TAX.L Regulatory News (TAX)

30 May 2008 15:23

Friday 30th May

eco city vehicles plc ('eco city' or 'the Company') - which was listed on the AIM in September - announces its Preliminary Results for the year to 31st December 2007.

Highlights:

Revenue in the 15 month period ending December 2007 was £41.9m (12 months to December 2006: £27.3m).

Operating profit before exceptional items in the 15 month period were in line with the company's internal expectations at £1.0m (12 months to December 2006: £0.3m).

Reverse takeover of Pannal plc and listing on AIM.

Acquisition of distribution centre in Coventry.

Cabvision technology licensed to newly formed Transmedia Limited.

Negotiations with electric vehicle manufacturers are at an advance stage.

Strong performance in finance and service activities.

Strong sales of new TX4 taxi.

Operating loss after exceptional items in the 15 month period was £2.9m (12 months to December 2006: £0.2m Loss). This was after exceptional items; £2.4m Cabvision debt write off, £0.8m relating to the cost of flotation and £0.8m Deemed Acquisition Costs resulting from the reverse accounting treatment under IFRS. 

Commenting on the results, Peter Da Costa, Group Chief Executive, said:

"This has been a very exciting and eventful year for everyone at the Company. The Group successfully listed on AIM giving us the necessary platform to expand the business into environmentally sustainable transportation.

"Last year's results show good growth in all areas of our business - with especially strong performances from our taxi sales division and related finance sales.

"Having formed Transmedia Ltd in October, to operate Cabvision's technology under licence, the Board took the decision to write-off Cabvision's previous debts of £2.4 million as an exceptional item. 

"Cabvision is now recognised as being a reliable accountable digital sales platform and the last quarter of 2007 saw a significant jump in the number of pitches to the major buying Agencies with further bookings for regular advertisers, which has continued since the period end. 

ENDS -

For further information:

 

Chief Executive's Statement

Taxi distribution business

The calendar year 2007 saw an increase in new vehicles sales from 610 in 2006 to 782 (Total new vehicle sales in the 15 month reporting period were 920). This resulted from pent up demand for the long awaited euro 4 compliant TX4 taxi-cab. 

Our Taxi sales division also saw a record year for finance sales with sales for the 15 months to December 2007 70% above the prior period for retained finance business.

After Sales Division

Our after sales service finished with the year within our expectations. The Company saw some rapid growth in the engine department, where our highly successfully TX2 timing conversion continues to dominate, helped by the TX2 coming out of the manufacturers warranty period.

The Company has also gained approval from the United Kingdom Accreditation Service for its Meter Division and will now be able to calibrate and test taxi-meters. This created a new revenue stream from a service previously only available from the British Standards Institute.

Cabvision

Having formed Transmedia Ltd in October, to operate Cabvision's technology under licence, the Board took the decision to write-off Cabvision's previous debts of £2.4 million as an extraordinary item. 

Cabvision is now recognised as being a reliable accountable digital sales platform and the last quarter of 2007 saw a significant jump in the number of pitches to the major buying Agencies with further bookings for regular advertisers, which has continued since the period end.

Commercial contracts

On 13 May 2008 the Company announced that it is in negotiations that may or may not lead to a significant commercial contract and that a further announcement will be made to the market at the appropriate time. The Company confirms that negotiations continue. It is also in advanced negotiations with a manufacturer of electric vehicles and convertors. The Company is undertaking a rigorous review of the available technologies and supply chains to ensure that it is able to meet what the Board expects to be strong demand for low emission transport.

Coventry site acquisition

In December 2007 the Company bought a 43000sq ft facility with substantial car parking adjacent to Coventry Airport. Conveniently located for the motorway network Coventry Airport is one of the UK's fastest growing cargo hubs in the UK. The Company acquired the premises on a 125 year lease for £2.15million, following a valuation by third party surveyors and valuers Bache Treharne. The lease has been wholly funded by a commercial mortgage. 

The Company has sublet one section of the building on a five year lease and are in advanced stage negotiations to let a similar space on the same terms. The rental income on the facility will pay for the buildings funding cost and loan repayments. The Company intends to use the remaining third of the building for its expansion programme. 

Reverse Take-Over & AIM Listing

On 10th October 2007 the Company successfully listed on AIM, a market of the London Stock Exchange, by way of a reverse take-over of Pannal Plc through Numis Securities Limited, its nominated adviser and broker.

 

Dividend policy

As stated in the Company's AIM Admission Document, the Board intends to apply the Group's cash resources to invest in its operations and therefore do not propose to pay a dividend at this stage.

Outlook

The Company believe that it is now in a position to exploit the wealth of experience in its Board to push itself to become a leader in the environmentally friendly vehicle market as well as looking at other lucrative niche market opportunities in the taxi and service vehicle markets

The Board anticipates that in executing the Group's strategy the makeup of the business will change significantly during the current year, and therefore the Board considers the outlook to be satisfactory.

Peter DaCosta

29 May 2008

 

Notes to Editors

About KPM UK

Background

In 1975 the founders of KPM identified an opportunity to provide vehicle servicing and repairs for the owner-drivers of the London Taxi market and so established KPM as a specialist one-shop repair service.

This was driven by the Founders' view that fleet operators dominated the London Taxi market and frequently took precedence over owner-drivers for vehicle servicing by the manufacturer.

KPM grew significantly over the next 13 years. The Directors believe, based upon the growth of KPM that during this period the number of London Taxi owner-drivers increased as a proportion of overall London Taxi ownership and today believe that the majority of the approximately some 22,000 cabs operating in Greater London and the suburbs are now owner-driven. 

In 1987 KPM UK and UK Taxi Services, a London Taxi-cab dealer, merged to create a company providing both distribution and after sales services.

In addition, eco city's core business continues to be its black cab dealership, which has traded and grown successfully for the past 32 years - making it the UK's largest independent dealership - and one of the most established and respected.

The Group's experienced Board comprises of Tim Yeo MP, Chairman; Peter Da Costa, Chief Executive, Keith Marder and Michael Troullis (co founders of KPM with Peter Da Costa), and Non- Executives Guy Saxton, John Swingewood and Jeremy Fenn. 

Tim Yeo is MP for South Suffolk and Chairman of the Environmental Audit Select Committee. 

Previously he has been a Minister in both the Thatcher and Major Administrations, serving in the Home Office, Foreign Office, Department of Health and Department of the Environment - latterly as Minister of State with responsibility for climate change and energy efficiency policy

He has also been a member of the Shadow Cabinet, shadowing Agriculture, Trade & Industry, Health, Education, Environment and Transport.

He is currently on the board of four other companies, three of which are environmentally related. One of the four companies is AIM listed and another listed in Paris.

Peter Da Costa is the founder and Chairman of KPM-UK Taxis Plc the UK's largest Independent taxi dealership established in 1975.

He was responsible for London Taxi International making KPM a main dealer in 1989, which was the first time an independent dealer had ever been appointed. Peter continues to advise on many issues relating to changes within the transport industry in London, especially environmental matters. 

Guy Saxton, Non-Executive Director of KPM, is well known in The City of London; having started his career at AXA and then moved to Fidelity. He sits on a number of boards and is CEO of First London Securities PLC. 

John Swingewood, fellow Non Executive Director, and former Director of Panel PLC, has 30 years' experience in the telecommunications, broadcast and multimedia industries. Previously he was Director of New Media at BskyB plc and had responsibility for developing Sky's interest in Internet, E-Commerce, and Online TV applications, Telephony, WAP, Mobile and Broadband.

Jeremy Fenn was Chief Executive of Sports Internet PLC when it was sold to BskyB PLC for £301 million in July 2000. He remained as an executive director of Skysports.com a trading subsidiary of BskyB plc, until January 2004. Before joining Sports Internet Group in July 1999 he was Managing Director of Leeds United Holdings plc for three years and left them having reported record profits, minimal debt and fourth place in the Premier League. Prior to this he held Finance Director positions at a number of media companies.

Keith Marder is a founder director of group company KPM UK Taxis PLC. Keith is KPM's Technical Director and is a fellow of the Institute of the Motor Industry, Certified Automotive Engineer, holds the National Craftsman Certificate and is an authorised MOT examiner.

Michael Troullis is a founder director of group company KPM UK Taxis PLC. Michael is the Chief Operating Officer and has substantial coach building experience. He is a fellow of the Institute of the Motor Industry, a Member of the Institute of Directors, a VOSA nominated MOT tester and authorised MOT examiner. Michael is responsible for the Groups Health and Safety team and ISO 9001/2000 accreditation .

  Consolidated Income Statement

			Period ended		Year ended
			31 December		30 September
			2007		2006
	Notes		£000		£000
Revenue	3		41,893		27,268
Cost of sales			(35,805)		(23,299)
Gross profit			6,088		3,969
Administrative expenses			(10,155)		(4,876)
Other operating income			1,129		663
Operating loss	4		(2,938)		(244)
Operating (loss)/profit, analysed as:	4
Before exceptional items			1,044		275
Amounts receivable from Cabvision Limited written off			(2,372)		(519)
Deemed reverse acquisition cost	22		(845)		-
Flotation costs and associated costs including abortive costs			(765)		-
Operating loss after exceptional items			(2,938)		(244)
Finance income	7		389		42
Finance costs	7		(135)		(119)
Loss before tax			(2,684)		(321)
Tax	8		(6)		34
Loss for the period attributable to shareholders			(2,690)		(287)
Loss per share	10		Pence		Pence
Basic and diluted			(1.07)		(0.12)

  Consolidated Balance Sheet

			As at		As at
			31 December		30 September
			2007		2006
	Notes		£000		£000
Non current assets
Property, plant and equipment	11		2,516		429
Investments	12		955		-
			3,471		429
Current assets
Inventories	13		2,527		1,099
Trade and other receivables	14		1,916		2,163
Cash at bank and in hand	15		1,262		1,503
			5,705		4,765
Total assets			9,176		5,194
Current liabilities
Current portion of long term borrowings	17		(61)		(85)
Trade and other payables	16		(6,489)		(2,594)
			(6,550)		(2,679)
Non current liabilities
Long term borrowings	17		(8)		(100)
Deferred tax liability	19		(34)		(28)
			(42)		(128)
Total liabilities			(6,592)		(2,807)
Net assets			2,584		2,387
Equity
Share capital	20		3,021		50
Share premium	21		1,922		-
Reverse acquisition reserve	21		(1,709)		-
Retained (deficit)/earnings	21		(650)		2,337
Total shareholders equity			2,584		2,387

  Group Statement of Changes in Equity

					Reverse
	Share		Share		acquisition		Retained
	capital		premium		reserve		earnings		TOTAL
	£000		£000		£000		£000		£000
At 1 October 2005	50		-		-		2,774		2,824
Loss for the year	-		-		-		(287)		(287)
Dividends	-		-		-		(150)		(150)
At 1 October 2006	50		-		-		2,337		2,387
Loss for the period	-		-		-		(2,690)		(2,690)
Total recognised income and expense							(2,690)		(2,690)
Share capital and share premium as recognised on reverse acquisition	571		1,922		-		-		2,493
Issue of share capital	2,400		-		-		-		2,400
Reverse acquisition arising (see note 21)	-		-		(1,709)		-		(1,709)
Share based payment	-		-		-		3		3
Dividends	-		-		-		(300)		(300)
Total income and expense recognised directly in equity	2,971		1,922		(1,709)		(2,987)		197
At 31 December 2007	3,021		1,922		(1,709)		(650)		2,584

  Group Cash Flow Statement

			Period ended		Year ended
			31 December		30 September
			2007		2006
	Notes		£000		£000
Operating activities
Operating loss			(2,938)		(244)
Deemed reverse acquisition cost			845		-
Depreciation			131		124
Share based payments			3		-
Impairment of cash investments			-		210
Decrease/(increase) in receivables	14		247		(168)
Increase/(decrease) in payables	16		3,895		(398)
(Increase)/decrease in inventories	13		(1,428)		1,414
Profit on disposal of property, plant and equipment			(1)		(1)
Taxes paid			-		(90)
Net cash generated by operating activities			754		847
Investing activities
Interest received	7		389		42
Purchase of property, plant and equipment	11		(2,280)		(12)
Proceeds from sale of property, plant and equipment			63		13
Acquisition of parent through reverse acquisition, net cash generated			2,339		-
Equity investments	12		(955)		-
Net cash (used in)/generated by investing activities			(444)		43
Financing activities
Dividends paid	9		(300)		(150)
Interest paid	7		(135)		(119)
Movement in obligations under finance leases	17		(116)		(65)
Net cash used in financing activities			(551)		(334)
Net (decrease)/increase in cash and cash equivalents			(241)		556
Cash and cash equivalents at beginning of period			1,503		947
Cash and cash equivalents at end of period	25		1,262		1,503

  Notes to the Group Financial Statements

1.  General Information

eco city vehicles plc is a company incorporated in the United Kingdom and listed on the London Stock Exchange. The address of the registered office is Hemming House, Hemming Street, London, E1 5BL.

The Group is engaged in the sale and service of new and used taxicabs to owner operators of licensed taxis in London and the provision of related services and the sale and service of low emissions vehicles to business users. During the financial period the Group operated from a single site in East London from where it conducted all operations. In December 2007 the Group acquired a long term lease on premises in Coventry which will be used to facilitate geographic expansion. 

These financial statements are presented in British Pounds Sterling, the currency of the primary economic environment in which the Group operates. The Group comprises eco city vehicles plc and its subsidiary and associates companies as set out in the Note 5 of the Parent Company's financial statements.

2. Accounting policies

The principal accounting policies adopted in preparation of the Group's financial statements are set out below. 

Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS and IFRIC Interpretations) issued by the International Accounting Standards Board (IASB) as adopted by the European Union and with those parts of the Companies Acts applicable to companies preparing their financial statements under IFRS. Practice is continuing to evolve on the application and interpretations of IFRS. Further standards may be issued by the International Accounting Standards (IASB) and standards currently in issue and endorsed by the EU may be subject to interpretations issued by IFRIC.

This preliminary report does not constitute the statutory accounts of the Company as defined by section 240 of the Companies Act 1985, but is extracted from those accounts. The auditors, Grant Thornton UK LLP, have reported on those statutory accounts and given an unqualified opinion, which did not include any statement under section 237(2) or 237(3) of the Companies Act 1985. The statutory accounts will be filed with the Registrar of Companies in due course.

The financial statements have been prepared using the measurement basis specified by IFRS for each type of asset, liability, income and expense. The measurement bases are more fully described in the detailed accounting policies below.

This is the first time the Group has prepared its financial statements in accordance with IFRS, having previously been prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP). Details of the transition from UK GAAP to IFRS are given in Note 27.

The Group has taken advantage of certain exemptions available under IFRS 1 "First time adoption of International Financial Reporting Standards". The exemptions used are explained under the respective accounting policies.

The preparation of financial statements, in conformity with general accepted accounting principles under IFRS, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results may ultimate differ from those estimates.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these consolidated financial statements.

Basis of consolidation

The financial statements incorporate the financial statements of the Company and subsidiaries controlled by the Company made up to the period ended 31 December 2007. 

Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the financial statements from the date that control commences until the date that control ceases.

On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to profit and loss in the period of acquisition. 

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. 

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. 

All intra-Group transactions, balances, income, expenses and unrealised gains are eliminated when preparing the historical financial information. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Reverse acquisition accounting

The acquisition of KPM Autos Limited and it subsidiaries by eco city vehicles plc (formerly known as Pannal Plc) on 11 October 2007 has been accounted using the principles of reverse acquisition accounting. Although the Group financial statements have been prepared in the name of the legal parent, eco city vehicles plc, they are in substance a continuation of the consolidated financial statements of the legal subsidiary, KPM Autos Limited. The following accounting treatment has been applied in respect of the reverse accounting:

The assets and liabilities of the legal subsidiary, KPM Autos Limited are recognised and measured in the consolidated financial statements at the pre-combination carrying amounts, without restatement of fair value.

The retained earnings and other equity balances recognised in the consolidated financial statements reflect the retained earnings and other equity balances of KPM Autos Limited immediately before the business combination and the results of the period from 1 October 2006 to the date of the business combination are those of KPM Autos Limited. However, the equity structure appearing in the Group financial statements reflects the equity structure of the legal parent, eco city vehicle plc, including the equity instruments issued in order to effect the business combination; and comparatives numbers presented in the financial statements are consolidated numbers of KPM Autos Limited for the year ended 30 September 2006.

Business combination

The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognized at their fair value at the acquisition date.

The Group has elected not to apply IFRS 3 "Business Combinations" retrospectively to business combinations prior to the date of transition.

Goodwill arising on acquisition is recognized as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceed the cost of the business combination, the excess is recognised immediately in the Income Statement.

Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The Group's investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss.

The Group's share of its associates' post-acquisition profits or losses is recognised in the income statement, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment.

When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

Goodwill

Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition. Goodwill is recognised as an asset at cost and is subsequent measured at cost less any accumulated impairment losses. Goodwill which is recognized as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in the Income Statement and is not subsequently reversed.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Goodwill arising on acquisitions before the date of transition to IFRSs has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date. Goodwill written off to reserves under UK GAAP prior to 1998 has not been reinstated and is not included in determining any subsequent profit or loss on disposal.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales-related taxes.

 

Sales of goods are recognised when goods are delivered and title has passed.

Sales of services are recognised when the service has been completed and invoiced to the customer. 

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

Dividend income from investments is recognised when the shareholders' rights to receive payment have been established. 

Leased assets

In accordance with IAS 17, the economic ownership of a leased asset is transferred to the lessee if the lease bears substantially all the risks and rewards related to the ownership of the leased assets. 

Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of liability. Finance charges are charged directly against income. Depreciation on the relevant assets is charged to the income statement.

All other leases are treated as operating leases. Their annual rentals are charged to the income statement on a straight line basis over the term of the lease.

Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight line basis over the lease term.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.

Depreciation is charged so as to write off the cost of property, plant and equipment by annual instalments over their estimated useful economic lives less estimated residual values, using either the straight line method or reducing balance method depending on the class of asset. The periods generally applicable are:

Leasehold property - over the term of the lease

Improvements to property - in accordance with the lease

Plant and machinery - 20% on reducing balance

Fixtures and fittings - 15% on reducing balance

Motor vehicles - 25% on reducing balance

Residual values and useful economic lives are reviewed annually. Property, plant and equipment are assessed for impairment annually or more often if events or changes in circumstances indicate that the carrying value may not be recoverable. Where an impairment review is deemed necessary it is performed in accordance with the policies set out below.

Impairment of assets other than goodwill and intangible assets with an indefinite life

At each balance sheet date, the Directors review the carrying amounts of the Group's tangible and intangible assets, other than goodwill and intangible assets with an indefinite life, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amounts of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of the money and the risks specific to the asset which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Impairment losses recognised for cash-generating units, to which goodwill has been allocated, are credited initially to the carrying amount of goodwill. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash generating unit) is increases to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would been determined had no impairment loss been recognized for the asset (cash-generating unit) in prior period. A reversal of an impairment loss recognised in the income statement immediately.

Inventories and work in progress

Inventories and work in progress are stated at the lower of cost and net realisable value. Cost is calculated on a first in and first out basis and includes attributable overheads, where appropriate. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. Where necessary, provision is made for slow moving and obsolete stock. Stocks on consignment and their related obligations are recognised in current assets and creditors respectively on adoption of the consignment stock where the risks and rewards of ownership pass to the Group.

Financial instruments

Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument. 

Cash and cash equivalents 

Cash and cash equivalents are carried in the balance sheet at cost. Cash and cash equivalents comprise cash on hand and deposits held on call with banks.

Trade and other receivables

Trade receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate method. They are as reduced by appropriate allowances for estimated irrecoverable amounts. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original term of the receivable. The amount of the provision is the difference between the carrying amount and the recoverable amount and this difference is recognised in the income statement.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. Loans and receivables are initially recognised at cost, being the fair value of consideration together with any associated issue costs. After initial recognition, interest bearing loans are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated taking into account any issue costs and discount or premium on settlement.

Financial liability and equity

Financial instruments issued by the Group are treated as equity (i.e. forming part of shareholders' funds) only to the extent that they meet the following two conditions: 

they include no contractual obligations upon the Group to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Group; and 

where the instrument will or may be settled in the company's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the company's own equity instruments or is a derivative that will be settled by the company exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the company's own shares, the amounts presented in the historical financial information for called up share capital and share premium account exclude amounts in relation to those shares.

The finance cost on the financial liability component is correspondingly higher over the life of the instrument.

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

"Share capital" represents the nominal value of equity shares.

"Share premium" represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue.

"Other reserve" represents equity-settled share-based employee remuneration until such share options are exercised.

"Reverse acquisition reserve" represents the excess of the fair value of the deemed cost of acquisition over the issued share capital and share premium of the combined entity.

Bank borrowings

Interest-bearing bank loans and overdrafts are recorded as the proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis to the profit and loss account using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. 

Trade payables

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

Dividends

Equity dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, these are recognised when they are paid. In the case of final dividends, this is when approved by the shareholders at the Annual General Meeting. 

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax. 

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. 

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. 

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. 

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. 

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. 

Retirement benefits

The company contributes to personal pension schemes of certain Directors and employees. Contributions to these schemes are charged to the income statement in the year in which the contributions are payable. 

Neither the Company nor any of its subsidiaries operate a defined contribution pension scheme.

Share based payments

The Group has applied the requirements of IFRS 2 Share based payments. IFRS 2 has been applied to all grants of equity instruments after 1 November 2005 that were unvested at 1 January 2006, in accordance with the exemptions of IFRS 1.

The Group issues equity and cash settled share-based payments to employees. Equity-settled share payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share based payments is expensed on a straight line basis over the vesting period, based on the Group's estimate of shares that is eventually vest and adjusted for the effect of non market-based vesting conditions. 

Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital, and where appropriate share premium.

A liability equal to the portion of the goods and services received is recognised at the current fair value determined at each balance sheet date for cash-settled, share-based payments

National insurance on share options

To the extent that the share price at the balance sheet date is greater than the exercise price on options granted under unapproved schemes, provision for any National Insurance Contributions have been based on the prevailing rate of National Insurance. The provision is accrued over the performance period attaching to the award.

  Accounting Standards issued but not yet effective and/ or adopted.

Listed below are new or amended Accounting Standards, or new interpretation guidelines that are not yet effective and/ or adopted that may have an impact on the Group, together with the year in which they become applicable to our financial statements.

Whilst the adoption if these new Accounting Standards and interpretations will undoubtedly, lead to additional or modified levels of disclosure and presentation of financial information, we do not anticipate that they will significantly alter the reported earnings of the Group.

Significant judgements, key assumptions and estimates

In the course of the preparation of the financial statements, the Group has made the following significant estimates:

  3. Segmental analysis

Primary segmental reporting format
The group's primary segment information is based on its operating divisions:
	New vehicles			Second hand and trade vehicles		Parts and accessories		Services and other		Group
	£'000			£'000		£'000		£'000		£'000
Period ended 31 December 2007
Revenue
Total segment revenue	26,226			5,911		3,934		6,254		42,325
Inter-segment revenue	-			-		(161)		(271)		(432)
	26,226			5,911		3,773		5,983		41,893
Year ended 30 September 2006
Revenue
Total segment revenue	14,682			5,182		3,110		4,597		27,571
Inter-segment revenue	-			-		(117)		(186)		(303)
	14,682			5,182		2,993		4,411		27,268

Based on risks and returns the directors consider the primary reporting format is by business segment. The secondary reporting format is by geographical analysis. Based on risks and returns the directors consider that there is only one geographical segment being the United Kingdom. All external revenues are earned from customers in the United Kingdom and it is the United Kingdom as a whole that dictates the level of geographical risk and return facing the Group.

The above disclosures are consistent with how management reports information internally for the purpose of evaluating the Group's performance and for making decisions about future allocations of resources to the Group. Consequently no further business segmentation information is provided.

  4. Operating loss

Operating loss has been arrived at after charging/ (crediting): 

			Period ended		Year ended
			31 December		30 September
			2007		2006
			£000		£000
Staff costs (see note 5)			4,120		2,953
Depreciation of property, plant and equipment			131		124
Profit on disposal of property, plant and equipment			(1)		(1)
Share based payment			3		-
Operating lease expenditure:
	-	plant and machinery	21		-
	-	property	449		519
Auditors' remuneration for following services:					37
Grant Thornton UK LLP (2006: Deloitte and Touche LLP)
	-	Fees payable for Company's auditor for the audit of the financial statements	57		37
	-	related regulatory reporting	-		5
	-	Services relating to corporate finance transactions	150		-
	-	Tax compliance services	-		1

The operating loss of £2.7m is after exceptional items totaling £3.9m, which include a write off of amounts receivable from Cabvision Limited due to the failure of the business totaling £2.3m (2006 - £0.5m), costs incurred in the listing on the AIM stock market of £765k, and deemed reverse acquisition costs incurred on the reverse acquisition of eco city vehicles Plc (formally Pannal Plc) of £845k. 

5. Staff costs

Staff costs (including Directors) consist of:

	Period ended		Year ended
	31 December		30 September
	2007		2006
	£000		£000
Wages and salaries	3,857		2,669
Social security costs	260		284
Share based payment	3		-
	4,120		2,953
	Number		Number
Engineering and technical	65		63
Distribution and sales	9		8
Administration	27		26
	101		97

6. Directors' emoluments

	Basic		Pension and benefits		Total		Total
	2007		2007		2007		2006
	£000		£000		£000		£000
Non-executive directors
Timothy Yeo	10,000		-		10,000		-
Jeremy Fenn	27,500		-		27,500		-
John Swingewood	19,000		-		19,000		-
Guy Saxton	4,500		-		4,500		-
Executive directors
Peter DaCosta	194,177		69,587		263,764		126,909
Micheal Troullis	167,654		69,587		237,241		128,101
Keith Marder	169,838		69,587		239,425		127,809
Rob Smith (resigned in 2008)	15,045		-		15,045		-
	607,714		208,761		816,475		382,819

7. Finance income and costs

	Period ended		Year ended
	31 December		30 September
	2007		2006
	£000		£000
Finance income
Bank interest received	389		39
Interest on trading balances	-		3
	389		42
Finance costs
Bank interest paid	2		15
Consignment stock interest	120		90
Finance lease interest	13		14
	135		119

  8. Tax charge/(credit)

	Period ended		Year ended
	31 December		30 September
	2007		2006
	£000		£000
Taxation charge/(credit) comprises:
Current tax charge/(credit)	-		(32)
Deferred tax (Note 19):	6		(2)
Total tax charge/(credit)	6		(34)
Factors affecting the tax charge for the year
The tax assessment for the year is higher than the standard UK corporate tax rate of 30% due to the following factors:
	Period ended		Year ended
	31 December		30 September
	2007		2006
	£000		£000
Loss on ordinary activities before taxation	(2,684)		(321)
Profit on ordinary activities at the standard rate of corporation tax in the UK of 30% (2006 - 30%)	(805)		(96)
Effects of:
Expenses that are not deductible in determining taxable profit	412		76
Deemed reverse acqusition cost (see note 22)	253
Change of tax rate	13		-
Unrecognised deferred tax assets	133		-
Tax effect of utilisation of tax losses not previously recognised	-		(27)
Other tax adjustments	-		13
Total tax charge/(credit)	6		(34)

There is no provision for UK Corporation tax due to tax losses incurred during the period, subject to agreement with HM Revenue & Customs. Accumulated tax losses of approximately £706,000 (2006 - £132,000) have not been recognised as deferred tax assets. The carrying forward losses will be relived at 28%.

  9. Dividends

	Period ended		Year ended
	31 December		30 September
	2007		2006
	£000		£000
Amounts recognsied as distributions to equity holders in the period:
Interim dividends	300		150

The interim dividends were paid by KPM Autos Limited to its shareholders before the reverse acquisition. The Directors do not recommend payment of final dividend.

10. Loss per share

	Period ended		Year ended
	31 December		30 September
	2007		2006
	£000		£000
Earnings
Loss for the purpose of basic and diluted earnings per share	(2,690)		(287)
Numbers
Weigted average number of ordinary shares for the purpose of basic loss per share	252,410,000		240,000,000

The denominators for the purposes of calculating both basic and diluted loss per share in 2006 have been adjusted for the share division that took place in 2006. There is no dilutive effect of the options.

  11. Property, plant and equipment

	Leasehold		Improvements		Plant and		Fixtures and		Motor
	property		to property		machinery		Fittings		vehicles		Total
	£000		£000		£000		£000		£000		£000
Cost
At 1 October 2005	41		151		389		226		612		1,419
Additions	-		-		8		-		30		38
Disposals	-		-		-		-		(72)		(72)
At 30 September 2006	41		151		397		226		570		1,385
Additions	2,150		-		119		-		11		2,280
Disposals	-		-		-		-		(211)		(211)
At 31 December 2007	2,191		151		516		226		370		3,454
Depreciation
At 1 October 2005	37		89		308		162		342		938
Charge for year	1		12		18		10		106		147
Eliminated on disposals	-		-		-		-		(129)		(129)
At 30 September 2006	38		101		326		172		319		956
Charge for year	1		12		46		10		62		131
Eliminated on disposals	-		-		-		-		(149)		(149)
At 31 March 2007	39		113		372		182		232		938
Carrying amount
At 31 December 2007	2,152		38		144		44		138		2,516
At 30 September 2006	3		50		71		54		251		429

The net book value of motor vehicles includes an amount of £173,000 (2006 - £165,000) in respect of assets held under finance leases and hire purchase. The related depreciation charge on these assets for the period was £65,000 (2006: £49,000). 

  12. Investments

				Investment in
				associate
				£000
At 1 October 2006				-
Additions
- Net assets				254
- Goodwill				701
At 31 December 2007
- Net assets				254
- Goodwill				701
				955

The investment in associate represents the investment made by the Group in One80 Limited. The Group acquired ordinary shares in one80 Limited in 2 stages. On 28 December 2006 the Group acquired 11% interest in for a consideration of £50k. On 31 December 2007 the Group increased its shareholding to 28.5% for an additional consideration of £905k. One80 Limited specialises in vehicle engineering and its shares are not publicly listed on a stock exchange and the fair value of its shares cannot be determined. Financial information of this associate can be summarised as follows: 

				2007
				£000
Assets				1,040
Liabilities				(150)
Net assets				890
Group share of net assets				254

At 1 October 2006 the Group held 28.3% of the ordinary shares of Cabvision Limited, a company specialising in digital advertising in London Taxis. Due to the failure of Cabvision Limited the Group disposed of the investment and at the period end has written off amounts receivable from Cabvision Limited amounting to £2.342m (2006 - £0.519m). The Group no longer holds any interest in Cabvision Limited. The shares in Cabvision Limited were held at nil value and disposed of for £57.

  13. Inventories

	31 December		30 September
	2007		2006
	£000		£000
Raw materials	295		314
Consignment stock	1,704		171
Finished goods and goods for resale	528		614
	2,527		1,099

All vehicles stocks held under consignment stock agreements are deemed to be assets of the Group and are included on the balance sheet from the point of consignment. The corresponding liabilities to the manufacturer are included within trade and other payables. Stocks are held on consignment until sold. Interest is payable at rates linked to Lloyds UDT Base Rate. The liability for consignment creditors are secured on the asset to which they relate.

Raw materials, which includes vehicles parts, is stated after provision for obsolescence of £21,755 (2006 - £50,113). Finished goods, which includes used vehicles, is stated after provision for slow moving vehicles of £327,063 (2006 - £48,500). 

The Directors consider that the carrying value of the inventories are stated at the lower of cost and net realisable value.

  14. Trade and other receivables

	31 December		30 September
	2007		2006
	£000		£000
Trade receivables	1,164		2,005
Other receivables	504		-
Prepayments and accrued income	248		158
	1,916		2,163

The Directors consider that the carrying amount of trade and other receivables approximates to their fair value. Included in trade receivables above are provisions for impairment of receivables of £34,000 (2006 - £21,000). All the receivables are due within next 12 months.

In addition, some of the unimpaired trade receivables are past due as at the reporting date. The age of the financial assets past due date but not impaired is as follows:

			31 December	30 September
			2007	2006
			£000	£000
Not more than 3 months			234	175
More than 3 months but not more than 1 year			67	94
			301	269

The Group has no significant concentration of credit risk, with exposure spread over a large number of customers. These bad debts have been determined by reference to past default experience and a knowledge of the individual circumstances of certain receivables.

15. Cash and cash equivalents

	31 December		30 September
	2007		2006
	£000		£000
Cash and cash equivalents	1,262		1,503

All of the Group's cash and cash equivalents are at floating rate.

The Directors consider that the carrying amount of cash and cash equivalents approximates to their face value.

  16. Trade and other payables

	31 December		30 September
	2007		2006
	£000		£000
Trade payables	5,669		2,109
Other taxation and social security	265		336
Other payables	161		11
Accrued expenses and deferred income	394		138
	6,489		2,594

Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is 49 days (2006 - 28 days).

Included in trade payables are amounts of £1.7m (2006: £171k) representing motor vehicle consignment stock not yet purchased.

The Directors consider that the carrying value of trade and other payables approximates to their fair value. All the trade and other payable are payable within next 12 months.

17. Borrowings

	31 December		30 September
	2007		2006
	£000		£000
Current portion of long term borrowings
Obligations under finance lease	61		85
Non-current long term borrowings
Obligations under finance lease	8		100
Total borrowings	69		185

  18. Financial instruments - Risk management

The Group in principal does not use or trade in derivative financial instruments.

The Group's financial instruments comprise hire purchase and finance leases, cash and cash equivalents and various other items such as trade receivables, other receivables and creditors that arise directly from its operations. The main purpose of these financial instruments is to provide finance for the Group's operations. The assets and liabilities that comprise the financial instruments of the Group are as follows: 

					31 December		30 September
					2007		2006
			Note		£000		£000
Financial assets catergorised as loans and receivables
Trade receivables			14		1,164		2,005
Other receivables			14		504		-
Cash and cash equivalents			15		1,262		1,503
					2,930		3,508
Financial liabilities measured at amortised cost
Trade payables			16		5,669		2,109
Other payables			16		161		11
Accruals and deferred income			16		394		138
Other taxes and social security			16		265		336
Finance leases			17		69		185
					6,558		2,779

The main risks arising from Group's financial instruments are credit risk, interest rate risk and liquidity risk. The Board reviews and agrees policies for managing these risks and they are summarised below. These policies have remained unchanged throughout the financial period.

Credit risk

The Group's exposure to credit risk is limited to the carrying values of financial assets recognized at the balance sheet date, as summarised below:

					31 December		30 September
					2007		2006
					£000		£000
Classes of financial assets - carrying amount
Cash and cash equivelents					1,262		1,503
Trade and other receivables					1,668		2,005
					2,930		3,508

The maximum exposure to credit risk in relation to trade receivables is equivalent to the period end balance. It is the Group's policy to assess the credit risk of its customers. The Group closely monitors the credit worthiness of customers and other counterparties, and will require an advance payment if necessary. The Group will terminate business with a poor credit history.

The directors consider that all the above financial assets that are not impaired for each of the reporting dates under review are of good credit quality, based on financial information and past trading history, including those that are past due.

The Group is not exposed to any significant credit risk exposure to any single counterparty or group of counterparties having similar characteristics. The credit risk for cash and cash equivalents is considered negligible since the counterparties are reputable banks with high quality external credit ratings.

Liquidity risk

The group's objective is to maintain a balance between continuity of funding and flexibility through cash pooling and shareholder funding. The Group monitors its liquidity risk on an ongoing basis by undertaking rigorous cash flow forecasting procedures.

As at 31 December 2007, the Group's financial liabilities have contracted maturities, which are summarized below:

	Current				Non-Current
	Within		6 to 12		2 to 5		Later Than
	6 Months		Months		Years		5 Years
	£000		£000		£000		£000
Obligations under finance leases	30		31		8		-
Trade payables	5,669		-		-		-
	5,699		31		8		-

This compares to the maturity of the Group's financial liabilities in the previous reporting period as follows:

	Current				Non-Current
	Within		6 to 12		2 to 5		Later Than
	6 Months		Months		Years		5 Years
	£000		£000		£000		£000
Obligations under finance leases	42		43		100		-
Trade payables	2,109		-		-		-
	2,151		43		100		-

Interest rate risk

The Group finances itself using its own cash balances which comprise cash and short-term deposits, and therefore has no significant interest rate risk. Additionally, borrowings on short term and long term borrowings are on fixed rates.

The carrying value of all other financial instruments equate to their fair value.

  19. Deferred taxation

Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 28% (2006 - 30%). The movement on the deferred tax accounts is shown below:

					31 December		30 September
					2007		2006
					£000		£000
Balance at the start of the period					28		30
Income statement charge/(credit)					6		(2)
Taken to equity					-		-
Balance at the end of the period					34		28
Details of the deferred tax liability are as follows:
Accelerated capital allowances					34		28

At the period end deferred tax assets of £198,000 (2006 - £40,000) were not recognised.

20. Share capital

					31 December		30 September
					2007		2006
					£000		£000
Authorised
600,000,000 (2006 - Nil) Ordinary shares of 1p each					6,000		-
Nil (2006 - 50,000) Ordinary shares and A Ordinary shares of £1 each					-		50
					6,000		50
Alloted, called up and fully paid
302,050,200 ordinary shares of 1p each					3,021		-
Nil (2006 - 50,000) ordinary shares and A ordinary shares of £1 each					-		50
					3,021		50

The Group's comparative figures for share capital presented in the financial statements are the consolidated numbers of KPM Autos Limited for the year ended 30 September 2006.

On 10 October 2007 the company's authorised share capital was increased from £563,069 to £6,000,000 by the creation of additional 543,693,060 ordinary shares of 1p each ranking pari passu with existing shares. Furthermore 260,000,000 ordinary shares of 1p each were issued at a premium of 4p to affect the reverse takeover and associated fund raising.

  Share options

The Group has established a share option scheme that entitles key management and senior employees to purchase shares in the entity.

The Group has established a scheme under the Enterprise Management Incentive (EMI) code (set out in Schedule 5 to the Income Tax (Earnings and Pensions) Act 2003). The options granted under EMI scheme may be exercised between three and ten years of the anniversary of the date of the grant. 

Qualifying employees are invited to apply for the grant of a contingent right to acquire shares under the plan. Subject to the rules of the Plan, options will enable employees to receive a number of eco city vehicles plc ordinary shares three years after the Option is granted, subject to meeting any performance targets set by the Remuneration Committee.

The Group has also granted share options to two directors under the unapproved scheme. Those granted under unapproved scheme may be exercised between three and ten years of the anniversary of the date of the grant. 

The number and weighted average exercise price of the Group's entire share options are as follows:

				Weighted average exercise price			Number of options
					2007		2007
Outstanding at the beginning of the period					-		-
Granted during the period					£0.05		4,755,000
Forfeited during the period					-		-
Outstanding at the end of the period					0.05		4,755,000

The fair value of services received in return for share options granted are measured by reference to the fair value of share options granted. The estimate of the fair value of the services is measured on a Black-Scholes model in respect of the schemes using the following assumptions:

							2007
Fair value of share options and assumptions
Fair value at grant date							£0.05
Share price at grant date							£0.05
Expected volatility							40%
Option life							3 years
Expected dividend yield							0%
Risk-free interest rate							5%

  21. Share premium, Retained Earnings and Reverse acquisition reserve

			Reverse
	Share		acquisition		Retained
	premium		reserve		(deficit)/earnings
	£000		£000		£000
At 1 October 2006	-		-		2,337
Loss for the period	-		-		(2,690)
Shares issued	1,982		-		-
Share issue costs	(60)		-		-
Acquisition of subsidiary	-		(1,709)		-
Share based payment	-		-		3
Dividends	-		-		(300)
At 31 December 2007	1,922		(1,709)		(650)

22.  Reverse acquisition

On 10 October 2007 the Group acquired 100% of the issued share capital of KPM Autos Limited for a consideration of £12 million satisfied by the issue of 240,000,000 new ordinary shares of 1p each at 5p per share.

In the consolidated Group accounts the transaction has been accounted for as a reverse acquisition in accordance with the principle of IFRS 3 Appendix B. The legal subsidiary is identified as the acquirer, and the fair value of the consideration given is £3.2m. The legal parent is identified as the subsidiary. Therefore no goodwill has arisen. The aggregate deemed fair value of consideration paid, asset and liabilities acquired and resulting charge to the income statement in respect of the above acquisition is detailed below:

			Period ended
			31 December
			2007
			£000
Deemed cost of acquisition			3,200
Less: Fair value of net assets acquired			(2,355)
Deemed reverese acquisition cost			845
The fair value of the net assets acquired are as follows:
			£000
Trade and other receivables			62
Cash and cash equivalents			2,335
Trade and other payables			(42)
			2,355

  23. Leases

Finance lease

Total future lease commitments expire as follows:

	Minimum						Minimum
	lease				Present		lease				Present
	payments		Interest		Value		payments		Interest		Value
	2007		2007		2007		2006		2006		2006
	£000		£000		£000		£000		£000		£000
Leases ending
Not later than one year	70		9		61		96		11		85
Later than one year and not later than five years	9		1		8		113		13		100
	79		10		69		209		24		185

The present value of future lease payments is analysed between current and non-current liabilities in Note 17.

Operating leases

The Group has operating leases on all its properties. The terms of the property leases vary although they all tend to be tenant repairing with rent reviews every three and five years and many have break clauses. The totals of future minimum lease payments are due as follows:

									2007		2006
									£000		£000
Not later than one year									393		307
Later than one year and not later than five years									1,347		1,216
Later than five years									2,908		2,640
									4,648		4,163

  24. Related party transactions

The Group entered into the following material transactions with related parties:

The Group has taken advantage of the exemption contained within IAS 24 - Related Party Disclosures from the requirement to disclose transactions between group companies as these have been eliminated on consolidation.

During the period, rent of £206,760 (2006: £116,600) was paid to KPM-UK Taxis Plc Discretionary Pension Scheme of which directors P.H. DaCosta, M.Troullis and K.L. Marder are the beneficiaries.

 During the period the Group made arm length transactions with a Global Meter Systems Limited, a company in which three of the directors are shareholders. Sales during the period amounted to £86,613 (2006 - £69,975) and the period end the net balance owed by Global Meter Systems limited is £33,216 (2006 - £27,431 credit balance).

During the period the Group made arm length transactions with Cabvision Limited, a company in which the Group had 28.3% interest for part of one period and one of the Company's Director is also a Director of Cabvision Limited. Sales during the period amounted to £473,103 (2006 - £438,118). At the period end the Group wrote off the debt of Cabvision Limited amounting to £2,372,000 (2006 - £519,000). The Group disposed of its interest in Cabvision Limited at a gain of £57.

25. Notes supporting cash flow statement

					31 December		30 September
					2007		2006
					£000		£000
Cash available on demand					1,262		1,503

There was no significant non-cash transaction, which would be classified as a financing activity, for the assets acquired under the finance leases (2006 - £225,000).

26. Capital commitments

The Group had no capital commitments at 31 December 2007.

27. Events after balance sheet date

On 24 January 2008 the Group obtained a long term bank loan of £2.15m to fund the acquisition of the leasehold property in Coventry. The long term bank loan is repayable within 15 years.

On 31 March 2008 the Group increased its interest from 28.5% to 33.3% in its associate undertaking, One80 Limited for a consideration of £245,000. 

28. Contingent liabilities

There are no material contingent liabilities.

 

29. First time adoption of International Financial Reporting Standards (IFRS) 

 This is the first year end that the Group has presented its financial statements under International Financial Reporting Standards (IFRS). The last financial statements under UK GAAP were for the year ended 31 December 2006 and the date of transition to IFRS was therefore 1 January 2006. 

 The adoptions of IFRS had no impact on either the equity or results of the Company for 2007. The only changes resulting from the transition to IFRS are of a presentational nature.

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