Ross Grp. Regulatory News (RGP)

Final Results

Ross Group plc are pleased to file final audited accounts for the year ended 31st December 2009.

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

ROSS GROUP PLC

ANNUAL REPORT &

FINANCIAL STATEMENTS

31 DECEMBER 2009

ROSS GROUP PLC

FINANCIAL STATEMENTS

for the Year Ended 31 December 2009

ROSS GROUP PLC & SUBSIDIARIES

CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS

for the Year Ended 31 December 2009

Page

ROSS GROUP PLC & SUBSIDIARIES

CHAIRMAN'S STATEMENT

for the Year Ended 31 December 2009

RESULTS

It gives me great pleasure, as recently elected Chairman, to announce for the year ending 31st December 2009 that the Ross Group Plc has made a profit before tax of £51,665.23 (Year ended 31 December 2008: loss of £1,055,000).

This marks a notable change in the Group's previous performances and recent results to date. For the first time in many years, the Group has made a profit; all of which duly reflects the new management's strategy, focus and intention to restructure and resolve all pre-existing and outstanding issues, endeavour to eliminate previous management charges, expenses and exposures to prior liabilities, albeit while equally trying to achieve an efficient and effective operation at the lowest possible overhead.

At the same time, the Group has been - and still is - specifically seeking to explore new core-business strategic and synergistic partnerships, alliances and acquisition opportunities within the consumer electronics, electrical and energy-related industries, while continuing to conduct its existing and any future business, wherever possible, on a pre-sold, pre-financed and pre-determined fixed profit basis. The Group also anticipates concluding further business of this nature in various countries during 2010 and is already in detailed discussions with several suitable companies. Whilst the global economy is still facing a number of major challenges and continues to be depressed in many areas, your Board of Directors are confident there are certain opportunities, within its core business competency, that are worth exploring with a view to expanding the Group as a whole into an orderly structured organisation in the near future. During this period of expected transition, it is considered that the Group will be able to continue to operate and gradually grow its own organic business in accordance with its current strategy of being risk adverse. This is to say, to forego large sales with little profits and lots of risks, in favour of other smaller service-related businesses that provide profitable income with little or limited risk. I would very much like to thank the recently elected Board of Directors, employees, contractors and consultants for all their excellent support and hard work in helping turn the Group into profit. I sincerely hope that during the forthcoming year the Group will be able to continue to build on its present success and perhaps bring more optimism to our extraordinarily loyal, long-suffering, shareholders who I would also like to thank for their patience and understanding during this particular period.

Barry Richard Pettitt Chairman & Chief Executive Officer

29 April 2010

ROSS GROUP PLC & SUBSIDIARIES

OPERATING AND FINANCIAL REVIEW

for the Year Ended 31 December 2009

Business Review

As can be seen from the accounts, the Group engaged in only minimal trading in 2009, as the new Management Team set about restructuring the Group and began working on various projects to bring new trading opportunities to it.

The Group at 31 December 2009 consisted of Ross Group plc, and two wholly owned subsidiaries Sansui Electronics (UK) Ltd and San Gain Limited, a corporation registered in Hong Kong. In 2010 it is planned to begin trading with a wholly owned subsidiary that has been established in the USA Ross Group (USA) Incorporated.

The Directors are satisfied with progress so far and look forward to greatly increased profitable trading in the expanded Group during 2010.

Business Outlook

The outlook for the Group should be enhanced by the new and potential significant changes in the structure and operation of the Group going forward.

.

ROSS GROUP PLC & SUBSIDIARIES

REPORT OF THE DIRECTORS

for the Year Ended 31 December 2009

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2009.

PRINCIPAL ACTIVITY

The Group has two operating subsidiaries which concentrate on the following activities: - The distribution of consumer electronic branded products through Sansui (UK) Ltd.

- The distribution of consumer electronic branded products through San Gain Ltd.

STRATEGY

Whilst the Group's loss-making engineering subsidiaries (namely, GEL and Ross Autotronics) are now in liquidation, the remaining unencumbered subsidiaries, Sansui Electronics (UK) Ltd and San Gain Ltd, have since continued conducting and seeking business in both consumer electronics trading, sales agency and supply chain management activities, however, the Board has deliberately determined that any future business is to be limited to pre-selling of consumer electronic products and supply chain management services on a secured and preferably pre-financed basis whereby costs and profitability can be more pre-determined.

The Group is also currently in the process of establishing two wholly-owned subsidiaries in overseas countries, with a view to conducting business in these particular countries in the future.

The new management of the Group is in the process of actively negotiating with all its creditors so as to restructure all outstanding loans into a form of rescheduling and/or equity conversion acceptable to both parties.

If such objectives can be satisfactorily achieved, it is the opinion of the management that the Group will then be in a better position to consider proceeding with certain opportunities which are currently being researched and investigated. We are confident that these will lead to increased revenues, profitability and shareholder value in the future.

The Board has increased its number of Directors (both executive and non-executive) in keeping with its new management philosophy of wanting greater Board supervision and involvement. For the time being no Director's salary will be more than £1 per annum; although appropriate performance related remuneration will be awarded, subject to Board approval.

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 2009.

DIRECTORS

B R Pettitt (Chief Executive Officer)

Barry Richard Pettitt, aged 50, 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.

ROSS GROUP PLC & SUBSIDIARIES

REPORT OF THE DIRECTORS

for the Year Ended 31 December 2009

M J Simon (Non Executive Director)

Michael Jonathan Simon, aged 51, 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 61, 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.

J C Broadley (Non Executive Director)

Jack Broadley, aged 69, was appointed to the Board on 22 December 2009. Educated at Rutherglen Academy, he qualified as a CA in 1967. He spent many years working for Lowe Bingham Matthew in Hong Kong, becoming partner there in 1972 and was a senior partner during their merger with Coopers (now Price Waterhouse Coopers) He retired in 1990, and entered into a successful consulting career, taking up several directorships with public companies in Hong Kong. He is now based in the UK, and his exceptional breadth of business experience is welcomed within the Group.

A C C Ma (Former Chairman)

Adrian Chi Chiu Ma, aged 65, was appointed to the board on 8 February 2000. He is a commerce graduate from Birmingham University, England and a member of the Institute of Chartered Accountants in England and Wales. Mr Ma has more than 20 years experience in the finance and operations of the computer peripheral and electronics industry. He is also an executive director of The Grande Group. Mr Ma resigned as a director on 28 April 2009.

M A B Binney (Former Chief Executive)

Michael Andrew Barclay Binney, aged 50, was appointed to the board on 11 February 2000. He studied at Coventry University, England and is a Fellow of the Institute of Chartered Accountants in England and Wales and the Hong Kong Society of Accountants. Mr Binney has extensive experience in manufacturing and operations of the consumer and computer electronics industry. He is also a non-executive director of The Grande Holdings Limited. Mr Binney resigned as a director on 28 April 2009.

R Lee Yen Kee (Former Executive Director)

Ruby Lee Yen Kee, aged 48, was appointed to the board on 11 May 2001. She is a law graduate from the University of Singapore, and is called to the Singapore Bar. She also holds masters in law from the London School of Economics, University of London. Prior to joining The Grande Group, Ms Yen Kee was in legal practice and she now leads the legal and company secretarial team of The Grande Group. Ms Yen Kee resigned on 28 April 2009.

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.

ROSS GROUP PLC & SUBSIDIARIES

REPORT OF THE DIRECTORS

for the Year Ended 31 December 2009

EMPLOYEE INVOLVEMENT

Currently the directors are the only employees.

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 B. Pettitt, directly and indirectly through Prime Growth Enterprises Limited and Vidacos Nominees, at the date of this report was 34,431,154 (25.29%).

None of the other directors held any shares in the Group.

Substantial shareholdings

As at 31st December 2009 the following were registered as being materially interested in 3% or more of the company's issued share capital, or being a related shareholder:

FINANCIAL INSTRUMENTS

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

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 2009

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:

Mr M J Simon - Secretary

29 April 2010

ROSS GROUP PLC & SUBSIDIARIES

CORPORATE GOVERNANCE STATEMENT

for the Year Ended 31 December 2009

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 currently consists of five directors. During the year under review the CEO appointed at the end of 2008, B R Pettitt, was joined by four new directors: W L Wade and M J Simon, both appointed in April 2009, and J C Broadley and S C Mehta both appointed in December 2009. Mr Simon was also appointed as Company Secretary in April. Also in April, A C C Ma, M A B Binney and R Lee Yen Kee all resigned as Directors, so the company has enjoyed a complete change of management during 2009.

The Chief Executive, Mr Pettitt is normally based overseas, and also serves as Chairman.

The two non-executive directors, Mr Simon and Mr Broadley, are considered to be independent as there are no circumstances or relationships as described by Code provision A.3.1 which apply to their appointments. 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

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 Broadley); 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 2009

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 on going 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 2009

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 is comprised of the two non-executive directors, Mr Simon and Mr Broadly, as well as one Executive Director Mr Mehta It meets 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 Pettitt Chairman & Chief Executive Officer

29 April 2010

ROSS GROUP PLC & SUBSIDIARIES

DIRECTORS' REMUNERATION REPORT

for the Year Ended 31 December 2009

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, Mr Broadley, both non executive directors, and Mr B Pettitt, Chief Executive, to determine the remuneration of the Board.

The Company policy during the restructuring period throughout 2009 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 2009

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 UK based executive director, Michael Binney, 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 2009 the only employees of the company were its directors. However, as the new business opportunities planned in 2009 begin to be realised in 2010 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

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROSS GROUP PLC

We have audited the financial statements of Ross Group Plc & Subsidiaries for the year ended 31 December 2009 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 Group and Parent Company Statements of Changes in Equity and the related notes 1 to 20. 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 an auditors' report 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 Directors' Responsibilities Statement set out on pages 5 and 6, 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 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 (APB'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.

Opinion on financial statements

In our opinion:

·; the financial statements give a true and fair view of the state of the Group's and of the parent company's affairs as at 31 December 2009 and of the Group's profit for the year then ended;

·; the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

·; the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and

·; the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS Regulation.

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 company's ability to continue as a going concern. The Group's total liabilities exceeded its total assets by £6.47million. 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 about the company'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 30th April 2011. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF

ROSS GROUP PLC & SUBSIDIARIES

Opinion on other matters prescribed by the Companies Act 2006

In our opinion:

·; the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and

·; the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

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:

·; adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

·; the parent company financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns; or

·; certain disclosures of directors' remuneration specified by law are not made; or

·; we have not received all the information and explanations we require for our audit.

Under the Listing Rules we are required to review:

·; the directors' statement, set out on page 5, in relation to going concern; and

·; the part of the Corporate Governance Statement relating to the company's compliance with the nine provisions of the June 2008 Combined Code specified for our review.

Jack Barclay (Senior Statutory Auditor)

For and on behalf of Everett & Son

Chartered Accountants and Statutory Auditors

35 Paul Street

London

EC2A 4UQ

30 April 2010

ROSS GROUP PLC & SUBSIDIARIES

CONSOLIDATED INCOME STATEMENT

for the Year Ended 31 December 2009

ROSS GROUP PLC & SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/(DEFICIT)

for the Year Ended 31 December 2009

ROSS GROUP PLC & SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the Year Ended 31 December 2009

ROSS GROUP PLC & SUBSIDIARIES

COMPANY STATEMENT OF CHANGES IN EQUITY

for the Year Ended 31 December 2009

ROSS GROUP PLC & SUBSIDIARIES (REGISTERED NUMBER: 00131902)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 December 2009

The financial statements were approved by the Board of Directors on 29 April 2010 and were signed on its behalf by:

B R Pettitt - Director

S C Mehta - Director

ROSS GROUP PLC & SUBSIDIARIES (REGISTERED NUMBER: 00131902)

COMPANY STATEMENT OF FINANCIAL POSITION

31 December 2009

The financial statements were approved by the Board of Directors on 29 April 2010 and were signed on its behalf by:

B R Pettitt - Director

S C Mehta - Director

ROSS GROUP PLC & SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

for the Year Ended 31 December 2009

ROSS GROUP PLC & SUBSIDIARIES

COMPANY STATEMENT OF CASH FLOWS

for the Year Ended 31 December 2009

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT

for the Year Ended 31 December 2009

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the statements of cash flows in respect of cash and cash equivalents are in respect of these balance sheet amounts:

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

for the Year Ended 31 December 2009

1. ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared in accordance with International Accounting Standard on a going concern basis. In addition to complying IFRSs as adopted by the European Union, IFRSs as issued by the International Accounting Standards Board (IASB) have also applied.

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, apart from the adoption of IAS 1 (Revised) and IFRS 8. 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 has taken place during the financial year has led to a new strategy being adopted by the Group and will allow them to take advantage of new, profitable business opportunities.

Basis of consolidation

The group financial statements consolidate those of the company and of its subsidiary undertakings drawn up to 31 December 2009. 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

Deferred tax 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.

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

for the Year Ended 31 December 2009

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 or at an historical Sterling equivalent if more appropriate. These transaction differences are dealt with in the profit and loss account. 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.

Leased assets

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease.

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 distribution of consumer electronic branded products. The directors will review this assessment next year.

3. OTHER OPERATING INCOME

4. EMPLOYEES AND DIRECTORS

Directors' emoluments in the current year totalled £3 (2008: £8,000). There were no other staff costs incurred in the current or previous year.

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

5. NET FINANCE COSTS

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

for the Year Ended 31 December 2009

6. (PROFIT)/LOSS BEFORE TAX

The profit/(loss) before tax is stated after charging:

7. TAX

Analysis of the tax charge

No liability for UK corporation tax arose on ordinary activities for the year ended 31 December 2009 or for the year ended 31 December 2008. The Group's profit for the financial year was offset against the trading losses brought forward.

Subject to the agreement with HM Revenue and Customs, the Group has taxable trading losses at 31 December 2009 for set-off against future trading profits of £11.57m (2008: £13.37m).

A deferred tax asset of £3.47m (2008: £3.74m) 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.

8. RESULT OF PARENT COMPANY

As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the parent company is not presented as part of these financial statements. The parent company's profit for the financial year was £206,864 (2008: £(677,688) loss).

ROSS GROUP PLC & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

for the Year Ended 31 December 2009

9. 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.