UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
April, 23, 2003
AUTO DATA NETWORK INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3944580
---------------------- ------------------
State of Incorporation IRS Employer ID No.
The Forsythe Centre, Lamberts Road
Tunbridge Wells, Kent, UK
- --------------------------------------------------------------------------------
Address of principal Executive Offices Zip Code
REGISTRANT'S TELEPHONE NUMBER 011 44 1892 511 566
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
ACQUISITION OF MAM SOFTWARE LTD.
On April 23rd, 2003 "Auto Data Network" or the "Company" completed the
previously announced acquisition of MAM Software Limited.
The company has entered into an underwriting agreement for the sale of up to
$5,000,000 of its securities. The shares are to be registered and sold at a
price to be agreed with the underwriter when the registration statement is
declared effective. This disclosure does not constitute an offer of any
securities for sale.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS
Financial statements included and attached to this filing:
a. M.A.M Software Limited Balance Sheet for April 23rd 2003 and April 23rd 2002
b. M.A.M Software Limited Statement of Operations from July 1st 2003 to April
23rd 2003
c. Pro Forma Financial Statements giving effect to acquisition
d. M.A.M Software Limited Consolidated Statement of Cashflows up to April 23rd
2003
e. M.A.M Software Limited audited financials for year end June 30 2002
f. M.A.M Software Limited audited financials for year end June 30 2001
g. Auditors Letter
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: August 7th, 2003
AUTO DATA NETWORK, INC.
/s/ Christopher Glover
----------------------------------
By: Christopher Glover
President
MAM SOFTWARE LIMITED
BALANCE SHEETS
$=1.6
April 23, April 23,
2003 2002
---------- ----------
(Unaudited) (Unaudited)
ASSETS
CURRENT ASSETS :
Cash and cash equivalents $ 28,266 $ 24,372
Accounts receivable 5,341,840 3,201,822
Inventories 440,000 186,310
Other current assets
---------- ----------
Total current assets 5,810,106 3,412,504
Tangibles Property, equipment and fixtures 433,018 452,607
0 0
433,018 452,607
Investments in affiliated in
companies
Intangible assets 1,114,470 529,545
Investments 2,691
---------- ----------
$7,360,285 $4,394,656
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES :
Accounts payable Short term $4,246,270 $3,397,768
Accrued expenses and other
liabilities
Related party loan Long term 1,003,890 78,985
Accrued interest
Total current liabilities 5,250,160 3,476,753
Other non-current liabilities 0 0
STOCKHOLDERS' EQUITY :
Preferred stock: $0.001 par value;
Common stock: $0.001 par value; 160 145
Additional paid in capital
Accumulated surplus/deficit 2,109,965 917,758
---------- ----------
Total stockholders' equity 2,110,125 917,903
---------- ----------
$7,360,285 $4,394,656
========== ==========
MAM SOFTWARE LIMITED
STATEMENT OF OPERATIONS
Period July 1 to April 23
-------------------------------
2003 2002
------------ ------------
TOTAL REVENUES 11,779,794 9,884,744
COST OF REVENUES 3,096,616 2,574,316
------------ ------------
Gross profit (loss) 8,683,178 7,310,428
OPERATING EXPENSES :
General and administration 6,811,884 6,586,825
Amortization 358,198 310,236
Depreciation
------------ ------------
Total operating expenses 7,170,082 6,897,061
Operating profit/loss 1,513,096 413,367
EBITDA 1,871,294 723,603
Profit on disposal of investments 0 --
Interest income 0 0
Interest expense (53,395) (31,794)
------------ ------------
Profit/Loss before income taxes 1,459,701 381,573
------------ ------------
Income tax expense (425,000) 0
------------ ------------
NET PROFIT/LOSS $ 1,034,701 $ 381,573
============ ============
NETPROFIT/ LOSS $ 1,034,701 $ 381,573
============ ============
MAM SOFTWARE LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
April 23,
2003
-----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 1,513,096
Adjustments to reconcile net loss to net cash
provided by / (used in) operating activities:
Depreciation and amortization 358,198
Loss on sale of fixed assets 0
Profit on disposal of Investments 0
Other non cash charges 0
Changes in operating assets and liabilities:
Accounts receivable -1,780,822
Inventories -73,043
Other current assets -74,594
Other non-current assets 0
Accounts payable 594,251
Accrued expenses and other liabilities 0
Accrued interest 0
-----------
Net cash provided by / (used in) operating activities 537,086
-----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of equipment and fixtures -80,658
Proceeds from disposal of assets 0
Purchase of intangible assets -755,346
Puchase of investment -2,691
Investment in affiliates 0
-----------
Net cash provided by / (used in) investing activities (838,695)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds of long term debt -53,094
Proceeds from bank borrowings 347,835
Net cash provided by / (used in) financing activities 294,741
Effect of exchange rates on cash --
-----------
Net increase (decrease) in cash and cash equivalents (6,868)
Cash and cash equivalents at the beginning of the period 35,133
-----------
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 28,265
-----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $ 62,957
===========
Note 1 NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Description of Company : MAM Software Limited is a UK company and a wholly owned
subsidiary of Auto Data Network, Inc. The company operates in the Automotive
sector supplying date and software management systems to the first and aftercare
markets.
These accounts have been prepared by the company in accordance generally
accepted accounting principals in the United States of America.
Recent Accounting Pronouncements
In June 2001, the FASB issued Statement No. 142, Goodwill and Other
Intangible Assets, effective for fiscal years beginning after December 15,
2001.Under the new rules, goodwill and intangible assets with indefinite lives
will no longer be amortized, but will be subject to annual impairment tests in
accordance with Statement 142. Other intangible assets will continue to be
amortized over their useful lives. The Company recorded goodwill as a result of
the Europortal Inc reverse acquisition, but has not recorded any amortization in
accordance with SFAS No. 142. The Company is still in the process of evaluating
the impact of adopting this pronouncement on its consolidated financial
statements,however, it does not believe that the adoption of this pronouncement
will have a material impact on the consolidated financial statements.
In June 2001, the FASB issued SFAS No. 143 "Accounting for Asset Retirement
Obligations." SFAS No.143 addresses financial accounting and reporting for
obligations associated with the retirement of intangible long-lived assets and
associated asset retirement costs. SFAS No. 143 requires that the fair value of
a liability for an asset retirement obligation be recognized in the period in
which it has occurred. The asset retirement obligations will be capitalized as a
part of the carrying amount of the long-lived asset. SFAS No. 143 applies to
legal obligations associated with the retirement of long-lived assets that
result from the acquisition, construction, development and normal operation of
long- lived assets. SFAS No. 143 is effective for years beginning after June 15,
2002, with earlier adoption permitted. Currently, the Company does not believe
this statement has any impact on the Company.
In August 2001, the FASB issued SFAS 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". This statement is effective for
fiscal years beginning after December 31, 2001. This supercedes SFAS 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of", while retaining many of the requirements of such statement. The
Company does not believe that this statement will have a material effect on the
Company's financial statements.
Note 2 BASIS OF PRESENTATION:
Financial statements are prepared on an accrual basis of accounting where
revenue is recognized when earned and expenses when incurred. The company has
changed its year end to February 28th.
Note 3 ACCOUNTS PAYABLE:
As of the date of this report there are no judgements or pending litigation.
However management indicates that if the funding exercise fails alternative
funding will be required to satisfy liabilities.
Note 4 USE OF ESTIMATES:
The preparation of financial statements in conformity with generally accepted
accounting principles require management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly actual results
could differ from these estimates. Significant estimates in the financial
statements includes the assumption that the company will continue as a going
concern.
Note 5 DEPRECIATION POLICY
The Company depreciates its assets over their useful lives on the following
basis :- Tangible Assets at 25% per annum of the net book value of the assets..
Intangible Assets at 3% per annum but also subject to review of impairment as
required by SFAS 144 Depreciation is provided 12 months from the date of
acquisition of the asset.
Note 6 REVENUE RECOGNITION
Non-refundable up-front payments received in connection with software licences
and support services are deferred and recognized on a usage basis over the
relevant periods of the service agreement typically 3 or 5 years. All other
services supplied are invoiced in arrears and are immediately collectible.
AUTO DATA NETWORK INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
For the three month period ending May 31, 2003
Combined
MAM Software ADN Group ADN plus MAM
Limited Pre Acquisition May 31,2003
------- --------------- -----------
ASSETS
Current Assets
Cash and equivalents 28,767 936,266 $965,033
Accounts Receivable 3,405,348 2,237,314 5,642,662
Prepaid expenses 512,817 65,194 578,011
Inventories 437,965 12,843 450,808
Total Current Assets 4,384897 3,251,617 $7,636,514
Fixed Assets less accumulated
depreciation 412,652 64,992 $ 477,644
Intangibles 834,882 4,906,167 5,741,049
Goodwill 0 6,071,688 6,071,688
--------- ---------- -----------
TOTAL ASSETS 5,632,431 14,294464 $19,926,895
LIABILITIES
Current Liabilities
Accounts Payable 3,496,023 2,752,927 6,248,950
Accrued Expenses (211,698) 417,293 721,411
Short-Term Loans 41,133 41,133
Short Bank Borrowing 506,547 320,583 772,674
Total Current Liabilities 3,790,872 3,531,936 $7,322,808
Other Liabilities
Accrued Tax 644,352 644,352
Long Term Liabilities & Deferred
Income 990,930 29,057 1,019,987
--------- --------- ---------
Total Liabilities 4,781,802 4,205,345 8,987,147
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value,
Authorized 50,000.000 Shares;
Issued and Outstanding
13,552,289 Shares 159 13,393 13,552
Additional Paid in Capital 0 11,189,062 11,189,062
Accumulated Other Income 21,671 21,671
Accumulated Deficit (321,536) (321,536)
----------- ----------- ----------
Total Stockholders' Equity 159 10,902,590 10,902,749
----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 4,781,961 15,107,935 $19,889,896
=========== =========== ===========
The accompanying notes and accountant's report are an integral part of these
financial statements.
AUTO DATA NETWORK INC.
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE THREE MONTHS ENDING MAY 31, 2003
Combined
MAM Software ADN Group ADN plus MAM
Limited Pre Acquisition May 31,2003
----------- ----------- -----------
Revenue 1,897,287 1,425,002 $ 3,322,289
Cost of Revenue (490,089) (1,167,040) (1,657,129)
----------- ----------- -----------
Gross Margin 1,407,198 257,962 $ 1,665,160
Operating Expenses
-----------
Personnel 453,335 18,616 $ 471,951
Sales & Marketing 1,481 67,775 $ 69,256
General & Administrative 189,359 342,019 531,378
Depreciation and Amortisation 14,931 3,424 18,355
----------- ----------- -----------
Total Operating Expenses 659,106 431,834 1,090,940
Net Operating Profit/Loss 748,095 (173,875) 574,220
Interest Expense (13,906) (13,906)
----------- ----------- -----------
NET PROFIT/LOSS FROM
TRADING 748,095 (187,781) 560,314
Net Profit/Loss before tax 748,095 (187,781) $ 560,314
Taxation (205,910) (205,910)
----------- ----------- -----------
Net Profit after Tax 748,095 (393,691) $ 354,404
Net Profit Per Share (0.034) 0.026
Weighted average
Number of Shares
Outstanding 11,552,289 13,552,289
The accompanying notes and accountant's report are an integral part of these
financial statements.
AUTO DATA NETWORK INC.
PRO FORMA CONSOLIDATED STATEMENT OF CASH FLOWS
May 31, 2003
For the 3 mos
Ended
May 31, 2003
------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income Profit $ 354,404
Adjustments to Reconcile Net Loss
To Cash Used in Operating
Activities:
Depreciation and other non-cash
charges 18,355
Other Non cash changes
Changes in Assets, Liabilities
Accounts receivable (4,276,371)
Other current assets (1,549,391)
Tangible assets (435,121)
Accounts Payable 3,988,973
Accrued Expenses 1,091,304
Other Non current liabilities 1,019,987
Net Cash Provided/(Used in)
Operations 212,139
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of subsidiaries (143,313)
Investing Activities 0
Net cash used in investing
Activities 3,091
CASH FLOWS FROM FINANCING
ACTIVITIES:
New Share issue 2,308
Additional Paid-in Capital 3,943,246
Effect of Exchange rates on cash 21,671
Other non cash changes --
Net Change in Cash and
Equivalents 4,179,094
Cash and Cash Equivalents at
Beginning of Period (286,153)
-----------
Cash and Cash Equivalents at
End of Period $ (289,461)
Supplemental disclosure of cash flow
Information
Interest paid 13,906
The accompanying notes and accountants report are an integral part of these
financial statements
AUTO DATA NETWORK INC.
Notes to Pro Forma Financial Statements
May 31, 2003
NOTE 1. BASIS OF PRESENTATION
The pro forma financial statements are prepared on the accrual basis of
accounting. Accordingly, revenue is recognized when earned and expenses when
incurred.
The accompanying pro forma condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles in the
United States of America. They do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included.
NOTE 2. LIQUIDITY
O the basis of this pro forma it is anticipated that the Company will be able to
meet its financial obligations through internal net revenue in the foreseeable
future
NOTE 3. STOCK TRANSACTIONS
The pro forma takes into account that the company issued 2,000,000 (two million)
shares of restricted Common stock in part satisfaction of the purchase
consideration of MAM Software Limited. The balance of the consideration is by a
deferred cash payment.
NOTE 4. PRO FORMA SHARE CAPITAL
Shares Value
---------- -----------
Issued Common Stock, $0.001 par value, at fiscal year end February 28, 2003 11,552,289 $ 11,552
---------- -----------
Stock issued for the acquisition of MAM Software Limited 2,000,000 2,000
Total Issued common stock as of May 31 2003 13,552,289 $ 13,552
NOTE 6. ADDITIONAL CONTRIBUTED CAPITAL
Additional contributed capital at fiscal year end February 28 2003 $ 5,120,518
Acquisition of MAM Software Limited 3,998,000
Adjustments and Exchange differences 0000
Total additional contributed capital as of May 31, $ 9,118,518
The company lists its Common Stock on the OTC Bulletin Board market (OTCBB -
ADNW). Authorised Common stock is 50,000,000 at $0.001 par value
NOTE 5. CONSOLIDATION
The company owns 100% of the equity of all its subsidiaries and the Financial
Statements incorporate consolidation of all companies in the group.
NOTE 6. DEPRECIATION POLICY AND ACCOUNTING FOR GOODWILL ADN INTANGIBLE ASSETS
The Company depreciates all its fixed assets over their useful lives on the
following basis :
Tangible Assets at the rate of 25% per annum on the reducing balance of the
asset value.
Intangible Assets at the rate of 3% per annum commencing one year after the
asset was acquired but subject to the provisions of SFAS 141
balance sheet. The company accounts for these assets under the provisions of
SFAS No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 142 requires that goodwill not be amortized, but
instead tested for impairment at least annually. The statement also requires
recognized intangible assets with finite useful lives to be amortized over their
useful lives. Long-lived assets, goodwill and intangible assets are reviewed for
impairment annually or whenever events or circumstances indicate that the
carrying amount of an asset may not be recoverable from future cash flows.
Future cash flows are forecasted based on management's estimates of future
events and could be materially different from actual cash flows. If the carrying
value of an asset is considered impaired, an impairment charge is recorded for
the amount by which the carrying value of the asset exceeds its fair value.
NOTE 7. REVENUE RECOGNITION
Non-refundable up-front payments received in connection with software licences
and support services are deferred and recognized on a usage basis over the
relevant periods of the service agreement typically 3 or 5 years. All other
services supplied are invoiced in arrears and are immediately collectible.
NOTE 8. FOREIGN CURRENCY
The company's foreign subsidiaries use the local currency as their functioning
currency. Accordingly Assets and liabilities are translated into US dollars at
year end exchange rates, and revenues and expenses are translated at the average
prevailing during the accounting period.
M.A.M Software Limited
DIRECTORS REPORT
FOR THE YEAR ENDED 30 JUNE 2002
The directors present their report and financial statements for the year ended
30 June 2002.
Principal activities and review of the business The principal activities of the
company in the year under review were the creation and marketing of computer
software products.
This year we have again increased our sales despite the general difficulties
being experienced in the IT and automotive sectors.
Results and dividends
The results for the year are set out on page 4.
The directors do not recommend payment of an ordinary dividend.
Research and development
The company is continually engaged in the enhancement of its existing products
and the development of new software. The cost of development activities is
capitalised in the balance sheet and written off to profit and loss over the
estimated life of each individual product, provided that each project meets the
criteria contained within SSAP 13.
Future developments
The company's range of products and services will have appeal to new customers,
and also to our large installed based of existing customers.
Our marketing plans will help us to capitalise on these opportunities.
Single European Currency
The company has a branch in Eire, and is thus operating in markets where the
single European currency has been implemented and is exposed to currency
fluctuations between the single European currency and Sterling.
The company's products have been compliant with the Euro for several years, and
thus the company has not suffered any exceptional financial losses as a
consequence of its introduction.
Directors
The following directors have held office since 1 July 2001:
M. I. Jamieson W. T. Jamieson N. B. Horrocks J. Hirst H. Elwick
Directors' Interests
The directors' interest in the shares of the company were as stated below:
Ordinary shares of (pound)1 each
30 June 2002 1 July 2001
------------ -----------
M. I. Jamieson 70 70
W. T. Jamieson -- --
N. B. Horrocks 20 20
J. Hirst 5 5
H. Elwick 5 5
Taxation status
The company was a close company within the provisions of the Income and
Corporation Taxes Act 1988 and this position has not changed since the end of
the financial year.
Auditors
In accordance with section 385 of the Companies Act 1985, a resolution proposing
that Hart Shaw be reappointed as auditors of the company will be put to the
Annual General Meeting.
Directors' responsibilities
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that period. In preparing
those financial statements, the directors are required to:
- - select suitable accounting policies and then apply them consistently;
- - make judgements and estimates that are reasonable and prudent;
- - prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. They are also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
On behalf of the board
M. I. Jamieson
Director
17 January 2003
INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF M.A.M SOFTWARE LIMITED
We have audited the financial statements of M.A.M Software Limited on pages 4 to
17 for the year ended 30 June 2002. These financial statements have been
prepared under the historical cost convention and the accounting policies set
out therein.
Respective responsibilities of the directors and auditors As described in the
statement of directors' responsibilities on page 2 the company's directors are
responsible for the preparation of the financial statements in accordance with
applicable law and United Kingdom accounting standards.
Our responsibility is to audit the financial statements in accordance with the
relevant legal and regulatory requirements and United Kingdom Auditing
Standards.
We report to you our opinion as to whether the financial statements give a true
and fair view and are properly prepared in accordance with the Companies Act
1985. We also report to you if, in our opinion, the directors' report is not
consistent with the financial statements, if the company has not kept proper
accounting records, if we have not received all the information and explanations
we require for our audit, or if information specified by law regarding
directors' remuneration and transactions with the company is not disclosed.
We read the directors' report and consider the implications for our report if we
become aware of any apparent misstatements within it.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom Auditing Standards
issued by the Auditing Practices Board. An audit includes examination, on a test
basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and
judgements make by the directors in the preparation of financial statements, and
of whether the accounting policies are appropriate to the company's
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Opinion
In our opinion the financial statements give a true and fair view of the state
of the company's affairs as at 30 June 2002 and of its profit for the year then
ended and have been properly prepared in accordance with the Companies Act 1985.
Hart Shaw 20/4/03
Chartered Accountants 346 Glossop Road
Registered Auditor Sheffield
S10 2HW
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2002
2002 2001
Notes (pound) (pound)
Turnover 2 7,968,845 6,978,239
Cost of sales (2,047,389) (1,905,897)
---------------- ----------------
Gross profit 5,921,456 5,072,342
Administrative expenses, Exceptional (5,822,179) (4,999,327)
item - impairment of development
costs
---------------- ----------------
Operating profit 3 99,277 73,015
Other interest receivable and - 26
similar income
Interest payable and similar charges 4 (28,541) (42,224)
---------------- ----------------
Profit on ordinary activities before 70,736 30,817
taxation
Tax on profit on ordinary activities 5 (23,808) (25,830)
---------------- ----------------
Profit on ordinary activities after 14 46,928 4,987
taxation
The profit and loss account has been prepared on the basis that all operations
are continuing operations.
There are no recognised gains and losses other than those passing through the
profit and loss account.
BALANCE SHEET
AS AT JUNE 30 2002
2002 2001
Notes (pound) (pound) (pound) (pound)
Fixed assets
Intangible assets 6 342,577 426,444
Tangible assets 7 313,577 318,728
-------------- -------------
656,154 745,172
Current assets
Stocks 8 229,348 196,391
Debtors 9 2,225,636 1,882,516
Cash at bank and in hand 21,958 1,167
-------------- --------------
2,476,942 2,080,074
Creditors: amounts falling 10 (2,150,422) (1,870,393)
due within one year
-------------- --------------
Net current assets 326,520 209,681
-------------- -------------
Total assets less current 982,674 954,853
liabilities
Creditors: amounts falling 11 (624,929) (644,036)
due after more than one year
-------------- -------------
357,745 310,817
-------------- -------------
Capital and reserves
Called up share capital 13 100 100
Profit and loss account 14 357,645 310,717
-------------- -------------
Shareholders funds - equity 15 357,745 310,817
interests
The financial statements were approved by the board on 17th January 2003.
M. I. Jamieson
Director
CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2002
2002 2001
(pound) (pound) (pound) (pound)
Net cash inflow from operating 192,501 130,189
activities
Returns on investments and servicing
of finance
Interest received -- 26
Interest paid (19,548) (35,668)
Hire purchase interest paid (1,930) (4,062)
Interest element of finance lease
rentals (7,473) (2,157)
---------------- --------------
Net cash flow for returns on (28,951) (41,861)
investments and servicing of finance
Taxation (6,848) (19,687)
Capital expenditure
Payments to acquire intangible assets (50,382) (151,216)
Payments to acquire tangible assets (84,892) (106,095)
Receipts from sales of tangible assets 4,368 7,493
---------------- --------------
Net cash outflow for capital
expenditure (130,906) (249,818)
---------------- -------------
Net cash inflow/(outflow) before 25,796 (181,177)
management of liquid resources and
financing
Financing
New long term loans (25,593) 149,821
Capital element of hire purchase (15,556) (15,606)
contracts
Capital element of finance lease
contracts (14,538) (7,115)
---------------- --------------
Net cash (outflow)/inflow from (55,687) 127,001
financing
---------------- -------------
Decrease in cash in the year (29,891) (54,077)
---------------- -------------
NOTES TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2002
1. Reconciliation of operating profit to net cash inflow from operating
activities
2002 2001
(pound) (pound)
Operating profit 99,277 73,015
Depreciation of tangible assets 122,143 106,635
Amortisation of intangible assets 134,249 55,045
Impairment of intangible fixed assets -- --
Loss on disposal of tangible assets 6,024 33,767
Increase in stocks (32,957) (30,240)
Increase in debtors (343,120) (323,236)
Increase in creditors within one year 206,885 215,203
-------------- -------------
Net cash inflow from operating activities 192,501 130,189
-------------- -------------
2. Analysis of net debt
1 July 2001 Cashflow Other non-cash 30 June 2002
changes
(pound) (pound) (pound) (pound)
Net cash
Cash at bank and in 1,167 20,791 - 21,958
hand
Bank overdrafts (354,407) (50,682) - (405,089)
-------------------- -------------------- -------------------- --------------------
(353,240) (29,891) - (383,131)
-------------------- -------------------- -------------------- --------------------
Debt:
Finance leases (77,989) (12,398) - (90,387)
Debts falling due (594,377) 25,593 - (568,784)
after one year
-------------------- -------------------- -------------------- --------------------
(672,366) 13,195 - (659,171)
-------------------- -------------------- -------------------- --------------------
Net debt (1,025,606) (16,696) - (1,042,302)
-------------------- -------------------- -------------------- --------------------
3. Reconciliation of net cash flow to movement in net debt
2002 2001
(pound) (pound)
Decrease in cash in the year (29,891) (54,077)
Cash outflow/(inflow) from decrease/(increase) in debt and
lease financing 13,195 (191,443)
--------------------- --------------------
Movement in net debt in the year (16,696) (245,520)
Opening net debt (1,025,606) (780,086)
--------------------- --------------------
(1,042,302) (1,025,606)
--------------------- --------------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2002
1. Accounting policies 1.1 Accounting convention
The financial statements are prepared under the historical cost convention.
The company meets its day to day working capital requirements through an
overdraft facility which is repayable on demand.
The nature of the company's business is such that there can be considerable
unpredictable variation in the timing of cash inflows. The directors have
prepared projected cash flow information for the period ending nine months from
the date of their approval of these financial statements. On the basis of this
cash flow information and discussions with the company's bankers, the directors
consider that the company will continue to operate within the facility currently
agreed and within that which has been agreed since the year end.
However, the margin of facilities over requirements is not large, and,
inherently there can be no certainty in relation to these matters. On this
basis, the directors consider is appropriate to prepare the financial statements
on the going concern basis. The financial statements do not include any
adjustments that would result from a withdrawal if the overdraft facility by the
company's bankers.
1.2 Turnover and profits
Turnover represents amounts receivable for goods and services net of VAT and
trade discounts.
Profit is recognised on long-term contracts, if the final outcome can be
assessed with reasonable certainty, by including in the profit and loss account
turnover and related costs as contract activity progresses. Turnover is
calculated as that proportion of total contract value which costs to date bear
to total expected costs for that contract.
1.3 Patents
Patents are valued at cost less accumulated amortisation. Amortisation is
calculated to write off the cost in equal annual instalments over their
estimated useful lives
1.4 Research and developments
Research expenditure is written off to the profit and loss account in the year
in which it is incurred. Development expenditure is written off in the same way
unless the directors are satisfied as to the technical, commercial and financial
viability of individual projects. In this situation the expenditure is deferred
and amortised over the period during which the company is expected to benefit.
The company currently anticipates that products developed will produce income
streams over a three year period from the date of first commercial sales, and
therefore writes off development costs over that period.
1.5 Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is
provided at rates calculated to write off the cost less estimated residual value
of each asset over its expected useful life, as follows:
Improvements to short leasehold property 12.12% Straight line
Computer equipment 33.33% Straight line
Fixtures, fittings and equipment 15% Reducing balance
Motor vehicles 25% Straight line
1.6 Leasing and hire purchase commitments
Assets obtained under hire purchase contracts and finance leases are capitalised
as tangible assets and depreciated over the shorter of the lease term and their
useful lives. Obligations under such agreements are included in the creditors
net of the finance charge allocated to future periods. The finance element of
the rental payment is charged to the profit and loss account so as to produce a
constant periodic rate of charge on the net obligation outstanding in each
period.
Rentals payable under operating leases are charged against income on a straight
line basis over the lease term.
1.7 Stock
Stock is valued at the lower of cost and net realisable value.
1.8 Long term contracts
Amounts recoverable on long term contracts, which are included in debtors, are
stated at the net sales value of the work done after provision for contingencies
and anticipated future losses on contracts, less amounts received as progress of
payments of account. Excess progress payments are included in creditors as
payments on account.
1.9 Pensions
The pension costs charged in the financial statements represent the
contributions payable by the company during the year.
1.10 Deferred taxation
Deferred tax is provided in full in respect of taxation deferred by timing
differences between the treatment of certain items for taxation and accounting
purposes. The deferred tax balance has not been discounted.
No provision has been made for deferred tax on gains recognised on revaluing
property to its market value as the company does not intend to sell the revalued
assets.
The above amounts to a change in accounting policy. The previous policy was to
provide deferred tax only to the extent that it was probable that liabilities
would crystallise in the foreseeable future. The adoption of FRS 19 does not
require a prior period adjustment, as the deferred tax asset at 30 June 2001 is
immaterial to the financial statements.
1.11 Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated
into sterling at the rates of exchange ruling at the balance sheet date.
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction. All differences are taken to profit and loss account.
2 Turnover
Turnover
2002 2001
(pound) (pound)
Geographical market
United Kingdom 7,630,747 6,728,587
Other E.C. Countries 152,423 249,652
Rest of Europe 7,865 -
Asia 1,450 -
---------------------------------
7,792,485 6,978,239
---------------------------------
3 Operating profit
Operating profit is stated after charging:
Amortisation of intangible assets 134,249 55,045
Depreciation of tangible assets 122,143 106,635
Loss on disposal of tangible assets 6,024 33,767
Loss on foreign exchange transactions - 21,615
Operating lease rentals
- - Plant and machinery 6,356 5,225
- - Other assets 425,540 406,823
Auditors' remuneration 6,500 6,000
and after crediting:
Profit on foreign exchange transactions (8,574) -
---------------------------------
4 Interest payable
On bank loans and overdraft 15,610 31,752
Lease finance charges and hire purchase interest 9,403 6,219
On overdue tax 3,528 4,226
Other interest - 27
---------------------------------
28,541 42,224
---------------------------------
5 Taxation
Domestic current year tax
U.K. corporation tax 23,808 23,240
Adjustment for prior years - 2,590
---------------------------------
Current tax charge 23,808 25,830
---------------------------------
Factors affecting the tax charge for the year
Profit on ordinary activities before taxation 70,736 30,817
---------------------------------
Profit on ordinary activities before taxation multiplied 13,970 6,163
by standard rate of UK corporation tax of 19.75% (2001:
20.00%)
---------------------------------
Effects of:
Non-deductible expenses 8,207 9,346
Depreciation and add back 22,109 20,332
Capital allowances (20,478) (19,354)
Adjustments to previous periods - 2,590
Other tax adjustments - 6,753
---------------------------------
9,838 19,667
---------------------------------
Current tax charge 23,808 25,830
---------------------------------
6 Intangible fixed assets
Patents Software Total
development
(pound) (pound) (pound)
Cost
At 1 July 2001 - 481,489 481,489
Additions 250 50,132 50,382
------------ ----------------------- ------------------
At 30 June 2002 250 531,621 531,871
------------ ----------------------- ------------------
Amortisation
At 1 July 2001 - 55,045 55,045
Charge for the year - 134,249 134.249
Impairment - - -
------------ ----------------------- ------------------
At 30 June 2002 - 189,294 189,294
------------ ----------------------- ------------------
Net book value
At 30 June 2002 250 342,327 342,577
------------ ----------------------- ------------------
At 30 June 2001 - 426,444 426,444
------------ ----------------------- ------------------
7 Tangible fixed assets
Improvem'ts Plant and Fixtures, Motor Total
to short machinery fittings and vehicles
leasehold equipment
property
(pound) (pound) (pound) (pound) (pound)
Cost
At 1 July 2001 58,580 319,773 169,981 40,277 588,611
Additions - 57,065 14,454 55,865 127,384
Disposals - - - (26,595) (26,595)
--------------- -------------- -------------- -------------- -------------
At 30 June 2002 58,580 376,838 184,435 69,547 689,400
--------------- -------------- -------------- -------------- -------------
Depreciation
At 1 July 2001 12,641 166,166 68,818 22,258 269,883
On disposals - - - (16,203) (16,203)
Charge for the year 7,096 92,552 16,679 5,816 122,143
--------------- -------------- -------------- -------------- -------------
At 30 June 2002 19,737 258,718 85,497 11,871 375,823
--------------- -------------- -------------- -------------- -------------
Net book value
At 30 June 2002 45,939 153,608 101,162 18,019 318,728
--------------- -------------- -------------- -------------- -------------
At 30 June 2001 45,939 153,608 101,162 18,019 318,728
--------------- -------------- -------------- -------------- -------------
Included above are assets held under finance leases or hire purchase contracts
as follows:
Improvem'ts to Fixtures, Motor vehicles Total
short fittings and
leasehold equipment
property
(pound) (pound) (pound) (pound)
Net book values
At 30 June 2002 18,431 47,195 52,095 117,721
---------------- ---------------- ---------------- ----------------
At 30 June 2001 21,833 63,362 15,085 100,280
---------------- ---------------- ---------------- ----------------
Depreciation charge for the year
30 June 2002 3,402 16,167 3,771 23,340
---------------- ---------------- ---------------- ----------------
30 June 2001 3,402 4,973 6,648 15,023
---------------- ---------------- ---------------- ----------------
8 Stocks
2002 2001
(pound) (pound)
Long term contract balances:
- - Net cost less foreseeable losses - 50,388
Finished goods and goods for resale 229,348 146,003
--------------- -------------
229,348 196,391
--------------- -------------
9 Debtors
2002 2001
(pound) (pound)
Trade debtors 2,043,360 1,763,208
ACT recoverable 533 533
Other debtors 93,652 11,223
Prepayments and accrued income 88,091 107,552
--------------- -------------
2,225,636 1,882,516
--------------- -------------
Amounts falling due after more than one year and included in the debtors above
are:
2002 2001
(pound) (pound)
Trade debtors 45,912 18,781
--------------- -------------
10 Creditors: amounts falling due within one year
2002 2001
(pound) (pound)
Bank loans and overdrafts 405,089 354,4077
Net obligations under finance leases and hire purchase contracts 34,242 28,330
Trade creditors 507,437 457,812
Corporation tax 47,048 30,088
Other taxes and social security costs 452,116 413,383
Other creditors 2,465 -
Accruals and deferred income 702,025 586,373
--------------- -------------
2,150,422 1,870,393
--------------- -------------
The bank overdraft is secured by a fixed and floating charge over the assets of
the company.
11 Creditors: amounts falling due after more than one year
2002 2001
(pound) (pound)
Accruals and deferred income 568,784 594,377
Net obligations under finance leases and hire purchase contracts 56,145 49,659
------------------- ------------------
624,929 644,036
------------------- ------------------
Net obligations under finance leases and hire purchase contracts
Repayable within one year 34,242 28,330
Repayable between one and give years 56,145 49,659
------------------- ------------------
90,387 77,989
Included in liabilities falling due within one year (34,242) (28,330)
------------------- ------------------
56,145 49,659
------------------- ------------------
12 Pension costs Defined contribution The company operates a defined
contribution pension scheme. The assets of the scheme are held separately from
those of the company in an independently administered fund. The pension cost
charge represents contributions payable by the company to the fund.
2002 2001
(pound) (pound)
Contributions payable by the company for the year 151,214 154,996
------------------- ------------------
13 Share capital
2002 2001
(pound) (pound)
Authorised
100 ordinary shares of(pound)1 each 100 100
------------------- ------------------
Allotted, called up and fully paid
100 ordinary shares of(pound)1 each 100 100
------------------- ------------------
14 Statements of movements on profit and loss account
Profit and loss
account
(pound)
Balance at 1 July 2001 310,717
Retained profit for the year 46,928
------------------
Balance at 30 June 2002 357,645
------------------
15 Reconciliation of movements in shareholders' funds
2002 2001
(pound) (pound)
Profit for the financial year 46,928 4,987
Opening of shareholders' funds 310,817 305,830
------------------ ------------------
Closing shareholders' funds 357,745 310,817
------------------ ------------------
16 Contingent liabilities
The company has guaranteed a leasing contract between one of its customers and
British Linen Finance Limited. The amount financed was (pound)14,688, and the
final instalment is due in October 2004.
The company is currently in litigation with regard to a claim by a former
customer. The directors consider that the claim is likely to fail, but should
the claimant succeed, the company is likely to incur an unprovided liability of
approximately (pound)30,000.
17 Financial commitments
At 30 June 2002 the company had annual commitments under non-cancellable
operating leases as follows:
Land and buildings Other
2002 2001 2002 2001
(pound) (pound) (pound) (pound)
Expiry date:
Within one year 4,710 10,186 59,173 118,435
Between two and five years 12,820 - 221,503 138,042
In over five years 109,000 116,699 - -
---------------- -------------- -------------- ----------------
126,530 126,885 280,676 256,477
---------------- -------------- -------------- ----------------
18 Directors' emoluments
2002 2001
(pound) (pound)
Emoluments for qualifying services 299,705 288,200
Company pension contributions to money purchase schemes 51,196 79,148
------------------ ------------------
350,901 367,348
------------------ ------------------
The number of directors for whom retirement benefits are accruing under money
purchase pension schemes amounted to 5 (2001- 5).
Emoluments disclosed above include the following amounts paid to the highest
paid director:
Emoluments for qualifying services 86,319 84,238
Company pension contributions to money purchase schemes 42,000 54,000
------------------- ------------------
19 Transactions with directors
The following directors had interest free loans during the year. The movement of
these loans are as follows:
Amount outstanding Maximum in year
2002 2001
(pound) (pound) (pound)
M. I. Jamieson 2,132 2,132 2,132
---------------- ---------------- ----------------
20 Employees
Number of employees
The average number of employees (including directors) during the year was:
2002 2001
Number Number
Administration and directors 17 13
Sales, service, technical support and development 152 136
------------- -------------
169 149
------------- -------------
Employment costs
(pound) (pound)
Wages and salaries 3,440,907 2,875,920
Social security costs 362,912 314,417
Other pension costs 151,214 154,996
------------- -------------
3,955,033 3,345,333
------------- -------------
21 Control
The ultimate controlling party is M. I. Jamieson.
22 Related party transactions
At 30 June 2002 the company was owed(pound)84,512 (30 June 2001:(pound)Nil) by M
A MM Software North America Inc., a company in which the directors have material
interests.
M.A.M. SOFTWARE LIMITED
DIRECTORS' REPORT
The directors present their annual report with the financial statements of the
company for the year ended 30 June 2001.
PRINCIPAL ACTIVITIES
The principal activities of the company in the year under review ere the
creation and marketing of computer software products.
No significant change in the nature of these activities occurred during the
year.
REVIEW OF THE BUSINESS
The net profit after providing for taxation amounted to (pound)4,987.
This year we have again increased our sales and profits despite the general
difficulties being experienced in the IT and automotive sectors.
We believe that a major contributory factor to our success is our continuing
investment in the development of new products and new technologies. During the
year we introduced a range of new software systems that are a direct result of
this investment. These new systems have been well received by our customers.
We are planning to release several new products in the coming year, and
anticipate that they will further consolidate our leading position in the market
place.
DIVIDENDS
No dividends were paid during the year and no recommendation is made as to
dividends.
FUTURE DEVELOPMENTS
The company's range of products and services will have appeal to new customers,
and also to our large installed base of existing customers.
Our marketing plans will help us to capitalise on these opportunities.
As a result, we expect to see significant increases in turnover and
profitability in the current financial year.
RESEARCH AND DEVELOPMENT
The company continually engaged in the enhancement of its existing products and
the development of new software. As from 1 July 1999, the cost of development
activities is capitalised in the balance sheet and written off to profit and
loss over the estimated life of each individual product.
INTRODUCTION OF THE SINGLE EUROPEAN CURRENCY
The company has a branch in Eire, and is thus operating in markets where the
single European currency has been adopted. The company is thus exposed to
currency fluctuations between the single European currency and Sterling.
All of the company's current products are compliant with the single European
currency.
M.A.M. SOFTWARE LIMITED
DIRECTORS' REPORT
DIRECTORS AND THEIR INTERESTS
The directors in office in the year and their beneficial interests in the
company at the balance sheet date and the beginning of the year (or on
appointment if later) were as follows:
Number of Shares
2001 2000
M.I. Jamieson Ordinary shares of(pound)1 each 70 69
W.T. Jamieson Ordinary shares of(pound)1 each - 1
N.B. Horrocks Ordinary shares of(pound)1 each 20 20
J. Hirst Ordinary shares of(pound)1 each 5 5
H. Elwick Ordinary shares of(pound)1 each 5 5
DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company as at the end of the financial year and of the profit and loss of the
company for that period. In preparing those financial statements, the directors
are required to:
- - select suitable accounting policies and then apply them consistently; - make
judgments and estimates that are reasonable and prudent; - prepare the financial
statements on the going concern basis unless it is inappropriate to presume that
the company will continue in business.
The directors are responsible for maintaining proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company to enable them to ensure that the financial statements comply with
Companies Act 1985. They are also responsible for safeguarding the assets of the
company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
AUDITORS
The auditors, Hart Shaw, will be proposed for re-appointment in accordance with
Section 385 of the Companies Act 1985.
By order of the board:
W.T. Jamieson
Secretary
Date: 8 October 2001
M.A.M. SOFTWARE LIMITED
AUDITORS' REPORT TO THE COMPANY
PURSUANT TO SECTION 247B OF THE COMPANIES ACT 1985
We have examined the abbreviated accounts on pages 5 to 18 together with the
full financial statements of the company prepared under Section 226 of the
Companies Act 1985 for the year ended 30 June 2001.
RESPECTIVE RESPONSIBILITIES OF THE DIRECTORS AND AUDITORS
The directors are responsible for preparing the abbreviated accounts in
accordance with Section 246 of the Companies Act 1985. It ids our responsibility
to form an independent opinion as to 6the company's entitlement to deliver
abbreviated accounts prepared in accordance with Section 246(5) and (6) of the
Companies Act 1985 and whether the abbreviated accounts have been properly
prepared in accordance with those provisions and to report our opinion to you.
BASIS OF OPINION
We have carried out the procedures we considered necessary to confirm by
reference to the audited financial statements that the company is entitled to
deliver abbreviated accounts prepared in accordance with Section 246 (5) and (6)
of the Companies Act 1985 and that the abbreviated accounts have been properly
prepared from those financial statements. The scope of our work for the purpose
of this report does not include examining or dealing with events after the date
of our report on the full financial statements.
OPINION
In our opinion, the company is entitled to deliver abbreviated accounts prepared
in accordance with Section 246 (5) and (6) of the Companies Act 1985 and the
abbreviated accounts on pages 5 to 18 have been properly prepared in accordance
with those provisions.
Hart Shaw
Chartered Accountants
Registered Auditors
346 Glossop Road
Sheffield
S10 2HW
Date: 12 December 2001
M.A.M. SOFTWARE LIMITED
PROFIT AND LOSS ACCONT
FOR THE YEAR ENDED 30 JUNE 2001
Notes 2001 2000
(pound) (pound)
TURNOVER 2 6,978,239 6,043,458
Cost of sales 1,905,897 1,657,456
-------------- --------------
GROSS PROFIT 5,072,342 4,386,002
Administrative expenses 4,999,329 4,366,651
-------------- --------------
OPERATING PROFIT 3 73,015 19,351
Investment income and interest receivable 4 26 1,291
Interest payable and similar charges 5 (42,224) (12,125)
-------------- --------------
PROFIT ON ORDNARY ACTIVITIES BEFORE TAXATION 30,817 8,517
Tax on profit on ordinary activities 8 (25,830) (4.021)
-------------- --------------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 4,987 4,496
-------------- --------------
Continuing operations
None of the company's activities were acquired or discontinued during the above
two financial years.
Total recognised gains and losses
The company has no recognised gains or losses other than profit for the above
two financial years.
M.A.M. SOFTWARE LIMITED
BALANCE SHEET
AS AT 30 JUNE 2001
2001 2000
Notes (pound) (pound) (pound) (pound)
FIXED ASSETS
Intangible assets 9 426,444 330,273
Tangible assets 10 318,728 296,185
------------- -------------
745,172 626,458
CURRENT ASSETS
Stocks 11 196,391 166,151
Debtors 12 1,882,516 1,559,280
Cash in bank and in hand 1,167 10,035
--------------- ---------------
2,080,074 1,735,466
CREDITORS: amounts falling due
within one year 13 (1,870,393) (1,595,076)
--------------- ---------------
NET CURRENT ASSETS 209,681 140,390
------------- -------------
TOTAL ASSETS LESS CURRENT LIABILITIES 954,853 766,848
CREDITORS: amount falling due after 14
more than one year (644,036) (461,018)
------------- -------------
NET ASSETS 310,817 305,830
------------- -------------
CAPITAL AND RSERVES
Called up share capital 17 100 100
Profit and loss account 18 310,717 305,730
------------- -------------
TOTAL SHAREHOLDERS' FUNDS 19 310,817 305,830
------------- -------------
The financial statements have been prepared in accordance with the special
provisions of Part VII of the Companies Act 1985 relating to medium-sized
companies.
Approved by the board of directors on 8 October 2001 and signed on its behalf
by:
M.I. Jamieson
Director
The notes of pages 8 and 18 form part of these financial statements.
M.A.M. SOFTWARE LIMITED
CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2001
Notes 2001 2000
(pound) (pound)
Net cash inflow/(outflow) from operating activities 3 130,189 (30,549)
Returns on investments and servicing of finance 20 (41,861) (9,693)
Taxation 20 (19,687) -
Capital expenditure 20 (249,818) (538,616)
---------------- -------------
Cash outflow before use of liquid resources and financing
Financing 20 127,100 76,160
---------------- -------------
DECREASE IN CASH IN THE YEAR (54,077) 502,698)
---------------- -------------
RECONCILITATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT 21
DECREASE IN CASH IN THE YEAR (54,077) (502,698)
Cash inflow from movement in debt and lease financing (127,100) 76,160)
---------------- -------------
Change in net debt resulting from cash flows (181,177) (578,858)
New hire purchase contracts and finance lease agreements (64,343) (25,000)
---------------- -------------
Movement in debt in the year (245,520) (603,858)
Net debt at 1 July 2000 (780,086) (176,228)
---------------- -------------
Net debt at 30 June 2001 (1,025,6060) (708,086)
---------------- -------------
M.A.M. SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
1. STATEMENT OF ACCOUNTING POLICIES
The financial statements have been prepared under the historical cost
convention.
Turnover
Turnover represents the total invoice value, excluding value added tax, of goods
sold and services rendered during the year.
Depreciation of tangible fixed assets Depreciation is provided at the following
annual rates in order to write off each asset over its useful life:
Tenants improvements to property 12.12% Straight line
Fixtures, fittings and equipment 15% Reducing balance
Computer equipment 33.33% Straight line
Motor vehicles 25% Straight line
Amortisation of intangible fixed assets Intangible fixed assets, other than
goodwill, are amortised over the directors' estimate of their economic useful
life.
Stocks
Stocks are stated at the lower of cost and net realisable value.
Net realisable value is based on estimated selling price less further costs to
completion and disposal.
Stock: long term contracts
Profit on long term contracts is taken as the work is carried out if the final
outcome can be assessed with reasonable certainty. The profit included is
calculated on a prudent basis to reflect the proportion of the work carried out
at the year end, by recording turnover and related costs as contract activity
progresses. Turnover is calculated as that proportion of total contract value
which cost incurred to date relates to total expected costs for that contract.
Revenues derived from variations on contracts are recognised only when they have
been accepted by the customer. Full provision is made for losses on all
contracts in the year in which the are first foreseen.
Research and development
Expenditure on research is written off in the year in which it is incurred.
Development expenditure is deferred to future periods where there is a clearly
defined project with separately identifiable expenditure. The outcome of such a
project has been assessed with reasonable certainty in regard to the technical
feasibility and the ultimate commercial viability has been carefully considered.
Future revenues are reasonably expected to exceed the current deferred
development costs, future development costs and related production, selling and
administration expenditure. Adequate financial resources are expected to be
available to complete the project. The company currently anticipates that
products developed will produce income streams over a three year period from the
date of the first commercial sales, and therefore write off development cost
over that period.
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the
rates of exchange ruling at the balance sheet date. Transactions in foreign
currencies are translated into sterling at the rate of exchange ruling at the
date of the transaction. Exchange differences are taken into the profit and loss
account for the year.
M.A.M. SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
1. STATEMENT OF ACCOUNTING POLICIES (continued)
Leasing and hire purchase commitments Assets held under finance leases and hire
purchase contracts are capitalised in the balance sheet and are depreciated over
their estimated useful lives. The interest element of the rental obligations is
charged to the profit and loss account over the period of the lease.
Lease payments under operating leases, where substantially all the risks and
benefits remain with the lessor, are charged as expenses in the periods in which
they are incurred.
Pension costs
The company operates a money purchase (defined contribution) pension scheme.
Contributions payable to this scheme are charged to the profit and loss account
in the period to which they relate. These contributions are invested separately
from the company's assets.
2. TURNOVER
2001 2000
(pound) (pound)
Analysis by geographical market:
United Kingdom 6,728,587 5,937,236
Other E.C. countries 249,652 99,152
Asia - 7,070
-------------- ----------------
6,978,239 6,043,458
-------------- ----------------
Turnover is attributable to the one principal activity of the company.
3. OPERATING PROFIT
Operating profit is stated 2001 2000
(pound) (pound)
After charting:
Depreciation of fixed assets 106,635 82,868
Loss on disposal of tangible assets 33,767 23,934
Amortisation of intangible assets 55,045 -
Auditors' remuneration 6,000 5.500
Loss of foreign currencies 21.615 144
Operating lease rentals
Land and buildings 131,002 121,520
Plant and machinery 281,046 271,694
-------------- ----------------
M.A.M. SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
3. OPERATING PROFIT (continued)
Reconciliation of operating profit to
Net cash inflow/ (outflow) from operating activities
2001 2000
(pound) (pound)
Operating profit 73,015 19,351
Depreciation 106,635 82,686
Amortisation 55,045 -
Loss on disposal of fixed assets 33,767 23,934
Decrease / (increase) in stocks (30,240) (30,020)
Increase in debtors (323,236) (400,721)
Increase in creditors 215,203 274,221
-------------- ----------------
Net cash inflow / (outflow) from operating activities 130,189 (30,549)
-------------- ----------------
4. INVESTMENT INCOME AND INTEREST RECEIVABLE
2001 2000
(pound) (pound)
Interest received and receivable
Bank interest 26 1,291
-------------- ----------------
5. INTEREST PAYABLE AND SIMILAR CHARGES
2001 2000
(pound) (pound)
On bank loans and overdrafts 31,752 6,157
On overdue tax 4,226 305
Lease finance charges and hire purchase interest 6,219 5,663
Other interest 27 --
-------------- ----------------
42,224 12,125
-------------- ----------------
M.A.M. SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
6. INFORMATION ON DIRECTORS AND EMPLOYEES
2001 2000
(pound) (pound)
Staff costs
Wages and salaries 2,875,920 2,436,760
Social security costs 314,417 250,780
Other pension costs 154,996 141,228
-------------- ----------------
3,345,333 2,828,768
-------------- ----------------
2001 2000
No. No.
The average number of employees during the year was made up as follows:
Administration and directors 13 13
Sales, service, technical support and development 136 130
-------------- ----------------
149 143
-------------- ----------------
2001 2000
(pound) (pound)
Directors' emoluments
Emoluments 288,200 282,961
Pension contributions to money purchase (defined contribution)
schemes 79,148 79,148
-------------- ----------------
367,348 362,109
-------------- ----------------
2001 2000
No. No.
During the year the following number of directors:
Accrued benefits under money purchase (defined contribution) pension
schemes 5 5
-------------- ----------------
2001 2000
(pound) (pound)
Details of highest paid director's emoluments
Emoluments 84,238 81,116
Company contributions to money purchase (defined contribution)
pension schemes 54,000 54.000
-------------- ----------------
138,238 135,116
-------------- ----------------
M.A.M. SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
7. PENSION COSTS
Money purchase (defined contribution) pension scheme The company
operates a money purchase (defined contribution) pension scheme. The
assets of the scheme are held separately from those of the company in
an independently administered fund. The pension cost charge represents
contributions payable by the company to the fund and amounted to
(pound)154,996 (200: (pound)141,228).
8. TAX ON POFIT ON ORDNARY ACTIVITIES
2001 2000
(pound) (pound)
The taxation charge comprises:
Current tax on income for the year 23,240 4,021
Adjustment in respect of prior years 2,590 -
-------------- -----------------
25,830 4,021
-------------- -----------------
9. INTANGIBLE FIXED ASSETS
Software
Development
(pound)
Cost:
At 1 July 2000 330,273
Additions 151,216
-----------------
At 30 June 2001 481,489
-----------------
Amortisation:
Charge for year 55,045
-----------------
Net book value:
At 30 June 2001 426,444
-----------------
At 30 June 2000 330,273
-----------------
M.A.M. SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
10. TANGIBLE FIXED ASSETS
Land & buildings Fixtures,
fittings and
computer equipment Motor vehicles Total
(pound) (pound) (pound) (pound)
Cost:
At 1 July 2000 58,580 400,220 48.431 507,231
Additions - 162,255 8.183 170,438
Disposals - (72,721) (16,337) (89,058)
------------------- ------------------- ------------------- -------------------
At 30 June 2001 58,580 489,754 40,277 588,611
------------------- ------------------- ------------------- -------------------
Depreciation:
At 1 July 2000 5,545 186,705 18,796 211,046
Charge for year .096 92,334 7,205 106,635
On disposals - (44,055) (3,743) (47,798)
------------------- ------------------- ------------------- -------------------
At 30 June 2001 12,641 234,984 22,258 269,883
------------------- ------------------- ------------------- -------------------
Net book value:
At 30 June 2001 45,939 254,770 18,019 318,727
------------------- ------------------- ------------------- -------------------
At 30 June 2000 53,035 213,515 29.635 296,185
------------------- ------------------- ------------------- -------------------
2001 2000
(pound) (pound)
Analysis of net book value of land and buildings:
Tenant's improvements to property 45,939 53,035
-------------- ----------------
Included above are assets held under finance lease or hire purchase contracts as
follows:
2001 2000
(pound) (pound)
Net book values:
Fixtures, fittings and equipment 63,362 7,849
Motor vehicles 15,085 17.040
Tenant's improvements to property 21,833 53,035
-------------- ----------------
100,280 77,924
-------------- ----------------
Depreciation charge for the year:
Fixtures, fittings and equipment 4,973 1,385
Motor vehicles 6,648 5,678
Tenant's improvements to property 3,402 5,545
-------------- ----------------
15,023 12,608
-------------- ----------------
Net obligations under finance leases and hire purchase contracts are
secured on the assets acquired.
M.A.M. SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
11. STOCKS
2001 2000
(pound) (pound)
Long term work in progress 50,388 -
Finished goods and goods for resale 146,003 166,151
-------------- -----------------
196,391 166,151
-------------- -----------------
There is no material difference between the replacement cost of stocks and
their balance sheet amounts.
12. DEBTORS
2001 2000
(pound) (pound)
Trade debtors 1,763,208 1,416,437
Director's current account 2,132 2,132
Other debtors 9,624 28,570
Prepayments and accrued income 107,552 112,141
-------------- -----------------
1,882,516 1,559,280
-------------- -----------------
Included in the above are amounts due after more than one year as follows:
Trade debtors 18,781 11,918
-------------- -----------------
13. CREDITORS: amounts falling due within one year
2001 2000
(pound) (pound)
Bank loans and overdrafts 354,407 309,198
Net obligations under finance leases and hire purchase contracts 28,330 19,905
Trade creditors 457,812 442,275
Corporation tax 30,621 24,478
Other taxes and social security costs 412,850 362,103
Other creditors - 1,010
Accruals and deferred income 586,373 436,107
-------------- -----------------
1,870,393 1,595,076
-------------- -----------------
Bank overdrafts amounting to(pound)354,407 (200:(pound)309,198) are secured by a
fixed and floating charge on all the assets of the company
Included within the accruals and deferred income is (pound)1,856 (200P
(pound)8,249) in respect of pension contributions.
M.A.M. SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
14. CREDITORS: amounts falling due after more than one year
2001 2000
(pound) (pound)
Accruals and deferred income 594,377 444,556
Net obligations under finance leases and hire purchase contracts 49,659 16,462
-------------- -----------------
644,036 461,018
-------------- -----------------
15. BORROWINGS
2001 2000
(pound) (pound)
The company's borrowings are repayable as follows
Up to one year and on demand 354,407 309,198
-------------- -----------------
16. OBLIGATIONS UNDER FINANCE LEASES AND HIRE PURCHASE CONTRACTS
2001 2000
(pound) (pound)
The company's obligations are repayable as follows:
Within one year or on demand 28,330 19,905
In two to five years 49,659 16,462
-------------- -----------------
Total net obligations 77,989 36,367
-------------- -----------------
Net obligations analysed as follows:
Included in creditors - amounts falling due within one year 29,330 19,905
Included in creditors - amounts falling due after more than on year 49,659 16,462
-------------- -----------------
77,989 36,367
-------------- -----------------
17. SHARE CAPITAL
2001 2000
(pound) (pound)
Authorised:
Equity interests:
100 Ordinary shares of(pound)1 each 100 100
-------------- -----------------
Allotted, called up and fully paid:
Equity interests:
100 Ordinary shares of(pound)1 each 100 100
-------------- -----------------
M.A.M. SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
18. PROFIT AND LOSS ACCOUNT
2001 2000
(pound) (pound)
Retained profit as at 1 July 2000 305,730 301,234
Profit for the year 4,987 4,496
-------------- -----------------
Retained profit as at 30 June 2001 310,717 305,730
-------------- -----------------
19. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
2001 2000
(pound) (pound)
Profit for the year 4,987 4,496
Opening shareholders' funds 305,830 301,334
-------------- -----------------
Closing shareholders' funds 310,817 305,830
-------------- -----------------
Represented by:
Equity interests 310,817 305,830
-------------- -----------------
M.A.M. SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
20. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT
2001 2000
(pound) (pound)
Returns on investment and servicing of finance
Interest received 26 1,291
Interest paid (35,668) (5,321)
Interest element of hire purchase contracts (4,062) (5,269)
Interest element of finance lease rental payments (2,157) (394)
--------------- -----------------
Net cash outflow from returns on investment and servicing of
finance (41,861) (9,693)
--------------- -----------------
Taxation
Corporation tax paid (19,687) -
--------------- -----------------
Net cash outflow from taxation (19,687) -
--------------- -----------------
Capital expenditure
Purchase of intangible fixed assets (151,216) (330,273)
Purchase of tangible fixed assets (106,095) (211,743)
Receipts from sale of tangible fixed assets 7,493 3,400
--------------- -----------------
Net cash outflow from capital expenditure (249,818) (538,616)
--------------- -----------------
Financing
New long-term loans 149,821 90,286
Capital element of hire purchase contract payments (15,606) (11,954)
Capital element of finance lease rental payments (7,115) (2,172)
--------------- -----------------
Net cash inflow from financing 127,100 76,160
--------------- -----------------
21. ANALYSIS OF CHANGES IN NET DEBT
2000 Cash flow Other movements 2001
(pound) (pound) (pound) (pound)
Cash at bank and in hand 10,035 (8,868) - 1,167
Bank overdraft (309,198) (45,209) - (354,407)
------------------
(54,077)
Debt due after one year (444,556) (149,821) - (594,377)
Finance lease agreements (36,367) 22,721 (64,343) (77,989)
------------- ------------------ ---------------- -------------
(780,086) (181,177) (64,343) 1,025,606)
------------- ------------------ ---------------- -------------
M.A.M. SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
22. CONTINGENT LIABILITIES
The company has guaranteed a leasing contract between one of its customers and
British Linen Finance Limited. The amount financed was (pound)14,688, and the
final instalment is due in October 2004.
23. REVENUE COMMITMENTS
At the year end the company was committed to making the following payments
during the next year in respect of operating leases with expiry dates as
follows:
Land and buildings Other
2001 2000 2001 2000
(pound) (pound) (pound) (pound)
Within one year 10,186 - 118,435 19,096
More than one year and less - 16,000 138,042 254,604
than five years
More than five years 116,699 108,853 - -
--------------------- ----------------- ---------------- ------------
126,885 124,853 256,477 273,700
--------------------- ----------------- ---------------- ------------
24. TRANSACTIONS WITH DIRECTORS
2001 2000
(pound) (pound)
Amounts owed by directors
M.I. Jamieson 2,132 2,132
---------------- ------------
The above loan was granted interest free and the maximum amount outstanding
during the year was (pound)2,132.
25. CONTROL
The company is controlled by M.I. Jamieson.
Our Ref. PC/SN Your ref:
PRIVATE & CONFIDENTIAL
The Directors 4 July, 2003 Auto Data Network Inc
The Forsythe Centre
Lamberts Road
Tunbridge Wells
Kent
Dear Sirs
Hart Shaw are Registered Auditors in England and Wales.
We confirm that we audited the company's financial statements for the periods
ended 30 June 2001 and 30 June 2000, which comprise the Balance Sheet, Profit
and Loss Account and Statement of Recognised Gains and Losses and the related
notes. These financial statements have been prepared on the basis of the
accounting policies set out therein, which are consistent with Generally
Accepted Accounting Practice in the UK.
Yours faithfully,
HART SHAW