Consolidated cash flow statements
for the year ended December 31, 2007
Year ended Year ended
December 31 December 31
2007 2006
(unaudited) (audited)
GBP '000 GBP '000
----------------------------------------------------------------------
Cash flows from operating activities
Cash used in operations (note 3) (5,058) (1,678)
Interest received 1,636 1,474
Taxes paid (28) (97)
Tax credits received 701 755
----------------------------------------------------------------------
Net cash used in operating activities (2,749) 454
----------------------------------------------------------------------
Cash flows from investing activities
Purchase of property, plant and equipment (1,502) (353)
Purchase of intangible assets (195) (552)
Capitalization of R&D assets (272) (21)
Movements on short term investments 2,355 (2,966)
Investment in associate (286) -
Purchase of Alarity (2,299) -
Purchase of Tenison (1,087) -
Purchase of Teja Technologies (2,461) -
----------------------------------------------------------------------
Net cash used in investing activities (5,747) (3,892)
----------------------------------------------------------------------
Cash flows from financing activities
Net proceeds from issue of ordinary shares 504 375
----------------------------------------------------------------------
Net cash generated from financing activities 504 375
----------------------------------------------------------------------
Effects of exchange rate changes (54) (267)
----------------------------------------------------------------------
Net decrease in cash and cash equivalents (8,046) (3,330)
----------------------------------------------------------------------
Cash and cash equivalents at January 1 18,146 21,476
----------------------------------------------------------------------
Cash and cash equivalents at December 31 10,100 18,146
----------------------------------------------------------------------
NOTES
1. Basis of presentation
The preliminary results are unaudited and do not constitute statutory accounts within the meaning of s240 of the Companies Act 1985. The statutory accounts for the year ended 2006 have been delivered to the Registrar of Companies. The auditors' opinion on these accounts was unqualified and did not contain a statement made under s237 (2) or s237 (3) of the Companies Act 1985.
The preliminary results of ARC International plc have been prepared in accordance with the EU Endorsed International Financial Reporting Standards (IFRS), IFRIC interpretations and the Companies Act 1985 applicable to companies reporting under IFRS. These have been prepared in accordance with the Listing Rules of the Financial Services Authority. In preparing the preliminary results, management have used the principal accounting policies as set out in the Group's annual report and accounts for the year ended December 31, 2006. The preliminary results have been prepared under the historical cost convention, except in respect of certain financial instruments.
The preliminary results incorporate the accounts of the Company and each of its subsidiaries for the period to December 31, 2007. All new acquisitions are accounted for under the purchase method from the date of acquisition.
The preparation of the preliminary results in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.
2. Summary of operating expenses
Year ended Year ended
December 31 December 31
2007 2006
(unaudited) (audited)
GBP '000 GBP '000
----------------------------------------------------------------------
Operating expenses
Research and development (7,423) (6,716)
Sales and marketing (5,518) (5,023)
General and administrative (3,678) (3,254)
Other expenses (1,686) (1,052)
----------------------------------------------------------------------
Net operating expenses (18,305) (16,045)
----------------------------------------------------------------------
