Ross Grp. Regulatory News (RGP)

Final Results

Ross Group plc is pleased to file final audited accounts for the year ended 31st December 2012.

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

Report of the Directors and

Consolidated Financial Statements for the Year Ended 31st December 2012

for

Ross Group Plc & Subsidiaries

Ross Group Plc & Subsidiaries

Contents of the Consolidated Financial Statements

for the Year Ended 31st December 2012

Page

Ross Group Plc & Subsidiaries

Company Information

for the Year Ended 31st December 2012

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 2012

Dear Shareholders,I am pleased to report to you on both the business activities and financial results of the Ross Group for the financial year ended 31st December 2012.

It has been a year of exhaustive exploration of several opportunities involving potential mergers, acquisitions and strategic alliances. Whilst we had decided at the beginning of this year to actively pursue specific opportunities in certain "non-core" business sectors; such as mining, mineral resources and energy-related supply chain management services, there has been no conclusive material event to report to date.The prime reasons for this outcome have been due to certain fundamental factors that, after our respective analysis, ultimately resulted in the Group strategically deciding to be more risk averse and therefore not to proceed with these projects - even though presenting potentially high rewards - as they were either found to be over-valued, lacking sufficient international accreditation, or deemed unacceptable during and/or after having conducted preliminary due diligences

Concurrently, we had also decided to continue conducting our existing "core" business of providing specialist supply chain management services within the consumer electronics industry; which has consistently contributed towards funding necessary new business research and development activities - such that the Group companies could fulfil their financial obligations in a timely and professional manner.Whilst continuing to maintain the Group's core competency, it has now since become evident that there are also a number of major core opportunities that have recently been considered worthwhile revisiting and/or exploring further, which are proving to present comparatively less risk; especially given the Group's overall management experience in the consumer electronics industry and our ability to assess such specific commercial risk/reward factors more significantly. These opportunities involve mature businesses, hard assets capable of significant potential growth - particularly if implementing specialist strategic management and direction.

At the end of this financial year, we are now fully focused on assessing certain "core" opportunities albeit at a very formative stage; with a view to being able to selectively prepare a proposal for the Board to recommend to our shareholders, as has been the case for some time. As such, the Board believes it to be an appropriate time to significantly structure the Group both operationally and in terms of its financial reporting; so as to become as deal-ready as possible, in preparation for such an event.

As a result, and consistent with our prior accounting policy implemented last year, certain items of costs which have been increasingly incurred over the last two to three years, in connection with the research, development, due diligences and processes of setting up possible future alliances and trade business, have been prudently written-off during this year. In total, these sums amount to £101,000.In recent years, prior to these results, the Group had reported small modest profits on the providing of specific supply chain management services within the consumer electronics industry, which it considers to be its "core" competency. The Group made a loss of £57,000 on these activities in 2012. Whilst the underlying operational performance of the business is not in any material way different from the previous three years, we have conservatively decided to make certain additional provisions and accruals, which together with the accounting policy mentioned above, resulted in an operating loss of £158,000 for the year.The Board is pleased with the new core progress made during 2012 and very much looks forward with confidence to 2013 to ensure the next phase of significant future development and growth for the Group.Once again, I would very much like to personally thank our Board of Directors, employees, contractors and consultants for all their excellent support, commitment and hard work in helping the Group towards achieving its aims. I would also like to personally thank our extraordinary loyal shareholders for their continued patience and understanding.

Barry Richard Pettitt

Chairman and Chief Executive

29 April 2013

Ross Group Plc & Subsidiaries

Operating and Financial Review

For the year ended 31 December 2012

Business Review

The Group at 31 December 2012 consisted of Ross Group plc, and two wholly owned subsidiaries; Sansui Electronics (UK) Limited (which is in the process of being renamed) and San Gain Industrial Company Limited, a corporation registered in Hong Kong.

The main focus of the Board during 2012 continued to be the safe custodianship of the Group whilst exploring various "non-core" business opportunities and maintaining a modest amount of low-risk "core" (consumer electronics) business, sufficient to be able to assist in the funding of merger and acquisition activities for and on behalf of the Group and its Directors who have been actively researching and negotiating new global business opportunities for Ross Group plc.

We also concluded a small number of supply-chain deals in the Far East through San Gain that has resulted in turnover and business broadly comparable to that of the previous year. In addition, consistent with the prior year disposal of certain corporate and trademark assets in the UK, the subsidiary Sansui Electronics (UK) Limited is currently in the process of being renamed. 

As noted in the Chairman's Statement, the Board again decided during the year to prudently make certain provisions, accruals and write downs of a number of project investments, in order to be as "deal-ready" as possible. This has resulted in a loss being recognised in the 2012 profit and loss account. The Directors are confident that the underlying value of the Group as a whole has not been diminished by this and that by doing so there is the probability that the Group could be considered worthy of further interest by certain prospective parties who are currently in detailed discussions with the Group.

Business Outlook

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

Ross Group Plc & Subsidiaries

Report of the Directors

for the Year Ended 31st December 2012

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2012.

PRINCIPAL ACTIVITY

The Group has one operating subsidiary which concentrates on the following activity:

- The distribution of consumer electronic branded products and complementary supply chain management services through San Gain Industrial Company Limited.

STRATEGY

San Gain Industrial Company Limited continues to conduct and seek business in both consumer electronics trading, sales agency and supply chain management activities.

These business activities were profitable and contributed to the group results.

As noted in the Chairman's statement, the Group's management continued throughout 2012 in its efforts to actively seek out new business opportunities and have recently decided to focus its full attention on "core" consumer electronics and electrical industry. Certain 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 2012.

DIRECTORS

B R Pettitt (Chief Executive Officer)

Barry Richard Pettitt, aged 54, 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 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 54, 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 54, 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 employee

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, Cynam Investments Inc and Pershing Nominees, at the date of this report was 37,835,702 (23.00%).

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

Substantial shareholdings

As at 31st December 2012 the following were registered as being materially interested in 4% 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 Report of the Directors 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 have elected to prepare the group 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, the directors are required to:

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.

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.

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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

29 April 2013

Ross Group Plc & Subsidiaries

Corporate Governance Statement

for the Year Ended 31st December 2012

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. Throughout the year the Company has complied with the main principles of 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. The Board is fully aware that is contrary to Code provision A.2.1, which states that the roles of chairman and chief executive should not be exercised by one individual. The Board is of the opinion that, given the current size of the business, and also Mr Pettitt's undoubted and considerable knowledge, experience and contacts in the Group's field of operations, that the shareholders interests are best served by this arrangement. The Board is active in its management of the Company and meets and confers regularly on business matters arising. These frequent and robust discussions serve to ensure that no one individual has unfettered powers of decision.

During 2012 Mr Pettitt 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 B.1.1 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. As part of his role, the non-executive director constructively challenges decisions and helps develop strategies and plans for the benefit of the Board.

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 is supplied with all the information relevant to the meeting in a timely manner and in a form and quantity appropriate to enable it to discharge its duties during the meetings.

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.

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

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.

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 2012 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

29 April 2013

Ross Group Plc & Subsidiaries

Director's Remuneration Report

for the Year Ended 31st December 2012

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 2012 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 currently 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 31st December 2012

 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 Officer, 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 2012 the only employees of the company were its directors. However, as the new business opportunities planned in 2012 begin to be realised in 2013 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 2012 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 £6.46 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 2014. 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:

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 Cross FCA (Senior Statutory Auditor)

for and on behalf of Everett & Son

Chartered Accountants & Statutory Auditors

35 Paul Street

London

EC2A 4UQ

29 April 2013

Ross Group Plc & Subsidiaries

Consolidated Income Statement

for the Year Ended 31st December 2012

Ross Group Plc & Subsidiaries

Consolidated Statement of Comprehensive Income

for the Year Ended 31st December 2012

Ross Group Plc & Subsidiaries (Registered number: 00131902)

Consolidated Statement of Financial Position

31st December 2012

The financial statements were approved by the Board of Directors on 29th April 2013 and were signed on its behalf by:

M J Simon - Director

S C Mehta - Director

Ross Group Plc & Subsidiaries (Registered number: 00131902)

Company Statement of Financial Position

31st December 2012

The financial statements were approved by the Board of Directors on 29th April 2013 and were signed on its behalf by:

B Pettitt - Director

Ross Group Plc & Subsidiaries

Consolidated Statement of Changes in Equity

for the Year Ended 31st December 2012

Ross Group Plc & Subsidiaries

Company Statement of Changes in Equity

for the Year Ended 31st December 2012

Ross Group Plc & Subsidiaries

Consolidated Statement of Cash Flows

for the Year Ended 31st December 2012

Ross Group Plc & Subsidiaries

Company Statement of Cash Flows

for the Year Ended 31st December 2012

Ross Group Plc & Subsidiaries

Notes to the Statements of Cash Flows

for the Year Ended 31st December 2012

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:

Ross Group Plc & Subsidiaries

Notes to the Consolidated Financial Statements

for the Year Ended 31st December 2012

1. ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared in accordance with International Accounting Standard 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.

Basis of consolidation

The group financial statements consolidate those of the company and of its subsidiary undertakings drawn up to 31 December 2012. 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 statement of financial position date.

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

4. EMPLOYEES AND DIRECTORS

There were no staff costs for the year ended 31st December 2012 nor for the year ended 31st December 2011.

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

31.12.12 31.12.11

Management 4 4

31.12.12 31.12.11

£ £

Directors' remuneration 4 4

5. LOSS BEFORE INCOME TAX

The loss before income tax is stated after charging:

6. INCOME TAX

No liability for UK corporation tax arose on ordinary activities for the year ended 31 December 2012 or for the year ended 31 December 2011. 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 allowable trading losses at 31 December 2012 for set-off against future trading profits of £11.72m (2011: £11.72m).

A deferred tax asset of £3.05m (2011: £3.05m) 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.

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 £(197,624) (2011 - £(355,792)).

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.

8. EARNINGS PER SHARE - continued

9. SUBSIDIARIES

At 31 December 2012 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

11. TRADE AND OTHER RECEIVABLES

12. CASH AND CASH EQUIVALENTS

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.

14. RESERVES

Other reserves of the Group consist of a capital redemption reserve of £1.92m (2011: £1.92m), a non-distributable capital reserve of £3.33m (2011: £3.33m), and a special reserve of £10.13m (2011: £10.13m).

Other reserves of the company consist of a capital redemption reserve of £1.92m (2011: £1.92m) and a special reserve of £29.02m (2011: £29.02m).

15. TRADE AND OTHER PAYABLES

Group Company

31.12.12 31.12.11 31.12.12 31.12.11

£'000 £'000 £'000 £'000

Current:

Trade creditors 98 76 99 76

Amounts owed to group undertakings - - 3,527 3,437

Other creditors 23 23 23 23

Accruals and deferred income 89 114 80 109

Directors' current account 1 16 1 16

211 229 3,730 3,661

Non-current:

Amounts owed to participating interests 4,196 4,226 186 216

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

6,258 6,288 2,248 2,278

Aggregate amounts 6,469 6,517 5,978 5,939

Group

31.12.12 31.12.11

£'000 £'000

Current:

Other loans 10 13

Terms and debt repayment schedule

Group

1 year or

less

£'000

Other loans 10

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 £186,000. 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 2012 see note 15.