OTIUM VENTURES PLC (Formerly HERTFORD INTERNATIONAL GROUP PLC)

ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2009

REGISTERED NUMBER: 05874310

OTIUM VENTURES PLC CONTENTS

Pages Directors, officers and advisors Chairman’s statement Directors’ report Statement of directors’ responsibilities Independent auditor’s report to the members of Otium Ventures Plc

1-2 3 4-6 7 8-9

Consolidated income statement

10

Consolidated balance sheet

11

Company balance sheet

12

Consolidated cash flow statement

13

Statements of changes in equity

14

Notes to the financial statements

`15-29

OTIUM VENTURES PLC DIRECTORS, OFFICERS AND ADVISORS Directors

Len Russell – Non Executive Chairman Len Russell has many years of general management experience and significant success in the development of a wide range of profitable city-based financial services operations businesses demonstrating strong organisational and commercial skills with particular emphasis on new venture and turnaround situations. Len was instrumental in establishing Nat West Stockbrokers as a Director post “big bang” and was a force in the firm becoming a volume leader in the market. Len then moved to Swiss Investment Corporation where he helped establish the firm in London before moving on to head up the High Net Worth team at Williams de Broe from 1996 to 2009.

Paul Seakens – Director and Company Secretary Paul Seakens has worked with Crewcard Network Limited from its inception. Paul has held a number of senior positions in financial services organisations over a career spanning thirty years. He was Group Head of Operations at SG Hambros Bank and Trust Limited from 2002 to 2003, and he was Head of Operations and Risk at Kas Bank from 1992 to 1998 and Director of Operations at EBC AMRO from 1990 to 1992. More recently he has been involved in running his own consulting company working with institutions such as Barclays Bank, AIG UK, The London Clearing House and Bank of Ireland on finance, compliance and management related projects.

Alexander Lubin - Director Alex started his career working in the City on the private clients' desk at Williams de Broe in early 2000. In late 2005 Alex was involved with Altair Technologies Limited through his close relationship with the founding shareholders, and in early 2006 he joined Altair as the fifth member of the Altair team. During his time with Altair Alex helped to set up the sales and marketing function as well as establishing relationships with third party suppliers. He was instrumental in establishing key business relationships with various international banks as well as direct relationships with MasterCard ™ and Visa ™. In 2006 Alex helped define the CrewCard proposition and in late 2007 Alex joined Crewcard Network Ltd as a full time employee.

1

OTIUM VENTURES PLC DIRECTORS, OFFICERS AND ADVISORS (continued)

Company Number

05874310

Registered Office

Thames House Portsmouth Road Esher Surrey KT10 9AD

Nominated Advisor & Broker

Arbuthnot Securities Limited Arbuthnot House 20 Ropemaker Street London EC2Y 9AR

Auditors

Clarkson Hyde LLP 70 Conduit Street London W1S 2GF

Legal Advisors

Moorcrofts LLP James House Mere Park Dedmere Road Marlow Bucks SL7 IFJ

Registrars

SLC Registrars Limited Thames House Portsmouth Road Esher Surrey KT10 9AD

2

OTIUM VENTURES PLC CHAIRMAN’S STATEMENT Introduction During the year Hertford International Group Plc, now renamed Otium Ventures Plc (“The Company”), acquired Cheque Exchange Limited (CEL) a subsidiary of Provident Financial Plc, a provider of cheque cashing and money remittance services. This acquisition involved a cash payment in a number of tranches of which the second was due by the end of July 2009. Due to market conditions and the effect of the recession on demand for prepaid debit cards and cheque cashing facilities the Company was unable to raise finance to complete the acquisition. As a result of this CEL was returned to Provident ownership. In view of the economic backdrop the Company decided to withdraw directly from the direct provision of prepaid debit cards and its subsidiary Crewcard Network Limited was placed into liquidation. However the Company remains active in the prepaid debit cards market via a joint venture with Prepaid Financial Solutions. This will ensure a share of revenue should the pre-paid debit card market develop in the way the Company expected them to. In light of the above the board undertook a restructuring of the Company’s activities and with the support of its primary lender proposed a Company Voluntary Arrangement (“CVA”), which was approved by shareholders and creditors on the 12th May 2010 after the end of the year covered by these accounts. Lewis Findlay and Adam Dougall resigned from the board during this year and Paul Marks resigned in April 2010 all as part of the restructuring of the business. The CVA leaves the company virtually debt free excepting for the remaining sums due to its primary lender. This lender has indicated, subject to certain conditions being met, it will swap the remaining debt into equity upon completion of a transaction. Summary of Financial Statements Our turnover for the year was £840,275 and after direct expenses we report a gross profit of £481,848. With administrative expenses and exceptional items totalling £3,950,774, the reported operating loss for the year of £3,625,220 largely represents a discontinued activity. Our net finance costs after investment income were £156,294 creating a total loss for the Year of £3,625,220, equivalent to a 7.6 pence loss per share. No dividend is being recommended. Balance Sheet & Cash Flow The net current liability position of the Group was £567,644 with total net liabilities of £2,317,644. During the year the company raised a total of £1,365,050 being £865,050 through the issuance of shares and £500,000 through the increase of Convertible Loan Note Facilities. The Directors have secured an undertaking from Palmdale Investments Inc to provide the working capital requirements the Company needs to secure the medium-term plans of the Company. Current Trading & Outlook Otium Ventures Plc is now a clean vehicle, which intends to acquire or invest in assets in the leisure, gaming and betting sectors where its expertise in financial services and payment systems may be of value. In addition it may be able to utilise its existing tax losses.

Len Russell Chairman 1 July 2010

3

OTIUM VENTURES PLC DIRECTORS’ REPORT The directors present their report and the audited financial statements for the year ended 31 December 2009. Principal activities The company was previously a provider of alternative financial services, however, following disposal of its subsidiaries and the approval of shareholders at a meeting on 12 May 2010, the company is now adopting an investing policy pursuant to AIM Rule 15. Business review A review of the business and future developments is contained in The Chairman’s Statement. Principal risks and uncertainties As the Group is currently inactive the principal financial risks are limited only to liquidity risk at this time. Details of these are provided in note 2 to the financial statement. Results and dividends The results for the year are set out in the consolidated income statements. The directors do not recommend the payment of a dividend. Post balance sheet events

1.

On 17th February 2010 Crewcard Network Limited, a wholly owned subsidiary of the company, was placed into creditors voluntary liquidation.

2.

On 15th May 2010 a proposal by the Directors to place the company into a Voluntary Arrangement was accepted by creditors and shareholders. The proposal will result in a payment to creditors of two pence in the pound.

3.

On 12th May 2010 shareholders voted in favour of a change of name for the company from Hertford International Group Plc to Otium Ventures Plc. Companies House effected the change of name on 22 June 2010.

4.

On 10th March 2010 the company disposed of a 55% share in Crewcall Network Limited, previously a wholly owned subsidiary, for £1. Also on the 19 th March 2010 the company disposed of Crewcall Telecoms Limited, also a wholly owned subsidiary, for the sum of £1.

5.

On 20th May 2010 the company appointed Len Russell as a non-executive director and chairman.

Capital structure Details of the company’s share capital, including shares issued in the year, are shown in note 21 to the financial statements.

4

OTIUM VENTURES PLC DIRECTORS’ REPORT (continued) Substantial shareholdings As at 20th May 2010, the directors had been notified by the following investors that they hold or are beneficially interested in 3% or more of the Company’s ordinary share capital: No of shares

Percentage of issued share capital

8,088,333 4,200,000 4,180,000 3,876,432 3,248,000 2,660,524 2,500,000

16.70% 8.67% 8.63% 8.00% 6.70% 5.49% 5.16%

Dexapoint United Corporation The Bank of New York Nominees Ltd a/c COR Lynchwood Nominees Limited HSBC Global Custody Nominee (UK) Ltd a/c 740468 Pershing Nominees Limited a/c PSL981 JIM Nominees Limited Inversiones Mowe SL

Directors The directors during the year were: P P Marks A C Lubin D Mifsud (resigned on 11 May 2009) P M Seakens L C Findlay (resigned on 18 December 2009) A J Dougall (appointed on 19 February 2009 resigned on 18 December 2009) After the end of the year, on 20 May 2010, L Russell was appointed as a director. Also after the end of the year P P Marks resigned on 7 April 2010. Directors’ share options Details of directors’ share options outstanding at 31 December 2009 are provided below; Director P Marks P Marks A Lubin P Seakens L Findlay A Dougall

Grant Date 27 November 2009 15 May 2009 27 November 2009 24 April 2008 24 April 2008 11 May 2009

Options Issued 250,000 350,000 1,500,000 600,000 2,500,000 500,000

Option Price 20p 20p 20p 20p 20p 15p

5

OTIUM VENTURES PLC DIRECTORS’ REPORT (continued) Directors’ liability insurance During the year, directors’ and officers’ liability insurance was maintained for directors and other officers of the Company as permitted by the Companies Act 2006. Supplier payment policy The group’s policy is to settle terms of payment with suppliers when agreeing the terms of each transaction, ensure that suppliers are made aware of the terms of payment and abide by the terms of payment. Trade creditors of the group at 31 December 2009 were equivalent to 109 days’ purchases. Employment of the disabled It is the policy of the group to give full and fair consideration to the employment of disabled persons in jobs suited to their individual circumstances and, as appropriate, to consider them for recruitment opportunities, career development and training. Where possible, arrangements are made for the continuing employment of employees who have become disabled whilst in the group’s employment. Employee consultation As at the date of this report this company only had two employees, both of whom are directors. Charitable and political contributions During the year, the group made charitable donations of £350 (2008: £600). During the year, the group did not make any political donations (2008: nil). Statement of disclosure to the independent auditors Each of the persons who is a director at the date of approval of this report confirms that: (i)

so far as the director is aware, there is no relevant audit information of which the company’s auditors are unaware; and

(ii)

the director has taken all the steps as a director in order to make himself aware of any relevant audit information and to establish that the company’s auditors are aware of that information.

Clarkson Hyde LLP have expressed their willingness to continue in office as auditors and a resolution to reappoint them will be proposed at the forthcoming Annual General Meeting.

By order of the Board

Paul Seakens Company Secretary 1 July 2010

6

OTIUM VENTURES PLC STATEMENT OF DIRECTORS’ RESPONSIBILITIES The directors are responsible for preparing the Annual Reportt and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under the law the directors have elected to prepare the group and company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for the period. In preparing these financial statements, the directors are required to: •

select suitable accounting policies and then apply them consistently;

•

make judgments and accounting estimates that are reasonable and prudent;

•

state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements;

•

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies’ Act 2006 and, as regards the group financial statements, Articles 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for the maintenance and integrity of the company’s website and legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Each of the directors, whose names are listed on page 1, confirms that, to the best of each person’s knowledge and belief: a.

the financial statements, prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and loss of the group and company, and

b.

the directors’ report contained in the annual report includes a fair review of the development and performance of the business and the position of the company and group, together with a description of the principal risks and uncertainties that they face.

7

OTIUM VENTURES PLC INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF OTIUM VENTURES PLC

8

9

OTIUM VENTURES PLC CONSOLIDATED INCOME STATEMENT

Notes

Year to 31 December 2009

15 months to 31 December 2008

£

£

840,275

144,270

(358,427)

(209,141)

481,848

(64,871)

(2,738,869)

(1,712,014)

Discontinued Operations Revenue Cost of sales Gross profit Administrative expenses Exceptional costs

5

(1,211,905)

(251,870)

Operating loss

4

(3,468,926)

(2,028,755)

Investment income

6

-

28,195

Finance costs

7

(156,294)

(52,814)

(3,625,220)

(2,053,374)

-

-

(3,625,220)

(2,053,374)

(7.6p)

(5.5p)

Loss before taxation Taxation

10

Loss for the financial year

Loss per share – basic and diluted

11

The company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent company profit and loss account. The loss for the parent company for the year was £5,259,869 (2008: £166,300).

10

OTIUM VENTURES PLC CONSOLIDATED BALANCE SHEET As at 31 December 2009 £

As at 31 December 2008 £

Non current assets Property, plant and equipment

12

-

86,922

Intangible fixed assets

14

-

1,386,872

-

1,473,794

Current assets Inventories

16

-

59,339

Trade and other receivables

17

6,539

553,167

Cash and cash equivalents

18

9,632

192,096

16,171

804,602

(583,815)

(603,627)

(567,644)

200,975

(1,750,000)

(1,232,243)

(2,317,644)

442,526

Current liabilities Trade and other payables

19

Net current (liabilities)/assets Non-current liabilities Non-current borrowings

20

Net assets Equity Share capital

484,420

426,750

2,710,230

1,902,850

Retained earnings

(5,512,294)

(1,887,074)

Equity attributable to equity holders of the parent

(2,317,644)

442,526

Share premium

21

Approved by the Board on 1 July 2010 and signed on its behalf by Paul Seakens Director

11

OTIUM VENTURES PLC COMPANY BALANCE SHEET As at 31 December 2009

As at 31 December 2008

£

£

13

-

326,600

Trade and other receivables

17

6,537

3,235,243

Cash and cash equivalents

18

8,623

-

15,160

3,235,243

Non current assets Investment in subsidiaries

Current assets

Current Liabilities Trade and other payables

(330,380)

Net current (liabilities)/assets

(315,220)

3,235,243

(1,750,000)

(1,232,243)

(2,065,220)

2,329,600

484,420

426,750

2,710,230

1,902,850

Retained earnings

(5,259,870)

-

Equity shareholders’ funds

(2,065,220)

2,329,600

Non-current liabilities Non-current borrowings

20

Net assets

Equity Share capital Share premium

21

Approved by the Board on 1 July 2010 and signed on its behalf by

Paul Seakens Director Company Number: 05874310

12

OTIUM VENTURES PLC CONSOLIDATED CASH FLOW STATEMENT Year to 31 December 2009 £

15 months to 31 December 2008 £

(3,625,220)

(2,053,374)

Depreciation

215,312

31,728

Amortisation

1,566,189

-

Profit on disposal of investment

(119,217)

(25,410)

-

(28,195)

156,294

52,814

-

166,300

489,080

(414,019)

59,339

23,343

(19,812)

80,245

(1,278,035)

(2,166,568)

(156,294)

(52,814)

(1,434,329)

(2,219,382)

(642,000)

83,961

Interest received

-

28,195

Purchase of intangible assets

-

(21,982)

(96,942)

(10,376)

-

25,410

(738,942)

105,208

1,125,757

303,270

865,050

2,003,000

Net cash from financing activities

1,990,807

2,306,270

Net (decrease)/increase in cash and cash equivalents

(182,464)

192,096

192,096

-

9,632

192,096

Cash flows from operating activities Loss before taxation Adjustments for :

Investment income Interest expense Share based payment Decrease/(increase) in trade and other receivables Decrease in inventories Increase in trade and other payables Cash used in operations Interest paid

Net cash used in operating activities Cash flows from investing activities Acquisition of subsidiaries, net of cash acquired

Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment

Net cash used in investing activities Cash flows from financing activities Net new long term loans received Issue of shares

Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year

13

OTIUM VENTURES PLC STATEMENTS OF CHANGES IN EQUITY

GROUP Retained earnings

Share capital

Share premium

Total

£

£

£

£

(1,887,074)

426,750

1,902,850

442,526

-

57,670

807,380

865,050

Loss for the year

(3,625,220)

-

-

(3,625,220)

As at 31 December 2009

(5,512,294)

484,420

2,710,230

(2,317,644)

Retained earnings £

Share capital £

Share premium £

Total

-

426,750

1,902,850

2,329,600

(5,259,870)

-

-

(5,259,870)

-

57,670

807,380

865,050

(5,259,870)

484,420

2,710,230

(2,065,220)

As at 31 December 2008 Ordinary shares issued in the year

COMPANY

As at 31 December 2008 Loss for the year Ordinary shares issued in the year As at 31 December 2009

£

14

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS 1.

Accounting policies

Basis of preparation: The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared on the historical cost basis. The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that effect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. Although these estimates are based on managements’ best knowledge of the amount, events or actions, actual results ultimately may differ from those of estimates. Going concern: The Group incurred a loss after tax of £3,625,220 during the year ended 31 December 2009. The directors have prepared trading and cash flow forecasts for the Group for the year to 30 June 2011. After the end of the year, the company and its creditors agreed a voluntary arrangement to cap the company's liabilities at the rate of 2p in the Pound. At the date of approval of these financial statements, the voluntary arrangement had not yet been concluded. Also, the directors are confident that the principal lender, Palmdale Investments Inc, will continue to provide financial support to the company for the foreseeable future. As a result the directors believe that the company will continue in operational existence and that it is therefore appropriate to prepare these financial statements on the going concern basis. Basis of consolidation: The consolidated financial statements incorporate the results of the Company and its subsidiary undertakings as at 31 December 2009 and exclude all intra-group transactions and balances. The results of subsidiary undertakings are included from the date of acquisition. The results of subsidiary undertakings disposed of are included up to the date of disposal. Goodwill: Goodwill represents any excess of the cost of acquisition over the fair value of the identifiable assets and liabilities acquired. Goodwill is tested annually for impairment and is carried at cost less accumulated impairment losses. Property, plant and equipment Property, plant and equipment are stated at cost net of accumulated depreciation and any provision for impairment. Depreciation is provided at rates calculated to write off the cost, less an estimated residual value, of the assets over their estimated useful lives at the following rates: Web site development Office equipment Motor vehicles

25% straight line 25% straight line 25% straight line

Patents Patents are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal annual instalments over their estimated useful lives. Development costs Development expenditure is written off in the year in which it is incurred unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit. Inventories Inventories are valued at the lower of cost and net realisable value.

15

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS (continued) Leased assets Rentals under operating leases are charged to the income statement on a straight-line basis over the lease term. All of the Group’s current leases are operating leases. Foreign currency Foreign currency transactions are recorded at the rate of exchange at the time of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in the income statement. Financial instruments Financial assets and liabilities are recognised at fair value in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument. The Group classifies its financial instruments into loans and receivables (comprising cash and trade receivables) and other liabilities (comprising loan notes and trade payables).

Trade and other receivables Trade and other receivables do not carry any interest and are stated at their nominal value unadjusted to reflect discounting for the time value of cash flows recoverable and are reduced by appropriate allowances for estimated irrecoverable amounts. Cash and cash equivalents Cash and cash equivalents comprise cash in hand and deposits which are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value and have an original maturity of three months or less at acquisition. Bank overdrafts are included within current liabilities unless there is a right of offset with cash balances. Financial liabilities and equity Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities. Trade and other payables Trade payables are not interest bearing and are stated at their nominal value. Equity instruments Equity instruments issued by the group are recorded at the proceeds received, net of direct issue costs. Share based payments Share options awarded to employees are measured at fair value at grant date using the Black-Scholes model. Inputs to the model are based on management’s best estimates of appropriate volatility, discount rate and share price growth. The fair value is expensed on a straight-line basis over the vesting period, based on an estimate of the number of options that will eventually vest. Cash-settled share based payment transactions result in the recognition of a liability at its current fair value.

16

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS (continued) 2.

Financial risk management

The Group is exposed through its operations to one or more of the following financial risks that arise from its use of financial instruments. A risk management programme has been established to protect the Group against the potential adverse effects of these financial risks. Credit risk Due to limited invoiced sales up to 31 December 2009, the Group is not exposed to significant credit risk. Trade debtors at 31 December 2009 amounted to £1,118. Liquidity risk Liquidity risk arises from the Group’s management of working capital and finance charges. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The liquidity risk is managed centrally by the finance function. Budgets are set and are agreed by the Board. As at 31 December 2009, the Group had cash and cash equivalents amounting to £9,632. Interest rate risk The Group’s external borrowings at 31 December 2009 comprise a loan bearing interest at a fixed rate of 10% p.a. Foreign currency risk The Group has no significant foreign currency risk. 3. Segment Reporting The Group’s turnover and operating loss for the year are derived wholly from the company’s principal activity, alternative financial services, and were generated wholly within the United Kingdom. The directors do not consider that there are any distinguishable geographical or business segments for reporting purposes. 4.

Operating loss Year to 31 December 2009

15 months to 31 December 2008

£

£

215,312

31,728

The operating loss was stated after charging: Depreciation Auditors remuneration: -

fees payable to the group’s auditor for the audit of the group’s annual accounts

8,500

10,000

-

non audit fees relating to tax services

5,253

7,597

-

non audit fees relating to due diligence services

-

21,539

17

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS (continued) 5.

Exceptional costs Year to 31 December 2009 £

15 months to 31 December 2008 £

Amortisation of goodwill relating to Crewcard Network Ltd

1,364,890

-

Profit on disposal of investment in Cheque Exchange Ltd Recovery of VAT previously charged to administrative expenses Write down of stock held by Crewcall Network Ltd

(119,217)

-

(77,440)

-

26,460

-

Loss on disposal of debt to Cheque Exchange Ltd Expenses incurred relating to AIM admission and raising of funds in December 2007

17,212

-

-

251,870

1,211,905

251,870

Year to 31 December 2009 £

15 months to 31 December 2008 £

-

28,195

Year to 31 December 2009

15 months to 31 December 2008

£

£

156,294

52,814

6.

Investment income

Interest on short term bank deposits

7.

Finance costs

Interest on borrowings

18

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS (continued) 8.

Information regarding directors and employees Year to 31 December 2009

15 months to 31 December 2008

No.

No.

12

14

£

£

Wages and salaries

1,170,056

682,371

Social security costs

131,068

72,938

-

166,300

1,301,124

921,609

Year to 31 December 2009

15 months to 31 December 2008

£

£

328,950

284,014

77,705

30,000

406,655

314,014

120,000

81,731

The average number of persons (including directors) employed by the group during the year was: Management and administration

Aggregate employee costs (including directors) were:

Share based payments

9.

Directors’ remuneration

Directors’ remuneration during the year was: Emoluments Compensation for loss of office

Highest paid director’s remuneration; Emoluments

19

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS (continued) 10. Taxation Year to 31 December 2009

15 months to 31 December 2008

£

£

-

-

Loss before taxation

(3,625,220)

(2,053,374)

Tax on loss at standard rate of 28%

(1,015,061)

(574,945)

Non-deductible expenses

36,994

110,892

Depreciation in excess of capital allowances

10,000

8,618

968,067

455,435

-

-

UK corporation tax in respect of current year

The tax charge for the year can be reconciled to the loss for the year as follows:

Effect of:

Tax losses carried forward Current tax charge

20

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS (continued) 11. Loss per share The basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of shares in issue in the year. In calculating the diluted earnings per share, outstanding share options warrants and convertible loans are taken into account where the impact is dilutive. Year to 31 December 2009 £

15 months to 31 December 2008 £

Loss for the financial year

(3,625,220)

(2,053,374)

Weighted average number of share in issue

48,015,400

37,224,749

(7.6p)

(5.5p)

(3,625,220)

(2,053,374)

128,274

38,026

Fully diluted loss for the financial year

(3,496,946)

(2,015,348)

Weighted average number of share in issue

48,015,400

37,224,749

- convertible loan agreements and warrants

-

4,118,708

- share options

-

652,315

48,015,400

41,995,772

(7.6p)

(5.5p)

Basic:

Basic loss per share

Fully Diluted: Loss for the financial year Add back interest charge on convertible loans, net of tax

Dilutive effect of:

Fully diluted loss per share

The fully diluted loss per share is the same as the basic loss per share. It is not reduced as a result of dilution.

21

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS (continued)

12. Property, plant and equipment Web site £

Motor vehicles £

Office equipment £

Total £

105,328

-

26,947

132,275

-

116,402

342,332

458,734

76,028

-

20,914

96,942

Disposals

-

(17,554)

-

(17,554)

On disposal of subsidiary

-

(98,848)

(363,246)

(462,094)

181,356

-

26,947

208,303

37,612

-

7,741

45,353

-

73,353

267,778

341,131

143,744

10,362

61,206

215,312

-

(83,715)

(309,778)

(393,493)

181,356

-

26,947

208,303

At 31 December 2009

-

-

-

-

At 31 December 2008

67,716

-

19,206

86,922

Group Cost At 1 January 2009 On acquisition of subsidiary Addition

At 31 December 2009 Accumulated depreciation At 1 January 2009 On acquisition of subsidiary Charge for the year On disposal of subsidiary At 31 December 2009 Net book value

22

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS (continued) 13. Investment in subsidiaries Company £

Cost At 1 January 2009

326,600

Addition

2,294,000

Disposal

(2,294,000)

Provision for Write Down

(326,600)

At 31 December 2009 The following were subsidiaries at the end of the year:

Country of incorporation

Proportion of owned interest

Crewcard Network Limited

UK

100%

Crewcall Network Limited

UK

100%

Acquirestar Limited

UK

100%

Principal activities Prepaid Debit Cards International Telephony Dormant

As the Company was unable to make the second instalment for the purchase of Cheque Exchange Limited from Provident Financial Plc in July 2009, ownership of Cheque Exchange Limited reverted back to Provident Financial Plc at 31 October 2009. During the year, the group acquired Cheque Exchange Limited. The fair value of assets acquired and liabilities assumed were as follows: £ Property, plant and equipment

110,377

Trade and other receivables

653,928

Inventories Cash

(35,451)

Trade payables

(800,257)

Long term debt

-

Total net liabilities

(71,403)

Goodwill

2,365,403

Fair value of cash consideration

2,294,000

23

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS (continued) 14. Intangible fixed assets Development costs

Trademarks

Goodwill

Group £

Cost At 1 January 2009

16,500

5,482

1,364,890

1,386,872

Additions

-

-

2,365,403

2,365,403

Disposals

-

-

(2,365,403)

(2,365,403)

(16,500)

(5,482)

(1,364,890)

(1,386,872)

-

-

-

-

Impairment At 31 December 2009

15. Deferred taxation The actual and potential liabilities to deferred taxation are £nil (2008: £nil) as a result of both significant trading losses having been incurred and uncertainty as to when the company might make sufficient profits in the future. 16. Inventories Group

Group

Company

Company

2008

2009

2008

£

£

£

£

-

59,339

-

-

Group

Group

Company

Company

2009

2008

2009

2008

£

£

£

£

1,118

1,996

1,118

-

Loans to group undertakings

-

-

-

3,235,243

Other debtors

-

150,000

-

-

Prepayments

5,421

401,171

5,420

-

6,539

553,167

6,538

3,235,243

2009

Finished goods

17. Trade and other receivables

Trade debtors

24

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS (continued) 18. Cash and cash equivalents Group

Group

Company

Company

2009

2008

2009

2008

£

£

£

£

9,632

192,096

8,623

-

Group

Group

Company

Company

2009

2008

2009

2008

£

£

£

£

Trade creditors

222,536

133,894

93,747

-

Other taxation and social security costs

313,673

23,703

190,098

-

47,606

446,030

46,535

-

583,815

603,627

330,380

-

Cash at bank and in hand

19. Trade and other payables

Accruals

25

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS (continued) 20. Non current borrowings

Other Loans

Group

Group

Company

Company

2009

2008

2009

2008

£

£

£

£

1,750,000

-

1,750,000

-

-

1,232,243

-

1,232,243

1,750,000

1,232,243

1,750,000

1,232,243

Convertible Loans Total Loans

Loans at 31 December 2009 are owed to Palmdale Investments Inc. The loan is secured by means of floating charge over the assets of the company. The loan is repayable by 31 March 2011. If the loan is not repaid at this date then the loan plus a premium equal to 100% of the loan value must be paid by 30 September 2012. In addition, if the loan is not repaid at 30 September 2012 a Penalty Charge of 5% per month thereafter will be charged. An Arrangement Fee of 10% of the principal amount is also due on repayment of the loan. The loan bears interest at 10% per annum however interest payments are off-set against the potential premium payable. 21. Share capital 2009 £

2008 £

100,000,000

100,000,000

Authorised: 10,000,000,000 Ordinary shares of 1p each Issued share capital: 48,442,000 (2008: 42,675,000) Ordinary shares of 1p

£ 484,420

426,750

On 29 January 2009, 5,767,000 ordinary shares were issued for a total consideration of £865,050 in order to assist with the funding of the acquisition of Cheque Exchange Limited. As at 31 December 2009,unexercised warrants, options and loan conversion rights totalling 8,193,200 had been granted over Ordinary shares.

26

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS (continued) 22. Share based payments The Group operates two share option schemes for directors and other employees, an EMI Share Option Scheme and an Unapproved Share Option Scheme. Under both schemes: (a) (b) (c) (d)

No payment is required for the grant of an option. Options are granted with an exercise price equal to the market value of the shares on the date of grant. Options are exercisable in two halves on the first and second anniversaries of the date of grant. Options lapse on ceasing to be an employee or otherwise 10 years after the date of grant. As at 31 December 2009

As at 31 December 2008

Weighted average exercise price

Weighted average exercise price

Number

£

Number

£

7,050,000

0.20

-

-

Lapsed during the year

400,000

0.20

-

-

Granted during the year

500,000

0.15

7,050,000

0.20

7,150,000

0.20

7,050,000

0.20

Outstanding at the beginning of the year

Outstanding at the end of the year

27

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS (continued)

22. Share based payments (continued) Of the total number of options outstanding at 31 December 2009, 5,325,000 had vested and were exercisable at the end of the year. The weighted average fair value of each option granted during the year to 31 December 2009 was £0.0396. The following information is relevant in determining the fair value of the options granted during the year to 31 December 2009: Option pricing model used

Black-Scholes

Weighted average share price at grant date

£0.20

Weighted average exercise price

£0.20

Expected volatility

40%

Expected life (years)

2

Risk free interest rate

0.7% Year to 31December 2009

15 months to 31 December 2008

£

£

-

166,300

Total expense recognised from share based payment transactions

As a result of the cessation of trading activities by the group in the year, the directors consider that share options outstanding at the end of the year are unlikely to be exercised and therefore no share based payments expense has been recognised for the year. 23. Related party transactions (i)

Share options granted to persons who served as director during the year are as follows: Grant date A Dougall

11 May 2009

Exercise price 15p

At 31 December 2009 500,000 500,000

(ii)

During the year to 31 December 2009, the company incurred costs of £77,050 from Aspirant Limited for consultancy services provided. Aspirant Limited is controlled by Paul Marks, a director.

(iii)

During the year loan interest amounting to £98,816 was paid to Dexapoint United Corporation, a shareholder

(iv)

During the year to 31 December 2009, the company incurred costs of £66,616 from Countermand Limited for consultancy services provided. Countermand Limited is controlled by Paul Seakens, a director.

28

OTIUM VENTURES PLC NOTES TO THE FINANCIAL STATEMENTS (continued) 24. Post balance sheet events (i)

On 17th February 2010 Crewcard Network Limited, a wholly owned subsidiary of the company, was placed into creditors voluntary liquidation.

(ii)

On 15th May 2010 a proposal by the Directors to place the company into a Voluntary Arrangement was accepted by creditors and shareholders. The proposal will result in a payment to creditors of two pence in the pound.

(iii)

On 12th May 2010 shareholders voted in favour of a change of name for the company from Hertford International Group Plc to Otium Ventures Plc. Companies House effected the change of name on 22 June 2010.

(iv)

On 10th March 2010 the company disposed of a 55% share in Crewcall Network Limited, previously a wholly owned subsidiary for £1. Also on the 19th March 2010 the company disposed of Crewcall Telecoms Limited also a wholly owned subsidiary for the sum of £1.

25. Ultimate controlling party The directors of the Company do not consider any one party to exercise ultimate control over the Group.

29