(68,339)

(91,652)

(390,914)

(217,692)

(Decrease)/increase in payables

230,096

(347,988)

(38,870)

(490,596)

Adjustment for waiver of loans

-

(180,695)

-

-

Cash absorbed by operations

(439,417)

(312,221)

(608,728)

(437,126)

11

ACQUISITIONS

On 1 December 2009 the Company acquired the whole of the issued share capitals of Ringwood Town and Country Experience Limited and of Oak Heritage Limited ("RTCE") for an aggregate consideration of £200 paid in cash. Oak Heritage Limited had cash of £100 and no other assets or liabilities. RTCE had, immediately prior to its acquisition by the Company, acquired the business and assets of an unincorporated business operating a museum and restaurant facility at their book value.

The following table summarises the amounts of the assets and liabilities of RTCE at the date of acquisition and represents the acquisition costs for RTCE and the directors' estimate of fair value at the date of acquisition:

Leasehold improvements

209,654

Inventories of memorabilia

487,274

Inventories of consumables

3,072

Cash

100

Trade and other payables

(6,000)

Bank loan

(104,000)

Vendor loan

(505,000)

Cash provided by the Group prior to acquisition 

(85,000)

Consideration paid in cash

100

No acquisition-related costs have been allocated to this acquisition and no goodwill has been recognised.

The vendor loan was exchanged for 10,100,000 new ordinary shares in March 2010.

The revenue included in the consolidated statement of comprehensive income since 1 December 2009 contributed by RTCE was £58,152. RTCE contributed a loss of £84,878 over the same period. As the business owned by RTCE was operated as an unincorporated business for the period prior to its acquisition, it is not practicable to provide comparable figures for the amounts which would have been contributed had RTCE been consolidated from 1 November 2009, but the directors do not believe that the additional revenues or profit or loss would have been material.

12

POST BALANCE SHEET EVENTS

In January 2011, Rotherham Metropolitan Borough Council gave notice that it was terminating the Development Agreement between itself and the Company's subsidiary, Oak Ventures Limited, with effect from the end of January 2011. As a result of this termination, the Group's investment in the YES! Project has ceased to have any future or value and the directors have therefore concluded that the goodwill previously recognised has been fully impaired. The directors have therefore made an impairment provision against the whole of the carrying value of the goodwill with an appropriate charge being made in the statement of comprehensive income. This property development activity has therefore ceased since the balance sheet date.

13

STATUS OF FINANCIAL INFORMATION

The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Consolidated Statement of Financial Position at 31 October 2010 and the Consolidated Statement of Comprehensive Income, the Statement of Changes in Equity and the Consolidated Cash Flow Statement and associated notes for the year then ended have been extracted from the Group's 2010 statutory financial statements on which the auditors will give an unqualified report, but with a statement drawing attention to the use of the going concern basis for the accounts.

14

ANNUAL GENERAL MEETING

The Annual General Meeting of the Company will be held at 11.30 am on 25 May 2011 at the offices of Starr & Partners, 5th Floor, 21 Garlick Hill, London EC4V 2AU

15

MAILING OF ACCOUNTS

The Annual Report and Accounts is being mailed to registered shareholders at their registered address and copies of the Annual Report will be made available to the public free of charge for one month at the Company's registered office, 38 South Molton Street, London W1K 5RL and from the Company's website: www.oakholdings.co.uk.