African Medical Investments PLC Final Results -11-

Operating expenses consist of the following:

 
                                                     2012        2011 
                                                    $'000       $'000 
                                               ----------  ---------- 
     Depreciation                                     872         573 
     Employee costs                                 3,295       1,997 
     Travel, accommodation and entertainment          515       1,280 
     Marketing costs                                  211         809 
     Occupancy costs                                  717         463 
     Professional fees                              2,089       2,777 
     Communications and IT                            282         261 
     Other expenses                                 1,717         843 
                                                    9,698       9,003 
                                               ==========  ========== 
 

10. Operating loss

Operating loss has been arrived at after charging:

 
                                                        2012        2011 
                                                       $'000       $'000 
                                                 -----------  ---------- 
 
     Loss on disposal of property, plant 
      and equipment                                      196          28 
     Depreciation of property, plant and 
      equipment                                        1,625       1,558 
     Operating lease rentals: land & buildings           683         716 
     Staff costs (see note 11)                        10,193       7,633 
 

Amounts payable to Baker Tilly UK Audit LLP and their associates in respect of both audit and non-audit services as follows:

 
                                                           2012        2011 
                                                          $'000       $'000 
                                                     ----------  ---------- 
     Group: 
     Audit services 
     - Audit of consolidated accounts                       210         220 
                                                     ----------  ---------- 
 
               *    current year                            174         145 
 
               *    under provision for prior year           36          75 
                                                     ----------  ---------- 
     - Audit of overseas subsidiaries                       192          92 
     Other services 
     - Services supplied pursuant to legislation              -           6 
                                                     ---------- 
                                                            402         318 
                                                     ==========  ========== 
     Comprising: 
     Audit services                                         402         312 
     Non-audit services                                       -           6 
                                                     ----------  ---------- 
                                                            402         318 
                                                     ==========  ========== 
 

11. Staff costs

The average monthly number of employees (including executive directors) employed by the Group for the period was as follows:

 
                                    2012         2011 
                                  Number       Number 
                             -----------  ----------- 
 
     Office and management            29           45 
     Operational                     257          324 
                             -----------  ----------- 
                                     286          369 
                             ===========  =========== 
 

The aggregate remuneration comprised:

 
                                         2012        2011 
                                        $'000       $'000 
                                  -----------  ---------- 
 
     Wages and salaries                10,285       7,633 
     Share based payment charge           158           - 
                                  -----------  ---------- 
                                       10,433       7,633 
                                  ===========  ========== 
 

Directors' remuneration:

 
                           2012        2011 
                          $'000       $'000 
                     ----------  ---------- 
 
     P Botha (1)            536           - 
     PH Edmonds              42          50 
     AS Groves               83         100 
     Dr VS Solanki            -          80 
     B Winstone               -         120 
                            661         350 
                     ==========  ========== 
 

(1) Includes sign on fee of $147,000 and options valued at $158,000.

12. Other gains and losses

 
                                          2012        2011 
                                         $'000       $'000 
                                    ----------  ---------- 
 
     Miscellaneous Income                   96           - 
     Foreign exchange gain/(loss)          132        (95) 
                                    ----------  ---------- 
                                           228        (95) 
                                    ==========  ========== 
 

13. Finance income and costs

 
                                                           2012        2011 
                                                          $'000       $'000 
                                                     ----------  ---------- 
     Finance income: 
     - Interest income on short-term bank deposits            1           3 
 
     Finance costs: 
     - Interest payable on convertible loan 
      notes (note 24)                                     (538)        (37) 
     - Interest payable on bank overdraft                   (4)        (12) 
                                                     ----------  ---------- 
     Net finance costs                                    (541)        (46) 
                                                     ==========  ========== 
 

14. Income tax expense

 
                                                               2012           2011 
                                                              $'000          $'000 
                                                      -------------  ------------- 
 
     Loss before tax:                                      (15,021)       (18,843) 
                                                      =============  ============= 
 
     Expected relief at local domestic tax 
      rates in each territory                               (1,816)        (2,255) 
     Tax effect of expenses that are not deductible 
      in determining taxable profit                               9             58 
     Tax effect of losses not recognised in 
      deferred tax                                            1,359          1,467 
     Other deferred taxes not recognised                        448            730 
     Tax expense for the period                                   -              - 
                                                      =============  ============= 
 

The tax reconciliation has been prepared using the local tax rates in each of the territories where AMI has subsidiaries, which is consistent with last year.

The Group has operations in a number of overseas jurisdictions where it has incurred cumulative total losses for tax purposes of US$20,490,470 (2011: US$14,403,000). To date no deferred tax asset has been recognised as the requirements of IAS 12 'Income Taxes' have not been met.

The Company is resident for taxation purposes in the Isle of Man and its income is subject to Isle of Man income tax, presently at a rate of zero (2011: zero).

15. Loss of power to control entities

Medical Insurance

IFRS 3 'Business Combinations' requires the consolidation of entities where there is the power to control or govern the financial and operating policies of such entities so as to obtain benefits from their activities. In the prior period the directors considered such power to control was in existence in respect of African Wellness Solutions Tanzania Ltd (AWS TZN) and African Wellness Solutions Mozambique Lda (AWS MOZ).

Both entities were dormant at the 28 February 2011 and immaterial in size in relation to the group. The group chose not to consolidate the results of these entities.

Expenses incurred during the prior financial period have been classified as discontinued operations and disclosed in note 16.

Details of the net assets of these entities at 28 February 2011 were as follows:

 
                                      AWS TZN       AWS MOZ       Total 
                                        $'000         $'000       $'000 
                                 ------------  ------------  ---------- 
     Cash and cash equivalents             12             5          17 
     Trade and other payables            (14)             -        (14) 
     Non-controlling interest             (8)           (6)        (14) 
     Loss of power to control 
      entities                           (10)           (1)        (11) 
                                 ------------  ------------  ---------- 
     Total consideration                    -             -           - 
                                 ============  ============  ========== 
     Net cash outflow arising 
      on disposal: 
     Cash consideration                     -             -           - 
     Cash and cash equivalents 
      disposed of                        (12)           (5)        (17) 
                                 ------------  ------------  ---------- 
     Net cash outflow to the 
      Group                              (12)           (5)        (17) 
                                 ============  ============  ========== 
 

16. Discontinued operations

Medical insurance