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RNS Number:4434J
Hanover Capital Group PLC
31 March 2003
HANOVER CAPITAL GROUP PLC
(FORMERLY TERA GROUP PLC)
CHAIRMAN'S STATEMENT
We are pleased to announce Hanover Capital Group PLC's results for the year ended 30 September 2002. The year in
question has been one of positive change for the Company with its business strategy changing from a technology
investment company to one whose primary focus is on mining investments. The loss for the year was #7,172,000 on a
turnover of #301,000. These losses relate almost entirely to the write-down of the Company's technology investments.
The Board of Tera Group plc, as the Company was named until it changed its name to Hanover Capital Group PLC in
October 2002, had since its inception focused on investing in the technology sector. Although there are still
significant opportunities in the sector and the Company retains an interest in some of its investments, the Board
felt it prudent to attempt to maximise shareholder value by moving out of that sector.
In September last year, the company was approached by a group of investors who outlined a business plan to your Board
which would provide the Company with opportunities to invest in the mining sector and to provide the Company with
access to additional funding. This strategy was approved at the Company's EGM and Ronald Lowenthal, Jo Malins and
Simon Robinson joined the Board. As a consequence of the above, Juha Kiikeri, Glenn Potrykus and Kari Laento, all
former Board members, resigned.
At that time, Michael Edelson agreed to remain as Non-Executive Chairman of Hanover Capital Group PLC, to ensure
continuity and to preside over the first mining investment that the new management made. In December last year, the
Company made three investments in gold mining operations in Mali and West Africa, which significantly added to the
asset base of the Company. In February 2003, Michael Edelson resigned as Non-Executive Chairman, in line with his
stated intentions and largely because he has no relevant experience in the mining sector. The current Board wishes to
thank him and all those people who were involved in Tera Group plc.
The future strategy for Hanover is to acquire additional AIM quoted shell companies into which the Company will
invest other mining assets with Hanover retaining a significant shareholding in each of these companies. The Board is
confident that the new management team at Hanover Capital Group PLC can achieve ongoing shareholder value.
Signed on behalf of the Board
Simon Robinson
Non-Executive Chairman
31 March 2003
The Directors present their report and the Group's audited accounts for the year ended 30 September 2002.
Principal activities
The principal activities of the Group during the year continued to be the making of investments in early stage
businesses focusing on the internet, new media and technology sectors. Subsequent to the year end, however, a new
Board of Directors has been appointed with expertise and knowledge of the natural resources sector, and in particular
mining.
Results and dividends
The Group's loss for the year amounted to #7,172,000. The Directors are not able to recommend the payment of a
dividend.
Business review and future developments
The review of the Group's performance during the year and its future strategy can be found in the Statement by the
Board on page 2.
Share capital
Movements in share capital during the year are shown in note 15 to the accounts.
Post balance sheet events
There have been substantial changes to the Group's share and investment structures subsequent to the year end.
Details of these changes are shown in the post balance sheet review in note 20 to the accounts.
Directors
The Directors who held office at 30 September 2002 and their beneficial interests in the shares of the Company at the
beginning and end of the financial year were as follows:
At At
30 September 2002 30 September 2001
J M Edelson (resigned 12 February 2003) 11,062,900 35,062,900
J J Kiikeri (resigned 30 October 2002) 65,867,892 65,867,892
G R Potrykus (resigned 30 October 2002) 65,798,775 65,798,775
K Laento (appointed 29 October 2001 and resigned 30 October 2002) - -
Directors (continued)
J M Edelson served as non-executive chairman throughout the year. However, on 12 February 2003 he resigned from the
Board.
J J Kiikeri, G R Potrykus and K Laento all resigned from the Board following an Extraordinary General Meeting of the
Company on 30 October 2002. At the same time, J W Malins, R Y Lowenthal and S M Robinson were appointed to the Board.
In addition to the directors listed above, K Harris and M R Freud both served as directors until their resignations
on 29 October 2001. E V Edelson also served as a director until her resignation on 31 May 2002.
On 30 October 2002 every 100 ordinary shares in the Company were consolidated into I ordinary share of #1 each.
Subsequently, every I ordinary share of #1 each was subdivided into 100 ordinary shares of 1p each, with 99 out of
every such 100 ordinary shares of 1p each being converted into deferred ordinary shares of 1p each. In addition, on
11 December 2002 569,929 ordinary shares of 1p each were issued G R Potrykus and 558,055 ordinary shares of 1p each
were issued to J J Kiikeri in settlement of their loans to the Company, details of which are given in note 23 to the
accounts. Subsequent to these events, the shareholdings at the date of this report of the current directors and those
directors who have resigned since the year end are as follows:
Ordinary Shares of 1p each Deferred Ordinary Shares of 1p each 'A' 'B'
Warrants Warrants
J M Edelson 110,629 10,952,271 - -
J J Kiikeri 1,216,733 65,209,213 558,055 558,055
G R Potrykus 1,227,916 65,140,787 569,929 569,929
J W Malins - - - -
R Y Lowenthal - - - -
S M Robinson - - - -
There have been no other changes in the Directors' share interests between 30 September 2002 and the date of this
report.
Substantial Shareholdings
At the date of this report the Company had been notified that (other than the Directors) the following were
interested in 3% or more of the issued share capital of the Company:
Name No. of % of Issued
Ordinary Shares Share Capital
Taunton Vale Limited 6,494,138 8.4
Stonedale Investments Limited 6,494,138 8.4
Sloane Holdings Limited 4,750,000 6.2
Gold Flower Limited 3,154,295 4.1
Sunoak Holdings Limited 3,154,295 4.1
Pershing Keen Nominees Limited 4,628,030 6.0
Keyvale Investments Limited 4,440,104 5.8
Vadni(International) Limited 4,440,104 5.8
EIE plc 5,000,000 6.5
Jubilee Investment Trust plc 20,833,333 27.0
Creditor Payment Policy
It is the Group's policy to fix the terms of payment with suppliers when agreeing the terms of each transaction and
the Group abides by these terms of payment.
At 30 September 2002 the average number of Group creditor days outstanding was 6.
Auditors
Horwath Clark Whitehill are willing to continue in office and a resolution to re-appoint them as auditors will be
proposed at the Annual General Meeting.
By Order of the Board
I Aspinall
Company Secretary
31 March 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 2002
Note 2002 2001
#000 #000
Turnover 2
Continuing operations:
- ongoing 301 174
- acquisitions - 56
301 230
Discontinued operations - 484
301 714
Administrative expenses:
- amounts written off investments 11 1,778 2,685
- goodwill amortisation 9 - 248
- goodwill impairment 9 4,726 -
- other administrative expenses 954 1,374
7,458 4,307
Operating loss 4
Continuing operations:
- ongoing (7,157) (3,316)
- acquisitions - (101)
(7,157) (3,417)
Discontinued operations - (176)
(7,157) (3,593)
Interest receivable 7 48
Interest payable 6 (22) (13)
Loss on ordinary activities before and after tax and loss for
the financial year 16 (7,172) (3,558)
Loss per share - basic and diluted 8 (0.83)p (0.72)p
NOTE OF HISTORICAL COST PROFITS AND LOSSES
FOR THE YEAR ENDED 30 SEPTEMBER 2002
2002 2001
#000 #000
Loss for the financial year (7,172) (3,558)
Realisation of investment gains of prior years 92 301
Historical cost loss for the financial year (7,080) (3,257)
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED
30 SEPTEMBER 2002
2002 2001
#000 #000
Loss for the financial year (7,172) (3,558)
Unrealised surplus on revaluation of fixed
asset investments - 3
Total recognised gains and losses for the financial year (7,172) (3,555)
RECONCILIATION OF MOVEMENT IN GROUP
SHAREHOLDERS' FUNDS FOR THE YEAR ENDED
30 SEPTEMBER 2002
2002 2001
#000 #000
Total recognised gains and losses for the financial year (7,172) (3,555)
Other movements:
Issue of ordinary shares (net of costs) 5 4,225
Total movements during the financial year (7,167) 670
Shareholders' funds at 1 October 2001 7,302 6,632
Shareholders' funds at 30 September 2002 135 7,302
CONSOLIDATED BALANCE SHEET
AS AT 30 SEPTEMBER 2002
2002 2001
Note #000 #000
Fixed assets
Intangible assets 9 - 4,726
Tangible assets 10 8 19
Investments 11 289 2,475
297 7,220
Current assets
Debtors 12 69 115
Cash at bank 376 506
445 621
Creditors: amounts falling due within one year 13 (307) (95)
Net current assets 138 526
Total assets less current liabilities 435 7,746
Creditors: amounts falling due after more
than one year 14 (300) (444)
Net assets 135 7,302
Capital and reserves
Called up share capital 15 8,631 8,626
Share premium account 16 6,313 6,313
Revaluation reserve 16 - 92
Profit and loss account 16 (14,809) (7,729)
Shareholders' funds 135 7,302
Approved by the Board on 31 March 2003
and signed on its behalf by:
S Robinson
Director
COMPANY BALANCE SHEET
AS AT 30 SEPTEMBER 2002
2002 2001
Notes #000 #000
Fixed assets
Investments 11 288 5,862
Current assets
Debtors: amounts falling due after more than
one year 12 218 1,874
Debtors: amounts falling due within one year 12 169 22
Cash at bank 45 353
432 2,249
Creditors: amounts falling due within one year 13 (306) (47)
Net current assets 126 2,202
Total assets less current liabilities 414 8,064
Creditors: amounts falling due after more than
one year 14 (300) (444)
Net assets 114 7,620
Share capital and reserves
Called up share capital 15 8,631 8,626
Share premium account 16 6,313 6,313
Profit and loss account 16 (14,830) (7,319)
Shareholders' funds 114 7,620
Approved by the Board on 31 March 2003
and signed on its behalf by:
S Robinson
Director
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2002
2002 2001
Notes #000 #000
Net cash outflow from operating activities 17 (493) (1,181)
Returns on investment and servicing of finance
Interest received 7 48
Interest paid (19) -
(12) 48
Capital expenditure and financial investment
Purchase of tangible fixed assets - (19)
Purchase of fixed asset investments (22) (1,893)
Sale of fixed asset investments 332 593
Sale of tangible fixed assets - 3
310 (1,316)
Acquisitions
Cash acquired with subsidiary undertakings 72 88
Purchase of subsidiary undertaking (12) -
60 88
Management of liquid resources
Movement in short term deposits - 1,000
Net cash outflow before financing (135) (1,361)
Financing
Issue of Ordinary Shares 5 501
Share issue expenses - (263)
New loans - 444
Cash flow from financing 5 682
Decrease in cash 18 (130) (679)
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 30 SEPTEMBER 2002
1. ACCOUNTING POLICIES
Basis of Preparation
The accounts are prepared under the historical cost convention as modified to include the revaluation of fixed
asset investments and in accordance with applicable accounting standards.
Basis of Consolidation
The consolidated accounts incorporate the accounts of Hanover Capital Group plc (formerly Tera Group plc) and
all of its subsidiary undertakings. No profit and loss account has been presented for Tera Group plc as permitted by
section 230 of the Companies Act 1985.
Subsidiary undertakings have been included in the accounts using the acquisition method of accounting. The
consolidated profit and loss account and statement of cash flows include the results and cash flows of subsidiary
undertakings for the period since acquisition.
In accordance with Financial Reporting Standard Number 9 investments which are held as part of the Group's
investment portfolio, including those over which the Group has significant influence, are shown on the balance sheet
as fixed asset investments.
Goodwill
Goodwill arising on acquisition is capitalised and amortised through the profit and loss account over the Directors'
estimate of its useful life. The Directors review goodwill for impairment if events or changes in circumstances
indicate that the carrying amount of goodwill may not be recoverable.
Depreciation
Depreciation is provided on all tangible fixed assets in use, at rates calculated to write off the cost, less
estimated residual value of each asset over its expected useful life, as follows:
Office improvements - 33% p.a. straight line
Computer equipment - 33% p.a. straight line
Office furniture - 33% p.a. straight line
Foreign currencies
The accounts of the overseas subsidiary are translated at the rate of exchange ruling at the balance sheet date.
Assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance
sheet date. All exchange differences arising on translation are taken to profit and loss account.
NOTES TO THE ACCOUNTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2002
1. ACCOUNTING POLICIES (CONTINUED)
Investments
Investments are valued dependent on the stage of development of the investee company and determined as follows:
* Quoted investments are stated at mid-market prices. Where the shares held are subject to restrictions or the
holding is significant in relation to the issued share capital, a discount to market value is applied.
* Unquoted investments are stated at Directors' valuation. It is the policy of the Directors to carry unquoted
investments at cost except in the following circumstances:
*where a company's underperformance against plan indicates a diminution in value of the investment, provision against
cost is made as appropriate;
*where a company is well established and profitable, the shares may be valued by applying a suitable price earnings
ratio to the company's historical post tax earnings. The ratio used is based on a comparable listed company or sector
but discounted to reflect lack of marketability. Unquoted investments will not normally be revalued upwards for a
period of at least 12 months from the date of acquisition;
*where a value is indicated by a material arms' length transaction by a third party in the shares of the company.
* Cost includes equity and loan capital together with provision of services if stipulated in the relevant
subscription agreements.
Operating lease rentals
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain
with the lessor are charged against profits on a straight line basis over the period of the lease.
Web design services
Where the group has provided web design services as part of the purchase consideration for an equity share in an
unlisted company, the cost of the those services are included in the investment on the balance sheet. At the same
time, a corresponding monetary provision is set up on the balance sheet to cover the company's contractual
obligations under the web design agreement. The provision is reduced when work has been performed under the relevant
agreement.
2. TURNOVER
(Losses)/Gains on disposal of
Analysis of activity Other
investments income Total
2002 2001 2002 2001 2002 2001
#000 #000 #000 #000 #000 #000
Continuing operations (43) 174 344 - 301 174
Acquisitions - - - 56 - 56
(43) 174 344 56 301 230
Discontinued operations - - - 484 - 484
(43) 174 344 540 301 714
3. OPERATING COSTS
2002 2001
#000 #000
Administrative expenses:
Continuing 7,458 3,490
Acquired - 157
7,458 3,647
Discontinued - 660
7,458 4,307
4. OPERATING LOSS
This is stated after charging: 2002 2001
#000 #000
Auditors' remuneration 14 22
Depreciation 11 123
Loss on disposal of tangible fixed assets - 1
Operating lease rentals 50 50
Directors emoluments 199 124
The audit fee payable by the Company was #10,000 (2001 - #15,000).
The above figures do not include irrecoverable VAT.
5. STAFF COSTS
2002 2001
#000 #000
Wages and salaries 384 461
Social security costs 6 34
Pension costs 35 -
425 495
The average number of persons employed during the year was made up as follows:
2002 2001
Number Number
Web design services - 4
Administration 2 2
Fund managers and consultants 4 4
Directors 4 4
10 14
Directors' remuneration:
Emoluments of the Directors of the parent company during the year, including payments made by subsidiary
undertakings, were as follows:
Salary/Fees Benefits Total Total
Director 2002 2002 2002 2001
#000 #000 #000 #000
J M Edelson 30 - 30 30
E V Edelson 36 - 36 52
M R Freud - - - 7
K R Harris - - - 7
K Laento 9 - 9 -
J J Kiikeri 50 15 65 14
G R Potrykus 50 9 59 14
175 24 199 124
The services of J M Edelson are provided and charged to the Group by London & City Credit Corporation Limited.
6. INTEREST PAYABLE
2002 2001
#000 #000
Loan interest 22 13
7. LOSS FOR THE FINANCIAL YEAR
The loss dealt with in the accounts of the parent company for the financial year was #7,511,000 (2001 -
#3,230,000 loss).
8. LOSS PER SHARE
The calculation of loss per share is based on the loss for the financial year of #7,172,000 (2001 - #3,558,000
loss) and a weighted average number of Ordinary Shares in issue during the financial year of 8,628,586 (2001 -
4,925,338). The weighted average number of Ordinary Shares for both thje current and prior years has been adjusted to
reflect the 1 for 100 share consolidation on 30 October 2002.
Exercise of the Company's share options and warrants would not result in any dilution in the loss per share.
9. INTANGIBLE FIXED ASSETS
Goodwill
Group #000
Cost
At 1 October 2001 and 30 September 2002 7,244
Amounts written off
At 1 October 2001 2,518
Provided in the year 4,726
At 30 September 2002 7,244
Net book value
At 30 September 2002 -
At 30 September 2001 4,726
The unamortised goodwill at 30 September 2001 amounting to #4,726,000 arose on the acquisition of Tera Group Oy. The
Directors do not consider that this company has any continuing material value to the Group and, therefore, the
goodwill is considered to be impaired and has been written off in full during the year ended 30 September 2002.
10. TANGIBLE FIXED ASSETS
Office Computer Office
improvements equipment furniture Total
Group #000 #000 #000 #000
Cost
At 1 October 2001 40 111 11 162
Fully depreciated assets written off (40) (80) - (120)
At 30 September 2002 - 31 11 42
Depreciation
At 1 October 2001 40 93 10 143
Charge for year - 10 1 11
Fully depreciated assets written off (40) (80) - (120)
At 30 September 2002 - 23 11 34
Net book value
At 30 September 2002 - 8 - 8
At 30 September 2001 - 18 1 19
11. INVESTMENTS
Listed Unlisted Loans to
investments investments unlisted
investments Total
Group #000 #000 #000 #000
Cost/Valuation
At 1 October 2001 385 4,424 2,102 6,911
Additions - 22 - 22
Disposals (375) - - (375)
Release of fully written down investments * - (1,379) (1,246) (2,625)
Reclassification to subsidiary undertaking - (250) (250) (500)
Other reclassifications 217 (217) - -
At 30 September 2002 227 2,600 606 3,433
Amounts written off
At 1 October 2001 9 2,465 1,962 4,436
Written off in the year 178 1,655 (55) 1,778
Release of fully written down investments - (1,379) (1,246) (2,625)
Reclassification to subsidiary undertaking - (250) (195) (445)
At 30 September 2002 187 2,491 466 3,144
Net book value
At 30 September 2002 40 109 140 289
At 30 September 2001 376 1,959 140 2,475
* The release of fully written down investments relates to investments in companies which have ceased trading and
have been formally closed down.
11. INVESTMENTS (CONTINUED)
Shares in
subsidiary
undertakings
Company #000
Cost
At 1 October 2001 9,136
Additions 84
Release of fully written down subsidiary* (353)
At 30 September 2002 8,867
Amounts written off
At 1 October 2001 3,274
Written off in the year 5,658
Release of fully written down subsidiary* (353)
At 30 September 2002 8,579
Net book value
At 30 September 2002 288
At 30 September 2001 5,862
*The release of the fully written off subsidiary relates to Aerohedge Limited which has been dissolved and struck off
the register at Companies House.
On 3 April 2002 the Group acquired a further 72.2% of the issued share capital of Global Remainders.com Limited for
cash consideration of #11,500. The Group had previously owned 26.3% of that company, giving it ownership of 98.5%.
An analysis of the net assets of Global Remainders.com Limited at the date the company became a subsidiary is as
follows:
#000
Cash at bank 72
Creditors due within one year (5)
Net assets at date of acquisition 67
Details of subsidiary undertakings, all of which are wholly owned at the balance
sheet date by Hanover Capital Group plc unless otherwise stated, are as follows:
Name of County of Nature of
Company incorporation Holding business
Tera Group Oy Finland Ordinary Shares Investment and
consultancy
Oxygen Investors Limited England Ordinary shares Investment
Oxygen Partners Limited England Ordinary shares Dormant
Oxygen Holdings B.V. Holland Ordinary shares Investment
** Global Remainders.com Ltd. England Ordinary shares Dormant
* WWW Investments Limited England Ordinary shares Investment
Specialday Limited England Ordinary shares Investment
*** Oxygen Ventures Limited England Ordinary shares Dormant
Helium Group Limited England Ordinary shares Investment
* Helium Partners Limited England Ordinary shares Investment
**** Aerohedge Limited England Ordinary shares Dormant
* held by a subsidiary undertaking.
** shareholding is 98.5% of issued share capital
*** Oxygen Ventures Limited has been disposed of by the Group since the year end.
**** Aerohedge Limited has been dissolved and struck off the register at Companies House since the year end.
_________________________________________________________________________
12. DEBTORS Group Company
2002 2001 2002 2001
#000 #000 #000 #000
Trade debtors 47 82 - -
Amounts due from group undertakings - - 368 1,874
Other debtors - - - -
Prepayments and accrued income 22 33 19 22
69 115 387 1,896
Amounts falling due after more than one year included above:
Amounts due from group undertakings - - 218 1,874
13. CREDITORS:amounts falling due Group Company
within one year 2002 2001 2002 2001
#000 #000 #000 #000
Loans 144 - 144 -
Trade creditors 8 58 8 20
Amounts due to group undertakings - - 67 -
Accruals 155 37 87 27
382 95 381 47
14. CREDITORS:amounts falling due Group Company
in more than one year 2001 2000 2001 2000
#000 #000 #000 #000
Loans 300 444 300 444
Interest is payable based on a rate of 5% per annum and is paid annually. Following shareholder approval at the
Extraordinary General Meeting held on 30 October 2002 loans included above amounting to #225,122 were capitalised in
exchange for 2,814,024 Ordinary Shares of 1p each in the Company at a price of 8p per share.
_________________________________________________________________________
15. SHARE CAPITAL
2002 2001
#000 #000
Authorised
1,395,000,000 Ordinary Shares of 1p each 13,950 13,950
50,000 Preference Shares of #1 each 50 50
14,000 14,000
Allotted, called up and fully paid
863,119,540 (2001 - 862,643,267) Ordinary Shares of 1p each 8,631 8,626
On the following dates during the year, new ordinary shares of 1p each were issued for cash on the exercise of
warrants at an exercise price of 1p:
29 October 2001 109,050
6 December 2001 20,500
10 December 2001 625
22 January 2002 26,687
8 March 2002 625
13 June 2002 8,119
1 July 2002 310,667
476,273
At the beginning and end of the financial year, warrants existed over 7,500,000 Ordinary Shares exercisable at 2p per
share between the first and fifth anniversary of the date of grant. These warrants were restructured subsequent to
the Extraordinary General Meeting held on 30 October 2002, whereby they became warrants over 75,000 ordinary shares
of 1p each exercisable at a price of #2 per share, exercisable before 28 January 2005.
25,000,000 warrants were issued to participants in the placing and open offer in June 2001, each warrant granting the
holder the right to acquire one Ordinary Share for 1p during the period of one year from 29 June 2001. During the
year 476,273 warrants were exercised leaving 24,523,727 unexercised warrants, all of which lapsed on 29 June 2002.
The Company has an unapproved share option scheme. The total options granted under the scheme at 30 September 2001
amounted to 15,500,000 and these options lapsed on 28 December 2001. No further share options were granted during the
year and consequently at 30 September 2002 there were no share options in issue.
Subsequent to the year end on 30 October 2002 the authorised and issued ordinary and preference share capital of the
Company has significantly changed and full details are shown in note 20 to the accounts.
_________________________________________________________________________
16. RESERVES
Share
Group premium Revaluation Profit and
account reserve loss account
#000 #000 #000
At 1 October 2001 6,313 92 (7,729)
Realisation of revaluation surplus - (92) 92
Loss for the financial year - - (7,172)
At 30 September 2002 6,313 - (14,809)
Share Profit and
Company premium account loss
account
#000 #000
At 1 October 2001 6,313 (7,319)
Loss for the financial year - (7,511)
At 30 September 2002 6,313 (14,830)
_________________________________________________________________________
17. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
2002 2001
Group #000 #000
Operating loss (7,157) (3,593)
Losses/(Gains) on disposal of investments 43 (174)
Depreciation of tangible fixed assets 11 123
Loss on disposal of tangible fixed assets - 1
Goodwill impairment and amortisation 4,726 248
Amounts written off fixed asset investments 1,778 2,685
Shares issued in lieu of directors fees - 37
Decrease in debtors 46 56
Increase/(Decrease) in creditors 60 (564)
Net cash outflow from operating activities (493) (1,181)
18. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)/FUNDS
2002 2001
Group #000 #000
(Decrease)/Increase in cash (130) (679)
Cash flow from loans - (444)
Cash flow from short term deposits - (1,000)
'
Movement in net funds during the year (130) (2,123)
Net funds at 1 October 2001 62 2,185
Net (debt)/funds at 30 September 2002 (68) 62
19. ANALYSIS OF NET (DEBT)/FUNDS
At 1 At 30 September 2002
October Cash
Group 2001 flow
#000 #000 #000
Cash at bank 506 (130) 376
Loans (444) - (444)
Net (debt)/funds 62 (130) (68)
_________________________________________________________________________
20. POST BALANCE SHEET EVENTS
At the Extraordinary General Meeting of the Company held on 30 October 2002 the following events were approved by
shareholders:
The resignations from the Board of J J Kiikeri, G R Potrykus and K Laento and the appointments to the Board of R
Y Lowenthal, J W Malins and S M Robinson.
Every 100 of the then issued ordinary shares of 1p each were consolidated into 1 ordinary share of #1 each giving
8,631,195 ordinary shares of #1 in issue. Subsequently, each 1 ordinary share of #1 was subdivided into 100 ordinary
shares of 1p each, with 99 out of every such 100 ordinary shares of 1p each being converted into deferred ordinary
shares of 1p each. This restructuring resulted in there being 8,631,195 ordinary shares of 1p each and 854,488,345
deferred ordinary shares of 1p each in issue at that date.
The 50,000 unissued redeemable preference shares of #1 each were converted into 50,000 convertible preference shares
of #1 each.
The authorised share capital of the Company was increased from #14,000,000 to #90,000,000. This was achieved by the
creation of an additional 2,605,000,000 ordinary shares of 1p each and an additional 49,950,000 convertible
preference shares of #1 each. The authorised share capital of the Company consists of:
Authorised share capital #000
3,145,511,655 Ordinary shares of 1p each 31,455
854,488,345 Deferred ordinary shares of 1p each 8,545
50,000,000 Convertible preference shares of #1 each 50,000
90,000
The Directors were generally and unconditionally authorised to allot the relevant securities up to an aggregate
nominal amount of #81,368,805 with such authority expiring on 30 October 2007, unless previously revoked or varied by
the Company in general meeting. The Directors may allot relevant securities pursuant to an offer or agreement made
before the expiry of the authority.
________________________________________________________________________
20. POST BALANCE SHEET EVENTS (CONTINUED)
The following warrants were created:
Exercise
Warrant type Number of warrants Price Terms of exercise
A 150,000,000 16p Within 3 years of issue
B 600,000,000 24p Within 5 years of issue
C 600,000,000 20p Within 3 years of issue
The Directors were authorised to issue the above warrants, such authority to expire on 30 October 2007 unless
previously revoked or varied by the Company in general meeting.
The Directors are authorised to allot securities in Hanover Capital Group PLC up to an aggregate nominal amount of
#20,000,000 without first offering them to shareholders.
On 4 December 2002 Grant Thornton were appointed as the Company's nominated adviser and Christows Limited were
appointed as the Company's broker. They both replaced Seymour Pierce Limited who acted as the Company's broker and
nominated adviser since its' flotation in February 2000.
On 11 December 2002 the Group acquired 180 ordinary shares of #1 each in Valley Forge Site Limited, representing
18.75% of that company's issued share capital. The purchase consideration amounting to #468,750 was satisfied by the
issue of 4,687,500 ordinary shares in Hanover Capital Group PLC at a price of 10p per share, together with the issue
of 2,343,750 'B' warrants and 2,343,750 'C' warrants.
On 11 December 2002 the Group also acquired 34 ordinary shares of #1 each in Steinbeck Limited, representing 3.54% of
that company's issued share capital. The purchase consideration amounting to #664,062 was satisfied by the issue of
6,640,620 ordinary shares in Hanover Capital Group PLC at a price of 10p per share, together with the issue of
3,320,310 'B' warrants and 3,320,310 'C' warrants.
On 11 December 2002 the Group also capitalised some long term loans amounting to #225,122. The loans were settled
with the issue of 2,814,024 ordinary shares in Hanover Capital Group PLC at a price of 8p per share, which was
approved at the Extraordinary General Meeting held on 30 October 2002. In addition, 2,814,024 'A' warrants and
2,814,024 'B' warrants were issued to the loan holders.
On 16 December 2002 the Group acquired 2,083,333 ordinary shares of 1p each in EIE plc, representing 4.00% of that
company's issued share capital. The purchase consideration amounting to #500,000 was satisfied by the issue of
5,000,000 ordinary shares in Hanover Capital Group PLC at a price of 10p per share.
____________________________________________________________________
20. POST BALANCE SHEET EVENTS (CONTINUED)
On 18 December 2002 the Group acquired a further 70 ordinary shares of #1 each in Steinbeck Limited, representing
7.29% of that company's issued share capital. The purchase consideration amounting to #1,367,187 was satisfied by the
issue of 13,671,870 ordinary shares in Hanover Capital Group PLC at a price of 10p per share, together with the issue
of 1,367,187 'B' warrants and 1,367,187 'C' warrants.
On 18 December 2002 the Group acquired 384 ordinary shares in Barnard Castle Limited, representing 40% of that
company's issued share capital. The purchase consideration amounting to #500,000 was satisfied by the issue of
5,000,000 ordinary shares in Hanover Capital Group PLC at a price of 10p per share, together with the issue of
2,500,000 'B' warrants and 2,500,000 'C' warrants.
On 23 December 2002 the Group issued 1,416,666 ordinary shares of 1p each in Hanover Capital Group PLC at 12p per
share in settlement of liabilities amounting to #170,000 which were incurred by the Group subsequent to the balance
sheet date of 30 September 2002.
On 24 January 2003 the Group acquired a further 204 ordinary shares in Valley Forge Site Limited, representing 21.25%
of that company's issued share capital. The purchase consideration amounting to #531,250 was satisfied by the issue
of 4,427,084 ordinary shares in Hanover Capital Group PLC at a price of 12p per share.
On 24 January 2003 the Group acquired 2,500,000 ordinary shares of #1 each in Jubilee Investment Trust plc. The
purchase consideration amounting to #2,500,000 was satisfied by the issue of 20,833,333 ordinary shares in Hanover
Capital Group PLC at a price of 12p per share.
On 19 February 2003 the Group issued 352,500 ordinary shares of 1p each in Hanover Capital Group PLC at 12p per share
in settlement of amounts owed to Parkgreen Communications Limited.
On 17 March 2003 Hanover, in consideration for the acquisition of the debt from the majority of the creditors of
Underwriting & Subscription plc, allotted 1,759,041 ordinary shares in the capital of Hanover to these creditors at a
price of 12p per share. Consequently, Hanover is the major creditor of Underwriting & Subscription plc, which owes
Hanover #221,952.
20. POST BALANCE SHEET EVENTS (CONTINUED)
On 19 March 2003 Hanover, in consideration for the acquisition of the debt from the majority of the creditors of
Prestige Publishing plc, allotted 1,800,668 ordinary shares in the capital of Hanover to these creditors at a price
of 12p per share. Consequently, Hanover is the major creditor of Prestige Publishing plc, which owes Hanover
#222,447.
Following the aforementioned share capital restructuring and issues of ordinary shares and warrants subsequent to the
balance sheet date, the table below shows the total issued share capital and warrants of the Company at the date of
the accounts were signed:
Type of share/warrant Number
Ordinary shares of 1p each 77,034,501
Deferred ordinary shares of 1p each 854,488,345
'A' warrants 2,814,024
'B' warrants 12,345,271
'C' warrants 9,531,247
Warrants held by Seymour Pierce Limited 75,000
21. FINANCIAL INSTRUMENTS
The Group's main financial instruments comprise bank balances, equity and non-equity fixed asset investments,
short term debtors and short term creditors. The main purpose of these financial instruments is to finance the
Group's operations and, in the case of equity investments, for trading purposes.
With the exception of equity investments it is, and has been throughout the year under review, the Group's
policy that no trading in financial instruments be undertaken.
Financial Assets
An analysis of the financial assets at the balance sheet date is as follows:
Floating rate Non-interest
financial bearing
Total assets assets
#000 #000 #000
Currency
Sterling 330 314 116
Euros 304 62 242
At 30 September 2002 734 376 358
Floating rate Non-interest
financial bearing
Total assets assets
#000 #000 #000
Currency
Sterling 2,604 470 2,134
Euros 492 36 456
At 30 September 2001 3,096 506 2,590
Financial assets comprise investments, debtors and bank balances.
Financial Liabilities
Financial liabilities comprising short term creditors are non interest bearing and all fall due within one year.
22. TAXATION
No taxation charge has been provided in either the current or preceding year. The Group has taxable losses of
approximately #800,000 (2001 - #350,000) available for offset against future trading profits.
23. DIRECTORS' INTEREST IN TRANSACTIONS
Included in loans on the balance sheet are the following amounts due to G R Potrykus and J J Kiikeri, who were
both Directors of the Company throughout the year ended 30 September 2002:
Director Loan at Loan at Interest
30 September 30 September charge for
2002 2001 the year
#000 #000 #000
G R Potrykus 74 74 4
J J Kiikeri 72 72 4
Subsequent to the year end, on 11 December 2002 the Company issued at a price of 8 pence per share 569,929
Ordinary Shares (#45,594) to G R Potrykus and 558,055 Ordinary Shares (#44,644) to J J Kiikeri in part settlement of
their loans.
24. OBLIGATIONS UNDER OPERATING LEASES
At 30 September 2002 the Group had the following annual commitments for amounts to be paid under non-cancellable
operating leases:
2002 2001
Land and buildings #000 #000
Leases expiring within one year - 5
The Company had no commitments under operating leases at the balance sheet date (2001 - #nil).
Copies of the Accounts are available from Simon Robinson, care of ParkGreen Communications: 3rd Floor, Goldsmiths
House, 137-141 Regent Street, London, W1B 4HZ. Copies will be posted to shareholders.
Company No: 3849385
HANOVER CAPITAL GROUP PLC
(FORMERLY TERA GROUP PLC)
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of the Company will be held at 11 a.m. on 2 May 2003 at the
registered office of the Company at Third Floor, 345 Stockport Road, Manchester M13 0LF for the purpose of
considering and, if thought fit, passing the following Ordinary Resolutions:
Ordinary Business
Resolution 1: to receive and adopt the Financial Statements of the Group for the year ended 30 September 2002
together with the Reports of the Directors and Auditors thereon.
Resolution 2: to re-elect as a Director Mr J W Malins who retires in accordance with the Company's Articles of
Association and offers himself for re-election.
Resolution 3: to re-elect as a Director Mr S Y Lowenthal who retires in accordance with the Company's Articles
of Association and offers himself for re-election.
Resolution 4: to re-elect as a Director Mr S M Robinson who retires in accordance with the Company's Articles of
Association and offers himself for re-election.
Resolution 5: to re-appoint Horwath Clark Whitehill as auditors of the Company and to authorise the Directors to
determine their remuneration.
By Order of the Board
...............................
I Aspinall
Company Secretary
31 March 2003
Registered office:
Third Floor
345 Stockport Road
Manchester M13 0LF
Notes:
1. A member entitled to attend and vote at the Meeting convened by this notice may appoint one or more proxies to
attend and, on a poll, vote instead of him. A proxy need not be a member of the Company.
2. Completing and returning a form of proxy does not preclude a member from attending the Meeting.
3. To be valid, a form of proxy and, if applicable, any authority under which it is signed, or a certificated copy of
such authority must be lodged at the offices of Northern Registrars Limited, Northern House, Woodsome Park, Fenay
Bridge, Huddersfield HD8 0LA not later than 48 hours before the time for holding the meeting.
4. As permitted by Regulation 34 of the Uncertificated Securities Regulations 1995, only those holders of Hanover
Capital Group plc shares who are registered on the Company's share register as at 11.00 a.m. on 30 April 2003 shall
be entitled to attend the Annual General Meeting and to vote in respect of the number of shares registered in their
names at that time. Changes to entries on the share register after 11.00 a.m. on 30 April 2003 shall be disregarded
in determining the rights of any person to attend and/or vote at the Annual General Meeting.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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