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The Niche Group Plc ('Niche' or 'the Company')

Annual Results

I am pleased to report on the results of the Company for the year ended 30 June 2009.

The Company made a loss for the year of £229,767 (2008: Loss £195,580) after reflecting impairment of available for sale investments. The operating loss for the year was £158,165 compared to £158,343 for the previous year. 

The lack of suitable IPO investment opportunities over the last eighteen months or so has meant that the Board considered alternative ways of enhancing shareholder value. Having considered a number of opportunities, on 20th July 2009, the Board announced that the Company had entered into a sale and purchase agreement together with a further option ('SP&O') with the shareholders of Ely Management Operations Limited ('EMO').  

Pursuant to the terms of this agreement, the Company was granted a call option to acquire the outstanding 94.5% of the issued share capital of EMO (the 'Call Option'). Exercise of the Call Option by Niche is conditional on the following being satisfied:

• the Company raising not less than £500,000; and

• the shareholders of the Company having passed at a general meeting of the Company such resolutions as may, in the Company's sole discretion, be required to exercise the Call Option.  

Shareholders should be aware that the Company has not yet satisfied any of the above conditions and that at this stage the Call Option may or may not be exercised. 

The Directors will continue to pursue opportunities for Shareholders and continue to seek to raise equity finance under existing shareholder authority to issue and allot shares. In addition, the Directors are seeking authority from shareholders at the next Annual General Meeting to increase the Company's authorised share capital and to allot shares in the Company to enable it to raise new equity finance for its investment activities. As a result of seeking this authority, which would allow the Company to seek to raise the necessary funds to satisfy one of the conditions to exercise the Call Option, the Company's shares are being suspended temporarily, pursuant to the AIM Rules, pending publication of an admission document. The Company will update the market as appropriate.

The directors have become aware that the Company's net assets are currently less than half of the Company's called-up share capital and as a result the directors are required, in accordance with section 142 of the Companies Act 1985, to call a general meeting of the Company for the purpose of considering whether any, and if so what, steps should be taken to deal with this.  This matter will therefore be considered at the Annual General Meeting.   

The notice of the Annual General Meeting, to be held at 10.00 a.m. on 29 September 2009 at the offices of Daniel Stewart & Company Plc, Becket House, 36 Old Jewry, London, EC2R 8DD, accompanies the Annual Report and Financial Statements which have today been sent to shareholders and are available on the Company's website www.nichegroupplc.co.uk.

Contact:

The Niche Group Plc                             Christopher Stainforth            020 7838 6700

Daniel Stewart                                        Oliver Rigby                          020 7776 6550

INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2009

		Year ended  30 June	Year ended  30 June
	Note	2009	2008
		£	£
Administrative expenses		(158,165)	(158,343)
Operating loss	3	(158,165)	(158,343)
Impairment of available for sale investments	8	(63,899)	(37,975)
Transfer to income statement of fair value reserve relating to impaired assets		(9,038)	-
Interest receivable and similar income	4	1,335	738
Loss on ordinary activities before taxation		(229,767)	(195,580)
Tax on loss on ordinary activities	6	-	-
Loss for the year		(229,767)	(195,580)
Loss per share (pence)
- Basic & diluted	7	(0.22)	(0.19)

The Income Statement has been prepared on the basis that all operations are continuing operations.

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2009

	Share Capital	Share Premium	Other reserves	Retained earnings	Total
	£	£	£	£	£
As at 1 July 2008	1,029,515	110,026	(30,109)	(762,660)	346,772
Loss for the year	-	-	-	(229,767)	(229,767)
Net losses on available for sale investments	-	-	(20,042)	-	(20,042)
Transfer to income statement of fair value reserve relating to impaired assets	-	-	9,038	-	9,038
As at 30 June 2009	1,029,515	110,026	(41,113)	(992,427)	106,001

BALANCE SHEET AS AT 30 JUNE 2009

		Year ended    30 June  2009	Year ended    30 June  2008
		£	£
	Note
ASSETS
Non-current assets
Investments - available for sale	8	74,409	158,350
Current assets
Trade and other receivables	9	8,910	12,389
Cash and cash equivalents	13	64,899	185,516
		73,809	197,905
LIABILITIES
Current liabilities
Trade and other payables	10	(42,217)	(9,483)
Net Current Assets		31,592	188,422
NET ASSETS		106,001	346,772
SHAREHOLDERS' EQUITY
Called up share capital	11	1,029,515	1,029,515
Share premium account		110,026	110,026
Other reserves		(41,113)	(30,109)
Retained earnings		(992,427)	(762,660)
TOTAL EQUITY		106,001	346,772

CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2009

	Notes	Year ended 30 June 2009	Year ended 30 June 2008
		£	£
Cash flows from operating activities
Cash expended from operations	12	(121,952)	(200,579)
Net cash outflow from operating activities		(121,952)	(200,579)
Cash flows from investing activities
Interest receivable		1,335	738
Net cash from investing activities		1,335	738
(Decrease) in cash and cash equivalents		(120,617)	(199,841)
Reconciliation of net cash flow to movement in net funds
(Decrease) in cash and cash equivalents		(120,617)	(199,841)
Change in net funds		(120,617)	(199,841)
Net funds at start of period		185,516	385,357
Net funds at end of period	13	64,899	185,516

NOTES TO THE ACCOUNTS

1.      ACCOUNTING POLICIES

1.1      Basis of preparation

The Niche Group Plc is a public company incorporated in the United Kingdom under the Companies Act 1985.

The financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the European Union ('IFRS') and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS.

The financial statements have been prepared under the historical cost convention or fair value where appropriate. The significant accounting policies adopted are described below.

 

1.2      Sources of estimation uncertainty

The preparation of the financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amounts, events or actions, actual results ultimately may differ from these estimates.

The Company believes that the most significant critical judgement area in the application of its accounting policies is the carrying value of the financial assets.

1.3       Financial instruments

The Company classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

    Financial instruments are recognised on the balance sheet at fair value when the Company becomes a party to the contractual provisions of the instrument.

1.4       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 cost, including transaction costs.

For available-for-sale investments, gains and losses arising from changes in fair value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the income statement. 

1.5       Financial liabilities

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 entity after deducting all of its financial liabilities.

Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as interest bearing loans and borrowings in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the Income Statement. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited directly to equity.

1.6       New standards and interpretations

The financial statements comply with International Financial Reporting Standards. Relevant International Financial Reporting Standards that have recently been issued or amended but are not yet effective, and have not been adopted for the annual reporting year ended 30 June 2009, are:

IFRS /Amendment	Title	Nature of change to accounting policy	Application date of standard	Application date for Company
IFRS 2 amendment	Share based payments	Vesting conditions and cancellations	1 July 2009	1 July 2009
IFRS 2 amendment	Share based payments	Group cash settled share based payment transactions	1 January 2010	1 July 2010
IFRS 3 amendment	Business combinations – acquisition accounting	Comprehensive revision on applying acquisition accounting	1 July 2009	1 July 2009
IFRS 5 amendment	Non-current assets held-for-sale and discontinued operations	No change to accounting policy, therefore no impact.	1 July 2009	1 July 2009
IFRS 5 amendment	Non-current assets held-for-sale and discontinued operations	No change to accounting policy, therefore no impact.	1 January 2010	1 July 2010
IFRS 8 amendment	Operating Segments	No change to accounting policy, therefore no impact.	1 January 2010	1 July 2010
IAS 17 amendment	Leases	No change to accounting policy, therefore no impact.	1 January 2010	1 July 2010
IAS 27 amendment	Consolidated and separate financial statements	No change to accounting policy, therefore no impact.	1 July 2009	1 July 2009
IAS 28 amendment	Investment in associates	No change to accounting policy, therefore no impact.	1 July 2009	1 July 2009
IAS 31 amendment	Investment in joint ventures	No change to accounting policy, therefore no impact.	1 July 2009	1 July 2009
IAS 36 amendment	Impairment of assets	No change to accounting policy, therefore no impact.	1 January 2010	1 July 2010
IAS 38 amendment	Intangible assets	No change to accounting policy, therefore no impact.	1 July 2009	1 July 2009
IAS 39 amendment	Financial Instruments and Measurement	No change to accounting policy, therefore no impact.	1 July 2009	1 July 2009
IAS 39 amendment	Financial Instruments and Measurement	No change to accounting policy, therefore no impact.	1 January 2010	1 July 2010

1.7       Taxation

Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date.

Deferred tax is recognised, using the liability method, in respect of temporary differences between the carrying amount of the company's assets and liabilities and their tax base.

Deferred tax liabilities are offset against deferred tax assets within the same taxable entity. Any remaining deferred tax asset is recognised only when, on the basis of all available evidence, it can be regarded as probable that there will be suitable taxable profits, within the same jurisdiction, in the foreseeable future against which the deductible temporary difference can be utilised.

Deferred tax is determined using tax rates that are expected to apply in the periods in which the asset is realised or liability settled, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date.

Current and deferred tax are recognised in the income statement, except when the tax relates to items charged or credited directly in equity, in which case the tax is also recognised in equity.

2.         SEGMENTAL REPORTING

    

The Company's primary and only segment relates to investing in quoted and unquoted shares. The Company's operating loss and net assets wholly relate to this segment. All trading activity takes place in the United Kingdom and all assets and liabilities are located there. 

3.        OPERATING LOSS

           The operating loss is stated after charging

	2009	2008
	£	£
Auditors remuneration – audit services	6,670	5,980

4.      Interest receivable & similar income

		2009	2008
		£	£
	Bank interest	-	738
	Other interest	1,335	-
		1,335	738

5.      DIRECTORS' REMUNERATION

		2009	2008
		£	£
	Aggregate emoluments	75,717	76,225
		75,717	76,225

During the year no retirement benefits accrued to the directors (2008: nil) in respect of money purchase pension schemes.

6.      tAXATION

		2009	2008
		£	£
	Current tax charge	-	-
	Factors affecting the tax charge for the period
	Loss on ordinary activities before taxation	(229,767)	(195,580)
	Loss on ordinary activities before taxation multiplied by standard rate of corporation tax of 28.0% (2008 – 30.0%)	(64,335)	(58,674)
	Effects of:
	Non deductible expenses Movement in tax losses	20,423         43,912	12,507 46,148
	Other tax adjustments	-	19
	Current tax charge	-	-

 

7.      LOSS PER SHARE

The calculation of the basic loss per share is based on the loss on ordinary activities after taxation of £229,767 (2008: £195,580) and on the weighted average number of shares of 102,951,500 (2008: 102,951,500) ordinary shares in issue during the year.

8.        INVESTMENTS - AVAILABLE FOR SALE

		Listed investment	Unlisted investment	2009	2008
		£	£	£	£
	Fair value
	At 1 July	58,350	100,000	158,350	271,515
	Impairment: Through income statement	(13,899)	(50,000)	(63,899)	(37,975)
	Net losses transfer to equity	(20,042)	-	(20,042)	(75,190)
	At 30 June	24,409	50,000	74,409	158,350

9.      Trade and other receivables

		2009	2008
		£	£
Prepayments and accrued income		8,910	12,389
		8,910	12,389

10.      TRade and other payables

			2009	2008
			£	£
	Trade payables		14,873	1,808
	Taxation and social security		2,301	1,695
	Accruals and deferred income		25,043	5,980
			42,217	9,483

11.      SHARE Capital

		2009	2008
		£	£
	Authorised
	200,000,000 Ordinary shares of 1p each	2,000,000	2,000,000
		2,000,000	2,000,000
	Allotted, called up and fully paid
	102,951,500 ordinary shares of 1p each	1,029,515	1,029,515
		1,029,515	1,029,515

On 20 July 2009, 10,295,150 ordinary shares of 1p each were issued in satisfaction of an invoice.

On 20 July 2009, 46,255,674 ordinary shares of 1p each were issued as consideration for the acquisition of 5.5% of the issued share capital of Ely Management Operations Limited (EMO).

12.      Reconciliation of operating loss to net cash outflow from Operating activities 

		2009	2008
		£	£
	Operating loss	(158,165)	(158,343)
	Decrease in debtors	3,479	3,639
	Increase /(Decrease) in creditors within one year	32,734	(45,875)
	Net cash outflow from operating activities	(121,952)	(200,579)

 

 

13.      CASH & CASH EQUIVALENTS
 

			2009	2008
			£	£
	Cash at bank and in hand		64,899	185,516
	The fair value of cash and cash equivalents at 30 June 2009 was £64,899 (2008: £185,516).

 

14.      financial instruments

The Company currently holds investments in other companies listed on the AIM market of the London Stock Exchange ('AIM') and unquoted companies where the directors consider there is value to be obtained by a prospective float on AIM in the future.

The Company's other financial instruments comprise cash at bank and various items such as trade debtors and creditors that arise directly from its operations. The main purpose of these instruments is to provide finance for operations. The Company has not entered into derivatives transactions and does not trade in financial instruments as a matter of policy. The main future risks arising from the Company's financial instruments are interest rate risk and liquidity risk. There is no currency risk as the Company trades in Sterling.

Operations to date have been financed through a placing of shares. It is the Board's policy to keep borrowings to a minimum. The Company has no long term borrowings.

Interest Rate Risk Profile of Financial Assets

The only financial assets (other than short term debtors) are cash at bank held at variable interest rates. Amounts held in Sterling at 30 June 2009 were £64,899.

Interest Rate Risk Profile of Financial Liabilities, excluding Non-debt Current Liabilities

During the year to 30 June 2009, the Company did not incur any interest charges as there were no borrowings.

The Company's investments in unlisted securities are measured at cost over fair value, due to the lack of a quoted market price in an active market. The Company's interest in these pre-IPO equity investments is expected to be realised when the companies obtain a stock listing.

The Company's listed investments have been valued at the year-end on 30 June 2009 London Stock Exchange share prices, and consequently no difference between the carrying amount and fair value of these financial assets exists.

15.      RELATED PARTY TRANSACTIONS

Fastnet Investments Limited, a company in which R Stirling is a director, invoiced the company £15,318 (2008: £15,510) in respect of director's fees.

Adler Shine LLP, a firm in which R Patel is a partner, invoiced the company £27,072 (2008: £27,417) in respect of director's fees.

The above transactions were on a commercial arms length basis.

16.      POST BALANCE SHEET EVENTS

On 20 July 2009, the Company entered into a Sale and Purchase agreement together with a further option ('SP&O') with the shareholders of Ely Management Operations Limited ('EMO') under which the Company purchased 5.5% of the issued share capital of EMO satisfied by the issue of 46,255,674 new ordinary shares of 1p each in the Company. Under the terms of the SP&O, the Company has been granted an option (the 'Further Option') to purchase the balance of the outstanding issued share capital of EMO to be satisfied by the issue of 794,756,580 new ordinary shares of 1p each.  

  

On 20 July 2009, the Company issued 10,295,150 new ordinary shares in consideration of the services provided by Baisden Investments Limited in connection with the proposed acquisition by the Company of EMO.  

On 28 July 2009, the Board also announced that the Company had entered into a call option agreement with Circle Opportunities Plc ('Circle'). Under the terms of this agreement, and conditional on a reverse takeover of the Company, Circle has the option to acquire certain investments held by the Company, consideration for which is to be satisfied by the issue and allotment to the Company of ordinary shares in the capital of Circle. 

  

Further details are set out in the announcements made by the Company on 20 July and 28 July 2009.

ENDFR USAORKURKRAR