Twincentric Limited Directors’ Report and Audited Financial Statements (25 Oct 2002 – 31 Dec 2003)

Summary

This document is the annual report and audited financial statements for Twincentric Limited, covering the period from October 25, 2002, to December 31, 2003. It includes the directors’ report, the independent auditors’ opinion, and detailed financial statements. The report outlines the company’s incorporation, principal activities in computer services and software development, director appointments, and financial results, including a reported loss for the period. The auditors confirm the accounts are true and fair and comply with UK law. The document is intended for shareholders and regulatory compliance.

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EX-10.3 4 v07206_ex10-3.txt REGISTERED NUMBER: 4573588 (England and Wales) TWINCENTRIC LIMITED REPORT OF THE DIRECTORS AND FINANCIAL STATEMENTS FOR THE PERIOD 25 OCTOBER 2002 TO 31 DECEMBER 2003 TWINCENTRIC LIMITED CONTENTS OF THE FINANCIAL STATEMENTS For The Period 25 October 2002 to 31 December 2003 Page Company Information 1 Report of the Directors 2 Report of the Independent Auditors 4 Profit and Loss Account 5 Balance Sheet 6 Notes to the Financial Statements 7 Trading and Profit and Loss Account 11 TWINCENTRIC LIMITED COMPANY INFORMATION For The Period 25 October 2002 to 31 December 2003 DIRECTORS: J Conning A J McGurk SECRETARY: Answerbuy limited REGISTERED OFFICE: Buxton Court 3 West Way Botley Oxfordshire OX2 0JB REGISTERED NUMBER: 4573588 (England and Wales) AUDITORS: James & Cowper Registered Auditor and Chartered Accountants Buxton Court 3 West Way Botley Oxford OX2 0JB Page 1 TWINCENTRIC LIMITED REPORT OF THE DIRECTORS For The Period 25 October 2002 to 31 December 2003 The directors present their report with the financial statements of the company for the period 25 October 2002 to 31 December 2003. INCORPORATION The company was incorporated on 25 October 2002 and commenced trading on 1 December 2002. PRINCIPAL ACTIVITY The principal activity of the company in the period under review was that of the provision of computer services and the development of internet related software. EVENTS SINCE THE END OF THE PERIOD Information relating to events since the end of the period is given in the notes to the financial statements. DIRECTORS The directors during the period under review were: J Conning - appointed 25.10.02 A J McGurk - appointed 25.10.02 The beneficial interests of the directors holding office on 31 December 2003 in the issued share capital of the company were as follows: 31.12.03 at date of appointment Ordinary (pound)1 shares J Conning 100,000 1 A J McGurk 100,000 -- Mr J Conning resigned as director and company secretary on 31 March 2004. STATEMENT OF 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. AUDITORS The auditors, James & Cowper, will be proposed for re-appointment in accordance with Section 385 of the Companies Act 1985. Page 2 TWINCENTRIC LIMITED REPORT OF THE DIRECTORS For The Period 25 October 2002 to 31 December 2003 This report has been prepared in accordance with the special provisions of Part VII of the Companies Act 1985 relating to small companies. ON BEHALF OF THE BOARD: .................................... A J McGurk - Director Date:.............................. Page 3 REPORT OF THE INDEPENDENT AUDITORS TO THE SHAREHOLDERS OF TWINCENTRIC LIMITED We have audited the financial statements of Twincentric Limited for the period ended 31 December 2003 on pages five to ten. These financial statements have been prepared in accordance with the Financial Reporting Standard for Smaller Entities (effective June 2002), under the historical cost convention and the accounting policies set out therein. This report is made solely to the company's members, as a body, in accordance with Section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As described on page two the company's directors are responsible for the preparation of financial statements in accordance with applicable law and United Kingdom Accounting Standards. Our responsibility is to audit the financial statements in accordance with 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 Report of the Directors 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 Report of the Directors 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 made by the directors in the preparation of the 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 31 December 2003 and of its loss for the period then ended and have been properly prepared in accordance with the Companies Act 1985. James & Cowper Registered Auditor and Chartered Accountants Buxton Court 3 West Way Botley Oxford OX2 0JB Date:.............................. Page 4 TWINCENTRIC LIMITED PROFIT AND LOSS ACCOUNT For The Period 25 October 2002 to 31 December 2003 Notes (pound) TURNOVER 590,633 Cost of sales 361,057 --------- GROSS PROFIT 229,576 Administrative expenses 703,590 --------- OPERATING LOSS 2 (474,014) Interest payable and similar charges 6,402 --------- LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (480,416) Tax on loss on ordinary activities 3 -- --------- LOSS FOR THE FINANCIAL PERIOD AFTER TAXATION (480,416) --------- DEFICIT FOR THE PERIOD (480,416) ========= The notes form part of these financial statements Page 5 TWINCENTRIC LIMITED BALANCE SHEET 31 December 2003 Notes (pound) (pound) FIXED ASSETS Intangible assets 4 -- Tangible assets 5 28,698 --------- 28,698 CURRENT ASSETS Debtors 6 18,323 CREDITORS Amounts falling due within one year 7 327,437 -------- NET CURRENT LIABILITIES (309,114) --------- TOTAL ASSETS LESS CURRENT LIABILITIES (280,416) ========= CAPITAL AND RESERVES Called up share capital 9 200,000 Profit and loss account 10 (480,416) --------- SHAREHOLDERS' FUNDS (280,416) ========= These financial statements have been prepared in accordance with the special provisions of Part VII of the Companies Act 1985 relating to small companies and with the Financial Reporting Standard for Smaller Entities (effective June 2002). ON BEHALF OF THE BOARD: .................................... A J McGurk - Director Approved by the Board on .......... The notes form part of these financial statements Page 7 TWINCENTRIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 25 OCTOBER 2002 TO 31 DECEMBER 2003 1. ACCOUNTING POLICIES ACCOUNTING CONVENTION The financial statements have been prepared under the historical cost convention and in accordance with the Financial Reporting Standard for Smaller Entities (effective June 2002). TURNOVER Turnover represents net invoiced sales of services, excluding value added tax. TANGIBLE FIXED ASSETS Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life. Fixtures and fittings - 50% straight line Computer equipment - 50% straight line DEFERRED TAX Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. PENSIONS The company operates a defined contribution pension scheme. Contributions payable for the period are charged in the profit and loss account. GOODWILL Goodwill, being the amount paid in connection with the aquisition of a business in 2002, has been fully written off at the end of the period after an impairment review considered goodwill to carry no value as at 31 December 2003. 2. OPERATING LOSS The operating loss is stated after charging/(crediting): (POUND) Depreciation - owned assets 33,915 Auditors remuneration 6,500 Foreign exchange differences (141) Pension costs 6,350 ======== Directors' emoluments and other benefits etc 33,985 ======== 3. TAXATION ANALYSIS OF THE TAX CHARGE No liability to UK corporation tax arose on ordinary activities for the period. Page 7 TWINCENTRIC LIMITED NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE PERIOD 25 OCTOBER 2002 TO 31 DECEMBER 2003 4. INTANGIBLE FIXED ASSETS GOODWILL (POUND) --------- COST Additions 365,716 --------- At 31 December 2003 365,716 --------- AMORTISATION Impairments 365,716 --------- At 31 December 2003 365,716 --------- NET BOOK VALUE At 31 December 2003 - ========= 5. TANGIBLE FIXED ASSETS
FIXTURES AND COMPUTER FITTINGS EQUIPMENT TOTALS (POUND) (POUND) (POUND) COST Additions 22,561 40,052 62,613 -------- ------- ------- At 31 December 2003 22,561 40,052 62,613 -------- ------- ------- DEPRECIATION Charge for period 12,220 21,695 33,915 -------- ------- ------- At 31 December 2003 12,220 21,695 33,915 -------- ------- ------- NET BOOK VALUE At 31 December 2003 10,341 18,357 28,698 ======== ======= ======= 6. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR (POUND) Trade debtors 10,073 Other debtors 4,500 Prepayments and accrued income 3,750 -------- 18,323 ======== 7. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR (POUND) Bank loans and overdrafts 119,899 Hire purchase contracts 5,678 Trade creditors 9,498 Social security and other taxes 15,104 VAT 21,688 Other creditors 16,346 Directors' loan accounts 105,095 Accrued expenses 34,129 --------- 327,437 ==========
Page 8 TWINCENTRIC LIMITED NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE PERIOD 25 OCTOBER 2002 TO 31 DECEMBER 2003 8. SECURED DEBTS The following secured debts are included within creditors: (POUND) Bank overdraft 119,899 ========= The bank overdraft is secured by the following: HSBC life policy number 9G8427T. First mortgage given by Twincentric Limited. HSBC life policy number 9C2822Y. First mortgage given by Twincentric Limited. Guarantee of (pound)75,000 given by A J McGurk. Guarantee of (pound)75,000 given by J B Conning. Debenture including fixed equitable charge over all present and future freehold and leasehold property; first fixed charge over, among other things, book and other debts, chattels, goodwill and uncalled capital, both present and future; and first floating charge over all assets and undertaking both present and future given by Twincentric Limited. 9. CALLED UP SHARE CAPITAL Authorised: Number: Class: Nominal value: (POUND) 10,000,000 Ordinary (pound)1 10,000,000 ========== Allotted, issued and fully paid: Number: Class: Nominal value: (POUND) 200,000 Ordinary (pound)1 200,000 ========== The following shares were allotted and fully paid for cash at par during the period: 200,000 Ordinary shares of (pound)1 each 10. RESERVES PROFIT AND LOSS ACCOUNT (POUND) Deficit for the period (480,416) --------- At 31 December 2003 (480,416) ========= 11. RELATED PARTY DISCLOSURES Included in other creditors are two loans due to the directors, amounting to (pound)105,095. (pound)102,427 is owed to J Conning and the balance of (pound)2,668 is owed to A J McGurk. On 1 December 2002, the company purchased the trade and assets of Twincentric Integration Limited, a company whose sole director is A J McGurk. The sale was at arms length and for an open market value. Page 9 TWINCENTRIC LIMITED NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE PERIOD 25 OCTOBER 2002 TO 31 DECEMBER 2003 12. POST BALANCE SHEET EVENTS The company became a wholly owned subsidiary of ActiveCore Technologies Inc. on 21 June 2004. 13. GOING CONCERN The financial statements have been prepared on the going concern basis. Trade losses have continued since the period end but the director believes it is appropriate for the financial statements to be prepared on the going concern basis as a result of continued financial support pledged by ActiveCore Technologies Inc. Page 10 TWINCENTRIC LIMITED TRADING AND PROFIT AND LOSS ACCOUNT FOR THE PERIOD 25 OCTOBER 2002 TO 31 DECEMBER 2003 (POUND) (POUND) TURNOVER Sales 454,493 Training 106,140 Commissions received 30,000 ---------- 590,633 COST OF SALES Purchases 89,910 Staff Costs 167,402 Sub contractors 103,520 Development costs 225 ---------- 361,057 ---------- GROSS PROFIT 229,576 EXPENDITURE Premises expenses 19,240 Rent 21,794 Rates and water 5,350 Insurance 24,174 Light and heat 4,690 Directors' salaries 33,474 Directors' social security 3,936 Wages 32,837 Social security 3,493 Pensions 6,350 Staff insurance and medical 5,927 Telephone 17,963 Post and stationery 1,747 Advertising 8,667 Travelling 10,135 Subscriptions 1,719 Repairs and renewals 4,134 Training costs 785 Sundry expenses 1,307 Accountancy 3,944 Legal fees 7,144 Auditors remuneration 6,500 Foreign exchange (profits)/ losses (141) Entertainment 3,219 Bad debts 69,492 ---------- 297,880 ---------- (68,304) FINANCE COSTS Bank charges 6,079 Bank interest 4,537 Hire purchase 1,865 ---------- 12,481 ---------- Carried forward (80,785) This page does not form part of the statutory financial statements Page 11 TWINCENTRIC LIMITED TRADING AND PROFIT AND LOSS ACCOUNT FOR THE PERIOD 25 OCTOBER 2002 TO 31 DECEMBER 2003 (POUND) (POUND) Brought forward (80,785) DEPRECIATION Fixtures and fittings 12,220 Computer equipment 21,695 ---------- 33,915 ---------- (114,700) IMPAIRMENT LOSSES Goodwill 365,716 ---------- NET LOSS (480,416) ========== Page 12