Volvere Regulatory News (VLE)

Volvere plc

("Volvere" or the "Group")

Final Results for the year ended 31 December 2010

Volvere plc (AIM:VLE) the turnaround investment company, announces its final results for the year ended 31 December 2010.

Highlights

Chairman's statement

The last year has been particularly challenging. Using our financial resources we have invested cautiously and made a satisfactory return. It is uncertain that this performance can be repeated this year, with the economic scenario continuing to be unsettled.

Acquisitions have been difficult, and we have declined to invest against that background. Where the opportunity exists we will be well-positioned to select promising companies.

Lord Kalms

Chairman31 March 2011

For further information:

Chief Executive's statement

Introduction

I am pleased to report on another successful year for the Group. Despite lacklustre growth in the UK economy, we increased our net assets per share (excluding non-controlling interests) by 10% to £3.43 (2009: £3.11) as a result principally of gains in our bonds and equities portfolio coupled with a good trading performance.

Operating review

During the year the Group operated in two segments: online marketing & data services and security solutions. The financial performance of each segment is summarised in the financial review and detailed in note 5 to the preliminary announcement .

Online marketing & data services

Our online marketing and data services business, IPT, produced revenue and profit before interest, tax and amortisation of £8.5 million and £1.1 million respectively (2009: £10.4 million and £1.7 million). This was in excess of our expectations at the beginning of the year. The company made significant efforts to improve the quality and quantity of its prospect data through close monitoring of suppliers, increasing the range and depth of its data. In 2011 the company is investing significant resource in new products which we expect will continue this trend.

IPT's sector is challenging and the result for 2010, whilst excellent, was still below that of 2009. I am cautious about the outlook for 2011 more because of the general economic environment rather than for any IPT-specific reason. IPT has a talented workforce and a strong management team who respond to market conditions appropriately and we remain committed to them.

The total cash received by way of loan repayments and dividends from IPT since acquisition in 2008 has, following a dividend received in 2011, reached £2.65 million compared with an original investment cost of £1.4 million. During the year, our stake in IPT was reduced to approximately 45% following the exercise of share options by the management team. IPT has already been a successful investment for us and it continues to be so.

Security solutions

Sira Defence & Security continued to expand the SiraView user base and to undertake security-related and other consulting work, resulting in its first ever profitable year. Government spending reductions are affecting many of our clients but a number of successes with projects during 2010 gives us some confidence that follow-on work will materialise. Revenue for the year was £0.5 million (2009: £0.4 million) with profit before interest and tax of £0.04 million (2009: loss £0.04 million).

Cash and investments

At the year end the Group had cash of £3.1 million and a total of £16.4 million (at cost) invested in available for sale investments, with a valuation of £17.8 million.

Acquisitions and future strategy

We reported in our interim report that deal flow had been increasing and this has continued into 2011. We avoided entering the recession with significant exposure and have enjoyed the rebound in the valuation of financial securities and more recently of corporate bonds and large cap equities. At this time we continue to seek quality acquisition opportunities commensurate with our skills and resources.

Jonathan Lander

Chief Executive

31 March 2011

Financial review

This financial review covers the Group's performance for the year ended 31 December 2010. It should be read in conjunction with the Chairman's and Chief Executive's statements.

Accounting policies and basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The Group's accounting policies are set out in note 1 to the preliminary announcement .

Revenue and operating performance

Detailed information about the Group's segments is set out in note 5 to this preliminary announcement and should be read in conjunction with this financial review.

Total revenue from continuing operations was £9.0 million for the year, a fall of 17% compared with the prior year (2009: £10.9 million). Revenue by segment is shown in note 5 to the preliminary announcement . Profit before tax from continuing businesses was £0.9 million (2009: £0.5 million) but the improvement was due largely to a lower finance expense in respect of share capital treated as debt (2010: £0.3 million; 2009: £1.0 million) and increased investment income, offset partly by weaker trading in IPT.

Online marketing and data services

The Group's principal trading subsidiary throughout 2010 was IPT, which forms the online marketing & data services segment. IPT's revenue for 2010 as a whole fell by 19% from £10.4 million in 2009 to £8.5 million. There was a corresponding fall in profit before tax from £1.7 million to £1.1 million. Although revenue for the second half of 2010 was only 2% lower than the first half, profits before tax were lower at £0.45 million (first half £0.63 million) as a result of a less profitable revenue mix.

Security solutions

Revenue from security solutions increased by 26% to £0.5 million (2009: £0.4 million) following delivery of a number of successful projects and encouraging SiraView sales. The effect of the increased revenue was a move for the first time into profit for the year as a whole with a profit before tax of £0.04 million (2009: loss £0.04m). Activity in the second half of the year was lower than the first half due to uncertainty surrounding public sector spending cuts but we are hopeful that in 2011 both further project work will be forthcoming along with efficiency-driven SiraView sales.

Investment revenues, other gains and losses and finance income and expense

Whilst continuing to review and assess further investments in trading activities, the Group has had significant cash on hand and has continued with active treasury management in response to prevailing low interest rates. This resulted in investment revenues, other gains and losses and finance income totalling £1.2 million (2009: £1.0 million).

Statement of financial position

Deferred tax

The group has recognised a deferred tax asset in the year of £0.9 million.

Cash and cash equivalents

Cash at the year end totalled £3.1 million (2009: £8.8 million). The reduction was a result of the investment by the Group in available for sale investments as part of treasury management. The Group's cash includes (by virtue of its full consolidation) £1.2 million (2009: £1.1 million) held in its 45% owned subsidiary, Interactive Prospect Targeting Limited.

Available for sale investments

At the year end the Group's available for sale investments had a market value of £17.8 million; the base cost of these investments was £16.4 million. The investments are in a mixture of non-investment grade bank fixed income securities, a FTSE tracker fund and another investment grade asset-backed securities fund of mainly US issuers.

Hedging

It is not the Group's policy to enter into derivative instruments to hedge interest rate risk. Certain of the investments are denominated in US dollars (base cost $4 million, valuation $4.3 million) and the Group has entered into a foreign exchange contract for the sale of $4.25 million in November 2011 at a rate of $1.5871/£1. The difference between the foreign exchange contract rate and the spot rate has resulted in a charge to the income statement of £0.07 million in 2010.

Dividends

In accordance with the policy set out in the prospectus on admission to AIM, the Board does not currently intend to recommend payment of a dividend and prefers to retain profits as they arise for investment in future opportunities. During the year, however, Interactive Prospect Targeting Limited paid dividends totalling £0.77 million (2009: £1.7million), of which £0.42 million (2009: £0.85 million) was paid to third party (i.e. non-Group) shareholders.

Purchase of own shares

The Group purchased for treasury a total of 298,000 shares at a total consideration of £0.88 million (representing an average price of £2.95 per share).

Earnings per share

The basic and diluted earnings per ordinary share were 19.44p and 19.39p respectively (2009: basic and diluted 113.57p). During the year the Company continued the operation of a share option scheme in which certain staff are entitled to participate, subject to the scheme's terms and conditions.

Key performance indicators

The Group uses key performance indicators suitable for the nature and size of the Group's businesses. These are primarily monthly reports of profitability, levels of working capital and workload. In the online marketing and data services segment, the Group monitors traffic statistics both in terms of yield and cost as well as overall profitability. Order intake is monitored weekly and reported monthly in respect of the security solutions segment. The segmental analysis in note 5 to this preliminary announcement summarises the performance of each segment.

Risk factors

The Company and Group face a number of specific business risks that could affect the Company's or Group's success. The Company and Group invests in distressed businesses and securities, which by their nature, often carry a higher degree of risk than those that are not distressed. The Group's businesses are principally engaged in the provision of services that are dependent on the continued employment of the Group's employees and availability of suitable, profitable workload. In addition, the online marketing and data services segment is particularly dependent on IT systems and infrastructure, the unavailability of which could impact the Group materially.

More information on the Group's financial risks is disclosed in note 16 to the preliminary announcement .

Nick Lander

Chief Financial & Operating Officer

31 March 2011

Consolidated income statement for the year ended 31 December 2010

Consolidated statement of comprehensive income for the year ended 31 December 2010

Consolidated statement of changes in equity for the year ended 31 December 2010

Consolidated statement of financial position as at 31 December 2010

Consolidated statement of cash flows for the year ended 31 December 2010

Notes forming part of the preliminary announcement for the year ended 31 December 2010

The financial information set out above, which was approved by the Board on 31 March 2011, is derived from the full Group accounts for the year ended 31 December 2010 and does not constitute the statutory accounts within the meaning of section 434 of the Companies Act 2006. The Group accounts on which the auditors have given an unqualified report, which does not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2009, will be delivered to the Registrar of Companies in due course.

Copies of the financial statements will be sent to shareholders shortly and will be available from the Company's registered office, York House, 74-82 Queen Victoria Street, London, EC4N 4SJ and website at www.volvere.co.uk.

1 Accounting policies

Basis of accounting

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS and IFRIC interpretations) as adopted by the European Union ("adopted IFRS") and with those parts of the Companies Act 2006 applicable to companies preparing their accounts under adopted IFRS.

The following principal accounting policies have been applied consistently, in all material respects, in the preparation of these financial statements:

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 December each year. 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.

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 consideration transferred over the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the consideration transferred below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to the income statement in the period of acquisition. The interest of non-controlling shareholders is stated at the non-controlling interest's proportion of the fair values of the assets and liabilities recognised.

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. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations

The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.

The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree's financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.

Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of a) fair value of consideration transferred, b) the recognised amount of any non-controlling interest in the acquiree and c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (ie gain on a bargain purchase) is recognised in profit or loss immediately.

For business combinations occurring since 1 January 2010, the requirements of IFRS 3 "Business Combinations (Revised 2008)" have been applied. Prior to 1 January 2010, business combinations were accounted under the previous version of IFRS 3 (see below for a summary of the significant changes).

Goodwill

Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognised. See above for information on how goodwill is initially determined. Goodwill is carried at cost less accumulated impairment losses.

Revenue recognition

Revenue is measured at the fair value of the consideration received or 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.

Revenue earned on time and materials contracts is recognised as costs are incurred. Income from fixed price contracts is recognised in proportion to the stage of completion, determined on the basis of work done, of the relevant contract.

Discontinued operations

Discontinued operations represent cash generating units or groups of cash generating units that have either been disposed of or classified as held for sale, and represent a separate major line of business or are part of a single co-ordinated plan to dispose of a separate major line of business. Cash generating units forming part of a single co-ordinated plan to dispose of a separate major line of business are classified within continuing operations until they meet the criteria to be held for sale. The post-tax profit or loss of the discontinued operation is classified as a single line on the face of the consolidated income statement, together with any post-tax gain or loss recognised on the re-measurement to fair value less costs to sell or on the disposal of the assets or disposal group constituting the discontinued operation. On changes to the composition of groups of units comprising discontinued operations, the presentation of discontinued operations within prior periods is restated to reflect consistent classification of discontinued operations across all periods presented.

Operating Segments

IFRS 8 "Operating Segments" requires the disclosure of segmental information for the Group on the basis of information reported internally to the chief operating decision-maker for decision-making purposes. The Group considers that the role of chief operating decision-maker is performed collectively by the board of Directors.

Volvere plc is a holding company that identifies and invests principally in undervalued and distressed businesses and securities as well as businesses that are complementary to existing Group companies. Its customers are based in the UK, Europe and the USA.

Financial information (including revenue and operating profits) is reported to the board on a segmental basis. Segment revenue comprises sales to external customers and excludes gains arising on the disposal of assets and finance income. Segment profit reported to the board represents the profit earned by each segment before the allocation of goodwill, amortisation, investment revenues, other gains and losses, finance expense and income and tax. For the purposes of assessing segment performance and for determining the allocation of resources between segments, the board reviews the non-current assets attributable to each segment as well as the financial resources available. All assets are allocated to reportable segments. Assets that are used jointly by segments are allocated to the individual segments on a basis of revenues earned. All liabilities are allocated to individual segments. Information is reported to the board of directors on a segmental basis as management believes that each segment exposes the Group to differing levels of risk and rewards due to their varying business life cycles. The segment profit or loss, segment assets and segment liabilities are measured on the same basis as amounts recognised in the financial statements. Each segment is managed separately.

Leasing

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 statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and the reduction of lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

Foreign currencies

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting date. Gains and losses arising on retranslation are included in net profit or loss for the period.

Retirement benefit costs

The Group's subsidiary undertakings operate defined contribution retirement benefit schemes. Payments to these schemes are charged as an expense in the period to which they relate. The assets of the schemes are held separately from those of the relevant company and Group in independently administered funds.

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 reporting date.

Deferred tax is the tax expected to be payable or recoverable on temporary 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 goodwill or 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, and interests in joint ventures, 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 reporting 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 measured on an undiscounted basis using 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.

Property, plant and equipment

Items of 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 or valuation of assets, less their residual values, over their estimated useful lives, using the straight line method, on the following bases:

Improvements to short-term leasehold property: Over the life of the lease

Plant and machinery: 20%-33%

Investments

Investments are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, including transaction costs. Available for sale current asset investments are carried at fair value with adjustments recognised in other comprehensive income.

Investment income

Income from investments is included in the income statement at the point the Group becomes legally entitled to it.

Impairment of tangible and intangible assets excluding goodwill

At each reporting date the Group reviews the carrying amounts of its tangible and intangible assets 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).

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 money and the risks specific to the asset for 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 asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised 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.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Share-based payments

The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value 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 options that will ultimately vest.

Fair value is measured by use of a Black-Scholes pricing model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances, overnight deposits and treasury deposits. The Group considers all highly liquid investments with original maturity dates of three months or less to be cash equivalents.

Financial assets

The Group classifies its financial assets into one of the following categories, depending on the purpose for which the asset was acquired. The Group's accounting policy for each category is as follows:

Fair value through profit or loss: This category comprises only in-the-money derivatives. They are carried in the statement of financial position at fair value with changes in fair value recognised in the income statement. The Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

Loans and receivables: These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (trade receivables), but also incorporate other types of contractual monetary asset. They are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method less any provision for impairment.

Available-for-sale: Non-derivative financial assets not included in the above categories are classified as available-for-sale and comprise the Group's investments in entities not qualifying as subsidiaries, associates or jointly controlled entities. They are carried at fair value with changes in fair value recognised directly in other comprehensive income. Fair value is determined by reference to independent valuation statements provided by the investment manager or broker (as the case may be) through whom such investments are made. Where the underlying investments are exchange-traded, the mid price of the investment is used.

Where a decline in the fair value of an available-for-sale financial asset constitutes objective evidence of impairment, the amount of the loss is removed from equity and recognised in the income statement.

Financial liabilities

The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. The Group's accounting policy for each category is as follows:

Fair value through profit or loss: This category comprises only out-of-the-money derivatives. They are carried in the statement of financial position at fair value with changes in fair value recognised in the income statement.

Other financial liabilities: Other financial liabilities include the following items:

·; Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

·; Bank and other borrowings are initially recognised at the fair value of the amount advanced net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest method. "Interest expense" in this context includes initial transaction costs and premia payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Financial liabilities and equity instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.

The Group has in issue A and B shares which are convertible into Ordinary shares at the option of the shareholder based upon a formula contained in the Company's Articles of Association. The A and B shares do not have a cash alternative. However, because the shares convert into a variable number of ordinary shares, dependent inter alia on the share price of the ordinary shares in issue, the terms of IAS 32 "Financial Instruments Presentation" require them to be classified as debt. The instrument is classified as an amortised cost liability and carried at its settlement amount, which approximates fair value. Movements in settlement amount re-estimation are recorded in profit or loss.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The nature of the Group's business is such that there can be unpredictable variation and uncertainty regarding its business. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The critical judgements and key sources of estimation uncertainty that have a significant impact on the carrying value of assets and liabilities are discussed below:

Deferred tax asset

The Group recognises a deferred tax asset in respect of temporary differences relating to capital allowances, revenue losses and other short term temporary differences when it considers there is sufficient evidence that the asset will be recovered against future taxable profits.

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 and VAT. Sales of goods are recognised when goods are delivered and title has passed. Revenue is recognised when the significant risks and rewards associated with ownership of the goods have been transferred. Sales of services are recognised with reference to the stage of completion.

Due to the nature of some services provided by certain of the Group's businesses the recoverability of receivables can be subject to some uncertainty. Whilst the Group has a thorough process for reviewing the requirement for receivables and credit note provisions, this area is inherently subjective.

New standards and interpretations

During the year, a number of new standards/interpretations have come into force and hence have been adopted by the Group. The adoption of these standards/interpretation has had no material effect on the Group's financial statements.

The accounting policies are consistent with the prior year with the exception of revisions and amendments to IFRS issued by the IASB, which are relevant to and effective for the annual period beginning 1 January 2010. These are as follows:

• IFRS 3 Business Combinations (Revised 2008)

• IAS 27 Consolidated and Separate Financial Statements (Revised 2008)

• Improvements to IFRSs 2009

Significant effects on current, prior or future periods arising from the first-time application of these new requirements in respect of presentation, recognition and measurement are described below.

Adoption of IFRS 3 Business Combinations (Revised 2008)

The revised standard on business combinations (IFRS 3R) introduced major changes to the accounting requirements for business combinations. It retains the major features of the purchase method of accounting, now referred to as the acquisition method. The most significant changes in IFRS 3R are as follows:

• acquisition-related costs of the combination are recorded as an expense in the income statement. Previously, these costs would have been accounted for as part of the cost of the acquisition

• any contingent consideration is measured at fair value at the acquisition date. If the contingent consideration arrangement gives rise to a financial liability, any subsequent changes are generally recognised in profit or loss. Previously, contingent consideration was recognised only once its payment was probable and changes were recognised as an adjustment to goodwill

• the measurement of assets acquired and liabilities assumed at their acquisition-date fair values is retained. However, IFRS 3R includes certain exceptions and provides specific measurement rules.

Business combinations for which the acquisition date is before 1 January 2010 have not been restated.

Adoption of IAS 27 Consolidated and Separate Financial Statements (Revised 2008)

The adoption of IFRS 3R required that the revised IAS 27 (IAS 27R) is adopted at the same time. IAS 27R introduced changes to the accounting requirements for transactions with non-controlling (formerly called 'minority') interests and the loss of control of a subsidiary. These changes are applied prospectively. During the current period the Group was not affected by the adoption of IAS 27R.

Standards in issue not yet effective

The IASB and IFRIC have issued the following Standards and Interpretations which are in issue but not yet effective

·; IFRS 9 Financial Instruments (effective 1 January 2013)

·; IAS 24 (Revised 2009) Related Party Disclosures (effective 1 January 2011)

·; IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (effective 1 July 2010)

·; Improvements to IFRS issued May 2010 (some changes effective 1 July 2010, others effective 1 January 2011)

·; Deferred Tax: Recovery of Underlying Assets - Amendments to IAS 12 Income Taxes (effective 1 January 2012)

The Group does not anticipate that the adoption of these Standards and Interpretations will have a material effect on its financial statements on initial adoption.

2 Operating profit

Operating profit is stated after charging/(crediting):

3 Staff costs

The average number of employees (including Directors) in the Group was as follows:

4 Directors' remuneration

The remuneration of the directors was as follows:

The services of Jonathan Lander and Nick Lander are provided under the terms of a Service Agreement with Dawnay, Day Lander Limited. The amount due under this agreement, which is in addition to the amounts disclosed above, for the year amounted to £502,000 (2009: £480,000). In addition, the amount paid to David Buchler in the year was to a third party on an invoice basis. None of the directors were members of the Group's defined contribution pension plan in the year (2009: none).

5 Segment information

All revenue arose through services rendered in the principal activities of online marketing & data services, security solutions and investing and management services.

Analysis by business segment: