Last checked at 31 May 2013 16:52
For immediate release | 31 May 2013 |
Vipera Plc ("Vipera" or "the Company")
Annual Report and Financial Statements for the year ended 31 December 2012
Notice of Annual General Meeting
The Company is pleased to announce the publication of its annual report and financial statements for the year ended 31 December 2012, extracts from which are set out below, and which are also available on the website www.vipera.com.
The Company has published a Notice of Annual General Meeting. The meeting takes place at the offices of Beaumont Cornish Limited, Bowman House, 29 Wilson Street, London EC2M 2SJ on Wednesday, 26 June 2013 at 12 noon.
Chairman's Statement
In 2012 Vipera continued its growth with revenues increasing from £660,000 to £974,000. We are successfully widening our customer base and in 2012 saw significant sales to European financial institutions. In parallel, we continue to receive further business from existing customers as we work with them to enhance their mobile services.
We have continued to invest in our product, creating enhancements in response to and in anticipation of trends in industry and technology, capitalising some £201,000 of expenditure on the Motif platform. A further £112,000 of expenditure on maintaining the platform was expensed. Continued investment at the same time as striving to grow revenues has consumed cash resources and we are grateful for the continued support of key shareholders.
Shareholders will be aware that during 2012 we withdrew from a proposed merger. However, the Board continues to pursue opportunities for M&A and partnerships that better suit our needs. In particular, we believe that we are successfully engaging in relationships which can strengthen our sales channels and reinforce our credentials in the mobile financial services market place. We expect the continued development of channel partner relationships to yield results in 2013.
Vipera commenced 2013 with an order book that is significantly greater than that at the beginning of 2012 and stronger channel partnerships. We look forward to continuing 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 the offices of Beaumont Cornish Limited, Bowman House, 29 Wilson Street, London EC2M 2SJ on Wednesday, 26 June 2013 at 12 noon and we welcome shareholders to attend the meeting.
Luciano Martucci
Chairman
31 May 2013
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 2012
Note | 2012 | 2011 | |
£ | £ | ||
Revenue | 3 | 974,359 | 660,188 |
Operating expenses | 7 | (1,487,597) | (1,157,691) |
Operating loss | 6 | (513,238) | (497,503) |
Finance income | 8 | 137 | 4,357 |
Finance costs | 9 | (24,058) | (51,635) |
Loss before taxation | (537,159) | (544,781) | |
Taxation | 10 | 33,775 | 37,362 |
Loss for the year | (503,384) | (507,419) | |
Other comprehensive income | |||
Currency translation difference | (4,710) | 6,247 | |
Total comprehensive income attributable to owners of the parent | (508,094) | (501,172) | |
Loss per ordinary share attributable to owners of the parent during the year (expressed in pence per share) | |||
Basic and diluted | 11 | (0.39) p | (0.39) p |
The loss for the financial year dealt with in the financial statements of the Parent Company, Vipera Plc, was £238,788 (2011 - loss of £7,717,484). As permitted by Section 408 of the Companies Act 2006, no separate statement of comprehensive income is presented in respect of the Parent Company.
Consolidated Statement of Financial Position
As at 31 December 2012
Note | 2012 | 2011 | |
£ | £ | ||
Non-current Assets | |||
Goodwill | 12 | 351,318 | 351,318 |
Intangible assets | 13 | 1,839,577 | 1,676,576 |
Deferred taxation | 14 | 378,447 | 288,068 |
Property, plant and equipment | 15 | 8,206 | 6,853 |
Total non-current assets | 2,577,548 | 2,322,815 | |
Current Assets | |||
Trade and other receivables | 18 | 598,827 | 253,531 |
Cash and cash equivalents | 108,734 | 390,751 | |
Total current assets | 707,561 | 644,282 | |
Current liabilities | |||
Trade and other payables | 19 | (498,466) | (409,329) |
Deferred revenue | (59,303) | (43,941) | |
Current taxation | (8,508) | (35,911) | |
Total current liabilities | (566,277) | (489,181) | |
Net current assets | 141,284 | 155,101 | |
Non-current liabilities | |||
Deferred taxation | 14 | (137,634) | (100,035) |
Other payables | 20 | (691,692) | - |
Total non-current liabilities | (829,326) | (100,035) | |
Net Assets | 1,889,506 | 2,377,881 | |
| |||
EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENT | |||
Share capital | 21 | 4,494,613 | 4,494,613 |
Share premium | 2,118,488 | 2,118,488 | |
Reverse acquisition reserve | (3,338,310) | (3,338,310) | |
Foreign currency translation reserve | (66,557) | (61,847) | |
Retained loss | (1,318,728) | (835,063) | |
Total equity | 1,889,506 | 2,377,881 |
Parent Company Statement of Financial Position
As at 31 December 2012
Company number 05383355
Note | 2012 | 2011 | |
£ | £ | ||
Non-current Assets | |||
Investment in subsidiary undertakings | 16 | 410,776 | 410,776 |
Loans to subsidiary undertakings | 17 | 1,352,159 | - |
Total non-current assets | 1,762,935 | 410,776 | |
Current Assets | |||
Trade and other receivables | 18 | 7,580 | 1,231,285 |
Cash and cash equivalents | 35,770 | 341,048 | |
Total current assets | 43,350 | 1,572,333 | |
Current liabilities | |||
Trade and other payables | 19 | (42,261) | (39,137) |
Total current liabilities | (42,261) | (39,137) | |
Net current assets | 1,089 | 1,533,196 | |
Non-current liabilities | |||
Deferred taxation | 14 | - | - |
Other payables | 20 | (39,120) | - |
Total non-current liabilities | (39,120) | - | |
Net Assets | 1,724,904 | 1,943,972 | |
| |||
EQUITY ATTRIBUTABLE TO SHAREHOLDERS | |||
Share capital | 21 | 4,494,613 | 4,494,613 |
Share premium | 2,118,488 | 2,118,488 | |
Retained loss | (4,888,197) | (4,669,129) | |
Total equity | 1,724,904 | 1,943,972 |
Consolidated Statement of Changes in Equity
For the year ended 31 December 2012
Attributable to the owners of the parent
Share capital | Share premium | Reverse acquisition reserve | Foreign currency translation reserve | Retained loss | Total | |
£ | £ | £ | £ | £ | £ | |
As at 1 January 2011 | 4,491,848 | 2,103,252 | (3,338,310) | (68,094) | (412,335) | 2,776,361 |
Loss for the year | - | - | - | - | (507,419) | (507,419) |
Currency translation difference | - | - | - | 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 parent |
2,765 |
15,236 |
- |
- |
84,691 |
102,692 |
As at 1 January 2012 | 4,494,613 | 2,118,488 | (3,338,310) | (61,847) | (835,063) | 2,377,881 |
Loss for the year | - | - | - | - | (503,384) | (503,384) |
Currency translation difference | - | - | - | (4,710) | - | (4,710) |
Total comprehensive income for the year |
- |
- |
- |
(4,710) |
(503,384) |
(508,094) |
Share based payment transactions |
- |
- |
- |
- |
19,719 |
19,719 |
Shares issued | - | - | - | - | - | - |
Total contributions by and distributions to owners of the parent |
- |
- |
- |
- |
19,719 |
19,719 |
As at 31 December 2012 | 4,494,613 | 2,118,488 | (3,338,310) | (66,557) | (1,318,728) | 1,889,506 |
Parent Company Statement of Changes in Equity
For the year ended 31 December 2012
Attributable to the owners of the parent
Share capital | Share premium | Merger reserve | Retained earnings | Total | |
£ | £ | £ | £ | £ | |
Balance at 1 January 2011 | 4,491,848 | 2,103,252 | 6,789,188 | (3,825,524) | 9,558,764 |
Total comprehensive loss 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 |
Transactions with owners | 2,765 | 15,236 | (6,789,188) | 6,873,879 | 102,692 |
As at 1 January 2012 | 4,494,613 | 2,118,488 | - | (4,669,129) | 1,943,972 |
Total comprehensive loss for the year |
- |
- |
- |
(238,787) |
(238,787) |
Share based payment transactions |
- |
- |
- |
19,719 |
19,719 |
Shares issued | - | - | - | - | - |
Transactions with owners | - | - | - | 19,719 | 19,719 |
As at 31 December 2012 | 4,494,613 | 2,118,488 | - | (4,888,197) | 1,724,904 |
Group and Parent Company Cash Flow Statements
For the year ended 31 December 2012
Group | Company | ||||
2012 | 2011 | 2012 | 2011 | ||
Note | £ | £ | £ | £ | |
Cash Flows from Operating Activities Loss for the year before tax |
(537,159) |
(544,781) |
(238,788) |
(7,717,484) | |
Impairment to investment in subsidiary | - | - | - | 7,494,925 | |
Depreciation of property, plant and equipment | 15 | 3,080 | 2,357 | - | - |
Expenses settled by the issue of shares | 19,720 | 84,691 | 19,720 | 84,691 | |
Finance costs (net) | 23,921 | (3,920) | (82) | (4,126) | |
Foreign exchange on operating activities | (83,292) | 22,080 | - | - | |
Increase in trade and other receivables | (151,155) | (244,932) | (128,454) | (658,811) | |
Increase/(decrease) in payables | 280,042 | 106,539 | 3,124 | (6,915) | |
Cash used in operations | (444,843) | (577,966) | (344,480) | (807,720) | |
Interest expense | 9 | (24,058) | (437) | - | - |
Tax paid | (50,206) | (281) | - | - | |
Net cash used in operating activities | (519,107) | (578,684) | (344,480) | (807,720) | |
Cash Flows from Investing Activities | |||||
Purchases of property, plant and equipment | 15 | (4,629) | (2,566) | - | - |
Purchases of intangible assets | 13 | (200,662) | (376,103) | - | - |
Interest received | 137 | 4,357 | 82 | 4,126 | |
Net cash used in investing activities | (205,154) | (374,312) | 82 | 4,126 | |
Cash Flows from Financing Activities | |||||
Net proceeds from borrowings | 410,011 | - | 39,120 | - | |
Net proceeds from issue of shares | - | 18,001 | - | 18,001 | |
Net cash generated from financing activities | 410,011 | 18,001 | 39,120 | 18,001 | |
Net (decrease)/increase in cash and cash equivalents |
(314,250) |
(934,995) |
(305,278) |
(785,593) | |
Exchange gains/(losses) | 32,233 | 17,964 | - | - | |
Cash and cash equivalents at beginning of year | 390,751 | 1,307,782 | 341,048 | 1,126,641 | |
Cash and cash equivalents at end of year | 108,734 | 390,751 | 35,770 | 341,048 | |
Notes to the Financial Statements
For the year ended 31 December 2012
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 operating decision-maker, being the Chief Executive Officer, and the 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:
2012 | 2011 | |
Revenue from external customers: | £ | £ |
Licence and deployment fees | 902,750 | 627,257 |
Support and maintenance charges | 70,895 | 32,693 |
Other fees | 714 | 238 |
974,359 | 660,188 | |
Revenues are generated in a number of countries analysed as to: | ||
Europe | 671,268 | 66,426 |
Middle East | 292,939 | 326,116 |
Far East | 10,152 | 267,646 |
974,359 | 660,188 |
2012 | ||||
UK | Switzerland | Italy | Total | |
£ | £ | £ | £ | |
Total segment revenue | 52,620 | 409,425 | 943,979 | 1,406,024 |
Inter-segment revenue | (52,620) | (80,374) | (298,671) | (431,665) |
Revenue from external customers | - | 329,051 | 645,308 | 974,359 |
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 |
Sales between entities are carried out at contractually agreed rates.
Revenues in excess of 10% with a single customer were as follows:
2012 | 2011 | |
£ | £ | |
Customer 1 | 636,877 | 267,646 |
Customer 2 | 196,613 | 166,303 |
Customer 3 | 58,820 | 94,567 |
Customer 4 | 40,434 | 64,934 |
Others | 41,615 | 66,738 |
974,359 | 660,188 | |
Attributable to the supply of software and related services by: | ||
Switzerland | 329,051 | 660,188 |
Italy | 645,308 | - |
Group | 974,359 | 660,188 |
The loss is attributable to entities as to:
2012 | |||||
UK | Switzerland | Italy | Consolidation | Total | |
£ | £ | £ | £ | £ | |
Operating (loss)/profit | (291,290) | (40,091) | (181,857) | - | (513,238) |
Finance income | 82 | 52 | 3 | - | 137 |
Finance costs | - | (23,502) | (556) | - | (24,058) |
Taxation | - | 55,231 | (21,456) | - | 33,775 |
(Loss)/Profit after tax | (291,208) | (8,310) | (203,866) | - | (503,384) |
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:
2012 | |||||
UK | Switzerland | Italy | Consolidation | Total | |
£ | £ | £ | £ | £ | |
Additions to non-current assets | - | 53,916 | 151,375 | - | 205,291 |
Depreciation charge | - | 614 | 2,466 | - | 3,080 |
Total assets | 1,806,285 | 2,164,618 | 818,922 | (1,504,716) | 3,285,109 |
Total liabilities | (81,381) | (2,052,253) | (707,227) | 1,445,258 | (1,395,603) |
1,724,904 | 112,365 | 111,695 | (59,458) | 1,889,506 |
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 |
4 Staff costs
The average number of employees, including Directors, employed by the Group was:
2012 | 2011 | |
No. | No. | |
Marketing and sales | 4 | 4 |
Technology and product development | 7 | 7 |
Administration | 5 | 5 |
16 | 16 |
Employees', including Directors', costs comprise:
2012 | 2011 | |
£ | £ | |
Wages, salaries and other staff costs | 754,772 | 920,050 |
Social security costs | 112,336 | 91,102 |
Pension costs | 20,683 | 18,812 |
887,791 | 1,029,964 |
Staff costs include £112,463 (2011: £232,165) of costs capitalised and included under additions to non-current intangible assets.
5 Directors
Directors' emoluments comprise:
2012 | 2011 | |
£ | £ | |
Emoluments | 372,318 | 375,845 |
Highest paid Director's remuneration: | ||
Emoluments | 121,730 | 130,140 |
Information regarding Directors' share options and warrants is shown under Directors' Interests in the Directors' Report.
Group 2012 | Salary and fees paid | Deferred remuneration |
Bonus | Other benefits |
Total |
£ | £ | £ | £ | £ | |
Marco Casartelli | 99,413 | 22,317 | - | - | 121,730 |
Silvano Maffeis | 97,200 | 13,148 | - | 4,048 | 114,396 |
Roger Mitchell (resigned 16 August 2012) | - | 20,340 | - | - | 20,340 |
Luciano Martucci | 8,115 | 37,737 | - | - | 45,852 |
Martin Perrin | 37,500 | 17,500 | - | - | 55,000 |
Petter Neby | - | 15,000 | 15,000 | ||
242,228 | 126,042 | - | 4,048 | 372,318 |
The deferred remuneration relates to the salaries and fees of the directors that have not been paid in the financial year ended 31 December 2012 and treated as loans from the directors to the group.
Group 2011 | Salary and fees |
Bonus | Other benefits |
Total |
£ | £ | £ | £ | |
Marco Casartelli | 130,140 | - | - | 130,140 |
Silvano Maffeis | 115,288 | - | - | 115,288 |
Roger Mitchell (resigned 16 August 2012) | 70,440 | - | - | 70,440 |
Luciano Martucci | 11,713 | - | - | 11,713 |
Martin Perrin | 30,000 | - | - | 30,000 |
Petter Neby | 4,205 | - | - | 4,205 |
John Defterios (resigned 20 September 2011) | 10,795 | - | - | 10,795 |
John Shaw (resigned 20 September 2011) | 10,795 | - | - | 10,795 |
383,376 | - | - | 383,376 |
6 Operating loss
2012 | 2011 | ||
£ | £ | ||
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 | 23,700 | 18,500 | |
Non-audit fees: | |||
- Tax services - Other services | 1,350 1,150 | 2,000 3,000 | |
Net foreign exchange losses/(gains) | 45,944 | 6,327 | |
Depreciation of property, plant and equipment | 3,080 | 2,357 | |
Operating lease rentals | - Land and buildings | 18,166 | 18,911 |
| - Other | 3,385 | 3,542 |
7 Operating Expenses by nature
2012 | 2011 | |
£ | £ | |
Employee benefit expense | 887,791 | 1,029,964 |
Depreciation | 3,080 | 2,357 |
Operating lease expenses | 21,551 | 22,453 |
Professional fees | 92,050 | 100,043 |
Outsourcing costs | 262,622 | - |
Other | 220,503 | 2,874 |
1,487,597 | 1,157,691 |
8 Finance income
2012 | 2011 | |
£ | £ | |
Interest receivable | 137 | 4,357 |
137 | 4,357 |
9 Finance costs
2012 | 2011 | |
£ | £ | |
Interest payable and other finance costs | 24,058 | 51,635 |
24,058 | 51,635 |
10 Tax
Analysis of tax (credit)/charge on ordinary activities:
2012 | 2011 | |
£ | £ | |
Current tax | ||
Current year | 22,887 | 29,445 |
Prior year adjustment | - | 654 |
22,887 | 30,099 | |
Deferred tax | ||
Current year | (56,662) | (67,461) |
Prior year adjustment | - | - |
Taxation (to Consolidated Statement of Comprehensive Income) | (33,775) | (37,362) |
Factors affecting the tax credit for the year
The tax credit for the year is lower (2011 - lower) than the standard rate of corporation tax in the UK applied to the Group loss before tax of 24% (2011: 26%). The difference is explained below:
2012 | 2011 | |
£ | £ | |
Group loss before tax | (537,159) | (544,781) |
Credit on loss on ordinary activities at standard rate | (128,918) | (141,643) |
Effect of: | ||
Expenses not deductible in determining taxable profit | 13,955 | 2,721 |
Relief given on capitalised expenses | (35,304) | - |
Deferred taxation | (56,662) | (67,461) |
Tax in foreign jurisdictions | 16,054 | 15,601 |
Capital taxes | 1,431 | 1,490 |
Adjustment to tax charge in respect of prior year | - | 654 |
Effect of different corporate tax rates on UK and overseas earnings | (671) | 459 |
Tax losses for the period not relieved | 156,340 | 150,817 |
(33,775) | (37,362) |
Factors affecting the tax charge of future periods
Tax losses available to be carried forward by the Group at 31 December 2012 against future taxable profit are estimated to comprise excess management expenses of approximately £355,000 arising in the UK and trading losses of approximately £1,991,000 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 £85,000 (31 December 2011: £61,000) 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 attributable to equity holders of the company 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 22.
2012 | 2011 | |
Basic and Diluted | ||
Loss after taxation | £503,384 | £507,419 |
Weighted average number of shares | 130,003,631 | 129,967,563 |
Loss per share (pence) | (0.39)p | (0.39)p |
12 Goodwill and business combination
Goodwill arising on reverse acquisition of the Company by Vipera GmbH in 2011 | Group | Company |
£ | £ | |
Cost | ||
At 1 January 2011 | 671,098 | - |
Additions | - | - |
At 31 December 2011 | 671,098 | |
Additions | - | - |
At 31 December 2012 | 671,098 | - |
Accumulated impairment losses | ||
At 1 January 2011 | 319,780 | - |
Impairment losses for the year | - | - |
At 31 December 2011 and 2012 | 319,780 | - |
Net book value | ||
At 31 December 2012 | 351,318 | - |
At 31 December 2011 | 351,318 | - |
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 | ||
Group | £ | ||
Cost | |||
At 1 January 2011 | 1,763,585 | ||
Additions | 143,938 | ||
Capitalised staff costs | 232,165 | ||
Exchange differences | (5,598) | ||
At 1 January 2012 | 2,134,090 | ||
Additions | 88,199 | ||
Capitalised staff costs | 112,463 | ||
Exchange differences | (47,824) | ||
At 31 December 2012 | 2,286,928 | ||
Accumulated amortisation | |||
At 1 January 2011 | (456,236) | ||
Impairment for the year | - | ||
Exchange differences | (1,278) | ||
At 1 January 2012 | (457,514) | ||
Impairment for the year | - | ||
Exchange differences | 10,163 | ||
At 31 December 2012 | (447,351) | ||
Net book value | |||
At 31 December 2012 | 1,839,577 | ||
At 31 December 2011 | 1,676,576 | ||
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 65-70% 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 £1,192,000. A reduction in the projected revenues by 39% 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 2012 | 31 December 2011 | 1 January 2011 |
£ | £ | £ | |
Intangible assets | (137,634) | (100,035) | (45,290) |
Tangible assets | 119 | 111 | 172 |
Unused tax losses | 378,328 | 287,957 | 165,392 |
240,813 | 188,033 | 120,274 | |
Reconciliation of net deferred tax asset | |||
Opening balance as of 1 January | 188,033 | 120,274 | 85,667 |
Tax income/(expense) recognised in consolidated Statement of Comprehensive Income |
56,662 |
67,461 |
21,069 |
Exchange differences | (3,882) | 298 | 13,538 |
Balance at 31 December 2012 | 240,813 | 188,033 | 120,274 |
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 movement in deferred tax assets and liabilities during the year is as follows:
At 1 January 2012 | (Charged)/Credited to Statement of Comprehensive Income | At 31 December 2012 | |
£ | £ | £ | |
Deferred tax liabilities | |||
Intangible assets | (100,035) | (37,599) | (137,634) |
Subtotal | (100,035) | (37,599) | (137,634) |
Deferred tax assets | |||
Tangible assets | 111 | 8 | 119 |
Unused tax losses | 287,957 | 90,371 | 378,328 |
Subtotal | 288,068 | 90,379 | 378,447 |
15 Property, plant and equipment
Office equipment | Technical equipment |
Total | |
Group | £ | £ | £ |
Cost | |||
At 1 January 2011 | 1,397 | 12,840 | 14,237 |
Additions | 2,102 | 464 | 2,566 |
Disposals | - | - | - |
Exchange differences | (207) | 29 | (178) |
At 1 January 2012 | 3,292 | 13,333 | 16,625 |
Additions | 4,273 | 356 | 4,629 |
Disposals | - | - | - |
Exchange differences | (284) | (156) | (440) |
At 31 December 2012 | 7,281 | 13,533 | 20,814 |
Accumulated depreciation | |||
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 1 January 2012 | 2,778 | 6,994 | 9,772 |
Charge for the year | 2,502 | 578 | 3,080 |
Disposals | - | - | - |
Exchange differences | (93) | (151) | (244) |
At 31 December 2012 | 5,187 | 7,421 | 12,608 |
Net book value At 31 December 2012 |
2,094 |
6,112 |
8,206 |
At 31 December 2011 | 514 | 6,339 | 6,853 |
16 Investment in subsidiary undertakings
2012 | 2011 | |
Company | £ | £ |
Cost at 1 January 2011 | 410,776 | 7,905,701 |
Additions | - | - |
Impairment provision writing down the investment in Vipera GmbH to its net asset value |
- |
(7,494,925) |
Cost at 31 December 2012 | 410,776 | 410,776 |
The following are the principal subsidiaries of the Company at 31 December 2012 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 |
17 Loans to subsidiary undertakings
During the year, the parent company advanced further funds to subsidiary undertakings to provide working capital and funds for investment in further development of the Group's motif platform. These sums previously reported as a current asset of the company have been re-designated as a non-current asset
2012 | 2011 | |
Company | £ | £ |
Amounts owed by group undertakings | 1,352,159 | - |
1,352,159 | - |
18 Trade and other receivables
2012 | 2011 | |||
Group | Company | Group | Company | |
£ | £ | £ | £ | |
Trade receivables | 578,727 | - | 235,641 | - |
Other receivables | 8,610 | - | 1,117 | - |
Amounts owed by group undertakings | - | - | - | 1,214,788 |
Prepayments and accrued income | 11,490 | 7,580 | 16,773 | 16,497 |
598,827 | 7,580 | 253,531 | 1,231,285 | |
Trade receivables
Included in the Group's trade receivables are debtors with a carrying amount of £170,090 (2011 - £38,553) 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:
2012 | 2011 | |
£ | £ | |
0 - 15 days | 32,596 | - |
16 - 30 days | 61,534 | 38,553 |
Over 30 days | 75,960 | - |
170,090 | 38,553 |
The carrying amount of the Group's trade receivables are denominated in the following currencies:
2012 | 2011 | |
£ | £ | |
US Dollars | 44,764 | 167,418 |
GB Pounds | - | 27,961 |
Euros | 533,963 | 40,262 |
578,727 | 235,641 |
The maximum exposure to credit risk at the reporting date is the carrying value reported above. The Group does not hold collateral as security.
19 Trade and other payables
2012 | 2011 | |||
Group | Company | Group | Company | |
£ | £ | £ | £ | |
Trade payables | 290,514 | 11,749 | 45,395 | 10,099 |
Shareholder loans | 22,727 | - | 273,262 | - |
Sundry creditors and accruals | 185,225 | 30,512 | 90,672 | 29,038 |
498,466 | 42,261 | 409,329 | 39,137 | |
Shareholder loans are unsecured, interest free and repayable subject to the Board's evaluation of the Group's working capital needs.
20 Non current liabilities
Other payables of £691,692 (2011 - £nil) represent loans from shareholders. The amounts are unsecured, accruing interest and repayable at the discretion of the Board taking into account the working capital requirements of the Group.
21 Called up share capital
2012 | 2011 | |||
No. of shares | No. of shares | |||
'000 | £ | '000 | £ | |
Allotted and fully paid: | ||||
Ordinary shares of 1p | 130,003,631 | 1,300,037 | 130,003,631 | 1,300,037 |
Deferred shares of 24p | 13,310,735 | 3,194,576 | 13,310,735 | 3,194,576 |
4,494,613 | 4,494,613 | |||
No. of 1p Ordinary Shares |
£ | No. of 24p Deferred Shares |
£ | |
At 1 January 2011 | 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 |
Shares issued | - | - | - | - |
At 31 December 2012 | 130,003,631 | 1,300,037 | 13,310,735 | 3,194,576 |
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.
22 Share Based Payments
Warrants
At 31 December 2012, warrants to subscribe for 5,448,106 new Ordinary Shares in the Company were in issue as follows:
No. of warrants | Weighted average price | |
At 1 January 2012 | 5,544,219 | 4.64p |
Lapsed during the year | (96,113) | 3.00p |
Exercised during the year | - | - |
Granted during the year | - | - |
At 31 December 2012 | 5,448,106 | 4.67p |
No. of warrants | Weighted average price | |
At 1 January 2011 | 6,096,812 | 6.7p |
Lapsed during the year | (376,122) | 37.5p |
Exercised during the year | (276,471) | 6.5p |
Granted during the year | 100,000 | 10.0p |
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 |
3,848,104 |
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 2012 | 5,448,106 |
The interests of the Directors in the above warrants are set out in the Directors' Report.
The warrants outstanding at 31 December 2012 had a weighted average price of 4.67 pence (2011: 4.64 pence) and a weighted average remaining contractual life of 2 years, 91 days (2011: 3 years, 94 days).
Options
At 31 December 2012, options to subscribe for 4,020,000 new Ordinary Shares in the Company were in issue as follows:
No. of options | Weighted average price | |
At 1 January 2012 | 5,220,000 | 12.95p |
Lapsed during the year | (1,200,000) | 8.50p |
Exercised during the year | - | - |
Granted during the year | - | - |
At 31 December 2012 | 4,020,000 | 14.28p |
The outstanding options are exercisable as follows:
Staff options issued: | No. of warrants | Exercise price |
Exercisable |
- during 2010 | 2,520,000 | 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 2011, and expiring 14 April 2016 |
At 31 December 2012 | 4,020,000 |
The interests of the Directors in the above options are set out in the Directors' Report.
The options outstanding at 31 December 2012 had a weighted average price of 14.28 pence and a weighted average remaining contractual life of 3 years, 39 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.
23 Contingent liabilities
The Board does not consider that the Group has any material contingent liabilities.
24 Financial commitments
Operating leases
At 31 December 2012 the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases which fall due as follows:
2012 | 2011 | |||
Land and buildings | Other | Land and buildings | Other | |
£ | £ | £ | £ | |
No later than one year | 23,262 | 3,644 | 13,365 | 9,501 |
Later than one year but no later than 5 years | - | 2,734 | - | - |
Total commitment | 23,262 | 6,378 | 13,365 | 9,501 |
25 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
2012 | 2011 | |||
Group | Company | Group | Company | |
£ | £ | £ | £ | |
Financial assets at amortised cost - Trade and other receivables |
587,337 |
1,352,159 |
236,758 |
1,214,788 |
Cash and cash equivalents | 108,734 | 35,770 | 390,751 | 341,048 |
Financial liabilities at amortised cost - Trade and other payables |
(1,004,933) |
(50,869) |
(217,150) |
(10,099) |
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 except for the loans from the directors.
Financial Risk Management
The Group's finance function monitors and manages the financial risks relating to the operations of the Group. The Group is exposed to market risks including foreign exchange risk, 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 (Euro and Swiss Franc) 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.
Price risk
The Group is not exposed to commodity price risk as a result of its operations. The Directors will revisit the appropriateness of this policy should the Group's operations change in size or nature.
The Group has no exposure to equity securities price risk, as it has no listed equity investments.
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.
26 Treasury Policy and financial instruments
The Group 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 Group. To date the Group has financed its activities by the raising of funds through the issue of shares and shareholder loans.
The risks arising from the Group's financial instruments are foreign exchange, liquidity and interest rate risk. The Directors review and agree policies for managing these risks and they are summarised below:
Foreign exchange risk
The group has not hedged against the foreign exchange risk as the Directors are of the opinion that the foreign exchange fluctuations would not have a significant impact on the financial statements of the Group at the present time. . 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. The Directors will continue to assess the effect of movements in exchange rates on the Group's financial operations and initiate suitable risk management measures where necessary.
Liquidity and interest rate risk
The Group 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 Group's resources whilst ensuring there is limited risk of loss to the Group. The deposit accounts are held at HSBC Bank plc and the Group 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 2012 was AA-.
27 Related party transactions
Directors' transactions
The Group paid fees amounting to £20,342 (2011 - £70,440) 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 2012 £26,122 was due to it (2011 - £59,663).
The Group paid fees amounting in total to £8,111 (2011 - £14,291) 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 2012 £68,773 was due to it (2011 - £69,251).
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 £52,620 (2011 - £65,961) from its subsidiaries. At the year end £1,352,159 (2011 - £1,214,788) was due from the subsidiary companies.
28 Events after the Reporting Period
There have been no significant post year end events.