Last checked at 3 Sep 2012 07:00
For immediate release - 7.00 3 September 2012
Vipera Plc ("Vipera" or "the Company")
Annual Report and Financial Statements for the year ended 31 December 2011
Notice of Annual General Meeting
Related party transaction
Appointment of Broker
The Company is pleased to announce the publication of its annual report and financial statements for the year ended 31 December 2011, extracts from which are set out below, and which are also available on the website www.vipera.com Accordingly, and further to the announcements of 8 June 2012, and 24 July 2012, the suspension of trading in the Company's shares has been lifted with effect from today.
The Company has published a Notice of Annual General Meeting. The meeting takes place at 1 Cornhill, London EC3V 3ND on Wednesday, 17 October 2012 at 12 noon.
The Company is also announcing today its unaudited results for the six months to 30 June 2012.
Chairman's Statement
Vipera has set out to be a significant supplier, to banks and other organisations, of software that enables mobilisation. By mobilisation in this context is meant enabling software functionality and product offerings that are currently available on the internet - in particular e-commerce, e-banking - to be available on mobile devices, often referred to as m-commerce. Indeed, mobile device technology opens up a greater range of possibilities, leveraging location and other device functionalities.
Vipera has built up a customer base in the Middle East where it has a close relationship with a number of banks. During 2011 the Company saw continued uptake of its Motif suite of mobile financial services products with ongoing work for major financial services organisations in the Middle East. Vipera's mobilisation services gained further traction with Middle Eastern government departments and organisations and indeed one of our customers was awarded "best e-service solution" at the QITCOM conference.
In 2011 revenues grew by over 250% from £253,000 to £660,000. This substantial increase is below the target which we had set ourselves. We found that deals took longer to close than we had expected, as banking clients are taking longer to make capital investment decisions. During 2011 the Company was able to make meaningful progress in opening doors to the European market. However, given the long lead times, the benefits of this will not be seen until 2012.
In parallel, your Board has been proactive in seeking out expansion opportunities which are compatible with our target market and our skill set. In the latter part of the year, such an opportunity was identified and pursued, culminating, in early 2012, in our announcing that a heads of agreement had been signed to execute a merger with a firm whose business was complementary to Vipera's. In due course, however, both parties decided not to progress the transaction to a binding sale and purchase contract, because they concluded that each company's strategic objectives were not best served by completing the transaction on the terms available. However, your Board continues to pursue opportunities for M&A and partnerships that better suit our needs
Today the current business pipeline is at its highest ever level and includes exciting new non-banking applications for our mobile transactions platform. We are encouraged to continue our endeavours in this fast expanding marketplace. Your Board would like to thank all of our staff for their enthusiastic work and commitment over the last year.
Our next General Meeting will be held at 1 Cornhill, London EC3V 3ND at 12.00 noon on Wednesday, 17 October 2012 and we welcome shareholders to attend the meeting.
Luciano Martucci
Chairman
31 August 2012
Vipera PLC | |
Marco Casartelli | Tel: +39 02 7214 2424 |
Martin Perrin | Tel: +44 (0) 7785 505 337 |
Beaumont Cornish Limited (Nomad and Broker) | Tel: +44 (0) 20 7628 3396 |
Roland Cornish | |
Felicity Geidt | |
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2011
Note | 2011 | 2010 | |
£ | £ | ||
Continuing operations | |||
Revenues | 3 | 660,188 | 253,109 |
Operating expenses | 7 | (1,157,691) | (363,841) |
Operating loss | 6 | (497,503) | (110,732) |
Profit on disposal of subsidiary undertaking | - | 158,139 | |
Impairment of goodwill | 12 | - | (319,780) |
Finance income | 8 | 4,357 | 703 |
Finance costs | 9 | (51,635) | (16,205) |
Loss before taxation from continuing operations | (544,781) | (287,875) | |
Taxation | 10 | 37,362 | 11,746 |
Loss for the year | (507,419) | (276,129) | |
Other comprehensive income | |||
Exchange differences on translation of foreign operations | 6,247 | 67,714 | |
Total comprehensive income attributable to equity shareholders of the Company | (501,172) | (208,415) | |
Loss per ordinary share from continuing operations attributable to equity shareholders of the Company (expressed in pence per share) | |||
Basic and diluted | 11 | (0.39) p | (0.24) p |
Consolidated Statement of Financial Position
31 December 2011
Company number 05383355
Note | 2011 | 2010 | |
£ | £ | ||
Non-current Assets | |||
Goodwill | 12 | 351,318 | 351,318 |
Intangible assets | 13 | 1,676,576 | 1,307,349 |
Deferred taxation | 14 | 288,068 | 165,564 |
Property, plant and equipment | 15 | 6,853 | 6,754 |
Total non-current assets | 2,322,815 | 1,830,985 | |
Current Assets | |||
Trade and other receivables | 17 | 253,531 | 144,411 |
Cash and cash equivalents | 390,751 | 1,307,782 | |
Total current assets | 644,282 | 1,452,193 | |
Current liabilities | |||
Trade and other payables | 18 | (409,329) | (315,993) |
Deferred revenue | (43,941) | (35,659) | |
Current taxation | (35,911) | (7,310) | |
Total current liabilities | (489,181) | (358,962) | |
Net current assets | 155,101 | 1,093,231 | |
Non-current liabilities | |||
Deferred taxation | 14 | (100,035) | (45,290) |
Other payables | 19 | - | (102,565) |
Total non-current liabilities | (100,035) | (147,855) | |
Net Assets | 2,377,881 | 2,776,361 | |
| |||
EQUITY | |||
Share capital | 20 | 4,494,613 | 4,491,848 |
Share premium | 2,118,488 | 2,103,252 | |
Merger and reverse acquisition reserve | (3,338,310) | (3,338,310) | |
Foreign currency translation reserve | (61,847) | (68,094) | |
Retained earnings | (835,063) | (412,335) | |
Shareholders' equity | 2,377,881 | 2,776,361 | |
Parent Company Statement of Financial Position
31 December 2011
Company number 05383355
Note | 2011 | 2010 | |
£ | £ | ||
Non-current Assets | |||
Investment in subsidiary undertakings | 16 | 410,776 | 7,905,701 |
Total non-current assets | 410,776 | 7,905,701 | |
Current Assets | |||
Trade and other receivables | 17 | 1,231,285 | 572,474 |
Cash and cash equivalents | 341,048 | 1,126,641 | |
Total current assets | 1,572,333 | 1,699,115 | |
Current liabilities | |||
Trade and other payables | 18 | (39,137) | (46,052) |
Total current liabilities | (39,137) | (46,052) | |
Net current assets | 1,533,196 | 1,653,063 | |
Non-current liabilities | |||
Deferred taxation | 14 | - | - |
Total non-current liabilities | - | - | |
Net Assets | 1,943,972 | 9,558,764 | |
| |||
EQUITY | |||
Share capital | 20 | 4,494,613 | 4,491,848 |
Share premium | 2,118,488 | 2,103,252 | |
Merger reserve | - | 6,789,188 | |
Retained earnings | (4,669,129) | (3,825,524) | |
Shareholders' equity | 1,943,972 | 9,558,764 | |
Consolidated Statement of Changes in Equity
For the year ended 31 December 2011
Attributable to equity shareholders of the Company
Group | Share capital | Share premium | Merger and reverse acquisition reserve | Foreign currency translation reserve | Retained earnings | Total |
£ | £ | £ | £ | £ | £ | |
Balance at 1 January 2010 | 561,161 | 582,074 | - | (135,808) | (229,139) | 778,288 |
Loss for the financial year | - | - | - | - | (276,129) | (276,129) |
Other comprehensive income | - | - | - | 67,714 | - | 67,714 |
Total comprehensive income for the year |
- |
- |
- |
67,714 |
(276,129) |
(208,415) |
Share based payment transactions |
- |
- |
- |
- |
92,933 |
92,933 |
Shares issued | 127,647 | 957,353 | - | - | - | 1,085,000 |
Reverse acquisition | 3,803,040 | 563,825 | (3,338,310) | - | - | 1,028,555 |
Total contributions by and distributions to owners of the Company |
3,930,687 |
1,521,178 |
(3,338,310) |
- |
92,933 |
2,206,488 |
Balance at 31 December 2010 |
4,491,848 |
2,103,252 |
(3,338,310) |
(68,094) |
(412,335) |
2,776,361 |
Loss for the financial year | - | - | - | - | (507,419) | (507,419) |
Other comprehensive income | - | - | - | 6,247 | - | 6,247 |
Total comprehensive income for the year |
- |
- |
- |
6,247 |
(507,419) |
(501,172) |
Share based payment transactions |
- |
- |
- |
- |
84,691 |
84,691 |
Shares issued | 2,765 | 15,236 | - | - | - | 18,001 |
Total contributions by and distributions to owners of the Company |
2,765 |
15,236 |
- |
- |
84,691 |
102,692 |
Balance at 31 December 2011 |
4,494,613 |
2,118,488 |
(3,338,310) |
(61,847) |
(835,063) |
2,377,881 |
Parent Company Statement of Changes in Equity
For the year ended 31 December 2011
Parent Company | Share capital | Share premium | Merger reserve | Retained earnings | Total |
£ | £ | £ | £ | £ | |
Balance at 1 January 2010 | 3,327,684 | 1,145,899 | - | (3,572,043) | 901,540 |
Total comprehensive income for the year |
- |
- |
- |
(346,414) |
(346,414) |
Share based payment transactions |
- |
- |
- |
92,933 |
92,933 |
Shares issued | 127,647 | 957,353 | - | - | 1,085,000 |
Reverse acquisition | 1,036,517 | - | 6,789,188 | - | 7,825,705 |
Total contributions by and distributions to owners of the Company |
1,164,164 |
957,353 |
6,789,188 |
92,933 |
9,003,638 |
Balance at 31 December 2010 | 4,491,848 | 2,103,252 | 6,789,188 | (3,825,524) | 9,558,764 |
Total comprehensive income for the year |
- |
- |
- |
(7,717,484) |
(7,717,484) |
Transfer | - | - | (6,789,188) | 6,789,188 | - |
Share based payment transactions |
- |
- |
- |
84,691 |
84,691 |
Shares issued | 2,765 | 15,236 | - | - | 18,001 |
Total contributions by and distributions to owners of the Company |
2,765 |
15,236 |
(6,789,188) |
6,873,879 |
102,692 |
Balance at 31 December 2011 | 4,494,613 | 2,118,488 | - | (4,669,129) | 1,943,972 |
Group and Parent Company Cash Flow Statements
For the year ended 31 December 2011
Group | Company | ||||
2011 | 2010 | 2011 | 2010 | ||
Note | £ | £ | £ | £ | |
Operating loss | (497,503) | (110,732) | (7,670,412) | (492,579) | |
Impairment to investment in subsidiary | - | - | 7,494,925 | - | |
Depreciation of property, plant and equipment | 15 | 2,357 | 1,800 | - | - |
Expenses settled by the issue of shares | 33,493 | 51,624 | 33,493 | 51,624 | |
Interest received | 8 | 4,357 | 703 | 4,126 | 2,950 |
Foreign exchange on operating activities | 22,080 | (53,841) | - | - | |
Increase in receivables | (244,932) | (120,423) | (658,811) | (572,474) | |
Increase/(decrease) in payables | 106,539 | (9,676) | (6,915) | 4,475 | |
Cash used in operations | (573,609) | (240,545) | (803,594) | (1,006,004) | |
Interest expense | 9 | (437) | (16,205) | - | (15,692) |
Tax paid | (281) | (1,956) | - | - | |
Net cash used in operating activities | (574,327) | (258,706) | (803,594) | (1,021,696) | |
Purchases of property, plant and equipment | 15 | (2,566) | (7,830) | - | - |
Purchases of intangible assets | 13 | (376,103) | (197,380) | - | - |
Payments to acquire subsidiary undertaking | - | - | - | (8,688) | |
Cash acquired with subsidiary undertaking | - | 531,633 | - | - | |
Net proceeds of sale of former subsidiary | - | 158,139 | - | 158,907 | |
Net cash (used in)/generated from investing activities |
(378,669) |
484,562 |
- |
150,219 | |
Financing activities | |||||
Net proceeds from issue of shares | 18,001 | 1,055,000 | 18,001 | 1,055,000 | |
Net cash generated from financing activities | 18,001 | 1,055,000 | 18,001 | 1,055,000 | |
Net (decrease)/increase in cash and cash equivalents |
(934,995) |
1,280,856 |
(785,593) |
183,523 | |
Foreign exchange on cash and cash equivalents | 17,964 | 9,223 | - | - | |
Cash and cash equivalents at beginning of year | 1,307,782 | 17,703 | 1,126,641 | 943,118 | |
Cash and cash equivalents at end of year | 390,751 | 1,307,782 | 341,048 | 1,126,641 | |
Non cash transactions in prior year
On 13 August 2010 the Company issued 103,651,724 Ordinary Shares at 7.55p each in exchange for the issued share capital of Vipera GmbH.
Notes to the Financial Statements
For the year ended 31 December 2011
3 Total revenue and segmental analysis
IFRS 8 requiresoperating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive Officer and Chief Financial Officer to allocate resources to the segments and to assess their performance. Management considers the business from both a geographic and activity perspective. The Group has three geographic operating entities and one single activity. The three geographic entities are located in the UK, Switzerland and Italy. These three entities together execute in the Group's single business activity, being the provision of software and services.
Total revenue comprises:
2011 | 2010 | |
Revenue from external customers: | £ | £ |
Licence and deployment fees | 627,257 | 226,310 |
Support and maintenance charges | 32,693 | 26,569 |
Other fees | 238 | 230 |
660,188 | 253,109 |
Revenues are generated in a number of countries analysed as to:
2011 | 2010 | |
£ | £ | |
Europe | 66,426 | 39,522 |
Middle East | 326,116 | 213,471 |
Far East | 267,646 | - |
USA | - | 116 |
660,188 | 253,109 |
2011 | ||||
UK | Switzerland | Italy | Total | |
£ | £ | £ | £ | |
Total segment revenue | 65,961 | 660,188 | 619,957 | 1,346,106 |
Inter-segment revenue | (65,961) | - | (619,957) | (685,918) |
Revenue from external customers | - | 660,188 | - | 660,188 |
2010 | ||||
UK | Switzerland | Italy | Total | |
£ | £ | £ | £ | |
Total segment revenue | 29,338 | 253,109 | 141,755 | 424,202 |
Inter-segment revenue | (29,338) | - | (141,755) | (171,093) |
Revenue from external customers | - | 253,109 | - | 253,109 |
Sales between entities are carried out at contractually agreed rates.
Revenues in excess of 10% with a single customer were as follows:
2011 | 2010 | |
£ | £ | |
Customer 1 | 267,646 | 83,191 |
Customer 2 | 166,303 | 80,621 |
Customer 3 | 94,567 | 49,659 |
Customer 4 | 64,934 | 39,408 |
Others | 66,738 | 230 |
660,188 | 253,109 |
All revenues are attributable to the Swiss entity, for the supply of software and related services.
The loss is attributable to entities as to:
2011 | |||||
UK | Switzerland | Italy | Consolidation | Total | |
£ | £ | £ | £ | £ | |
Operating (loss)/profit | (175,488) | (357,427) | 35,412 | - | (497,503) |
Impairment adjustment to carrying value of subsidiary |
(7,494,925) |
- |
- |
7,494,925 |
- |
Finance income | 4,126 | 188 | 43 | - | 4,357 |
Finance costs | (51,197) | (423) | (15) | - | (51,635) |
Taxation | - | 65,317 | (27,955) | - | 37,362 |
(Loss)/Profit after tax | (7,717,484) | (292,345) | 7,485 | 7,494,925 | (507,419) |
The assets and liabilities of the Group are attributable to entities as to:
2011 | |||||
UK | Switzerland | Italy | Consolidation | Total | |
£ | £ | £ | £ | £ | |
Additions to non-current assets | - | 376,567 | 2,102 | - | 378,669 |
Depreciation charge | - | 814 | 1,543 | - | 2,357 |
Total assets | 1,983,109 | 2,215,542 | 232,602 | (1,464,156) | 2,967,097 |
Total liabilities | (39,137) | (1,743,997) | (210,780) | 1,404,698 | (589,216) |
1,943,972 | 471,545 | 21,822 | (59,458) | 2,377,881 | |
2010 | |||||
UK | Switzerland | Italy | Consolidation | Total | |
£ | £ | £ | £ | £ | |
Operating (loss)/profit | 6,827 | (131,193) | 13,634 | - | (110,732) |
Profit on disposal of subsidiary | 158,139 | - | - | - | 158,139 |
Impairment of goodwill | (319,780) | - | - | - | (319,780) |
Finance income | 682 | 21 | - | - | 703 |
Finance costs | (15,692) | (510) | (3) | - | (16,205) |
Taxation | - | 19,068 | (7,322) | - | 11,746 |
(Loss)/Profit after tax | (169,824) | (112,614) | 6,309 | - | (276,129) |
The assets and liabilities of the Group are attributable to entities as to:
2010 | |||||
UK | Switzerland | Italy | Consolidation | Total | |
£ | £ | £ | £ | £ | |
Additions to non-current assets | - | 197,380 | - | - | 197,380 |
Depreciation charge | - | 596 | 1,204 | - | 1,800 |
Total assets | 9,604,816 | 1,702,585 | 155,018 | (8,179,241) | 3,283,178 |
Total liabilities | (46,052) | (945,409) | (140,214) | 624,858 | (506,817) |
9,558,764 | 757,176 | 14,804 | (7,554,383) | 2,776,361 |
4 Staff costs
The average number of employees, including Directors, employed by the Group was:
2011 | 2010 | |
No. | No. | |
Marketing and sales | 4 | 2 |
Technology and product development | 7 | 3 |
Administration | 5 | 3 |
16 | 8 |
Employees', including Directors', costs comprise:
2011 | 2010 | |
£ | £ | |
Wages, salaries and other staff costs | 920,050 | 306,937 |
Social security costs | 91,102 | 28,028 |
Pension costs | 18,812 | 2,870 |
1,029,964 | 337,835 |
Staff costs include £232,165 (2010: £140,813) of costs capitalised and included under non-current intangible assets.
5 Directors
Directors' emoluments comprise:
2011 | 2010 | |
£ | £ | |
Emoluments | 375,845 | 305,465 |
Highest paid Director's remuneration: | ||
Emoluments | 130,140 | 96,698 |
Information regarding Directors' share options and warrants is shown under Directors' Interests in the Directors' Report.
Group 2011 | Salary and fees |
Bonus | Other benefits |
Total |
£ | £ | £ | £ | |
Marco Casartelli | 130,140 | - | - | 130,140 |
Silvano Maffeis | 115,288 | - | - | 115,288 |
Roger Mitchell | 70,440 | - | - | 70,440 |
Luciano Martucci | 11,713 | - | - | 11,713 |
Martin Perrin | 30,000 | - | - | 30,000 |
Petter Neby | 4,205 | - | - | 4,205 |
John Defterios | 10,795 | - | - | 10,795 |
John Shaw | 10,795 | - | - | 10,795 |
383,376 | - | - | 383,376 |
Group 2010 | Salary and fees |
Bonus | Other benefits |
Total |
£ | £ | £ | £ | |
Marco Casartelli | 96,698 | - | - | 96,698 |
Silvano Maffeis | 89,233 | - | - | 89,233 |
Roger Mitchell | 23,284 | 20,000 | - | 43,284 |
John Defterios | 5,625 | - | - | 5,625 |
Martin Perrin | 21,250 | 5,000 | 5,000 | 31,250 |
John Shaw | 24,375 | 15,000 | - | 39,375 |
260,465 | 40,000 | 5,000 | 305,465 |
6 Operating loss
2011 | 2010 | ||
£ | £ | ||
The operating loss is arrived at after charging: | |||
Auditors' remuneration: Fees payable to the Company's auditors: - for the audit of the Company's and Group's financial statements | 18,500 |
18,950 | |
Non-audit fees: | |||
- Tax services - Other services | 2,000 3,000 | 1,420 - | |
Net foreign exchange losses/(gains) | 6,327 | (34,722) | |
Depreciation of property, plant and equipment | 2,357 | 1,800 | |
Operating lease rentals | - Land and buildings | 18,911 | 7,910 |
| - Other | 3,542 | 2,265 |
In accordance with IFRSs, costs associated with the reverse acquisition of Vipera Plc (formerly Ricmore Capital Plc) by Vipera GmbH in 2010 were expensed in the statement of comprehensive income of the Company in that year. These had been incurred or accrued for by the date of completion of the acquisition, and were accounted for as pre-acquisition expenses.
The loss for the financial year dealt with in the financial statements of the Parent Company, Vipera Plc, was £7,717,484 (2010 - loss of £346,414). As permitted by Section 408 of the Companies Act 2006, no separate statement of comprehensive income is presented in respect of the Parent Company.
7 Expenses by nature
2011 | 2010 | |
£ | £ | |
Employee benefit expense | 1,029,964 | 123,647 |
Depreciation | 2,357 | 1,800 |
Operating lease expenses | 22,453 | 10,175 |
Professional fees | 100,043 | 187,179 |
Other | 2,874 | 41,040 |
1,157,691 | 363,841 |
8 Finance income
2011 | 2010 | |
£ | £ | |
Interest receivable | 4,357 | 703 |
4,357 | 703 |
9 Finance costs
2011 | 2010 | |
£ | £ | |
Interest payable and other finance costs | 51,635 | 16,205 |
51,635 | 16,205 |
10 Tax
Analysis of tax (credit)/charge on ordinary activities:
2011 | 2010 | |
£ | £ | |
Current tax | ||
Current year | 29,445 | 9,323 |
Prior year adjustment | 654 | - |
30,099 | 9,323 | |
Deferred tax | ||
Current year | (67,461) | (21,069) |
Prior year adjustment | - | - |
Total tax credit (to Consolidated Statement of Comprehensive Income) | (37,362) | (11,746) |
Factors affecting the tax credit for the year
The tax credit for the year is lower (2010 - lower) than the standard rate of corporation tax in the UK applied to the Group loss before tax of 26% (2010: 28%). The difference is explained below:
2011 | 2010 | |
£ | £ | |
Group loss before tax | (544,781) | (287,875) |
Credit on loss on ordinary activities at standard rate | (141,643) | (80,605) |
Effect of: | ||
Expenses not deductible in determining taxable profit | 2,721 | 92,408 |
Capital gains utilised | - | (44,279) |
Deferred taxation | (67,461) | (21,069) |
Tax in foreign jurisdictions | 15,601 | - |
Capital taxes | 1,490 | 2,001 |
Adjustment to tax charge in respect of prior year | 654 | - |
Effect of different corporate tax rates on UK and overseas earnings | 459 | 793 |
Tax losses for the period not relieved | 150,817 | 39,005 |
(37,362) | (11,746) |
Factors affecting the tax charge of future periods
Tax losses available to be carried forward by the Group at 31 December 2011 against future taxable profit are estimated to comprise excess management expenses of approximately £254,000 arising in the UK and trading losses of approximately £1,515,000 arising in Switzerland. In addition, capital losses of approximately £2,175,000 arising in the UK are available to be carried forward.
A deferred tax asset at 24% amounting to approximately £61,000 (31 December 2010: £30,000) has not been recognised in respect of accumulated realised losses in the UK (excluding capital losses), as there is insufficient evidence that the asset will be recovered in the foreseeable future. There were no other factors that may affect future tax charges.
11 Loss per share
Basic loss per share has been calculated by dividing the loss on ordinary activities after taxation by the weighted average number of shares in issue during the year. There is no difference between the basic and diluted loss per share as the effect on the exercise of options and warrants would be to decrease the loss per share.
Since the year end, no warrants have been exercised which may result in the dilution of the earnings per share in the future. Details of share options and warrants that were anti-dilutive but may be dilutive in the future are set out in note 21.
31 December 2011 | Basic and Diluted | |
Loss on ordinary activities after taxation | £(507,419) | |
Weighted average number of shares | 129,967,563 | |
Loss per share (pence) | (0.39)p |
31 December 2010 | Basic and Diluted | |
Loss on ordinary activities after taxation | £(276,129) | |
Weighted average number of shares | 110,803,187 | |
Loss per share (pence) | (0.24)p |
12 Goodwill and business combination
Group | Company | |
Goodwill arising on reverse acquisition of the Company by Vipera GmbH in 2010 | £ | £ |
Cost | ||
At 1 January 2010 | - | - |
Additions | 671,098 | - |
At 31 December 2010 | 671,098 | |
Additions | - | - |
At 31 December 2011 | 671,098 | - |
Accumulated impairment losses | ||
At 1 January 2010 | - | - |
Impairment losses for the year | 319,780 | - |
At 31 December 2010 and 2011 | 319,780 | - |
Net book value | ||
At 31 December 2011 | 351,318 | - |
At 31 December 2010 | 351,318 | - |
At 31 December 2009 | - | - |
The goodwill is attributable to the benefits to be derived from the listing of the Parent Company. Goodwill is included within the UK reporting segment.
13 Intangible assets
Product platforms |
Total | ||
Group | £ | £ | |
Cost | |||
At 1 January 2010 | 1,364,842 | 1,364,842 | |
Additions | 56,567 | 56,567 | |
Internal development | 140,813 | 140,813 | |
Exchange differences | 201,363 | 201,363 | |
At 1 January 2011 | 1,763,585 | 1,763,585 | |
Additions | 143,938 | 143,938 | |
Internal development | 232,165 | 232,165 | |
Exchange differences | (5,598) | (5,598) | |
At 31 December 2011 | 2,134,090 | 2,134,090 | |
Accumulated amortisation | |||
At 1 January 2010 | (402,838) | (402,838) | |
Charge for the year | - | - | |
Exchange differences | (53,398) | (53,398) | |
At 1 January 2011 | (456,236) | (456,236) | |
Charge for the year | - | - | |
Exchange differences | (1,278) | (1,278) | |
At 31 December 2011 | (457,514) | (457,514) | |
Net book value | |||
At 31 December 2011 | 1,676,576 | 1,676,576 | |
At 31 December 2010 | 1,307,349 | 1,307,349 | |
At 31 December 2009 | 962,004 | 962,004 |
The above intangible assets comprise investment in the development of Group product platforms. All research and development costs not eligible for capitalisation have been expensed.
The recoverable amount of the above cash generating unit has been determined based on value in use calculations. No goodwill is allocated to the Group's cash generating unit as this related to the Parent Company as explained in note 12. The value in use calculations use cash flow projections based on financial budgets approved by Management covering a two year period. These incorporate contracted revenues, revenues which are based on project tenders and projected revenue. Given the nature of the work and the visibility of revenue in the future, it is considered appropriate not to extend the discounted cash flow workings beyond this period. Probabilities have been assigned to revenues based on the anticipated success - a rate of 90-95% has been applied to contracted work, versus 70% applied to projected work. A discount rate of 15% has been used in the calculations. The recoverable amount based on value in use exceeded the carrying value by £695,625. A reduction in the projected revenues by 29% would remove the remaining headroom and give rise to the recognition of an impairment charge against profit or loss.
14 Deferred taxation
Group | |||
31 December 2011 | 31 December 2010 | 1 January 2010 | |
£ | £ | £ | |
Temporary timing differences arising on intangible assets | (100,035) | (45,290) | (10,815) |
Temporary timing differences on property, plant and equipment | 111 | 172 | 218 |
Losses available for offset against future taxable profits | 287,957 | 165,392 | 96,264 |
188,033 | 120,274 | 85,667 | |
Reflected in the Statement of Financial Position as to: | |||
Deferred tax asset | 288,068 | 165,564 | 96,482 |
Deferred tax liability | (100,035) | (45,290) | (10,815) |
188,033 | 120,274 | 85,667 | |
Reconciliation of net deferred tax asset | |||
Opening balance as of 1 January | 120,274 | 85,667 | 108,019 |
Tax income/(expense) recognised in consolidated Statement of Comprehensive Income |
67,461 |
21,069 |
(13,797) |
Exchange differences | 298 | 13,538 | (8,555) |
Balance at 31 December | 188,033 | 120,274 | 85,667 |
Deferred tax assets are recognised on tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. The Group did not recognise deferred tax assets in respect of tax losses (excluding capital losses) of approximately £61,000, which are available to carry forward against future taxable income.
15 Property, plant and equipment
Office equipment | Technical equipment |
Total | |
Group | £ | £ | £ |
Cost | |||
At 1 January 2010 | 326 | 5,826 | 6,152 |
Additions | 1,038 | 6,792 | 7,830 |
Disposals | - | - | - |
Exchange differences | 33 | 222 | 255 |
At 1 January 2011 | 1,397 | 12,840 | 14,237 |
Additions | 2,102 | 464 | 2,566 |
Disposals | - | - | - |
Exchange differences | (207) | 29 | (178) |
At 31 December 2011 | 3,292 | 13,333 | 16,625 |
Accumulated depreciation | |||
At 1 January 2010 | 162 | 5,295 | 5,457 |
Charge for the year | 1,072 | 728 | 1,800 |
Disposals | - | - | - |
Exchange differences | 17 | 209 | 226 |
At 1 January 2011 | 1,251 | 6,232 | 7,483 |
Charge for the year | 1,592 | 765 | 2,357 |
Disposals | - | - | - |
Exchange differences | (65) | (3) | (68) |
At 31 December 2011 | 2,778 | 6,994 | 9,772 |
Net book value At 31 December 2011 |
514 |
6,339 |
6,853 |
At 31 December 2010 | 146 | 6,608 | 6,754 |
At 31 December 2009 | 164 | 531 | 695 |
16 Investment in subsidiary undertakings
2011 | 2010 | |
Company | £ | £ |
Cost at 1 January 2010 | 7,905,701 | - |
Additions | - | 7,905,701 |
Impairment provision writing down the investment in Vipera GmbH to its net asset value |
(7,494,925) |
- |
Cost at 31 December 2011 | 410,776 | 7,905,701 |
The following are the principal subsidiaries of the Company at 31 December 2011 and at the date of these financial statements.
Country of incorporation | Class of shares | Proportion of Nominal value and voting rights held by parent company | Nature of business | |
Vipera GmbH | Switzerland | Ordinary | 100% | Software development and sales |
Vipera Srl | Italy | Ordinary | 100% | Sales and marketing of group products |
Vipera GmbH was acquired on 16 August 2010 for a consideration of £7,897,013. This was settled by the issue of shares at 7.55p each, being the fair value of the shares at the acquisition date, together with 4,044,217 warrants. The fair value of the warrants has been calculated as £71,308, using the Black Scholes pricing model.
On 4 October 2010 the Company created a subsidiary in Italy, Vipera Srl, with share capital of €10,000 (£8,688).
17 Trade and other receivables
2011 | 2010 | |||
Group | Company | Group | Company | |
£ | £ | £ | £ | |
Trade receivables | 235,641 | - | 130,245 | - |
Other receivables | 1,117 | - | 11,666 | 3,657 |
Amount owed by group undertakings | - | 1,214,788 | - | 566,317 |
Prepayments and accrued income | 16,773 | 16,497 | 2,500 | 2,500 |
253,531 | 1,231,285 | 144,411 | 572,474 | |
Trade receivables
Included in the Group's trade receivables are debtors with a carrying amount of £38,553 (2010 - £105,733) which are past due at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable.
Ageing of past due but not impaired trade receivables:
2011 | 2010 | |
£ | £ | |
0 - 15 days | - | 112,812 |
16 - 30 days | 38,553 | - |
Over 30 days | - | 17,433 |
38,553 | 130,245 |
The carrying amount of the Group's trade receivables are denominated in the following currencies:
2011 | 2010 | |
£ | £ | |
US Dollars | 167,418 | 77,974 |
GB Pounds | 27,961 | - |
Euros | 40,262 | - |
Emirati Dirham | - | 52,271 |
235,641 | 130,245 |
The maximum exposure to credit risk at the reporting date is the carrying value reported above. The Group does not hold collateral as security.
18 Trade and other payables
2011 | 2010 | |||
Group | Company | Group | Company | |
£ | £ | £ | £ | |
Trade payables | 45,395 | 10,099 | 43,414 | 19,144 |
Shareholder loans | 273,262 | - | 171,308 | - |
Sundry creditors and accruals | 90,672 | 29,038 | 101,271 | 26,908 |
409,329 | 39,137 | 315,993 | 46,052 | |
Shareholder loans are unsecured, interest free and repayable subject to the Board's evaluation of the Group's working capital needs.
19 Non current liabilities
Other payables of £Nil (2010 - £102,565) represent loans from shareholders. The amounts are unsecured, interest free and repayable at the discretion of the Board taking into account the working capital requirements of the Group.
20 Called up share capital
2011 | 2010 | |||
No. of shares | No. of shares | |||
'000 | £ | '000 | £ | |
Allotted and fully paid: | ||||
Ordinary shares of 1p | 130,003,631 | 1,300,037 | 129,727,160 | 1,297,272 |
Deferred shares of 24p | 13,310,735 | 3,194,576 | 13,310,735 | 3,194,576 |
4,494,613 | 4,491,848 | |||
No. of 1p Ordinary Shares |
£ | No. of 24p Deferred Shares |
£ | |
At 1 January 2010 | 332,768,383 | 3,327,684 | - | - |
Share consolidation | (319,457,648) | (3,194,576) | 13,310,735 | 3,194,576 |
Shares issued | 116,416,425 | 1,164,164 | - | - |
At 31 December 2010 | 129,727,160 | 1,297,272 | 13,310,735 | 3,194,576 |
Shares issued | 276,471 | 2,765 | - | - |
At 31 December 2011 | 130,003,631 | 1,300,037 | 13,310,735 | 3,194,576 |
On 13 August 2010 the Company consolidated each Ordinary Share of 1p each in the capital of the Company into Ordinary Shares of 25p each. Immediately thereafter each resulting Ordinary Share of 25p was sub-divided and reclassified as 1 Ordinary Share of 1p each and 1 Deferred Share of 24p each in the capital of the Company.
The Ordinary Shares entitle the holders to receive all ordinary dividends and all assets on a winding up, subject only to satisfying the entitlement, if any, of the holders of the Deferred Shares.
A Deferred Share does not entitle the holder thereof to receive notice of or attend and vote at any general meeting of the Company or to receive a dividend or other distribution or to participate in any return of capital on a winding up other than the nominal amount paid on such shares once the holders of new Ordinary Shares have received a distribution of £10,000,000 per new Ordinary Share.
On 17 January 2011 and 25 January 2011 the Company issued respectively 58,824 and 117,647 ordinary shares of 1p each at 8.5p per share pursuant to the exercise of warrants. On 5 April 2011 the Company issued 100,000 ordinary shares of 1p each at 3p per share pursuant to the exercise of warrants.
21 Warrants and options
Warrants
At 31 December 2011, warrants to subscribe for 5,544,219 new Ordinary Shares in the Company were in issue as follows:
No. of warrants | Weighted average price | |
At 31 December 2010 | 6,096,812 | 6.7p |
Lapsed during the year | (376,122) | 37.5p |
Exercised during the year | (276,471) | 6.5p |
Granted pursuant to a consultancy agreement | 100,000 | 10p |
At 31 December 2011 | 5,544,219 | 4.64p |
The outstanding warrants are exercisable as follows:
Warrants issued: | No. of warrants | Exercise price |
Exercisable |
- as replacements for options formerly held in Vipera GmbH |
3,944,217 |
3.0p |
from 16 Aug 2010 to 16 Aug 2015 |
- pursuant to readmission in August 2010 |
400,000 |
8.5p |
from 16 Aug 2010 to 16 Aug 2015 |
- attached to new Ordinary Shares subscribed for in November 2010 |
1,000,002 |
8.5p | from 9 November 2010 to 9 November 2013 |
- pursuant to a consultancy agreement |
100,000 |
10.0p | from 14 December 2010 to 14 December 2013 |
- pursuant to a consultancy agreement |
100,000 |
10.0p |
from 1 July 2011 to 1 July 2014 |
At 31 December 2011 | 5,544,219 |
The interests of the Directors in the above warrants are set out in the Directors' Report.
The warrants outstanding at 31 December 2011 had a weighted average price of 4.64 pence and a weighted average remaining contractual life of 3 years, 94 days.
Options
At 31 December 2011, options to subscribe for 5,220,000 new Ordinary Shares in the Company were in issue as follows:
No. of options | Weighted average price | |
At 31 December 2010 | 3,720,000 | 8.5p |
Lapsed during the year | (600,000) | 24p |
Exercised during the year | - | - |
Granted pursuant to a consultancy agreement | 2,100,000 | 24p |
At 31 December 2011 | 5,220,000 | 12.95p |
The outstanding options are exercisable as follows:
Staff options issued: | No. of warrants | Exercise price |
Exercisable |
- during 2010 | 3,720,000 | 8.5p | In three equal annual tranches commencing 31 December 2011, and expiring 31 December 2015 |
- during 2011 | 1,500,000 | 24.0p | In three equal annual tranches commencing 29 April 2012, and expiring 14 April 2016 |
At 31 December 2011 | 5,220,000 |
The interests of the Directors in the above options are set out in the Directors' Report.
The options outstanding at 31 December 2011 had a weighted average price of 12.95 pence and a weighted average remaining contractual life of 4 years, 31 days.
Fair value of warrants and options
The fair value of the share options and warrants issued during 2011 was determined using the Black Scholes valuation model. The assumptions used in applying the Black Scholes pricing model were as follows:
Share price at the date of grant | 18p |
Expected volatility | 23.4% |
Expected option life | 4.7 years |
Dividend yield | 0% |
Risk free rate | 0.5% |
The volatility was determined by examining the monthly share price for the earlier part of the financial year up to the date on which the instruments were issued.
22 Contingent liabilities
The Board does not consider that the Group has any material contingent liabilities.
23 Financial commitments
Operating leases
At 31 December 2011 the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases which fall due as follows:
2011 | 2010 | |||
Land and buildings | Other | Land and buildings | Other | |
£ | £ | £ | £ | |
In the next year | 13,365 | 9,501 | 16,156 | - |
In the second to fifth years inclusive | - | - | - | - |
Total commitment | 13,365 | 9,501 | 16,156 | - |
24 Financial instruments
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis for measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument, are disclosed in the accounting policies in note 1.
Categories of financial instruments
2011 | 2010 | |||
Group | Company | Group | Company | |
£ | £ | £ | £ | |
Financial assets at amortised cost - Trade and other receivables |
236,758 |
1,214,788 |
141,911 |
569,974 |
Cash and cash equivalents | 390,751 | 341,048 | 1,307,782 | 1,126,641 |
Financial liabilities at amortised cost - Trade and other payables |
(217,150) |
(10,099) |
(214,722) |
(19,144) |
The carrying value of each class of financial asset denoted above approximates to its fair value.
Fair value measurements recognised in the statement of financial position
IFRS 7 requires the classification of fair value measurements using a fair value hierarchy that reflects the significance of the inputs used to determine those fair values. The Group has no financial instruments whose fair value has been determined using a valuation technique required to be discussed by IFRS 7.
Capital risk management
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders. The Group's capital structure primarily consists of equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings. The Group has no debt.
The Group's finance function monitors and manages the financial risks relating to the operations of the Group. The Group is exposed to market and other price risk, credit risk and to a very limited amount interest rate risk and liquidity risk.
The Board of Directors monitors risks and implements policies to mitigate financial risk exposures.
Foreign exchange risk
Foreign exchange risk arises because the Group has operations located in various parts of the world whose functional currency is not the same as the functional currency in which other Group companies are operating. The Group's net assets arising from such overseas operations are exposed to currency risk resulting in gains and losses on retranslation into Sterling. Only in exceptional circumstances will the Group consider hedging its net investments in non Sterling operations as generally it does not consider that the reduction in foreign currency exposure warrants the cash flow risk created from such hedging techniques. It is the Group's policy to hold surplus funds over and above working capital requirements at the Parent Company treasury. The Group considers this policy minimises any unnecessary foreign exchange exposure.
In order to monitor the continuing effectiveness of this policy the Board through their approval of both corporate and capital expenditure budgets, and review of the currency profile of cash balances and management accounts, considers the effectiveness of the policy on an ongoing basis.
Credit risk
Credit risk arises from the Group's trade receivables. Where no independent rating of customers is available, credit control assesses the quality of customers by reference to their financial position, past experience and any other relevant factors.
Interest rate risk management
The Group has interest free borrowings and is therefore not exposed to interest rate risk in that respect. The low interest rates currently prevailing mean that there is little downside risk to rates currently earned on cash balances.
Liquidity risk management
The Group manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
25 Treasury Policy and financial instruments
The Company operates informal treasury policies which include continuing assessments of interest rate management and borrowing policy. The Board approves all decisions on treasury policy.
Facilities are arranged, based on criteria determined by the Board, as required to finance the long term requirements of the Company. To date the Company has financed its activities by the raising of funds through the issue of shares and shareholder loans.
The risks arising from the Company's financial instruments are liquidity and interest rate risk. The Directors review and agree policies for managing these risks and they are summarised below:
Liquidity and interest rate risk
The Company seeks to manage financial risk, to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. This is achieved by the close control of the Directors of Vipera Plc in the day to day management of liquid resources. Cash is invested in deposit accounts which provide a modest return on the Company's resources whilst ensuring there is limited risk of loss to the Company. The deposit accounts are held at HSBC Bank plc and the Company earns interest at rates that depend on the amount of money deposited at any one time. The Standard & Poor's rating of HSBC Bank plc at December 2011 was AA-.
26 Related party transactions
Directors' transactions
The Group paid fees amounting to £70,440 (2010 - £23,361) for services supplied by Albachiara Srl, of which Roger Mitchell is a Director and holds an interest. Albachiara Srl has made interest free loans to the Group pursuant to which, at 31 December 2011 £59,663 was due to it (2010 - £87,132).
The Group paid fees amounting in total to £14,291 (2010 - £141,824) for services supplied or procured for the Group by Mobile World Srl, of which Marco Casartelli is a Director and holds an interest. Mobile World Srl has made interest free loans to the Group pursuant to which, at 31 December 2011 £69,251 was due to it (2010 - £70,252).
John Defterios has made interest free loans to the Group pursuant to which, at 31 December 2011 £6,872 was due to him (2010 - £6,852).
Details of Directors' interests in Ordinary Shares and in warrants and share options are as disclosed in the Directors' Report, together with details of other significant holdings in the equity of the Company. The Company has no ultimate controlling party.
Parent Company transactions with subsidiary companies
During the year the Company received management fees of £65,961 (2010 - £29,228) from its subsidiaries. At the year end £1,214,788 (2010 - £566,317) was due from the subsidiary companies.
27 Post year end events
In the period since 31 December 2011 up to the date of approval of these Financial Statements, the Group and Company has received additional loans from shareholders totalling €330,000 (£250,795) in order to support its working capital requirements.
Related party transaction
The Group has drawn down a loan of £260,000 ("Loan") from Neby & Jahrmann Srl, a company controlled by Mr Petter Neby, a director and a 22.89% shareholder in the Company. The principal terms of the loan are that it shall bear interest of 10% per annum, accruing monthly and payable at the repayment of the loan. The loan is secured by a fixed and floating charge over the assets of Vipera GmbH an operating subsidiary of Vipera and the loan is repayable out of the proceeds of a placing by Vipera of new equity capital. The loan is a related party transaction under the AIM Rules. Accordingly, the Directors other than Mr Neby, having consulted with the Company's Nominated Adviser, consider that the terms of the loan are fair and reasonable in so far as the Company's shareholders are concerned.
Appointment of Broker
The Company are pleased to announce the appointment of Beaumont Cornish Limited as broker to the Company with immediate effect.