Xps Pensions Regulatory News (XPS)

Embargoed: 0700hrs 30 July 2013

EXPANSYS plc

("EXPANSYS" or the "Group")

Preliminary Results for the year ended 30 April 2013

EXPANSYS plc (AIM: XPS), a global provider of end-to-end ecommerce and fulfilment solutions in the consumer electronics and wireless sectors, announces its preliminary results for the year ended 30 April 2013.

Group Financial Summary

·; Turnover £93.2 million (2012:£108.5 million)

·; Adjusted pre-tax profit £1.5 million (2012:£4.3 million)*

·; Unrestricted cash at the year end of £3.3 million (2012:£5.5 million)

*adjusted for exceptional, foreign exchange and other non-cash items.

Bob Wigley, Chairman of EXPANSYS, commented:

'We believe that new opportunities and a re-focussed strategy will enable us to develop a more robust business in the medium term.'

For further information please contact:

Chairman's Statement

Introduction

The year to 30 April 2013 has been a difficult one for the EXPANSYS Group, requiring management to make further significant changes to the Group's operations. The retail division has performed poorly relative to our expectation for the year and the management team has been working hard to reduce costs in this area. Although the results are clearly disappointing we have seen some positive developments in other parts of the business, such as the growth in our North American SIM business and some new contract wins which will see us providing ecommerce and fulfilment services to some well known global brands.

Results

Total turnover for the Group for the year to 30 April 2013 (FY 13) was down by 14% to £93.2 million (2012: £108.5 million). The pre-tax profit for the year (adjusted for exceptional items, share-based payments and other non-cash items) was £1.5 million compared to £4.3 million in the previous year. Basic earnings per share on an adjusted basis were: 0.2p (2012:0.25p). A reconciliation of the reported loss before tax to the adjusted profit before tax is included in the Financial Review.

The Group's unrestricted cash balance at year end was £3.3 million (2012: £5.5 million).

Exceptional costs that affected cash totalled £2.6 million. This was comprised of three main items: the restructuring costs in Europe (£1.1 million); costs in respect of two aborted acquisitions (£0.6 million); and the settlement of a supplier claim. In addition a non-cash item of £17.4 million has been charged for the impairment of the goodwill attributed to Data Select Network Solutions Limited following a review by the Board.

Markets

The retail business has faced stronger headwinds in our core markets which, when compounded with our organisational changes, has resulted in lower revenues and disappointing results. In March 2013 we announced that we were undertaking a strategic review to accelerate our intentions to become an end-to-end solutions provider to MNOs, MVNOs and OEMs/technology brands. In line with this strategy the Group has already won two important strategic contracts during the year.

DSNS, our SIM distribution and solutions business, performed above our expectations during the year despite being under pressure in the UK due to the change in our terms with the MNOs, where there has now been an almost complete shift to a revenue share model. The shift in the model is now complete for all of the major networks.

We have successfully rolled out the DSNS business to the US. This demonstrates that the underlying model can be exported.

PJ Media, our e-commerce service and solutions division, which specialises in developing solutions for MNOs and MVNOs in emerging markets, has won some important contracts during the year. We believe the greatest short to medium potential for this division is in emerging markets, especially Asia and we are actively pursuing opportunities in this fast growth region from our established base in Hong Kong.

Outlook

In FY 14 we will continue to reduce costs where possible to achieve a more efficient Global operation. While this will provide the foundations necessary to improve our profitability we believe that new opportunities and a re-focussed strategy will enable us to develop a more robust business in the medium term.

Bob Wigley

Chairman

CEO's STATEMENT

Business review - EXPANSYS.com

The retail business performed significantly below expectation as its largest region (Europe) went backwards in revenue and profitability. Despite overall retail revenue growth in H1, a weak H2 (including Xmas trading) reduced the annual performance. As previously communicated, we have taken further action in terms of the cost base (with more cost reduction action planned) as we continue to look at ways in which we can increase the efficiency of the retail business.

Regionally, performance was mixed:

Asia - strong web traffic growth of 60% was negatively impacted by the currency devaluation in Japan (our biggest Asian market), which affected pricing and ultimately conversion/volumes in the market. The region did well at developing the South Korean market (including establishing a local presence) and other markets (including opening new territories for EXPANSYS.com in Thailand, Malaysia and Philippines) to mitigate this challenge, and we are well placed to see continued growth in FY14, with the planned development of the Taiwanese and Chinese markets, along with an expected recovery in Japan.

The team also successfully initiated the operational support and management for the new Partner fulfilment contract (see Partners below).

UK - The UK improved its Gross Profit for the year by 3%, and reduced its losses annually by over £500k following prior year cost reductions. Sales fell compared to the prior year, but this was mostly due to the significant inventory clearance activity in the prior period.

USA - a disappointing year for the retail business in the USA, with both online and b2b revenues lower than the prior year. This was mainly because of weaker market conditions, competitive pressure and a conscious decision to focus upon the development of the SIM business, which grew strongly.

Europe - we went through significant change in Europe during FY13, as we reduced costs to support a reducing revenue stream more efficiently. During the year we outsourced our European logistics and customer services solutions to the UK in order to become more efficient. However, as a result of lower revenues, the division fell into an operating loss during the period. Moving forward and because of the organisational changes we have made, we expect an improvement in the current financial year.

Partners - despite the challenges faced elsewhere in the retail group, our Partner business enjoyed solid growth and development in FY13. The exclusive fulfilment contract in Asia began to contribute to the group.

During the year we also signed a multi-market agreement with a leading global mobile network operator (MNO) to develop international branded websites in non-footprint locations. With seven markets now open, we expect a further 25+ markets to open over the next 18 months, and we believe that the relationship will develop synergies and deliver new revenue streams across the MNO group as we leverage our 'end 2 end' ecommerce solutions further.

We believe that there is significant value to our customers in the unique and bespoke online platform and capability we have developed over many years, which is capable of supporting MNOs, MVNOs (mobile virtual network operators) and technology brands globally. Our solutions include ecommerce, fulfilment and 'go to market' solutions, and the contract wins we have seen in FY13 give us confidence that this remains a strong growth opportunity for the group.

Business Review - DSNS

In the UK, DSNS performed in line with our expectations. Our core business model has been re-positioned as all the major MNOs have completed their migration (begun in October 2010) to a revenue share model, and away from the previous activation based reward model. This has had 3 main impacts:

·; Channel volumes have reduced significantly in the short term.

·; The cash and profit dynamic of the model has been extended as payments are made later by the MNOs (up to 6 months in some cases) and the revenue is recognized at a later date.

·; The changes are designed to improve the ARPU (average revenue per user) of the customers being connected through the channel.

These significant shifts in the channel now leave us in a position where our core UK business has a reduced volume, but a more sustainable business model. We will continue to develop our revenues by working with the MNOs and MVNOs to further improve customer quality and develop incremental volume opportunities throughout FY14.

In the USA (trading as EXPANSYS Inc.), the SIM business out-performed our expectations. We have experienced a very strong year of growth, in both revenues and profitability. The US SIM business now has market agreements with one major MNO and four MVNOs as well as an airtime distribution agreement with a major provider in the USA.

We have been delighted with the progress of the SIM business in the USA, and remain confident that this division will continue to grow its market presence, and develop its strategic importance to MNOs and MVNOs and overall contribution to the group.

Business Review - PJ Media

PJ Media has not made the progress hoped for this year, and the business performed below expectations. The profitability reduced as pipeline projects were delayed or cancelled. We have reduced the cost base and the benefits of this action will flow through in the second half of the current year. We are placing a far greater emphasis upon opportunities within emerging markets, with Asia being a key focus in the short to medium term.

The SaaS (Software as a Service) core model has added notable customers in the year and these contracts offer further opportunities for lateral development moving forward. Our newly formed VAS (Value Added Services) division has enjoyed a number of contract wins supporting MNOs and MVNOs in four languages and three territories to date, with revenue development and customer tenure development programs to boost MNO/MVNO and Partner ROI.

We are also about to launch a new NOC (Network Operations Centre) which will bring Enterprise class monitoring and support services to existing and new customers. These enhanced services will benefit all of our partner customers across the group.

During the year, we enabled our Partners to achieve 2.7m mobile and online transactions, and delivered more than 6.5m brand messages to customers on their behalf.

Strategy evolution

We have made good progress in terms of the strategic review we communicated earlier, and are examining a number of options available to us. Our strategy is to focus upon our unique ecommerce and fulfilment capability and infrastructure and become a 'complete end 2 end' provider of technology and logistics based solutions to MNOs, MVNOs, technology manufacturers and brands who are looking to sell a greater proportion of their own products and services directly.

Summary and outlook

We have had a further year of significant organisational change, helping us to reposition the group appropriately for the strategic opportunities we face. We predict further short-term challenges in FY14, but remain confident that there are strong medium to long term growth opportunities in the international SIM distribution markets, partner ecommerce services and software solutions for MNOs/MVNOs.

Anthony Catterson

CEO

EXPANSYS plc

Financial Review for the year ended 30 April 2013

Results Overview

Turnover for the year ended 30 April 2013 (FY13) was £93.2 million (2012: £108.5 million), representing a reduction of 14%, following an increase of 33% in the previous year.

The underlying profit before tax for the Group was £1.5 million (2012: £4.3 million). A reconciliation to the reported loss for the year of £18.8 million (2012: profit £1.9 million) is set out below. The reconciling items are, in the opinion of the Board, not indicative of the Group's underlying trading.

A charge of £17.4 million has been taken for the impairment of goodwill attributed to Data Select Network Solutions Limited ('DSNS'). At the time that DSNS was acquired in July 2010 the goodwill was valued at £41.9 million. Due to the change that has taken place in the business model this has been reassessed and revalued at £24.5 million.

The restructuring costs were incurred in the outsourcing of our European distribution and customer services. This initiative was taken to improve service and reduce costs in the medium term, and allow the European team to concentrate upon commercial development. Most of the charge is for redundancy related costs. Total staff numbers in our French office have been reduced from 88 at April 2012 to 40 at the end of April 2013. This reduces staff costs by over £1 million per year. In addition we have taken out a new lease on the premises in France with reduced space making a further saving of £0.1 million per year. The savings are partially offset by the outsourced fulfilment and customer service costs but going forward we expect net savings to the group of about £0.3 million per year.

The intangible assets acquired with Data Select Network Solutions Limited have been fully amortised.

The Company incurred costs on two potential acquisitions which were both aborted.

Revenue

For the purpose of this review the retail division includes the following: Expansys UK, Expansys Europe, Expansys Hong Kong and the retail division of Expansys Inc. The SIM distribution division of Expansys Inc. has been included in the DSNS numbers.

Following two years of significant growth, revenue from the retail division was down by 14% to £70.0 million (2012: £81.2 million). The largest decrease was in Europe including the UK (our largest turnover retail region), where revenue was down 24% to £38.1 million (2012: £50.2 million). Revenues were also down in the retail division of the US business by 14% to £14.5 million (2012: £16.9 million). Asia continued to grow, albeit at a lower rate than previous years and revenue was up by 24% to £17.5 million (2012: £14.1 million).

Total revenue from the SIM distribution business, DSNS, was down by 16% to £20.8 million (2012: £24.7 million). This was despite a significant increase in revenue from the US operation of this division. Revenues were down in the UK, as expected, partly because the previous year included sales of propositions including airtime, which was discontinued in FY 13, but also because all of the major MNOs have now changed to a revenue share model, which has reduced volumes in the channel and delayed revenue and profits.

Revenue for PJ Media was down 11% to £2.4 million (2012: £2.7 million). There were some delays and cancellations of some projects which detracted from contract wins.

Operating Profit

The adjusted loss for retail division after adding back exceptional items and intercompany charges was £0.9 million (2012: loss of £0.1 million).

The European division of the retail business made an adjusted loss of £0.8 million (2012: £0.7 million). Asia benefited from a new significant fulfilment contract but profits overall were flat at £0.4 million (2012:£0.4 million). The US retail division made an adjusted loss of £0.4 million (2012: profit of £0.2 million).

The adjusted profit contribution from DSNS in total was £4.1 million (2012:£5.9 million). The adjusted profit from PJ Media was £0.5 million (2012: £0.6 million).

Central costs for the year which comprise mainly the Board, Central Finance, IT and HR, PLC related costs and the amortisation of web development costs, totalled £2.2 million (2012: £2.1 million).

Taxation

There is a tax credit for the year of £0.9 million (2012: charge of £1.5 million). The tax credit is mainly due to an over provision in the previous year. This was partly as a result of the R&D tax credits received by PJ Media and also tax relief on the settlement of a supplier claim. The Group benefits from R&D tax credits generated by PJ Media and this significantly reduces the tax rate. The Group also has various tax losses available which will keep the Group tax charge low in future years. In particular there are tax losses in Asia of £1.6 million and in the UK of £3.9 million.

Results

The basic loss per share for the year was 1.55 pence (2012: profit of 0.04 pence). The adjusted earnings per share was 0.2 pence (2012:0.25 pence).

Balance Sheet and Working Capital

Due to the impairment charge to goodwill noted above the Intangible assets on the balance sheet have reduced from £50.7 million at the end of April 2012 to £33.7 million. The total goodwill remaining on the consolidated balance sheet is £32.9 million. The other significant items included in Intangible Assets are the internally developed assets of the web sites and software created by PJ Media, totalling £0.8 million.

 Working capital has increased by £0.7 million. Stock has reduced significantly to £3.0 million (2012: £4.7 million) and stock days have been reduced from 22 to 17. Trade debtors have increased by £0.6 million to £5.8 million and debtor days have increased from 17 to 22. This is partly due to the increase in turnover in the US SIM business where the business model requires initial working capital. It is expected that this profile will improve as the model matures. Trade creditors have come down by £1.9 million.

 At the year end the Group had a total cash balance of £5.8 million. However, this included £2.4 million held on behalf of a customer for payment of overseas duties and is therefore presented as restricted cash. The Group's unrestricted cash balance at the year end was £3.3 million (2012:£5.5 million).

GROUP STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 April 2013

GROUP STATEMENT OF FINANCIAL POSITION

At 30 April 2013

GROUP STATEMENT OF CHANGES IN EQUITY

At 30 April 2013

*Exchange differences relate to the retranslation of net assets of subsidiary undertakings.GROUP CASH FLOW STATEMENT

For the year ended 30 April 2013

NOTES

1. Basis of preparation

The financial information within this report has been prepared in accordance with International Financial Reporting Standards (IFRSs) and International Finance Reporting Interpretation Committee (IFRIC) interpretations as adopted by the European Union as they apply to the financial statements of the Group for the year ended 30 April 2013 and applied in accordance with Companies Act 2006.

The Group financial statements are presented in Sterling (being the Group's functional and presentation currency) and all values are rounded to the nearest thousand pounds (£000) except where indicated otherwise.

The principal accounting policies adopted by the Group are set out in note 2.

The financial information set out in this announcement does not constitute the Group's statutory financial statements for the year ended 30 April 2013 or 2012 but is derived from those financial statements. The comparative figures are derived from the financial statements for the year ended 30 April 2012. The auditors have reported on the Group's statutory financial statements and the report was unqualified and did not contain a statement under section 498 (2) or 498 (3) Companies Act 2006. The statutory financial statements for the year ended 30 April 2013 have not yet been delivered to the Registrar of Companies and will be delivered following the Company's Annual General Meeting.

The financial information contained in this statement does not constitute statutory accounts as defined by Section 240 of the Companies Act.

2. Accounting policies

The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. The nature of estimation means that actual outcomes could differ from those estimates. Estimates and assumptions used in the preparation of the financial statements are continually reviewed and revised as necessary. Whilst every effort is made to ensure that such estimates and assumptions are reasonable, by their nature they are uncertain and, as such, changes in estimates and assumptions may have a material impact in the financial statements.

The key sources of estimation uncertainty that have significant risk of causing material adjustment to carrying amounts of assets and liabilities within the next financial year are the measurement of:

·; indefinite life intangible assets

·; inventory provisions; and

·; trade receivable provisions; and

·; taxation.

The measurement of intangible assets on a business combination involves estimation of future cash flows and the selection of a suitable discount rate. The Group determines whether indefinite life intangible assets are impaired on an annual basis and this requires an estimation of the value in use of the cash generating units to which the intangible assets are allocated. This involves estimation of future cash flows and choosing a suitable discount rate. Any estimates of future economic benefits made in relation to these assets may differ from the benefits that ultimately arise and materially affect the recoverable value of the asset.

Calculation of inventory provisions requires judgements to be made which include forecast consumer demand and inventory loss trends.

Provisions for irrecoverable receivables are based on extensive historical evidence and the best available information in relation to specific issues, but are nevertheless inherently uncertain.

The complex nature of tax legislation across the tax jurisdictions in which the Group operates necessitates the use of estimates and assumptions, where the outcome may differ from that assumed. The extent to which tax losses can be utilised depends on the extent to which taxable profits are generated in the relevant jurisdictions in the foreseeable future, and on the tax legislation then in force and, as such, the value of associated deferred tax assets is uncertain.

3. Segment information

The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors, since they are responsible for making strategic decisions.

Operating segments are reported in a manner consistent with the internal reporting provided to the Board which is split in accordance with statutory trading entities in the group, in addition to the parent company.

·; EXPANSYS plc, parent company, incorporated in the United Kingdom

·; EXPANSYS UK Limited, incorporated in the United Kingdom

·; EXPANSYS Europe SAS, incorporated in France

·; EXPANSYS Inc (formerly Mobile Planet Inc), incorporated in United States of America

·; EXPANSYS Hong Kong Limited, incorporated in Hong Kong, and its subsidiaries RCK Communications Limited, incorporated in Hong Kong , and EXPANSYS Shenzhen Trading Company, incorporated in China

·; Data Select Network Solutions Limited, incorporated in the United Kingdom

·; PJ Media Limited, incorporated in the United Kingdom

Transfer prices between business segments are set on an arm's length basis in a manner similar to transactions between third parties. Segment revenue, segment expense and segment result includes transfers between business segments. Those transfers are eliminated on consolidation.

No one customer accounts for more than 10% of Group revenue.

The following tables present revenue and (loss) / profit and certain asset and liability information regarding the Group's business segments for the years ended 30 April 2013 and 2012.

4. Exceptional items - administrative expenses

All of the exceptional items in the table above, are deemed allowable for corporation tax purposes.

The impairment of goodwill is not allowable for tax purposes.

5. Taxation

6. Earnings per ordinary share

Basic earnings per share amounts are calculated by dividing loss for the year attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share for the year amounts are calculated by dividing the loss attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

The following reflects the income and share data used in the basic and diluted earnings per share computations:

The amounts for earnings per share after exceptional items are as follows:

Underlying earnings per share

The Group presents as exceptional items, foreign exchange and other non-cash items on the face of the Statement of Comprehensive Income, those material items of income and expense which, because of the nature and expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to facilitate better assessment of trends in financial performance.

To this end, basic and diluted earnings per share is also presented on this basis and using the weighted average number of ordinary shares for both basic and diluted amounts as per the table above the underlying profit attributable to the parent is derived as follows:

The amounts for underlying earnings per share before exceptional and other non-cash items are as follows:

7. Impairment review of goodwill

As required by IAS 36 "Impairment of Assets", goodwill is subject to annual impairment reviews. These reviews are carried out using the following criteria.

Goodwill acquired through business combinations has been allocated for impairment testing purposes to five cash generating units, which are also reportable segments, as follows:

§ EXPANSYS UK Limited;

§ EXPANSYS Inc;

§ EXPANSYS Europe SAS;

§ Data Select Network Solutions Limited; and

§ PJ Media Limited

These represent the lowest level within the Group at which goodwill is monitored for internal management purposes.

The recoverable amount of each CGU is determined based on calculating its value in use, using cash flow projections based on financial budgets approved by the board for the financial period to 30 April 2014. Growth rates that are consider appropriate for each regions have been assumed for the following two years and in the years beyond this a growth rate of 3.2% has been assumed.

The post tax discount rate applied to cash flow projections is 11.1% (2012: 9.05%) and is deemed as the Group's weighted average cost of capital.

Cash flows in outlying years are extrapolated using a 3.2% growth rate (2012: 2%).

The tax rate appropriate for the different regions has been used as follows: UK - 23% (2012: 24%); France - 33% (2012: 33%); US - 34% (2012: 34%); Asia - 17% (2012: 17%).

Following a review of the goodwill held in the five CGUs above a charge has been taken of £17.4 million (2012: £nil) as an impairment of the goodwill attributed to Data Select Network Solutions Limited.

Carrying amount of goodwill allocated to CGUs

Key assumptions used in value in use calculations

The calculation of value in use is most sensitive to the following assumptions:

§ Gross margin in the retail business; the average rate is 16%.

§ Distribution costs; in the budget a rate of between 3.4% and 4.6% has been used.

§ Gross margin in DSNS: 23%

§ Gross margin in PJ Media: 45%

§ Discount rates; as above 11.1% has been assumed in these calculations.

§ Growth rate used to extrapolate cash flows beyond the first three years; as noted above a rate of 3.2% has been assumed.

Gross margins and distribution and administration expenses are based on the rates used in the budget for FY 2014. These are consistent with the run rate.

Discount rates reflect management's estimate of return on capital employed for the Group as whole.

Sensitivity to changes in assumptions

A sensitivity analysis was performed on the base case assumptions used for assessing the goodwill. In particular a more prudent forecast for the year with lower growth rates was assumed compared to the budget .In addition different discount rates were used. A discount rate of 7.8% and below would produce no impairment in the carrying value of goodwill for DSNS. The rate used last year of 9.05 % would produce impairment of £8.5 million. The higher rate of 11.1% that has been used led to the impairment charge of £17.4 million but this and other sensitivities that were applied did not produce impairment in any of the other CGUs.

With regards to the assessment of value in use of the cash-generating units, the Directors believe that the key assumptions are reasonable and do not expect these to be incorrect to the extent that it would cause the carrying value of the unit to exceed its recoverable amount.

8. Issued share capital

B Collie (non-executive Director) has been awarded 2,721,416 shares, as satisfaction of 50% of his salary pursuant to the terms of his service contract. £6,804 has been credited to equity share capital and £13,196 credited to equity share premium.

9. Share based payments

Share options

.

There were no cash settled share options and no share options were exercised during either year.

The share options issued will all expire seven years from the date of vesting.

The fair value of equity settled share options granted is estimated as at the date of the grant using the Black-Scholes-Merton model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model:

The expected volatility reflects the assumption that the AIM index is indicative of future trends, which may not necessarily be the actual outcome.

The expense to the statement of comprehensive income during the year ended 30 April 2013 was £315,000 (2012: £523,000).

The weighted average exercise price is 4.20 pence (2012: 4.26 pence) for the 90,966,778 shares (2012: 97,964,318) under option at 30 April 2013.

The weighted average exercise price of shares granted during the year ended 30 April 2013 was 1.225 pence for the 11,890,625 options granted in the year. The weighted average exercise price of shares granted during the year ended 30 April 2012 was 1.3125 pence for the 30,645,122 options granted in that year.

10. Related party transactions

Data Select Limited

The Group has a close relationship with Data Select Limited ("Data Select") which is ultimately controlled by Peter Jones CBE. Peter Jones CBE and Stephen Vincent are also directors of Data Select. EXPANSYS UK Limited has a trade credit facility with Data Select of £2.5 million. The facility is secured by a fixed and floating charge and is guaranteed by EXPANSYS plc. In the year ended 30 April 2013 purchases by EXPANSYS UK Limited from Data Select amounted to £2.8 million (2012: £2.8 million) and sales to Data Select amounted to £37,000 (2012: £0.5 million). At 30 April 2013 EXPANSYS UK Limited had a receivable balance with Data Select of £21,000 (2012: £294,000) and a payable balance of £851,000 (2012: £634,000).

In the year to 30 April 2013 purchases by EXPANSYS Inc from Data Select totalled £2.0million (2012: £2.7 million) and sales to Data Select totalled £11,000 (2012: £98,000). At 30 April 2013 EXPANSYS Inc. had a payable balance with Data Select of £603,000 (2012: £481,000) and a receivables balance of £nil (2012: £nil).

EXPANSYS Europe SAS made no sales to Data Select in the year (2012: £1,700) and purchases of £199,000 (2012: £nil). At 30 April 2013 there was a receivable balance with the company of £nil (2012: £nil) and a payable balance of £115 (2012: £nil).

DSNS has a trading relationship with Data Select. In the year ended April 2013 sales to Data Select by DSNS have totalled £nil (2012: £2.2 million) and purchases by DSNS have totalled £2.3 million (2012: £2.8 million). DSNS pays rent to Data Select under a licence and in the year ended 30 April 2013 this has amounted to £144,000 (2012: £144,000) included in the total purchases figure above. At 30 April 2013 DSNS had a receivable balance with Data Select of £nil (2012: £1,200) and a payable balance of £11,000 (2012: £450,000).

PJ Media made sales to Data Select in the year of £86,000 (2012: £432,000). PJ Media pays rent to Data Select under a licence and in the year ended April 2013 this has amounted to £72,000 (2012: £72,000). Other purchases by PJ Media from Data Select have totalled £134,000 (2012: £159,000). At 30 April 2013 PJ Media had a payable balance with Data Select of £44,000 (2012: £28,000) and a £9,000 receivable balance (2012: £nil).

Peter Jones Foundation

Peter Jones Foundation is a charity of which Peter Jones CBE, Bob Wigley, and Stephen Vincent are Trustees. In the year to 30 April 2013 sales to Peter Jones Foundation by PJ Media totalled £6,000 (2012: £39,000) and purchases to PJ Media of £4,500 (2012: £nil). At 30 April 2013 there was a receivables balance of £nil (2012: £4,000). EXPANSYS PLC committed a donation to PJ Foundation of £2,500 (2012: £2,000). At 30 April 2013 there was a payables balance with the company of £nil (2012: £2,000).

In view of the significant number of related party transactions of the Group, these are reviewed on a regular basis by the Audit Committee to confirm that such transactions are transparent to the Board and the terms are on an arm's length basis.

Transactions with key management personnel

The Directors and the business unit heads of the UK, Europe, US and Hong Kong are deemed to be key management personnel.

Key management personnel compensation is disclosed below: