Final Results

 

TIDMPNB 
 
RNS Number : 7210U 
Pubs 'n' Bars PLC 
30 June 2009 
 
 
 
 
 
Pubs 'n' Bars Plc 
(AIM: PNB) 
("Pubs 'n' Bars" or "the Company") 
 
 
 
 
FINAL RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2008 
 
 
Pubs 'n' Bars, the AIM quoted community pub owner and operator, announces its 
audited results for the 12 month period ended 31 December 2008. 
 
 
Highlights: 
 
 
  *  Revenues increased 11% to GBP22.3m (2007:GBP20.0m) 
  *  EPS (basic) of (18.96)p (2007:2.74p) 
  *  Dividend Nil (2007:1.75p) 
 
 
 
Keith Chapman, Chairman of Pubs 'n' Bars, commented: 
 
"This has been a particularly challenging reporting period. Although revenues 
for the year have increased by 11 per cent, tough trading conditions and IFRS 
accounting policies have contributed to the company generating a pre-tax loss of 
GBP8,944,680. As consumer confidence remains fragile the Company approaches the 
future with cost-consciousness and caution". 
 
 
These results are available to be downloaded from the Company's website at 
www.pubsnbars.co.uk. 
 
 
Enquiries: 
 
 
Pubs 'n' Bars Plc      Tel: [phone] 
Mel Belligero, Chief Executive 
 
 
Daniel Stewart & Company Plc      Tel: [phone] 
Stewart Dick 
 
 
CHAIRMAN'S STATEMENT 
 
 
It gives me little pleasure to report on your Company's results for the year 
ended 31 December 2008. The Board's decision last year to pass the interim 
dividend has, regrettably, been justified by subsequent events and the Board 
does not recommend the payment of a dividend for the year ended 31 December 
2008. 
 
 
Although revenues for the year have increased by 11 per cent to GBP22,287,657 
(2007: GBP19,996,881) the company generated a pre-tax loss of GBP8,944,680 
(2007: restated profit of GBP341,960). The impact of 2008's fall in asset values 
recognised in the Income Statement, along with other accounting adjustments, 
detracts from the true trading position of the Group. The fall in property 
values has also lead to the Group breaching its banking covenants and to the 
inclusion of an "Emphasis of Matter" statement in the Report of the Auditors. 
The Directors are currently in discussions with the Group's bankers with regard 
to restructuring its bank facilities and believe that this will include 
increased interest rate charges. As a result steps have been undertaken to 
reduce the Group's overheads. 
 
 
There has also been an expensive and complex review of the Group's accounts with 
the Financial Reporting Review Panel (FRRP) and as a result the comparative 
figures for 2007 have been restated. Please see the financial review below for 
an analysis of these events and adjustments, which I believe shows much more 
clearly the performance of the Group over the year. 
 
 
Financial Review 
 
 
Following first time adoption of International Financial Reporting Standards 
(IFRS) in 2007 and the FRRP review, the Group's 2007 figures have been restated, 
as described in note 27 to the accounts. The principal change in accounting 
policy, is that of treating premiums paid for short leasehold properties as 
intangible assets and amortising them over their lease terms. Any improvements 
to short leasehold properties are classified as leasehold improvements under 
tangible fixed assets and depreciated over the lesser of 5 years or the 
remaining lease terms. 
 
 
+---------------------------------------------+-----+-------------+------------+ 
| Overview of Performance                     |     |        2008 |       2007 | 
+---------------------------------------------+-----+-------------+------------+ 
|                                             |     |         GBP |        GBP | 
+---------------------------------------------+-----+-------------+------------+ 
| Total Sales                                 |     |  22,287,657 | 19,996,881 | 
+---------------------------------------------+-----+-------------+------------+ 
|                                             |     |             |            | 
+---------------------------------------------+-----+-------------+------------+ 
| Operating performance                       |     |             |            | 
+---------------------------------------------+-----+-------------+------------+ 
| Operating profit as stated in the accounts  |     | (6,398,132) |  2,127,863 | 
+---------------------------------------------+-----+-------------+------------+ 
| Add back exceptional items                  |     |   7,494,705 |  (350,241) | 
+---------------------------------------------+-----+-------------+------------+ 
| Underlying operating profit                 |     |   1,096,573 |  1,777,622 | 
+---------------------------------------------+-----+-------------+------------+ 
| Add back depreciation and amortisation      |     |   1,285,026 |  1,260,981 | 
| charges                                     |     |             |            | 
+---------------------------------------------+-----+-------------+------------+ 
| Underlying EBITDA                           |     |   2,381,599 |  3,038,603 | 
+---------------------------------------------+-----+-------------+------------+ 
|                                             |     |             |            | 
+---------------------------------------------+-----+-------------+------------+ 
| Net interest charges                        |     |   2,546,548 |  1,785,903 | 
+---------------------------------------------+-----+-------------+------------+ 
 
 
Due to tough trading conditions during the year the underlying EBITDA for the 
Group, taking into account exceptional items outlined in note 4 to the accounts, 
fell 22% to GBP2,381,599. This is in part due to a decline in like for like 
sales and an increase in administrative overheads and is explained further 
below. 
 
 
During the year total sales increased by 11% to GBP22,287,657, however like for 
like sales fell by 5% due to the continued impact of the smoking ban, the 
associated decline in machine income and the general economic downturn. Despite 
the reduction in like for like sales, gross margins were maintained at 67% as 
the Group has resisted price cuts and negotiated improved purchase terms as a 
result of the 2007 acquisitions. 
 
 
Administrative overheads before exceptional items increased by 17% to 
GBP13,777,550. This rise was, in part, due to recognising full year running 
costs of the 2007 acquisitions, rising energy costs and substantial professional 
fees in relation to the FRRP review and implementation of IFRS. 
Net interest charges increased by 43% to GBP2,546,548 due to the full year 
impact of the increased borrowings to finance the acquisitions made in 2007. The 
change in policy by our principal bankers in April 2008 to charge 2% above LIBOR 
from 1.5% above Base Rate contributed to approximately GBP150,000 of the 
increase in the net interest charges. 
 
 
Key Performance Indicators 
 
 
The key measures for our business are volume and turnover. These have been 
difficult to predict since early last year and remain so today. Current like for 
like sales are approximately 3% below last year. This position coupled with 
weakness in consumer spending makes accurate forecasting for the current year 
extremely difficult. It would be foolhardy to forecast a rapid and sustained 
recovery from a recession, the like of which, has not been seen since the 1930s. 
 
 
The Pub Estate 
 
 
At the year end our estate comprised 106 pubs: 
 
 
Freehold          53                    Managed     64 
Leasehold        53                   Tenanted     42 
 
 
During the year there were no acquisitions or disposals. 
 
 
Since the year-end we have adopted a policy of offering our tenants the 
opportunity to purchase the freeholds of their pubs, and we have engaged agents 
to manage the process on our behalf. Negotiations are in hand but thus far we 
have yet to conclude any sales. 
 
 
The estate was revalued as at 31st December 2008, indications are that prices 
are still depressed and are subject to some volatility. 
 
 
The Industry 
 
 
The on-trade is still suffering from the smoking ban and the associated drop in 
machine revenues. Sales of cut-price alcohol by supermarkets, which the 
government seem unwilling to tackle, are another important factor in what seems 
like an anti-pub campaign. Beer is often cheaper than bottled water in the 
supermarkets encouraging consumers to stock up and drink at home where they can 
also smoke. 
 
 
Current Trading and Outlook 
 
 
Trading since the year end has been unpredictable and customer confidence 
remains fragile. We have generally resisted the temptation to discount our 
prices, instead we have tried to improve our standards and continue to offer a 
friendly, warm and welcoming environment within which our customers can relax. 
 
 
I would like to thank our team both at Head Office and at pub level for their 
contribution to the company in what has been a difficult year. 
 
 
Finally, I would also like to extend my thanks to my predecessor, Seamus Murphy, 
and recognise his contribution to the business over the past 10 years. His 
industry knowledge is unparalleled. We all wish him a speedy recovery to full 
health. 
 
 
K.J. Chapman 
Chairman 
 
 
 
 
CONSOLIDATED INCOME STATEMENT 
FOR THE YEAR ENDED 31 DECEMBER 2008 
 
 
+---------------------------+--+--+--+--------------+--------------+--------------+--------------+ 
|                           |     |  |         2008 |         2008 |         2007 |         2007 | 
|                           |     |  |              |              |     Restated |     Restated | 
+---------------------------+-----+--+--------------+--------------+--------------+--------------+ 
|                           |  Notes |          GBP |          GBP |          GBP |          GBP | 
+---------------------------+--------+--------------+--------------+--------------+--------------+ 
|                           |     |  |              |              |              |              | 
+---------------------------+-----+--+--------------+--------------+--------------+--------------+ 
| REVENUE                   |     |  |              |   22,287,657 |              |   19,996,881 | 
+---------------------------+-----+--+--------------+--------------+--------------+--------------+ 
|                           |     |  |              |              |              |              | 
+---------------------------+-----+--+--------------+--------------+--------------+--------------+ 
| Cost of sales             |     |  |              |  (7,413,534) |              |  (6,547,720) | 
+---------------------------+-----+--+--------------+--------------+--------------+--------------+ 
|                           |     |  |              |              |              |              | 
+---------------------------+-----+--+--------------+--------------+--------------+--------------+ 
| GROSS PROFIT              |     |  |              |   14,874,123 |              |   13,449,161 | 
+---------------------------+-----+--+--------------+--------------+--------------+--------------+ 
|                           |     |  |              |              |              |              | 
+---------------------------+-----+--+--------------+--------------+--------------+--------------+ 
| Administrative expenses   |     |  |              |              |              |              | 
+---------------------------+-----+--+--------------+--------------+--------------+--------------+ 
| Before exceptional items           | (13,777,550) |              | (11,727,757) |              | 
+------------------------------------+--------------+--------------+--------------+--------------+ 
| Exceptional items            |  |4 |  (7,494,705) |              |      350,241 |              | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
|                              |  |  |              | (21,272,255) |              | (11,377,516) | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
|                              |  |  |              |              |              |              | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
| Other operating income       |  |5 |              |            - |              |       56,218 | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
|                              |  |  |              |              |              |              | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
| OPERATING (LOSS)/PROFIT      |  |  |              |  (6,398,132) |              |    2,127,863 | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
|                              |  |  |              |              |              |              | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
| Finance cost                 |  |9 |              |  (2,552,642) |              |  (1,820,100) | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
|                              |  |  |              |              |              |              | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
| Investment income            |  |  |              |        6,094 |              |       34,197 | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
|                              |  |  |              |              |              |              | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
| (LOSS)/PROFIT BEFORE         |  |  |              |  (8,944,680) |              |      341,960 | 
| TAXATION                     |  |  |              |              |              |              | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
|                              |  |  |              |              |              |              | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
| Taxation                     |  10 |              |    1,379,084 |              |      494,532 | 
+------------------------------+-----+--------------+--------------+--------------+--------------+ 
|                              |  |  |              |              |              |              | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
| (LOSS)/PROFIT FOR THE PERIOD |  |  |              |  (7,565,596) |              |      836,492 | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
|                              |  |  |              |              |              |              | 
+------------------------------+--+--+--------------+--------------+--------------+--------------+ 
| EARNINGS PER SHARE                                |              |              |              | 
+---------------------------------------------------+--------------+--------------+--------------+ 
| Basic - from continuing   |  |  11 |              |     (18.96)p |              |        2.74p | 
| and total operations      |  |     |              |              |              |              | 
+---------------------------+--+-----+--------------+--------------+--------------+--------------+ 
| Diluted - from continuing |  |  11 |              |     (18.96)p |              |        2.62p | 
| and total operations      |  |     |              |              |              |              | 
+---------------------------+--+--+--+--------------+--------------+--------------+--------------+ 
 
 
The accompanying notes form an integral part of these financial 
statements.  CONSOLIDATED BALANCE SHEET 
AS AT 31 DECEMBER 2008 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
|                                           |             |    |        2008 |  |       2007 | 
|                                           |             |    |             |  |   Restated | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
|                                           |       Notes |    |         GBP |  |        GBP | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| ASSETS                                    |             |    |             |  |            | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Non-current assets                        |             |    |             |  |            | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Property, plant and equipment             |          14 |    |  41,276,365 |  | 49,017,379 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Intangible fixed assets                   |          15 |    |   4,564,533 |  |  6,207,175 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Deferred tax assets                       |          20 |    |   1,881,039 |  |    575,217 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
|                                           |             |    |  47,721,937 |  | 55,799,771 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Current assets                            |             |    |             |  |            | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Inventories                               |          16 |    |     764,863 |  |    751,617 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Trade and other receivables               |          17 |    |   2,176,002 |  |  2,157,544 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Cash and cash equivalents                 |             |    |     100,072 |  |    136,923 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
|                                           |             |    |   3,040,937 |  |  3,046,084 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| TOTAL ASSETS                              |             |    |  50,762,874 |  | 58,845,855 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
|                                           |             |    |             |  |            | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| EQUITY AND LIABILITIES                    |             |    |             |  |            | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Capital and reserves                      |             |    |             |  |            | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Ordinary share capital                    |          18 |    |   7,965,671 |  |  7,934,671 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Share premium account                     |             |    |   7,192,665 |  |  7,192,665 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Revaluation reserve                       |             |    |   2,203,815 |  |  3,999,254 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Share-based payment reserve               |             |    |      52,933 |  |          - | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Retained earnings                         |             |    | (7,873,214) |  |   (89,073) | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
|                                           |             |    |             |  |            | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| TOTAL EQUITY                              |             |    |   9,541,870 |  | 19,037,517 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
|                                           |             |    |             |  |            | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Non-current liabilities                   |             |    |             |  |            | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Long-term borrowings                      |          19 |    |           - |  | 34,244,410 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Finance lease liabilities                 |          23 |    |     156,904 |  |      6,040 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Derivative financial instruments          |          19 |    |   1,374,700 |  |    258,000 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Deferred tax liabilities                  |          20 |    |     949,069 |  |  1,885,576 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
|                                           |             |    |   2,480,673 |  | 36,394,026 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Current liabilities                       |             |    |             |  |            | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Trade and other payables                  |          21 |    |   3,343,676 |  |  3,019,403 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Short-term borrowings                     |          19 |    |  35,330,701 |  |    370,638 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Current tax payable                       |             |    |           - |  |     20,511 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| Finance lease liabilities                 |          23 |    |      65,954 |  |      3,760 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
|                                           |             |    |  38,740,331 |  |  3,414,312 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
| TOTAL EQUITY AND LIABILITIES              |             |    |  50,762,874 |  | 58,845,855 | 
+-------------------------------------------+-------------+----+-------------+--+------------+ 
 
 
 
 
The accompanying notes form an integral part of these financial statements. 
 
 
Approved by the Board and authorised for issue on 26th June 2009 and signed on 
its behalf by: 
 
 
K.J.CHAPMAN 
Director 
  CONSOLIDATED CASH FLOW STATEMENT 
FOR THE YEAR ENDED 31 DECEMBER 2008 
+-----------------------------------+----------+-----+--+-------------+--+-------------+ 
|                                   |                |  |        2008 |  |        2007 | 
|                                   |                |  |             |  |    Restated | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
|                                   |          Notes |  |         GBP |  |         GBP | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Cash flows from operating activities               |  |             |  |             | 
+----------------------------------------------------+--+-------------+--+-------------+ 
| (Loss)/Profit before taxation     |                |  | (8,944,680) |  |     341,960 | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Adjustments for:                  |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Investment income                 |                |  |     (6,094) |  |    (34,197) | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Interest expense                  |                |  |   2,552,642 |  |   1,820,100 | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Derivative financial instrument fair value         |  |   1,116,700 |  |      45,000 | 
| adjustment                                         |  |             |  |             | 
+----------------------------------------------------+--+-------------+--+-------------+ 
| Profit on disposal of fixed assets                 |  |           - |  |    (56,218) | 
+----------------------------------------------------+--+-------------+--+-------------+ 
| Decrease in value of property                      |  |   5,287,979 |  |     297,847 | 
+----------------------------------------------------+--+-------------+--+-------------+ 
| Depreciation                      |                |  |     732,410 |  |     699,665 | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Amortisation and impairments                       |  |   1,642,642 |  |     595,267 | 
+----------------------------------------------------+--+-------------+--+-------------+ 
| Discount on acquisition of Moorgate Taverns        |  |           - |  |   (725,254) | 
| Limited                                            |  |             |  |             | 
+----------------------------------------------------+--+-------------+--+-------------+ 
| Recognition of loan to Community Taverns Limited   |  |           - |  |     729,522 | 
+----------------------------------------------------+--+-------------+--+-------------+ 
| Expenses in return for shares     |                |  |      31,000 |  |           - | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| (Increase)/Decrease in            |                |  |    (13,246) |  |      54,039 | 
| inventories                       |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| (Increase)/Decrease in trade and other receivables |  |    (18,458) |  |     786,763 | 
+----------------------------------------------------+--+-------------+--+-------------+ 
| Increase/(Decrease) in trade      |                |  |     621,214 |  | (1,662,026) | 
| payables                          |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
|                                   |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Cash generated from operations    |                |  |   3,002,109 |  |   2,892,468 | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
|                                   |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Interest paid                     |                |  | (2,805,085) |  | (1,610,451) | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Tax paid                          |                |  |    (31,699) |  |   (237,345) | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
|                                   |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| NET CASH FROM OPERATING ACTIVITIES                 |  |     165,325 |  |   1,044,672 | 
+----------------------------------------------------+--+-------------+--+-------------+ 
|                                   |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Cash flows from investing activities               |  |             |  |             | 
+----------------------------------------------------+--+-------------+--+-------------+ 
| Purchase of tangible fixed assets |                |  |   (938,059) |  |   (865,352) | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Acquisition of subsidiary net of cash        |     |  |           - |  | (3,949,246) | 
| acquired                                     |     |  |             |  |             | 
+----------------------------------------------+-----+--+-------------+--+-------------+ 
| Proceeds of sale of tangible fixed assets          |  |           - |  |     114,394 | 
+----------------------------------------------------+--+-------------+--+-------------+ 
| Interest received                 |                |  |       6,094 |  |      34,197 | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
|                                   |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| NET CASH FROM INVESTING ACTIVITIES                 |  |   (931,965) |  | (4,666,007) | 
+----------------------------------------------------+--+-------------+--+-------------+ 
|                                   |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Cash flows from financing activities               |  |             |  |             | 
+----------------------------------------------------+--+-------------+--+-------------+ 
| Proceeds from issue of shares     |                |  |           - |  |   1,309,525 | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Funds raised by sale and lease back of assets      |  |     238,693 |  |           - | 
+----------------------------------------------------+--+-------------+--+-------------+ 
| Net drawdown/(repayment) of borrowings             |  |      13,885 |  |   2,770,929 | 
+----------------------------------------------------+--+-------------+--+-------------+ 
| Payment of finance lease          |                |  |    (25,635) |  |     (4,776) | 
| liabilities                       |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Dividends paid                    |             12 |  |   (199,142) |  |   (555,568) | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
|                                   |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| NET CASH FROM FINANCING ACTIVITIES                 |  |      27,801 |  |   3,520,110 | 
+----------------------------------------------------+--+-------------+--+-------------+ 
|                                   |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| NET DECREASE IN CASH AND CASH EQUIVALENTS          |  |   (738,839) |  |   (101,225) | 
+----------------------------------------------------+--+-------------+--+-------------+ 
|                                   |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Cash and cash equivalents at beginning of period   |  |   (217,844) |  |   (116,619) | 
+----------------------------------------------------+--+-------------+--+-------------+ 
|                                   |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| CASH AND CASH EQUIVALENTS AT END OF PERIOD         |  |   (956,683) |  |   (217,844) | 
+----------------------------------------------------+--+-------------+--+-------------+ 
|                                   |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| REPRESENTED BY:                   |                |  |             |  |             | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Cash at bank and in hand          |                |  |     100,072 |  |     136,923 | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
| Bank overdrafts                   |                |  | (1,056,755) |  |   (354,767) | 
+-----------------------------------+----------------+--+-------------+--+-------------+ 
|                                   |                |  |   (956,683) |  |   (217,844) | 
+-----------------------------------+----------+-----+--+-------------+--+-------------+ 
 
 
The accompanying notes form an integral part of these financial statements. 
  CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
FOR THE YEAR ENDED 31 DECEMBER 2008 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
|                       |  |  Ordinary |     Share | Revaluation | Share-based |    Retained |       Total | 
|                       |  |     Share |   Premium |    Reserve1 |    Payments |    Earnings |      Equity | 
|                       |  |   Capital |           |             |    Reserve2 |             |             | 
+-----------------------+--+           +           +             +             +             +             + 
|                       |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
|                       |  |       GBP |       GBP |         GBP |         GBP |         GBP |         GBP | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Balances at 1 January |  |           |           |             |             |             |             | 
| 2008                  |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| - previously stated   |  | 7,934,671 |7,192,665  |   4,550,775 |           - |   2,507,877 |  22,185,988 | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
|    Prior year adjustment |         - |         - |   (551,521) |           - | (2,596,950) | (3,148,471) | 
|                (note 27) |           |           |             |             |             |             | 
+--------------------------+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Balances at 1 January |  | 7,934,671 | 7,192,665 |   3,999,254 |           - |    (89,073) |  19,037,517 | 
| 2008                  |  |           |           |             |             |             |             | 
| - restated            |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Changes in equity:    |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Loss on property      |  |         - |         - | (2,658,684) |           - |           - | (2,658,684) | 
| revaluation           |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Issues of share       |  |    31,000 |         - |           - |           - |           - |      31,000 | 
| capital               |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Loss for the period   |  |         - |         - |           - |           - | (7,565,596) | (7,565,596) | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Deferred tax arising on  |         - |         - |     863,245 |           - |           - |     863,245 | 
| revaluation              |           |           |             |             |             |             | 
+--------------------------+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Share-based payments  |  |         - |         - |           - |      52,933 |    (19,403) |      33,530 | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Dividends paid        |  |         - |         - |           - |           - |   (199,142) |   (199,142) | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
|                       |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Balances at 31        |  | 7,965,671 | 7,192,665 |   2,203,815 |      52,933 | (7,873,214) |   9,541,870 | 
| December 2008         |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
|                       |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
|                       |  |  Ordinary |     Share | Revaluation | Share-based |    Retained |       Total | 
|                       |  |     Share |   Premium |    Reserve1 |    Payments |    Earnings |      Equity | 
|                       |  |   Capital |           |             |    Reserve2 |             |             | 
+-----------------------+--+           +           +             +             +             +             + 
|                       |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
|                       |  |       GBP |       GBP |         GBP |         GBP |         GBP |         GBP | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Balances at 1 January |  |           |           |             |             |             |             | 
| 2007                  |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| - previously stated   |  | 5,099,442 | 5,131,869 |   4,460,560 |           - |   1,424,803 |  16,116,674 | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
|    Prior year adjustment |         - |         - |   (302,074) |           - | (1,814,113) | (2,116,187) | 
|                (note 27) |           |           |             |             |             |             | 
+--------------------------+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Balances at 1 January |  | 5,099,442 | 5,131,869 |   4,158,486 |           - |   (389,310) |  14,000,487 | 
| 2007                  |  |           |           |             |             |             |             | 
| - restated            |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
|                       |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Changes in equity:    |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Gain on property      |  |         - | -         |   (221,155) |           - |           - |   (221,155) | 
| revaluation           |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Issues of share       |  | 2,835,229 | 2,151,538 |           - |           - |           - |   4,986,767 | 
| capital               |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Costs of issue of     |  |         - | (90,742)  |           - |           - |           - |    (90,742) | 
| share capital         |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Share options issued  |  |         - | -         |           - |           - |      19,403 |      19,403 | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Profit for the period    |         - | -         |           - |           - |     836,492 |     836,492 | 
| previously stated        |           |           |             |             |             |             | 
+--------------------------+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Deferred tax arising on  |         - |         - |      61,923 |           - |           - |      61,923 | 
| revaluation              |           |           |             |             |             |             | 
+--------------------------+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Dividends paid        |  |         - |         - |           - |           - |   (555,658) |   (555,658) | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
|                       |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
| Balances at 31        |  | 7,934,671 | 7,192,665 |   3,999,254 |           - |    (89,073) |  19,037,517 | 
| December 2007 -       |  |           |           |             |             |             |             | 
| restated (note 27)    |  |           |           |             |             |             |             | 
|                       |  |           |           |             |             |             |             | 
+-----------------------+--+-----------+-----------+-------------+-------------+-------------+-------------+ 
 
 
1 The revaluation reserve relates to any increase in value to the revaluation of 
freehold and long leasehold property 
 

  above its original cost at the 
year end. 
 
 
2 The share-based payment reserve relates to the value of share options in issue 
at the year end. 
 
 
 
 
The accompanying notes form an integral part of these financial 
statements.  NOTES TO THE ANNUAL FINANCIAL STATEMENTS 
FOR THE YEAR ENDED 31 DECEMBER 2008 
 
 
 
 
1.     ACCOUNTING POLICIES 
 
 
The principal accounting policies applied in the preparation of these financial 
statements are set out below. These policies have been applied consistently to 
all the years presented, unless otherwise stated. 
 
 
Basis of Preparation 
 
 
The consolidated financial statements have been prepared in accordance with 
applicable International Financial Reporting Standards (IFRS) as issued by the 
International Accounting Standards Board (IASB), under the historical cost 
convention as modified by the revaluation of freehold, long leasehold property 
and derivative financial instruments. The measurement basis is the historical 
cost convention and the principal accounting policies are set out below. 
 
 
A separate profit and loss account for the parent company has not been presented 
as permitted by section 230(4) of the Companies Act 1985. The parent company 
reported a loss of GBP8,249,352 (2007: profit of GBP31,512). 
 
 
Going Concern 
 
 
The financial statements have been prepared on a going concern basis which the 
Directors believe to be appropriate. 
 
 
At the year end the Group has reclassified GBP34,273,946 of long term bank as 
short term liabilities due to breaches of covenants in the underlying 
agreements. The Group is in discussions with its bankers with regard to 
restructuring its facilities and it is likely that this will include increased 
interest margins. The loss for the year includes GBP5,287,979 of exceptional 
non-trade losses arising from the downward valuation of assets and liabilities 
due to the current economic climate. 
 
 
A number of issues have impacted on the pub sector including the credit squeeze 
affecting individual's discretionary spending, the effect of discounted alcohol 
available at supermarkets and the smoking ban. 
 
 
The Directors have prepared cash flow forecasts for two years from the year end 
and have taken steps to reduce the Group's net cash outflow. These projections 
have been prepared on the basis that the impact of the current economic downturn 
has been incorporated in their forecasts. In terms of any future interest rate 
changes, the cash projections have been revised to reflect possible interest 
rate adjustments. On this basis the Board considers that the Group will have 
sufficient funds for the twelve month period from the date of signing of the 
accounts. 
 
 
In view of the significance of the factors outlined above, the Report of the 
Auditors includes an Emphasis of Matter which refers to the existence of these 
uncertainties and their impact on the Group's ability to continue in operational 
existence for the foreseeable future. 
 
 
Standards, amendments and interpretations to existing standards that are not yet 
effective and have not been adopted early by the Group 
 
 
At the date of authorisation of these financial statements, certain new 
standards, amendments and interpretations to existing standards have been 
published but are not yet effective, and have not been adopted early by the 
Group. Management anticipates that all of the pronouncements will be adopted in 
the Group's accounting policies for the first period beginning after the 
effective date of the pronouncements. Information on new standards, amendments 
and interpretations that are expected to be relevant to the Group's financial 
statements is provided below. Certain other new standards and interpretations 
have been issued but are not expected to have a material impact on the Group's 
financial statements. 
 
 
IFRS 8 Operating Segments - effective from 1 January 2009 
 
 
IFRS 8 replaces IAS 14 'Segment Reporting' and requires the Group to adopt the 
'management approach' to reporting on the financial performance of its operating 
segments. Generally, the information to be reported would be what management 
uses internally for evaluating segment performance and deciding how to allocate 
resources to operating segments. The new standard will significantly change the 
way segmental information is currently reported. Goodwill, which is presently 
allocated to cash-generating units based on reportable segments, will also need 
to be reallocated based on the new reportable segments. It is managements' 
opinion that the reallocation will not result in any further impairment charges 
against goodwill. 
 
 
IFRS 3 Business Combinations (Revised 2008) (effective from 1 July 2009) 
 
 
The standard is applicable for business combinations occurring in reporting 
periods beginning on or after 1 July 2009 and will be applied prospectively. The 
new standard introduces changes to the accounting requirements for business 
combinations, but still requires use of the purchase method, and will have a 
significant effect on business combinations occurring in reporting periods 
beginning on or after 1 July 2009. 
 
 
IAS 27 Consolidated and Separate Financial Statements (Revised 2008) (effective 
from 1 July 2009) 
 
 
The revised standard introduces changes to the accounting requirements for the 
loss of control of a subsidiary and for changes in the Group's interest in 
subsidiaries. Management does not expect the standard to have a material effect 
on the Group's financial statements. 
 
 
Amendments to IFRS 2 Share-based Payment (effective from 1 January 2009) 
 
 
The IASB has issued an amendment to IFRS 2 regarding vesting conditions and 
cancellations. None of the Group's current share-based payment schemes is 
affected by the amendments. Management does not consider the amendments to have 
an impact on the Group's accounting policies. 
 
 
Annual Improvements 2008 
 
 
The IASB has issued Improvements for International Financial Reporting Standards 
2008. Most of these amendments become effective in annual periods beginning on 
or after 1 January 2009. The Group expects the amendment to IAS 23 Borrowing 
Costs to be relevant to the Group's accounting policies. The amendment clarifies 
the definition of borrowing costs by reference to the effective interest method. 
This definition will be applied for reporting periods beginning on or after 1 
January 2009, however forecasts indicate the effect to be insignificant. Smaller 
amendments are made to several other standards, however, these amendments are 
not expected to have a material impact on the Group's financial statements. 
 
 
Basis of Consolidation 
 
 
The financial information incorporates the results of the Company and entities 
controlled by the Company (its subsidiaries). Control is achieved where the 
Company has the power to govern the financial and operating policies of an 
investee entity so as to obtain benefits from its activities. 
 
 
The results of subsidiaries acquired or disposed of during the period are 
included in the consolidated income statement from the effective date of 
acquisition or up to the effective date of disposal, as appropriate. Financial 
statements of the subsidiaries are prepared to the same year end, 31 December. 
 
 
Where necessary, adjustments are made to the results of subsidiaries to bring 
the accounting policies used into line with those used by the Group. 
 
 
All intra-Group transactions, balances, income and expenses are eliminated on 
consolidation. 
 
 
Business Combinations and Goodwill 
 
 
Goodwill on acquisitions comprises the excess of the fair value of the 
consideration plus any associated costs for investments in subsidiary 
undertakings over the fair value of the net identifiable assets acquired. 
Adjustments are made to fair values to bring the accounting policies of acquired 
businesses into alignment with those of the Group. The costs of integrating and 
reorganising acquired businesses are charged to the post acquisition income 
statement. 
 
 
Goodwill is carried at cost less accumulated impairment losses. Goodwill is 
tested for impairment annually. Gains and losses on the disposal of an entity 
include the carrying amount of goodwill relating to the entity sold.  Negative 
goodwill is recognised immediately in the income statement. 
 
 
Revenue Recognition 
 
 
Revenue is the value of goods and services sold to third parties as part of the 
Group's trading activities, after deducting sales based taxes, coupons and staff 
discounts. The majority of revenue comprises food and beverages sold in the 
Group's outlets. This revenue is recognised at the point of sale to the 
customer. Revenue arising from the sale of property is recognised on legal 
completion of the sale. Investment income is recognised upon a receivable basis. 
 
 
Taxation 
 
 
The tax expense represents the sum of the tax currently payable and any deferred 
tax. The tax currently payable is based on the estimated taxable profit for the 
year. Taxable profit differs from net profit as reported in the income statement 
because it excludes items of income or expenses that are taxable or deductible 
in other years and it further excludes items that are never taxable or 
deductible. The Group's liability for current tax is calculated using tax rates 
that have been enacted or substantially enacted by the balance sheet date. 
 
 
Deferred tax is provided in full, using the liability method, on temporary 
differences arising between the tax bases of assets and liabilities and their 
carrying amounts in the consolidated financial statements. The deferred tax is 
not accounted for if it arises from initial recognition of an asset or liability 
in a transaction, other than a business combination, that at the time of the 
transaction affects neither accounting nor taxable profit or loss. Deferred tax 
is determined using tax rates (and laws) that have been enacted or substantially 
enacted by the balance sheet date and are expected to apply when the related 
deferred tax asset is realised or the deferred income tax liability is settled. 
 
 
Deferred tax assets are recognised to the extent that it is probable that future 
taxable profit will be available against which the temporary differences can be 
utilised. 
 
 
Deferred tax is provided on temporary differences arising on investments in 
subsidiaries, joint ventures and associates, except where the timing of the 
reversal of the temporary difference is controlled by the Group and it is 
probable that the temporary difference will not reverse in the foreseeable 
future. 
 
 
Share-based Payments 
 
 
The cost of share-based payment arrangements, whereby employees receive 
remuneration in the form of shares or share options, is recognised as an 
employee benefit expense in the income statement. 
 
 
The total expense to be apportioned over the vesting period of the benefit is 
determined by reference to the fair value at the date of grant. The assumptions 
underlying the number of awards expected to vest are subsequently adjusted for 
the effects of non market-based vesting conditions prevailing at the balance 
sheet date. Fair value is measured by the use of Black-Scholes option pricing 
model and is based on a reasonable expectation of the extent to which 
performance criteria will be met. 
 
 
Property, Plant and Equipment 
 
 
Plant and equipment are stated at cost less accumulated depreciation and any 
recognised impairment loss. Depreciation is charged so as to write off the costs 
of assets, over their estimated useful lives, using the straight-line method, on 
the following bases: 
    Fixtures and fittings                                10% straight line 
    Computers and EPOS                           20% straight line 
    Motor 
vehicles                                        25% straight line 
 
Leasehold Improvements                      the shorter of the lease term or 5 
years 
 
 
The freehold and long leasehold property assets of the Group are stated at 
revalued amounts, being fair value at the date of revaluation less accumulated 
impairment losses.  Increases in the value of revalued assets are recognised in 
the revaluation reserve except to the extent they relate to a previous decrease 
in value on that individual asset which had been charged to the income 
statement. Decreases in value are taken to the revaluation reserve to the extent 
of any pre-existing surplus on that individual asset; decreases in excess of any 
pre-existing surplus on that individual asset are taken to the income statement. 
 
 
Pub Operating Lease Premiums 
 
 
Short leasehold property premiums arising on leases of property which are 
classified as operating leases under IAS 17 are recognised as intangible fixed 
assets. They are capitalised at cost and amortised over the finite lease term, 
amortisation being recognised under administration expenses. The leases are 
tested annually for impairment. Any improvements to the short leasehold property 
are classified as leasehold improvements under tangible fixed assets. 
 
 
Impairment 
 
 
Assets that are subject to depreciation or amortisation are reviewed for 
impairment whenever events or changes in circumstances indicate that the 
carrying amount may not be recoverable. A review for indicators of impairment is 
performed annually. An impairment loss is recognised for the amount by which the 
asset's carrying amount exceeds its recoverable amount. The recoverable amount 
is the higher of an asset's fair value less costs to sell and value in use. Any 
impairment charge is recognised in the income statement in the year in which it 
occurs. When an impairment loss, other than an impairment loss on goodwill, 
subsequently reverses due to a change in the original estimate, the carrying 
amount of the asset is increased to the revised estimate of its recoverable 
amount, up to the carrying amount that would have resulted, net of depreciation, 
had no impairment loss been recognised for the asset in prior years. 
 
 
 Trade and other receivables 
 
 
Trade receivables are stated at their original invoiced value, as the interest 
that would be recognised from discounting future cash receipts over the short 
credit period is not considered to be material. Trade receivables are reduced by 
appropriate allowances for estimated irrecoverable amounts. Interest on overdue 
trade receivables is recognised as it accrues. 
 
 
Cash and cash equivalents 
 
 
Cash and cash equivalents comprise cash at bank and in hand and other short-term 
highly liquid deposits with an original maturity at acquisition of three months 
or less. Cash held on deposit with an original maturity at acquisition of more 
than three months is disclosed as current asset investments. For the purposes of 
the cash flow statement, cash and cash equivalents consists of cash and cash 
equivalents as defined above, net of bank overdrafts that are repayable on 
demand and that are integral to the Group's cash management. 
 
Trade payables 
 
 
Trade payables are stated at their original invoiced value, as the interest that 
would be recognised from discounting future cash payments over the short payment 
period is not considered to be material. 
 
 
Derivative financial instruments 
 
 
The Group's policy is to hedge a proportion of its variable rate borrowings at 
fixed rates of interest. To achieve this, the Group enters into interest rate 
swap contracts in which the Group agrees to exchange its variable rate 
obligations for fixed rate obligations. 
 
 
Although not accounted for as being hedge effective, the swaps are held for risk 
management purposes and not for trading purposes. These swaps are defined as 
cash flow hedges and the fair values of the swaps are determined by discounting 
the future cash flows using the mid point of the sterling yield curve prevailing 
at the year end. 
 
 
Interest-bearing borrowings 
 
 
Interest-bearing borrowings are stated at amortised cost using the effective 
interest method. The effective interest method is a method of calculating the 
amortised cost of a financial liability and of allocating interest expense over 
the relevant period. The effective interest rate is the rate that exactly 
discounts estimated future cash payments through the expected life of the 
financial liability. 
 
 
Provisions 
 
 
Provisions are recognised in the balance sheet when there is a present legal or 
constructive obligation as a result of a past event, and it is probable that an 
outflow of economic benefits will be required to settle the obligation. 
 
 
Plant and Equipment Leases 
 
 
Leases of plant and equipment, where the Group has substantially all the risks 
and rewards of ownership, are classified as finance leases. Finance leases are 
capitalised at the lease's inception at the lower of the fair value of the 
leased property and the present value of the minimum lease payments. Each lease 
payment is allocated between the liability and finance charges so as to achieve 
a constant rate on the finance balance outstanding. The corresponding rental 
obligations, net of finance charges, are included in other long-term payables. 
The interest element of the finance cost is charged to the income statement over 
the lease period so as to produce a constant periodic rate of interest on the 
remaining balance of the liability for each period. The property, plant and 
equipment acquired under finance leases is depreciated over the shorter of the 
asset's useful life and the lease term. 
 
 
Leases where the lessor retains substantially all the risks and rewards of 
ownership are classified as operating leases. Payments made under operating 
leases (net of any incentives received from the lessor) are charged to the 
income statement on a straight-line basis over the period of the lease. 
 
 
Rental income received under operating leases is credited to the income 
statement on a straight line basis over the lease term. 
 
 
Inventories 
 
 
Inventories are stated at the lower of cost and net realisable value. Cost is 
determined using the first-in, first-out (FIFO) method. It excludes borrowing 
costs. Net realisable value is the estimated selling price in the ordinary 
course of business, less applicable variable selling expenses. 
 
 
Pensions 
 
 
The Group operates a defined contribution pension plan. The scheme is funded 
through payments to insurance companies. 
 
 
A defined contribution plan is a pension plan under which the Group pays fixed 
contributions into a separate entity. The Group has no legal or constructive 
obligations to pay further contributions if the fund does not hold sufficient 
assets to pay all employees the benefits relating to employee service in the 
current and prior periods. 
 
 
For a defined contribution plan, the Group pays contributions to publicly or 
privately administered pension insurance plans on a contractual basis. The 
contributions are recognised as employee benefit expense when they are due. 
 
 
Exceptional Items 
 
 
Exceptional items comprise changes in the values of its freehold, long leasehold 
properties and derivative financial instruments and impairments of operating 
lease premiums, recognised in the income statement, as exceptional items. This 
is due to these profits and losses not being directly attributable to the 
trading performance of the Group. 
 
 
 
2.CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY 
 
 
The preparation of financial information in conformity with generally accepted 
accounting practice requires management to make estimates and judgments that 
affect the reported amounts of assets and liabilities as well as the disclosure 
of contingent assets and liabilities at the balance sheet date and the reported 
amounts of revenues and expenses during the reporting period. 
 
 
Estimates and judgments are continually evaluated and are based on historical 
experience and other factors, including expectations of future events that are 
believed to be reasonable under the circumstances. The significant judgments 
made by management in applying the Group's accounting policies and the key 
sources of estimation were: 
 
 
  *  Impairment of goodwill and operating leases.  Determining whether goodwill is 
  impaired requires an estimation of the value in use of the cash-generating units 
  to which goodwill has been allocated. The value in use calculation requires the 
  Group to estimate the future cash flows expected to arise from the 
  cash-generating unit and a suitable discount rate in order to calculate the 
  present value. 
  *  Non-depreciation of assets.  The Directors believe that the following factors 
  are relevant to the Group's public house estates, which mitigate the need to 
  apply depreciation to the freehold and long leasehold property assets: 
  *  The Company has a policy of regular maintenance and repair such that the 
  properties are retained at the previously assessed standard of performance; 
  *  The properties are unlikely to suffer from technical or commercial obsolescence; 
  *  The Company, as a commercial enterprise, has historically recognised disposal 
  proceeds of similar assets which have not been materially less than their 
  carrying value. 
 
Therefore the directors consider that it is not necessary to depreciate the 
freehold and long leasehold property assets owned. 
 
 
 
3.    SEGMENTAL REPORTING 
 
 
The Directors consider that there are two main classes of business; managed 
houses and tenanted houses. 
 
 
Managed house income comprises the sale of liquor, catering services, vending 
machine income, and cigarette commission. This class of business accounts for 
85% of reported turnover for 2008. Therefore the Directors do not consider it 
necessary to produce a segmental report. 
 
 
All income is derived from the within United Kingdom. 
 
 
 
 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
| 4. | Exceptional items                                    |  |      2008 |  |      2007 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |       GBP |  |       GBP | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Group operating profit for the year is stated after  |  |           |  |           | 
|    | the following:                                       |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Impairment of short leasehold property               |  | 1,090,026 |  |    32,166 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Revaluation deficit on freehold and long leasehold   |  | 5,287,979 |  |   297,847 | 
|    | property                                             |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Negative goodwill on acquisition of subsidiary       |  |         - |  | (725,254) | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Revaluation deficit on derivative financial          |  | 1,116,700 |  |    45,000 | 
|    | instrument                                           |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  | 7,494,705 |  | (350,241) | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | The totals above have been disclosed on the face of the income statement as these  | 
|    | exceptional items do not affect the underlying trading performance of the Group.   | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
 
 
 
 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
| 5. | OPERATING PROFIT                                     |  |      2008 |  |      2007 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |       GBP |  |       GBP | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Group operating profit for the year is stated after  |  |           |  |           | 
|    | the following:                                       |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Depreciation of owned tangible fixed assets          |  |   723,460 |  |   694,880 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Depreciation of assets held under finance leases     |  |     8,950 |  |     3,000 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Amortisation of operating lease premiums             |  |   552,616 |  |   563,101 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Impairment of operating lease premiums               |  | 1,090,026 |  |    32,166 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Operating lease expense - land and buildings         |  | 2,777,624 |  | 2,155,642 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | And after crediting:                                 |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Rental income                                        |  | 1,123,374 |  |   804,368 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Profit on disposal                                   |  |         - |  |    56,218 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
 
 
 
 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
| 6. | AUDITORS' REMUNERATION                               |  |      2008 |  |      2007 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |       GBP |  |       GBP | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Fees payable to the Group's auditor for the audit of |  |    65,000 |  |    49,000 | 
|    | the Group's annual financial statements              |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Fees payable to the Group's auditor and its          |  |           |  |           | 
|    | associates for other services:                       |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |   Tax services                                       |  |     5,000 |  |     4,500 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |   Other services (non-audit)                         |  |    51,985 |  |       900 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
 
 
 
 
 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
| 7. | STAFF COSTS                                          |  |      2008 |  |      2007 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |       GBP |  |       GBP | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Staff costs comprised:                               |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Wages and salaries                                   |  |   849,106 |  |   910,952 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Social security costs                                |  |    66,512 |  |    76,018 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Other pension costs                                  |  |    27,490 |  |    29,895 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |   943,108 |  | 1,016,865 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | The average monthly number of employees, employed by    |           |  |           | 
|    | the Group, including directors during the year can be   |           |  |           | 
|    | categorised                                             |           |  |           | 
+----+---------------------------------------------------------+-----------+--+-----------+ 
|    | as follows:                                          |  |    Number |  |    Number | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |   Administration employees                           |  |        22 |  |        23 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |   Pub employees                                      |  |        40 |  |        60 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |        62 |  |        83 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
 
 
 
 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
| 8. | DIRECTORS EMOLUMENTS                                 |  |      2008 |  |      2007 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |       GBP |  |       GBP | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Emoluments                                           |  |   409,482 |  |   347,791 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Pension costs                                        |  |    18,067 |  |    17,689 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |   427,549 |  |   365,480 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | The number of directors accruing benefits under a money purchase scheme were 2     | 
|    | (2007: 2).                                                                         | 
+----+------------------------------------------------------------------------------------+ 
|    |                                                      |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Highest paid director:                               |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Emoluments                                           |  |   157,698 |  |   150,336 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Pension costs                                        |  |    10,987 |  |    10,769 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |   168,685 |  |   161,105 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
 
 
 
 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
| 9. | FINANCE COSTS                                        |  |           |  |  Restated | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |      2008 |  |      2007 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |       GBP |  |       GBP | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Bank overdraft and loans                             |  | 2,587,086 |  | 1,846,936 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    | Interest rate hedging                                |  |  (34,444) |  |  (26,836) | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  | 2,552,642 |  | 1,820,100 | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
|    |                                                      |  |           |  |           | 
+----+------------------------------------------------------+--+-----------+--+-----------+ 
 
 
 
 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
| 10. | TAXATION                                           |  |        2008 |  |      2007 | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     |                                                    |  |             |  |  Restated | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     |                                                    |  |         GBP |  |       GBP | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     |                                                    |  |             |  |           | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Current tax charge                                 |  |           - |  |    16,648 | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Deferred tax                                       |  |    (73,262) |  |  (14,699) | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Utilisation of tax losses (note 20)                |  |     174,812 |  | (422,070) | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Deferred tax released on revaluations (note 20)    |  | (1,480,634) |  |  (54,032) | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Deferred tax released on reduction in future tax   |  |           - |  |  (20,379) | 
|     | rate (note 20)                                     |  |             |  |           | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     |                                                    |  |             |  |           | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Total tax credit for the period                    |  | (1,379,084) |  | (494,532) | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     |                                                    |  |             |  |           | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
| 10. | TAXATION - continued                               |  |             |  |           | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     |                                                    |  |             |  |           | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | (Loss)/profit on ordinary activities before tax    |  | (8,944,680) |  |   341,960 | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     |                                                    |  |             |  |           | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Tax on (loss)/profit at 28% (2007: 30%)            |  | (2,504,510) |  |   102,588 | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Effect of:                                         |  |             |  |           | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Small companies rate relief                        |  |           - |  |   (8,635) | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Expenses not deductible for tax purposes           |  |     743,943 |  |     4,351 | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Transfers to reserves                              |  |     744,588 |  |         - | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Accelerated capital allowances                     |  |      33,605 |  |       687 | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Relief for losses brought forward                  |  |   (190,527) |  | (159,719) | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Effect of losses carried forward                   |  |     307,599 |  |         - | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     | Group tax adjustments                              |  |     865,302 |  |    77,376 | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     |                                                    |  |           - |  |    16,648 | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
|     |                                                    |  |             |  |           | 
+-----+----------------------------------------------------+--+-------------+--+-----------+ 
 
 
 
 
+-----+-----------------------------------------------------+--+-------------+--+------------+ 
| 11. | EARNINGS PER SHARE                                  |  |        2008 |  |       2007 | 
+-----+-----------------------------------------------------+--+-------------+--+------------+ 
|     |                                                     |  |             |  |   Restated | 
+-----+-----------------------------------------------------+--+-------------+--+------------+ 
|     |                                                     |  |         GBP |  |        GBP | 
+-----+-----------------------------------------------------+--+-------------+--+------------+ 
|     | Earnings from continuing and total operations       |  |             |  |            | 
+-----+-----------------------------------------------------+--+-------------+--+------------+ 
|     | Earnings for the purpose of basic and diluted       |  | (7,565,596) |  |    836,492 | 
|     | earnings per share being net profit attributable to |  |             |  |            | 
|     | equity shareholders                                 |  |             |  |            | 
+-----+-----------------------------------------------------+--+-------------+--+------------+ 
|     |                                                     |  |             |  |            | 
+-----+-----------------------------------------------------+--+-------------+--+------------+ 
|     | Number of Shares                                    |  |             |  |            | 
+-----+-----------------------------------------------------+--+-------------+--+------------+ 
|     | Weighted average number of ordinary shares for the  |  |  39,885,244 |  | 30,575,127 | 
|     | purpose of basic earnings per share                 |  |             |  |            | 
+-----+-----------------------------------------------------+--+-------------+--+------------+ 
|     |                                                     |  |             |  |            | 
+-----+-----------------------------------------------------+--+-------------+--+------------+ 
|     | Weighted average number of ordinary shares          |  |  42,325,115 |  | 31,978,267 | 
|     | for the purpose of dilutive earnings per share      |  |             |  |            | 
+-----+-----------------------------------------------------+--+-------------+--+------------+ 
|     |                                                     |  |             |  |            | 
+-----+-----------------------------------------------------+--+-------------+--+------------+ 
|     | The calculation of diluted earnings per share assumes conversion of all              | 
|     | potentially dilutive ordinary shares, all of which arise from share options. A       | 
|     | calculation is performed to determine the number of shares that could have been      | 
|     | acquired at fair value, based upon the monetary value of the subscription rights     | 
|     | attached to outstanding share options.                                               | 
+-----+--------------------------------------------------------------------------------------+ 
|     |                                                     |  |             |  |            | 
+-----+-----------------------------------------------------+--+-------------+--+------------+ 
|     | At 31 December 2008 all share options in issue were valued below their exercise      | 
|     | price, being anti dilutive by nature. For this reason these options have not been    | 
|     | included in the weighted average number of share to calculate the dilutive           | 
|     | earnings per share.                                                                  | 
+-----+-----------------------------------------------------+--+-------------+--+------------+ 
 
 
 
 
+-----+-----------------------------------------------------+--+-----------+--+-----------+ 
| 12. | DIVIDENDS                                           |  |      2008 |  |      2007 | 
+-----+-----------------------------------------------------+--+-----------+--+-----------+ 
|     |                                                     |  |       GBP |  |       GBP | 
+-----+-----------------------------------------------------+--+-----------+--+-----------+ 
|     |                                                     |  |           |  |           | 
+-----+-----------------------------------------------------+--+-----------+--+-----------+ 
|     | Dividends paid during the year                      |  |   199,142 |  |   555,658 | 
+-----+-----------------------------------------------------+--+-----------+--+-----------+ 
|     | Dividends per share                                 |  |     0.50p |  |     1.75p | 
+-----+-----------------------------------------------------+--+-----------+--+-----------+ 
|     |                                                     |  |           |  |           | 
+-----+-----------------------------------------------------+--+-----------+--+-----------+ 
|     | Final dividend declared after year end              |  |         - |  |   199,142 | 
+-----+-----------------------------------------------------+--+-----------+--+-----------+ 
|     | Final dividend per share                            |  |         - |  |     0.50p | 
+-----+-----------------------------------------------------+--+-----------+--+-----------+ 
|     |                                                     |  |           |  |           | 
+-----+-----------------------------------------------------+--+-----------+--+-----------+ 
 
 
 
+-----+------------------+---+--------------+--------+--------+---+-----+---+----+---+------------+ 
| 13. | SHARE BASED PAYMENTS                                            |        |                | 
+-----+-----------------------------------------------------------------+--------+----------------+ 
|     |                      |              |        |        |         |        |                | 
+-----+----------------------+--------------+--------+--------+---------+--------+----------------+ 
| a)  | Share Options and Warrants                                      |        |                | 
+-----+-----------------------------------------------------------------+--------+----------------+ 
|     |                                                                                           | 
+-----+-------------------------------------------------------------------------------------------+ 
|     | The following share options issued to directors existed at the year end in respect of     | 
|     | approved and unapproved schemes.                                                          | 
+-----+-------------------------------------------------------------------------------------------+ 
|     |                  |                  |        |            |         |        |            | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  |                  | Option |         At | Granted | Lapsed |         At | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     | Directors Name   | Date Granted     |  Price |   1.1.2008 |      in |     in | 31.12.2008 | 
|     |                  |                  |        |            |    2008 |   2008 |            | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  |                  |        |            |         |        |            | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     | C. Belligero     | 13 October 1999  |    45p |    200,000 |       - |      - |    200,000 | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 3 October 2000   |    48p |     52,166 |       - |      - |     52,166 | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 15 October 2001  |    37p |     40,000 |       - |      - |     40,000 | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 1 October 2002   |    30p |    350,000 |       - |      - |    350,000 | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 29 September     |    42p |     15,000 |       - |      - |     15,000 | 
|     |                  | 2003             |        |            |         |        |            | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 19 July 2006     |  41.5p |    300,000 |       - |      - |    300,000 | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 19 September     |  41.5p |     90,000 |       - |      - |     90,000 | 
|     |                  | 2007             |        |            |         |        |            | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 24 October 2007  |    39p |    253,000 |       - |      - |    253,000 | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 18 June 2008     |  23.5p |          - | 600,000 |      - |    600,000 | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     | S. Namasivayam   | 27 September     |    48p |     42,500 |       - |      - |     42,500 | 
|     |                  | 1999             |        |            |         |        |            | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 3 October 2000   |    48p |     12,292 |       - |      - |     12,292 | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 15 October 2001  |    37p |     10,000 |       - |      - |     10,000 | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 1 October 2002   |    30p |     20,000 |       - |      - |     20,000 | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 29 September     |    42p |      9,928 |       - |      - |      9,928 | 
|     |                  | 2003             |        |            |         |        |            | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 6 October 2006   |    47p |     90,000 |       - |      - |     90,000 | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 19 September     |  41.5p |     90,000 |       - |      - |     90,000 | 
|     |                  | 2007             |        |            |         |        |            | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 24 October 2007  |    39p |    144,800 |       - |      - |    144,800 | 
+-----+------------------+------------------+--------+------------+---------+--------+------------+ 
|     |                  | 18 June 2008     |  23.5p |          - | 300,000 |      - |    300,000 | 
+-----+------------------+---+--------------+--------+--------+---+-----+---+----+---+------------+ 
 
 
+----+------------------+----------------+--------+----------+----------+--------+------------+ 
|    |                                                                                        | 
+----+----------------------------------------------------------------------------------------+ 
| b) | The following share options existed at the year end in respect of approved and         | 
|    | unapproved schemes for staff and have been granted to subscribe for ordinary shares of | 
|    | the Company as follows:                                                                | 
+----+----------------------------------------------------------------------------------------+ 
|    |                  |                | Option |       At |  Granted | Lapsed |         At | 
+----+------------------+----------------+--------+----------+----------+--------+------------+ 
|    |                  | Date Granted   |  Price | 1.1.2008 |  in 2008 |     in | 31.12.2008 | 
|    |                  |                |        |          |          |   2008 |            | 
+----+------------------+----------------+--------+----------+----------+--------+------------+ 
|    |                  |                |        |          |          |        |            | 
+----+------------------+----------------+--------+----------+----------+--------+------------+ 
|    |                  | 27 September   |    48p |   17,500 |        - |      - |     17,500 | 
|    |                  | 1999           |        |          |          |        |            | 
+----+------------------+----------------+--------+----------+----------+--------+------------+ 
|    |                  | 3 October 2000 |    48p |   30,000 |        - |      - |     30,000 | 
+----+------------------+----------------+--------+----------+----------+--------+------------+ 
|    |                  | 15 October     |    37p |   20,000 |        - |      - |     20,000 | 
|    |                  | 2001           |        |          |          |        |            | 
+----+------------------+----------------+--------+----------+----------+--------+------------+ 
|    |                  | 1 October 2002 |    30p |   17,000 |        - |      - |     17,000 | 
+----+------------------+----------------+--------+----------+----------+--------+------------+ 
|    |                  | 29 September   |    42p |   16,000 |        - |      - |     16,000 | 
|    |                  | 2003           |        |          |          |        |            | 
+----+------------------+----------------+--------+----------+----------+--------+------------+ 
|    |                  | 6 October 2006 |    47p |   10,000 |        - |      - |     10,000 | 
+----+------------------+----------------+--------+----------+----------+--------+------------+ 
|    |                  | 19 September   |  41.5p |   25,000 |        - |      - |     25,000 | 
|    |                  | 2007           |        |          |          |        |            | 
+----+------------------+----------------+--------+----------+----------+--------+------------+ 
|    |                  | 24 October     |    39p |   42,500 |        - |      - |     42,500 | 
|    |                  | 2007           |        |          |          |        |            | 
+----+------------------+----------------+--------+----------+----------+--------+------------+ 
|    |                  | 18 June 2008   |  23.5p |        - |  100,000 |      - |    100,000 | 
+----+------------------+----------------+--------+----------+----------+--------+------------+ 
 
+-----+----------------------------------------------------------------------------------+ 
| 13. | SHARE BASED PAYMENTS - continued                                                 | 
+-----+----------------------------------------------------------------------------------+ 
 
 
+----+-------+-------+-------+-------+---------------+-------+-------+-------+------------+ 
|    |               | Number of     | Subscription          |               |            | 
|    |               | shares        |                       |               |            | 
+----+---------------+---------------+-----------------------+---------------+------------+ 
|    |               | under option  | price per     | Exercise period                    | 
|    |               |               | share         |                                    | 
+----+---------------+---------------+---------------+------------------------------------+ 
|    |               |               |               |                                    | 
+----+---------------+---------------+---------------+------------------------------------+ 
|    |               | 60,000        | 48p           | 27/09/2002 - 27/09/2009            | 
+----+---------------+---------------+---------------+------------------------------------+ 
|    |               | 200,000       | 45p           | 13/10/2002 - 13/10/2009            | 
+----+---------------+---------------+---------------+------------------------------------+ 
|    |               | 94,458        | 48p           | 03/10/2003 - 03/10/2010            | 
+----+---------------+---------------+---------------+------------------------------------+ 
|    |               | 70,000        | 37p           | 15/10/2004 - 15/10/2011            | 
+----+---------------+---------------+---------------+------------------------------------+ 
|    |               | 387,000       | 30p           | 01/10/2005 - 01/10/2012            | 
+----+---------------+---------------+---------------+------------------------------------+ 
|    |               | 40,928        | 42p           | 29/09/2007 - 29/09/2013            | 
+----+---------------+---------------+---------------+------------------------------------+ 
|    |               | 300,000       | 41.5p         | 19/07/2009 - 19/07/2016            | 
+----+---------------+---------------+---------------+------------------------------------+ 
|    |               | 100,000       | 47p           | 06/10/2009 - 01/10/2016            | 
+----+---------------+---------------+---------------+------------------------------------+ 
|    |               | 205,000       | 41.5p         | 19/09/2010 - 19/09/2017            | 
+----+---------------+---------------+---------------+------------------------------------+ 
|    |               | 440,300       | 39p           | 24/10/2010 - 24/10/2017            | 
+----+---------------+---------------+---------------+------------------------------------+ 
|    |               | 1,000,000     | 23.5p         | 18/06/2011 - 18/06/2018            | 
+----+---------------+---------------+---------------+------------------------------------+ 
|    |               |               |               |                                    | 
+----+---------------+---------------+---------------+------------------------------------+ 
|    | There are no Performance Restricted Share Plans in place.                          | 
+----+------------------------------------------------------------------------------------+ 
|    |                                                                                    | 
+----+------------------------------------------------------------------------------------+ 
|    | The weighted average remaining contractual life of granted share options is 7      | 
|    | years and 4 months.                                                                | 
+----+------------------------------------------------------------------------------------+ 
|    |                                                                                    | 
+----+------------------------------------------------------------------------------------+ 
| c)         | Share based   |                                                            | 
|            | payments      |                                                            | 
+------------+---------------+------------------------------------------------------------+ 
|            |                                                                            | 
+------------+----------------------------------------------------------------------------+ 
|            | The Company recognised the following total expenses and costs in respect   | 
|            | of payments settled by options in the period:                              | 
+------------+----------------------------------------------------------------------------+ 
|            |                                                       |                    | 
+------------+-------------------------------------------------------+--------------------+ 
|            | Recognised immediately and charged as an expense to the profit and loss    | 
|            | account GBP33,530.                                                         | 
+------------+----------------------------------------------------------------------------+ 
|            |                                                       |                    | 
+------------+-------------------------------------------------------+--------------------+ 
|            | The total fair value of options granted in the period |                    | 
|            | was GBP100,000.                                       |                    | 
+------------+-------------------------------------------------------+--------------------+ 
|            |                                                       |                    | 
+------------+-------------------------------------------------------+--------------------+ 
|            | The inputs into a modified Black-Scholes model used   |                    | 
|            | to calculate the fair values as well as the share     |                    | 
|            | price at date of grant are:                           |                    | 
+------------+-------------------------------------------------------+--------------------+ 
|            |   Expected volatility                                 |                59% | 
+------------+-------------------------------------------------------+--------------------+ 
|            |   Expected life                                       |            5 years | 
+------------+-------------------------------------------------------+--------------------+ 
|            |   Discount for smaller listed company                 |                20% | 
+------------+-------------------------------------------------------+--------------------+ 
|            |   Dividend yield                                      |              0.00% | 
+------------+-------------------------------------------------------+--------------------+ 
|            |                                                       |                    | 
+------------+-------------------------------------------------------+--------------------+ 
|            | Expected volatility has been calculated based on the historic volatility   | 
|            | of the Company's share price corresponding to the expected life of the     | 
|            | share option or share award.                                               | 
+----+-------+-------+-------+-------+---------------+-------+-------+-------+------------+ 
 
 
+----+-----------------------------------------+----------------------+-------------+ 
| d) | Weighted average exercise price         |                                    | 
+----+-----------------------------------------+------------------------------------+ 
|    |                                                                              | 
+----+------------------------------------------------------------------------------+ 
|    | The weighted average exercise prices for the following groups of options are | 
|    | as follows:                                                                  | 
+----+------------------------------------------------------------------------------+ 
|    |                                                                |             | 
+----+----------------------------------------------------------------+-------------+ 
|    |                                                                |       Pence | 
+----+----------------------------------------------------------------+-------------+ 
|    |                                                                |             | 
+----+----------------------------------------------------------------+-------------+ 
|    | Outstanding at 1 January 2008                                  |             | 
+----+----------------------------------------------------------------+-------------+ 
|    | Granted during the period                                      |       39.61 | 
+----+----------------------------------------------------------------+-------------+ 
|    | Lapsed during the period                                       |       23.50 | 
+----+----------------------------------------------------------------+-------------+ 
|    | Exercisable at 31 December 2008                                |       32.43 | 
+----+----------------------------------------------------------------+-------------+ 
|    | Outstanding at 31 December 2008                                |           - | 
+----+-----------------------------------------+----------------------+-------------+ 
 
 
 
 
 
 
 
 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
| 14.      |                                 PROPERTY, PLANT AND EQUIPMENT |                                                               | 
+----------+---------------------------------------------------------------+---------------------------------------------------------------+ 
|          |                                     |             |           |           |              |           |          |             | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          | GROUP                               | Freehold    | Long      | Short     | Leasehold    | Fixtures  | Motor    | Total       | 
|          |                                     | Land        | Leasehold | Leasehold | Improvements | &         | Vehicles |             | 
|          |                                     |             | Property  | Property  |              | Fittings  |          |             | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          |                                     | GBP         | GBP       | GBP       | GBP          | GBP       | GBP      | GBP         | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          |                      COST/VALUATION |             |           |           |              |           |          |             | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          | At 1 January 2008 - restated        | 45,558,435  | 1,123,692 | -         | 2,670,995    | 3,501,579 | 11,000   | 52,865,701  | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          | Additions                           | 453,855     | 2,694     | -         | 285,382      | 193,628   | 2,500    | 938,059     | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          | Deficit on revaluation              | (7,868,910) | (77,753)  | -         | -            | -         | -        | (7,946,663) | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          | At 31 December 2008                 | 38,143,380  | 1,048,633 | -         | 2,956,377    | 3,695,207 | 13,500   | 45,857,097  | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          |                                     |             |           |           |              |           |          |             | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          | DEPRECIATION                        |             |           |           |              |           |          |             | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          | At 1 January 2008                   | -           | -         | -         | 1,941,984    | 1,895,338 | 11,000   | 3,848,322   | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          | Charge for the period               | -           | -         | -         | 343,402      | 388,808   | 200      | 732,410     | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          | At 31 December 2008                 | -           | -         | -         | 2,285,386    | 2,284,146 | 11,200   | 4,580,732   | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          |                                     |             |           |           |              |           |          |             | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          | NET BOOK VALUE                      |             |           |           |              |           |          |             | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          | At 31 December 2008                 | 38,143,380  | 1,048,633 | -         | 670,991      | 1,411,061 | 2,300    | 41,276,365  | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
|          |                                     |             |           |           |              |           |          |             | 
+----------+-------------------------------------+-------------+-----------+-----------+--------------+-----------+----------+-------------+ 
 
 
+----+---+---------------------------------+----------------------+------------------+ 
|    |                                                                               | 
+----+-------------------------------------------------------------------------------+ 
|    | The public houses, which are freehold and long leasehold, are included at     | 
|    | market valuation. Annual impairment reviews are performed. Where the residual | 
|    | value is considered to have fallen, the reversal of previous upward           | 
|    | revaluations on that asset will maintain the value of the asset in the        | 
|    | Company's books at an amount equivalent to the residual value of the asset.   | 
+----+-------------------------------------------------------------------------------+ 
|        | Included above are assets held  | Net Book Value       | Depreciation     | 
|        | under finance leases:           |                      |                  | 
+--------+---------------------------------+----------------------+------------------+ 
|        |                                 | 2008                 | 2008             | 
+--------+---------------------------------+----------------------+------------------+ 
|        |                                 | GBP                  | GBP              | 
+--------+---------------------------------+----------------------+------------------+ 
|        |                                 |                      |                  | 
+--------+---------------------------------+----------------------+------------------+ 
|        | Fixtures and fittings           | 238,693              | 8,950            | 
+--------+---------------------------------+----------------------+------------------+ 
|    |                                     |                      |                  | 
+----+-------------------------------------+----------------------+------------------+ 
|    | The freehold and long leasehold property assets of the Group, including       | 
|    | fixtures and fittings, were valued at 31 December 2008 by Davis Coffer Lyons, | 
|    | Chartered Surveyors, external to the Group. Fair values were obtained         | 
|    | directly by reference to observable prices in an active market.               | 
+----+---+---------------------------------+----------------------+------------------+ 
 
+-----+-------------------+-------+----+------+----+--------+----+---------+----+------+----+-----+----+----+----------+ 
| 14. | PROPERTY, PLANT AND EQUIPMENT - continued           |                                                          | 
+-----+-----------------------------------------------------+----------------------------------------------------------+ 
|     |                           |           |             |              |           |          |         |          | 
+-----+---------------------------+-----------+-------------+--------------+-----------+----------+---------+----------+ 
|     | GROUP             |   Freehold |      Long |       Short |    Leasehold |  Fixtures |    Motor |         Total | 
|     |                   |      Land  | Leasehold |   Leasehold | Improvements |         & | Vehicles |               | 
|     |                   |            |  Property |    Property |              |  Fittings |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     |                   |        GBP |       GBP |         GBP |          GBP |       GBP |      GBP |           GBP | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | COST/VALUATION    |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | At 1 January      | 27,653,878 | 1,231,166 |   4,672,592 |            - | 2,829,607 |   11,000 |    36,398,243 | 
|     | 2007 -            |            |           |             |              |           |          |               | 
|     | previously        |            |           |             |              |           |          |               | 
|     | stated            |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | Prior year        |          - |         - | (4,672,592) |    2,311,743 |         - |        - |   (2,360,849) | 
|     | adjustment (note  |            |           |             |              |           |          |               | 
|     | 27)               |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | At 1 January      | 27,653,878 | 1,231,166 |           - |    2,311,743 | 2,829,607 |   11,000 |    34,037,394 | 
|     | 2007 - restated   |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | Additions         |    266,950 |     2,607 |             |      359,252 |   224,685 |        - |       853,494 | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | Surplus/(Deficit) |  (304,043) | (110,081) |           - |            - |         - |        - |     (414,124) | 
|     | on revaluation    |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | Acquired through  | 17,941,650 |         - |           - |            - |   467,587 |        - |    18,409,237 | 
|     | business          |            |           |             |              |           |          |               | 
|     | combination       |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | Disposals         |          - |         - |           - |            - |  (20,300) |        - |      (20,300) | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | At 31 December    | 45,558,435 | 1,123,692 |           - |    2,670,995 | 3,501,579 |   11,000 |    52,865,701 | 
|     | 2007 restated     |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     |                   |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | DEPRECIATION      |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | At 1 January      |          - |         - |           - |            - | 1,536,494 |   11,000 |     1,547,494 | 
|     | 2007 -            |            |           |             |              |           |          |               | 
|     | previously        |            |           |             |              |           |          |               | 
|     | stated            |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | Prior year        |          - |         - |           - |    1,602,948 |         - |        - |     1,602,948 | 
|     | adjustment (note  |            |           |             |              |           |          |               | 
|     | 27)               |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | At 1 January -    |          - |         - |           - |    1,602,948 | 1,536,494 |   11,000 |     3,150,442 | 
|     | restated          |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | Prior year        |          - |         - |           - |      339,036 |         - |        - |       339,036 | 
|     | adjustment (note  |            |           |             |              |           |          |               | 
|     | 27)               |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | Charge for the    |          - |         - |           - |            - |   360,629 |        - |       360,629 | 
|     | period            |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | Released on       |          - |         - |           - |            - |   (1,785) |        - |       (1,785) | 
|     | disposal          |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | At 31 December    |          - |         - |           - |    1,941,984 | 1,895,338 |   11,000 |     3,848,322 | 
|     | 2007 - restated   |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     |                   |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | NET BOOK VALUE    |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     | At 31 December    | 45,558,435 | 1,123,692 |           - |      729,011 | 1,606,241 |        - |    49,017,379 | 
|     | 2007              |            |           |             |              |           |          |               | 
+-----+-------------------+------------+-----------+-------------+--------------+-----------+----------+---------------+ 
|     |                   |            |           |             |              |           |          |               | 
+-----+-------------------+-------+----+------+----+--------+----+---------+----+------+----+-----+----+----+----------+ 
 
+----+----+----+----+----+-----------+-----------+----+----+----------+----+----+------------+ 
|                   | Included above are assets held  | Net Book Value     | Depreciation    | 
|                   | under finance leases:           |                    |                 | 
+-------------------+---------------------------------+--------------------+-----------------+ 
|                   |                                 | 2007               | 2007            | 
+-------------------+---------------------------------+--------------------+-----------------+ 
|                   |                                 | GBP                | GBP             | 
+-------------------+---------------------------------+--------------------+-----------------+ 
|                   |                                 |                    |                 | 
+-------------------+---------------------------------+--------------------+-----------------+ 
|                   | Fixtures and fittings           | 15,000             | 3,000           | 
+-------------------+---------------------------------+--------------------+-----------------+ 
|         |                                           |                    |                 | 
+---------+-------------------------------------------+--------------------+-----------------+ 
|    | The historical cost carrying amount would be GBP44,165,103 (2007: GBP43,982,481).     | 
+----+---------------------------------------------------------------------------------------+ 
|    |         |         |           |           |         |          |         |            | 
+----+---------+---------+-----------+-----------+---------+----------+---------+------------+ 
|    | Borrowings are secured against the freehold and leasehold properties of the Group     | 
|    | with fixed charges.                                                                   | 
+----+----+----+----+----+-----------+-----------+----+----+----------+----+----+------------+ 
 
 
 
 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
| 15. | INTANGIBLE FIXED ASSETS                |   Goodwill |  |  Operating |   |      Total | 
|     |                                        |            |  |      Lease |   |            | 
|     |                                        |            |  |   Premiums |   |            | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     |                                        |        GBP |  |        GBP |   |        GBP | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     | COST                                   |            |  |            |   |            | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     | At 1 January 2008 - previously stated  |  2,224,260 |  |  8,176,049 |   | 10,400,309 | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     | Additions                              |          - |  |          - |   |          - | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     | At 31 December 2008                    |  2,224,260 |  |  8,176,049 |   | 10,400,309 | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     |                                        |            |  |            |   |            | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     | AMORTISATION AND IMPAIRMENT LOSSES     |            |  |            |   |            | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     | At 1 January 2008 - restated           |    585,447 |  |  3,607,687 |   |  4,193,134 | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     | Amortisation charge                    |          - |  |    552,616 |   |    552,616 | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     | Impairment losses                      |          - |  |  1,090,026 |   |  1,090,026 | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     | At 31 December 2008                    |    585,447 |  |  5,250,329 |   |  5,835,776 | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     |                                        |            |  |            |   |            | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     | NET BOOK VALUE                         |            |  |            |   |            | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     | At 31 December 2008                    |  1,638,813 |  |  2,925,720 |   |  4,564,533 | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
|     |                                        |            |  |            |   |            | 
+-----+----------------------------------------+------------+--+------------+---+------------+ 
 
 
+----+-----+------------------------------------+------------+--+------------+---+------------+ 
|    |                                          |   Goodwill |  |  Operating |   | Total      | 
|    |                                          |            |  |      Lease |   |            | 
|    |                                          |            |  |   Premiums |   |            | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    |                                          |        GBP |  |        GBP |   |        GBP | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | COST                                     |            |  |            |   |            | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | At 1 January 2007 - previously stated    |  2,031,071 |  |          - |   |  2,031,071 | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | Prior year adjustments (note 27)         |          - |  |  5,724,561 |   |  5,724,561 | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | At 1 January 2007 - restated             |  2,031,071 |  |  5,724,561 |   |  7,755,632 | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | Additions                                |    193,189 |  |          - |   |    193,189 | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | Prior year adjustments (note 27)         |          - |  |  2,451,488 |   |  2,451,488 | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | At 31 December 2007 - restated           |  2,224,260 |  |  8,176,049 |   | 10,400,309 | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    |                                          |            |  |            |   |            | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | AMORTISATION AND IMPAIRMENT LOSSES       |            |  |            |   |            | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | At 1 January 2007 - previously stated    |    585,447 |  |          - |   |    585,447 | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | Prior year adjustments (note 27)         |          - |  |  3,012,420 |   |  3,012,420 | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | At 1 January 2007 - restated             |    585,447 |  |  3,012,420 |   |  3,597,867 | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | Prior year adjustments:                  |            |  |            |   |            | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    |     | Amortisation charge (note 27)      |          - |  |    563,101 |   |    563,101 | 
+----+-----+------------------------------------+------------+--+------------+---+------------+ 
|    |     | Impairment losses (note 27)        |          - |  |     32,166 |   |     32,166 | 
+----+-----+------------------------------------+------------+--+------------+---+------------+ 
|    | At 1 January 2008 restated               |    585,447 |  |  3,607,687 |   |  4,193,134 | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    |                                          |            |  |            |   |            | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | NET BOOK VALUE                           |            |  |            |   |            | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | At 31 December 2007                      |  1,638,813 |  |  4,568,362 |   |  6,207,175 | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    |                                          |            |  |            |   |            | 
+----+------------------------------------------+------------+--+------------+---+------------+ 
|    | Impairment losses in respect of the operating lease premiums have been recognised      | 
|    | directly in administrative expenses within the income statement. These losses result   | 
|    | from an impairment review where the estimated value of the pub operating leases was    | 
|    | found to be lower than the carrying value. The fall in values is due to tough trading  | 
|    | conditions in the industry as a whole, and the resulting fall in profitability.        | 
+----+-----+------------------------------------+------------+--+------------+---+------------+ 
 
 
 
+-----+-------------------------------+------------+--+-----------+--+----------+--+----------+ 
| 16. | INVENTORIES                   |                           |  |                        | 
+-----+-------------------------------+---------------------------+--+------------------------+ 
|     |                               |            |  |           |  |     2008 |  |     2007 | 
+-----+-------------------------------+------------+--+-----------+--+----------+--+----------+ 
|     |                               |            |  |           |  |      GBP |  |      GBP | 
+-----+-------------------------------+------------+--+-----------+--+----------+--+----------+ 
|     |                               |            |  |           |  |          |  |          | 
+-----+-------------------------------+------------+--+-----------+--+----------+--+----------+ 
|     | Goods for resale              |            |  |           |  |  764,863 |  |  751,617 | 
+-----+-------------------------------+------------+--+-----------+--+----------+--+----------+ 
 
 
 
+-----+-------------------------------+------------+--+-----------+--+-----------+--+-----------+ 
| 17. | TRADE AND OTHER RECEIVABLES                               |  |                          | 
+-----+-----------------------------------------------------------+--+--------------------------+ 
|     |                               |            |  |           |  |      2008 |  |      2007 | 
+-----+-------------------------------+------------+--+-----------+--+-----------+--+-----------+ 
|     |                               |            |  |           |  |       GBP |  |       GBP | 
+-----+-------------------------------+------------+--+-----------+--+-----------+--+-----------+ 
|     |                               |            |  |           |  |           |  |           | 
+-----+-------------------------------+------------+--+-----------+--+-----------+--+-----------+ 
|     | Trade receivables (gross)     |            |  |           |  |   547,811 |  |   324,509 | 
+-----+-------------------------------+------------+--+-----------+--+-----------+--+-----------+ 
|     | Less bad debt provision       |            |  |           |  |  (68,758) |  |         - | 
+-----+-------------------------------+------------+--+-----------+--+-----------+--+-----------+ 
|     | Trade receivables (net)       |            |  |           |  |   479,053 |  |   324,509 | 
+-----+-------------------------------+------------+--+-----------+--+-----------+--+-----------+ 
|     | Other receivables             |            |  |           |  |   873,454 |  | 1,039,930 | 
+-----+-------------------------------+------------+--+-----------+--+-----------+--+-----------+ 
|     | Prepayments and accrued       |            |  |           |  |   823,495 |  |   793,105 | 
|     | income                        |            |  |           |  |           |  |           | 
+-----+-------------------------------+------------+--+-----------+--+-----------+--+-----------+ 
|     |                               |            |  |           |  | 2,176,002 |  | 2,157,544 | 
+-----+-------------------------------+------------+--+-----------+--+-----------+--+-----------+ 
|     |                               |            |  |           |  |           |  |           | 
+-----+-------------------------------+------------+--+-----------+--+-----------+--+-----------+ 
 
 
 
 
+----------+----------------------------------------+----------------+------------+--+------------+ 
| 18.      | SHARE CAPITAL                          |                |       2008 |  |       2007 | 
+----------+----------------------------------------+----------------+------------+--+------------+ 
|          |                                        |                |            |  |            | 
+----------+----------------------------------------+----------------+------------+--+------------+ 
|          | Authorised:                            |                |            |  |            | 
+----------+----------------------------------------+----------------+------------+--+------------+ 
|          | Number of shares                       |                | 50,000,000 |  | 50,000,000 | 
+----------+----------------------------------------+----------------+------------+--+------------+ 
|          | Ordinary shares of 20p each (GBP)      |                | 10,000,000 |  | 10,000,000 | 
+----------+----------------------------------------+----------------+------------+--+------------+ 
|          |                                        |                |            |  |            | 
+----------+----------------------------------------+----------------+------------+--+------------+ 
|          | Issued, called up, allotted and fully  |                |            |  |            | 
|          | paid:                                  |                |            |  |            | 
+----------+----------------------------------------+----------------+------------+--+------------+ 
|          | Number of shares                       |                | 39,828,355 |  | 39,673,358 | 
+----------+----------------------------------------+----------------+------------+--+------------+ 
|          | Ordinary shares of 20p each (GBP)      |                |  7,965,671 |  |  7,934,671 | 
+----------+----------------------------------------+----------------+------------+--+------------+ 
|          |                                        |                |            |  |            | 
+----------+----------------------------------------+----------------+------------+--+------------+ 
|          | On 2 May 2008 155,000 shares were issued at par as consideration for corporate       | 
|          | services.                                                                            | 
+----------+--------------------------------------------------------------------------------------+ 
|          |                                                                                      | 
+----------+--------------------------------------------------------------------------------------+ 
|          | 2,897,686 shares are reserved for issue under share options.                         | 
+----------+----------------------------------------+----------------+------------+--+------------+ 
 
 
 
 
+-------------------------+-------------------------+--------------+--------------+--------------+--------------+ 
|                     19. | FINANCIAL INSTRUMENTS                  |              |              |              | 
+-------------------------+----------------------------------------+--------------+--------------+--------------+ 
|                         |                         |              |              |              |              | 
+-------------------------+-------------------------+--------------+--------------+--------------+--------------+ 
|                         | The main risks arising from the Group's financial instruments are interest rate     | 
|                         | risk, liquidity risk and credit risk. The Board of Directors reviews and agrees     | 
|                         | policies for managing each of these risks which are summarised below.               | 
+-------------------------+-------------------------------------------------------------------------------------+ 
|                         |                         |              |              |              |              | 
+-------------------------+-------------------------+--------------+--------------+--------------+--------------+ 
|                      a) | Interest Rate Risk      |              |              |              |              | 
+-------------------------+-------------------------+--------------+--------------+--------------+--------------+ 
|                         |                         |              |              |              |              | 
+                         +-------------------------+--------------+--------------+--------------+--------------+ 
|                         | The Group's exposure to the risk of changes in market interest rates relates primarily to the  | 
|                         | Group's medium debt obligations which are borrowed at variable rates of interest. These loans  | 
|                         | are denominated in sterling.                                                                   | 
+                         +------------------------------------------------------------------------------------------------+ 
|                         |                         |                         |              |              |              | 
+                         +-------------------------+-------------------------+--------------+--------------+--------------+ 
|                         | The Group's policy is to hedge a proportion of its variable rate borrowings at fixed rates of  | 
|                         | interest. To achieve this, the Group enters into interest rate swap contracts in which the     | 
|                         | Group contracts to exchange its variable rate obligations for fixed rate obligations.          | 
+                         +------------------------------------------------------------------------------------------------+ 
|                         |                         |                         |              |              |              | 
+                         +-------------------------+-------------------------+--------------+--------------+--------------+ 
|                         | At 31 December 2008, after taking into account the effect of interest rate swaps, 94.5% (2007: | 
|                         | 61.8%) of the Group's borrowings were at fixed rates of interest.                              | 
+-------------------------+------------------------------------------------------------------------------------------------+ 
|                         |                                                                                     | 
+-------------------------+-------------------------------------------------------------------------------------+ 
|                         | At 31 December 2008 the Group had interest rate swap agreements in place with a     | 
|                         | nominal amount of GBP26.3 million (2007: GBP14.3 million), whereby it pays fixed    | 
|                         | rates of interest averaging 5.45% (2007: 5.82%) and receives a variable rate equal  | 
|                         | to three month LIBOR. These rates are pre-loan margin which range between 1.50% and | 
|                         | 2.00% (2007 1.50% and 2.00%).                                                       | 
+                         +-------------------------------------------------------------------------------------+ 
|                         |                                                                                                | 
+                         +------------------------------------------------------------------------------------------------+ 
|                         | Although not accounted for as being hedge effective, the swaps are held for risk management    | 
|                         | purposes and not for trading purposes. These swaps are defined as cash flow hedges and the     | 
|                         | fair values are determined by discounting the future cash flows using the mid point of the     | 
|                         | sterling yield curve prevailing on 31 December 2008.                                           | 
+-------------------------+-------------------------+--------------+--------------+--------------+--------------+ 
 
 
 
+-----+---------------------------------------+--------------+--------------+--------------+ 
| 19. | FINANCIAL INSTRUMENTS - continued     |              |              |              | 
+-----+---------------------------------------+--------------+--------------+--------------+ 
 
 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    | The Group's interest rate profile as at 31 December 2008 is summarised      |        | 
|    | below:                                                                      |        | 
+----+-----------------------------------------------------------------------------+--------+ 
|    |                         |                                      |         |  |        | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    | Maturity Profile        |                                      |    2008 |  |   2007 | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    |                         |                                      |  GBP000 |  | GBP000 | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    |                         |                                      |         |  |        | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    | Up to one year          |                                      |   9,300 |  |      - | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    | 1 - 2 years             |                                      |       - |  |  9,300 | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    | 2 - 5 years             |                                      |  17,000 |  |  5,000 | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    | Over 5 years            |                                      |       - |  |      - | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    |                         |                                      |  26,300 |  | 14,300 | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    |                         |                                      |         |  |        | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    | Average rate            |                                      |   5.45% |  |  5.82% | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    |                         |                                      |         |  |        | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    | Fair value              |                                      | (1,375) |  |  (258) | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    |                         |                                      |         |  |        | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
|    | The fair values of the interest rate swaps aggregate a negative GBP1,374,700 (2007:  | 
|    | negative GBP258,000). Changes in the fair value of the swaps are taken to the        | 
|    | income statement.                                                                    | 
+----+--------------------------------------------------------------------------------------+ 
|    |                                                                                      | 
+----+--------------------------------------------------------------------------------------+ 
|    | If the valuation rates were to have been 0.50% higher at 31 December 2008, the       | 
|    | negative fair value would have been reduced by GBP283,336 (2007: GBP178,950). If     | 
|    | the rates had been lower by the same amount the negative fair value would have been  | 
|    | increased by GBP283,336 (2007: GBP178,950).                                          | 
+----+--------------------------------------------------------------------------------------+ 
|    |                                                                                      | 
+----+--------------------------------------------------------------------------------------+ 
|    | At 31 December 2008 GBP1.95 million of borrowings were at variable rates of          | 
|    | interest (2007: GBP12.88 million). If short term interest rates had been 0.50%       | 
|    | higher or lower, the effect on the income statement would have been plus or minus    | 
|    | GBP9,754 (2007: GBP64,400).                                                          | 
+----+-------------------------+--------------------------------------+---------+--+--------+ 
 
 
+----+--------------------+----------+----------------+----------------+------------------+ 
|    |                    |          |                |                |                  | 
+----+--------------------+----------+----------------+----------------+------------------+ 
| b) | Credit Risk        |          |                |                |                  | 
+----+--------------------+----------+----------------+----------------+------------------+ 
|    |                    |          |                |                |                  | 
+----+--------------------+----------+----------------+----------------+------------------+ 
|    | The Group deals with its credit risk exposure on receivables by ensuring any third | 
|    | parties who are offered credit have undergone credit checks.                       | 
+----+------------------------------------------------------------------------------------+ 
|    |                                                                                    | 
+----+------------------------------------------------------------------------------------+ 
|    | Derivative instruments held for hedging purposes have been undertaken with the     | 
|    | financial institutions providing the debt finance. The directors believe that      | 
|    | these financial institutions are financially sound, and, accordingly, minimal      | 
|    | credit risk exists in respect of these contracts.                                  | 
+----+------------------------------------------------------------------------------------+ 
|    |                    |          |                |                |                  | 
+----+--------------------+----------+----------------+----------------+------------------+ 
|    | During the year the Group made no defaults of principal, interest or redemption    | 
|    | terms of loans payable.                                                            | 
+----+------------------------------------------------------------------------------------+ 
|    |                                                                                    | 
+----+------------------------------------------------------------------------------------+ 
|    | The Group provides guarantees to three suppliers of Standwood Taverns Limited, and | 
|    | any default by them could result in a credit risk to the Group. The Board monitors | 
|    | the performance of the company on a regular basis to asses any credit risk to the  | 
|    | Group.                                                                             | 
+----+------------------------------------------------------------------------------------+ 
|    |                    |          |                |                |                  | 
+----+--------------------+----------+----------------+----------------+------------------+ 
| c) | Capital Risk       |          |                |                |                  | 
+----+--------------------+----------+----------------+----------------+------------------+ 
|    |                    |          |                |                |                  | 
+----+--------------------+----------+----------------+----------------+------------------+ 
|    | The Group's capital structure comprises net debt, issued share capital and         | 
|    | reserves. The Group's debt is divided into three securitisations, and the board    | 
|    | regularly reports to the debt providers any changes in circumstances.              | 
+----+--------------------+----------+----------------+----------------+------------------+ 
 
 
 
+-----+---------------------------------------+--------------+--------------+--------------+ 
| 19. | FINANCIAL INSTRUMENTS - continued     |              |              |              | 
+-----+---------------------------------------+--------------+--------------+--------------+ 
 
 
+----+--------------------+----------+----------------+-----+--+------+-----+---+------------+ 
| d) | Liquidity Risk     |          |                |               |                      | 
+----+--------------------+----------+----------------+---------------+----------------------+ 
|    |                    |          |                |               |                      | 
+----+--------------------+----------+----------------+---------------+----------------------+ 
|    | The Group's objective is to maintain a balance between continuity of funding and      | 
|    | flexibility through the use of bank overdrafts and bank loans. Its loan maturity      | 
|    | profile is set out below:                                                             | 
+----+---------------------------------------------------------------------------------------+ 
|    |                                                                                       | 
+----+---------------------------------------------------------------------------------------+ 
|    | Maturity profile of Group's loans                    |                   |            | 
+----+------------------------------------------------------+-------------------+------------+ 
|    |                                                      |  |       2008 |   |       2007 | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    |                                                      |  |        GBP |   |        GBP | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    | Short term borrowings repayable:                     |  |            |   |            | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    |                                                      |  |            |   |            | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    | Bank overdraft on demand                             |  |  1,056,755 |   |    354,767 | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    | Loans within one year                                |  | 34,273,946 |   |     15,871 | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    |                                                      |  | 35,330,701 |   |    370,638 | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    |                                                      |  |            |   |            | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    | Long term borrowings repayable:                      |  |            |   |            | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    |                                                      |  |            |   |            | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    | Loans due in more than one year but not more than    |  |          - |   | 11,496,612 | 
|    | two years                                            |  |            |   |            | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    | Loans within two to five years                       |  |          - |   | 20,581,872 | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    | Loans more than five years                           |  |          - |   |  2,165,926 | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    |                                                      |  |          - |   | 34,244,410 | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    |                                                      |  |            |   |            | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    | Total borrowings                                     |  | 35,330,701 |   | 34,615,048 | 
+----+------------------------------------------------------+--+------------+---+------------+ 
|    |                                                                                       | 
+----+---------------------------------------------------------------------------------------+ 
|    |                                                                                       | 
+----+---------------------------------------------------------------------------------------+ 
|    | At 31 December 2008, the Group had undrawn facilities available amounting to          | 
|    | GBP0.45 million.                                                                      | 
+----+---------------------------------------------------------------------------------------+ 
|    |                                                                                       | 
+----+---------------------------------------------------------------------------------------+ 
|    | During 2008 the Group breached its banking covenants and at 31 December 2008 the      | 
|    | Group's banking facilities were not formally agreed. As a result all borrowings       | 
|    | have been classified as short term at 31 December 2008.                               | 
+----+---------------------------------------------------------------------------------------+ 
|    |                                                                                       | 
+----+---------------------------------------------------------------------------------------+ 
|    | Borrowings are secured against the freehold and leasehold properties of the Group     | 
|    | with fixed charges, and with floating charges against its other assets.               | 
+----+--------------------+----------+----------------+-----+--+------+-----+---+------------+ 
 
 
 
 
+-----+------------------------+-------+------+-------+-------+-----------+-------+----------+ 
| 20. | DEFERRED TAX                                  |       |                              | 
+-----+-----------------------------------------------+-------+------------------------------+ 
|     |                        |       |      |       |       |      2008 |       |     2007 | 
+-----+------------------------+-------+------+-------+-------+-----------+-------+----------+ 
|     |                        |       |      |       |       |           |       | restated | 
+-----+------------------------+-------+------+-------+-------+-----------+-------+----------+ 
|     | ASSETS                 |       |      |       |       |       GBP |       |      GBP | 
+-----+------------------------+-------+------+-------+-------+-----------+-------+----------+ 
|     |                        |       |      |       |       |           |       |          | 
+-----+------------------------+-------+------+-------+-------+-----------+-------+----------+ 
|     | At 1 January 2008/2007                        |       |   575,217 |       |   99,115 | 
+-----+-----------------------------------------------+-------+-----------+-------+----------+ 
|     |                                               |       |           |       |          | 
+-----+-----------------------------------------------+-------+-----------+-------+----------+ 
|     | Arising from utilisation of tax losses        |       | (174,812) |       |  422,070 | 
+-----+-----------------------------------------------+-------+-----------+-------+----------+ 
|     | Arising from revaluations taken to income     |       | 1,480,634 |       |   54,032 | 
|     | statement                                     |       |           |       |          | 
+-----+-----------------------------------------------+-------+-----------+-------+----------+ 
|     |                                               |       |           |       |          | 
+-----+-----------------------------------------------+-------+-----------+-------+----------+ 
|     |                        |       |      |       |       |           |       |          | 
+-----+------------------------+-------+------+-------+-------+-----------+-------+----------+ 
|     | At 31 December 2008/2007                      |       | 1,881,039 |       |  575,217 | 
+-----+-----------------------------------------------+-------+-----------+-------+----------+ 
|     |                        |       |      |       |       |           |       |          | 
+-----+------------------------+-------+------+-------+-------+-----------+-------+----------+ 
|     | A deferred tax asset of GBP247,258 has been recognised in 2008 (2007: GBP422,070).   | 
|     | It is considered probable that Community Taverns Limited will generate future        | 
|     | taxable profits against which its unutilised tax losses can be offset.               | 
+-----+------------------------+-------+------+-------+-------+-----------+-------+----------+ 
 
+-----+---------------------------------------------+-------+----------------------------+ 
| 20. | DEFERRED TAX - continued                    |       |                            | 
+-----+---------------------------------------------+-------+----------------------------+ 
 
 
+----+------------------------+-------+------+-------+-------+-----------+-------+-----------+ 
|    |                        |       |      |       |       |           |       |           | 
+----+------------------------+-------+------+-------+-------+-----------+-------+-----------+ 
|    | LIABILITIES            |       |      |       |       |      2008 |       |      2007 | 
+----+------------------------+-------+------+-------+-------+-----------+-------+-----------+ 
|    |                        |       |      |       |       |           |       |  restated | 
+----+------------------------+-------+------+-------+-------+-----------+-------+-----------+ 
|    |                        |       |      |       |       |       GBP |       |       GBP | 
+----+------------------------+-------+------+-------+-------+-----------+-------+-----------+ 
|    | Accelerated capital allowances at 1 January   |       | 1,885,576 |       | 1,982,578 | 
|    | 2008/2007                                     |       |           |       |           | 
+----+-----------------------------------------------+-------+-----------+-------+-----------+ 
|    | Arising from revaluations taken to equity     |       | (863,245) |       |  (61,924) | 
+----+-----------------------------------------------+-------+-----------+-------+-----------+ 
|    | Released due to change in future tax rate to  |       |         - |       |  (20,379) | 
|    | 28%                                           |       |           |       |           | 
+----+-----------------------------------------------+-------+-----------+-------+-----------+ 
|    | Credit in income statement for the year (note |       |  (73,262) |       |  (14,699) | 
|    | 10)                                           |       |           |       |           | 
+----+-----------------------------------------------+-------+-----------+-------+-----------+ 
|    |                        |       |      |       |       |           |       |           | 
+----+------------------------+-------+------+-------+-------+-----------+-------+-----------+ 
|    | At 31 December 2008/2007                      |       |   949,069 |       | 1,885,576 | 
+----+------------------------+-------+------+-------+-------+-----------+-------+-----------+ 
 
 
 
 
+-----+-------------------------------+------------+--+--+------+-----------+-------+-----------+ 
| 21. | TRADE AND OTHER PAYABLES      |            |  |  |      |      2008 |       |      2007 | 
+-----+-------------------------------+------------+--+--+------+-----------+-------+-----------+ 
|     |                               |            |  |  |      |       GBP |       |       GBP | 
+-----+-------------------------------+------------+--+--+------+-----------+-------+-----------+ 
|     |                               |            |  |  |      |           |       |           | 
+-----+-------------------------------+------------+--+--+------+-----------+-------+-----------+ 
|     | Trade payables                |            |  |  |      | 1,520,409 |       | 1,207,032 | 
+-----+-------------------------------+------------+--+--+------+-----------+-------+-----------+ 
|     | Other payables                |            |  |  |      |   302,493 |       |   304,446 | 
+-----+-------------------------------+------------+--+--+------+-----------+-------+-----------+ 
|     | Social security and other     |            |  |  |      |   656,521 |       |   386,815 | 
|     | taxes                         |            |  |  |      |           |       |           | 
+-----+-------------------------------+------------+--+--+------+-----------+-------+-----------+ 
|     | Accruals and deferred income  |            |  |  |      |   864,253 |       | 1,121,110 | 
+-----+-------------------------------+------------+--+--+------+-----------+-------+-----------+ 
|     |                               |            |  |  |      | 3,343,676 |       | 3,019,403 | 
+-----+-------------------------------+------------+--+--+------+-----------+-------+-----------+ 
 
 
 
 
+-----+--------------------------------+-----------+--+-----------+--+----------+--+----------+ 
| 22. | PENSIONS                       |           |  |           |  |          |  |          | 
+-----+--------------------------------+-----------+--+-----------+--+----------+--+----------+ 
|     |                                |           |  |           |  |          |  |          | 
+-----+--------------------------------+-----------+--+-----------+--+----------+--+----------+ 
|     | The Company operates a defined contribution pension scheme. The assets of the scheme  | 
|     | are held separately from those of the Company in an independently administered fund.  | 
|     | The pension cost charge represents contributions payable by the Company to the fund   | 
|     | and amounted to GBP27,490 (2007: GBP29,895).                                          | 
+-----+---------------------------------------------------------------------------------------+ 
|     |                                |           |  |           |  |          |  |          | 
+-----+--------------------------------+-----------+--+-----------+--+----------+--+----------+ 
 
 
 
 
+-----+--------------------------------+-----------+--+-----------+--+---------+--+--+--+--+----------+ 
| 23. | FUTURE FINANCIAL COMMITMENTS                                                                  | 
+-----+-----------------------------------------------------------------------------------------------+ 
|     |                                |           |  |           |            |     |     |          | 
+-----+--------------------------------+-----------+--+-----------+------------+-----+-----+----------+ 
| a)  | Operating Leases:              |           |  |           |            |     |     |          | 
+-----+--------------------------------+-----------+--+-----------+------------+-----+-----+----------+ 
|     | At 31 December 2008 the Group had total commitments under rental operating leases as          | 
|     | set out below:                                                                                | 
+-----+-----------------------------------------------------------------------------------------------+ 
|     |                                                              | Land       |     | Land and    | 
|     |                                                              | and        |     |             | 
+-----+--------------------------------------------------------------+------------+-----+-------------+ 
|     |                                                              | Buildings  |     | Buildings   | 
+-----+--------------------------------------------------------------+------------+-----+-------------+ 
|     |                                                              | 2008       |     | 2007        | 
+-----+--------------------------------------------------------------+------------+-----+-------------+ 
|     |                                                              | GBP        |     | GBP         | 
+-----+--------------------------------------------------------------+------------+-----+-------------+ 
|     | Leases expiring:                                             |            |     |             | 
+-----+--------------------------------------------------------------+------------+-----+-------------+ 
|     | Within one year                                              | 22,376     |     | 49,068      | 
+-----+--------------------------------------------------------------+------------+-----+-------------+ 
|     | In the second to fifth year                                  | 4,544,631  |     | 3,167,396   | 
+-----+--------------------------------------------------------------+------------+-----+-------------+ 
|     | After five years                                             | 14,772,307 |     | 17,817,135  | 
+-----+--------------------------------------------------------------+------------+-----+-------------+ 
|     |                                                              | 19,339,314 |     | 21,033,599  | 
+-----+--------------------------------+-----------+--+-----------+--+---------+--+--+--+--+----------+ 
 
 
 
+-----+--------------------------------------------------------------------------------+ 
| 23. | FUTURE FINANCIAL COMMITMENTS - continued                                       | 
+-----+--------------------------------------------------------------------------------+ 
 
 
+---+--------+--------+--------+---------------+--------+--------+--------+--------+--------+ 
| b)         | Finance Leases: |               |                 |                 | 
+------------+-----------------+---------------+-----------------+-----------------+ 
|            | At 31 December 2008 the Group had obligations under finance leases  | 
|            | as set out below:                                                   | 
+------------+---------------------------------------------------------------------+ 
|   |                 |                                 |                 |                 | 
+---+-----------------+---------------------------------+-----------------+-----------------+ 
|   |                 |                            2008 |                 |            2007 | 
+---+-----------------+---------------------------------+-----------------+-----------------+ 
|   |                 |                             GBP |                 |             GBP | 
+---+-----------------+---------------------------------+-----------------+-----------------+ 
|   | Gross amount    |                                 |                 |                 | 
|   | payable:        |                                 |                 |                 | 
+---+-----------------+---------------------------------+-----------------+-----------------+ 
|   | Within one year |                         110,001 |                 |           4,160 | 
+---+-----------------+---------------------------------+-----------------+-----------------+ 
|   | In the second   |                         187,666 |                 |           6,240 | 
|   | to fifth year   |                                 |                 |                 | 
+---+-----------------+---------------------------------+-----------------+-----------------+ 
|   |                 |                         297,667 |                 |          10,400 | 
+---+-----------------+---------------------------------+-----------------+-----------------+ 
|   | Less: Finance   |                        (74,809) |                 |           (600) | 
|   | charges         |                                 |                 |                 | 
|   | allocated to    |                                 |                 |                 | 
|   | future periods  |                                 |                 |                 | 
+---+-----------------+---------------------------------+-----------------+-----------------+ 
|   |                 |                         222,858 |                 |           9,800 | 
+---+-----------------+---------------------------------+-----------------+-----------------+ 
|   | Obligations     |                                 |                 |                 | 
|   | under finance   |                                 |                 |                 | 
|   | leases are      |                                 |                 |                 | 
|   | analysed:       |                                 |                 |                 | 
+---+-----------------+---------------------------------+-----------------+-----------------+ 
|   | Amounts falling |                          65,954 |                 |           3,760 | 
|   | due within one  |                                 |                 |                 | 
|   | year            |                                 |                 |                 | 
+---+-----------------+---------------------------------+-----------------+-----------------+ 
|   | Amounts falling |                         156,904 |                 |           6,040 | 
|   | due after more  |                                 |                 |                 | 
|   | than one year   |                                 |                 |                 | 
+---+-----------------+---------------------------------+-----------------+-----------------+ 
|   |                 |                         222,858 |                 |           9,800 | 
+---+-----------------+---------------------------------+-----------------+-----------------+ 
|   |                 |                                 |                 |                 | 
+---+-----------------+---------------------------------+-----------------+-----------------+ 
|   | The contingent rent is fixed over the term of the lease agreement and the Group has   | 
|   | the right to purchase the assets at the end of the lease term for a nominal fee.      | 
|   | There are no restrictions imposed by the lease arrangements                           | 
+---+--------+--------+--------+---------------+--------+--------+--------+--------+--------+ 
 
 
 
 
 
+----------------+-------------------------+-------------+-----------+---+---+---+---+--+----------+ 
| 24.            | RELATED PARTY TRANSACTIONS                                |       |  |          | 
+----------------+-----------------------------------------------------------+-------+--+----------+ 
|                |                                                           |       |  |          | 
+----------------+-----------------------------------------------------------+-------+--+----------+ 
|                | The Group conducted trade on normal commercial terms with the following         | 
|                | entities in which the directors below had a material interest.                  | 
+----------------+---------------------------------------------------------------------------------+ 
| Director       | Entity                  |     Sales - |         Admin |   Balance | 
|                |                         |  Management |      Expenses |  due from | 
|                |                         |        Fees | -Professional | entity at | 
|                |                         |             |      Services |        31 | 
|                |                         |             |               |  December | 
+----------------+-------------------------+-------------+---------------+-----------+ 
|                |                         |         GBP |           GBP |       GBP | 
+----------------+-------------------------+-------------+---------------+-----------+ 
|                |                         |             |               |           | 
+----------------+-------------------------+-------------+---------------+-----------+ 
| K.J. Chapman   | Going Ethnic Limited    |      24,000 |             - |    10,332 | 
|                | 2008                    |             |               |           | 
+----------------+-------------------------+-------------+---------------+-----------+ 
|                | Going Ethnic Limited    |      24,000 |             - |    25,758 | 
|                | 2007                    |             |               |           | 
+----------------+-------------------------+-------------+---------------+-----------+ 
|                | Crouch Chapman 2008     |           - |        28,824 |         - | 
+----------------+-------------------------+-------------+---------------+-----------+ 
|                | Crouch Chapman 2007     |           - |         4,940 |         - | 
+----------------+-------------------------+-------------+-----------+---+---+---+---+--+----------+ 
 
 
 
 
+-----+-----------------------------------------------------------+---------+--+----------+ 
| 25. | CONTINGENT LIABILITIES                                    |         |  |          | 
+-----+-----------------------------------------------------------+---------+--+----------+ 
|     |                                                           |         |  |          | 
+-----+-----------------------------------------------------------+---------+--+----------+ 
|     | The Company's previous nominated supplier of beers, wines, spirits and soft       | 
|     | drinks was Standwood Taverns Limited. The Group had provided guarantees to three  | 
|     | suppliers of Standwood Taverns Limited in respect of liabilities incurred by      | 
|     | Standwood Taverns Limited on the Group's behalf.                                  | 
+-----+-----------------------------------------------------------------------------------+ 
|     |                                                           |         |  |          | 
+-----+-----------------------------------------------------------+---------+--+----------+ 
|     | At the date of signing the financial statements, a claim has been received from   | 
|     | one of the three suppliers for GBP1.1m. This claim is subject to a counter claim  | 
|     | from Standwood Taverns Limited and it has yet to be established if any residual   | 
|     | claim under the guarantee would be valid.                                         | 
+-----+-----------------------------------------------------------+---------+--+----------+ 
 
 
 
 
+-----+---------------------------------------------------------------------------------+ 
| 26. | CAPITAL COMMITMENTS                                                             | 
+-----+---------------------------------------------------------------------------------+ 
|     |                                                                                 | 
+-----+---------------------------------------------------------------------------------+ 
|     | As at 31 December 2008 Pubs 'n' Bars Plc. had no outstanding capital            | 
|     | commitments.                                                                    | 
+-----+---------------------------------------------------------------------------------+ 
|     |                                                                                 | 
+-----+---------------------------------------------------------------------------------+ 
 
 
 
+-----+-----------------------------------------------------------+---------+--+----------+ 
| 27. | PRIOR YEAR ADJUSTMENTS                                    |         |  |          | 
|     |                                                           |         |  |          | 
+-----+-----------------------------------------------------------+---------+--+----------+ 
|     | During 2008, the Group was involved in ongoing discussions with the FRRP which    | 
|     | centred around the treatment of the Group's short leasehold properties under      | 
|     | IFRS. The Panel have concluded their enquiry and it was agreed that the Group     | 
|     | would undertake a full retrospective restatement to reclassify the premiums       | 
|     | arising on short leaseholds as intangible assets in these financial statements.   | 
|     | Leasehold improvements remain classified as tangible fixed assets.                | 
|     | The impact on the Financial Statements is as follows, with unbracketed figures    | 
|     | being debit entries and bracketed figures credit entries:-                        | 
|     |                                                                                   | 
+-----+-----------------------------------------------------------+---------+--+----------+ 
 
 
+----+------------------------------------------------------+-----------+----------------+ 
|    | Income statement for the year ended 31 December 2007                              | 
+----+-----------------------------------------------------------------------------------+ 
|    |                                                      |       GBP |                | 
|    |                                                      |           |                | 
+----+------------------------------------------------------+-----------+----------------+ 
|    |                                                      |           |                | 
+----+------------------------------------------------------+-----------+----------------+ 
|    | Short leasehold revaluation reversal                 | (251,155) |                | 
+----+------------------------------------------------------+-----------+----------------+ 
|    | Amortisation of operating leases                     |   563,101 |                | 
+----+------------------------------------------------------+-----------+----------------+ 
|    | Impairment of operating leases                       |    32,166 |                | 
+----+------------------------------------------------------+-----------+----------------+ 
|    | Depreciation of leasehold improvements               |   339,036 |                | 
+----+------------------------------------------------------+-----------+----------------+ 
|    | Deferred tax                                         |    99,689 |                | 
+----+------------------------------------------------------+-----------+----------------+ 
|    |                                                      |           |                | 
+----+------------------------------------------------------+-----------+----------------+ 
|    | Net decrease in profit for the year                  |   782,837 |                | 
+----+------------------------------------------------------+-----------+----------------+ 
|    |                                                      |           |                | 
+----+------------------------------------------------------+-----------+----------------+ 
|    | The short leasehold property as had been previously stated, has been written      | 
|    | back to cost resulting in a reversal of the previous revaluations     of          | 
|    | GBP251,155. There is an associated decrease in the taxation charge of GBP99,689   | 
|    | due to restatement of the deferred tax arising on the revaluation reversals. The  | 
|    | division of the short leasehold property into operating leases and leasehold      | 
|    | improvements has resulted in an amortisation charge of GBP563,101 against the     | 
|    | operating leases and a depreciation charge of GBP339,036 against the leasehold    | 
|    | improvements. The operating leases were reviewed for impairment at 31 December    | 
|    | 2007 and written down by GBP32,166.                                               | 
|    |                                                                                   | 
+----+------------------------------------------------------+-----------+----------------+ 
 
 
 
 
+-----+---------------------------+------------+--------------+---------------+------------+ 
|  27 | PRIOR YEAR ADJUSTMENTS - continued                                                 | 
+-----+------------------------------------------------------------------------------------+ 
|     |                                                                                    | 
+     +------------------------------------------------------------------------------------+ 
|     | Balance sheet at 31 December 2007                                           | 
+-----+-----------------------------------------------------------------------------+ 
|     |                           |         As |  Adjustments |   Adjustments |   Balances | 
|     |                           | previously |           to |   in year to  |   restated | 
|     |                           |  stated at |   1 Jan 2007 |     31 Dec 07 |        at  | 
|     |                           |  31 Dec 07 |              |               |  31 Dec 07 | 
|     |                           |            |              |               |            | 
+-----+---------------------------+------------+--------------+---------------+------------+ 
|     |                           |        GBP |          GBP |           GBP |        GBP | 
+-----+---------------------------+------------+--------------+---------------+------------+ 
|     | Non current assets        |            |              |               |            | 
+-----+---------------------------+------------+--------------+---------------+------------+ 
|     | Operating lease premiums  |          - |    2,712,141 |     1,856,221 |  4,568,362 | 
+-----+---------------------------+------------+--------------+---------------+------------+ 
|     | Short leasehold property  |  7,578,632 |  (4,672,592) |   (2,906,040) |          - | 
+-----+---------------------------+------------+--------------+---------------+------------+ 
|     | Leasehold improvements    |          - |      708,795 |        20,216 |    729,011 | 
+-----+---------------------------+------------+--------------+---------------+------------+ 
|     |                           |            |              |               |            | 
+-----+---------------------------+------------+--------------+---------------+------------+ 
|     | Capital and reserves      |            |              |               |            | 
+-----+---------------------------+------------+--------------+---------------+------------+ 
|     | Revaluation reserve       |  4,550,775 |    (302,075) |     (249,446) |  3,999,254 | 
+-----+---------------------------+------------+--------------+---------------+------------+ 
|     | Retained earnings         |  2,507,877 |  (1,814,113) |     (782,837) |   (89,073) | 
+-----+---------------------------+------------+--------------+---------------+------------+ 
 
 
 
+-------------------------------------------------------------------------------+-------------------------------------------------------------------------------+ 
| 27.                                                                           | PRIOR YEAR ADJUSTMENTS - continued                                            | 
+-------------------------------------------------------------------------------+-------------------------------------------------------------------------------+ 
|                                                                               |                                                                               | 
+-------------------------------------------------------------------------------+-------------------------------------------------------------------------------+ 
|                                                                               | Balance sheet at 31 December 2007 - continued                                 | 
+-------------------------------------------------------------------------------+-------------------------------------------------------------------------------+ 
|                                                                               |                                                                               | 
+-------------------------------------------------------------------------------+-------------------------------------------------------------------------------+ 
|                                                                               | On restatement all short leasehold property premiums were reclassified as     | 
|                                                                               | intangible fixed assets. The value of operating leases acquired prior to      | 
|                                                                               | 2007, net of amortisation and goodwill over the lease period was GBP2,712,139 | 
|                                                                               | and during the period GBP1,856,221.                                           | 
+                                                                               +-------------------------------------------------------------------------------+ 
|                                                                               |                                                                               | 
+                                                                               +-------------------------------------------------------------------------------+ 
|                                                                               | Short leasehold property was reduced to nil, with any previous improvements   | 
|                                                                               | being reclassified as leasehold improvements. Leasehold improvements net of   | 
|                                                                               | depreciation made prior to 2007 were GBP708,795 and during 2007 were          | 
|                                                                               | GBP20,216.                                                                    | 
+-------------------------------------------------------------------------------+-------------------------------------------------------------------------------+ 
 
 
 
 
+------+------------------------------------------+------------------------------------------+----------------+------------+ 
|      | Cash Flow statement for the year ended 31st December 2007                                            |            | 
+------+------------------------------------------------------------------------------------------------------+------------+ 
|      |                                          |                                          |                |            | 
+------+------------------------------------------+------------------------------------------+----------------+------------+ 
|      |                                          |                                       As |                |            | 
+------+                                          +------------------------------------------+----------------+------------+ 
|      |                                          |                        Previously stated |     Adjustment |   Restated | 
+------+------------------------------------------+------------------------------------------+----------------+------------+ 
|      |                                          |                                      GBP |            GBP |        GBP | 
+------+------------------------------------------+------------------------------------------+----------------+------------+ 
|      | Cash flows from operating activities     |                                          |                |            | 
+------+------------------------------------------+------------------------------------------+----------------+------------+ 
|      | Profit/(Loss) before taxation            |                                1,025,108 |      (780,157) |   (244,951 | 
+------+------------------------------------------+------------------------------------------+----------------+------------+ 
|      | Adjustments for:                         |                                          |                |            | 
+------+------------------------------------------+------------------------------------------+----------------+------------+ 
|      | Decrease in value of property            |                                  549,002 |      (151,466) |    397,536 | 
+------+------------------------------------------+------------------------------------------+----------------+------------+ 
|      | Depreciation                             |                                  360,629 |        339,036 |    699,665 | 
+------+------------------------------------------+------------------------------------------+----------------+------------+ 
|      | Amortisation and Impairments             |                                        - |        595,267 |    595,267 | 
+------+------------------------------------------+------------------------------------------+----------------+------------+ 
|      |                                          |                                          |                |            | 
+------+------------------------------------------+------------------------------------------+----------------+------------+ 
|      | NET CASH FROM OPERATING ACTIVITIES       |                                1,044,672 |              - |  1,044,672 | 
+------+------------------------------------------+------------------------------------------+----------------+------------+ 
|      |                                          |                                          |                |            | 
+------+------------------------------------------+------------------------------------------+----------------+------------+ 
|      | The impact on the income statement has had an associated impact on the lines                                      | 
|      | above from the 'cash flows from operating activities' section of the cash flow                                    | 
|      | statement.                                                                                                        | 
+------+------------------------------------------+------------------------------------------+----------------+------------+ 
 
 
 
 
+-----+--------------------------------------------------------------------------------+ 
|     | Statement of Changes in Equity for the year ended 31 December 2007             | 
+-----+--------------------------------------------------------------------------------+ 
|     |                                                                                | 
+-----+--------------------------------------------------------------------------------+ 
|     | The impact can be seen in the 'capital and reserves' section of the balance    | 
|     | sheet note above.                                                              | 
+-----+--------------------------------------------------------------------------------+ 
 
 
 
 
+-----+-----------------------------------------------------------+---------+--+----------+ 
| 28. | ULTIMATE CONTROLLING PARTY                                |         |  |          | 
+-----+-----------------------------------------------------------+---------+--+----------+ 
|     |                                                           |         |  |          | 
+-----+-----------------------------------------------------------+---------+--+----------+ 
|     | The Group has no single controlling party, but is controlled by its shareholders. | 
+-----+-----------------------------------------------------------+---------+--+----------+ 
 
 
 
 
+-----+-----------------------------------------------------------+---------+--+----------+ 
| 29. | POST BALANCE SHEET EVENTS                                 |         |  |          | 
+-----+-----------------------------------------------------------+---------+--+----------+ 
|     |                                                           |         |  |          | 
+-----+-----------------------------------------------------------+---------+--+----------+ 
|     | There have been no adjusting or non-adjusting post balance sheet events.          | 
+-----+-----------------------------------------------------------+---------+--+----------+ 
 
 
  REPORT OF THE AUDITORS 
TO THE MEMBERS OF PUBS 'N' BARS PLC 
 
 
We have audited the parent company financial statements of Pubs 'n' Bars PLC for 
the year ended 31 December 2008 which comprise the Balance Sheet and related 
notes. These parent company financial statements have been prepared under the 
accounting policies set out therein. 
 
 
We have reported separately on the Group financial statements of Pubs 'n' Bars 
PLC for the year ended 31 December 2008. That report is modified by the 
inclusion of an Emphasis of Matter. 
 
 
Our responsibility is to audit the parent company financial statements in 
accordance with the relevant legal and regulatory requirements and International 
Standards on Auditing (UK and Ireland). This report, including the opinion, has 
been prepared for and only for the Company's members as a body in accordance 
with Section 235 of the Companies Act 1985 and for no other purpose. We do not, 
in giving this opinion, accept or assume responsibility for any other purpose or 
to any other person to whom this report is shown or into whose hands it may come 
save where expressly agreed by our prior consent in writing. 
 
 
Respective responsibilities of Directors and auditors 
 
 
The Directors' responsibilities for preparing the Annual Report and the parent 
company financial statements in accordance with applicable law and United 
Kingdom Accounting Standards (UK Generally Accepted Accounting Practice) are set 
out in the Statement of Directors Responsibilities. 
 
 
We report to you our opinion as to whether the parent company financial 
statements give a true and fair view and whether the parent company financial 
statements to be audited have been properly prepared in accordance with the 
Companies Act 1985. We also report to you whether in our opinion the information 
given in the Directors' Report is consistent with the parent company financial 
statements. 
 
 
In addition we report to you if, in our opinion, the Company has not kept proper 
accounting records, if we have not received all the information and explanations 
we require for our audit, or if information specified by law regarding 
directors' remuneration and other transactions is not disclosed. 
 
 
We read other information contained in the Annual Report and consider whether it 
is consistent with the audited parent company financial statements. The other 
information comprises only the Chairman's Statement, the Report of the Directors 
and the Statement of Directors' Responsibilities. We consider the implications 
for our report if we become aware of any apparent misstatements or material 
inconsistencies with the parent company financial statements. 
 
 
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 financial statements. It also includes an assessment of the 
significant estimates and judgements made by the directors in the preparation of 
the financial statements, and of whether the accounting policies are appropriate 
to the Company's circumstances, consistently applied and adequately disclosed. 
 
 
We planned and performed our audit so as to obtain all the information and 
explanations which we considered necessary in order to provide us with 
sufficient evidence to give reasonable assurance that the parent company 
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 parent company 
financial statements. 
  Opinion 
 
 
In our opinion: 
 
- the parent company financial statements give a true and fair view, in 
accordance with United Kingdom Generally 
   Accepted Accounting Practice, of 
the state of the Company's affairs as at 31 December 2008 ; 
- the parent company financial statements have been properly prepared in 
accordance with the Companies Act 
   1985; and 
- the information given in the Report of the Directors is consistent with the 
parent company financial statements. 
 
 
Emphasis of matter - Going concern 
 
 
In forming our opinion on the financial statements, which is not qualified, we 
have considered the adequacy of the disclosures made in note 30 to the financial 
statements concerning the Company's ability to continue as a going concern. 
 
 
As stated in note 30 the Company has reclassified GBP22,893,945 of bank loans as 
short term liabilities due to breaches of covenants and/or terms and conditions 
of the underlying agreements. The Company believes the only variation in the 
terms and conditions of these agreements will be a change in the interest 
charges. The Company's Directors' forecasts taking the increased interest 
charges into account have been prepared showing the Company has sufficient 
available funds to meet their day to day working capital requirements for the 
foreseeable future. 
 
 
These conditions indicate the existence of a material uncertainty which may cast 
significant doubt about the Company's ability to continue as a going concern. 
The financial statements do not include the adjustments that would result if the 
Group was unable to continue as a going concern. 
 
 
Kingston Smith LLP 
Chartered Accountants and Registered Auditors 
Devonshire House 
60 Goswell 
Road 
London ECIM 7AD 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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