Cleardebt Group PLC
15 September 2006
ClearDebt Group Plc
'ClearDebt' or 'the Group'
Preliminary Results for the 18 months ended 30 June 2006
ClearDebt Group plc (formerly Carrwood plc), the AIM quoted debt adviser and IVA
provider, is very pleased to announce its maiden Preliminary Results since the
acquisition of ClearDebt Limited. These results cover the 18 month period ended
30 June 2006.
Financial highlights
- Operating loss of £429,267 after amortisation of goodwill and
capitalised development costs of £173,277
- Placing of new shares by WH Ireland to raise £1.2m
- Net cash balance at 30 June 2006 of £721,599
Operational highlights
- Acquisition of ClearDebt Limited
- Development of kaizen (continually improving) manufacturing derived
system allowing ClearDebt to process IVAs for lower levels of debt
than its competitors
- Strong quarter on quarter growth of creditor agreed IVAs since
ClearDebt's commencement of operations:
o 2005 Q2 - 7 IVAs
o 2005 Q3 - 23 IVAs = 228.6 % growth
o 2005 Q4 - 32 IVAs = 39.1 % growth
o 2006 Q1 - 44 IVAs = 37.5 % growth
o 2006 Q2 - 82 IVAs = 86.4 % growth
- Successfully negotiated agreement with John Charcoal regarding
re-mortgages
Gerald Carey, Non Executive Chairman, said:
'The past year has been one of transformation for the company now known as
ClearDebt Group plc. Following the successful acquisition of ClearDebt Limited
and simultaneous placing of new shares, the Group is in a position to fund the
expansion which its operational success demands. Our model is fully scaleable,
and we will be able to grow to meet the increasing demand for IVAs.'
David Mond, CEO said
'Our record of operational growth over the past 18 months proves that our low
overhead, high quality driven model allows us both to grow rapidly and to target
a sector of the market that our competitors find it difficult to access . Due to
our kaizen derived operating model, we are able to offer IVAs to individuals
with a considerably lower level of debt than the vast majority of the industry.
With both rising levels of personal debt and the imminent introduction of the
new SIVA, the level of consumer IVAs is predicted to rise. Given ClearDebt's
ability to scale its model to match the growth of the market, I look to the
future with continued confidence.'
15 September 2006
Annual Report
The Annual Report will be sent to shareholders on 15 September 2006. Additional
copies will be available to the public, free of charge, from the Company's
registered office at George House, 48 George Street, Manchester M1 4HF or
downloadable from www.cleardebtgroup.co.uk.
For further information please contact:
Clear Debt Group plc
David Mond, Chief Executive 0161 244 5433
Andrew Smith, Director of Marketing 0161 244 5433
www.cleardebt.co.uk
WH Ireland
David Youngman 0161 8326644
College Hill Associates
Gareth David / Paddy Blewer 020 7457 2020
Notes to Editors
ClearDebt aims to provide the most transparent and ethical service to debtors,
at the lowest cost - giving many more people the opportunity to arrange an IVA
than has been possible before. All customer-facing staff have been specifically
trained in IVA provisions and all have insolvency practice experience: ClearDebt
is not a call centre, nor does it employ call centre type operatives.
ClearDebt's principles include providing best advice wherever possible to all
debtors: Where the facts indicate an IVA is the right solution ClearDebt will
provide advice and support - but never pressure - to the debtor. Where the facts
indicate other solutions ClearDebt will point the debtor in the right direction.
CLEARDEBT GROUP PLC
CHAIRMAN'S STATEMENT
I reported to you on 27 March 2006, on presentation of the interim results for
the 6 months ended 31 December 2005 that we had successfully concluded the
acquisition of ClearDebt Limited.
I now present the Group's financial statements for the 18 months ended 30 June
2006.
The Group made an operating loss of £429,267 (2004:£22,353) after amortisation
of goodwill and capitalised development costs of £173,277 (2004: Nil) which is a
creditable performance considering this covers the start up position of
ClearDebt Limited, the introduction of its different business model into the
market place and finally the costs associated with the acquisition of ClearDebt
Limited and the placing of new equity.
The Group's Balance Sheet shows net current assets of £878,549 including cash of
£721,599 following the placing and re-admission to AIM which is sufficient to
develop the Group's initial strategy.
Operationally, we have had an impressive start, with ClearDebt's business model
proving both viable and successful. ClearDebt has now arranged 188 creditors
agreed IVAs, an excellent performance since the commencement of trading.
Given the prevailing market conditions, and ClearDebt's capabilities, I have
every confidence regarding the Group's future prospects.
Gerald Carey FCIB
Chairman
15 September 2006
CLEARDEBT GROUP PLC
CHIEF EXECUTIVE'S STATEMENT
The IVA Market
ClearDebt Group operates within the debt relief sector, a new sub-category of
financial services, which has emerged to service the recent expansion in
consumer debt and insolvency.
Consumer insolvencies are currently growing at a phenomenal rate. The number of
insolvencies handled by the quoted companies in the sector is expected to double
in 2006 compared to 2005 and to continue to grow strongly into 2007 and 2008.
Demand is currently outstripping the capacity of IVA providers - thereby
providing an ideal growth opportunity for ClearDebt.
The ClearDebt Model
Unlike many of its major competitors in the consumer IVA market, ClearDebt has
developed a low overhead, high quality model, based on kaizen manufacturing
principles and an intelligent internet interface - www.cleardebt.co.uk . This
model allows the Group cost base to be kept to the minimum compatible with the
higher level of service provided and facilitates efficient growth, as there is
minimal need to hire new staff until customer number thresholds have been
breached.
Due to this distinctive operating model, ClearDebt is able to offer a more
effective IVA package than many of its rivals. The model allows ClearDebt to
offer IVA's at lower cost not only to the debtor, but also the creditor -
thereby increasing the chance that the IVA will be approved by the creditor and
completed by the debtor, benefiting all involved in the proposal and ensuring
that ClearDebt will gain the full level of income from the IVA.
It is significant that this provides us with a capacity to handle lower levels
of debt than our major competitors. The Group believes that this advantage will
prove highly valuable on the introduction of the proposed 'SIVA' scheme, where
it is believed there will be a rapid increase in lower level IVA cases.
Operational Review
Since April 2005, the following numbers of IVAs have been arranged:
Number of IVAs
o 2005 Q3 - 23 IVA = 228.6% growth
o 2005 Q4 - 32 IVA = 39.1 % growth
o 2006 Q1 - 44 IVA = 37.5 % growth
o 2006 Q2 - 82 IVA = 86.4 % growth
As can be seen ClearDebt's web based model is attracting considerable interest
and generating customers for our services. The increase in both web site hits
and IVA's has been driven by an intelligent marketing mix. Natural search is
augmented by search engine optimization, cost per click, recommendations and
email newsletters in addition to highly targeted radio, television, full colour
press advertisements and posters in the London Underground, overland railways
and the Manchester Metro. This programme has established a strong brand
awareness, especially with the introduction of the 'Debt is a Monster - Tame it'
campaign.
Future Outlook
The Group has had a promising start to its corporate life. Operational growth
from ClearDebt has been matched by the successful reverse onto AIM, which has
given the Group flexibility with regard to its future funding needs.
With the predicted growth in the consumer IVA market combined with the likely
growth in lower level IVA's predicted following the introduction of 'SIVA's, I
have every confidence in the future.
David Emanuel Merton Mond FCA FCCA
Chief Executive Officer
15 September 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE EIGHTEEN MONTH PERIOD ENDED 30 JUNE
2006
Notes 18 Months to 30 12 Months to
June 2006 31 Dec 2004
£ £
TURNOVER 1 174,796 -
Cost of sales (284,289) -
GROSS LOSS (109,493) -
Administrative expenses excluding amortisation (146,497) (22,353)
Goodwill and capitalised development cost amortisation (173,277) -
Total administrative expenses (319,774) (22,353)
OPERATING LOSS ON ORDINARY ACTIVITIES BEFORE INTEREST AND TAXATION 2 (429,267) (22,353)
Interest receivable 16,151 -
Interest payable and similar charges 5 (89,512) -
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (502,628) (22,353)
Taxation on loss on ordinary activities 6 - -
RETAINED LOSS FOR THE FINANCIAL PERIOD/YEAR 15 (502,628) (22,353)
Loss per share (basic and diluted) 7 (0.55)p (0.18)p
The group has no recognised gains or losses other than the results for the 18
months as set out above.
No note of historical cost profits and losses has been prepared as the
historical cost profits and losses are the same as detailed in the above profit
and loss account.
All items above from turnover to operating loss are derived from acquired
continuing operations.
CONSOLIDATED BALANCE SHEET AT 30 JUNE 2006
Notes 30 June 2006 31 Dec 2004
£ £
FIXED ASSETS
Intangible assets 9 3,137,545 -
Tangible assets 10 116,404 -
3,253,949 -
CURRENT ASSETS
Debtors 12 443,387 16,828
Cash at bank and in hand 721,599 11,906
1,164,986 28,734
CREDITORS: Amounts falling due within one year 13 (286,437) (1,087)
NET CURRENT ASSETS 878,549 27,647
TOTAL ASSETS LESS CURRENT LIABILITIES 4,132,498 27,647
NET ASSETS 4,132,498 27,647
CAPITAL AND RESERVES
Called up share capital 14 5,141,891 249,813
Share premium account 15 52,167 336,766
Profit and loss account 15 (1,061,560) (558,932)
SHAREHOLDERS' EQUITY FUNDS 4,132,498 27,647
The financial statements were approved and authorised for issue by the Board on
15 September 2006
D E M Mond
Director
COMPANY BALANCE SHEET AT 30 JUNE 2006
Notes 30 June 2006 31 Dec 2004
£ £
FIXED ASSETS
Investments 11 3,085,000 -
CURRENT ASSETS
Debtors 12 702,647 16,828
Cash at bank and in hand 714,380 11,906
1,417,027 28,734
CREDITORS: Amounts falling due within one year 13 (29,921) (1,087)
NET CURRENT ASSETS 1,387,106 27,647
NET ASSETS 4,472,106 27,647
CAPITAL AND RESERVES
Called up share capital 14 5,141,891 249,813
Share premium account 15 52,167 336,766
Profit and loss account 15 (721,952) (558,932)
SHAREHOLDERS' EQUITY FUNDS 4,472,106 27,647
The financial statements were approved by the board on 15 September 2006
D E M Mond
Director
CONSOLIDATED CASH FLOW STATEMENT
FOR THE EIGHTEEN MONTH PERIOD ENDED 30 JUNE 2006
Notes Period ended 30 Year ended 31 Dec
June 2006 2004
£ £
Net cash (outflow)/inflow from operating activities 17a (291,781) 11,906
Returns on investments and servicing of finance 17b 16,151 -
Taxation - -
Capital expenditure and financial investment 17b (31,333) -
Acquisition of subsidiary 18 5,922 -
CASH (OUTFLOW)/INFLOW BEFORE FINANCING (301,041) 11,906
Financing 17b 1,010,734 -
INCREASE IN CASH IN THE PERIOD/ YEAR 17c 709,693 11,906
RECONCILIATION OF SHAREHOLDERS' FUNDS
FOR THE EIGHTEEN MONTH PERIOD ENDED 30 JUNE 2006
GROUP
Period ended Year ended
30 June 2006 31 Dec 2004
£ £
Loss for the financial period (502,628) (22,353)
New equity share capital subscribed 4,892,078 -
Share premium utilised for new share issue (336,766) -
Share premium on new share capital subscribed 52,167 -
4,104,851 (22,353)
Opening shareholders' equity funds 27,647 50,000
Closing shareholders' equity funds 4,132,498 27,647
COMPANY
Period ended Year ended
30 June 2006 31 Dec 2004
£ £
Loss for the financial period (163,020) (22,353)
New equity share capital subscribed 4,892,078 -
Share premium utilised for new share issue (336,766) -
Share premium on new share capital subscribed 52,167 -
4,444,459 (22,353)
Opening shareholders' equity funds 27,647 50,000
Closing shareholders' equity funds 4,472,106 27,647
ACCOUNTING POLICIES
FOR THE EIGHTEEN MONTH PERIOD ENDED 30 JUNE 2006
BASIS OF ACCOUNTING
The financial statements have been prepared under the historical cost convention
and are in accordance with applicable accounting standards.
In these financial statements FRS 25 'Financial Instruments: Disclosure &
Presentation' has been adopted for the first time. There is no effect on the
current or prior year figures as a result of this change in accounting policy.
BASIS OF CONSOLIDATION
The consolidated accounts incorporate the accounts of the company and all group
undertakings. The subsidiary undertakings accounts are adjusted, where
appropriate, to conform to group accounting policies. Acquisitions are
accounted for under the acquisition method and goodwill on consolidation is
capitalised and amortised over its estimated useful life from the year of
acquisition. The results of companies acquired or disposed of are included in
the profit and loss account after or up to the date that control passes
respectively.
GOING CONCERN
The directors confirm that they are satisfied that the company and the group
have adequate resources to continue in business for the foreseeable future. For
this reason, they continue to adopt the going concern basis in preparing the
financial statements.
TURNOVER
The Turnover shown in the group profit and loss account represents amounts in
respect of the provision of financial solutions to individuals experiencing
personal debt problems. Turnover is largely derived from nominee and
supervisory fees which results from individual voluntary arrangements (IVA).
These fees are recognised as follows:
Nominee fees: on the approval by the creditors of a finalised IVA proposal
Supervisory fees: on a monthly basis, commencing on approval by creditors of the
IVA
The Group also received commission income from the referral of cases for
re-mortgaging. The income is recognised on receipt of the commission.
COST OF SALES
Cost of sales represent the cost of advertising, new advertising creative,
promotional and disbursements of specific cases. The cost of advertising is not
written off as incurred. It is carried forward for a period of four months from
the date of inception of the campaign and then amortised over a period of twelve
months.
AMORTISATION
Amortisation is calculated so as to write off the cost of intangible assets less
their estimated residual value, over the useful economic life of the asset as
follows:
Development costs - 25% straight line
Goodwill - 10% straight line
The directors review the carrying value of development costs and goodwill on a
regular basis and if appropriate impair the value of development cost and
goodwill as required.
DEPRECIATION
Depreciation is provided to write off the cost or valuation, less estimated
residual values, of all fixed assets over their expected useful lives. It is
calculated at the following rates:
Software Development - 25% straight line
Fixtures and fittings - 25% straight line
INVESTMENTS
Fixed asset investments are stated at cost expect where in the opinion of the
Directors, there has been permanent diminution in the value of the investments,
in which case an appropriate adjustment is made.
TAXATION
The charge for taxation is based on the profit for the year and takes into
account taxation deferred because of timing differences between the treatment of
certain items for taxation and accounting purposes. Deferred tax is recognised,
without discounting, in respect of all timing differences between the treatment
of certain items for taxation and accounting purposes which have arisen but not
reversed by the balance sheet date, except as otherwise required by FRS 19.
CASH AND LIQUID RESOURCES
Cash, for the purpose of the cash flow statement, comprises cash in hand and
deposits repayable on demand, less overdrafts payable on demand.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE EIGHTEEN MONTH PERIOD ENDED 30 JUNE 2006
1 TURNOVER
The turnover and losses before tax are attributable to the principal activity of
the group, which is the provision of IVA and other financial solutions to
individuals experiencing personal problems. All turnover originated in the UK.
2 OPERATING PROFIT Period ended 30 Year ended
June 2006 31 Dec 2004
£ £
Operating profit is stated after charging:
Amortisation 173,277 -
Depreciation:
- owned assets 16,666 -
Auditors' remuneration - audit services 14,000 850
- other services 2,000 -
3 EMPLOYEES Period ended Year ended
30 June 2006 31 Dec 2004
£ £
The aggregate payroll costs of the staff consist of:
Wages and salaries 105,220 -
Social security costs 7,462 -
112,682 -
The average monthly number of staff employed by the group during the
financial period amounted to:
Number Number
Directors 3 3
Advice team, management and administration 2 -
IVA processing team 6 -
11 3
4 DIRECTORS' EMOLUMENTS Period ended Year ended
30 June 2006 31 Dec 2004
£ £
The aggregate emoluments in respect of qualifying services were:
Directors' fees 27,000 -
Directors' emoluments 12,667 -
39,667 -
5 INTEREST PAYABLE AND SIMILAR CHARGES Period ended Year ended 31
30 June 2006 Dec 2004
£ £
Additional amounts payable on repayment of Sound Financial plc loan 89,512 -
(see note 24)
6 TAXATION Period ended 30 Year ended 31
June 2006 Dec 2004
£ £
Corporation tax at 30% (2005: 30%) - -
Total current tax - -
Deferred tax:
Origination of and reversal of timing differences - -
Tax on profit on ordinary activities - -
Factors affecting the tax charge for the year
Loss on ordinary activities before taxation (502,628) (22,353)
Loss on ordinary activities before taxation multiplied by standard rate of
UK corporation tax of 30% (2004: 30.00%) (150,788) (6,709)
Effects of:
Non deductible expenses 49,721 -
Depreciation in excess of capital allowances 2,631 -
Origination of tax losses 98,436 6,709
- -
Current tax charge - -
7 LOSS PER SHARE
The calculations of earnings per share are based on the following losses and numbers of shares.
Period ended 30 Year ended 31
June 2006 Dec 2004
£ £
Loss for the financial period/ year (502,628) (22,353)
Weighted average number of shares
2006 2004
No. of shares No. of shares
For basic earnings per share 91,235,958 12,490,641
There is no difference between the basic and diluted loss per
share as the outstanding warrants would have had the effect of reducing the loss
per ordinary share and would, therefore, not be dilutive under the terms of FRS
22.
8 LOSS ATTRIBUTABLE TO THE MEMBERS OF THE PARENT COMPANY
The loss dealt with in the accounts of the parent company for the 18 months
ended 30 June 2006 was £163,020 (2004: 22,353).
9 INTANGIBLE FIXED ASSETS Development
Goodwill costs Total
GROUP £ £ £
Cost
At beginning of period - - -
Additions 3,230,510 80,312 3,310,822
At end of period 3,230,510 80,312 3,310,822
Amortisation
At beginning of period - - -
Charge for the period 161,524 11,753 173,277
At end of period 161,524 11,753 173,277
Net Book Value
At 30 June 2006 3,068,986 68,559 3,137,545
At 31 December 2004 - - -
The company holds no intangible fixed assets.
10 TANGIBLE FIXED ASSETS
Software Fixture &
GROUP Development Fittings Total
£ £ £
Cost
At beginning of period - - -
Additions 92,457 40,613 133,070
At end of period 92,457 40,613 133,070
Depreciation
At beginning of period - - -
Charge for the period 11,697 4,969 16,666
At end of period 11,697 4,969 16,666
Net book value
At 30 June 2006 80,760 35,644 116,404
At 31 December 2004 - - -
The Company holds no tangible fixed assets.
11 INVESTMENTS
30 June 2006 31 Dec 2004
COMPANY £ £
Investments in subsidiary undertakings:
Cost 3,085,000 -
The subsidiary undertakings at 30 June 2006, all of which were incorporated in
England and acquired during the period are as follows:
Aggregate
Capital and
Reserves
Class of Shares Holding 30 June 2006
Company Activity £
ClearDebt Limited Financial Advisors Ordinary 100% (323,591)
Carrwood Limited Dormant Ordinary 100% -
12 DEBTORS 30 June 31 Dec 30 June 31 Dec
2006 2004 2006 2004
Group Group Company Company
£ £ £ £
Trade debtors 209,380 - - -
Other debtors 28,411 16,828 6,063 16,828
Amounts owed by group undertakings - - 680,366 -
Prepayments and accrued income 205,596 - 16,218 -
443,387 16,828 702,647 16,828
13 CREDITORS: Amounts falling due within 30 June 31 Dec 30 June 31 Dec
one year 2006 2004 2006 2004
Group Group Company Company
£ £ £ £
Trade creditors 155,613 - - -
Other creditors 22,627 - 22,627 -
Social security & other taxes 5,133 - - -
Accruals 103,064 1,087 7,294 1,087
286,437 1,087 29,921 1,087
14 SHARE CAPITAL 30 June 2006 31 Dec 2004
£ £
Company
Authorised share capital
500,000,000 (2004: 25,000,000) ordinary shares of 2 pence each 10,000,000 500,000
Allotted, called up and fully paid
257,094,536 (2004: 12,490,641) ordinary shares of 2 pence each 5,141,891 249,813
On the 4 January 2006 the company issued 240,187,228 ordinary shares of 2p at
par. 60,350,000 of these were issued for cash. 150,000,000 were issued for the
acquisition of a subsidiary, and 29,837,228 were issued to settle an outstanding
loan note.
On the 4 January 2006 the company issued to W H Ireland warrants enabling them
to subscribe for 7,580,336 ordinary shares at 2p during the period 4 January
2006 to 4 January 2009. Subscription shareholders were also granted warrants
enabling them to subscribe for 24,018,722 ordinary shares at 4p during the
period 4 January 2006 to 4 January 2009.
On the 3 February 2006 the company issued a further 1,066,667 ordinary shares of
2p each for consideration of 3.75p.
On the 6 June 2006 the company issued 3,350,000 ordinary shares of 2p each for
consideration of 3p per share for cash.
Options under the company's shares option scheme that were granted in 1998 were
cancelled on the 18 March 2005 and so are no longer outstanding.
15 RESERVES Share Profit &
premium Loss Total
£ £ £
GROUP
At beginning of period 336,766 (558,932) (222,166)
Premium on issue of shares 52,167 - 52,167
Loss for the year - (502,628) (502,628)
Flotation costs written off (336,766) - (336,766)
Balance carried forward 52,167 (1,061,560) (1,009,393)
COMPANY
At beginning of period 336,766 (558,932) (222,166)
Premium on issue of shares 52,167 - 52,167
Loss for the year - (163,020) (163,020)
Flotation costs written off (336,766) - (336,766)
Balance carried forward 52,167 (721,952) (669,785)
16 DEFERRED TAXATION
GROUP AND COMPANY 30 June 31 Dec
2006 2004
£ £
The movement in the deferred taxation account during the period/ year was:
Balance brought forward - -
Charged in period/ year - -
Balance carried forward - -
====== ======
No deferred tax asset has been recognised in relation to tax losses
of £328,120 carried forward. This asset of £98,436 (at a rate of 30%) will be
recognised when the Group starts making profits.
17 NOTES TO THE STATEMENT OF CONSOLIDATED CASH FLOWS Period ended Year ended
30 June 2006 31 Dec
£ 2004
£
a Reconciliation of operating profit to net cash inflow from operating activities
Operating (loss)/profit (429,267) (22,353)
Amortisation 173,277 -
Depreciation 16,666 -
(Increase)/ decrease in debtors (269,499) 33,172
Increase in creditors 217,042 1,087
(291,781) 11,906
b Analysis of Cash Flows For Headings Netted Off in the Cash Flow Statement
Period ended 30 Year ended 31 Dec
June 2006 2004
£ £
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 16,151 -
Net cash inflow from returns on investments and servicing of finance 16,151 -
CAPITAL EXPENDITURE
Purchase of tangible fixed assets (31,333) -
Analysis of Cash Flows For Headings Netted Off in the Cash Flow Statement (continued)
Period Year
ended 30 ended 31
June 2006 Dec 2004
£ £
FINANCING
Issue of ordinary share capital 1,347,500 -
Issue costs (336,766) -
Net cash inflow from financing 1,010,734 -
At 1 January 2005 Cash flow At 30 June 2006
c Analysis of net funds £ £ £
Net cash:
Cash at bank and in hand 11,906 709,693 721,599
Net funds 11,906 709,693 721,599
18 PURCHASE OF SUBSIDIARY UNDERTAKING
Period ended Year ended 31
30 June 2006 Dec 2004
£ £
Net liabilities acquired:
Intangible fixed assets 80,312
Tangible fixed assets 101,737 -
Trade debtors 62,958 -
Other debtors 94,102 -
Cash at bank and in hand 90,922 -
Trade creditors (31,231) -
Accruals (34,308) -
Other creditors (510,002) -
-
(145,510) -
Goodwill 3,230,510 -
3,085,000 -
Discharged by:
Shares allotted 3,000,000 -
Cash paid 85,000 -
3,085,000 -
18 PURCHASE OF SUBSIDIARY UNDERTAKING (continued)
The subsidiary undertaking acquired during the year contributed £251,781 to the group's net
operating cash flows and utilised £31,333 for capital expenditure.
Period ended Year ended 31
30 June 2006 Dec 2004
£ £
Analysis of the net inflow of cash in respect of the purchase of
subsidiary undertaking
Cash consideration (85,000) -
Cash at bank and in hand acquired 90,922 -
Net flow of cash in respect of the purchase of subsidiary 5,922 -
19 CAPITAL COMMITMENTS
Neither the Group nor Company have any capital expenditure which is contracted for but not provided in the
financial statements.
20 PENSION AND OTHER POST EMPLOYMENT COMMITMENTS
The Group intends to set up and operate a defined contribution pension scheme whose assets will be
held separately from those of the Group in an independently administered fund.
21 COMMITMENTS UNDER OPERATING LEASES
At 30 June 2006 the Group and the Company had no annual commitments under
non-cancellable operating leases.
22 DERIVATIVES AND FINANCIAL INSTRUMENTS
It is not the Group's policy to enter into financial derivatives for
speculative or trading purposes. The financial instruments employed by the
Group other than short term debtors and creditors are used to fund its
operations and comprise cash and short term deposits.
The Group's policy during the period ended 30 June 2006 was to place the
majority of its cash on short term deposit with its bankers.
The Group's exposure to interest rate risk is limited to cash deposits which
are typically held at a floating rate. As permitted by Financial Reporting
Standard ('FRS') No.13 the disclosures below with the exception of currency
exposure, exclude short-term debtors and creditors.
22 DERIVATIVES AND FINANCIAL INSTRUMENTS (continued)
Interest rate risk profile of financial assets
The interest rate profile of financial assets of the Group as at 30 June 2006 is
as follows:
Financial assets on which no Floating rate financial Total
interest is earned assets
£ £ £
2006 Sterling - 721,599 721,599
2004 Sterling - 11,906 11,906
Floating rate financial assets comprise cash deposits on money market deposit at
call and interest is received at a rate of between 0.5% and 5%.
Interest rate risk profile of financial liabilities
The Group has no interest bearing financial liabilities at the period end.
Currency exposures
The Group has no currency exposures at the period end.
Borrowing facility
At the year end the Group did not have a borrowing facility.
Fair Values of financial assets and financial liabilities
The fair value, based upon the market value or discounted cash flows of the
financial instruments detailed above was not materially different from their
book values.
23 CONTINGENT LIABILITIES
The company has no contingent liabilities (2004: nil).
24 TRANSACTION WITH DIRECTORS
D E M Mond is a partner in Hodgsons, Chartered Accountants,
from whom ClearDebt Limited received finance and services to the value of £2,648
on normal commercial terms in the period since acquisition. At the balance
sheet date the amount due by ClearDebt Limited was £22,627 (2004: £19,980) and
is included in other creditors (see note 13). No interest is being charged for
the outstanding amounts.
D E M Mond is a shareholder and director of Sound Financial plc. On the
acquisition of ClearDebt Limited amounts owed to Sound Financial plc of £507,233
were cleared by the issue of shares with a value of £596,745. The additional
amounts payable of £89,512 are shown in note 5.
25 CONTROL
D E M Mond, together with beneficial trusts, his immediate family and Sound
Financial plc, has control over more than 50% of the voting rights of the
company.
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The company news service from the London Stock Exchange
