antonov automatic transmission

  30 april 2008                          antonov plc                       (de "Onderneming")                     Goedgekeurde resultaten             voor het boekjaar eindigend op 31 december 2007        De Board van Antonov plc maakt haar goedgekeurde resultaten bekend              voor het boekjaar eindigend op 31 december 2007.  Hoofdpunten:   · Totale omzet in licentie-inkomsten en technische dienstverlening gestegen tot £ 771.000     (2006: £ 11.000).   · Operationeel verlies £ 3.935.000 (2006: £ 4.083.000), met inbegrip van een bedrag van      £ 500.000 gerelateerd aan de sluitingskosten van de Franse bedrijfsactiviteiten en de     investering in de nieuwe bedrijfsruimten in Warwick (Groot-Brittannië).    · Nettoverlies £ 4.073.000 (2006: £ 3.396.000 ­ zoals herzien). Het nettoverlies over 2006      van £ 3.396.000 werd ten gevolge van een eenmalige bate van £ 925.000 uit hoofde van      financiële inkomsten positief beïnvloed. Dit was gerelateerd aan het wijzigen van de      voorwaarden van de converteerbare obligatielening in 2006.   · Investeringen in nieuwe technologie en commerciële producten zoals gewaardeerd in de     ontwikkelingskosten zijn gestegen tot £ 2.259.000 (2006: £ 1.189.000).   · Financieringsfaciliteiten ter hoogte van £ 12.613.000 beschikbaar op 31 december 2007,     die samen met te genereren cash uit verwachte omzet het werkkapitaal vormen om de     omzetgenererende activiteiten te ondersteunen.   · Netto cashpositie per 31 december 2007 £ 98.000 (31 december 2006: £ 226.000). John Moore, Antonov's CEO, licht toe: "Ik ben zeer verheugd dat de grote veranderingen die wij in de laatste twee jaar hebben doorgevoerd hun vruchten afwerpen in de financiële resultaten met voor het eerst een aanzienlijke omzet. De hernieuwde commerciële focus heeft meer kansen gecreëerd en de consolidatie van onze activiteiten in de nieuwe faciliteit in Groot-Brittannië heeft ons in staat gesteld om het benodigde technische talent aan te trekken om de kracht van onze technologie te kapitaliseren terwijl de omzet zich verder blijft ontwikkelen."  Kopieën van deze aankondiging zijn verkrijgbaar op het kantoor van Dawnay, Day Corporate Finance Limited op 17  Grosvenor Gardens, London, SW1W 0BD, Groot-Brittannië, een digitale versie is te verkrijgen via de website van de  Onderneming op www.antonovat.com.  Voor verdere informatie kunt u contact opnemen met: Jos Haag, Director, Antonov plc        06 51 561 767 Antonov Plc  Chairman's Statement The steady transformation of the business has continued through the year and I am pleased to be able to say that all the major operational changes are complete. We now have a highly professional engineering team in an impressive facility which will stand scrutiny from experts in the automotive industry. The changes made over the last three years are also bearing fruit as evidenced by the company results as we have delivered strong growth in revenues which amount to £771k in 2007. These revenues are a combination of licence fees, engineering service fees and sales of product. This is a direct result of our much stronger commercial position created by the engineering work done over the past two years with the building of a professional engineering team. Although we have continued to incur losses, there has been a significant element of one-off costs related to setting up the new Warwick Technical Centre and closure of the Group's operations in France and The Netherlands, of £150k, £350k and £20k respectively. This compares to the French redundancy costs of £34k in the prior year The six speed programme is expected to deliver demonstration vehicles by May, in line with our plan. These will not be with Geely (as anticipated in the previous year), since the Board had to make the difficult decision in September 2007 that cooperation was hindering progress of the company rather than helping it. However, with Loncin, we believe we have a much stronger partner whose independence from car manufacturers opens up a much larger market for our transmission technology than would have been possible through Geely. Supercharger revenues were lower than anticipated. However, we now have strong industry interest in the application of the two speed unit to support engine auxiliary drives. With our new team we can now build on these opportunities and deliver a professional service to increase the success rate of our technology. At the same time, our focus on innovation has also continued with the filing of five new patent applications during the year. As we continue to increase our engagement with customers, we expect to identify new business problems and needs which will provide the opportunity for us to invent new solutions. Our previous CFO, Peter Logsdon, left the Board in July 2007 and the Board is grateful for the substantial contribution he made in the restructuring of the Company, especially in the field of finance. Mory Motabar, who joined the Board as a Non-Executive Director in April 2007, continues to act as Interim CFO as he steers the relocation of the Finance function through the move to the new location in Warwick. The Board expects to make a permanent appointment to the role of CFO following completion of the move to Warwick. The technical operation completed the move to the new Warwick Technical Centre in December 2007 and recruitment has continued. The new location has enabled us to gain access to a strong pool of talent and we now have a highly experienced and capable team of automotive industry professionals. The new building gives us a world class facility with space to accommodate future growth. The operation in Paris is now completely closed and we have no employees in France as of 31 March 2008. The high level of internal change in 2007 will be followed by a period of consolidation in 2008 but the commercial progress is expected to accelerate rapidly with the formation of the manufacturing joint venture with Loncin and the expansion of the dual speed product line. The business continues to have the confidence of its funding partners and has already entered into agreement for the funding required to implement these ambitious plans for the future. C.G.Ross Chairman Antonov Plc Antonov Plc Chief Executive Officer's report & Chief Financial Officer's review for the year ended 31 December 2007  2007 has been a year of significant internal change which has been managed without loss of focus on technical delivery and with significant commercial progress. I am very proud of the management team that has made this possible and the dedicated staff who have continued to work hard and effectively during this period of relocation and restructuring. As a result of this good work, we started 2008 with a strong team in a world class facility and with a higher level of commercial opportunities than the company has ever previously achieved. Production Programmes Six Speed Automatic Transmission Production development of the Antonov 6 speed automatic transmission continues on schedule. The first prototypes have been built and will be initially tested in the new test facility in the Warwick Technical Centre before being built into demonstrator vehicles. These will be used in Europe and China to demonstrate the transmission to prospective customers.  The current design is aimed at mid-sized cars and will be suitable for gasoline/petrol engines of up to 2.5 litres and diesel engines of up to 2.0 litres. Initial discussions have been held with prospective customers in China and the next steps will be the availability of the demonstrator vehicles and the details of full product costing which are in preparation in close co-operation with Loncin Chong Qing General Purpose Engine Co. Ltd ("Loncin"). Loncin is a leading Chinese manufacturer of high specification motor-cycles, small engines and a range of automotive components. Start of production is scheduled for mid 2010 with initial planned production capacity of 200,000 units per annum. However, the current high level of interest from Chinese automotive manufacturers indicates that the plan will need to allow for growth in this capacity to above 200,000 units per annum, which is now being taken into account within the planned production facility. Joint venture negotiations with Loncin are expected to be completed in the second half of 2008 to set up a manufacturing plant in Chong Qing, PRC. Dual Speed Supercharger Many car manufacturers are seeking routes to downsize their car engines. Turbo-charging offers greater power but has limitations in generating the low speed torque needed to match the feel of a larger engine. Supercharging can offer this but loses efficiency due to the difficulty to match the supercharger to the vehicle. Antonov's unique two speed module offers a highly efficient low cost solution. Initial low volume application to vehicles such as the Hummer H3 has proven that the Antonov solution gives a great drive with no adverse fuel economy results. Aftermarket supercharger sales have been growing steadily. The decision by Hummer France to select the Antonov dual speed system as a dealer option was a significant step forward. However, it has become clear that expansion of the market for the complete supercharger will require investment in additional vehicle kits. In order to speed up access to market and reduce the entry barriers, a new product has therefore been developed which is a stand alone dual speed pulley. This can be applied to any supercharger system and does not require Antonov to invest in vehicle kits. This product is now on sale and will also enable us to provide vehicle makers with a trial unit for engine auxiliary drive systems for evaluation purposes. Developing the market in the high volume sector is progressing well through Emporio which is expected to provide access to the important German auto industry with the goal of facilitating the drive to down-sized engines by providing a supercharging solution that provides high torque at low engine speeds. Dual Speed Accessory and Alternator Drives The work to commercialise the Antonov dual speed accessory drive has progressed more slowly than anticipated but with the much stronger technical capability we are now starting to accelerate interest. A number of opportunities for initial engineering projects are being pursued and these are expected to lead to licensing opportunities. Low Cost Four Speed Automatic The renewed interest in the Antonov 4 speed automatic system is expected to result in engineering projects during 2008. These will be client confidential projects and as such will not be announced to shareholders, but we will report progress as far as constraints of confidentiality allow. The good news for shareholders is that the previous investments made in development of transmissions with Honda, GM and others is now being put to good use through identifying the appropriate target market for the technology.  People and Structure  Following the move to the new Warwick Technical Centre, we now have a team of 26 staff, a mix of permanent and contract staff, and will continue to grow the capability as required to meet the demands of client funded commercial programmes. It is notable that the level of experience in the new senior engineering team is much greater now. The average age of the principal engineers in Paris was 31 as compared with 49 in the new team which has a higher level of experience in delivering commercial projects as opposed to merely performing generic development work.  The new building has a total space area of over 2000 square metres, which provides us with the flexibility required for future planning. The investment over the last year has elevated our design and analysis capabilities to the industry's highest standards in addition to helping us to create a highly professional test capability. As a result, we are now able to meet all of our design and analysis needs in house. We can also undertake the majority of test work although we will continue to outsource the prototype manufacturing and certain specialist test requirements. The Paris facility is now completely closed and there are no remaining employees in France. The Thetford office will close by the middle of 2008 and the office in Rotterdam is now closed. However, the Rotterdam office lease will expire in March 2009 and on the basis that we do not expect to be able to exit the lease before the expiry date, full provision has been made for the remaining lease costs, which will not exceed £15k. The consolidation of all European operations in one location will help us save overheads but will also improve the efficiency of the operation, allowing everyone to be clearly focused on moving the business forward. We have initiated the setting up of a Wholly Owned Foreign Enterprise (WOFE) in Chong Qing, PRC, which will form the basis for the Loncin joint venture management. It is currently planned to comprise a permanent staff of four employees. All operational work will be referred back to the UK. Financial Group revenues for 2007 increased to £771k from £11k for the full year 2006. Revenues comprise engineering services fees from Geely and Loncin, as well as license fees from Emporio distribution agreement in Germany and receipts from sale of products, which demonstrates the success of our commercialisation strategy and our efforts to broaden our business model.  The operating loss before financial expense and tax for 2007 of £3,935k was lower than the operating loss of £4,083k for 2006. Positive impact of higher revenues, as compared with 2006 revenues, was partly offset by additional one-time operational costs related to the closure of the company's operations in France and the setting up of the newly established consolidated operational facility in Warwick (UK). This has already resulted in a more efficient operation which will contribute towards our efforts to manage our operating expenses in future periods. The loss for the year (after financial expense of £29k and tax charge of £109k) was £4,073k. This compares with a loss of £3,396k (restated) in 2006 which reflects a one-off benefit of £925k (restated) relating to the financial income arising on the amendment to the terms of the Group's convertible loan notes. Investment in new technology and development of new products as capitalised within development costs increased to £2,259k in 2007, as compared with an investment of £1,189k in 2006. The company had a total funding facility of £12,613k in place at the end of December 2007, with no obligations related to external loans or borrowings. The funding facility will be used to support our commercialisation strategy, instead of development activities which has been the case historically. This will enable us to generate more revenues, enabling us to reduce our dependency on external funding. Antonov Plc Report of the directors for the year ended 31 December 2007  The directors present their report together with the audited financial statements for the year ended 31 December 2007. Results and dividends    The Consolidated Income Statement is set out on page 13 and shows the loss for the year. Principal activities and review of the business     The Group is engaged in the development and commercialisation of a range of    transmission products for both automotive and non-automotive applications.    The operating results and future prospects are discussed in the Chief Executive Officer's    Report & Chief Financial Officer's Review on pages 4 to 5. No dividends (2006: £nil) are    proposed and the loss of £4,073k (2006: £3,396k (restated)) has been transferred to    reserves. The Group's key financial and other performance indicators during the year were as follows:                         2007      2006                              (restated)                         £'000     £'000 Group revenue                   771       11 Group loss before tax            (3,964)     (3,158) Loss per share (pence)            (8.5)P     (9.5)P Cash and short term deposits            98      226 Shareholders' funds               4,213     1,985 Further details of the business review are contained in the Chief Executive Officer's Review. Capital management      The primary objective of the Group's capital management is to ensure an appropriate      level of liquid resources are available to fund the daily operations of the business. This      has been achieved by a combination of funds received from drawdowns under the      financing facilities as well as revenue received from customers. At 31 December 2007      the unutilised financing facility available amounts to £12,623k and total available cash      balance was £98k. Principal risks and uncertainties   · Foreign currency risk      The majority of the Group's revenues are denominated in Euros while its costs are      principally denominated in sterling. As a result, the Group is subject to the risks of     foreign currency movements. The Group does not operate any type of hedging program     to mitigate this risk.   · Market risk     Larger automotive-related companies are better placed and better resourced than the     Group. It is possible that other companies may have competitive products in     development, which are not known to the Group. Competitors may be able to develop     more effective technologies which may be superior to those of the Group.   o Technological Risk     The Group is exposed to future changes in technology which may make the market for     products based on its particular designs less effective.   · Patent Protection     The continuing ability to establish, protect and enforce our proprietary rights is     fundamental to the Group. This is principally achieved through the process of patent     application and establishing patent protection. However, should these applications or     granted patents be challenged, then the defence of our rights could incur costs and the     outcome cannot be predicted with certainty   · Commercialisation     The Group's commercial progress depends upon its ability to establish and maintain     successful relationships with appropriate licensees and other third parties to exploit     successfully the Antonov technologies through development, manufacturing and     distribution agreements. Going concern    The directors are of the opinion that the working capital now available to the Group is    sufficient for its foreseeable requirements and that, together with the generation of new    revenue streams in 2008, they consider that it is appropriate for the accounts to be    prepared on a going concern basis.  Post balance sheet events    Post balance sheet events are set out in note 32 to the financial statements. Directors    The directors that held office during the year were:    R Antonov (resigned 2 April 2007)    D A Bovell (resigned 2 April 2007)    J E Haag    P N L Logsdon (resigned 24 July 2007)    J W Moore    C G Ross    M Motabar (appointed 26 April 2007) Beneficial interests    The directors of the company during the year and their beneficial interests (unless    otherwise stated) in the ordinary share capital of the parent company, options to purchase    such shares under the Senior Executive Savings Related Share Option Scheme, and    interests arising from the long term incentive scheme, were as follows:                Options and similar interests           Shares              31 December    31 December     31 December     31 December                2007         2006        2007         2006      R Antonov        75,000       250,571      2,956,704      2,956,704      D A Bovell       100,000       100,000       438,936       438,936      J E Haag        510,000       100,000          -         -      J W Moore       568,334       133,334          -         -      C G Ross        510,000       125,000       59,700       59,700      M Motabar       300,000          -          -         - Major interests    The directors are aware of the following interests that represent three percent or more of    the issued share capital of the company at 31 March 2008:    Shareholder                      Number of Percentage                                ordinary  of ordinary                                 shares     shares    Euroclear                      38,093,431     63.8%    Quivest                       11,635,560     19.5%    HSBC Global Custody Nominee Ltd            3,705,047     6.2%    Antonov SARL                     2,956,704     5.0% Research and development    The Group continues to invest in research and development. This has resulted in    improvements in current intellectual property and new ideas being developed which will    benefit the Group going forward. Certain costs in relation to the supercharger and TX6    automatic gearbox projects totalling £2,259k have been capitalised in the balance sheet    and the remainder has been written off as incurred through the Income Statement. Disabled employees    The Group gives full consideration to applications for employment from disabled persons    where the candidate's particular aptitudes and abilities are consistent with adequately    meeting the requirements of the job.  Directors' indemnity insurance    The Group has granted an indemnity to one or more of its directors against liability in    respect of proceedings bought by third parties, subject to the conditions set out in the    Companies Act 1985. Such qualifying third party indemnity provision remains in force as at    the date of approving the directors' report. Financial instruments    Details of the use of financial instruments by the company are contained in notes 21 and 22    and its subsidiary undertakings are contained in note 11 to the financial statements. Policy on the payment of creditors    The Group and the company's policy is that payments to suppliers are made in accordance    with those terms and conditions agreed between the Group and its suppliers, provided that    all trading terms and conditions have been complied with.    The number of average days purchases of the company represented by trade creditors at    31 December 2007 was: 48 days (2006: 23 days), Group: 81 days (2006: 49 days). Directors' statement as to disclosure of information to auditors    The directors who were members of the board at the time of approving the directors' report    are listed on page 7. Having made enquiries of the directors and of the company's auditors,    each of the directors confirms that:       · to the best of each director's knowledge and belief, there is no information         relevant to the preparation of their report of which the Group's auditors are         unaware; and       · each director has taken all the steps a director might reasonably be expected to         have taken to be aware of relevant audit information and to establish that the         Group's auditors are aware of that information. Auditors    A resolution to reappoint Ernst & Young LLP as the company's auditors will be put to the    forthcoming Annual General Meeting. By order of the Board S Alexander Company Secretary Antonov Plc Statement of directors' responsibilities The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the company, for safeguarding the assets, for taking reasonable steps for the prevention and detection of fraud and other irregularities and for the preparation of financial statements which comply with the requirements of the Companies Act 1985. The directors are responsible for preparing the annual report and the financial statements. The directors are required to prepare financial statements for the Group in accordance with International Financial Reporting Standards as adopted by the European Union.  Group financial statements Company law requires directors to prepare such financial statements in accordance with IFRS's, the Companies Act and Article 4 of the IAS regulation. This requires the faithful representation of the effects of the transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board's "Framework for the preparation and presentation of financial statements'. In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable International Financial Reporting Standards. A fair presentation also requires the directors to: ·  properly select and apply appropriate accounting policies in accordance with IAS 8; ·  present information, including accounting policies, in a manner that provides relevant,    reliable, comparable and understandable information; and ·  provide additional disclosures when compliance with the specific requirements in IFRS is    insufficient to enable users to understand the impact of particular transactions, other events    and conditions on the entity's financial position and financial performance. ·  International Accounting Standard 1 requires that financial statements present fairly for    each financial year the company's financial position, financial performance and cash flows.    This requires the faithful representation of the effects of transactions, other events and    conditions in accordance with the definitions and recognition criteria for assets, liabilities,    income and expenses set out in the International Accounting Standards Board.  The    directors are required to state that the Group has complied with IFRSs, subject to any    material departures disclosed and explained in the financial statements. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group 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 Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Antonov Plc Independent auditors' report to the members of Antonov Plc We have audited the Group financial statements of Antonov Plc for the year ended 31 December 2007 which comprise the Consolidated Income Statement, the Consolidated Statement of Changes in Equity, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement and the related notes 1 to 32. These Group financial statements have been prepared under the accounting policies set out therein. We have reported separately on the parent company financial statements of Antonov Plc for the year ended 31 December 2007. 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 The directors are responsible for preparing the Annual Report and the Group financial statements in accordance with applicable United Kingdom law and International Financial Reporting Standards (IFRSs) as adopted by the European Union as set out in the Statement of Directors' Responsibilities. Our responsibility is to audit the Group financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the Group financial statements give a true and fair view and whether the Group financial statements have been properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS Regulation. We also report to you whether in our opinion the Directors' Report is not consistent with the Group financial statements. In addition we report to you if, in our opinion, we have not received all the information and explanations we require for our audit, or if the information specified by law regarding director's remuneration and other transactions is not disclosed. We read other information contained in the Annual Report and consider whether it is consistent with the audited Group financial statements. The other information comprises only the Financial Highlights, Chairman's Statement, Chief Executive Officer's Report and Chief Financial Officer's Review. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the Group financial statements. Our responsibilities do not extend to any other information. Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the Group financial statements. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the Group financial statements, and of whether the accounting policies are appropriate to the Group'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 Group 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 Group financial statements.  Opinion In our opinion: · the Group financial statements give a true and fair view, in accordance with IFRSs as   adopted by the European Union, of the state of the Group's affairs as at 31 December 2007   and of its loss for the year then ended;  · the Group financial statements have been properly prepared in accordance with the   Companies Act 1985 and Article 4 of the IAS Regulation; and · the information given in the Directors' Report is consistent with the Group financial   statements. Ernst & Young LLP Registered Auditor Manchester Antonov Plc Consolidated income statement for the year ended 31 December 2007                                           Restated *                      Note            2007       2006                                    £'000      £'000 Revenue                  7              771        11 Cost of sales                              (26)        -                                  _______      _______ Gross profit                              745        11 Operating expenses                         (4,680)     (4,094)                                  _______      _______ Loss from operations            8            (3,935)     (4,083) Finance (expense)/income          11              (29)       925                                  ________     ________ Loss before tax                           (3,964)     (3,158) Taxation                  12             (109)      (238)                                  _______      _______ Loss for the year             26            (4,073)     (3,396)                                  _______      _______ Loss per share                                          - Basic and diluted           13            (8.5p)      (9.5p) (pence)                                  _______      _______ The notes on pages 18 to 43 form part of these financial statements. * restated for correction of share issue costs (see note 2).  Antonov Plc  Consolidated statement of changes in equity for the year ended 31 December 2007                   Share   Restated   Capital    Foreign    Warrant    Restated*   Restated                  Capita  *Share    Redemptio   Exchang    Reserve    Retained   *                  l     Premium    n Reserve   e              Losses    Total                                      Reserve                  Equity                   £'000    £'000     £'000     £'000     £'000     £'000    £'000 Balance at 01 January 2006     6,163    20,467     2,587     (85)       -   (31,688)   (2,556) Adjustment to foreign          -       -       -     47        -       -      47 exchange Net income recognised directly     -       -       -     47        -       -      47 in equity Loss for the year ­ as restated     -       -       -       -       -    (3,396)   (3,396) Total recognised income and       -       -       -     47        -    (3,396)   (3,349) expense for the year ­ as restated Increase in share capital      2,565    5,162        -       -       -       -    7,727 Share issue costs ­ as         -    (269)        -       -       -       -    (269) restated Movement on exchange of         -       -       -       -     361       -     361 warrants Share based payment           -       -       -       -       -      71      71 Balance at 31 December       8,728    25,360     2,587     (38)      361    (35,013)    1,985 2006 ­ as restated Adjustment to foreign          -       -       -     114        -       -     114 exchange Net income recognised directly     -       -       -     114        -       -     114 in equity Loss for the year            -       -       -       -       -    (4,073)   (4,073) Total recognised income and       -       -       -     114        -    (4,073)   (3,959) expense for the year Increase in share capital      1,858    4,582        -       -       -       -    6,440 Share issue costs            -    (484)        -       -       -       -    (484) Movement on exchange of         -       -       -       -      9       -      9 warrants Share based payment           -       -       -       -       -     222      222 Balance at 31 December       10,586    29,458     2,587      76      370    (38,864)    4,213 2007  All amounts are attributable to equity holders of the parent.  The notes on pages 18 to 43 form part of these financial statements.  * restated for correction of share issue costs (see note 2). Antonov Plc Consolidated balance sheet at 31 December 2007                                        Restated *                             Note     2007     2006                                   £'000     £'000 ASSETS                                          Non-current assets                                     Property, plant and equipment (PPE)         14      509      370  Intangible assets                  15     4,524     2,212 Total non-current assets                      5,033     2,582 Current assets                                       Inventories                     17       35        -  Trade and other receivables             18     1,424      434  Cash and short term deposits                    98      226 Total current assets                        1,557      660 Total assets                            6,590     3,242 LIABILITIES AND EQUITY                                  Current liabilities                                     Trade and other payables               19     2,377     1,248 Total current liabilities                     2,377     1,248 Non-current liabilities                                   Other creditors ­ Euro warrants           20       -       9 Total non-current liabilities                     -       9 Total liabilities                         2,377     1,257 Equity attributable to equity                               holders of the parent company                                Share capital                    25     10,586     8,728  Share premium reserve                26     29,458    25,360  Capital redemption reserve              26     2,587     2,587  Foreign exchange reserve               26       76      (38)  Warrant reserve                   26      370      361  Retained losses                   26    (38,864)   (35,013) Total equity                            4,213     1,985 Total liabilities and equity                    6,590     3,242 * restated for correction of share issue costs (see note 2). The financial statements on pages 13 to 43 were approved by the Board of Directors and authorised for issue on 29 April 2008 and were signed on its behalf by: J W Moore               M Motabar Director                Director The notes on pages 18 to 43 form part of these financial statements. Antonov Plc Consolidated cash flow statement for the year ended 31 December 2007                                            Restated *  Restated *                                2007      2007    2006     2006                                £'000     £'000    £'000    £'000 Operating activities                                               Loss before tax                              (3,964)         (3,158)  Adjustments for:                                                Depreciation                          110            130         Amortisation                           43            81          Accelerated amortisation of intangible               -           384        assets                       Loss on disposal of tangible assets               60            15          Share based payments - stock options              222            71          Share based payments - Non cash                 19            298        payments                                                 _______             ______                                                454            979  Adjustments for non cash movements:                                      Financial liabilities ­ convertible debt              -          (740)         Exchange movements                        33             -         Euro warrants                           -          (185)         Other                              29             -                                           _                             ______             _______                                                62           (925)                                       _______         _______ Cash flow from operations before                      (3,448)         (3,104) changes in                    working capital and provisions                                          (Increase)/Decrease in trade and other           (536)             254        receivables                    (Increase)/Decrease in inventories              (35)            116         Increase/(Decrease) in trade and other           1,535             (88)        payables                                                 _______             _______                                                964            282                                       _______         _______ Cash outflow from operating activities               (2,484)          (2,822) carried forward                                             * restated for correction of share issue costs (see note 2).  Consolidated cash flow statement for the year ended 31 December 2007 (continued)                                      Restated *    Restated *                           2007     2007      2006      2006                           £'000    £'000      £'000      £'000 Cash outflows from operating                                      activities brought forward                        (2,484)             (2,822) Investing activities                                           Payments to acquire PPE             (417)            (251)           Proceeds on sale of PPE              123              -           Payments to acquire intangible assets       (41)             (90)          Capitalisation of development costs      (2,259)            (1,189)                                        (2,594)             (1,530) Financing activities                                           Proceeds from issue of ordinary         4,950            1,837          shares  Issue of convertible debt              -            2,471                                 _______            _______                                          4,950              4,308                               _______             _______ (Decrease) in cash                       (128)               (44) Cash and cash equivalents at the                                     beginning of the period                     226               270 Cash and cash equivalents at the              _______             _______  end of the period                        98               226                               _______             _______ The notes on pages 18 to 43 form part of these financial statements. * restated for correction of share issue costs (see note 2). Antonov Plc Notes forming part of the financial statements for the year ended 31 December 2007   1 Corporate Information     Antonov plc is a public limited liability company incorporated in the United Kingdom     under the Companies Act 1985. The address of the registered office is 2 Hawkes Drive,     Heathcote Industrial Estate, Warwick, Warwickshire, CV34 6LX. Antonov's shares are     publicly traded on AIM (The Alternative Investment Market of the London Stock     Exchange) with a secondary listing on Euronext Amsterdam.   2 Basis of preparation and statement of compliance      The accounting policies which follow set out those policies which apply in preparing the      financial statements for the year ended 31 December 2007.      These Group financial statements have been prepared in accordance with International      Financial Reporting Standards (IFRSs) as adopted by the European Union as they      apply to the financial statements of the Group for the year ended 31 December 2007.     The parent Company financial statements of Antonov plc have been prepared in     accordance with UK GAAP.     The consolidated financial statements have been prepared under the historical cost     convention, unless otherwise stated below, and are presented in Sterling.     Going concern     The accounts have been prepared on a going concern basis which assumes that the     Group will continue in operational existence for the foreseeable future.     At 31 December 2007, the Group had cash of £98k (2006: £226k) and an undrawn     committed borrowing facility in respect of convertible loan notes of 2,100k,     approximately £1,510k (2006: £2,000k) and 15,100k, approximately £11,103k     from a committed share finance facility agreement (2006: £4,200k). Since 31     December 2007 the Group has received £288k from ordinary share warrants that     have been exercised and £1,360k from the share finance facility agreement. The     directors are of the opinion that the working capital now available to the Group is     sufficient for its foreseeable requirements. The directors therefore consider that it is     appropriate for the accounts to be prepared on a going concern basis.     Prior year adjustment     In preparing the financial statements for the current year the Group identified £269k of     share issue costs that had been charged to the income statement in the prior year as     opposed to being charged to the share premium account. This has resulted in a prior     year adjustment for the Group. The finance income in the prior year has increased by     £269k and consequently the loss for the prior year has decreased by £269k. There is no     impact on total equity.   3 Basis of consolidation     Where the company has the power, either directly or indirectly, to govern the financial     and operating policies of another entity or business so as to obtain benefits from its     activities, it is classified as a subsidiary. The consolidated financial statements present     the results of the company and its subsidiaries      ("the Group") as if they formed a single entity. Inter company transactions and balances     between Group companies are therefore eliminated in full.      he financial statements of subsidiaries are prepared for the same reporting year as the     T     parent company using consistent accounting policies.   4 Significant accounting estimates     The key source of estimation uncertainty that has a significant risk of causing material     adjustment to the carrying amounts of liabilities within the next financial year is the     estimation of share-based      payment costs. The estimation of share-based payment costs requires the     selection of an appropriate valuation model, consideration as to the inputs     necessary for the valuation model chosen and the estimation of the number of     awards that will ultimately vest and the continuing participation of employees (see     note 28).   5 Accounting policies      he accounting policies adopted are consistent with those of the previous financial year     T     except as follows:     The Group has adopted the following new and amended IFRS and IFRIC interpretations     during the year.Adoption of these revised standards and interpretations did not have any     effect on the financial performance or position of the Group in the current or prior     periods. In certain cases, they did however give rise to additional disclosures.     · IFRS 7 Financial Instruments: Disclosures     · IAS 1 Amendment ­ Presentation of Financial Statements: Capital Disclosures     · IFRIC 8 Scope of IFRS 2     · IFRIC 9 Reassessment of Embedded Derivatives     · IFRIC 10 Interim Financial Reporting and Impairment     The principal effects of these changes are as follows:     IAS 1 Presentation of Financial Statements     This amendment requires the Group to make new disclosures to enable users of the     financial statements to evaluate the Group's objectives, policies and processes for     managing capital. These new disclosures are shown in the capital management section     of the Operating and Financial Review.       Revenue       Revenue represents amounts receivable for goods and services provided in the normal       course of business, net of trade discounts, VAT and other sales related taxes. Amounts       receivable consist of royalties, licence fees, professional services and support and       maintenance payments.        Revenue is recognised for any element of a sale when all of the basic criteria are       met for that element. These are given below.        Licence Fees and Royalties ­ revenue is recognised when persuasive evidence       for the arrangement exists, delivery has occurred, fees are fixed or determinable,       non refundable and require no further commitments with the collection being       probable.         rofessional Services ­ invoiced in line with customer contracts and recognised       P      on the basis of work performed using the stage of completion method and based on       achievement of key milestones defined in the project.       Product Sales ­ revenue is recognised when the significant risks and rewards of       ownership of the products have passed to the buyer, usually on despatch.        evenue is also accrued on the above elements when revenue can be recognised       R      but has not been invoiced.        evenue is deferred on the above elements when it has not been recognised but       R      the invoice has been raised.        evenue relating to contracts with multiple elements is allocated based on the fair       R      value of each element and is recognised in accordance with the accounting       principles for each element described above.       Foreign currencies       Transactions entered into by Group entities in a currency other than the currency of the       primary economic environment in which it operates (the "functional currency") are       recorded at the rates ruling when the transactions occur. Foreign currency monetary       assets and liabilities are translated at the rate ruling at the balance sheet date.       Exchange differences arising on the retranslation of unsettled monetary assets and       liabilities are similarly recognised immediately in the income statement.       On consolidation, the results of overseas operations are translated into sterling at rates       approximating to those ruling when the transactions took place. All assets and liabilities       of overseas operations, including goodwill arising on the acquisition of those operations,       are translated at the rate ruling at the balance sheet date. Exchange differences arising       on translating the opening net assets at opening rate and the results of overseas       operations at actual rate are recognised directly in a separate component of equity (the       "foreign exchange reserve"). Exchange differences on foreign currency borrowings, to       the extent that they are used to finance or provide a hedge against foreign equity       investments, are also taken to equity.     On disposal of a foreign operation, the cumulative exchange differences recognised in     the foreign exchange reserve relating to that operation up to the date of disposal are     transferred to the income statement as part of the profit or loss on disposal.     The functional currency and the presentational currency of the Group is sterling     Intangible Assets     The significant intangibles recognised by the Group, their useful economic lives and the     methods used to determine the cost of intangibles acquired in a business combination     are as follows:                          Useful economic life         Amortisation method     Patent and trademark applications 20 years                   Straight line basis     Software                  3 years               Straight line basis     Development costs             5 years                Straight line basis         Patents and trademarks     Patent and trademark costs, which are included in intangible assets, are stated at     cost, reduced by a provision for amortisation over the period of their expected     useful lives of 20 years. The directors review the carrying value of all such assets     for impairment when events or changes in circumstances indicate that the carrying     value may be impaired.     Research and development expenditure      Expenditure on research and development activities that does not meet the criteria as     stated below, is recognised as an expense in the Income Statement in the period in     which it is incurred.     Development costs are capitalised if it can be demonstrated that:     · it is technically feasible to develop the product for it to be sold;     · adequate resources are available to complete the development;     · there is an intention to complete and sell the product;     · the Group is able to sell the product;     · sale of the product will generate future economic benefits; and     · expenditure on the project can be measured reliably.     Capitalised development costs are amortised over the periods the Group expects to     benefit from selling the products developed. The carrying value of capitalised     development expenditure is reviewed for impairment annually before being brought     into use.    Property, plant and equipment     Property, plant, and equipment are stated at cost less accumulated depreciation and     accumulated impairment losses. Depreciation is provided on all other items of property,     plant and equipment to write off the cost, less estimated residual value, based on prices     prevailing at the balance sheet date, evenly over their expected useful economic lives as     follows:-                        Useful economic life      Amortisation method      Motor vehicles            3 years             Straight line basis      Equipment              3 years             Straight line basis      Leasehold property          5 years             Straight line basis  improvements     Impairment of assets      The carrying value of property, plant and equipment and intangible assets are reviewed     for impairment if events or changes in circumstances indicate the carrying value is not     recoverable. An impairment loss is recognised for the amount by which the asset's     carrying value exceeds its recoverable amount. The recoverable amount is the higher of     an asset's fair value less costs to sell and value in use.    Income tax     The tax expense represents the sum of the tax currently payable and deferred tax,     together with research and development tax credits received.     Income tax is charged to equity or credited directly to equity if it relates to items that are     credited or charged to equity. Otherwise income tax is recognised in the income     statement.     Current tax assets and liabilities are measured at the amount expected to be recovered     from or paid to the taxation authorities, based on tax rates and laws that are enacted or     substantially enacted by the balance sheet date.     Deferred taxation     Deferred tax assets and liabilities are recognised on all temporary differences arising     between the carrying amount of an asset or liability in the balance sheet differs to its tax     base, except for differences arising on:     · the initial recognition of goodwill;     · the initial recognition of an asset or liability in a transaction which is not a business       combination and at the time of the transaction affects neither accounting or taxable       profit; and     · investments in subsidiaries and jointly controlled entities where the Group is able to       control the timing of the reversal of the difference and it is probable that the       difference will not reverse in the foreseeable future.     A deductible temporary difference arises on share-based payments calculated as the     difference between the tax base of the remuneration expense (being the option's intrinsic     value at its future exercise date) and its carrying value of nil on the balance sheet. This     gives rise to a deferred tax asset. As the tax deduction is based on the unknown future     share price at the date of exercise, the tax base is estimated on the basis of the entity's     share price at each balance sheet date. Where this amount exceeds the cumulative     amount of the remuneration expense on equity-settled transactions recognised in the     income statement and credited to equity, the excess deferred tax is recognised in equity     in accordance with the principle that the tax follows the item. The deferred tax effects of     cash settled transactions are always recognised in the income statement.     Recognition of deferred tax assets is restricted to those instances where it is probable     that taxable profit will be available against which the deductible temporary differences,     carried forward tax credits or tax losses can be utilised.     The amount of the asset or liability is determined using tax rates that have been enacted     or substantially enacted by the balance sheet date and are expected to apply when the     deferred tax liabilities/(assets) are settled/(recovered). Deferred tax balances are not     discounted.     Deferred tax assets and liabilities are offset when the Group has a legally enforceable     right to offset  current tax assets and liabilities and the deferred tax assets and liabilities     relate to taxes levied by the same tax authority on either the same taxable Group     company; or different Group entities which intend either to settle current tax assets and     liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously,     in each future period in which significant amounts of deferred tax assets or liabilities are     expected to be settled or recovered.     Inventories     Inventories are stated at the lower of cost and net realisable value. Cost comprises all     costs of purchase, costs of conversion and other costs incurred in bringing the     inventories to their present location and condition.     Net realisable value is based on estimated selling price less any further costs expected     to be incurred to completion and disposal.     Trade receivables     Trade receivables are measured at initial recognition at fair value and are subsequently     measured at amortised cost using the effective interest rate method where the true value     of money is material.      Appropriate allowances for estimating irrecoverable amounts are recognised in the     Income Statement when there is evidence that the asset is impaired. This impairment     would be recognised within administrative expenses.     Cash and cash equivalents     Cash and short term deposits in the balance sheet comprise of cash on hand and     demand deposits, and other short term highly liquid investments that are readily     convertible into known amounts of cash and are subject to an insignificant risk of     changes in value. For the purpose of the consolidated cash flow statement, cash and     cash equivalents consist of cash and cash equivalents as defined above, net of     outstanding bank overdrafts                                         Share-based payments ­ equity settled transactions     Where share options are awarded to employees, the cost is measured by reference to     the fair value of the options at the date of grant and is charged to the income statement     over the vesting period. Fair value is determined by an external valuer using an     appropriate pricing model. Non-market vesting conditions are taken into account by     adjusting the number of equity instruments expected to vest at each balance sheet date     so that, ultimately, the cumulative amount recognised over the vesting period is based on     the number of options that eventually vest. Market vesting conditions are factored into     the fair value of the options granted. As long as all other vesting conditions are satisfied,     a charge is made irrespective of whether the market vesting conditions are satisfied.     The cumulative expense is not adjusted for failure to achieve a market vesting condition.     Where the terms and conditions of options are modified before they vest, the increase in     the fair value of the options, measured immediately before and after the modification, is     also charged to the income statement over the remaining vesting period. No reduction is     recognised if the fair value decreases. Where an equity settled award is cancelled, it is     treated as if it had vested on the date of cancellation, and any cost not yet recognised in     the income statement for the award is expensed immediately.     Where equity instruments are granted to persons other than employees, the income     statement is charged with the fair value of goods and services received.     Retirement benefit costs     The Group does not have a pension scheme for employees. However, the Group pays a     contribution into personal pension schemes for certain employees on a salary-sacrifice     basis.     Leased assets     Where substantially all of the risks and rewards incidental to ownership are retained by     the lessor (an "operating lease"), the total rentals payable under the lease are charged to     the income statement on a straight-line basis over the lease term.     Financial assets     Loans and receivables. These assets are non-derivative financial assets with fixed or     determinable payments that are not quoted in an active market. They arise principally     through the provision of goods and services to customers (trade debtors), but also     incorporate other types of contractual monetary asset. They are carried at amortised    cost using the effective interest method if the time value of money is significant less any    provision for impairment.         Equity instruments    Equity instruments issued by the Company are recorded at the proceeds received, net of    direct issue costs. The carrying amount of the equity component is not re-measured in    subsequent years.    Financial liabilities    Trade payables: Trade payables are initially measured at fair value, and are    subsequently measured at amortised cost    Warrants: Where warrants are denominated in the functional currency of the parent    entity, sterling, with a fixed price, they are treated as equity.    Where instruments are denominated in a currency other than the functional currency of    the entity, they are considered to have a variable price and as such are recorded as a    liability at fair value, with any movements on subsequent measurement through the    income statement.    The warrants have been valued using an option pricing model. The model takes into    account the risk free interest rate for the life of the option, the exercise price of the    option, the current price of the underlying shares, the life of the option, the expected    volatility of the option and any market based vesting conditions.    Other financial liabilities: These include trade payables and other short-term monetary    liabilities, which are initially recognised at fair value and subsequently re-measured at    amortised cost using the effective interest method. 6   New standards and interpretations not applied     During the year, IASB and IFRIC have issued the following standards and     interpretations with an effective date after the date of these financial statements:                                        Effective International Accounting Standards (IAS/IFRSs)                 Date          Amendment to IFRS 2 ­ Vesting              1 January IFRS 2      conditions and cancellations                 2009          Business combinations (revised January IFRS 3                                 1 July 2009          2008)                                      1 January IFRS 8      Operating segments                      2009          Presentation of Financial Statements          1 January IAS 1       (Revised September 2007)                   2009                                      1 January IAS 23      Borrowing Costs (Revised March 2007)             2009 IAS 27      Consolidated and separate financial statements      1 July 2009          (revised January 2008)                                                  . International Financial Reporting Interpretations Committee         Effective (IFRIC)                                     Date IFRIC                                   1January         Service Concession Arrangements 12                                       2008 IFRIC      Customer Loyalty Programmes               1 July 2008 13         IAS 19 ­ The Limit on a Defined Benefit Asset, IFRIC                                   1 January         Minimum Funding Requirements and their 14                                       2008         Interaction The Group has not yet completed a detailed evaluation of the impact of the above standards and interpretations on its financial position but does not currently expect the adoption of these to have impact on its current financial condition.  7    Revenue                                                                                 2007      2006                                             £'000     £'000      Revenue arises from:                                             Professional services - design and development                 398      11      Product sales                                  35       -      License fees and royalties                           338       -                                            _______    _______                                              771      11                                            _______    _______ 8    Loss from operations                                                                          2007      2006                                             £'000     £'000      This is stated after charging:                                        Depreciation of property, plant and equipment                  110      130      Loss on disposal of property, plant and equipment                60      15      Amortisation of intangible fixed assets                     43      465      Foreign exchange differences                           31       3      Operating lease expense:                                              Property                                 107      187      Auditors remuneration:                                              Audit of the financial statements *                     52      42        Local statutory audits for subsidiaries                    3      24        Fees paid to the company's auditors for non-audit services:                            Fees in respect of prospectus for working capital review        25      15      *£11k (2006: £10k) of this relates to the company              _______    _______ 9     Staff costs                                                                              2007      2006                                             £'000     £'000      Staff costs (including directors) comprise:                                 Wages and salaries                              1,352     1,312      Share-based payment expense *                          289      242      Social security costs                              242      252      Pension costs                                  75      126                                            _______    _______                                             1,958     1,932                                            _______    _______      *   The share-based payment expense comprises the following:-                                              2007       2006                                              £'000       £'000        Payments settled by grant of stock options (note 28)              222        71        Payments settled by issue of shares                       67       171                                               289       242     The average number of employees (including directors) during the year, analysed by     category, was as follows:                                              2007         2006                                             Number        Number      Administration                                    13         8      Research and development                               21         16                                                 34         24     The emoluments of the individual directors were as follows:     2007:      Director     Basic   Bonu   Compen    Benefits     Total    Social       Pension               salar   s    sation    in kind          charges      contributions               y and       for loss                and other               fees        of office               insurances               £'000  £'000    £'000      £'000   £'000       £'000        £'000      R Antonov      22     -      -         -   22          3         3      D A Bovell      6     -      -         -   6          1          -      J E Haag       48     -      -         -   48          -          -      P N L Logsdon    69    20      38         -   127         22          -      J W Moore      114    42      -         6   162         19         11      C G Ross       48     -      -         -   48          -          -      M Motabar      128     -      -         -   128          -          -                435    62      38         6   541         45         14     J W Moore's remuneration as stated above includes £45k to be paid in shares of Antonov     plc (bonus: £40k, salary: £5k).      M Motabar's remuneration as stated above includes £22k to be paid in shares of Antonov       plc.      There have been no options exercised during the year.      The Group paid into a personal pension scheme for J W Moore and paid into a statutory     government scheme for R Antonov and French employees during the year.    2006:    Director       Basic   Bonu   Benefit   Total    Social      Pension              salary    s    s in         charges and contribution               and         kind           other        s               fees                   insurances               £'000   £'000   £'000   £'000      £'000       £'000    R Antonov         99     -     5    104        13        13    D A Bovell        71    30      -    101        13         -    J E Haag         48     -     -     48         -        -    P N L Logsdon       67    20      -     87         -        -    J W Moore         84    40      6    130        16        23    C G Ross         30    30      -     60         -        -                399    120     11     530        42        36     D A Bovell received 165,449 shares in the company in part-payment of his salary and     bonus. The fair value of these shares was £89,000.     C G Ross received 59,700 shares in part-payment of his fees and bonus. The fair vale of     these shares was £40,000. 10 Segment information     The Group's primary reporting format for reporting segment information is business     segments. The Group has one business segment which is the development and     commercialisation of Antonov Automotive Transmissions. Therefore, all revenue, assets     and liabilities and all other assets and liabilities and all other costs relate to this one     business segment in both 2007 and 2006.     The Group's secondary reporting format for reporting segment information is geographic     segments.            External revenue          Total assets        Capital expenditure             by location of       by location of assets      by location of assets              customers              2007     2006      2007       2006      2007       2006              £'000     £'000     £'000      £'000      £'000      £'000 China           398        -        -        -        -        - France            31      11       69       502        -       79 Netherlands          -       -      704      2,316        -       146 UK              2       -     5,817       424      2,798      1,305 Luxembourg         340        -        -        -        -        -            _______    _______    _______      _______    _______      _______               771       11     6,590      3,242      2,798      1,530            _______    _______    _______      _______    _______      _______ 11 Finance (expense)/income                                       Restated *                                    2007    2006                                    £'000    £'000 Convertible debt                             -     740 Euro warrants                              -     185 Other                                 (29)      -                                   _______   _______                                    (29)     925                                   _______   _______  * restated for correction of share issue costs (see note 2). 12 Tax on loss from operations                                    2007    2006                                    £'000    £'000 Current tax                                       Foreign tax charge / (credit)                     109    (38) Adjustment for prior periods                       -    276                                   _______   _______                                     109     238 Deferred tax                                      Origination and reversal of temporary                          differences                               -      -                                   _______   _______                                      -      -                                   _______   _______ Total tax charge/(credit)                       109     238                                   _______   _______     The reasons for the difference between the actual tax charge for the year and the     standard rate of corporation tax in the UK applied to losses for the year are as follows:                                        Restated *                                     2007     2006                                     £'000    £'000 Loss before tax                           (3,964)   (3,158)                                   _______   _______ Expected tax credit based on the standard rate of                      corporation tax in the UK of 30% (2006 - 30%)            (1,189)    (947) Expenses not deductible for tax purposes                 167    (736) Tax losses not recognisable                      1,071    1,630 Adjustment for prior periods                        -     276 Other adjustments                             60      15                                   _______   _______ Total tax charge/(credit)                        109     238                                   _______   _______     * restated for correction of share issue costs (see note 2).     The adjustment for prior periods in 2006 is the result of a reassessment of tax to be     reclaimed on research and development activities undertaken by a subsidiary     undertaking. The computations containing these claims are still available for review by     the local tax authorities. 13 Loss per share                                           Restated *                                       2007      2006 Basic and diluted loss per share                     (8.5p)     (9.5p)                                       £'000     £'000 Numerator                                            Loss for the year                            (4,073)     (3,396) Loss used in basic EPS and diluted EPS                 (4,073)     (3,396) Denominator                             Number of  Number of                                     shares     Shares Weighted average number of shares used in basic and diluted     47,681,072  35,836,277 EPS Contingently issuable shares                            Number of                                             shares Share options                                     2,315,647 Warrants                                       8,374,242 Total contingently issuable shares                         10,689,889     * restated for correction of share issue costs (see note 2).     All the contingently issuable shares (see note 25 for full details) have been excluded in     the calculation of the weighted average number of shares for diluted EPS as they are     anti-dilutive for the periods presented.     The significant ordinary shares issued after the year end are detailed below:     There have been 9,413,671 shares issued after the year end in relation to:                                                Number of                                                  Shares Exercise of warrants                                      841,640 Issued under the terms of share finance facility agreement                  7,129,723 Settlement of creditor                                    1,442,308                                                9,413,671 14 Property, plant and equipment                      Equipment      Motor       Leasehold      Total                                vehicles      property                                        improvements                       £'000       £'000       £'000       £'000    At 31 December 2006                                         Cost                    607       208            -     815    Accumulated depreciation         (325)      (120)           -    (445)    Net book value               282       88            -     370    At 31 December 2007                                             Cost                    401       219          148      768    Accumulated depreciation         (120)      (139)           -    (259)    Net book value               281       80          148      509    Year ended 31 December 2006                                         Opening net book value           215       43            -     258    Additions                  170       81            -     251    Disposals                  (12)       (2)           -     (14)    Depreciation                (95)      (35)           -    (130)    Exchange differences              4        1           -      5    Closing net book value           282       88            -     370    Year ended 31 December 2007                                         Opening net book value           282       88            -     370    Additions                  258       11          148      417    Disposals                 (183)        -           -    (183)    Depreciation                (91)      (19)           -    (110)    Exchange differences             15        -           -     15    Closing net book value           281       80          148      509    At 31 December 2007 the Group had £305k (2006: £nil) in respect of contractual    commitments for tangible fixed assets. 15 Intangible assets                                                  Development      Software     Patent and    Total                         costs                trademark                                          application                                            costs                         £'000        £'000      £'000      £'000    At 31 December 2006                                          Cost                      1,604       123       2,918     4,645    Accumulated amortisation              -      (109)      (2,324)   (2,433)    Net book value                 1,604       14        594     2,212    At 31 December 2007                                              Cost                      3,863       14       3,156     7,033    Accumulated amortisation              -       (14)      (2,495)   (2,509)    Net book value                 3,863        -        661     4,524    Year ended 31 December 2006                                          Opening net book value              415       21        944     1,380    Additions                                                   - Internally developed             1,189        -         -    1,189    - Externally acquired               -        -        90      90    Amortisation                    -       (7)       (458)     (465)    Exchange differences                -        -        18      18    Closing net book value             1,604       14        594     2,212    Year ended 31 December 2007          1,604       14        594     2,212    Opening net book value                                            Additions                                                   - Internally developed             2,259        -         -    2,259    - Externally acquired               -        -        41      41    Amortisation                    -       (14)        (29)     (43)    Exchange differences                -        -        55      55    Closing net book value             3,863        -        661     4,524     At 31 December 2007 the Group had no contractual commitments for development or     other intangible fixed assets (2006: £nil).  16  Subsidiaries      The principal subsidiaries of Antonov Plc, all of which have been included in these      consolidated financial statements, are as follows:  Name        Country of    Proportion   Nature of    Parent      Status           incorporatio   of       business           n and      ownership           operation    interest  Antonov      The       100%      Licensing    Antonov Plc    Trading Automotive     Netherlands Technologies   BV (AAT)  Antonov      United      100%      Design,     Antonov Plc    Trading Automotive     Kingdom             research & Technologies Ltd                  development,                           sales &                           marketing  Antonov      The       100%      Licensing    AAT        Non-trading  Automotive     Netherlands  Europe BV  Antonov      The       100%      Licensing    AAT        Non-trading  Automotive Far   Netherlands  East BV  Antonov      The       100%      Licensing    AAT        Non-trading  Automotive     Netherlands  North America  BV  Antonov      France      100%      Research &   AAT        Trading  Automotive                     Development  Technologies  France SARL   As a result of the relocation of operations from France to Warwick (UK), Antonov Automotive   Technologies France SARL is in the process of being liquidated.                      17 Inventories                                          2007    2006                                          £'000    £'000  Work-in-progress                                  35      -                                         _______ _______ 18 Trade and other receivables                                              2007    2006                                             £'000    £'000 Trade debtors                                       446      - Other debtors and prepayments                               978     299 Taxation                                           -     98 Amounts owed by Directors                                  -     34 Amounts owed by related parties                               -      3                                            _______   _______                                             1,424     434                                            _______   _______    Trade debtors of £344k at 31 December 2007 are denominated in Euros (2006:£nil).                 Carrying      Less     Between    Between       More    Trade debtors       Amount     than 30    31 and 60     61 and     than 90                  £000      days      days     90 days       days                          £000      £000      £000       £000    As at 31 December      446       88        3      11       344    2007    Trade debtors due more than 90 days are primarily due from one customer, which will be    received during 2008.    The maximum amount owed by directors during the year was £34,000 (2006: £34,000).    This relates to R Antonov who resigned as a director on 02 April 2007. 19 Trade and other payables - current                                              2007    2006                                             £'000    £'000 Trade creditors                                     1,029     525 Other creditors and accruals                              1,348     694 Amounts owed to related parties                               -     29                                            _______   _______                                             2,377    1,248                                            _______   _______ 20 Financial liabilities                                                2007    2006                                               £'000    £'000 Other creditors - Euro warrants                                  -     9                                              _______    _______                                                  -     9                                              _______    _______ 21 Financial instruments - Risk Management     The Group is exposed through its operations to one or more of the following financial     risks:     · Fair value or cash flow interest rate risk     · Foreign currency risk     · Liquidity risk     · Market price risk     · Credit risk     Policy for managing these risks is set by the Board following recommendations from the     Chief Financial Officer. Certain risks are managed centrally, while others are managed     locally following guidelines communicated from the centre. The policy for each of the     above risks is described in more detail below.     Fair value and cash flow interest rate risk     It is currently Group policy that all of its external Group borrowings (excluding short-term     overdraft facilities) are fixed. This policy is managed centrally. Operations are not     permitted to borrow long-term from external sources locally.      Foreign currency risk     Foreign exchange risk arises because the Group has operations located in various parts     of the world whose functional currency is not the same as the Group's primary functional     currency (sterling). Although its global market penetration arguably reduces the Group's     risk in that it has diversified into several markets, the net assets from such overseas     operations are exposed to currency risk giving rise to gains or losses on retranslation     into sterling. The Group does not consider hedging its net investments in overseas     operations as generally it does not consider that the cash flow risk created from such     hedging techniques warrants the reduction in the small movements in the consolidated     net assets.     Foreign exchange risk also arises when individual Group operations enter into     transactions denominated in a currency other than their functional currency. The foreign     exchange risk is minimal and no hedging techniques have been considered appropriate. Liquidity risk     The liquidity risk of each Group entity is managed centrally by management of Antonov     plc in the UK. Management assess what funds are required on a monthly basis and     ensure that adequate funds are available to all operations using drawdown facilities on     convertible debt or by issuing shares for cash via new share issues or the conversion of     warrants.     Market price risk     The directors believe that the exposure to market price risk from activities negligible.     Credit risk     In 2007, the Group had a number of credit sales related to projects which exposed the     Group to credit risk. It is the Group's policy to assess the credit risk of new customers     before entering contracts.      The exposure to credit risk in other circumstances is not considered significant. 22 Financial assets and liabilities ­ Numerical information     Maturity of financial liabilities     The carrying amounts of financial liabilities, all of which are exposed to cash flow or fair     value interest rate risk, are repayable as follows:                                            2007    2006                                            £'000    £'000     Within one year                                  -      9                                         _________ _________                                              -      9                                         _________ _________ 23 Financial assets and liabilities ­ Numerical information (continued)     Borrowing facilities     The Group has un-drawn committed borrowing facilities available at 31 December 2007     in which all conditions have been met.                                       Fixed rate       2007                                                   total                                          £'000      £'000     Expiry within 1 year                            1,511      1,511                                          1,511      1,511     The Group had undrawn committed borrowing facilities available at 31 December 2006     in which all conditions had been met.                                      Fixed rate    2006 total                                         £'000       £'000     Expiry in more than 2 years                      1,950        1,950                                        1,950        1,950     Interest rate risk     The Group had no loans or other borrowings during the year.     Fair values     The book value and fair value of financial assets and liabilities are as follows:                              Book      Fair    Book        Fair                              value     value    value       value                              2007      2007     2006       2006                              £'000     £'000    £'000       £'000     Cash                          98      98      226        226     Financial liabilities ­ Euro warrants          -      -      (9)       (9)                             _______    _______   _______      _______                                98      98      217        217                             _______    _______   _______   _______    To the extent that financial assets are not carried at fair value in the consolidated balance    sheet, book value approximates to fair value at 31 December 2006 and 2007. 24 Deferred tax      A deferred tax asset has not been recognised for the following:                                                      2007         2006                                                     £'000         £'000      Unused tax losses                                      11,178        10,353      Fixed asset timing differences                                  (11)           -                                                   _______        _______                                                    11,167        10,353                                                   _______        _______      The movement in the Group's unrecognised deferred tax assets in the year relates to      exchange differences, the loss arising in the year and a review of the brought forward tax      position. If the Group generates profits in the future the unrecognised deferred tax      assets are potentially recoverable. 25 Share capital                                           Authorised                                2007         2007         2006         2006                             Number          £'000       Number          £'000     Ordinary shares of 20p each         60,000,000          12,000     60,000,000         12,000                                   Issued and fully paid                            2007         2007          2006         2006                         Number          £'000        Number          £'000    Ordinary shares of 20p each                                                   At 01 January 2007           43,638,606          8,728      30,813,526         6,163    Debt conversion rights exercised      725,972          145       4,117,697          824    Issue of shares             7,775,671          1,555       8,707,383         1,741    Exercise of warrants            790,903          158           -             -   At 31 December 2007           52,931,152         10,586      43,638,606         8,728      During the year a total of 9,292,546 shares were issued. Total proceeds from the issue      of shares were £4.95m. Shares are reserved to issue under share option contracts. The terms and conditions are:      Senior Executive Share Options       At 31 December 2007 the following share options were outstanding in respect of the       ordinary shares:        Date of       Number of                                          grant         Shares           Period of Option           Exercise price        2002            464,815      September 2002 ­ April 2007               1.07        2005             58,334       May 2006 ­ January 2008               1.20p        2005            108,333      December 2006 ­ November                1.60                                              2007        2006            400,000    February 2006 ­ February 2009                120p        2007           1,605,000     October 2007 ­ October 2012                 62p     Contingently issuable shares  Year ended 31 December 2007:              At the  New in the  Exercised in   Lapsed in  At the end of    Exercise    Exercise           beginning of     year    the year     the year    the year     period       price             the year Warrants issued pursuant to                                                   placings: -  unlisted    3,259,263   2,461,560   (790,903)    (621,887)   4,308,033    to Dec 09   0.58-0153 -  listed     4,066,209       -        -        -   4,066,209    to Dec 09   124p ­ 336p            7,325,472                          8,374,242                   Options granted to Directors and Employees: R Antonov       250,571       -        -   (175,571)     75,000    to 01.02.09      120p D A Bovell       100,000       -        -        -    100,000    to 01.02.09      120p J N Dickens       10,000       -        -        -    10,000    to 25.04.12      160p M Emmerson       266,764       -        -   (266,764)        -        -        - J E Haag        100,000    435,000        -    (25,000)    510,000    to 15.10.12   62p ­ 120p K E Ludvigsen      10,000       -        -        -    10,000    to 25.04.12      160p C Minnar         10,000       -        -        -    10,000    to 25.04.12      160p J W Moore       133,334    435,000        -        -    568,334    to 15.10.12   62p - 120p C G Ross        125,000    435,000        -    (50,000)    510,000    to 15.10.12   62p - 120p M Motabar           -    300,000        -        -    300,000    to 15.10.12      62p Employee         25,813    200,000        -     (3,500)    222,313    to 15.10.12   62p ­ 160p share options            1,031,482                          2,315,647                             8,356,954   4,266,560   (790,903)    (1,142,722)   10,689,889                      Year ended 31 December 2006:             At the  New in the  Exercised in   Lapsed in  At the end of    Exercise    Exercise          beginning of     year    the year    the year    the year     period      price            the year Warrants issued pursuant to                                                 placings: -  unlisted   3,422,181    1,056,867   (764,035)    (455,750)   3,259,263    to Dec 09   0.58-0.80 -  listed    3,591,209     475,000        -       -   4,066,209    to Dec 09   124p ­ 336p -         7,013,390                          7,325,472                  Options granted to Directors and Employees: R Antonov       175,571     75,000        -       -    250,571    to Feb 09     1.07  D A Bovell       25,000     75,000        -       -    100,000    to Feb 09     1.07 J N Dickens      10,000       -        -       -    10,000    to 25.04.12     160p M Emmerson      266,764       -        -       -    266,764    to 18.04.07   41p ­ 84p J E Haag        25,000     75,000        -       -    100,000    to Feb 09   107p ­ 120p K E Ludvigsen     10,000       -        -       -    10,000    to 25.04.12     160p C Minnar        10,000       -        -       -    10,000    to 25.04.12     160p J W Moore       33,334    100,000        -       -    133,334    to Feb 09      120p C G Ross        50,000     75,000        -       -    125,000    to Feb 09   107p ­ 120p  Employee        39,413       -        -   (13,600)    25,813    to 20.05.09  40p ­ 108.5p share options            645,082                         1,031,482                            7,658,472    1,931,867   (764,035)    (469,350)   8,356,954                  26 Reserves                       Restated*    Capital    Foreign   Warrant   Restated*                        Share    Redemption   Exchange    Reserve   Retained                       Premium     Reserve    Reserve           Losses                        £'000      £'000     £'000    £'000     £'000    Balance at 01 January 2006        20,467      2,587      (85)      -    (31,688)    Proceeds on share issue         5,162         -       -      -        -    Share issue costs (as restated)      (269)        -       -      -        -    Translation differences on           -        -      47       -        -    overseas operations    Share based payment expense          -        -       -      -       71    Movement on exchange of            -        -       -    361         -    warrants    Loss for the year ­ as restated        -        -       -      -    (3,396)    Balance at 31 December 2006       25,360      2,587      (38)    361     (35,013)    as restated    Proceeds on share issue         4,582         -       -      -        -    Share issue costs             (484)        -       -      -        -    Translation differences on           -        -     (392)      -        -    overseas operations    Exchange difference on long-          -        -     506       -        -    term loan    Share based payment expense          -        -       -      -      222    Movement on exchange of            -        -       -      9        -    warrants    Loss for the year               -        -       -      -    (4, 073)    Balance at 31 December 2007       29,458      2,587      76     370     (38,864)    * restated for correction of share issue costs (see note 2). 27 Leases     Operating leases - lessee     The minimum total of future lease payments due are as follows:                                            2007      2006                                            £000      £000     Not later than one year                             147       27     Later than one year and not later than five years                485        -     Later than five years                              546        -                                            1,178       27 28 Share-based payments     The company operates an equity-settled share based remuneration scheme for directors     and staff.                              2007      2007      2006    2006                             Weighted    Number    Weighted   Number                             average           average                             exercise           exercise                              price            price      Outstanding at 01 January 2007         102.0p    1,031,482     93.4p    645,082      Granted during the year             62.0p    1,805,000    120.0p    400,000      Lapsed in the year               230.0p     (520,835)    227.2p    (13,600)      Outstanding at 31 December 2007         76.9p    2,315,647    102.0p    1,031,48                                                    2     Included in the total outstanding at 31 December 2007 are options to purchase shares     held by the following ex-directors:                 R Antonov 75,000                 D Bovell 100,000                 J N Dickens 10,000                 K E Ludvigsen 10,000                 C Minnaar 10,000     The exercise price of options outstanding at the end of the year ranged between 62p and     160p (2006: 40p and 160p) and their weighted average contractual life was 4 years     (2006: 2 years).      Under the scheme, options vest if the share price reaches or exceeds a value within the     range of 240p to 140p, dependent on the option, for a continuous period of ten     consecutive business days. Of the total number of options outstanding at the end of the     year, nil (2006: nil) had vested and were exercisable at the end of the year.     There were no options exercised during the period.     The weighted average exercise price of each option granted during the year was 62p     (2006: 120p).     The following information is relevant in the determination of the fair value of options     granted during the year under the equity-settled and cash-settled share based     remuneration schemes operated by the Group.     In 2007, share options were granted on 16 October 2007. The exercise prices of the     options granted on those dates were 62p, and their estimated fair values were 23p. The fair values were calculated using the Monte Carlo Model. The principal assumptions used were:                                       16 October                                       2007     Share price at date of grant                     £0.60     Exercise price                            £0.62     Expected volatility                         45.00%     Risk free rate                            5.20%     Expected dividend yield                       nil     Expected volatility was determined by reference to historic volatility of the company's     share price in the period before the date of grant.     The Group recognised total expenses of £222k (2006: £71k) relating to stock option     equity-based payments during the year.      During the year, one supplier was paid in shares for services provided to the Group. The     fair value of the services provided was £406k.  29 Related party transactions     Trading transactions     During the year Group companies entered into the following transactions with related     parties who are not members of the Group.            Sales of Goods     Purchases of    Amounts owed by    Amounts owed to                         goods       related parties    related parties             Year    Year   Year   Year    Year    Year    Year    Year            ended    ended   ended   ended   ended   ended    ended   ended           31/12/07 31/12/06 31/12/07 31/12/06 31/12/07 31/12/06 31/12/07 31/12/06                £     £     £     £     £      £     £     £      Four     25,589    7,035     -     -     -   28,920      -      -      Stroke      SARL      Antonov       -    544     -    367      -      -   2,981   3,015      Holdings      SARL     All of the entities listed are considered to be related parties as they are controlled by R     Antonov, a former director of the Group and a significant shareholder.     The above transactions were undertaken on normal commercial terms.      Details of director's remuneration are given in note 9. There are no additional key     management personnel.      Details of subsidiaries are given in note 16.     The Group is dependent upon its significant shareholder for funding. The funds provided     during the year by this shareholder was as follows:      Shareholder                              2007     2006                                         £'000    £'000      Quivest BV                               4,500    1,200 30 Other commitments     The Group had no other commitments outstanding as at 31 December 2007. 31 Contingent liabilities     There are no contingent liabilities to report for the year. 32 Post balance sheet events     The parent company entered into a new equity financing agreement with Quivest BV on     17 January 2008 for 25m. This agreement replaces t he equity financing agreement     signed on 27 July 2007 for 15m. Quivest is a substantial shareholder of Antonov Plc     and as such the agreement of the extended credit facility is classed as a related party     transaction. 

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Deel: ' Goedgekeurde resultaten 2007 Antonov plc '






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