3. Cash used in operations

                                                Year ended  Year ended
                                               December 31 December 31
                                                      2007        2006
                                               (unaudited)   (audited)
                                                  GBP '000    GBP '000

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Net loss for the year                              (2,504)     (1,133)
Adjustments for:
Interest receivable                                (1,470)     (1,509)
Tax credit                                         (1,389)     (1,583)
Amortization                                        1,211         823
Depreciation                                          475         229
Loss on disposal of property, plant and
 equipment                                             20           5
Share based award expense                             286         277
Share loss from associate                              22           -
(Increase) in inventories                             153        (203)
(Increase)/decrease in trade and other
 receivables                                         (477)        393
Increase/(decrease) in trade and other
 payables                                          (1,224)        965
Increase/(decrease) in provisions                    (161)         58
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Cash used in operations                            (5,058)     (1,678)
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4. Statement of changes in shareholders' equity

                                          Cumulative
                 Share    Share    Other translation Retained
 Group         capital  premium reserves  adjustment earnings    Total
              GBP '000 GBP '000 GBP '000    GBP '000 GBP '000 GBP '000
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At January 1,
 2006
 (audited)         149    2,923   60,474       (190) (30,567)  32,789
Shares issued        2      333                                   335
Change in
 value of
 ESOP reserve                                             40       40
Share based
 award
 reserve                             277                          277
Exchange loss                                  (267)             (267)
Loss for the
 year                                                 (1,133)  (1,133)
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At December
 31, 2006
 (audited)         151    3,256   60,751       (457) (31,660)  32,041
----------------------------------------------------------------------
Shares issued        2      427                                   429
Change in
 value of
 ESOP reserve                                             75       75
Share based
 award
 reserve                             286                          286
Exchange loss                                                         (54)                            (54)
Loss  for  the
  year                                                                                                  (2,504)    (2,504)
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At  December
  31,  2007
  (unaudited)              153        3,683      61,037              (511)  (34,089)    30,273
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