Ross Grp. Regulatory News (RGP)

Final Results

Ross Group plc is pleased to file final audited accounts for the year ended 31st December 2011.

A full review for the year is included within the accounts.

Report of the Directors and

Consolidated Financial Statements for the Year Ended 31 December 2011

for

Ross Group Plc & Subsidiaries

Ross Group Plc & Subsidiaries

Contents of the Consolidated Financial Statements

for the Year Ended 31 December 2011

Page

Ross Group Plc & Subsidiaries

Company Information

for the Year Ended 31 December 2011

DIRECTORS: W L Hopkins

B Pettitt

M J Simon

S C Mehta

REGISTERED OFFICE: 35 Paul Street

London

EC2A 4UQ

REGISTERED NUMBER: 00131902 (England and Wales)

AUDITORS: Everett & Son

Chartered Accountants & Statutory Auditors

35 Paul Street

London

EC2A 4UQ

ROSS GROUP PLC & SUBSIDIARIES

CHAIRMAN'S STATEMENT

for the Year Ended 31 December 2011

RESULTS

Dear Shareholders,

I am pleased to report on the business activities and financial results of the Group for the financial year ended 31 December 2011

It has been a year of continued progress towards our stated strategy of achieving long-term financial stabilisation of the business while also exploring several potential acquisitions or strategic alliances.

Whilst this has been our initial aim since the new management came into the Group at the end of 2008 it has, however, always been the prime objective to try to provide the best value for our shareholders and, in this respect, we have actively decided to pursue specific opportunities in mining, mineral resources and energy-related supply chain management services.

Concurrently, we have ensured that sufficient existing profitable business was being closed to fund all the necessary business research and development activities, such that the Group companies could fulfil their financial obligations in a timely and professional manner. 

In each of the previous two years, prior to these set of results, the Group have reported a small modest profit on the providing of specific supply chain management services and the underlying operational performance of the business is not in any material way different from those previous two years, showing a operating profit of £ 2,000 for 2011.

Nevertheless, as we approach the end of this financial, fully focused on research and negotiation, we are now beginning to close in on an appropriate significant proposal to be recommended to our shareholders and, as a result, the Board feels it now an appropriate time to structure the Group Balance Sheet to be as deal-ready as possible in preparation for such an event. As a result, certain items of costs, which have been increasingly incurred over the last two years both in connection with the setting up possible future alliances and trade business, initially recorded in the accounts as an investment in such projects, have now been duly written-off during the year. In total, these sums amount to £ 343,000 and are therefore the reason for a net loss of £ 341,000 

The Board is satisfied with the progress made during 2011 and very much looks forward with confidence to 2012 to ensure the next phase of future development and growth for the Group.

Once again, I would very much like to thank the elected Board of Directors, employees, contractors and consultants for all their excellent support, commitment and hard work in helping the Group achieve its aims. I would also like to personally thank our extraordinary loyal and long-suffering shareholders for their continued patience and understanding.

Barry Richard Pettitt

Chairman & Chief Executive Officer

30 April 2012

ROSS GROUP PLC & SUBSIDIARIES

OPERATING AND FINANCIAL REVIEW

for the Year Ended 31 December 2011

Business Review

The Group at 31 December 2011 consisted of Ross Group plc, and two wholly owned subsidiaries Sansui Electronics (UK) Ltd and San Gain Limited, a corporation registered in Hong Kong. 

The main focus of the Board during 2011 continued to be the safe custodianship of the Group and its businesses, engaging in a modest degree of low-risk trading, sufficient to fund the activities the group directors who were actively researching and negotiating new global trading and acquisition opportunities for Ross Group plc.

To this end, just as in 2010, we concluded a small number of supply-chain deals in the Far East via San Gain; in addition, there was a disposal of certain trademark assets in the UK. Consequently, our turnover figure for the year is broadly comparable to that of 2010 and 2009.

As noted in the Chairman's statement, the Board decided during the year to write down a number of deal-project investments, and this has resulted in a loss being recognised in the 2011 profit and loss account. The Directors are confident that the underlying value of the Group as a whole has not been diminished by this.

Business Outlook

The Board is confident that the outlook for the Group will only be enhanced by developments currently being researched and negotiated, which we believe will result in significant improvements to the structure and operation of the business.

ROSS GROUP PLC & SUBSIDIARIES

REPORT OF THE DIRECTORS

for the Year Ended 31 December 2011

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2011.

PRINCIPAL ACTIVITY

The Group has two operating subsidiaries which concentrate on the following activities:

- The distribution of consumer electronic branded products through Sansui Electronics (UK) Limited.

- The distribution of consumer electronic branded products and complementary supply chain management

services through San Gain Industrial Company Limited.

STRATEGY

Sansui Electronics (UK) Ltd and San Gain Industrial Company Limited continue to conduct and seek business in both consumer electronics trading, sales agency and supply chain management activities. These trading activities were profitable during the year and contributed to the group results.

As noted in the Chairman's statement, the Group's management continued throughout 2011 in its efforts to actively seek out new business opportunities. Various projects have presented themselves and are currently under active research and consideration. The Board is confident that these will lead to increased profitability and shareholder value in the future.

The Group is also continuing in its pursuing of plans to establish subsidiaries in certain overseas countries, with a view to expanding its business infrastructure geographically across the World.

REVIEW OF BUSINESS

The results for the year and financial position of the company and the group are as shown in the annexed financial statements and detailed in the Operating and Financial Review.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2011.

ROSS GROUP PLC & SUBSIDIARIES

REPORT OF THE DIRECTORS

for the Year Ended 31 December 2011

DIRECTORS

B R Pettitt (Chief Executive Officer)

Barry Richard Pettitt, aged 52, was appointed to the board on 22 December 2008 as the CEO of the Group and elected as its Chairman and CEO on 28 April 2009. He has more than 30 years experience within the consumer electronics industry, during which time he successfully started a specialist supply chain management services company, ISO International (Holdings) Ltd., which was subsequently purchased by a Hong Kong Public Company for HK$ 155,000,000 in 2003. In addition, he has managed a number of Public Company divisions (in the capacities of President and Managing Director) and recently successfully relisted a Hong Kong Public Company, Vision Tech Ltd., as its CEO in 2007. Through Premier Consultants Ltd., a specialist consulting company, of which he was a founding member and has specialised primarily in working with major consumer electronics and electrical Public Companies, usually all being based in Hong Kong; where he has resided since 1990. Prior to that, he was the joint Managing Director of Ross Consumer International Ltd. and a main board director of the Ross Group (formerly Ross Consumer Electronic plc) in 1988/89 after which he has continued to be a shareholder in Ross Group for the last 20 years.

M J Simon (Non Executive Director)

Michael Jonathan Simon, aged 53, was reappointed to the board on 29 April 2009. He is an economics graduate from the University of Cambridge and a fellow of the Institute of Chartered Accountants in England and Wales and also of the Association of Chartered Certified Accountants. Mr Simon is in a partnership in public practice and a non-executive director of several other companies.

W L Hopkins (Executive Director)

 Wade Lionel Hopkins, aged 63, was appointed to the board 22 December 2009. He has over 35 years of experience in both Consumer Electronics and the Electronic Components Industry. He has previously worked for the Ross Group as Managing Director of a subsidiary, Britimpex, in 1988/90.

S C Mehta (Executive Director)

Shashi Mehta, aged 53, was appointed to the Board 22 December 2009. He holds a BSc (Hons) in Manufacturing and has had a distinguished career in a variety of industrial and manufacturing trouble-shooting roles. He brings a wealth of experience and expertise to the Group. He spent many years working for the Ford Motor Company, and was Operations Manager in Ross Consumer Electronics during the 1980's.

GROUP'S POLICY ON PAYMENT OF CREDITORS

It is the policy of the company that it and each of its subsidiaries should agree appropriate terms and conditions for its transactions with suppliers (by means ranging from standard written terms to individually negotiated contracts) and that payment should be made in accordance with those terms and conditions, provided that the supplier has also complied with them.

FINANCIAL INSTRUMENTS

Details of the financial instruments used by the Group can be found in note 16 of the accounts.

EMPLOYEE INVOLVEMENT

Currently the directors are the only employees.

ROSS GROUP PLC & SUBSIDIARIES

REPORT OF THE DIRECTORS

for the Year Ended 31 December 2011

DIRECTORS INTERESTS

Directors

The directors had no interests in contracts of significance with the company.

In accordance with the Articles of Association members will be asked to confirm the appointment of all directors.

The total number of shares controlled by Barry Pettitt, directly and indirectly through Prime Growth Enterprises Limited, Vidacos Nominees and Premier Consultants Limited, at the date of this report was 37,835,702 (25.26%).

The following directors also owned shares in Ross Group plc at the date of this report:

Substantial shareholdings

As at 31st December 2011 the following were registered as being materially interested in 3% or more of the company's issued share capital, or being a related shareholder:

Barry Pettitt had the following interest through his nominees:

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors are required to prepare the Group the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and Article 4 of the IAS Regulation and have chosen to prepare the parent company financial statements under IFRSs as adopted by the EU. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, International Accounting Standard 1 requires the directors to:

ROSS GROUP PLC & SUBSIDIARIES

REPORT OF THE DIRECTORS

for the Year Ended 31 December 2011

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

DIRECTORS' RESPONSIBILITY STATEMENT

We confirm that to the best of our knowledge:

1. the financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

2. the management report, which is incorporated into the Directors' Report together with the information provided in the Chairman's Statement, the Operating and Financial Review, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation as a whole, together with a description of the principal risks and uncertainties that they face.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Everett & Son, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

........................................................................

M J Simon - Secretary

30 April 2012

ROSS GROUP PLC & SUBSIDIARIES

CORPORATE GOVERNANCE STATEMENT

for the Year Ended 31 December 2011

The company is pleased to present its report on Corporate Governance the Combined Code. The Board strives to comply with the high standards set by The Combined Code as incorporated in the UK Listing Rules of the Financial Services Authority. The Code on Corporate Governance requires the company to make a two part disclosure statement, firstly on how the principles of the code are applied and secondly confirmation of compliance or explanation of any reason for deviation from the Code.

Application Of The Principles Of The Combined Code

The Board

There is an effective and appropriately constituted board which in the year under review consisted of four directors. The Chief Executive, Mr Pettitt who is normally based overseas, also serves as Chairman and during 2011 was supported by three other directors: W L Wade and M J Simon, both appointed in April 2009, and S C Mehta appointed in December 2009. Mr Simon has acted as Company Secretary since April 2009. 

The non-executive director Mr Simon is considered to be independent as there are no circumstances or relationships as described by Code provision A.3.1 which apply to his appointment. The Group's definition of a non-executive director is one who considers the interest of all the shareholders and this is demonstrated during the board meetings. At the time of writing, the Board is actively engaged in a process of selecting an individual with the appropriate experience and skill to serve as a second non-executive director on the Board.

Board Procedure

The Board is responsible for decisions concerning strategic and financial planning and matters involving the overall direction of the company. Management will seek Board approval of the annual budget and rolling business plan. Reforecasts are presented as updates to the budget throughout the year to account for variances and provide forward vision. The operational business decisions are taken by local management with reference to the Board where necessary.

The Board has established separate committees for: Appointments (Chaired by Mr Pettitt); Audit (Chaired by Mr Simon) and Remuneration (Chaired by Mr Simon). 

All of the directors are subject to periodic re-election and the full board considers all appointments. A director will require re-election within a maximum period of three years.

Biographies of the Board are included in the Financial Statements. These indicate a wealth of experience, which is essential in effectively managing the activities of the Group. In addition to this the board members, where appropriate, attend seminars and courses of their respective professional organisations.

Attendance

Board meetings are held regularly throughout the year. Due to the location of the directors, the meetings are often held electronically.

The Board has now established procedures in respect of access to the Company Secretary and the Directors have access to consult the Company Secretary when required.

All Shareholders have the opportunity to put forward questions to the Board during the Company's Annual General Meeting and the Board communicates with the Shareholders via the notices and other papers relating to the Annual General Meeting. The Company also welcomes and responds to written communication from its shareholders. The Company website allows shareholders to contact the directors by email.

ROSS GROUP PLC & SUBSIDIARIES

CORPORATE GOVERNANCE STATEMENT

for the Year Ended 31 December 2011

The Board has carried out a formal and rigorous annual evaluation of its performance and of its committees and individual directors. This evaluation covers contribution, commitment and the manner in which board related duties have been completed. The chairman has discussed the review with individual directors where necessary to ensure the Board operates as an effective unit. The performance review was conducted using recognised evaluation processes. The independent non-executive director has conducted a performance review on the chairman which included the consideration of the views expressed by the executive directors. 

Internal audit and control

The respective responsibilities of the directors and the auditors in connection with the Financial Statements are set out in the audit report. The directors have overall responsibility of the effectiveness of the Group's whole system of internal control, including financial and other controls, which are designed to provide reasonable but not absolute assurance against material misstatement or loss. The key procedures that the directors have established to provide effective internal financial control are as follows:

Financial Reporting

There is a comprehensive system for reporting performance. During the course of the year, a one year rolling budget is prepared for each company within the Group and a consolidated budget is prepared for the whole Group. The Board then formally approves the budgets. The results are then reported regularly to the Board for their consideration and forecasts are revised accordingly.

Quality and Integrity of Personnel

The integrity of the Group is maintained through the appointment of experienced and professional staff and the application of appropriate policies and procedures.

Capital Investment

The Group has set procedures for capital expenditure. These include annual budgets, appraisals and review of the required expenditure, approvals at the right levels of authority and the commissioning of independent professional advice where appropriate.

Professional Advice

Professional advice is usually sought on contentious and disclosure issues, this being as a result of discussions during the Board Meetings. During the year the Chairman can seek independent professional advice in relation to matters affecting the Group.

The Group has an ongoing system for identifying, evaluating and managing the significant risks faced by the Group which has been in place for the whole of the year under review up to the date of approval of the annual report and accounts and which is regularly reviewed by the Board to ensure it continues to accord with the "Turnbull Guidance". The directors have reviewed the effectiveness of the system of internal financial control during the year from information provided by the management and the Group's external auditors. It must be recognised that such a system can only provide reasonable and not absolute assurance, and in that context, the review revealed nothing which, in the opinion of the directors, indicates that the system was inappropriate or unsatisfactory.

The Group has no formal internal audit function and the Board has determined that there is no need for one. The Board considers that internal audit is dealt with in other ways and the situation is regularly reviewed.

ROSS GROUP PLC & SUBSIDIARIES

CORPORATE GOVERNANCE STATEMENT

for the Year Ended 31 December 2011

Going Concern

The directors confirm that after making the appropriate enquires, they are of the opinion that the Group as a whole has adequate resources to continue in operational existence for the foreseeable future and therefore have prepared the Financial Statements on a going concern basis.

External Audit and Audit Committee

The Audit Committee during 2011 was comprised of the non-executive director, Mr Simon, as well as Executive Directors Mr Mehta and Mr Wade. It met periodically to review the adequacy of the Group's internal control systems, accounting policies, corporate governance policies and compliance with applicable accounting standards and to consider the appointment of the external auditors and to review their fees. Everett & Son is invited to attend these meetings. The Audit Committee is authorised by the Board to investigate any activity within its terms of reference and obtain external professional advice as is necessary.

By order of the Board

Barry Richard PettittChairman & Chief Executive Officer

30 April 2012

ROSS GROUP PLC & SUBSIDIARIES

DIRECTORS' REMUNERATION REPORT

for the Year Ended 31 December 2011

The Board is pleased to present its Remuneration Report in accordance with section 12.43A(c) of The Listing Rules.

The Board has in place a Remuneration Committee, comprising Mr Michael Simon, non executive director, and Mr B Pettitt, Chief Executive and Mr W L Hopkins , to determine the remuneration of the Board.

The Company policy during the restructuring period throughout 2011 was to pay directors only a nominal £1 salary. This policy will be reconsidered as occasion arises and as the new business opportunities open to the Group are realised. The directors feel it would be inappropriate to take any reward until then.

No director has a service contract with a notice period in excess of 12 months. All executive directors have contracts that require a notice period of one month. The contracts of the non-executive directors would normally be renewed for a period of one year. All directors are presented for re-election by the members at the Annual General Meeting on a maximum cycle of three years.

The Group does not currently operate a director's share option scheme or a long-term incentive scheme. The Group also does not currently have an employees share scheme or other long-term incentive.

ROSS GROUP PLC & SUBSIDIARIES

CORPORATE SOCIAL RESPONSIBILITY (CSR)

for the Year Ended 31 December 2011

The Board is fully aware of its responsibilities and fully supports the drive for ongoing improvement in this area. The impact the group's activities on the environment are regularly assessed to enable action to be directed at areas where any harmful impact could be reduced.

The Board has instructed local management to ensure the companies address those corporate social responsibilities which are recognised as being of prime importance. The responsibility for CSR rests with the Chief Executive director, Barry Pettitt, who will bring to the Board's attention any major issues which require their approval and regularly updates the Board on CSR matters. The views of shareholders and interested external parties are considered when developing the ongoing policy to CSR.

Figures are available for the board to review to enable them to assess the trend towards improvement in CSR matters and to direct the policy towards those areas that require further attention.

Employees

During 2011 the only employees of the company were its directors. However, as the new business opportunities planned in 2010 begin to be realised in 2012 and beyond, this will not remain the case.

As a statement of principle, then, the company considers that employees constitute a company's most valuable asset and therefore it is committed to ensuring they will be rewarded with the best environment in which to perform their duties. This environment will be one of equal opportunity and free from discrimination and harassment. The company is keen to develop a culture which suits the recruitment and retention of the highest calibre of staff and to ensure that all staff will be trained to the appropriate standard required to fully meet their job specifications.

The health and safety of the employees is paramount to the company. Staff will be issued with data sheets on the handling of any substances which might be toxic and will be trained in the correct procedures to follow. The company has a Health and Safety committee where any potential issues can be raised.

Environment

The Company has worked with its suppliers during the year to ensure the products used in manufacturing and any waste arising from the use of those products has a minimal impact on the environment. The use of energy is closely monitored and the available controls are used to good effect to reduce consumption where possible.

Customers

Customer satisfaction is one of the main targets for the company and this is aided by a rigorous quality policy. The Quality procedures adopted by the company require the recording of customer feedback and measures our performance against customer expectation. The company strives to meet the demands of its customers, but also ensures that solutions to their requirements are designed with efficiency.

Local Community

The company seeks to inter act with the local community and develop close relationships within its area of operation. It has established links with the local schools and colleges.

Commitment

The Group will continue to enhance its approach to CSR to ensure that it supports the principles as it expands its range of activities and welcomes any suggestions on how it can improve in this area.

Report of the Independent Auditors to the Members of

Ross Group Plc & Subsidiaries

We have audited the financial statements of Ross Group Plc for the year ended 31 December 2011 which comprise the Group and Parent Company Statements of Financial Position, the Group Income Statement, the Group Statement of Comprehensive Income, the Group and Parent Company Statements of Cash Flow, the Gorup and Parent Company Statement of Changes in Equity and the related notes 1 to 21. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union, and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As explained more fully in the Statement of Directors' Responsibilities set out on pages six and seven, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group's and the parent company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion:

Emphasis of matter - going concern

In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosure made in note 1 to the financial statements concerning the Group's ability to continue as a going concern. The Group's total liabilities exceeded its total assets by £6.47 million. This condition, along with the other matters explained in note 1 to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt over the Group's ability to continue as a going concern. However, the Chairman has pledged his personal support to cover the overheads of the Group up to 31 December 2013. The financial statements do not include any adjustments that would result if the Group was unable to continue as a going concern.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion:

Report of the Independent Auditors to the Members of

Ross Group Plc & Subsidiaries

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report to you if, in our opinion:

Under the Listing Rules we are required to review:

Jonathan N Cross FCA (Senior Statutory Auditor)

for and on behalf of Everett & Son

Chartered Accountants & Statutory Auditors

35 Paul Street

London

EC2A 4UQ

Date: 30th April 2012

Ross Group Plc & Subsidiaries

Consolidated Income Statement

for the Year Ended 31 December 2011

31.12.11 31.12.10

Notes £'000 £'000

CONTINUING OPERATIONS

Revenue 2 100 113

Other operating income 3 90 -

Administrative expenses (547) 15

OPERATING (LOSS)/PROFIT (357) 128

Finance costs 16 (13)

Income tax 6 - -

(LOSS)/PROFIT FOR THE YEAR (341) 115

(Loss)/profit attributable to:

Owners of the parent (341) 115

Earnings per share expressed

in pence per share: 8

Basic -0.23 0.08

Diluted -0.23 0.08

Ross Group Plc & Subsidiaries

Consolidated Statement of Comprehensive Income

for the Year Ended 31 December 2011

31.12.11 31.12.10

£'000 £'000

(LOSS)/PROFIT FOR THE YEAR (341) 115

OTHER COMPREHENSIVE INCOME - -

Total comprehensive income attributable to:

Owners of the parent (341) 115

Ross Group Plc & Subsidiaries

Consolidated Statement of Financial Position

31 December 2011

31.12.11 31.12.10

Notes £'000 £'000

ASSETS

CURRENT ASSETS

Trade and other receivables 11 62 190

Cash and cash equivalents 12 2 5

64 195

TOTAL ASSETS 64 195

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital 13 11,149 11,136

Share premium 14 2,535 2,317

Other reserves 14 15,384 15,384

Retained earnings 14 (35,534) (35,193)

TOTAL EQUITY (6,466) (6,356)

LIABILITIES

NON-CURRENT LIABILITIES

Trade and other payables 15 6,288 6,288

CURRENT LIABILITIES

Trade and other payables 15 229 248

242 263

TOTAL LIABILITIES 6,530 6,551

TOTAL EQUITY AND LIABILITIES 64 195

The financial statements were approved by the Board of Directors on 26th April 2012 and were signed on its behalf by:

Barry Richard Pettitt

Director

Shahshank Mehta

Director

Ross Group Plc & Subsidiaries

Company Statement of Financial Position

31 December 2011

31.12.11 31.12.10

Notes £'000 £'000

ASSETS

CURRENT ASSETS

Trade and other receivables 11 16 194

Cash and cash equivalents 12 2 4

18 198

TOTAL ASSETS 18 198

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital 13 11,149 11,136

Share premium 14 2,535 2,317

Other reserves 14 30,938 30,938

Retained earnings 14 (50,543) (50,188)

TOTAL EQUITY (5,921) (5,797)

LIABILITIES

NON-CURRENT LIABILITIES

Trade and other payables 15 2,278 2,278

CURRENT LIABILITIES

Trade and other payables 15 3,661 3,717

TOTAL LIABILITIES 5,939 5,995

TOTAL EQUITY AND LIABILITIES 18 198

The financial statements were approved by the Board of Directors on 26 April 2012 and were signed on its behalf by:

Barry Richard Pettitt - Director

Ross Group Plc & Subsidiaries

Consolidated Statement of Changes in Equity

for the Year Ended 31 December 2011

Called up Profit

share and loss Share Other Total

capital account premium reserves equity

£'000 £'000 £'000 £'000 £'000

Balance at 1 January 2010 11,136 (35,308) 2,317 15,384 (6,471)

Changes in equity

Total comprehensive income - 115 - - 115

Balance at 31 December 2010 11,136 (35,193) 2,317 15,384 (6,356)

Changes in equity

Issue of share capital 13 - 218 - 231

Total comprehensive income - (341) - - (341)

Balance at 31 December 2011 11,149 (35,534) 2,535 15,384 (6,466)

Ross Group Plc & Subsidiaries

Company Statement of Changes in Equity

for the Year Ended 31 December 2011

Called up Profit

share and loss Share Other Total

capital account premium reserves equity

£'000 £'000 £'000 £'000 £'000

Balance at 1 January 2010 11,136 (50,047) 2,317 30,938 (5,656)

Changes in equity

Total comprehensive income - (141) - - (141)

Balance at 31 December 2010 11,136 (50,188) 2,317 30,938 (5,797)

Changes in equity

Issue of share capital 13 - 218 - 231

Total comprehensive income - (355) - - (355)

Balance at 31 December 2011 11,149 (50,543) 2,535 30,938 (5,921)

Ross Group Plc & Subsidiaries

Consolidated Statement of Cash Flows

for the Year Ended 31 December 2011

31.12.11 31.12.10

Notes £'000 £'000

Cash flows from operating activities

Cash generated from operations 1 (264) 6

Interest paid 16 (13)

Net cash from operating activities (248) (7)

Cash flows from financing activities

Loan repayment (2) -

Amount introduced by directors 16 -

Share issue 231 -

Net cash from financing activities 245 -

Ross Group Plc & Subsidiaries

Company Statement of Cash Flows

for the Year Ended 31 December 2011

31.12.11 31.12.10

Notes £'000 £'000

Cash flows from operating activities

Cash generated from operations 1 (265) 5

Interest paid 16 (13)

Net cash from operating activities (249) (8)

Cash flows from financing activities

Amount introduced by directors 16 -

Share issue 231 -

Net cash from financing activities 247 -

Ross Group Plc & Subsidiaries

Notes to the Statements of Cash Flows

for the Year Ended 31 December 2011

Group

31.12.11 31.12.10

£'000 £'000

(Loss)/profit before income tax (341) 115

Creditor balance written back - (185)

Finance costs (16) 13

(357) (57)

Decrease in trade and other receivables 128 25

(Decrease)/increase in trade and other payables (35) 38

Company

31.12.11 31.12.10

£'000 £'000

Loss before income tax (355) (141)

Finance costs (16) 13

(371) (128)

Decrease/(increase) in trade and other receivables 177 (19)

(Decrease)/increase in trade and other payables (71) 152

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the statements of cash flow in respect of cash and cash equivalents are in respect of these statement of financial position amounts:

Group Company

Year ended 31 December 2011

31.12.11 1.1.11 31.12.11 1.1.11

£'000 £'000 £'000 £'000

Cash and cash equivalents 2 5 2 4

Year ended 31 December 2010

31.12.10 1.1.10 31.12.10 1.1.10

£'000 £'000 £'000 £'000

Cash and cash equivalents 5 12 4 12

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

for the Year Ended 31 December 2011

1. ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared in accordance with IFRS and IFRIC interpretations on a going concern basis. The adoption of all relevant new Standards issued by the International Accounting Standards Board in the current period has not led to any changes in the Group's accounting policies or financial statements. The directors have adopted these policies to the extent they feel is appropriate.

At the date of authorisation of these financial statements a number of Standards, amendments and Interpretations, issued by the IASB and not applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the EU) none of which will have a significant impact on the financial statements.

Going concern

Although the Group has incurred significant losses in the past resulting in negative retained earnings and total liabilities exceed total assets the Directors feel the going concern basis is appropriate. The change in management structure that took place in 2009 year has led to a new strategy being adopted by the Group and will allow them to take advantage of new, profitable business opportunities. The directors are confident these opportunities will come to fruition in 2012, but if they are delayed Barry Pettitt will continue to support the Group.

Basis of consolidation

The group financial statements consolidate those of the company and of its subsidiary undertakings drawn up to 31 December 2011. Profits or losses on intra-group transactions and intra-group balances are eliminated in full. On acquisition of a subsidiary, all of the subsidiary's assets and liabilities which exist at the date of acquisition are recorded at their fair values reflecting their condition at that date.

Revenue recognition

Revenue is the total amount receivable by the group for goods supplied and services provided to third parties, excluding VAT.

Financial instruments

Financial assets and liabilities are recognised on the balance sheet when the entity becomes party to the contractual provisions of the instrument.

The Group's financial instruments consist primarily of cash and cash equivalents, accounts receivable and accounts payable.

Cash and cash equivalents

Cash and cash equivalents comprise cash and short term deposits held with banks, bank overdrafts are recorded under current liabilities on the balance sheet.

Trade and other receivables

Trade and other receivables are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts and included in current assets, except for maturities greater than 12 months from the balance sheet date.

Trade and other payables

Trade and other payables are stated at their nominal value and included in current liabilities, except for maturities greater than 12 months from the balance sheet date.

Deferred taxation

A deferred tax asset is provided for if material, using the tax rates estimated to arise when the timing differences reverse and is accounted for to the extent that it is probable that an asset will crystallise.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

Foreign currencies

Transactions denominated in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. These transaction differences are dealt with in the income statement. The financial statements of foreign subsidiaries are translated at the rate of exchange ruling at the balance sheet date. The exchange differences arising from the retranslation of the opening net investment in subsidiaries are taken directly to reserves.

2. SEGMENTAL REPORTING

The directors feel that due to the small amount of trading that has taken place during the year it is not possible to identify any segments and as a result cannot follow IFRS 8. The entire turnover was generated overseas and relates to the principal activity of the Group. The directors will review this assessment next year.

3. OTHER OPERATING INCOME

31.12.11 31.12.10

£'000 £'000

Sale of trademark 90 -

4. EMPLOYEES AND DIRECTORS

There were no staff costs for the year ended 31 December 2011 nor for the year ended 31 December 2010.

The average monthly number of employees during the year was as follows:

31.12.11 31.12.10

Management 4 5

31.12.11 31.12.10

£ £

Directors' remuneration 4 5

5. (LOSS)/PROFIT BEFORE INCOME TAX

The loss before income tax (2010 - profit before income tax) is stated after charging:

31.12.11 31.12.10

£'000 £'000

Auditors' remuneration 36 35

6. INCOME TAX

No liability for UK corporation tax arose on ordinary activities for the year ended 31 December 2011 or for the year ended 31 December 2010.

Subject to the agreement with HM Revenue and Customs, the Group has allowable trading losses at 31 December 2011 for set-off against future trading profits of £11.72m (2010: £11.41m).

A deferred tax asset of £3.05m (2010: £3.47m) arises due to the large trading losses described above. As it is not known when the Group will be able to make use of these losses the asset has not been recognised in the financial statements.

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

7. LOSS OF PARENT COMPANY

As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these financial statements. The parent company's loss for the financial year was £(355,792) (2010 - £(140,042)).

8. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.

Reconciliations are set out below.

31.12.11

Weighted

average

number Per-share

Earnings of amount

£'000 shares pence

Basic EPS

Effect of dilutive securities - - -

Diluted EPS

Adjusted earnings (341) 149,799,116 -0.23

31.12.10

Weighted

average

number Per-share

Earnings of amount

£'000 shares pence

Basic EPS

Effect of dilutive securities - - -

Diluted EPS

Adjusted earnings 115 136,181,924 0.08

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

9. SUBSIDIARIES

At 31 December 2011 the company held 100% of the allotted equity share capital of the following:-

The costs of these fixed asset investments have been written off over the previous periods.

10. INVESTMENTS

Group

Unlisted

investments

£'000

COST

Reclassification/transfer 344

At 31 December 2011 344

PROVISIONS

Impairments 344

At 31 December 2011 344

NET BOOK VALUE

At 31 December 2011 -

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

Company

Unlisted

investments

£'000

COST

Reclassification/transfer 344

At 31 December 2011 344

PROVISIONS

Impairments 344

At 31 December 2011 344

NET BOOK VALUE

At 31 December 2011 -

The directors decided to capitalise the amount Ross Group plc lent to Ross Group (USA) Inc and account for it as an investment. However since Ross Group (USA) Inc is currently not trading the directors have decided to fully impair the investment. This impairment of £343,672 has been included in administrative expenses in the consolidated and company's income statements.

11. TRADE AND OTHER RECEIVABLES

Group Company

31.12.11 31.12.10 31.12.11 31.12.10

£'000 £'000 £'000 £'000

Current:

Trade debtors 60 - 10 -

Amounts owed by group undertakings - - 4 4

Other debtors - 190 - 190

VAT 2 - 2 -

62 190 16 194

12. CASH AND CASH EQUIVALENTS

Group Company

31.12.11 31.12.10 31.12.11 31.12.10

£'000 £'000 £'000 £'000

Bank current account 2 5 2 4

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

13. CALLED UP SHARE CAPITAL

Group and Company

Alloted, called up and fully paid:

The ordinary shares have both voting rights and the right to dividends. The deferred shares have no rights to dividends and no voting rights.

On a winding up the holders of the deferred shares of 4.8p each shall be entitled to receive 1p per share after the repayment of all amounts payable to the holders of any other class of share and the payment of £5,000 on each ordinary share for the time being in issue. On a winding up the holders of deferred shares of 0.1p each shall be entitled to receive 0.1p per share after the payment of £5,000 on each ordinary share for the time being in issue but shall not confer the right to participate in any surplus.

The deferred shares of 4.8p each are redeemable at the company's option any time at a price of 1p for each of the deferred shares held by any member. The deferred shares of 0.1p each are transferable at the company's option at any time to any person at a total price of 1p for all of the shares held by a shareholder. The deferred shares of 0.1p each are redeemable or cancellable at the company's option at any time at a total price of 1p for all of the shares held by a shareholder.

As the deferred shares rank behind the ordinary shares, they are recognised as equity.

Managing Capital

The Group's objectives when managing capital are:

 - To safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.

 - To provide an adequate return to shareholders by pricing products and services at an appropriate level taking into account the level of risk.

The Group sets an amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and risk characteristics of the underlying assets.

The entity is not subject to any externally imposed capital requirements.

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

14. RESERVES

Group

Retained Share Other

earnings premium reserves Totals

£'000 £'000 £'000 £'000

At 1 January 2011 (35,193) 2,317 15,384 (17,492)

Deficit for the year (341) (341)

Cash share issue - 218 - 218

At 31 December 2011 (35,534) 2,535 15,384 (17,615)

Company

Retained Share Other

earnings premium reserves Totals

£'000 £'000 £'000 £'000

At 1 January 2011 (50,188) 2,317 30,938 (16,933)

Deficit for the year (355) (355)

Cash share issue - 218 - 218

At 31 December 2011 (50,543) 2,535 30,938 (17,070)

Other reserves of the Group consist of a capital redemption reserve of £1.92m (2010: £1.92m), a non-distributable capital reserve of £3.33m (2010: £3.33m), and a special reserve of £10.13m (2010: £10.13m).

Other reserves of the company consist of a capital redemption reserve of £1.92m (2010: £1.92m) and a special reserve of £29.02m (2010: £29.02m).

15. TRADE AND OTHER PAYABLES

Group Company

31.12.11 31.12.10 31.12.11 31.12.10

£'000 £'000 £'000 £'000

Current:

Trade creditors 76 87 76 86

Amounts owed to group undertakings - - 3,437 3,480

Other creditors 23 23 23 23

Accruals and deferred income 114 138 109 128

Directors' current account 16 - 16 -

229 248 3,661 3,717

Non-current:

Amounts owed to participating interests 4,226 4,226 216 216

Other loans 2,062 2,062 2,062 2,062

6,288 6,288 2,278 2,278

Aggregate amounts 6,517 6,536 5,939 5,995

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

Group

31.12.11 31.12.10

£'000 £'000

Current:

Other loans 13 15

Terms and debt repayment schedule

Group

1 year or

less

£'000

Other loans 13

17. FINANCIAL INSTRUMENTS

The Group uses financial instruments, comprising borrowings, cash, liquid resources and various items, such as trade debtors, trade creditors etc., that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the group's operations.

The Group did not enter into derivatives transactions such as interest rate swaps, forward rate agreements and forward foreign currency contracts.

The Board of the Group considers that the interest rate risk, liquidity risk and foreign currency risks arising from the Group financial instruments are low. However it reviews policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous periods.

It is and has been throughout the year under review, the group policy that no trading in financial instruments shall be undertaken.

Short-term debtors and creditors

Short-term debtors and creditors have been excluded from all the following disclosures, other than the currency risk disclosures.

Interest rate risk

The Group finances its operations through a mixture of borrowings. It relies on a loan from its shareholders, Keniworth Capital Limited and Prime Growth Enterprises Limited to ensure sufficient liquidity is available to meet foreseeable needs.

Prime Growth Enterprises Limited has waived it's right to the 6% interest it initially stated was payable on the loan of £216,000. The directors of Prime Growth Enterprises Limited have back-dated this decision to the inception of the loan. This means the Group's exposure to interest rate fluctuations has been limited by the fact that none of the loans incur interest.

Maturity of financial liabilities

For the Group financial liabilities analysis at 31 December 2011 see note 15.

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

Currency risk

The Group does not have foreign investments held in foreign currencies.

The Group's exposure to translation and transaction foreign exchange risk is considered to be low by the board.

100% of the Group's worldwide income in the year was invoiced in Sterling. As a result the board does not consider there is a need for Group policy to manage the currency risk as it considers the risk to be low.

Fair values

The Board considers that the fair values of the Group's borrowings are equal to their book values.

18. RELATED PARTY DISCLOSURES

Group

The Group had the following balances with related parties at the year end:

Receivables

Payables

The directors decided to capitalise the amount Ross Group plc lent to Ross Group (USA) Inc and account for it as an investment. However since Ross Group (USA) Inc is currently not trading the directors have decided to fully impair the investment. This impairment of £343,672 has been included in administrative expenses in the consolidated and company's income statements.

Barry Pettitt, the Chairman and Chief Executive Officer of Ross Group Plc, owns Prime Growth Enterprises Limited and controls Ross Group (USA) Inc. Prime Growth Enterprises Limited owns 20% of the ordinary share capital in Ross Group Plc.

Keniworth Capital Limited owns 27% of the ordinary share capital in Ross Group Plc.

Barry Pettitt has pledged to cover the overheads of the Group until 31 December 2013.

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements - continued

for the Year Ended 31 December 2011

Company

At the year end Ross Group plc had the following outstanding balances with its related parties:

Receivables

Payables

19. EVENTS AFTER THE REPORTING PERIOD

Since the 31 December 2011, Ross Group plc has issued 7,340,156 new ordinary shares of 0.1p each. Following this, the company's total issued share capital is 157,139,272 ordinary shares.

20. ULTIMATE CONTROLLING PARTY

The directors consider that there is no ultimate controlling party of Ross Group Plc and subsidiaries for 2011; however Barry Pettitt, by virtue of his position as CEO within the Group and his 25% shareholding, exerts a significant influence.

21. RECONCILIATION OF MOVEMENTS IN RESERVES

Group

31.12.11 31.12.10

£'000 £'000

(Loss)/profit for the financial year (341) 115

Shares issued in the year 231 -

Net (reduction)/addition to reserves (110) 115

Opening reserves (6,356) (6,471)

Closing reserves (6,466) (6,356)

Company

31.12.11 31.12.10

£'000 £'000

Loss for the financial year (355) (141)

Shares issued during the year 231 -

Net reduction of reserves (124) (141)

Opening reserves (5,797) (5,656)

Closing reserves (5,921) (5,797)

Ross Group Plc & Subsidiaries

Consolidated Income Statement Summaries

for the Year Ended 31 December 2011

31.12.11 31.12.10

£'000 £'000

REVENUE

Sales 100 113

100 113

OTHER OPERATING INCOME

Sale of trademark 90 -

90 -

ADMINISTRATIVE EXPENSES

Administrative expenses

Management charge - 3

Post and stationery 4 7

Travel & subsistence 36 24

Legal and professional fees 39 45

Accountancy fees 6 22

Auditors' remuneration 36 35

Impairment of investment 344 -

Exceptional items - (185)

Finance costs

Bank charges 2 1

Bad debt provision 80 33

547 (15)

FINANCE COSTS

Loan (16) 13

(16) 13