1Accounting Policies

Basis of measurement and preparation of accounts
The financial statements have been prepared under the historical cost convention, and in
accordance with the Financial Reporting Standard for Smaller Entities (effective April 2008).

The company has net current assets of £391,368 yet net liabilities of £13,677,783 however we
believe that the company's financial statements should be prepared on a going concern basis on
the grounds that current and future sources of funding or support will be more than adequate for
the company's needs and the parent company will not demand repayment of its loan until the
company is in a position to do so. We believe that no further disclosures relating to the
company's ability to continue as a going concern need to be made in the financial statements. In
assessing going concern, we have paid particular attention to a period of not less than one year
from the date of approval of the financial statements.

Turnover policy
The turnover shown in the profit and loss account represents amounts invoiced during the
period.

Tangible assets depreciation policy
Fixed assets:
All fixed assets are initially recorded at cost.

Depreciation:

Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value,
over the useful economic life of that asset as follows:
Fixtures & Fittings - 20% straight line
Equipment - 25% Straight Line
Website - 25% Straight Line

Other accounting policies
Deferred taxation
Deferred tax is recognised in respect of all timing differences that have originated but not
reversed at the balance sheet date where transactions or events have occurred at that date that
will result in an obligation to pay more, or a right to pay less or to receive more tax, with the
following exceptions:

Provision is made for tax on gains arising from the revaluation (and similar fair value
adjustments) of fixed assets, and gains on disposal of fixed assets that have been rolled over
into replacement assets, only to the extent that, at the balance sheet date, there is a binding
agreement to dispose of the assets concerned. However, no provision is made where, on the
basis of all available evidence at the balance sheet date, it is more likely than not that the
taxable gain will be rolled over into replacement assets and charged to tax only where the
replacement assets are sold.
Deferred tax assets are recognised only to the extent that the directors consider that it is more
likely than not that there will be suitable taxable profits from which the future reversal of the
underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in
the periods in which timing differences reverse, based on tax rates and laws enacted or
substantively enacted at the balance sheet date.

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
account in arriving at the operating profit.

All shares in issue rank pari passu but in the event of liquidation or winding up, the assets
available for distribution shall be applied in the following priority:
i) 1st in payment pari passu to holders of Series A-1 and Series A-2 preferred shares, as part of
Series B
ii) 2nd in payment pari passu to holders of Ordinary shares.