Proposed acquisition of Avisen Group Ltd and change of ... - 1Spatial
Proposed acquisition of Avisen Group Ltd and change of ... - 1Spatial
Proposed acquisition of Avisen Group Ltd and change of ... - 1Spatial
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Z GROUP plcAcquisition <strong>of</strong> <strong>Avisen</strong> <strong>Group</strong> Limited<strong>Proposed</strong> <strong>change</strong> <strong>of</strong> name to <strong>Avisen</strong> plcAdmission to trading on AIMNominated Adviser <strong>and</strong> BrokerJohn East & Partners Limited
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents <strong>of</strong> thisdocument you should consult a person authorised under the Financial Services <strong>and</strong> Markets Act 2000 (“FSMA”) who specialises in advising on the<strong>acquisition</strong> <strong>of</strong> shares <strong>and</strong> other securities before taking any action. The whole <strong>of</strong> the text <strong>of</strong> this document should be read. Investment in the Company isspeculative <strong>and</strong> involves a high degree <strong>of</strong> risk.If you have sold or transferred your Ordinary Shares in the Company you should send this document along with the Form <strong>of</strong> Proxy at once to thepurchaser or transferee or the stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser ortransferee.This document constitutes an admission document in accordance with the AIM Rules for Companies. This document is not an approved prospectus for thepurposes <strong>of</strong> Sections 85 <strong>and</strong> 87 <strong>of</strong> FSMA. This document does not constitute a financial promotion <strong>and</strong> has not been approved for issue as such in the UnitedKingdom for the purposes <strong>of</strong> Section 21 <strong>of</strong> FSMA.The Company, the Directors <strong>and</strong> the <strong>Proposed</strong> Directors, whose names appear on page 3, accept responsibility for the information contained in this document. Tothe best <strong>of</strong> the knowledge <strong>of</strong> the Company, the Directors <strong>and</strong> the <strong>Proposed</strong> Directors (who have taken all reasonable care to ensure that such is the case) theinformation contained in this document is in accordance with the facts <strong>and</strong> contains no omission likely to affect the import <strong>of</strong> such information.AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or moreestablished companies. AIM securities are not admitted to the Official List <strong>of</strong> the UK Listing Authority (“UKLA”).A prospective investor should be aware <strong>of</strong> the risks <strong>of</strong> investing in such companies <strong>and</strong> should make the decision to invest only after carefulconsideration <strong>and</strong>, if appropriate, consultation with an independent financial adviser.The AIM Rules for Companies are less dem<strong>and</strong>ing than those <strong>of</strong> the Official List. It is emphasised that no application is being made for admission <strong>of</strong> thesecurities to the Official List. Further, neither the London Stock Ex<strong>change</strong> nor the UKLA has examined or approved the contents <strong>of</strong> this document.Each AIM company is required pursuant to the AIM Rules for Companies to have a nominated adviser. The nominated adviser is required to make adeclaration to the London Stock Ex<strong>change</strong> on admission in the form set out in Schedule Two to the AIM Rules for Nominated Advisers.It is expected that Admission will become effective <strong>and</strong> that dealings in the Enlarged Issued Share Capital will commence on AIM on 2 February 2009.Z GROUP plc(Incorporated <strong>and</strong> registered in Engl<strong>and</strong> <strong>and</strong> Wales under the Companies Act 1985(as amended) with registered number 5429800)(ISIN: GB00B09LQS34)<strong>Proposed</strong> <strong>acquisition</strong> <strong>of</strong> <strong>Avisen</strong> <strong>Group</strong> Limited,<strong>Proposed</strong> approval <strong>of</strong> a waiver <strong>of</strong> the obligations under Rule 9 <strong>of</strong> the City Code,<strong>Proposed</strong> <strong>change</strong> <strong>of</strong> name to <strong>Avisen</strong> plc,Notice <strong>of</strong> General Meeting<strong>and</strong>Admission to trading on AIMNOMINATED ADVISER AND BROKERJohn East & Partners LimitedSHARE CAPITAL ON ADMISSIONAuthorisedIssued <strong>and</strong> fully paidNumber Amount Number Amount200,000,000 £10,000,000 Ordinary Shares <strong>of</strong> £0.05 each 110,412,546 £5,520,627John East & Partners Limited (“JEP”), which is authorised <strong>and</strong> regulated by the Financial Services Authority <strong>of</strong> the United Kingdom, is acting as nominatedadviser <strong>and</strong> broker to Z GROUP plc in connection with the arrangements set out in this document <strong>and</strong> is not acting for anyone else <strong>and</strong> will not be responsible toanyone other than Z GROUP plc for providing the protections afforded to customers <strong>of</strong> JEP or for providing advice in relation to the contents <strong>of</strong> this document<strong>and</strong> the admission <strong>of</strong> the Ordinary Shares to trading on AIM. In particular, JEP, as nominated adviser to the Company, owes certain responsibilities to the LondonStock Ex<strong>change</strong> which are not owed to the Company or the Directors or <strong>Proposed</strong> Directors or to any other person in respect <strong>of</strong> his or her decision to acquireOrdinary Shares in reliance on any part <strong>of</strong> this document. JEP accepts no liability for the accuracy <strong>of</strong> any information or opinions contained in or for the omission<strong>of</strong> any material information from this document, for which the Company <strong>and</strong> its Directors <strong>and</strong> <strong>Proposed</strong> Directors are solely responsible.This document contains forward looking statements. These statements relate to the Enlarged <strong>Group</strong>’s future prospects, developments <strong>and</strong> business strategy.Forward looking statements are identified by their use <strong>of</strong> terms <strong>and</strong> phrases, including without limitation, statements containing the words “believe”,“anticipated”, “expected”, “could”, “envisage”, “estimate”, “may” or the negative <strong>of</strong> those, variations or similar expressions including references to assumptions.Such forward looking statements involve unknown risk, uncertainties <strong>and</strong> other factors which may cause the actual results, financial condition, performance orachievement <strong>of</strong> the Enlarged <strong>Group</strong>, or industry results to be materially different from any future results, performance or achievements expressed or implied bysuch forward looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in “Risk Factors” set out in Part II <strong>of</strong>this document. Given these uncertainties, prospective investors are cautioned not to place any undue reliance on such forward looking statements. These forwardlooking statements speak only as at the date <strong>of</strong> this document. The Company disclaims any obligations to update any such forward looking statements in thisdocument to reflect events or developments.The whole <strong>of</strong> this document should be read. Your attention is drawn, in particular, to Part I “Letter from the Chairman <strong>of</strong> Z GROUP plc” <strong>and</strong> Part II“Risk Factors” for a more complete discussion <strong>of</strong> the factors that could affect the Enlarged <strong>Group</strong>’s future performance <strong>and</strong> the industry in which it willoperate.A notice convening a General Meeting <strong>of</strong> Z GROUP plc to be held at the <strong>of</strong>fices <strong>of</strong> Orrick, Herrington & Sutcliffe, Tower 42, Level 35, 25 Old BroadStreet, London EC2N 1HQ on 30 January 2009 commencing at 10.00 a.m. is set out at the end <strong>of</strong> this document. The Form <strong>of</strong> Proxy for use in connectionwith the General Meeting is enclosed with this document <strong>and</strong> should be returned as soon as possible <strong>and</strong>, in any event, so as to be received at the <strong>of</strong>fices<strong>of</strong> the Company’s registrars, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible but in any event notlater than 10.00 a.m. on 28 January 2009, being 48 hours (excluding weekends <strong>and</strong> public holidays) before the time appointed for the holding <strong>of</strong> theGeneral Meeting. The completion <strong>and</strong> depositing <strong>of</strong> a Form <strong>of</strong> Proxy will not preclude a Shareholder from attending <strong>and</strong> voting in person at the GeneralMeeting.
Directors, <strong>Proposed</strong> Directors, Secretary <strong>and</strong> AdvisersDirectors <strong>and</strong>Registered Office<strong>Proposed</strong> DirectorsCompany SecretaryNominated Adviser<strong>and</strong> BrokerSolicitors to theCompanySolicitors to <strong>Avisen</strong>Solicitors to theNominated Adviser<strong>and</strong> BrokerAuditors <strong>and</strong> ReportingAccountantsRegistrarsJonathan Kent Claydon (Non-Executive Chairman)Marcus Yeoman (Director)Duncan John Neale (Finance Director)(Andrew) Ian Smith (Non-executive Director)all <strong>of</strong> whose address for business is at the Company’s registered <strong>of</strong>fice:31 Vernon StreetLondon W14 0RNMarcus Nigel Hanke (<strong>Proposed</strong> Chief Executive Officer)Andrew James Turner (<strong>Proposed</strong> Director)Louis Donald Peacock (<strong>Proposed</strong> Director)Keith Glynne Jones (<strong>Proposed</strong> Director)all <strong>of</strong> whose address for business is at <strong>Avisen</strong>’s registered <strong>of</strong>fice:20 Station RoadGerrards CrossBuckinghamshire SL9 8ELDuncan John NealeJohn East & Partners Limited10 Finsbury SquareLondon EC2A 1ADOrrick, Herrington & SutcliffeTower 42Level 3525 Old Broad StreetLondon EC2N 1HQBP CollinsCollins House32-38 Station RoadGerrards CrossBuckinghamshire SL9 8ELNabarro LLPLacon HouseTheobald’s RoadLondon WC1X 8RWHorwath Clark Whitehill LLPSt Brides’ House10 Salisbury SquareLondon EC4Y 8EHCapita Registrars LimitedNorthern HouseWoodsome ParkFenay BridgeHuddersfieldWest YorkshireHD8 0LA3
Definitions (continued)“Subsidiaries”“UK” or “United Kingdom”“UKLA”“uncertificated” or “inuncertificated form”“Vendors”“Waiver”the subsidiaries <strong>of</strong> <strong>Avisen</strong>, being <strong>Avisen</strong> Limited, <strong>Avisen</strong> B.V.,<strong>Avisen</strong> L.L.C., Solution Minds (UK) <strong>Ltd</strong>, Solution Minds <strong>Ltd</strong>,Dawnglen Investments (Proprietary) Limited (to be renamed<strong>Avisen</strong> (Proprietary) Limited) <strong>and</strong> Enfourmen Limitedthe United Kingdom <strong>of</strong> Great Britain <strong>and</strong> Northern Irel<strong>and</strong>the Financial Services Authority acting in its capacity as thecompetent authority for the purposes Part VI <strong>of</strong> FSMAan Ordinary Share recorded on the Company’s register as beingheld in uncertificated form in CREST <strong>and</strong> title to which, byvirtue <strong>of</strong> the CREST Regulations, may be transferred by means<strong>of</strong> CRESTMarcus Hanke, Andrew Turner, Louis Peacock, OdetteMcMahon, Mark Waller, Andrew Glenday, Graham Galloway<strong>and</strong> Raymond Alth<strong>of</strong> Beheer <strong>and</strong> Management B.V., details <strong>of</strong>whom are set out in Part I <strong>of</strong> this documentthe waiver by the Panel <strong>of</strong> obligations under Rule 9 <strong>of</strong> the CityCode as described in Part I <strong>of</strong> this document6
“Balanced Scorecard”GlossaryThe balanced scorecard is a performance management tool whichhas been developed from a concept <strong>of</strong> measuring whether thesmaller-scale operational activities <strong>of</strong> a company are aligned withits larger-scale objectives in terms <strong>of</strong> vision <strong>and</strong> strategy.“BI” Business intelligence, specifically skills, knowledge,technologies, applications <strong>and</strong> practices used to help a businessacquire a better underst<strong>and</strong>ing <strong>of</strong> market behaviour <strong>and</strong> businesscontext. Businesses may refer to the collected information itselfor the explicit knowledge developed from the information. BIapplications provide historical, current, <strong>and</strong> predictive views <strong>of</strong>business operations, most <strong>of</strong>ten using operational data.“CPM”“KPI”Corporate performance management is a set <strong>of</strong> processes thathelp organisations optimise their business performance. It is aframework for organising, automating <strong>and</strong> analysing businessmethodologies, metrics, processes <strong>and</strong> systems that drive businessperformance. CPM helps businesses make efficient use <strong>of</strong> notonly their financial, but also their human, material <strong>and</strong> otherresources.Key performance indicators are financial <strong>and</strong> non-financialmetrics used to help an organisation define <strong>and</strong> measure progresstoward organisational goals. KPIs can be delivered through BItechniques to assess the present state <strong>of</strong> the business <strong>and</strong> to assistin prescribing a course <strong>of</strong> action. KPIs are frequently used to‘value’ difficult to measure activities such as the benefits <strong>of</strong>leadership development, engagement, service, <strong>and</strong> satisfaction.KPIs are typically tied to an organisation’s strategy throughtechniques such as the Balanced Scorecard.“Performance Management” Performance management is a tool designed to help organisationsachieve their strategic goals. Performance managementtechniques are designed to help ensure that an organisation’s dataworks in the furtherance <strong>of</strong> organisational goals to provideinformation that is actually useful in achieving them.“Value-based Management”This is a management approach that is designed to ensurecompanies are run consistently on value, i.e. typically tomaximise shareholder value. Value-based Managementcomprises three key concepts – ‘Creating Value’ (ways toactually increase or generate maximum future value), ‘Managingfor Value’ (governance, <strong>change</strong> management, organisationalculture, communication, leadership) <strong>and</strong> ‘Measuring Value’(valuation).7
Share capital statisticsNumber <strong>of</strong> Existing Ordinary Shares 23,745,879Number <strong>of</strong> Consideration Shares 86,666,667Number <strong>of</strong> Ordinary Shares in issue following Admission 110,412,546Consideration Shares as a percentage <strong>of</strong> the Enlarged Issued Share CapitalMarket capitalisation <strong>of</strong> the Company on Admission*78.49 per cent.£5.80 million* based on the closing middle market price <strong>of</strong> the Ordinary Shares on AIM on 6 January 2009, the last practicable date prior to thepublication <strong>of</strong> this documentExpected timetable <strong>of</strong> principal eventsDespatch <strong>and</strong> date <strong>of</strong> this document 7 January 2009Latest time <strong>and</strong> date for receipt <strong>of</strong> the completed Forms <strong>of</strong> Proxyto be valid at the General MeetingGeneral Meeting10.00 a.m. on28 January 200910.00 a.m. on30 January 2009Completion <strong>of</strong> the Acquisition <strong>and</strong> Admission <strong>and</strong> commencement <strong>of</strong>dealings on AIM in the Enlarged Issued Share Capital 2 February 20098
If the Company does not obtain Shareholder approval <strong>of</strong> the Proposals, the Company will not haveundertaken an <strong>acquisition</strong> constituting a reverse takeover within the required timeframe <strong>of</strong> becoming aninvesting company, under Rule 15 <strong>of</strong> the AIM Rules, <strong>and</strong>, therefore, trading in the Company’s shareswill be suspended immediately following the General Meeting pursuant to the AIM Rules. TheCompany’s admission to trading on AIM would be cancelled on 8 July 2009, unless an alternative<strong>acquisition</strong> is identified <strong>and</strong> completed before that date.Following Admission <strong>and</strong> the implementation <strong>of</strong> the Proposals, the Concert Party will hold in excess <strong>of</strong>30 per cent. <strong>of</strong> the Enlarged Issued Share Capital <strong>and</strong> would normally incur an obligation, under Rule 9<strong>of</strong> the City Code, to make a general <strong>of</strong>fer to the Shareholders to acquire their shares. However, subjectto the approval <strong>of</strong> the Independent Shareholders on a poll at the General Meeting, the Panel has agreedto waive this obligation.The Proposals are conditional, inter alia, on passing <strong>of</strong> Resolutions numbered 1, 2, 3 <strong>and</strong> 4 <strong>and</strong> onAdmission. If such Resolutions are approved by Shareholders, it is expected that Admission willbecome effective <strong>and</strong> dealings in the Enlarged Issued Share Capital will commence on AIM on2 February 2009.The purpose <strong>of</strong> this document is to convene the General Meeting, to provide you with information on,the background to <strong>and</strong> reasons for the Proposals <strong>and</strong> to recommend that you vote at the GeneralMeeting in favour <strong>of</strong> the Resolutions which are necessary to give effect to the Proposals.Background information on the CompanyZ GROUP was incorporated on 20 April 2005 <strong>and</strong> admitted to trading on AIM on 21 June 2005. Atthat time, the Company operated in the s<strong>of</strong>tware <strong>and</strong> computer services sector. Following the disposal<strong>of</strong> its trading subsidiaries on 7 January 2008, the Company no longer had a trading business <strong>and</strong>accordingly the Company became an investing company pursuant to Rule 15 <strong>of</strong> the AIM Rules. InJanuary 2008, the directors at that time stated that the Company intended to implement an investingstrategy, in accordance with the AIM Rules, <strong>and</strong> seek a suitable investment opportunity for theCompany, being a target in the technology, media or sciences sectors. Any potential <strong>acquisition</strong> wouldalso need to satisfy the main criteria <strong>of</strong> having an experienced management team, a sizeable projectedmarket for the target’s products <strong>and</strong>/or services <strong>and</strong> the promising potential growth <strong>of</strong> that market.The Independent Directors consider that <strong>Avisen</strong> meets these criteria <strong>and</strong> they believe that the quality <strong>of</strong><strong>Avisen</strong>’s management team <strong>and</strong> the size <strong>of</strong> its target market justify their recommendation <strong>of</strong> theAcquisition to Independent Shareholders.Information on <strong>Avisen</strong>Overview<strong>Avisen</strong> is a business <strong>and</strong> technology consultancy specialising in Performance Management with a focuson strategy creation, development <strong>and</strong> implementation. It provides advisory services <strong>and</strong> s<strong>of</strong>twaredistribution <strong>of</strong> solutions in the corporate performance management market. <strong>Avisen</strong> aims to providespecialist advice to enable organisations to build more effective capabilities in order to manage theperformance <strong>of</strong> their business <strong>and</strong> allow them to achieve their desired targets. The solutions <strong>and</strong> adviceprovided by <strong>Avisen</strong> are used to assist clients in a number <strong>of</strong> areas including:• Development <strong>and</strong> implementation <strong>of</strong> improved business strategies• Pr<strong>of</strong>itability management <strong>and</strong> cost reduction services• Business or corporate performance management10
<strong>Avisen</strong>’s business<strong>Avisen</strong>’s business is conducted through two key br<strong>and</strong>s, ‘<strong>Avisen</strong>’ <strong>and</strong> ‘Solution Minds’, <strong>and</strong> followingAdmission, its business will be conducted through four principal trading subsidiaries. A diagramsetting out the structure <strong>of</strong> the Enlarged <strong>Group</strong> following Admission is set out below.<strong>Avisen</strong> plc<strong>Avisen</strong> <strong>Group</strong> Limited<strong>Avisen</strong>Limited<strong>Avisen</strong> BVNetherl<strong>and</strong>sSolution MindsUK LimitedDawnglenInvestments(Proprietary)Limited*South AfricaNote: this diagram excludes dormant subsidiaries* to be re-named <strong>Avisen</strong> (Proprietary) Limited‘<strong>Avisen</strong>’The <strong>Avisen</strong> br<strong>and</strong> is the group’s advisory services <strong>and</strong> traditional consulting br<strong>and</strong>, which is served bytwo trading entities in the UK <strong>and</strong> the Netherl<strong>and</strong>s. Client work undertaken by these entities ispositioned as “technology independent” (i.e. not reliant on s<strong>of</strong>tware applications) <strong>and</strong> the team utilisedfor these types <strong>of</strong> engagement have broad skills across business disciplines ranging from strategicplanning, operational planning, Balanced Scorecard <strong>and</strong> operational excellence <strong>change</strong> programmesalongside an awareness <strong>of</strong> multiple technology platforms.‘Solution Minds’Solution Minds is the group’s technology enablement services br<strong>and</strong>. Client work is focussed on theCPM market <strong>and</strong> positioned as “technology dependant”, working with s<strong>of</strong>tware vendors such as IBMCognos <strong>and</strong> Micros<strong>of</strong>t (through the Harvey Jones business described below).Dawnglen Investments (Proprietary) Limited has entered into an agreement to acquire the assets <strong>and</strong>business <strong>of</strong> Harvey Jones Systems (Proprietary) Limited, a specialist BI consultancy based in SouthAfrica, which is an established operator in the CPM market. Although completion <strong>of</strong> the <strong>acquisition</strong> isyet to occur as it is subject to certain regulatory approvals in South Africa, the trade <strong>of</strong> the HarveyJones business, with effect from 31 October 2008, has been carried out for the benefit <strong>of</strong> <strong>Avisen</strong>’ssubsidiary in South Africa, Dawnglen Investments (Proprietary) Limited (to be renamed <strong>Avisen</strong>(Proprietary) Limited). Following receipt <strong>of</strong> the requisite regulatory approvals it will be <strong>Avisen</strong>’sspecialist Micros<strong>of</strong>t s<strong>of</strong>tware <strong>and</strong> service provider, trading primarily in South Africa <strong>and</strong> in Europe.‘Keeping Strategy Alive’<strong>Avisen</strong>’s primary <strong>of</strong>fering is a framework methodology called ‘Keeping Strategy Alive’. It isunderpinned by a process called PlanPoint ® <strong>and</strong>, in the future it is intended that it will be served by aproprietary s<strong>of</strong>tware solution called StrategyGPS TM . It is intended that StrategyGPS TM will be rolledout to clients during 2010 <strong>and</strong> will be focused on providing them with a greater strategic insight intotheir own business.The basic principles behind PlanPoint ® <strong>and</strong> Strategy GPS TM can be summarised as follows:• PlanPoint ® – this is <strong>Avisen</strong>’s methodology to manage the strategic planning process.• StrategyGPS TM – this is <strong>Avisen</strong>’s proprietary s<strong>of</strong>tware which is intended to enable clients toeffectively <strong>and</strong> constantly measure their performance against predetermined goals or actions.The s<strong>of</strong>tware will utilise the Planpoint ® methodology to manage the planning cycle.12
History<strong>Avisen</strong>’s business was established in April 2004 by its founding director, Andrew Turner.Subsequently, Marcus Hanke joined the business <strong>and</strong> became a director <strong>and</strong> equal shareholder inNovember 2006. <strong>Avisen</strong> now has <strong>of</strong>fices based in London, Amsterdam <strong>and</strong> Johannesburg with a total<strong>of</strong> 40 permanent employees, in addition to using the services <strong>of</strong> consultants <strong>and</strong> contractors on an adhoc/project based basis.Revenue modelRevenue is generated through three types <strong>of</strong> service, which are described below:• Advisory consulting – Charged on a pr<strong>of</strong>essional day rate <strong>and</strong>, in certain circumstances, chargedon an annual basis.• Technology consulting – This service is similar to advisory consulting but is s<strong>of</strong>tware specific.Consulting time is sold to implement a s<strong>of</strong>tware application <strong>and</strong> is charged on a pr<strong>of</strong>essional dayrate.• S<strong>of</strong>tware distribution – The s<strong>of</strong>tware distribution follows normal s<strong>of</strong>tware purchase <strong>and</strong> revenuerecognition guidelines. This involves an upfront perpetual license fee followed by an annualsupport <strong>and</strong> maintenance charge. <strong>Avisen</strong> has s<strong>of</strong>tware distribution agreements with a number <strong>of</strong>s<strong>of</strong>tware vendors such as Tagetik <strong>and</strong> Pr<strong>of</strong>itbase. <strong>Avisen</strong> has also engaged Acorn Systems todefine the potential UK <strong>and</strong> Irel<strong>and</strong> market, with a view to agreeing a distribution agreement in2009.Corporate clients <strong>and</strong> previous projectsSome examples <strong>of</strong> <strong>Avisen</strong>’s existing <strong>and</strong> previous projects <strong>and</strong> clients are set out below.HeinekenBAE Systems<strong>Avisen</strong> was engaged, together with other suppliers, to review thecurrent state <strong>of</strong> Heineken’s Performance Management cycle <strong>and</strong>processes in 2006. This involved the creation <strong>of</strong> a business case <strong>and</strong> aprogram to align processes across more than 80 operating companies(from breweries to sales operations) within Heineken. The program,codenamed ‘CIL’ (Corporate Information Logistics) is ongoing <strong>and</strong>being led internally by Heineken’s <strong>Group</strong> Control & Accountingfunction. It covers all financial <strong>and</strong> managerial information processes,<strong>and</strong> is now in the implementation <strong>and</strong> rollout phase with an expectedcompletion date in 2011.Solution Minds (UK) <strong>Ltd</strong>, now part <strong>of</strong> <strong>Avisen</strong>’s group, was originallyengaged to lead the implementation <strong>of</strong> a new enterprise resourceplanning (Maconomy ERP) solution as part <strong>of</strong> the AdvancedTechnology Centre division <strong>of</strong> BAE Systems (“BAE”) in September2000, which BAE now use across its entire Shared Services group.Solution Minds (UK) <strong>Ltd</strong> has since been engaged in severalsubsequent projects, the latest <strong>of</strong> which commenced in February 2007<strong>and</strong> was completed in July 2008, to implement a replacement sales<strong>and</strong> operational planning solution at the Technology <strong>and</strong> EngineeringServices section <strong>of</strong> BAE’s Shared Services division.The Performance Management marketIndependent market research firm, Gartner estimated in November 2007 that the CPM s<strong>of</strong>tware suitesmarket will be worth $3 billion by 2011 with a compound annual growth rate <strong>of</strong> 14 per cent. Gartnerstate that budgeting, planning <strong>and</strong> forecasting applications are still the most commonly deployedcomponents <strong>of</strong> CPM, but scorecards <strong>and</strong> dashboards have become more popular, driven by morestrategically focused initiatives. It also states that mature economies in the US <strong>and</strong> Western Europe still13
form the majority <strong>of</strong> CPM activity <strong>and</strong> that dem<strong>and</strong> for CPM suites is increasing from midsizeenterprises, which represent one <strong>of</strong> the most dynamic areas <strong>of</strong> the business application s<strong>of</strong>tware sector.AMR Research, in its 2008 report on BI <strong>and</strong> Performance Management spending, estimated that totalglobal spending for BI <strong>and</strong> Performance Management programs will reach $57.1 billion for the year.It estimated that spending would be broken up into the following categories: BI (27 per cent.);dashboards <strong>and</strong> scorecards (23 per cent.); budgeting <strong>and</strong> planning (18 per cent.); analyticsinfrastructure (18 per cent.); <strong>and</strong> analytics applications (14 per cent.). It also estimated that companiesplan to buy approximately $13.4 billion <strong>of</strong> BI/Performance Management-related s<strong>of</strong>tware products in2008.Barriers to entry <strong>and</strong> competitionCPM is largely served by traditional consulting organisations, some <strong>of</strong>fering solutions with technology,others without. At one end <strong>of</strong> the spectrum there are very small companies (perhaps consisting <strong>of</strong> onlyone or two individuals) who serve a specific industry, based on experience gained during their career.On the other end <strong>of</strong> the spectrum, there are large global consultancies such as McKinsey, Accenture,Cap Gemini, Deloitte <strong>and</strong> IBM.The <strong>Proposed</strong> Directors believe there is an opportunity to <strong>of</strong>fer methodologies or automated solutionswhich the customer can operate independently. Solutions typically, by design, come with a built-independency for almost continuous use <strong>of</strong> consultants to develop <strong>and</strong> implement them. The <strong>Proposed</strong>Directors believe that the use <strong>of</strong> <strong>Avisen</strong>’s StrategyGPS TM solution could constitute a significantstep-<strong>change</strong> in providing organisations with the internal capability to formulate <strong>and</strong> execute theirstrategy <strong>and</strong> should relieve their dependency on external support to realise their long term goals <strong>and</strong>ambitions.Historic financial results <strong>and</strong> current tradingFifteen monthperiod ended31 March2006£Yearended31 March2007£Yearended31 March2008£Six monthperiod ended30 September2008£Revenue 103,872 863,563 4,020,397 1,730,947Pr<strong>of</strong>it before tax 93,856 208,486 482,146 320,883Since the end <strong>of</strong> the six month period ended 30 September 2008, <strong>Avisen</strong>’s trading has been broadly inline with the expectations <strong>of</strong> the <strong>Proposed</strong> Directors, with consistent monthly revenues from its coreclient contracts.In contemplation <strong>of</strong> completion <strong>of</strong> the <strong>acquisition</strong> <strong>of</strong> the business <strong>and</strong> assets <strong>of</strong> Harvey Jones, <strong>Avisen</strong>has made certain restructuring <strong>change</strong>s, which are expected to result in significantly lower overheads inthe current financial year ending 31 December 2009, particularly in the areas <strong>of</strong> marketing <strong>and</strong> costsassociated with direct lead generation. The <strong>Proposed</strong> Directors anticipate further cost savings in 2009through the transfer <strong>of</strong> its maintenance <strong>and</strong> support function to the Harvey Jones business in SouthAfrica.<strong>Avisen</strong> has re-focused its s<strong>of</strong>tware distribution business around Acorn <strong>and</strong> Pr<strong>of</strong>itBase <strong>and</strong> is currentlyexperiencing particular interest in the Acorn s<strong>of</strong>tware as a pr<strong>of</strong>it management <strong>and</strong> cost reduction tool.<strong>Avisen</strong> is currently in discussions regarding two significant potential contracts that the <strong>Proposed</strong>Directors hope will materialise in 2009. Both the Solution Minds <strong>and</strong> Harvey Jones businesses have astrong outlook for the first quarter <strong>of</strong> 2009.Principal terms <strong>of</strong> the AcquisitionOn 7 January, Z GROUP entered into the Acquisition Agreement pursuant to which it hasconditionally agreed to acquire the entire issued share capital <strong>of</strong> <strong>Avisen</strong>, the consideration for which isto be satisfied by the issue <strong>of</strong> the Consideration Shares (representing 78.49 per cent. <strong>of</strong> the EnlargedIssued Share Capital), on Admission.14
The Acquisition Agreement contains warranties from the Vendors in relation to the business, assets <strong>and</strong>affairs <strong>of</strong> <strong>Avisen</strong> <strong>and</strong> the Subsidiaries <strong>and</strong> certain indemnities from the Vendors concerning <strong>Avisen</strong>’smost recent <strong>acquisition</strong>s <strong>of</strong> Solution Minds (UK) <strong>Ltd</strong> <strong>and</strong> the assets <strong>and</strong> business <strong>of</strong> Harvey JonesSystems (Proprietary) Limited <strong>and</strong> in respect <strong>of</strong> corporation tax <strong>and</strong> other tax liabilities <strong>of</strong> <strong>Avisen</strong> <strong>and</strong>the Subsidiaries for the period prior to completion <strong>of</strong> the Acquisition.The Acquisition Agreement is conditional, inter alia, upon Admission becoming effective by not laterthan 27 February 2009 <strong>and</strong> on the passing <strong>of</strong> the Resolutions.Further details <strong>of</strong> the Acquisition Agreement are set out in paragraph 10.1.1 <strong>of</strong> Part V <strong>of</strong> thisdocument.New BoardI will remain as a Non-Executive Chairman <strong>of</strong> the Company following Admission. In addition, MarcusYeoman will also remain on the Board as a Non-Executive Director <strong>and</strong> Duncan Neale as FinanceDirector. Marcus Hanke, Andrew Turner, Louis Peacock <strong>and</strong> Keith Jones will each join the Board.Marcus Hanke will be appointed Chief Executive Officer. Andrew Turner, Louis Peacock <strong>and</strong> KeithJones will each become executive Directors. Mr Turner will be responsible for s<strong>of</strong>tware distribution,Mr Peacock will be responsible for European sales <strong>and</strong> operations <strong>and</strong> Mr Jones will be responsible forAfrican, Middle Eastern <strong>and</strong> Asian sales <strong>and</strong> operations.Ian Smith will resign as a director <strong>of</strong> the Company on Admission.Brief details on the proposed New Board are set out below:Existing DirectorsJon Claydon (aged 47), Non-Executive ChairmanJon Claydon started his career at Cargill Inc., working as a senior trader in its Geneva <strong>of</strong>fice. In 1990,he left to establish the marketing agency Claydon Heeley. In 2000 the agency was sold to Americanmarketing services group Omnicom <strong>Group</strong> Inc. <strong>and</strong> Mr Claydon went on to become chairman <strong>of</strong> themarketing services group Zulu Network (a division <strong>of</strong> Omnicom <strong>Group</strong>), in the process co-foundingthe digital agencies Agency Republic Limited. He left Omnicom in 2007. In 2008, he was appointedNon-Executive Chairman <strong>of</strong> Z GROUP <strong>and</strong> is presently chairman <strong>of</strong> a digital agency Work ClubLimited.Marcus Yeoman (aged 45), Non-Executive DirectorMarcus Yeoman has 20 years experience as a director <strong>of</strong> small companies. He is currently anon-executive director <strong>of</strong> three PLUS quoted companies, as well as holding directorships <strong>of</strong> a number<strong>of</strong> private companies which have engaged him principally to assist them with their growth strategies.His early career started with the formation <strong>of</strong> three companies in IT infrastructure <strong>and</strong> distribution,after which he moved into small company broking <strong>and</strong> corporate work with Rathbone StockbrokersLimited <strong>and</strong> Cheviot Capital (Nominees) Limited. In 1999, he led a management buy-in into a golfproducts company with external debt <strong>and</strong> equity funding. Since 2003, he has been acting as aconsultant or non-executive director to smaller companies in the high growth sector. He has alsoassisted a number <strong>of</strong> quoted companies with M&A work.Duncan Neale (aged 39), Finance DirectorDuncan Neale qualified as a chartered accountant with Price Waterhouse, nowPricewaterhouseCoopers, in London. He spent the early part <strong>of</strong> his career as group financial controllerat Quantum Energy Derivatives PLC (now part <strong>of</strong> Corona Energy Limited) in which he played anactive role in the transformation <strong>of</strong> the business from being a small energy broker to being one <strong>of</strong> thelargest independent energy supplier to businesses in the UK. Most recently, Mr Neale assisted with theflotation <strong>of</strong> IX Europe plc (now part <strong>of</strong> Equinex Inc.). He joined Z GROUP as a consultant in February2006 <strong>and</strong> was formally appointed as finance director in September 2006.15
<strong>Proposed</strong> DirectorsMarcus Hanke (aged 37), <strong>Proposed</strong> Chief Executive OfficerMarcus Hanke began his career at Price Waterhouse (now PricewaterhouseCoopers). He qualified as achartered management accountant <strong>and</strong> has since worked in industry with Compass <strong>Group</strong> Plc <strong>and</strong>consulting with KPMG <strong>and</strong> Deloitte. In 2003, he formed an independent Performance Managementcompany which was subsequently acquired by Cognos Inc. in 2004. In 2006, Mr Hanke joined <strong>Avisen</strong>as Managing Partner <strong>and</strong> has led the growth <strong>of</strong> the services business <strong>and</strong> the diversification intos<strong>of</strong>tware distribution.Over the last 10 years Mr Hanke has led several corporate Performance Management programs rolledout in Europe, the Middle East <strong>and</strong> Africa <strong>and</strong> has advised some global s<strong>of</strong>tware application vendors inthis area. He specialises in corporate performance management, Value-based Management <strong>and</strong> thetechnology enablement <strong>of</strong> these processes.Andrew Turner (aged 42), <strong>Proposed</strong> DirectorAndrew Turner has over 18 years experience working with Global 2000 organisations, s<strong>of</strong>twareauthors <strong>and</strong> leading consulting organisations. In his previous role as chief operating <strong>of</strong>ficer <strong>of</strong> TescoMobile <strong>and</strong> as retail operations director, Tesco Telecoms, he was part <strong>of</strong> the founding team <strong>of</strong> the newtelecoms business unit within Tesco plc from 2003. Prior to telecoms, he spent a number <strong>of</strong> years inmarketing <strong>and</strong> operations roles within Tesco’s financial services joint venture with Royal Bank <strong>of</strong>Scotl<strong>and</strong> plc.Prior to Tesco, he worked for MPS <strong>Group</strong> (NYSE:MPS) as operations director, where he was involvedin driving the growth <strong>of</strong> their e-Business consulting organisation: Idea Integration. Mr Turner has alsoheld senior marketing, product management <strong>and</strong> sales positions with SAP from 1997 to 1998 <strong>and</strong>worked with General Electric from 1993 to 1997 across their industrial <strong>and</strong> services businesses ininformation management <strong>and</strong> business <strong>change</strong> roles in UK <strong>and</strong> Europe.Louis Peacock (aged 38), <strong>Proposed</strong> DirectorLouis Peacock was born in South Africa where he qualified as a chartered accountant with ArthurAndersen before moving to the UK in 1996. He has 15 years <strong>of</strong> commercial, enterprise resourceplanning (ERP) systems implementation, corporate performance management <strong>and</strong> business processre-engineering experience, the majority <strong>of</strong> this being with Maconomy A.S., the ERP s<strong>of</strong>tware vendorwhich is listed in Copenhagen. Prior to joining <strong>Avisen</strong>, Mr Peacock was managing director <strong>of</strong> SolutionMinds (UK) <strong>Ltd</strong>, a planning <strong>and</strong> business intelligence solutions business. Solution Minds (UK) <strong>Ltd</strong>was acquired by <strong>Avisen</strong> in January 2008.Keith Jones (aged 44), <strong>Proposed</strong> DirectorKeith Jones is a South African citizen <strong>and</strong> has over 20 years experience in the IT industry <strong>and</strong> morethan 10 years in the Performance Management market. He has worked across Europe with clientsincluding JP Morgan Chase <strong>and</strong> UBS before returning to South Africa to co-found Harvey JonesSystems (Proprietary) Limited in 1997. Mr Jones grew the Harvey Jones business to be an international<strong>and</strong> award winning company which achieved recognition globally with Micros<strong>of</strong>t prior to its<strong>acquisition</strong> by <strong>Avisen</strong> in 2008.Change <strong>of</strong> accounting reference dateIt is proposed that the Company’s financial year end will be <strong>change</strong>d from 28/29 February to31 December, resulting in a 10 month accounting period ending 31 December 2008.The Enlarged <strong>Group</strong> will, therefore, report audited financial information for the 10 month period ended31 December 2008, on or before 30 June 2009, <strong>and</strong> subsequently produce its half yearly report to30 June 2009 within three months <strong>of</strong> that date, <strong>and</strong> its Annual Report <strong>and</strong> Accounts for the year ending31 December 2009 within six months <strong>of</strong> that date.16
Lock-in <strong>and</strong> orderly market arrangementsUnder the terms <strong>of</strong> the lock-in agreements referred to in paragraph 10.1.3 <strong>of</strong> Part V <strong>of</strong> this document,each <strong>of</strong> the New Board <strong>and</strong>, to the extent not included in the foregoing, each <strong>of</strong> the Vendors hasundertaken to the Company <strong>and</strong> JEP that he or she will not (<strong>and</strong> will procure that any person withwhom he or she is connected will not) sell or otherwise dispose <strong>of</strong> any interest in Ordinary Sharesbeneficially owned or otherwise held or controlled by him or her for a period <strong>of</strong> 12 months followingAdmission, save in limited circumstances such as, inter alia, a takeover becoming or being declaredunconditional; the giving <strong>of</strong> an irrevocable undertaking to accept an <strong>of</strong>fer; or a disposal pursuant to acourt order, or required by law or any competent authority. Each <strong>of</strong> the New Board <strong>and</strong>, to the extentnot included in the foregoing, each <strong>of</strong> the Vendors has also undertaken that for a further period <strong>of</strong> 12months after the first anniversary <strong>of</strong> the date <strong>of</strong> Admission, he or she will not (<strong>and</strong> will use allreasonable endeavours to procure that no person connected with him or her shall) dispose <strong>of</strong> anyOrdinary Shares, save in certain limited circumstances, without the consent <strong>of</strong> JEP (such consent not tobe unreasonably withheld).Financial information on <strong>and</strong> current trading <strong>and</strong> prospects for the CompanyShareholders’ attention is drawn to the Company’s audited report <strong>and</strong> accounts for the yearsended 28 February 2006, 28 February 2007 <strong>and</strong> 29 February 2008 (together, the “Accounts”)which were posted to shareholders on 12 June 2006, 21 June 2007 <strong>and</strong> 29 August 2008, respectively,<strong>and</strong> which are available to download in pdf format from the Company’s website athttp://www.zgroupplc.com/reports/. In addition, Shareholders’ attention is also drawn to theCompany’s interim results announcement which was released on 28 November 2008, which is alsoavailable for download from the Company’s website. The financial information on the Company asrequired by the Code is included in the Company’s financial statements <strong>and</strong> notes thereto, which are setout on pages 20 to 33, 22 to 44 <strong>and</strong> 15 to 33 <strong>of</strong> the Accounts, for 2006, 2007 <strong>and</strong> 2008, respectively.Shareholders <strong>and</strong> holders <strong>of</strong> options over Ordinary Shares may request hard copies <strong>of</strong> the Accountsfrom the Company’s nominated adviser, John East & Partners Limited, 10 Finsbury Square, LondonEC2A 1AD or alternatively by telephone on 020 7628 2200. If a request is made, hard copies <strong>of</strong> theAccounts will be dispatched as soon as possible <strong>and</strong>, in any event, within two business days <strong>of</strong> therequest being received. In the absence <strong>of</strong> such a request being made, Shareholders <strong>and</strong> holders <strong>of</strong>options over Ordinary Shares will not be sent hard copies <strong>of</strong> the Accounts.The Company currently has no trading activity <strong>and</strong> is seeking to implement the Proposals. Net assets asat 31 August 2008 were £1,488,335. The cash balance as at 6 January 2009 (being the last practicabledate prior to publication <strong>of</strong> this document) was approximately £1.2 million.Share optionsThe New Board believes that the recruitment, motivation <strong>and</strong> retention <strong>of</strong> key employees is vital for thesuccessful growth <strong>of</strong> the Enlarged <strong>Group</strong>. The Board considers that an important element in achievingthese objectives is the ability to incentivise <strong>and</strong> reward staff (including executive directors) byreference to the market performance <strong>of</strong> the Company in a manner which aligns the interests <strong>of</strong> thosestaff with the interest <strong>of</strong> shareholders generally. The Company will utilise the Share Option Schemepursuant to which Options to acquire new Ordinary Shares will be granted to directors <strong>and</strong> employees<strong>of</strong> the Enlarged <strong>Group</strong>. It is expected that the total number <strong>of</strong> new Ordinary Shares that may becommitted under the Share Option Scheme, will represent a maximum <strong>of</strong> 10 per cent. <strong>of</strong> the Enlarged<strong>Group</strong>’s issued ordinary share capital from time to time (in accordance with the rules <strong>of</strong> the ShareOption Scheme). Further details <strong>of</strong> the Share Option Scheme are set out in paragraph 9 <strong>of</strong> Part V <strong>of</strong> thisdocument.Amendments to the Articles <strong>of</strong> AssociationResolution 7 seeks the approval <strong>of</strong> Shareholders for a number <strong>of</strong> amendments to the Company’sArticles <strong>of</strong> Association primarily to reflect the provisions <strong>of</strong> the 2006 Act.An explanation <strong>of</strong> the main <strong>change</strong>s between the proposed <strong>and</strong> the existing Articles <strong>of</strong> Association isset out in paragraph 5.7 <strong>of</strong> Part V <strong>of</strong> this document.17
A copy <strong>of</strong> the proposed Articles <strong>of</strong> Association showing all the <strong>change</strong>s to the existing Articles <strong>of</strong>Association is available for inspection, as noted at paragraph 16 <strong>of</strong> Part V <strong>of</strong> this document, <strong>and</strong> will beavailable for inspection at the General Meeting.Corporate GovernanceThe New Board recognises the importance <strong>of</strong> sound corporate governance <strong>and</strong> the New Board intendsto ensure that, following Admission, the Company adopts policies <strong>and</strong> procedures which reflect theprinciples <strong>of</strong> Good Governance <strong>and</strong> Code <strong>of</strong> Best Practice as published by the Committee on CorporateGovernance (commonly known as the “Combined Code”) as are appropriate to the Company’s size onAdmission. The Company does not currently comply with the Combined Code on CorporateGovernance due to its size.Following the implementation <strong>of</strong> the Proposals, the New Board will meet monthly to review keyoperational issues <strong>and</strong> the strategic development <strong>of</strong> the Enlarged <strong>Group</strong>. The financial performance <strong>of</strong>the Enlarged <strong>Group</strong> will be reported <strong>and</strong> monitored. All matters <strong>of</strong> a significant nature will continue tobe discussed in the forum <strong>of</strong> a board meeting. The New Board will be responsible for internal controlsto minimise the risk <strong>of</strong> financial or operational loss or material misstatement. The controls establishedwill be designed to meet the particular needs <strong>of</strong> the Company having regard to the nature <strong>of</strong> itsbusiness.The Company has also established an Audit Committee, Remuneration Committee <strong>and</strong> a NominationCommittee with formally delegated duties <strong>and</strong> responsibilities. Each committee will consist <strong>of</strong> JonClaydon <strong>and</strong> Marcus Yeoman <strong>and</strong> Marcus Yeoman will chair the committees.The Audit Committee will determine the terms <strong>of</strong> engagement <strong>of</strong> the Enlarged <strong>Group</strong>’s auditors <strong>and</strong>will determine, in consultation with the auditors, the scope <strong>of</strong> the audit. The Audit Committee willreceive <strong>and</strong> review reports from management <strong>and</strong> the Enlarged <strong>Group</strong>’s auditors relating to the interim<strong>and</strong> annual accounts <strong>and</strong> the accounting <strong>and</strong> internal control systems in use throughout the Enlarged<strong>Group</strong>. The Audit Committee will have unrestricted access to the Enlarged <strong>Group</strong>’s auditors.The Remuneration Committee will review the scale <strong>and</strong> structure <strong>of</strong> the executive directors’ <strong>and</strong> senioremployees’ remuneration <strong>and</strong> the terms <strong>of</strong> their service or employment contracts, including shareoption schemes <strong>and</strong> other bonus arrangements. The remuneration <strong>and</strong> terms <strong>and</strong> conditions <strong>of</strong> thenon-executive directors will be set by the entire board.The Nomination Committee will be responsible for screening <strong>and</strong> proposing c<strong>and</strong>idates forappointment to the Board.The Enlarged <strong>Group</strong> will ensure, in accordance with Rule 21 <strong>of</strong> the AIM Rules, that the New Board<strong>and</strong> applicable employees do not deal in any Ordinary Shares during a close period (as defined in theAIM Rules) <strong>and</strong> will take all reasonable steps to ensure compliance by the Directors <strong>and</strong> applicableemployees.The Directors believe that the Company has sufficient experience in accounting systems <strong>and</strong> controlswhich will provide a reasonable basis for them to make proper judgements as to the financial position<strong>and</strong> prospects <strong>of</strong> the Enlarged <strong>Group</strong>.Dividend PolicyThe New Board’s objective is to grow the Enlarged <strong>Group</strong>’s business. Future income generated by theEnlarged <strong>Group</strong> is likely to be re-invested to implement its growth strategy. In view <strong>of</strong> this, it isunlikely that the New Board will recommend a dividend in the early years following Admission.However, the New Board intends that the Company will recommend or declare dividends at somefuture date once they consider it commercially prudent for the Company to do so, bearing in mind thefinancial position <strong>and</strong> resources required for its development.18
The City CodeThe issue <strong>of</strong> the Consideration Shares to the Concert Party gives rise to certain considerations underthe Code. Brief details <strong>of</strong> the Panel, the Code <strong>and</strong> the protections they afford to Shareholders aredescribed below.The Code is issued <strong>and</strong> administered by the Panel. Z GROUP is a company to which the Code applies<strong>and</strong> its shareholders are entitled to the protection afforded by the Code.Under Rule 9 <strong>of</strong> the Code (“Rule 9”), when: (i) a person acquires an ‘interest’ (as defined in the Code)in shares which, taken together with shares in which he is already interested <strong>and</strong> in which persons‘acting in concert’ with him are interested (as defined in the Code), carry 30 per cent. or more <strong>of</strong> thevoting rights <strong>of</strong> a company that is subject to the Code; or (ii) any person who, together with personsacting in concert with him is interested in shares which in aggregate carry not less than 30 per cent. <strong>of</strong>the voting rights <strong>of</strong> a company, but does not hold shares carrying more than 50 per cent. <strong>of</strong> the votingrights <strong>of</strong> the company subject to the Code, <strong>and</strong> such person, or any persons acting in concert with him,acquires an interest in any other shares which increases the percentage <strong>of</strong> the shares carrying votingrights in which he is interested, then in either case, that person together with the persons acting inconcert with him, is normally required to make a general <strong>of</strong>fer in cash, at the highest price paid by him,or any persons acting in concert with him, for any interest in shares in the Company during the 12months prior to the announcement <strong>of</strong> the Offer, for all the remaining equity share capital <strong>of</strong> theCompany.Under the Code, a concert party arises where persons acting together pursuant to an agreement orunderst<strong>and</strong>ing (whether formal or informal) co-operate to obtain or consolidate control <strong>of</strong> thatcompany. Control means an interest or interests in shares carrying an aggregate <strong>of</strong> 30 per cent. or more<strong>of</strong> the voting rights <strong>of</strong> the company, irrespective <strong>of</strong> whether the holding or holdings give de factocontrol.The members <strong>of</strong> the Concert Party are deemed to be acting in concert for the purposes <strong>of</strong> the Code. OnAdmission, the Concert Party will be interested in 86,716,667 Ordinary Shares, representing 78.54 percent. <strong>of</strong> the Enlarged Issued Share Capital.A table showing the interests in Ordinary Shares <strong>of</strong> the members <strong>of</strong> the Concert Party on Admission,subject to passing <strong>of</strong> the Resolutions, is as set out below:On AdmissionNumber <strong>of</strong>OrdinarySharesPercentage <strong>of</strong>EnlargedIssued ShareCapitalMarcus Hanke (1) 28,569,259 25.88Andrew Turner 28,519,259 25.83Louis Peacock 8,767,756 7.94Odette McMahon (2) 7,285,363 6.60Mark Waller 6,427,780 5.82Raymond Alth<strong>of</strong> Beheer <strong>and</strong> Management B.V. (3) 4,262,513 3.86Andrew Glenday 1,480,532 1.34Graham Galloway 1,404,205 1.27Totals 86,716,667 78.54(1) Marcus Hanke acquired 50,000 Ordinary Shares in the Company prior to Admission <strong>and</strong> holds these Ordinary Shares in the name <strong>of</strong>Str<strong>and</strong> Nominees Limited.(2) Odette McMahon, aged 39, is the partner <strong>of</strong> Keith Jones, a <strong>Proposed</strong> Director.(3) Raymond Alth<strong>of</strong> Beheer <strong>and</strong> Management B.V. is a company which is wholly owned by Raymond Alth<strong>of</strong>, a senior manager <strong>of</strong> <strong>Avisen</strong>.The Panel has agreed however, subject to Resolution 2 being passed (on a poll) by the IndependentShareholders at the General Meeting, to waive the obligation on the Concert Party under Rule 9 tomake a general <strong>of</strong>fer for the entire issued share capital <strong>of</strong> the Company which would otherwise arise asa result <strong>of</strong> the Acquisition. Accordingly, approval <strong>of</strong> the Independent Shareholders (on a poll) to theWaiver is sought in Resolution 2. Marcus Hanke <strong>and</strong> Marcus Yeoman, due to the fact that he19
previously acted as a consultant to <strong>Avisen</strong>, have undertaken not to vote on Resolution 2 at the GeneralMeeting.Shareholders should note that, if Resolution 2 is passed, the Concert Party would between them beinterested in Ordinary Shares carrying more than 50 per cent. <strong>of</strong> the voting rights <strong>of</strong> the Company <strong>and</strong>,for as long as they continue to be treated as acting in concert, would be able to acquire further OrdinaryShares, without incurring an obligation to make an <strong>of</strong>fer to shareholders <strong>of</strong> the Company under Rule 9,although individual members <strong>of</strong> the Concert Party will not be able to increase their percentage interestsin shares through 30 per cent. or between 30 <strong>and</strong> 50 per cent. <strong>of</strong> the voting rights <strong>of</strong> the Companywithout Panel consent.As Z GROUP is a cash shell with no trading business <strong>and</strong>, except for two <strong>of</strong> the Directors, has noemployees, the business <strong>of</strong> the Enlarged <strong>Group</strong> following the Acquisition will be that <strong>of</strong> <strong>Avisen</strong>. TheDirectors <strong>and</strong> <strong>Proposed</strong> Directors have confirmed that following the Acquisition they have no intentionto make any material amendments to the existing rights <strong>of</strong> the Enlarged <strong>Group</strong>’s employees or thedeployment <strong>of</strong> the fixed assets <strong>of</strong> the Company. It is likely that the location <strong>of</strong> the Enlarged <strong>Group</strong>’splace <strong>of</strong> principal business will be <strong>Avisen</strong>’s premises in 8, The Square, Stockley Park, UxbridgeUB11 1FW.Information on the Concert PartyThe Concert Party comprises the vendors <strong>of</strong> <strong>Avisen</strong>. The Concert Party comprises Marcus Hanke,Andrew Turner, Louis Peacock, Odette McMahon, Mark Waller, Andrew Glenday, Graham Galloway<strong>and</strong> Raymond Alth<strong>of</strong> Beheer <strong>and</strong> Management B.V.Marcus Hanke, Andrew Turner <strong>and</strong> Louis Peacock are all directors <strong>of</strong> <strong>Avisen</strong> <strong>and</strong> <strong>Proposed</strong> Directors.Odette McMahon is the partner <strong>of</strong> Keith Jones, who is a current director <strong>of</strong> <strong>Avisen</strong> <strong>and</strong> a <strong>Proposed</strong>Director. Further detail on the <strong>Proposed</strong> Directors can be found in the paragraph headed New Board.Mark Waller, Andrew Glenday, Raymond Alth<strong>of</strong> <strong>and</strong> Graham Galloway are all senior management<strong>and</strong> employees <strong>of</strong> <strong>Avisen</strong>. Raymond Alth<strong>of</strong> is the sole shareholder <strong>of</strong> Raymond Alth<strong>of</strong> Beheer <strong>and</strong>Management B.V. <strong>and</strong> is also a senior manager <strong>of</strong> <strong>Avisen</strong>.TaxationHMRC has confirmed that <strong>Avisen</strong> <strong>and</strong> its Subsidiaries, taken together as a group <strong>of</strong> companies, willmeet the trading requirements for the Enterprise Investment Scheme (“EIS”) <strong>and</strong> Venture Capital Trust(“VCT”) legislation. The Directors <strong>and</strong> <strong>Proposed</strong> Directors believe, therefore, that the Enlarged <strong>Group</strong>will also meet the trading requirements for EIS <strong>and</strong> VCT <strong>and</strong> shall seek clearance followingAdmission.Further information regarding taxation is set out in paragraph 13 <strong>of</strong> Part V <strong>of</strong> this document. Thesedetails are intended as a general guide only to the position under current UK taxation law as at the date<strong>of</strong> this document. If a Shareholder is in any doubt as to his or her tax position he or she should consulthis or her own independent financial adviser immediately.CRESTThe Consideration Shares are eligible for CREST settlement. Accordingly, following Admission,settlement <strong>of</strong> transactions in the new Ordinary Shares together with the Existing Ordinary Shares maytake place within the CREST system if the relevant shareholder so wishes.CREST is a voluntary system <strong>and</strong> shareholders who wish to receive <strong>and</strong> retain share certificates will beable to do so.General MeetingThe notice convening the General Meeting is set out at the end <strong>of</strong> this document. A General Meetinghas been convened for 10.00 a.m. on 30 January 2009 at the <strong>of</strong>fices <strong>of</strong> Orrick, Herrington & Sutcliffe,Tower 42, Level 35, 25 Old Broad Street, London EC2N 1HQ for the purpose <strong>of</strong> considering <strong>and</strong>, ifthought fit, passing the following resolutions:20
Ordinary resolutions to:(1) approve, for the purposes <strong>of</strong> Rule 14 <strong>of</strong> the AIM Rules, the Acquisition;(2) approve the Waiver;(3) increase the authorised share capital <strong>of</strong> the Company;(4) authorise the Directors to allot relevant equity securities under Section 80 <strong>of</strong> the 1985 Act up toan aggregate nominal amount £6,173,542;Special resolutions to:(5) disapply statutory pre-emption rights;(6) <strong>change</strong> the name <strong>of</strong> the Company to <strong>Avisen</strong> plc; <strong>and</strong>(7) amend the Articles <strong>of</strong> Association to reflect certain provisions <strong>of</strong> the 2006 Act; <strong>and</strong>(8) amend the memor<strong>and</strong>um <strong>of</strong> association to reflect the <strong>change</strong> <strong>of</strong> name <strong>of</strong> the Company.To be passed, Resolutions 1 to 4 require a majority <strong>of</strong> not less than 50 per cent. <strong>and</strong> Resolutions 5 to 8will require a majority <strong>of</strong> not less than 75 per cent. <strong>of</strong> the Shareholders voting in person or by proxy infavour <strong>of</strong> each Resolution. In addition, in accordance with the requirements by the Panel, Resolution 2shall be taken on a poll <strong>of</strong> Independent Shareholders.Irrevocable undertakings to approve the ProposalsIan Smith <strong>and</strong> Jon Claydon (as Directors <strong>and</strong> Shareholders) <strong>and</strong> certain Shareholders, namely JackBekhor <strong>and</strong> Jamie True, have irrevocably undertaken to the Company to vote in favour <strong>of</strong> theResolutions to be proposed at the General Meeting, in respect <strong>of</strong> their aggregate beneficial holdingstotalling 12,012,248 Existing Ordinary Shares, representing approximately 50.59 per cent. <strong>of</strong> theExisting Ordinary Shares.Further details on the Irrevocable Undertakings are set out in paragraph 10 <strong>of</strong> Part V <strong>of</strong> this document.Admission <strong>and</strong> dealingsApplication will be made to the London Stock Ex<strong>change</strong> for the Enlarged Share Capital to be admittedto trading on AIM. It is expected that Admission will become effective <strong>and</strong> that dealings in theEnlarged Issued Share Capital will commence on 2 February 2009, under the symbol “AVI”.Further informationThe attention <strong>of</strong> Shareholders is drawn to the information contained in Parts II to V <strong>of</strong> this documentwhich provide additional details on the Proposals <strong>and</strong> the Enlarged <strong>Group</strong>.Action to be takenA Form <strong>of</strong> Proxy is enclosed with this document for use by Shareholders in connection with theGeneral Meeting. Whether or not you intend to be present at the General Meeting, Shareholders areasked to complete, sign <strong>and</strong> return the Form <strong>of</strong> Proxy in accordance with the instructions printedthereon. To be valid, completed Forms <strong>of</strong> Proxy must be received by the Company’s Registrars, CapitaRegistrars, Proxies, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, as soon aspossible <strong>and</strong> in any event so as to arrive not later than 10.00 a.m. on 28 January 2009, being 48 hours(excluding weekends <strong>and</strong> public holidays) before the time appointed for the holding <strong>of</strong> the GeneralMeeting. The completion <strong>and</strong> return <strong>of</strong> the Form <strong>of</strong> Proxy will not preclude Shareholders fromattending the General Meeting <strong>and</strong> voting in person should they wish to do so. Accordingly, whether ornot Shareholders intend to attend the General Meeting they are urged to complete <strong>and</strong> return the Form<strong>of</strong> Proxy as soon as possible.21
RecommendationThe Independent Directors, having been so advised by JEP, consider the Proposals to be fair <strong>and</strong>reasonable <strong>and</strong> in the best interests <strong>of</strong> the Company <strong>and</strong> its Shareholders as a whole. In providingadvice to the Board, JEP has confirmed that it has taken into account the Independent Directors’commercial assessments.Marcus Yeoman, a Director <strong>and</strong> Shareholder, has previously acted as a consultant to <strong>Avisen</strong>, <strong>and</strong> as aresult, has been declared to have a conflict <strong>of</strong> interest for the purposes <strong>of</strong> Rule 25.1 (Note 3) <strong>of</strong> the CityCode <strong>and</strong> therefore has taken no part in the deliberations <strong>of</strong> the Board <strong>and</strong> is excluded for therecommendation <strong>of</strong> the Board <strong>and</strong> will not vote on the Waiver sought in Resolution 2.Accordingly, the Independent Directors unanimously recommend that Shareholders vote in favour <strong>of</strong>the Resolutions, as they have undertaken to do in respect <strong>of</strong> their aggregate holdings <strong>of</strong> 4,117,598Ordinary Shares representing approximately 17.34 per cent. <strong>of</strong> the Existing Ordinary Shares, bysigning <strong>and</strong> returning the Form <strong>of</strong> Proxy to the Company’s Registrars.Yours faithfullyJon ClaydonNon-Executive Chairman22
PART IIRisk factorsPotential investors should carefully consider the risks described below before making a decisionto invest in the Company. This Part II contains what the Directors <strong>and</strong> the <strong>Proposed</strong> Directorsbelieve to be the principal risk factors associated with an investment in the Company. It shouldbe noted that this list is not exhaustive <strong>and</strong> that other risk factors will apply to an investment inthe Company. If any <strong>of</strong> the following risks actually occur, the Enlarged <strong>Group</strong>’s business,financial condition <strong>and</strong>/or results or future operations could be materially adversely affected. Insuch circumstances, the trading price <strong>of</strong> the Ordinary Shares could decline <strong>and</strong> an investor maylose all or part <strong>of</strong> his investment.There can be no certainty that the Enlarged <strong>Group</strong> will be able to implement successfully thestrategy set out in this document. Additional risks <strong>and</strong> uncertainties not currently known to theDirectors or <strong>Proposed</strong> Directors or which the Directors or <strong>Proposed</strong> Directors currently deemimmaterial, may also have an adverse effect on the Enlarged <strong>Group</strong>.This document contains forward-looking statements that involve risks <strong>and</strong> uncertainties. TheEnlarged <strong>Group</strong>’s actual results could differ materially from those anticipated in theforward-looking statements as a result <strong>of</strong> many factors, including the risks faced by the Enlarged<strong>Group</strong> which are described below <strong>and</strong> elsewhere in this document. Prospective investors shouldcarefully consider the other information in this document. The risks listed below do notnecessarily comprise all the risks associated with an investment in the Enlarged <strong>Group</strong>.An investment in the Company may not be suitable for all recipients <strong>of</strong> this document. Investorsare accordingly advised to consult an independent financial adviser duly authorised under theFinancial Services <strong>and</strong> Markets Act 2000 <strong>and</strong> who specialises in advising upon the <strong>acquisition</strong> <strong>of</strong>shares <strong>and</strong> other securities before making a decision to invest.Market risksPotential investors should be aware that the value <strong>of</strong> shares can go down as well as up <strong>and</strong> that aninvestment in a share that is traded on AIM may be less readily realizable <strong>and</strong> may carry a higherdegree <strong>of</strong> risk that an investment in a share listed on the Official List <strong>of</strong> the UK Listing Authority. Theprice which investors may realise for their holding <strong>of</strong> Ordinary Shares, as <strong>and</strong> when they are able to doso, may be influenced by a large number <strong>of</strong> factors, some <strong>of</strong> which are specific to the Company <strong>and</strong>others <strong>of</strong> which are extraneous.It may be difficult for an investor to sell his or her Ordinary Shares <strong>and</strong> he or she may receive less thanthe amount paid by him or her for them. The market for shares in smaller public companies, includingthe Company’s, is less liquid than for larger public companies. Consequently, the share price may besubject to greater fluctuation on small volumes <strong>of</strong> shares, <strong>and</strong> thus the Ordinary Shares may be difficultto sell at a particular price.The market price <strong>of</strong> the Ordinary Shares may not reflect the underlying value <strong>of</strong> the Company’s pr<strong>of</strong>itsor net assets.Business risks relating to the Enlarged <strong>Group</strong>The Enlarged <strong>Group</strong>’s future business performance depends on the award <strong>of</strong> contractsThe Enlarged <strong>Group</strong>’s success depends on its ability to renew contracts with existing clients <strong>and</strong> toattract new clients. A substantial portion <strong>of</strong> the Enlarged <strong>Group</strong>’s future revenues will be directly orindirectly derived from new contracts driven by market conditions. Failure to gain new business orrenew contracts may adversely affect the Enlarged <strong>Group</strong>’s future.The Enlarged <strong>Group</strong>’s dependence on the award or renewal <strong>of</strong> contracts means that its revenue streamis not constant <strong>and</strong> has the potential to be particularly sporadic. Delays in revenue delivery in future23
accounting periods may adversely affect the Enlarged <strong>Group</strong>’s results <strong>and</strong>, therefore, the market price<strong>of</strong> its shares.Liabilities under service contractsCertain contracts entered into by <strong>Avisen</strong> <strong>and</strong> the Enlarged <strong>Group</strong> require it to indemnify the clientagainst certain losses resulting from the performance <strong>of</strong> the contract. There have been no claims to datebut, in the event such liabilities arise, they could have an adverse impact on the Enlarged <strong>Group</strong>.Termination <strong>of</strong> contractsWhile the Company is not aware <strong>of</strong> any client that may wish to terminate a material contract, for thisreason, many <strong>of</strong> the contracts can be terminated on three months’ or shorter notice by the client <strong>and</strong>should any such contracts be terminated the Enlarged <strong>Group</strong> would lose the benefit <strong>of</strong> the contract.Attraction <strong>and</strong> retention <strong>of</strong> key management <strong>and</strong> employeesThe successful operation <strong>of</strong> the Enlarged <strong>Group</strong> will depend partly upon the performance <strong>and</strong> expertise<strong>of</strong> its current <strong>and</strong> future management <strong>and</strong> employees. The loss <strong>of</strong> the services <strong>of</strong> Marcus Hanke,Andrew Turner or other members <strong>of</strong> the Enlarged <strong>Group</strong>’s key management or employees, or a loss <strong>of</strong>the ability to continue to attract <strong>and</strong> retain qualified employees, may have a material adverse effect onthe Enlarged <strong>Group</strong>. The Company is in the process <strong>of</strong> obtaining key man insurance in respect <strong>of</strong> the<strong>Proposed</strong> Directors <strong>and</strong> expects the appropriate policies to be in place at Admission.Loss <strong>of</strong> major customersAlthough <strong>Avisen</strong> has a number <strong>of</strong> clients with repeat business, a loss <strong>of</strong> a major client or group <strong>of</strong>clients, which accounted for a significant amount <strong>of</strong> <strong>Avisen</strong>’s revenues, may have an impact on theEnlarged <strong>Group</strong>’s revenues <strong>and</strong> pr<strong>of</strong>itability.Rapid GrowthIf the Enlarged <strong>Group</strong>’s business <strong>and</strong> operations experience rapid growth <strong>and</strong> its systems <strong>and</strong> controlshave not been developed to manage this growth effectively, the Enlarged <strong>Group</strong>’s business <strong>and</strong>operating results could be harmed <strong>and</strong> the Enlarged <strong>Group</strong> may have to incur significant expenditure toimplement the additional operational <strong>and</strong> control requirements necessary to meet such growth.Reliance on intellectual propertyThe Company relies <strong>and</strong> will, in future, rely on intellectual property laws <strong>and</strong> third partynon-disclosure agreements to protect its intellectual property rights. Despite precautions which may betaken by the Company to protect its products, unauthorised parties may attempt to copy, or obtain <strong>and</strong>use its products. To the extent that intellectual property rights protect the Company, litigation may benecessary to protect such rights <strong>and</strong> could result in substantial costs to, <strong>and</strong> diversification <strong>of</strong> effort by,the Company with no guarantee <strong>of</strong> success. The failure or inability <strong>of</strong> the Company to protect itsproprietary information, <strong>and</strong> the expense <strong>of</strong> doing so, could have a material adverse effect on itsoperating results <strong>and</strong> financial condition.Entry into new markets <strong>and</strong> development <strong>of</strong> new products<strong>Avisen</strong>’s future growth will be highly dependent on its ability to generate business in new sectors <strong>and</strong>additional geographic markets, particularly in relation to its StrategyGPS TM product <strong>and</strong> sales <strong>of</strong> thirdparty s<strong>of</strong>tware. Whilst the <strong>Proposed</strong> Directors strongly believe that the areas they are targeting in themedium term will prove rewarding there is no guarantee that the Company will be able to generate thelevel <strong>of</strong> sales or pr<strong>of</strong>itability anticipated if the costs <strong>of</strong> entry into <strong>and</strong> operating in these new areasprove to be higher than expected or dem<strong>and</strong> for the Company’s products <strong>and</strong> services proves to belower than anticipated.With reference to StrategyGPS TM , <strong>Avisen</strong> has already invested <strong>and</strong> the Enlarged <strong>Group</strong> will continue toinvest, both time <strong>and</strong> resources into this product. Whilst the <strong>Proposed</strong> Directors believe the dem<strong>and</strong> for24
this product will justify the investment made to date <strong>and</strong> in the future, there is no guarantee that thisproduct will generate revenues <strong>and</strong>, accordingly, the Enlarged <strong>Group</strong>’s performance may be affected.Management <strong>of</strong> growthThe Directors expect the Company to grow organically <strong>and</strong> by <strong>acquisition</strong>. Failure to successfullymanage such growth <strong>and</strong> the integration <strong>of</strong> any <strong>acquisition</strong>s <strong>and</strong> new customers may have a materialadverse impact on the Company’s business.Competition<strong>Avisen</strong> may face significant competition, including from domestic <strong>and</strong> overseas competitors who havegreater capital <strong>and</strong> other resources <strong>and</strong> superior br<strong>and</strong> recognition than the Company <strong>and</strong> may be ableto provide better products or adopt more aggressive pricing policies. There is no assurance that theCompany will be able to compete successfully in such a marketplace.The Enlarged <strong>Group</strong>’s objectives may not be fulfilledThe value <strong>of</strong> an investment in the Company is dependent upon the Enlarged <strong>Group</strong> achieving the aimsset out in this document. There can be no guarantee that the Enlarged <strong>Group</strong> will achieve the level <strong>of</strong>success that the New Board expects.Internal Systems <strong>and</strong> ControlsThe Enlarged <strong>Group</strong> does not currently have all the internal systems <strong>and</strong> controls which investorswould expect from a larger, more established business. On Admission, the New Board intends to takesteps to ensure that systems <strong>and</strong> controls (appropriate for a group <strong>of</strong> the size <strong>and</strong> <strong>of</strong> the nature <strong>of</strong> theEnlarged <strong>Group</strong>) are adopted <strong>and</strong> reviewed regularly.Other directorships/interestsIt is possible that members <strong>of</strong> the New Board may, following Admission, be interested in or act, in alimited quality, in the management or conduct <strong>of</strong> the affairs <strong>of</strong> other companies. Should any conflicts<strong>of</strong> interest be identified, they will be declared to the New Board <strong>and</strong> dealt with appropriately. AndrewTurner is an investor <strong>and</strong> acts as a consultant, providing business development services to W<strong>and</strong>iscoInc. The arrangements have been disclosed to the Directors <strong>and</strong> have been approved by the New Boardwith effect from Admission.Economic, political, judicial, administrative, taxation or other regulatory mattersThe Enlarged <strong>Group</strong> may be adversely affected by <strong>change</strong>s in economic, political, judicial,administrative, taxation or other regulatory factors, as well as other unforeseen matters. In particular,<strong>Avisen</strong>’s financial performance may be adversely affected by such <strong>change</strong>s in other jurisdictions inwhich it operates e.g. in the Netherl<strong>and</strong>s or the Republic <strong>of</strong> South Africa.Requirement for further fundsThe existing resources <strong>of</strong> the Company <strong>and</strong> <strong>Avisen</strong> may not be sufficient for the future working capitalrequirements <strong>of</strong> the Enlarged <strong>Group</strong> or allow the Enlarged <strong>Group</strong> to exploit new opportunities. It maytherefore be necessary for the Company to raise further funds in the future, which may be by way <strong>of</strong>issue <strong>of</strong> further Ordinary Shares on a non pre-emptive basis.Taxation FrameworkThis document has been prepared in accordance with current UK tax legislation, practice <strong>and</strong>concession <strong>and</strong> interpretation there<strong>of</strong>. Any <strong>change</strong> in the Company’s tax status or in taxation legislationcould affect the Company’s ability to provide returns to its shareholders or alter post tax returns to itsshareholders. Statements in this document concerning the taxation <strong>of</strong> investors in Ordinary Shares arebased on current tax law <strong>and</strong> practice which is subject to <strong>change</strong>. The taxation <strong>of</strong> an investment in theCompany depends on the individual circumstances <strong>of</strong> investors.25
General risksIf any or all <strong>of</strong> the above risks actually occur, the Enlarged <strong>Group</strong>’s business, financial conditions,results or future operations could be adversely affected. In such a case, the price <strong>of</strong> the Ordinary Sharescould decline <strong>and</strong> investors may lose all or part <strong>of</strong> their investment. Additional risks <strong>and</strong> uncertaintiesnot presently known to the Directors <strong>and</strong> <strong>Proposed</strong> Directors, or which the Directors <strong>and</strong> <strong>Proposed</strong>Directors currently deem immaterial, may also have an adverse effect upon the Enlarged <strong>Group</strong>.26
PART IIISection AAccountants’ Report on the financial information <strong>of</strong> <strong>Avisen</strong> <strong>Group</strong> LimitedThe Directors <strong>and</strong> <strong>Proposed</strong> DirectorsZ GROUP plc31 Vernon StreetLondon W14 0RN<strong>and</strong>The DirectorsJohn East & Partners Limited10 Finsbury SquareLondon EC2A 1ADDear Sirs<strong>Avisen</strong> <strong>Group</strong> Limited <strong>and</strong> its subsidiaries (“<strong>Avisen</strong> <strong>Group</strong>” or the “<strong>Group</strong>”)7 January 2009IntroductionWe report on the financial information set out in Section B <strong>of</strong> Part III <strong>of</strong> the admission document <strong>of</strong> Z GROUPplc (“Z GROUP”) dated 7 January 2009 (the “Document”). This financial information has been prepared forinclusion in the Document on the basis <strong>of</strong> the accounting policies set out in note 1 to the financial information.This report is required by Paragraph (a) <strong>of</strong> Schedule Two <strong>of</strong> the AIM Rules for Companies (the “AIM Rules”)<strong>and</strong> is given for the purposes <strong>of</strong> complying with that paragraph <strong>and</strong> for no other purpose.ResponsibilitiesThe directors <strong>of</strong> <strong>Avisen</strong> are responsible for preparing the financial information on the <strong>Avisen</strong> <strong>Group</strong> on the basis<strong>of</strong> preparation set out in note 1 to the financial information <strong>and</strong> in accordance with applicable InternationalFinancial Reporting St<strong>and</strong>ards (“IFRS”).It is our responsibility to form an opinion as to whether the financial information gives a true <strong>and</strong> fair view, forthe purposes <strong>of</strong> the Document, <strong>and</strong> to report our opinion to you.Save for any responsibility arising under Paragraph (a) <strong>of</strong> Schedule Two <strong>of</strong> the AIM Rules to any person as <strong>and</strong>to the extent there provided, to the fullest extent permitted by the law we do not assume any responsibility <strong>and</strong>will not accept any liability to any other person for any loss suffered by any such other person as a result <strong>of</strong>,arising out <strong>of</strong>, or in connection with this report or our statement, required by <strong>and</strong> given solely for the purposes <strong>of</strong>complying with Paragraph (a) <strong>of</strong> Schedule Two <strong>of</strong> the AIM Rules, consenting to its inclusion in the Document.Basis <strong>of</strong> OpinionWe conducted our work in accordance with St<strong>and</strong>ards <strong>of</strong> Investment Reporting issued by the Auditing PracticesBoard in the United Kingdom. Our work included an assessment <strong>of</strong> evidence relevant to the amounts <strong>and</strong>disclosures in the financial information. It also included an assessment <strong>of</strong> the significant estimates <strong>and</strong>judgements made by those responsible for the preparation <strong>of</strong> the financial information <strong>and</strong> whether theaccounting policies are appropriate to the entity’s circumstances, consistently applied <strong>and</strong> adequately disclosed.We planned <strong>and</strong> performed our work so as to obtain all the information <strong>and</strong> explanations which we considerednecessary in order to provide us with sufficient evidence to give reasonable assurance that the financialinformation is free from material misstatement whether caused by fraud or other irregularity or error.27
OpinionIn our opinion, the financial information gives, for the purposes <strong>of</strong> the Document, a true <strong>and</strong> fair view <strong>of</strong> the state<strong>of</strong> affairs <strong>of</strong> the <strong>Avisen</strong> <strong>Group</strong> as at the dates stated <strong>and</strong> <strong>of</strong> its pr<strong>of</strong>its, cash flows <strong>and</strong> <strong>change</strong>s in equity for theperiods then ended in accordance with the basis <strong>of</strong> preparation set out in note 1 to the financial information <strong>and</strong>has been prepared in accordance with applicable IFRS as described in note 1 to the financial information.DeclarationFor the purposes <strong>of</strong> Paragraph (a) <strong>of</strong> Schedule Two <strong>of</strong> the AIM Rules, we are responsible for this report as part <strong>of</strong>the Document <strong>and</strong> declare that we have taken all reasonable care to ensure that the information contained in thisreport is, to the best <strong>of</strong> our knowledge, in accordance with the facts <strong>and</strong> contains no omission likely to affect itsimport. This declaration is included in the Document in compliance with Paragraph (a) <strong>of</strong> Schedule Two <strong>of</strong> theAIM Rules.Yours faithfullyHorwath Clark Whitehill LLPChartered Accountants28
Section BFinancial Information on <strong>Avisen</strong> <strong>Group</strong> LimitedConsolidated Income StatementNotesFifteenmonthperiod ended31 March2006£Year ended31 March2007£Year ended31 March2008£Six monthperiod ended30 September2008£Revenue 2 103,872 863,563 4,020,397 1,730,947Cost <strong>of</strong> sales — (280,554) (1,997,792) (647,822)Gross pr<strong>of</strong>it 103,872 583,009 2,022,605 1,083,125Administrative expenses (10,073) (374,620) (1,571,565) (770,001)Operating pr<strong>of</strong>it 4 93,799 208,389 451,040 313,124Finance costs 6 — (1,392) (772) —Finance income 7 57 1,489 31,878 7,759Pr<strong>of</strong>it on ordinary activities before taxation 93,856 208,486 482,146 320,883Income tax expense 8 (21,000) (45,386) (164,610) (100,390)Pr<strong>of</strong>it for the period 72,856 163,100 317,536 220,493Attributable to:Equity shareholders <strong>of</strong> the company 58,285 147,621 318,366 218,836Minority interest 14,571 15,479 (830) 1,65772,856 163,100 317,536 220,49329
Consolidated Balance SheetNotesAs at31 March2006£As at31 March2007£As at31 March2008£As at30 September2008£ASSETSNon-current assetsProperty, plant <strong>and</strong> equipment 10 — 1,146 12,993 11,369Intangible assets — — — 353,929Goodwill 11 — — 244,889 244,889— 1,146 257,882 610,187Current assetsTrade <strong>and</strong> other receivables 13 50,356 356,473 760,856 974,329Cash <strong>and</strong> cash equivalents 14 76,180 414,759 1,066,526 374,922126,536 771,232 1,827,382 1,349,251Total assets 126,536 772,378 2,085,264 1,959,438EQUITY AND LIABILITIESEquity attributable to shareholders<strong>of</strong> the parentShare capital 15 100 100 21,483 21,483Share premium 17 — — 206,518 206,518Currency translation reserve 17 — — (259) (4,884)Retained earnings 17 47,085 174,706 403,221 622,057Total parent shareholders’ equity 47,185 174,806 630,963 845,174Minority interest (55,404) (69,925) 241 1,899Total equity (8,219) 104,881 631,204 847,073Current liabilitiesTrade <strong>and</strong> other payables 18 113,755 601,111 1,198,910 803,875Current tax payable 18 21,000 66,386 255,150 308,490Total liabilities 134,755 667,497 1,454,060 1,112,365Total equity <strong>and</strong> liabilities 126,536 772,378 2,085,264 1,959,43830
Consolidated Statement <strong>of</strong> Changes in EquityShareCapital£SharePremium£OtherReserves£RetainedEarnings£Balance as at 1 January 2005 100 — — — 100Changes in equity for the fifteenmonth period ended 31 March 2006Pr<strong>of</strong>it for the period — — — 58,285 58,285Total recognised income <strong>and</strong> expensefor the period — — — 58,285 58,285Dividends paid — — — (11,200) (11,200)Balance as at 31 March 2006 100 — — 47,085 47,185Changes in net equity for the yearended 31 March 2007Pr<strong>of</strong>it for the period — — — 147,621 147,621Total recognised income <strong>and</strong> expensesfor the period — — — 147,621 147,621Dividends paid — — — (20,000) (20,000)Balance as at 31 March 2007 100 — — 174,706 174,806Changes in equity for the yearended 31 March 2006Pr<strong>of</strong>it for the period — — — 318,366 318,366Total recognised income <strong>and</strong> expensesfor the period — — — 318,366 318,366Currency translation — — (259) — (259)Transfer to pr<strong>of</strong>it or loss for the year — — — (69,951) (69,951)Bonus issue <strong>of</strong> shares — — — (19,900) (19,900)Sale <strong>of</strong> shares 21,383 206,518 — — 227,901Balance as at 31 March 2008 21,483 206,518 (259) 403,221 630,963Changes in equity for the six monthperiod ended 30 September 2008Pr<strong>of</strong>it for the period — — — 218,836 218,836Total recognised income <strong>and</strong> expensefor the period — — — 218,836 218,836Currency translation — — (4,625) — (4,625)Balance as at 30 September 2008 21,483 206,518 (4,884) 622,057 845,174Total£31
Consolidated Statement <strong>of</strong> Recognised Income <strong>and</strong> ExpenseFifteenmonthperiod ended31 March2006£Year ended31 March2007£Year ended31 March2008£Six monthperiod ended30 September2008£Loss on foreign currency translation — — (259) (4,625)Net expense recognised directly in equityPr<strong>of</strong>it for the period 72,856 163,100 317,536 220,493Total recognised income <strong>and</strong> expenses for the period 72,856 163,100 317,277 215,868Attributable to:Equity holders <strong>of</strong> the parent — — 318,126 214,558Minority interest — — (849) 1,310— — 317,277 215,86832
Consolidated Cash Flow StatementFifteenmonthperiod ended31 March2006£Year ended31 March2007£Year ended31 March2008£Six monthperiod ended30 September2008£Cash flows from operating activitiesPr<strong>of</strong>it from operations 93,799 208,389 451,040 313,124Adjustments for:Depreciation on property, plant <strong>and</strong> equipment — 573 7,330 1,624Operating cash flows before movement inworking capital 93,799 208,962 458,370 314,748Increase in receivables (50,231) (306,117) (404,384) (213,472)Increase/(Decrease) in payables 113,755 487,356 597,799 (401,337)Cash generated from/(used in) operations 157,323 390,201 651,785 (300,061)Income taxes paid — — (20,735) (47,050)Interest paid — (1,392) (772) —Net cash generated from/(used in)operating activities 157,323 388,809 630,278 (347,111)Cash flows from investing activitiesPurchase <strong>of</strong> property, plant <strong>and</strong> equipment — (1,719) — —Purchase <strong>of</strong> subsidiary — — (41,018) —Expenditure on development costs — — — (353,929)Interest received 57 1,489 31,878 7,759Net cash generated from/(used in)investing activities 57 (230) (9,140) (346,170)Cash flows from financing activitiesDividends paid – <strong>Group</strong> (11,200) (20,000) — —Dividends paid – monthly (70,000) (30,000) — —Proceeds from the issue <strong>of</strong> share capital — — 27,901 —Increase in bank overdrafts — — — 6,302Net cash (used in)/generated fromfinancing activities (81,200) (50,000) 27,901 6,302Net increase/(decrease) in cash <strong>and</strong>cash equivalents 76,180 338,579 649,039 (686,979)Cash <strong>and</strong> cash equivalents at the beginning <strong>of</strong>the period — 76,180 414,759 1,066,526Effect <strong>of</strong> foreign ex<strong>change</strong> — — 2,728 (4,625)Cash <strong>and</strong> cash equivalents at the end <strong>of</strong> the period 76,180 414,759 1,066,526 374,92233
Notes to the Consolidated Financial Information1. Accounting polices1.1 Presentation <strong>of</strong> financial informationThe financial information is prepared in sterling <strong>and</strong> under the historical cost convention.The consolidated financial information has been prepared in accordance with IFRS as adopted by the EuropeanUnion.The accounting policies set out below have been applied consistently to all periods presented in the financialinformation.The disclosures concerning the transition from UK GAAP to IFRS are disclosed in note 24.At the date <strong>of</strong> authorisation <strong>of</strong> the financial information, the following st<strong>and</strong>ards <strong>and</strong> interpretations which havenot been applied in the financial information were in issue but not yet effective:IFRS 3 – Business Combinations (Revised)IFRS 8 – Operating SegmentsIAS 1 – (Revised) Presentation <strong>of</strong> Financial StatementsIAS 23 – Borrowing CostsIAS 27 – Consolidated <strong>and</strong> Separate Financial Statements (Revised 2008)IFRIC 11 – <strong>Group</strong> <strong>and</strong> Treasury Share TransactionsIFRIC 12 – Service Concession ArrangementsIFRIC 13 – Customer Loyalty Programmes (effective for periods commencing on or after 1 July 2008)IFRIC 14 (IAS19) – The Limit on a Defined Benefit Asset Minimum Funding Requirement <strong>and</strong> their InteractionThese st<strong>and</strong>ards <strong>and</strong> interpretations are not expected to have any significant impact on the financial information<strong>of</strong> the <strong>Group</strong>, in their periods <strong>of</strong> initial application, except for the additional disclosures on operating segmentswhen the relevant st<strong>and</strong>ard comes into effect for periods commencing on or after 1 January 2009.1.2 Basis <strong>of</strong> consolidationControl exists where the <strong>Group</strong> has the power, directly or indirectly, to govern the financial <strong>and</strong> operatingpolicies <strong>of</strong> an entity so as to obtain benefits from its activities. Subsidiaries are entities controlled by theCompany. The financial information <strong>of</strong> the Subsidiaries are included in the consolidated financial informationfrom the date control commences until the date that control ceases.Intracompany balances, <strong>and</strong> any unrealised gains <strong>and</strong> losses or income <strong>and</strong> expenses arising from intragrouptransactions, are eliminated when preparing the consolidated financial information.1.3 Revenue recognitionRevenue is earned under a wide variety <strong>of</strong> contracts to provide pr<strong>of</strong>essional services <strong>and</strong> advice to third parties.Revenue is measured at the fair value <strong>of</strong> the consideration received or receivable <strong>and</strong> represents amountschargeable to clients including recoverable expenses <strong>and</strong> disbursements, net <strong>of</strong> discounts, VAT <strong>and</strong> other salesrelated tax.Revenue is recognised to the extent that it is probable that the economic benefits will flow to the <strong>Group</strong> <strong>and</strong> therevenue can be reliably measured.Revenue is recognised as services progress by reference to the stage <strong>of</strong> completion <strong>of</strong> the transaction at thebalance sheet date.When the outcome <strong>of</strong> a transaction is unable to be estimated reliably no pr<strong>of</strong>it is recognised.1.4 Trade <strong>and</strong> other receivablesTrade <strong>and</strong> other receivables are stated at their cost less impairment losses.34
1.5 Trade <strong>and</strong> other payablesTrade <strong>and</strong> other payables are stated at their cost less impairment losses.1.6 Cash <strong>and</strong> cash equivalentsCash <strong>and</strong> cash equivalents comprise cash <strong>and</strong> all deposits with an original maturity <strong>of</strong> three months or less.1.7 Property, plant & equipment <strong>and</strong> depreciationProperty, plant <strong>and</strong> equipment are stated at cost less accumulated depreciation <strong>and</strong> impairment losses. Whereparts <strong>of</strong> an item <strong>of</strong> property, plant <strong>and</strong> equipment have different useful lives, they are accounted for as separateitems <strong>of</strong> property, plant <strong>and</strong> equipment.Depreciation is charged to the income statement on a straight line basis over the estimated useful economic lives<strong>of</strong> each part <strong>of</strong> an item <strong>of</strong> property, plant <strong>and</strong> equipment. The depreciation rates are as follows:Computer Equipment 33.3 per cent. straight line1.8 Foreign CurrencyOn consolidation, assets <strong>and</strong> liabilities <strong>of</strong> the <strong>Group</strong>’s foreign subsidiaries are translated into sterling at year endex<strong>change</strong> rates.At each balance sheet date, monetary assets <strong>and</strong> liabilities that are denominated in foreign currency areretranslated at the prevailing rates on the balance sheet date. Non monetary items that are measured at historicalcost in a foreign currency are not retranslated.The results <strong>of</strong> the <strong>Group</strong>’s foreign subsidiaries are translated into sterling at average rates <strong>of</strong> ex<strong>change</strong> for theyear.Foreign ex<strong>change</strong> differences arising on retranslation are recognised directly in equity.1.9 GoodwillGoodwill arising on consolidation represents the excess cost <strong>of</strong> <strong>acquisition</strong> over the <strong>Group</strong>’s interest in the fairvalue <strong>of</strong> the identifiable assets <strong>and</strong> liabilities <strong>of</strong> a subsidiary, associate or jointly controlled entity at the date <strong>of</strong><strong>acquisition</strong>. Goodwill is initially recognised as an asset <strong>and</strong> reviewed for impairment at least annually. Anyimpairment is recognised immediately in the income statement <strong>and</strong> is not subsequently reversed.For the purpose <strong>of</strong> impairment testing, goodwill is allocated to each <strong>of</strong> the <strong>Group</strong>’s cash generating unitsexpected to benefit from the synergies <strong>of</strong> the combination. Cash generating units to which goodwill has beenallocated are tested for impairment annually, or more frequently when there is an indication <strong>of</strong> impairment. Theamount <strong>of</strong> the impairment loss is allocated first to reduce the carrying amount <strong>of</strong> any goodwill allocated to theunit <strong>and</strong> then to the other assets <strong>of</strong> the unit pro-rata on the basis <strong>of</strong> the carrying amount <strong>of</strong> each asset in the unit.On disposal <strong>of</strong> a subsidiary, associate or jointly controlled entity, the attributable amount <strong>of</strong> goodwill is includedin the determination <strong>of</strong> the pr<strong>of</strong>it or loss on disposal.1.10 Internally-generated intangible assets – research <strong>and</strong> development expenditureExpenditure on research activities is recognised as an expense in the period in which it is incurred. Aninternally-generated intangible asset arising from the <strong>Group</strong>’s development is recognised only if all <strong>of</strong> thefollowing conditions are met:- an asset is created than can be identified- it is probable that the asset created will generate future economic benefits, <strong>and</strong>- the development cost <strong>of</strong> the asset can be measured reliably.Where no internally-generated intangible asset can be recognised, development expenditure is recognised as anexpense in the period in which it is incurred. Internally-generated intangible assets are amortised over theestimated useful lives.1.11 Impairment <strong>of</strong> tangible <strong>and</strong> intangible assetsImpairment testing is carried out for all tangible <strong>and</strong> intangible assets at the balance sheet date or where there hasbeen an indication that impairment exists. Where the asset does not generate cash flows that are independent fromother assets, the <strong>Group</strong> estimates the recoverable amount <strong>of</strong> the cash generating unit to which the asset belongs.35
An intangible asset with an indefinite useful life is tested for impairment annually <strong>and</strong> whether there is anindication that the asset may be impairedFor the purpose <strong>of</strong> the impairment testing, the carrying amounts <strong>of</strong> the tangible <strong>and</strong> intangible assets are reviewed<strong>and</strong> an impairment loss is recognised where the carrying amounts exceed the assets’ recoverable amounts.The recoverable amount is the higher <strong>of</strong> the asset’s fair value less costs to sell <strong>and</strong> value in use. Value in use isdetermined by discounting an asset’s estimated future cash flows to its present value using a discount rate whichreflects current market assessments <strong>of</strong> the time value <strong>of</strong> money <strong>and</strong> asset specific risks.Any impairment loss arising is recognised immediately in the income statement. Where the asset is carried at arevalued amount, the impairment loss is recognised as a decrease to the revaluation reserve.1.12 Share-based paymentsIn accordance with IFRS2, Share-based payment, the <strong>Group</strong> reflects the economic cost <strong>of</strong> awarding shares <strong>and</strong>share options to employees. The fair value <strong>of</strong> share options granted is recognised as an employee expense with acorresponding increase in equity.1.13 TaxationThe tax expense comprises the current tax payable by the <strong>Group</strong> <strong>and</strong> deferred tax.Current taxes are based on the taxable pr<strong>of</strong>it for the period <strong>of</strong> the <strong>Group</strong> companies <strong>and</strong> are calculated accordingto local tax rules, using the tax rates that have been enacted or substantially enacted by the balance sheet date.Deferred tax is provided in full using the balance sheet liability method for all taxable temporary differencesarising between the tax bases <strong>of</strong> assets <strong>and</strong> liabilities <strong>and</strong> their carrying values for financial reporting purposes.Deferred tax is measured using currently enacted or substantially enacted tax rates.Deferred tax assets are recognised to the extent the temporary difference will reverse in the foreseeable future <strong>and</strong>that it is probable that future taxable pr<strong>of</strong>it will be available against which the asset can be utilised.Deferred tax is recognised for all deductible temporary differences arising from investments in subsidiaries,branches <strong>and</strong> associates, <strong>and</strong> interests in joint ventures, to the extent that it is probable that the temporarydifference will reverse in the foreseeable future <strong>and</strong> taxable pr<strong>of</strong>it will be available against which the temporarydifference can be utilised.1.14 Financial instrumentsFinancial assets <strong>and</strong> financial liabilities are recognised in the <strong>Group</strong>’s balance sheets when the <strong>Group</strong> has becomea party to the contractual provisions <strong>of</strong> the instrument.1.15 Use <strong>of</strong> assumptions <strong>and</strong> estimatesThe <strong>Group</strong> makes judgements, estimates <strong>and</strong> assumptions that affect the application <strong>of</strong> policies <strong>and</strong> reportedamounts <strong>of</strong> assets <strong>and</strong> liabilities, income <strong>and</strong> expenses. The resulting accounting estimates calculated using thesejudgements <strong>and</strong> assumptions will, by definition, seldom equal the related actual results but are based on historicalexperience <strong>and</strong> expectations <strong>of</strong> future events. The estimates <strong>and</strong> underlying assumptions are reviewed on anongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised ifthe revision affects only that period, or in the period <strong>of</strong> revision <strong>and</strong> future periods if the revision affects bothcurrent <strong>and</strong> future periods.The estimates <strong>and</strong> assumptions that have a significant effect on the amounts recognised in the financialinformation are those related to establishing depreciation <strong>and</strong> amortisation periods for the <strong>Group</strong>, <strong>and</strong> theestimates in relation to future cash flows <strong>and</strong> discount rates utilised in impairment testing.2. RevenueFifteenmonthperiod ended31 March2006£Year ended31 March2007£Year ended31 March2008£Six monthperiod to30 September2008£Continuing operationsSale <strong>of</strong> service 103,872 863,563 4,020,397 1,730,94736
3. Segmental analysisThe turnover <strong>and</strong> pr<strong>of</strong>it before tax are attributable to the one principal activity <strong>of</strong> the <strong>Group</strong>. The primaryreporting format is by geographical area <strong>and</strong> the secondary reporting format is by business segment.Analysis <strong>of</strong> turnover is given below:Fifteenmonthperiod ended31 March2006£Year ended31 March2007£Year ended31 March2008£Six months to30 September2008£United Kingdom 103,872 729,930 3,453,996 843,141EU — 133,633 525,683 824,868Rest <strong>of</strong> World — — 40,718 62,938103,872 863,563 4,020,397 1,730,947Segment information about the business is reported below:30 September 2008UK2008£US2008£EU2008£Consolidation2008£Continuing operationsRevenueExternal sales 1,587,054 — 143,893 1,730,9471,587,054 — 143,893 1,730,947Segment operating pr<strong>of</strong>it/(loss) 343,450 (52,380) 22,054 313,124Finance income 7,716 — 43 7,759Pr<strong>of</strong>it before tax 351,166 (52,380) 22,097 320,883Income tax expense (100,390) — — (100,390)Pr<strong>of</strong>it/(Loss) for the period 250,776 (52,380) 22,097 220,493Other informationDepreciation 1,624 — — 1,624Balance sheetTotal assets 1,829,910 12,047 117,481 1,959,438Total liabilities 936,777 83,077 92,511 1,112,36537
31 March 2008UK2008£US2008£EU2008£Consolidation2008£Continuing operationsRevenueExternal sales 4,020,397 — — 4,020,3974,020,397 — — 4,020,397Segment operating pr<strong>of</strong>it/(loss) 476,220 (14,115) (11,065) 451,040Finance expense (772) — — (772)Finance income 31,877 — 1 31,878Pr<strong>of</strong>it before tax 507,325 (14,115) (11,064) 482,146Income tax expense (164,610) — — (164,610)Pr<strong>of</strong>it/(Loss) for the year 342,715 (14,115) (11,064) 317,536Other informationCapital additions 19,177 — — 19,177Depreciation 7,330 — — 7,330Balance sheetTotal assets 2,049,513 14,115 21,637 2,085,265Total liabilities 1,421,271 14,115 18,674 1,454,06031 March 2007UK2007£EU2007£Consolidation2007£Continuing operationsRevenueExternal sales 863,563 — 863,563836,563 — 863,563Segment operating pr<strong>of</strong>it 208,389 — 208,389Finance expense (1,392) — (1,392)Finance income 1,489 — 1,489Pr<strong>of</strong>it before tax 208,486 — 208,486Income tax expense (45,386) — (45,386)Pr<strong>of</strong>it for the year 163,100 — 163,100Other informationCapital additions 1,719 — 1,719Depreciation 573 — 573Balance sheetTotal assets 772,378 — 772,378Total liabilities 667,497 — 667,49738
31 March 2006UK2006£EU2006£Consolidation2006£Continuing operationsRevenueExternal sales 103,872 — 103,872103,872 — 103,872Segment operating pr<strong>of</strong>it 93,799 — 93,799Finance expense — — —Finance income 57 — 57Pr<strong>of</strong>it before tax 93,856 — 93,856Income tax expense (21,000) — (21,000)Pr<strong>of</strong>it for the period 72,856 — 72,856Balance sheetTotal assets 126,536 — 126,536Total liabilities 134,755 — 134,7554. Operating pr<strong>of</strong>itThis is stated after charging/(crediting)Fifteenmonthperiod ended31 March2006£Year ended31 March2007£Year ended31 March2008£Six monthperiod ended30 September2008£Wages <strong>and</strong> salaries 4,200 291,644 626,633 662,020Social security costs — 36,016 94,572 129,865Staff costs including directors 4,200 327,660 721,205 791,885Depreciation <strong>of</strong> tangible fixed assets — 573 7,330 1,6245. Employees <strong>and</strong> DirectorsStaffThe average number <strong>of</strong> employees, including directors was:Fifteenmonthperiod ended31 March2006£Year ended31 March2007£Year ended31 March2008£Six monthperiod ended30 September2008£Management 2 2 3 4Technical 1 4 10 15Administrative — 1 — 53 7 13 24Directors emolumentsFifteenmonthperiod ended31 March2006£Year ended31 March2007£Year ended31 March2008£Six monthperiod ended30 September2008£Salary — 62,500 300,000 150,000Bonus — 200,000 50,000 37,160— 262,500 350,000 187,16039
6. Finance costsFifteenmonthperiod ended31 March2006£Year ended31 March2007£Year ended31 March2008£Six monthperiod ended30 September2008£Other — 1,392 772 —772 1,392 772 —7. Finance incomeFifteenmonthperiod ended31 March2006£Year ended31 March2007£Year ended31 March2008£Six monthperiod ended30 September2008£Bank interest receivable 57 1,489 31,878 7,75957 1,489 31,878 7,7598. Income taxFifteenmonthperiod ended31 March2006£Year ended31 March2007£Year ended31 March2008£Six monthperiod ended30 September2008£Current taxesTotal current tax 21,000 45,386 169,893 98,966Adjustments in respect <strong>of</strong> previous periods — — (5,283) 1,424Total income tax on continuing operations 21,000 45,386 164,610 100,390Tax rate reconciliationPr<strong>of</strong>it on ordinary activities before tax 93,856 208,486 482,146 320,883Applicable tax rates 19 per cent. 19 per cent. 30 per cent. 28 per cent.Current tax 17,833 39,612 144,644 89,847Effect <strong>of</strong>:Items not deductable for tax purposes 164 490 25,905 5,670Depreciation add back — 109 2,199 487Capital allowances — (163) (65) (274)Adjustments in respect <strong>of</strong> previous periods — — (5,283) 1,424Other 3,003 5,338 (2,790) 3,236Current tax charge 21,000 45,386 164,610 100,3909. DividendsFifteenmonthperiod ended31 March2006£Year ended31 March2007£Year ended31 March2008£Six monthperiod ended30 September2008£Equity dividends paid 11,200 20,000 — —40
10. Property, plant <strong>and</strong> equipmentComputerequipment£CostAs at 1 January 2005 <strong>and</strong> 1 April 2006 —Additions 1,719As at 31 March 2007 1,719Additions 19,177As at 31 March 2008 20,896As at 30 September 2008 20,896DepreciationAs at 1 January 2005 <strong>and</strong> 1 April 2006 —Charge for the year 573As at 31 March 2007 573Charge for the year 7,330As at 31 March 2008 7,903Charge for the period 1,624As at 30 September 2008 9,527Net book value as at 31 March 2006 —Net book value as at 31 March 2007 1,146Net book value as at 31 March 2008 12,993Net book value as at 30 September 2008 11,36911. Intangible assetsGoodwill£CostAs at 1 January 2005, 1 April 2006 <strong>and</strong> 1 April 2007 —Additions 244,889As at 31 March 2008 244,889As at 30 September 2008 244,889The <strong>Group</strong> carried out an impairment test <strong>of</strong> goodwill for the year ended 31 March 2008 as required by IFRSs.The impairment test did not result in the recognition <strong>of</strong> any loss <strong>and</strong> the carrying amount <strong>of</strong> all cash generatingunits was considered lower than their recoverable amount.For the purpose <strong>of</strong> impairment testing, the carrying amount <strong>of</strong> goodwill <strong>and</strong> other assets has been allocated tocash generating units as follows:As at 31 March 2008Asset allocationsGoodwill 244,889 — — 244,889Property, plant <strong>and</strong> equipment 12,993 — — 12,993257,882 — — 257,882UK2008£US2008£EU2008£Total2008£41
As at 30 September 2008Asset allocationsGoodwill 244,889 — — 244,889Property, plant <strong>and</strong> equipment 11,369 — — 11,369Development costs 353,929 — — 353,929610,187 — — 610,187No goodwill arises in earlier periods.The principal assumptions made in determining the value in use <strong>of</strong> each cash generating unit throughout the<strong>Group</strong> were as follows:1. The impairment test has been carried out based on the valuation surrounding the purchase <strong>of</strong> SolutionMinds (UK) <strong>Ltd</strong>, this being 31 January 2008.2. The directors believe that any reasonable <strong>change</strong> in the key assumptions on which the recoverable amountis based would not cause the carrying amount to exceed its recoverable amount.Goodwill has arisen on the <strong>acquisition</strong> <strong>of</strong> the <strong>Group</strong>’s interest in the fair value <strong>of</strong> the identifiable assets <strong>and</strong>liabilities <strong>of</strong> Solution Minds (UK) <strong>Ltd</strong>. The consideration comprised shares <strong>and</strong> cash. The goodwill acquiredrepresents a payment made by the <strong>Group</strong> in anticipation <strong>of</strong> future economic benefits from assets that are notcapable <strong>of</strong> being individually identified <strong>and</strong> separately recognised. The future economic benefits are anticipatedto result from synergy arising from a combination <strong>of</strong> these assets.12. Other intangible assetsDevelopmentCosts£CostAs at 1 January 2005, 1 April 2006, 1 April 2007 <strong>and</strong> 1 April 2008 —Additions 353,929As at 30 September 2008 353,929UK2008£US2008£EU2008£Total2008£13. Trade <strong>and</strong> other receivablesAs at31 March2006£As at31 March2007£As at31 March2008£As at30 September2008£Trade receivablesTrade receivables 50,231 351,354 440,697 594,868Other receivablesDirectors’ current accounts — — 200,386 75,825Other debtors 125 5,119 66,825 174,546Prepayments <strong>and</strong> accrued income — — 52,948 129,090125 5,119 320,159 379,46142
The aged analysis <strong>of</strong> trade receivables that are not overdue as well as overdue amounts <strong>and</strong> related provisions fordoubtful trade receivables is as follows:As at31 March2006£As at31 March2007£As at31 March2008£As at30 September2008£Total 50,231 351,354 486,138 743,883Less provision for doubtful tradereceivables/credit notes — — (45,441) (149,015)Total trade receivables 50,231 351,354 440,697 594,868<strong>of</strong> which:Not overdue 11,633 329,225 66,077 279,515Past due not more than 1 month 8,724 11,747 159,763 61,144Past due more than 1 month <strong>and</strong> not more than3 months 7,138 10,382 116,869 96,294Past due more than 3 months <strong>and</strong> not more than6 months 12,161 — 16,702 15,896Past due more than 6 months <strong>and</strong> not more than1 year 10,575 — 126,727 291,034Past due more than 1 year — — — —Provision for doubtful receivables/credit notes — — (45,441) (149,015)Total trade receivables 50,231 351,354 440,697 594,868Fifteenmonthperiod ended31 March2006daysYear ended31 March2007daysYear ended31 March2008daysSix monthperiod ended30 September2008daysThe average credit period 177 149 40 63There is no material difference between fair value <strong>of</strong> receivables <strong>and</strong> their book value. In determining therecoverability <strong>of</strong> trade receivables, the <strong>Group</strong> considers any <strong>change</strong> in the credit quality <strong>of</strong> the trade receivablefrom the date credit was initially granted to the reporting date.The directors consider that the carrying amount <strong>of</strong> trade <strong>and</strong> other receivables approximates to their fair value.14. Cash <strong>and</strong> cash equivalentsAs at31 March2006£As at31 March2007£As at31 March2008£As at30 September2008£Cash <strong>and</strong> cash equivalents 76,180 414,759 1,066,526 374,922Cash <strong>and</strong> cash equivalents comprise cash held by the <strong>Group</strong>.43
15. Equity share capitalAs at31 March2006£As at31 March2007£As at31 March2008£As at30 September2008£Authorised share capital1,000 Ordinary 100p shares 1,000 1,000 — —2,500,000 Founder 1p shares — — 25,000 25,0001,000,000 Ordinary A 1p shares — — 10,000 10,0001,500,000 Ordinary B 1p shares — — 15,000 15,0001,000 1,000 50,000 50,000Allotted, called up <strong>and</strong> fully paid100 Ordinary shares 100 100 — —2,000,000 Founder shares — — 20,000 20,000107,500 Ordinary A shares — — 1,075 1,07540,750 Ordinary B shares — — 408 408100 100 21,483 21,483During 2008 the authorised share capital was increased from £1,000 to £50,000 <strong>and</strong> then sub divided into 1pshares. At the time <strong>of</strong> the sub division the shares were re-designated into 2,500,000 Founder shares, 1,000,000Ordinary A shares <strong>and</strong> 1,500,000 Ordinary B shares.In 2008 107,500 Ordinary A shares were issued with a deemed cost <strong>of</strong> £1.86 per share. The issue formed thebasis <strong>of</strong> a share for share ex<strong>change</strong> regarding the purchase <strong>of</strong> Solution Minds (UK) <strong>Ltd</strong> <strong>and</strong> Solution Minds <strong>Ltd</strong>.Also in 2008, 40,750 Ordinary B shares were issued at a cost <strong>of</strong> £0.1963 per share.The rights attached to Founder Shares include an entitlement to receive dividends <strong>and</strong> an entitlement to attend<strong>and</strong> vote at general meetings <strong>of</strong> the Company. The Founder Shares can be transferred if written consent is givenby the discretion <strong>of</strong> Controlling Shareholders.The rights attached to the Ordinary A <strong>and</strong> Ordinary B shares relating to the transfer <strong>of</strong> shares are more restrictivethan for the rights attached to the Founder shares. The principal difference between the rights attached to thedifferent classes <strong>of</strong> share are that the Ordinary A <strong>and</strong> Ordinary B shares carry no voting rights.16. Share based paymentsAs at 31 March 2008 there were no share based payments.During the period ended 30 September 2008, the Company had the following share based payment arrangement:Six monthperiod ended30 September2008Employee share option planOutst<strong>and</strong>ing at 1 April 2008 —Granted 182,601Outst<strong>and</strong>ing at 30 September 2008 182,601The date <strong>of</strong> grant for these share options was 27 June 2008 <strong>and</strong> the stock value at the time <strong>of</strong> grant was 20p. Thevesting date is 1 April 2010 unless there is a prior sale or flotation. The options have an exercise price <strong>of</strong> 20p <strong>and</strong>all options were granted to option holders on 27 June 2008.A charge <strong>of</strong> £nil was recorded in the consolidated income statement for the period ended 30 September 2008 asthe directors have concluded that, had the fair value <strong>of</strong> equity-settled share options been estimated as at the date<strong>of</strong> grant using a option pricing model under IFRS2- share based payment, the amounts would be immaterial.44
17. ReservesSharePremiumAccountCurrencyTranslationReservePr<strong>of</strong>it <strong>and</strong>LossAccountAs at 1 January 2005 — — —Retained pr<strong>of</strong>it for the period — — 47,085As at 31 March 2006 — — 47,085As at 1 April 2006 — — 47,085Retained pr<strong>of</strong>it for the year — — 127,621As at 31 March 2007 — — 174,706As at 1 April 2007 — — 174,706Transfer to pr<strong>of</strong>it or loss for the year — — (69,951)Retained pr<strong>of</strong>it for the year — — 318,366Ex<strong>change</strong> movements on translation <strong>of</strong> overseas net assets — (259) —Bonus issue <strong>of</strong> shares — — (19,900)Issue <strong>of</strong> shares 206,518 — —As at 31 March 2008 206,518 (259) 403,221As at 1 April 2008 206,518 (259) 403,221Retained pr<strong>of</strong>it for the period — — 218,836Ex<strong>change</strong> movements on translation <strong>of</strong> overseas net assets — (4,625) —As at 30 September 2008 206,518 (4,884) 622,057Share premium accountThe share premium account represents the amounts received by the Company on the issue <strong>of</strong> Ordinary A <strong>and</strong>Ordinary B Shares that are in excess <strong>of</strong> the nominal value <strong>of</strong> the issued shares.Currency translation reserveThe currency translation reserve is used to record ex<strong>change</strong> differences arising from the translation <strong>of</strong> thefinancial statements <strong>of</strong> foreign subsidiaries.18. Trade <strong>and</strong> other payablesAs at31 March2006£As at31 March2007£As at31 March2008£As at30 September2008£Bank overdraft — — — 6,302Trade payables — 149,407 265,264 326,608Corporation tax 21,000 66,386 255,150 308,490Other taxes <strong>and</strong> social security costs 7,481 219,788 504,827 291,012Directors’ current accounts 16,112 26,119 — —Other creditors 7,212 185,105 187,287 87,730Accruals <strong>and</strong> deferred income 82,950 20,692 241,532 92,223134,755 667,497 1,454,060 1,112,365Fifteenmonthperiod ended31 March2006daysYear ended31 March2007daysYearended31 March2008daysSix monthperiod ended30 September2008daysThe average credit period — 194 48 92The directors consider that the book value <strong>of</strong> trade payables, accrued liabilities <strong>and</strong> deferred income approximatesto their fair value at the balance sheet date.45
The maturity pr<strong>of</strong>ile <strong>of</strong> the financial liabilities at 31 March 2008, based on contractual undiscounted payments,are for the trade <strong>and</strong> other payables to fall due for payment on normal commercial terms. The company aims toensure that all payables are paid within the credit time frame.19. Related party transactionsIn the year ended 31 March 2008 <strong>Avisen</strong> <strong>Group</strong> transferred £14,115 <strong>and</strong> £18,674 to <strong>Avisen</strong> LLC <strong>and</strong> <strong>Avisen</strong> BVrespectively in order to aid cash flow. At the year end <strong>Avisen</strong> <strong>Group</strong> Limited was owed £14,115 by <strong>Avisen</strong> LLC<strong>and</strong> £18,674 by <strong>Avisen</strong> BV.In the year ended 31 March 2008 <strong>Avisen</strong> <strong>Group</strong> Limited recharged expenditure <strong>of</strong> £2,300,073 <strong>and</strong> income <strong>of</strong>£24,237 to <strong>Avisen</strong> Limited. These transactions were carried out to reflect the matching <strong>of</strong> income <strong>and</strong>expenditure in relation to the company holding signed service contracts with customers.In the year indirect payments amounting to £3,991,279 in respect <strong>of</strong> invoices raised in <strong>Avisen</strong> Limited werecredited to <strong>Avisen</strong> <strong>Group</strong> Limited’s bank account in error.In the year ended 31 March 2008 a management charge <strong>of</strong> £290,000 was charged to <strong>Avisen</strong> Limited by <strong>Avisen</strong><strong>Group</strong> Limited.As at 31 March <strong>Avisen</strong> <strong>Group</strong> Limited owed <strong>Avisen</strong> Limited £392,790 (2007 – £100).In the year end 31 March 2008 <strong>Avisen</strong> <strong>Group</strong> Limited was charged £31,707 by Solution Minds (UK) <strong>Ltd</strong>, asubsidiary company, for services incurred. At the year end <strong>Avisen</strong> <strong>Group</strong> Limited owed Solution Minds (UK) <strong>Ltd</strong>£31,707.20. Operating lease commitmentsAs at31 March2006L<strong>and</strong> <strong>and</strong>Buildings£As at31 March2007L<strong>and</strong> <strong>and</strong>Buildings£As at31 March2008L<strong>and</strong> <strong>and</strong>Buildings£As at30 September2008L<strong>and</strong> <strong>and</strong>Buildings£Expire within one year — — 33,600 25,200Operating lease payments represent rentals payable by the <strong>Group</strong> in relation to its <strong>of</strong>fice property21. Financial InstrumentsThe <strong>Group</strong>’s operations expose it to a limited amount <strong>of</strong> credit <strong>and</strong> liquidity risk. There is little financial riskarising from the effects <strong>of</strong> <strong>change</strong>s in market prices other than the exposure to movements in ex<strong>change</strong> rates.There is no interest rate risk as it has no significant borrowings.The <strong>Group</strong> does not use derivative financial instruments to manage interest rate costs, <strong>and</strong> as such, no hedgeaccounting is appliedCredit RiskThe <strong>Group</strong> has implemented policies that require appropriate credit checks on potential customers before newaccounts are accepted. The amount <strong>of</strong> any exposure to any individual client is subject to a limit, which ismonitored annually by management.Liquidity RiskThe <strong>Group</strong> has no significant borrowings ensuring there are sufficient available funds for operations <strong>and</strong> plannedexpansions.Interest Rate RiskThe <strong>Group</strong>’s exposure to <strong>change</strong>s in interest rate risk relates primarily to interest-earning financial assets <strong>and</strong>interest-bearing financial liabilities. Interest rate risk is managed by the <strong>Group</strong> on an on going basis with theprimary objective <strong>of</strong> limiting the extent to which net interest expense could be affected by an adverse movementin interest rates.46
Foreign Currency RiskThe <strong>Group</strong> incurs foreign currency risk on sales <strong>and</strong> purchases that are denominated in currencies other thansterling. The principal currency giving rise to this risk is the Euro. At present, the <strong>Group</strong> does not have anyformal policy for hedging against ex<strong>change</strong> exposure.22. Transactions with directorsThe following directors had outst<strong>and</strong>ing loans during the year. Interest is being charged at 6.25 per cent. perannum.The movement on these loans are as follows:Fifteenmonthperiod ended31 March2006£Year ended31 March2007£Year ended31 March2008£Six monthperiod ended30 September2008£Amount Outst<strong>and</strong>ingA Turner — — 94,227 71,944M Hanke — — 106,159 3,881In period to31 March2006£In year2007£In year2008£In period to30 September2008£MaximumA Turner — — 94,227 94,227M Hanke — — 106,159 106,159On 22 May 2008 £200,000 <strong>of</strong> the outst<strong>and</strong>ing loan amounts disclosed above were repaid in full.The outst<strong>and</strong>ing loan amounts disclosed above are to be repaid in full within nine months <strong>of</strong> the period ended30 September 2008.23. Post balance sheet eventsOn 2 November 2008, <strong>Avisen</strong> <strong>Group</strong> Limited entered into an agreement to acquire the trade, certain assets <strong>and</strong>certain liabilities <strong>of</strong> the South African business intelligence company, Harvey Jones Systems (Proprietary)Limited.The cash consideration for the <strong>acquisition</strong> was £25,000. The fair values <strong>of</strong> the significant assets <strong>and</strong> liabilitiesassumed are currently being finalised but are expected to be in line with the consideration.24. Translation to IFRSReconciliation <strong>of</strong> pr<strong>of</strong>it from UK GAAP to IFRSFifteenmonthperiod ended31 March2006£Year ended31 March2007£Year ended31 March2008£Six monthperiod ended30 September2008£UK GAAP pr<strong>of</strong>it for the financial period 72,856 163,100 317,536 220,493Pr<strong>of</strong>it from continuing operations – IFRS 72,856 163,100 317,536 220,493Reconciliation <strong>of</strong> net assets from UK GAAP toIFRSNet assets per UK GAAP at 1 April (8,219) 104,881 631,205 847,073Net assets per IFRS (8,219) 104,881 631,205 847,073GoodwillInternational Financial Reporting St<strong>and</strong>ards require goodwill to be subject to review for impairment rather thanregular amortisation.<strong>Group</strong> cash flow statementThe <strong>Group</strong> cash flow statement prepared in accordance with IFRS presents substantially the same information asthat prepared in accordance with IFRS 1 (revised).47
PART IVSection AAccountant’s Report on the Pro Forma Statement <strong>of</strong> Net Assets <strong>of</strong> the Enlarged <strong>Group</strong>The Directors <strong>and</strong> <strong>Proposed</strong> DirectorsZ GROUP plc31 Vernon StreetLondonW14 0RNThe DirectorsJohn East & Partners Limited10 Finsbury SquareLondonEC2A 1ADDear SirsZ GROUP plc (the “Company”) – <strong>Proposed</strong> <strong>acquisition</strong> <strong>of</strong> <strong>Avisen</strong> <strong>Group</strong> Limited7 January 2009We report on the pro forma net assets (the “Pro forma financial information”) set out in Section B <strong>of</strong> Part IV <strong>of</strong>the admission document <strong>of</strong> Z GROUP plc dated 7 January 2009 (the “Document”) which has been prepared onthe basis described, for illustrative purposes only, to provide information about how the <strong>acquisition</strong> <strong>of</strong> <strong>Avisen</strong><strong>Group</strong> Limited might have affected the financial information presented on the basis <strong>of</strong> the accounting policiesadopted by the Company as at 31 August 2008.Save for any responsibility arising under guidance issued by the London Stock Ex<strong>change</strong> with respect to the AIMMarket to any person as <strong>and</strong> to the extent there provided, to the fullest extent permitted by the law we do notassume any responsibility <strong>and</strong> will not accept any liability to any other person for any loss suffered by any suchother person as a result <strong>of</strong>, arising out <strong>of</strong>, or in connection with this report or our statement, required by <strong>and</strong> givensolely for the purposes <strong>of</strong> complying with Schedule Two <strong>of</strong> the AIM Rules for Companies (the “AIM Rules”),consenting to its inclusion in the Document.ResponsibilitiesIt is the responsibility <strong>of</strong> the Directors <strong>and</strong> <strong>Proposed</strong> Directors to prepare the Pro forma financial information setout in Section B <strong>of</strong> Part IV <strong>of</strong> the Document.It is our responsibility to form an opinion as to the proper compilation <strong>of</strong> the Pro forma financial information <strong>and</strong>to report that opinion to you.In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on anyfinancial information used in the compilation <strong>of</strong> the Pro forma financial information, nor do we acceptresponsibility for such reports or opinions beyond that owed to those to whom those reports or opinions wereaddressed by us at the dates <strong>of</strong> their issue.Basis <strong>of</strong> OpinionWe conducted our work in accordance with the St<strong>and</strong>ards for Investment Reporting issued by the AuditingPractices Board in the United Kingdom. The work that we performed for the purpose <strong>of</strong> making this report,which involved no independent examination <strong>of</strong> any <strong>of</strong> the underlying financial information, consisted primarily<strong>of</strong> comparing the unadjusted financial information with the source documents, considering the evidencesupporting the adjustments <strong>and</strong> discussing the Pro forma financial information with the Directors <strong>and</strong> <strong>Proposed</strong>Directors.48
We planned <strong>and</strong> performed our work so as to obtain the information <strong>and</strong> explanations we considered necessary inorder to provide us with reasonable assurance that the Pro forma financial information has been properlycompiled on the basis stated.OpinionIn our opinion:(a)(b)the Pro forma information has been properly compiled on the basis stated; <strong>and</strong>such basis is consistent with the accounting policies <strong>of</strong> the Company.DeclarationFor the purposes <strong>of</strong> Paragraph (a) <strong>of</strong> Schedule Two <strong>of</strong> the AIM Rules for Companies we are responsible for thisreport as part <strong>of</strong> the Document <strong>and</strong> declare that we have taken all reasonable care to ensure that the informationcontained in this report is, to the best <strong>of</strong> our knowledge, in accordance with the facts <strong>and</strong> contains no omissionlikely to affect its import. This declaration is included in the Document in compliance with Schedule Two <strong>of</strong> theAIM Rules.Yours faithfullyHorwath Clark Whitehill LLPChartered Accountants49
Section BUnaudited Pro Forma Statement <strong>of</strong> Net Assets <strong>of</strong> the Enlarged <strong>Group</strong>The following unaudited Pro forma statement <strong>of</strong> net assets, which is based on the net assets <strong>of</strong> the Companyextracted from the interim financial statements for the six months ended 31 August 2008, has been adjusted toshow the effect <strong>of</strong> the <strong>acquisition</strong> <strong>of</strong> <strong>Avisen</strong> <strong>Group</strong> Limited.The unaudited Pro forma financial information has been prepared for illustrative purposes only, because <strong>of</strong> itsnature, the Pro forma financial information addresses a hypothetical situation <strong>and</strong>, therefore, does not representthe Enlarged <strong>Group</strong>’s actual position or results <strong>and</strong> may not give a true picture <strong>of</strong> the financial position <strong>of</strong> theEnlarged <strong>Group</strong>.(1)Z GROUPplc as at31 August2008£(2)<strong>Avisen</strong> <strong>Group</strong>Limited as at30 September2008£(3)Pro formaAdjustments£Adjusted Pr<strong>of</strong>orma NetAssets£ASSETSGoodwill — 244,889 58,324 303,213Property, plant <strong>and</strong> equipment 8,935 11,369 — 20,304Other intangible assets — 353,929 — 353,929Other receivables 117,500 — — 117,500Non current assets 126,435 610,187 58,324 794,946Trade <strong>and</strong> other receivables 160,091 974,329 — 1,134,420Cash <strong>and</strong> cash equivalents 1,322,558 374,922 — 1,697,480Current assets 1,482,649 1,349,251 — 2,831,900Total assets 1,609,084 1,959,438 58,324 3,626,846Current liabilities (120,749) (1,112,365) (300,000) (1,533,114)NET ASSETS 1,488,335 847,073 (241,676) 2,093,732Notes:The unaudited Pro forma financial information has been prepared on the following basis:1. Company net assetsThe net assets <strong>of</strong> the Company have been extracted from the interim financial statements for the six months ended 31 August 2008.2. <strong>Avisen</strong> <strong>Group</strong> Limited net assetsThe net assets <strong>of</strong> the <strong>Avisen</strong> <strong>Group</strong> Limited have been extracted from the Financial Information set out in Section B <strong>of</strong> Part III <strong>of</strong> thisDocument.3. An adjustment has been made to reflect the estimated goodwill arising on the <strong>acquisition</strong> <strong>of</strong> the <strong>Avisen</strong> <strong>Group</strong>. This is an approximationonly <strong>and</strong> may differ from the goodwill in the consolidated financial statements <strong>of</strong> the Enlarged <strong>Group</strong>. A further adjustment has beenmade to reflect the estimated costs associated with the Acquisition <strong>of</strong> £300,000 (net <strong>of</strong> VAT).For the purposes <strong>of</strong> the Pro forma financial information, goodwill is measured as the excess <strong>of</strong> the cost <strong>of</strong> the business combination overthe net fair value <strong>of</strong> Z GROUP’s identifiable assets <strong>and</strong> liabilities. Consideration has been calculated based on 23,745,879 Z GROUP plcshares at a value <strong>of</strong> 5.25 pence per share. Therefore, the estimated goodwill arising as a result <strong>of</strong> the Acquisition is measured as follows:£Consideration 1,246,659Capitalised transaction costs 300,0001,546,659Net assets acquired 1,488,335Goodwill arising on the Acquisition 58,3244. No adjustments have been made to reflect the trading results <strong>of</strong> the <strong>Avisen</strong> <strong>Group</strong> Limited or any subsequent <strong>acquisition</strong>s made by the<strong>Avisen</strong> <strong>Group</strong> Limited since the date to which its Financial Information has been made up.5. No fair value adjustments have been made as a result <strong>of</strong> the <strong>acquisition</strong> <strong>of</strong> <strong>Avisen</strong> <strong>Group</strong> Limited.50
PART VAdditional information1. Responsibility1.1 The Company, the Directors <strong>and</strong> the <strong>Proposed</strong> Directors accept responsibility, both individually <strong>and</strong>collectively, for the information contained in this document <strong>and</strong> confirm that to the best <strong>of</strong> theirknowledge <strong>and</strong> belief (who having taken all reasonable care to ensure that such is the case), theinformation contained in this document is in accordance with the facts <strong>and</strong> does not omit anything likelyto affect the import <strong>of</strong> such information.1.2 Each member <strong>of</strong> the Concert Party accepts responsibility for the information contained in this documentrelating to himself <strong>and</strong> <strong>Avisen</strong> <strong>and</strong> to the best <strong>of</strong> their knowledge <strong>and</strong> belief (who having taken allreasonable care to ensure that such is the case), the information contained in this document for which theyare responsible is in accordance with the facts <strong>and</strong> does not omit anything likely to affect the import <strong>of</strong>such information.2. The Company <strong>and</strong> its subsidiaries2.1 The Company was incorporated in Engl<strong>and</strong> <strong>and</strong> Wales on 20 April 2005 as a public limited companyunder the 1985 Act, with registered number 5429800 <strong>and</strong> under the name Z GROUP plc. On 16 June2005, the Company obtained a certificate to commence trading under section 117 <strong>of</strong> the 1985 Act. Theliability <strong>of</strong> the members <strong>of</strong> the Company is limited.2.2 The registered <strong>of</strong>fice <strong>and</strong> principal place <strong>of</strong> business <strong>of</strong> the Company is 31 Vernon Street, LondonW14 0RN (telephone number 0870 011 1173).2.3 The principal legislation under which the Company operates is the 1985 Act <strong>and</strong> the 2006 Act <strong>and</strong> theregulations made thereunder. The Ordinary Shares have been created pursuant to the 1985 Act.2.4 On Admission, the Company will be the holding company <strong>of</strong> the Enlarged <strong>Group</strong> <strong>and</strong> will, directly orindirectly, own the following companies:2.4.1 <strong>Avisen</strong>, which was incorporated in Engl<strong>and</strong> <strong>and</strong> Wales on 21 July 2004 as a private limitedcompany <strong>and</strong> registered under number 5185468. On Admission it will be a wholly ownedsubsidiary <strong>of</strong> the Company;2.4.2 Solution Minds <strong>Ltd</strong>, which was incorporated in Engl<strong>and</strong> <strong>and</strong> Wales on 20 July 2006 as a privatelimited company <strong>and</strong> registered under number 5881956. On Admission it will continue to be awholly owned subsidiary <strong>of</strong> <strong>Avisen</strong>.2.4.3 Solution Minds (UK) <strong>Ltd</strong>, which was incorporated in Engl<strong>and</strong> <strong>and</strong> Wales on 16 December 2005 asa private limited company <strong>and</strong> registered under number 5656050. On Admission it will continue tobe a wholly owned subsidiary <strong>of</strong> <strong>Avisen</strong>.2.4.4 <strong>Avisen</strong> Limited, which was incorporated in Engl<strong>and</strong> <strong>and</strong> Wales on 30 September 2003 as a privatelimited company <strong>and</strong> registered under number 4916520. On Admission it will continue to be awholly owned subsidiary <strong>of</strong> <strong>Avisen</strong>.2.4.5 Enfourmen Limited, which was incorporated in Engl<strong>and</strong> <strong>and</strong> Wales on 13 January 2004 as aprivate limited company <strong>and</strong> registered under number 5013598. On Admission it will continue tobe a wholly owned subsidiary <strong>of</strong> <strong>Avisen</strong>.2.4.6 Dawnglen Investments (Proprietary) Limited (to be renamed <strong>Avisen</strong> (Proprietary) Limited), whichwas incorporated in South Africa on 17 September 2007 as a private limited company <strong>and</strong>registered under number 2008/022385/07. On Admission it will continue to be a wholly ownedsubsidiary <strong>of</strong> <strong>Avisen</strong>.2.4.7 <strong>Avisen</strong> LLC, which was incorporated in the State <strong>of</strong> Massachusetts on 5 June 2007 as a limitedliability company <strong>and</strong> registered under identification number 000953063. On Admission it willcontinue to be a wholly owned subsidiary <strong>of</strong> <strong>Avisen</strong>.2.4.8 <strong>Avisen</strong> BV, which was incorporated in Amsterdam, the Netherl<strong>and</strong>s on 4 January 2008 as aprivate limited liability company <strong>and</strong> registered at the Chamber <strong>of</strong> Commerce under registrationnumber 34291338. On Admission it will continue to be a wholly owned subsidiary <strong>of</strong> <strong>Avisen</strong>.51
2.4.9 Z <strong>Group</strong> Investments Limited, which was incorporated in Engl<strong>and</strong> <strong>and</strong> Wales on 10 September2003 as a private limited company <strong>and</strong> registered under number 4893689. On Admission it will bea wholly owned subsidiary <strong>of</strong> the Company.3. Share Capital3.1 The authorised <strong>and</strong> issued share capital <strong>of</strong> the Company at the date <strong>of</strong> this document <strong>and</strong> immediatelyfollowing Admission assuming passing <strong>of</strong> the Resolutions are as follows:As at the date <strong>of</strong> this documentAuthorisednumber <strong>of</strong>OrdinaryShares52On AdmissionIssued <strong>and</strong> fully paidAuthorisednumber <strong>of</strong>OrdinaryShares Issued <strong>and</strong> fully paidNumber Amount Number AmountAuthorisedshare capital 100,000,000 23,745,879 £1,187,294 200,000,000 110,412,546 £5,520,6273.2 At the date <strong>of</strong> its incorporation, the authorised share capital <strong>of</strong> the Company was £50,000 divided into50,000 ordinary shares <strong>of</strong> 100p each, <strong>of</strong> which two subscriber shares were in issue, fully paid.3.3 On 15 June 2005, the authorised share capital <strong>of</strong> the Company was increased from £50,000, consisting <strong>of</strong>1,000,000 ordinary shares <strong>of</strong> £0.05 each, to £5,000,000 consisting <strong>of</strong> 100,000,000 ordinary shares <strong>of</strong>£0.05 each by the creation <strong>of</strong> a further 99,000,000 Ordinary Shares <strong>of</strong> £0.05 each. The Company thenentered into a share for share ex<strong>change</strong> agreement with the shareholders <strong>of</strong> Net2Roam Limited, underwhich the Company issued 16,692,795 Ordinary Shares as consideration for the entire issued share capital<strong>of</strong> Net2Roam Limited.3.4 On 21 June 2005, the Company issued 4,907,408 Ordinary Shares at a price <strong>of</strong> 108p per Ordinary Sharepursuant to a placing <strong>and</strong> its admission to trading on AIM.3.5 The Company has issued the following Ordinary Shares:3.5.1 On 22 June 2006, the Company issued 240,100 Ordinary Shares to Berkeley Consultants Limited.3.5.2 On 29 November 2006, the Company issued 33,072 Ordinary Shares to Hansard CommunicationsLimited.3.5.3 On 15 December 2006, the Company issued 3,942,134 Ordinary Shares upon the purchase <strong>of</strong> theminority shareholdings in Onshare Limited.3.5.4 On 26 February 2007, the Company issued 60,000 Ordinary Shares to Jonty Slater.3.5.5 The total amount <strong>of</strong> issued <strong>and</strong> authorised shares (all <strong>of</strong> which had a par value <strong>of</strong> £0.05)outst<strong>and</strong>ing at the beginning <strong>and</strong> the end <strong>of</strong> the Company’s latest financial year ended on29 February 2008 was as follows:Date Authorised Shares Issued Shares28 February 2007 5,000,000 1,187,29429 February 2008 5,000,000 1,187,2943.6 If the Proposals are approved, the authorised share capital <strong>of</strong> the Company will be increased from£5,000,000 divided into 100,000,000 Ordinary Shares to £10,000,000 divided into 200,000,000 OrdinaryShares.3.7 If the Proposals are implemented, on Admission the Company will issue <strong>and</strong> allot the ConsiderationShares.The following 200,775 Ordinary Shares are held under option. Information on the Share Option Schemeis set out in paragraph 9 <strong>of</strong> this Part V.Number <strong>of</strong>OrdinaryNameShare Option PlanShares heldunder option Date <strong>of</strong> grantExercisepriceGraeme HossieIndividual option 43,295 21 June 2005 55pgrant outside <strong>of</strong>share option plansDuncan Neale EMI Plan 157,480 15 December 2006 63.5p
3.8 Save as referred to in this paragraph 3 <strong>and</strong> in paragraph 9, no share or loan capital <strong>of</strong> the Company isunder option or has been agreed, conditionally or unconditionally, to be put under option.3.9 The Consideration Shares will rank pari passu in all respects with the Existing Ordinary Shares includingthe right to receive all dividends <strong>and</strong> other distributions declared, made or paid after Admission on theissued share capital.3.10 The Company does not have any securities in issue not representing the share capital.3.11 No shares in the capital <strong>of</strong> the Company are held by or on behalf <strong>of</strong> the Company or by any subsidiaries inthe Company.3.12 Save as disclosed in this document, there are no <strong>acquisition</strong> rights or obligations over authorised butunissued share capital or undertakings to increase the capital <strong>of</strong> the Company.3.13 Save as disclosed in this document, there are no convertible, ex<strong>change</strong>able securities or securities withwarrants in the Company.4. Memor<strong>and</strong>um <strong>of</strong> AssociationThe principal objects <strong>of</strong> the Company are set out in paragraph 4 <strong>of</strong> its memor<strong>and</strong>um <strong>of</strong> association (which isavailable for inspection at the address specified in paragraph 16 below <strong>and</strong> principally include acting as a holdingcompany <strong>and</strong> the carrying on <strong>of</strong> business as a general commercial company (including the carrying on <strong>of</strong> anytrade or business whatsoever <strong>and</strong> the doing <strong>of</strong> all such things as are incidental or conducive to the carrying on <strong>of</strong>any trade or business).5. Articles <strong>of</strong> AssociationThe Articles <strong>of</strong> Association contain, inter alia, provisions to the following effect:5.1 Rights attaching to the Ordinary Shares5.1.1 VotingSubject to any restrictions imposed by or pursuant to these Articles <strong>and</strong> to any rights or restrictionsattached to any special class <strong>of</strong> shares in the capital <strong>of</strong> the Company, on a show <strong>of</strong> h<strong>and</strong>s everymember personally present (or by proxy or being a corporation), present by a duly appointedrepresentative (unless the proxy in either case or the representative is himself a member entitled tovote) shall have one vote only, <strong>and</strong> in case <strong>of</strong> a poll every member present in person or by proxyshall (subject to these Articles) have one vote for every share in the capital <strong>of</strong> the Company heldby him.No holder <strong>of</strong> a share shall, unless the Directors otherwise determine, be entitled (save as proxy foranother member) to be present or vote at a general meeting either personally or by proxy if:(a)(b)(c)any call or such other such sum as is presently payable by him to the Company in respect<strong>of</strong> that share remains unpaid; orhe or any other person who appears to be interested in that share has been duly served anotice, pursuant to section 793 <strong>of</strong> the 2006 Act or any other statutory provision concerningthe disclosure <strong>of</strong> interests in voting shares, with a notice requiring the provision to theCompany <strong>of</strong> information regarding that share, <strong>and</strong> is in default in complying with suchnotice; orhe has been duly served with a notice pursuant to the Articles requiring the disclosure <strong>of</strong>the identity <strong>of</strong> the beneficial owner <strong>of</strong> that share <strong>and</strong> (if such owner is a body corporate)such other information specified in the Articles as may be required by that notice, <strong>and</strong> is indefault in complying with such notice.Any such notice must (inter alia) specify a period for compliance with its requirementsthat must not be less than 14 days from the date <strong>of</strong> service <strong>of</strong> the notice.5.1.2 DividendsThe Company may by ordinary resolution declare dividends. No dividend will be payable exceptout <strong>of</strong> the pr<strong>of</strong>its <strong>of</strong> the Company available for distribution in accordance with the provisions <strong>of</strong>the Statutes, or in excess <strong>of</strong> the amount recommended by the Directors. The Directors may payinterim dividends <strong>of</strong> such amounts <strong>and</strong> on such dates as they think fit. There is no fixed date forthe payment <strong>of</strong> dividends.53
Subject to any rights or privileges for the time being attached to any shares having preferential orspecial rights in regard to dividend, the pr<strong>of</strong>its <strong>of</strong> the Company that it shall from time to time havedetermined to distribute by way <strong>of</strong> dividend shall be applied in payment <strong>of</strong> dividends upon theshares in proportion to the amounts paid up thereon respectively otherwise than in advance <strong>of</strong>calls. If any share is issued upon terms providing that it shall rank for dividend as from or after aparticular date, or be entitled to dividends declared after a particular date, such share shall rank foror be entitled to dividend accordingly. Dividends may be paid in any currency.The Directors may retain any dividend payable on or in respect <strong>of</strong> a share on which the Companyhas a lien or (except in the circumstances specified in the Articles) if:(a) a notice has been duly served in respect <strong>of</strong> that share pursuant to section 793 <strong>of</strong> the 2006Act or any other statutory provision concerning the disclosure <strong>of</strong> interests in voting shares;(b) the share or shares which are the subject <strong>of</strong> that notice represent in aggregate at least 0.25per cent <strong>of</strong> that class <strong>of</strong> share; <strong>and</strong>(c)`the notice has not been complied with within the period stipulated in the notice (whichmust not be less than 14 days).Any dividend remaining unclaimed after a period <strong>of</strong> 12 years from the date such dividendbecomes due for payment shall be forfeited <strong>and</strong> shall revert to the Company.5.1.3 Distribution <strong>of</strong> assets on a winding-upSubject to any special rights for the time being attached to any class <strong>of</strong> shares, on a return <strong>of</strong> assetson liquidation or otherwise the surplus assets <strong>of</strong> the Company remaining after payment <strong>of</strong> itsliabilities shall be distributed in proportion to the amounts paid up or deemed to be paid up on theshares <strong>of</strong> the Company then in issue.5.1.4 Return <strong>of</strong> CapitalWithout prejudice to any special rights conferred on shareholders or holders <strong>of</strong> a class <strong>of</strong> shares<strong>and</strong> subject to the provisions <strong>of</strong> the Statutes <strong>and</strong> these Articles any shares in the capital <strong>of</strong> theCompany for the time being may be allotted with such special rights, privileges or restrictions asthe Company may by ordinary resolution (before the allotment <strong>of</strong> such shares) from time to timedetermine.5.1.5 Alteration <strong>of</strong> share capitalThe Company may from time to time by ordinary resolution increase its capital by the creation <strong>of</strong>new shares.The Company may from time to time by ordinary resolution:(a)(b)(c)consolidate <strong>and</strong> divide all or any <strong>of</strong> its share capital into shares <strong>of</strong> larger amount than itsexisting shares; orcancel any shares which at the date <strong>of</strong> the passing <strong>of</strong> the relevant resolution have not beentaken or agreed to be taken by any person <strong>and</strong> diminish the amount <strong>of</strong> its share capital bythe nominal amount <strong>of</strong> the shares so cancelled; orby sub-division <strong>of</strong> its existing shares, or any <strong>of</strong> them, divide its capital, or any part there<strong>of</strong>,into shares <strong>of</strong> smaller amount.The Company may from time to time by special resolution reduce its share capital, any capitalredemption reserve <strong>and</strong> any share premium account. These provisions are not more stringent thanrequired by law.5.1.6 Purchase <strong>of</strong> Own SharesThe Company may from time to time purchase its own shares (including any redeemable shares)but no contract for such a purchase shall be entered into unless the purchase has previously beensanctioned by an extraordinary resolution passed at a separate meeting <strong>of</strong> the holders <strong>of</strong> any class<strong>of</strong> securities issued by the Company which are listed <strong>and</strong> convertible into shares which are <strong>of</strong> thesame class as those proposed to be purchased.54
available to members <strong>of</strong> the relevant company (any such interest being deemed for thepurpose <strong>of</strong> this Article to be a material interest in all circumstances); or(e) an arrangement for the benefit <strong>of</strong> the employees <strong>of</strong> the Company or any <strong>of</strong> its subsidiaryundertakings which does not award him any privilege or benefit not generally awarded tothe employees to whom such arrangement relates; or(f) the purchase <strong>and</strong>/or maintenance <strong>of</strong> any insurance policy for the benefit <strong>of</strong> directors or forthe benefit <strong>of</strong> persons including directors.Subject to the provisions <strong>of</strong> the Statutes, a director may, notwithst<strong>and</strong>ing his <strong>of</strong>fice:(a) be party to, or otherwise interested in, any contract, transaction, arrangement or proposalwith the Company or in which the Company is otherwise interested;(b) be a director or other <strong>of</strong>ficer <strong>of</strong>, or employed by or party to any contract, transaction,arrangement or proposal with, or otherwise interested in, any body corporate promoted bythe Company or in which the Company is otherwise interested; <strong>and</strong>(c) act by himself or his firm in a pr<strong>of</strong>essional capacity (other than that <strong>of</strong> an auditor) for theCompany or any body corporate promoted by the Company or in which the Company isotherwise interested.A director shall not, by reason <strong>of</strong> his holding an <strong>of</strong>fice as a director (or <strong>of</strong> the fiduciaryrelationship established by holding that <strong>of</strong>fice), be liable to account to the Company for anyremuneration, pr<strong>of</strong>it or other benefit which results.5.3 Transfer <strong>of</strong> SharesAll transfers <strong>of</strong> shares may be effected in certificated form by transfer in writing in any usual or commonform or in any other form acceptable to the Directors or in uncertificated form in accordance with thefacilities <strong>and</strong> requirements <strong>of</strong> the relevant system concerned or by any other method which is authorisedby statute <strong>and</strong> approved or adopted by the Directors. Any instrument <strong>of</strong> transfer for a share in certificatedform shall be signed by or on behalf <strong>of</strong> the transferor <strong>and</strong> (except in the case <strong>of</strong> fully paid shares) by or onbehalf <strong>of</strong> the transferee. The transferor shall remain the holder <strong>of</strong> the shares concerned until the name <strong>of</strong>the transferee is entered in the register <strong>of</strong> members in respect there<strong>of</strong>.The Directors may in their absolute discretion, <strong>and</strong> without assigning any reason therefor, refuse toregister any transfer <strong>of</strong> a share held in certificated form:(a) on which the Company has a lien, being a partly paid share, unless to do so would preventdealings taking place on an open <strong>and</strong> proper basis;(b) (except in the circumstances specified in the Articles) if:(i) a notice has been duly served in respect <strong>of</strong> that share pursuant to section 793 <strong>of</strong> the 2006Act or any other statutory provision concerning the disclosure <strong>of</strong> interests in voting shares;(ii) the share or shares which are the subject <strong>of</strong> that notice represent in aggregate at least 0.25per cent. <strong>of</strong> that class <strong>of</strong> share; <strong>and</strong>(iii) the notice has not been complied with within the period stipulated in the notice (whichmust not be less than 14 days); or(iv) that is in favour <strong>of</strong> more than four persons jointly.The Directors may also decline to recognise a transfer <strong>of</strong> shares unless it is in respect <strong>of</strong> only oneclass <strong>of</strong> share <strong>and</strong> is deposited at the place where the register <strong>of</strong> members <strong>of</strong> the Company is keptfor the time being (or at such other place as the Directors may from time to time determine)accompanied (save in the case <strong>of</strong> a transfer by a recognised clearing house or a nominee <strong>of</strong> arecognised clearing house or <strong>of</strong> a recognised investment ex<strong>change</strong>, unless <strong>and</strong> to the extent thatcertificates must by law have been issued in respect <strong>of</strong> the shares in question) by the relevant sharecertificate(s) <strong>and</strong> in any case such other evidence as the Directors may reasonably require to showthe right <strong>of</strong> the transferor to make the transfer.56
5.4 Variation <strong>of</strong> RightsWhenever the share capital is divided into different classes <strong>of</strong> shares, all or any <strong>of</strong> the rights attached toany class (unless otherwise provided by the terms <strong>of</strong> issue <strong>of</strong> the shares <strong>of</strong> that class) may be modified,varied, extended, abrogated or surrendered either in such manner (if any) as may be provided by suchrights or (in the absence <strong>of</strong> any such provision) with the written consent <strong>of</strong> the holders <strong>of</strong> at leastthree-fourths in nominal value <strong>of</strong> the issued shares <strong>of</strong> that class or with the sanction <strong>of</strong> an extraordinaryresolution passed at a separate general meeting <strong>of</strong> the holders <strong>of</strong> such shares. To every separate generalmeeting <strong>of</strong> the holders <strong>of</strong> a particular class <strong>of</strong> shares the provisions <strong>of</strong> the Articles relating to generalmeetings shall (mutatis mut<strong>and</strong>is) apply except as varied by section 334 <strong>of</strong> the 2006 Act.5.5 Borrowing PowersSubject to the provisions <strong>of</strong> Article 128 the Directors may exercise all the powers <strong>of</strong> the Company toborrow or raise money, to mortgage or charge all or any <strong>of</strong> its undertaking, property, assets <strong>and</strong> uncalledcapital, to issue debentures <strong>and</strong> other securities, <strong>and</strong> to give security whether outright or as collateralsecurity for any debt, liability or obligation <strong>of</strong> the Company, any subsidiary <strong>of</strong> the Company or <strong>of</strong> anythird party.The Directors shall restrict the borrowings <strong>of</strong> the Company <strong>and</strong> exercise all voting <strong>and</strong> other rights orpowers <strong>of</strong> control exercisable by the Company in relation to its subsidiaries (if any) so as to secure (asregards subsidiaries so far as by such exercise they can secure) that the aggregate amount for the timebeing remaining undischarged <strong>of</strong> all moneys borrowed by the <strong>Group</strong> (which expression in this Article <strong>and</strong>Article 129 means <strong>and</strong> includes the Company <strong>and</strong> all its subsidiaries for the time being) <strong>and</strong> for the timebeing owing to persons outside the <strong>Group</strong> shall not, without the previous sanction <strong>of</strong> an ordinaryresolution <strong>of</strong> the Company, exceed an amount equal to the greater <strong>of</strong> 4 times the Adjusted Capital <strong>and</strong>Reserves <strong>and</strong> £10,000,000. The certificate <strong>of</strong> the Auditors for the time being as to the amount <strong>of</strong> theAdjusted Capital <strong>and</strong> Reserves at any time shall be conclusive <strong>and</strong> binding upon all concerned.5.6 Electronic communicationThe Articles <strong>of</strong> Association provide that notices <strong>and</strong> other documents may be sent by the Company to, <strong>and</strong>received from, shareholders by electronic communication, subject to certain conditions, in addition toother methods <strong>of</strong> communication. Documents may also be made available to shareholders on a website.5.7 <strong>Proposed</strong> <strong>change</strong>s to the Articles <strong>of</strong> Association(a)Articles which duplicate statutory provisionsProvisions in the current Articles <strong>of</strong> Association which replicate provisions contained in the 1985Act are in the main amended to bring them into line with the 2006 Act. Certain examples <strong>of</strong> suchprovisions include provisions as to the form <strong>of</strong> resolutions, the variation <strong>of</strong> class rights, <strong>and</strong>provisions regarding the period <strong>of</strong> notice required to convene general meetings. The main <strong>change</strong>smade to reflect this approach are detailed below.(b)(c)(d)Form <strong>of</strong> resolutionThe current Articles <strong>of</strong> Association contain a provision that, where for any purpose an ordinaryresolution is required, a special or extraordinary resolution is also effective <strong>and</strong> that, where anextraordinary resolution is required, a special resolution is also effective. This provision is beingamended as the concept <strong>of</strong> extraordinary resolutions has not been retained under the 2006 Act.Variation <strong>of</strong> class rightsThe current Articles <strong>of</strong> Association contain provisions regarding the variation <strong>of</strong> class rights. Theproceedings <strong>and</strong> specific quorum requirements for a meeting convened to vary class rights arecontained in the 2006 Act. The relevant provisions have therefore been removed in the proposednew Articles <strong>of</strong> Association.Convening extraordinary <strong>and</strong> annual general meetingsThe provisions in the current Articles <strong>of</strong> Association dealing with the convening <strong>of</strong> generalmeetings <strong>and</strong> the length <strong>of</strong> notice required to convene general meetings are being amended toconform to new provisions in the 2006 Act. In particular an extraordinary general meeting toconsider a special resolution can be convened on 14 days’ notice whereas previously 21 days’notice was required.57
(e)(f)(g)Votes <strong>of</strong> membersUnder the 2006 Act proxies are entitled to vote on a show <strong>of</strong> h<strong>and</strong>s whereas under the currentArticles <strong>of</strong> Association proxies are only entitled to vote on a poll. The time limits for theappointment or termination <strong>of</strong> a proxy appointment have been altered by the 2006 Act so that theArticles <strong>of</strong> Association cannot provide that they should be received more than 48 hours before themeeting or in the case <strong>of</strong> a poll taken more than 48 hours after the meeting, more than 24 hoursbefore the time for the taking <strong>of</strong> a poll, with weekends <strong>and</strong> bank holidays being permitted to beexcluded for this purpose. Multiple proxies may be appointed provided that each proxy isappointed to exercise the rights attached to a different share held by the shareholder. The proposednew Articles <strong>of</strong> Association reflect all <strong>of</strong> these new provisions.Age <strong>of</strong> directors on appointmentThe current Articles <strong>of</strong> Association contain a provision requiring a director’s age to be disclosed ifhe has attained the age <strong>of</strong> 70 years or more in the notice convening a meeting at which the directoris proposed to be appointed or re-appointed. Such provision could now fall foul <strong>of</strong> theEmployment Equality (Age) Regulations 2006 <strong>and</strong> so has been removed from the proposed newArticles <strong>of</strong> Association.Conflicts <strong>of</strong> interestThe 2006 Act sets out directors’ general duties which largely codify the existing law but withsome <strong>change</strong>s. Under the 2006 Act, from 1 October 2008 a director must avoid a situation wherehe has, or can have, a direct or indirect interest that conflicts, or possibly may conflict with thecompany’s interests. The requirement is very broad <strong>and</strong> could apply, for example, if a directorbecomes a director <strong>of</strong> another company or a trustee <strong>of</strong> another organisation. The 2006 Act allowsdirectors <strong>of</strong> public companies to authorise conflicts <strong>and</strong> potential conflicts, where appropriate,where the articles <strong>of</strong> association contain a provision to this effect. The 2006 Act also allows thearticles <strong>of</strong> association to contain other provisions for dealing with directors’ conflicts <strong>of</strong> interest toavoid a breach <strong>of</strong> duty. The proposed new Articles <strong>of</strong> Association give the directors authority toapprove such situations <strong>and</strong> to include other provisions to allow conflicts <strong>of</strong> interest to be dealtwith in a similar way to the current position.There are safeguards which will apply when directors decide whether to authorise a conflict orpotential conflict. First, only directors who have no interest in the matter being considered will beable to take the relevant decision, <strong>and</strong> secondly, in taking the decision the directors must act in away they consider, in good faith, will be most likely to promote the company’s success. Thedirectors will be able to impose limits or conditions when giving authorisation if they think this isappropriate It is also proposed that the proposed new Articles <strong>of</strong> Association should containprovisions relating to confidential information <strong>and</strong> attendance at board meetings to protect adirector being in breach <strong>of</strong> duty if a conflict <strong>of</strong> interest or potential conflict <strong>of</strong> interest arises. Theseprovisions will only apply where the position giving rise to the potential conflict has previouslybeen authorised by the directors.(h)Notice <strong>of</strong> board meetingsUnder the current Articles <strong>of</strong> Association, when a director is abroad it is not necessary to servenotice on him <strong>of</strong> directors’ meetings (but an alternate director can be appointed in his place). Thisprovision has been amended as modern communications mean that there may be no particularobstacle to giving notice to a director who is abroad. It has been replaced with a more generalprovision that it shall not be necessary to serve a director with notice <strong>of</strong> a meeting when he is notin the United Kingdom unless he supplies the Company with the information necessary to ensurethat he receives notice <strong>of</strong> a meeting before it takes place. Notice to directors <strong>of</strong> Board meetingsmay now also be given by e-mail at an e-mail address provided to the Company by that director.5.8 Other relevant laws <strong>and</strong> regulations5.8.1 Disclosure <strong>of</strong> interests in sharesA shareholder in a public company incorporated in the UK whose shares are admitted to tradingon AIM is required pursuant to rule 5 <strong>of</strong> the Disclosure <strong>and</strong> Transparency Rules to notify theCompany <strong>of</strong> the percentage <strong>of</strong> his voting rights if the percentage <strong>of</strong> voting rights which he holds as58
a shareholder or through his direct or indirect holding <strong>of</strong> financial instruments reaches, exceeds orfalls below certain thresholds.Pursuant to Part 22 <strong>of</strong> the 2006 Act <strong>and</strong> the Articles, the Company is empowered by notice inwriting to require any person whom the Company knows, or has reasonable cause to believe to beor, at any time during the three (3) years immediately preceding the date on which the notice isissued, within a reasonable time to disclose to the Company particulars <strong>of</strong> any interests, rights,agreements or arrangements affecting any <strong>of</strong> the shares held by that person or in which such otherperson as aforesaid is interested.6. Directors’ <strong>and</strong> other’s interests6.1 The interests <strong>of</strong> the New Board <strong>and</strong> the persons connected with them (within the meaning <strong>of</strong> section252-254 <strong>of</strong> the 2006 Act) in the share capital <strong>of</strong> the Company as at the date <strong>of</strong> this document (which havebeen notified to the Company pursuant Chapter 3 <strong>of</strong> the Disclosure Rules <strong>and</strong> Transparency Rules orcould, with reasonable diligence, be ascertained by the Directors <strong>and</strong> <strong>Proposed</strong> Directors) <strong>and</strong> as they areexpected to be immediately following Admission are as follows:As at the date <strong>of</strong> this documentNumber <strong>of</strong>OrdinarySharesPercentage <strong>of</strong>issued ordinaryshare capitalOn AdmissionNumber <strong>of</strong>OrdinarySharesPercentage <strong>of</strong>Enlarged IssuedOrdinaryShare CapitalJon Claydon (1) 1,729,170 7.28 1,729,170 1.57Marcus Yeoman (2) 1,182,640 4.98 1,182,640 1.07Andrew Turner* — — 28,519,259 25.83Marcus Hanke (3) * 50,000 0.21 28,569,259 25.88Louis Peacock* — — 8,767,756 7.94Keith Jones (4) * — — 7,285,363 6.60(1) 1,345,170 Ordinary Shares are held directly by Jon Claydon <strong>and</strong> 384,000 Ordinary Shares are held in the name <strong>of</strong> ClachanNominees Limited(2) These Ordinary Shares are held in the name <strong>of</strong> Pershing Nominees Limited(3) These Ordinary Shares are held in the name <strong>of</strong> Str<strong>and</strong> Nominees Limited(4) These Ordinary Shares are held by Keith Jones’ partner, Odette McMahon* A member <strong>of</strong> the Concert Party6.2 Save as disclosed above, the Directors <strong>and</strong> <strong>Proposed</strong> Directors are not aware <strong>of</strong> any interests <strong>of</strong> personsconnected with them which would, if such connected person were a Director, be required to be notified tothe Company pursuant to Chapter 3 <strong>of</strong> the Disclosure Rules <strong>and</strong> Transparency Rules <strong>and</strong> would berequired to be entered in the register <strong>of</strong> directors’ interests pursuant to section 809 <strong>of</strong> the 2006 Act.6.3 So far as the Directors <strong>and</strong> <strong>Proposed</strong> Directors are aware, the following persons (other than as disclosed inparagraph 6.1 above) are or will be directly or indirectly interested (beneficial unless otherwise disclosed)in 3 per cent. or more <strong>of</strong> the issued share capital <strong>of</strong> the Company as at the date <strong>of</strong> this document <strong>and</strong> onAdmission:As at the date <strong>of</strong> this documentNumber <strong>of</strong>OrdinarySharesPercentage <strong>of</strong>issued ordinaryshare capitalOn AdmissionNumber <strong>of</strong>OrdinarySharesPercentage <strong>of</strong>Enlarged IssuedOrdinaryShare capitalJamie True (1) 3,947,325 16.62 3,947,325 3.58Jack Bekhor (1) 3,947,325 16.62 3,947,325 3.58Ian Smith (2) 2,388,428 10.06 2,388,428 2.16Chris Potts (3) 1,945,180 8.19 1,945,180 1.76Credit Agricole Cheuvreux 714,000 3.0 714,000 0.65(1) These Ordinary Shares are held in the name <strong>of</strong> Clachan Nominees Limited.(2) 2,365,280 Ordinary Shares are held by Pershing Nominees Limited <strong>and</strong> 23,148 Ordinary Shares are held directly by Ian Smith.(3) These Ordinary Shares are held by Pershing Nominees Limited.6.4 Save as disclosed in paragraphs 6.1 <strong>and</strong> 6.3 above, the Directors <strong>and</strong> <strong>Proposed</strong> Directors are not aware <strong>of</strong>any interest (within the meaning <strong>of</strong> Part 22 <strong>of</strong> the 2006 Act) in the Company’s ordinary share capitalwhich, at the date <strong>of</strong> this document <strong>and</strong>/or immediately on Admission, would amount to 3 per cent. ormore <strong>of</strong> the Company’s issued ordinary share capital.59
6.5 The Company’s significant shareholders do not have <strong>and</strong> on Admission will not have different votingrights to the Company’s other shareholders.6.6 As at 6 January 2009 (being the latest practicable date prior to publication <strong>of</strong> this document) <strong>and</strong> save asdisclosed in this paragraph 6, the Directors <strong>and</strong> the <strong>Proposed</strong> Directors are not aware <strong>of</strong> any person orpersons who, directly or indirectly, jointly or severally, own or exercise or could own or exercise controlover the Company.6.7 Save as disclosed in this document in respect <strong>of</strong> the Vendors, the Company is not aware <strong>of</strong> anyarrangements which may at a subsequent date result in a <strong>change</strong> <strong>of</strong> control in the Company.6.8 There are no m<strong>and</strong>atory takeover bids outst<strong>and</strong>ing in respect <strong>of</strong> the Company <strong>and</strong> none has been madeeither in the last financial year or the current financial year <strong>of</strong> the Company. No public takeover bids havebeen made by third parties in respect <strong>of</strong> the Company’s issued share capital in the current financial yearnor in the last financial year.6.9 Save as set out in this paragraph 6, following Admission neither the Directors nor the <strong>Proposed</strong> Directorsnor any person connected with the Directors or <strong>Proposed</strong> Directors (within the meaning <strong>of</strong> section 809 <strong>of</strong>the 2006 Act) is expected to have any interest, beneficial or non-beneficial, in the share or loan capital <strong>of</strong>the Company.6.10 Save as disclosed in this document, none <strong>of</strong> the Directors nor any <strong>of</strong> the <strong>Proposed</strong> Directors have anyinterest, direct or indirect, in any assets which have been or are proposed to be acquired or disposed <strong>of</strong> by,or leased to, the Company <strong>and</strong> no contract or arrangement exists in which a Director or <strong>Proposed</strong> Directoris materially interested <strong>and</strong> which is significant in relation to the business <strong>of</strong> the Enlarged <strong>Group</strong>.6.11 There are no outst<strong>and</strong>ing loans granted by the Company to any <strong>of</strong> the Directors, nor are there anyguarantees provided by the Company for their benefit.6.12 Save as disclosed in this paragraph 6, none <strong>of</strong> the Directors nor any <strong>of</strong> the <strong>Proposed</strong> Directors has anyinterest, whether direct or indirect, in any transaction which is or was unusual in its nature or conditions orsignificant to the business <strong>of</strong> the Company taken as a whole <strong>and</strong> which was effected by the Companysince its incorporation <strong>and</strong> which remains in any respect outst<strong>and</strong>ing or unperformed.6.13 Save as disclosed in paragraph 3.7 <strong>of</strong> this Part V, neither the Directors nor the <strong>Proposed</strong> Directors, norany member <strong>of</strong> their respective families, has a related financial product (as defined in the AIM Rules)referenced to the Ordinary Shares.6.14 During the disclosure period, the following transactions have taken placing in the issued share capital <strong>of</strong><strong>Avisen</strong>:(i) On 8 January 2008, the issued share capital <strong>of</strong> <strong>Avisen</strong> was increased from 1,000 ordinary shares <strong>of</strong>£1 each to 50,000 ordinary shares <strong>of</strong> £1 each;(ii) On 8 January 2008, a bonus issue <strong>of</strong> 199 ordinary shares <strong>of</strong> £1 each was declared for each issuedshare held in <strong>Avisen</strong>, giving both Andrew Turner <strong>and</strong> Marcus Hanke an additional 9,950 ordinaryshares <strong>of</strong> £1 each;(iii) On 8 January 2008, the issued share capital <strong>of</strong> <strong>Avisen</strong> was re-designated to 20,000 founder shares<strong>of</strong> £1 each <strong>and</strong> the authorised, but un-issued, share capital was redesignated to 5,000 foundershares <strong>of</strong> £1 each. 10,000 ‘A’ ordinary shares <strong>of</strong> £1 each <strong>and</strong> 15,000 ‘B’ ordinary shares <strong>of</strong> £1each;(iv) On 8 January 2008, the share capital <strong>of</strong> <strong>Avisen</strong> was subdivided into 2,500,000 founder shares <strong>of</strong> 1penny each, 1,000,000 ‘A’ ordinary shares <strong>of</strong> 1 penny each <strong>and</strong> 1,500,000 ‘B’ ordinary shares <strong>of</strong> 1penny each;(v) On 15 January 2008, Graham Galloway subscribed for 40,750 B ordinary shares in <strong>Avisen</strong>;(vi) On 25 January 2008, Louis Peacock received 107,500 A ordinary shares in <strong>Avisen</strong> in partconsideration for the <strong>acquisition</strong> <strong>of</strong> Solution Minds (UK) Limited <strong>and</strong> Solution Minds Limited;(vii) On 19 November 2008, Odette McMahon subscribed for 161,119 A ordinary shares;(viii) On 1 December 2008, Louis Peacock, Andrew Glenday <strong>and</strong> Mark Waller each exercised optionsover 53,706, 42,965 <strong>and</strong> 85,930 B ordinary shares, respectively;60
(ix) On 4 December 2008, Raymond Alth<strong>of</strong> Beheer <strong>and</strong> Management B.V. was issued 23,094 Bordinary shares in consideration for the <strong>acquisition</strong> <strong>of</strong> 27 Shares <strong>of</strong> a nominal value <strong>of</strong> €50 each in<strong>Avisen</strong> BV;(x) On 2 January 2009, Andrew Turner <strong>and</strong> Marcus Hanke re-designated a total <strong>of</strong> 125,755 1 pennyfounder shares each <strong>and</strong> transferred 50,302 A ordinary shares to Odette McMahon, 100,604 Bordinary shares to Raymond Alth<strong>of</strong> <strong>and</strong> 100,604 B ordinary shares to Mark Waller; <strong>and</strong>(xi) On 2 January 2009, Andrew Turner <strong>and</strong> Marcus Hanke each re-designated 46,617 1 penny foundershares into 93,234 A ordinary shares, in aggregate, which were transferred to Louis Peacock.6.15 Information required by the Code:Shareholdings, arrangements <strong>and</strong> dealings:6.15.1 Save for the Existing Ordinary Shares held by Marcus Hanke as set out in paragraph 6.1 above <strong>and</strong>the transfers <strong>of</strong> shares referred to in paragraph 6.14 above, neither <strong>Avisen</strong> nor any <strong>of</strong> its directorsnor any member <strong>of</strong> their immediate families, any related trust nor any associate (as definedbelow), nor any connected persons (within the meaning <strong>of</strong> section 252 <strong>of</strong> the 2006 Act), nor anyperson acting in concert with such persons, owns or controls, or has borrowed or lent, or isinterested in, or has any right to subscribe for, or any arrangement concerning, directly orindirectly, any <strong>of</strong> the relevant securities, nor has any such person dealt for value therein during thedisclosure period or has any short position (whether conditional or absolute <strong>and</strong> whether in themoney or otherwise), including a short position under a derivative or right to require any person totake delivery <strong>of</strong> any <strong>of</strong> the relevant securities.6.15.2 Save as disclosed in paragraph 6.1 <strong>of</strong> this Part V, none <strong>of</strong> (i) the Company, (ii) the Directors; (iii)associates <strong>of</strong> the Company; (iv) the pension funds <strong>of</strong> the Company or <strong>of</strong> any associate <strong>of</strong> theCompany; (v) any employee benefit trust <strong>of</strong> the Company or <strong>of</strong> a company which is an associate<strong>of</strong> the Company; (vi) any connected adviser to the Company or to a company which is an associate<strong>of</strong> the Company or any person acting in concert with the Directors; <strong>and</strong> (vii) any personcontrolling, controlled by or under the same control as any connected adviser falling within (vi)above (except for an exempt principal trader or an exempt fund manager; owns or controls or isinterested in, or has any right to subscribe for, or any arrangement concerning, directly orindirectly, any <strong>of</strong> the relevant securities nor has any such person dealt for value therein during thedisclosure period or has any short position (whether conditional or absolute <strong>and</strong> whether in themoney or otherwise), including a short position under a derivative or right to require any person totake delivery <strong>of</strong> any <strong>of</strong> the relevant securities.6.15.3 None <strong>of</strong> the Directors or anyone acting in concert with the Company has borrowed or lent any <strong>of</strong>the Company’s relevant securities.6.15.4 Definitions for the purposes <strong>of</strong> this paragraph 6:(a) “acting in concert” has the meaning attributed to it in the Code;(b)(c)(d)“arrangement” includes an indemnity or option arrangement <strong>and</strong> any agreement orunderst<strong>and</strong>ing, formal or informal, <strong>of</strong> whatever nature relating to relevant securities whichmay be an inducement to deal or refrain from dealing;“associate” <strong>of</strong> any company means:(i) its parent, subsidiaries <strong>and</strong> fellow subsidiaries, their associated companies, <strong>and</strong>companies <strong>of</strong> which any such parent, subsidiaries, fellow subsidiaries or associatedcompanies are associated companies (for this purpose, ownership or control <strong>of</strong> 20per cent. or more <strong>of</strong> the equity share capital <strong>of</strong> a company is regarded as the test <strong>of</strong>“associated company” status);(ii) its connected advisers <strong>and</strong> persons controlling, controlled by or under the samecontrol as such connected advisers;(iii) its directors <strong>and</strong> the directors <strong>of</strong> any company covered in (i) above (together in eachcase with their close relatives <strong>and</strong> related trusts); <strong>and</strong>(iv) its pension funds or the pension funds <strong>of</strong> a company covered in (i) above;“connected adviser” has the meaning attributed to it in the Code;61
(e)(f)(g)(h)“connected person” has the meaning attributed to it in section 252 <strong>of</strong> the 2006 Act;“control” means a holding, or aggregate holdings, <strong>of</strong> shares carrying 30 per cent. or more<strong>of</strong> the voting rights attributable to the share capital <strong>of</strong> a company which are currentlyexercisable at a general meeting, irrespective <strong>of</strong> whether the holding or aggregate holdinggives de facto control;“dealing” or “dealt” includes the following:(i) the <strong>acquisition</strong> or disposal <strong>of</strong> relevant securities, <strong>of</strong> the right (whether conditionalor absolute) to exercise or direct the exercise <strong>of</strong> voting rights attached to relevantsecurities, or <strong>of</strong> general control <strong>of</strong> relevant securities;(ii) the taking, granting, <strong>acquisition</strong>, disposal, entering into, closing out, termination,exercise (by either party) or variation <strong>of</strong> an option (including a traded optioncontract) in respect <strong>of</strong> any relevant securities;(iii) subscribing or agreeing to subscribe for relevant securities;(iv) the exercise <strong>of</strong> conversion <strong>of</strong> any relevant securities carrying conversion orsubscription rights;(v) the <strong>acquisition</strong> <strong>of</strong>, disposal <strong>of</strong>, entering into, closing out, exercise (by either party)<strong>of</strong> any rights under, or variation <strong>of</strong>, a derivative referenced, directly or indirectly, torelevant securities;(vi) entering into, terminating or varying the terms <strong>of</strong> any agreement to purchase or sellrelevant securities; <strong>and</strong>(vii) any other action resulting, or which may result, in an increase or decrease in thenumber <strong>of</strong> relevant securities in which a person is interested or in respect <strong>of</strong> whichhe has a short position;“derivative” includes any financial product whose value in whole or in part is determineddirectly or indirectly by reference to the price <strong>of</strong> an underlying security but which does notinclude the possibility <strong>of</strong> delivery <strong>of</strong> such underlying security;(i) “disclosure date” means 6 January 2009, being the latest practicable date prior to theposting <strong>of</strong> this document;(j) “disclosure period” means the period commencing on 6 January 2008, being the date 12months prior to the disclosure date <strong>and</strong> ending on the disclosure date;(k)(l)“exempt principal trader” or “exempt fund manager” has the meaning attributed to itin the City Code;being “interested” in relevant securities includes where a person:(i) owns relevant securities;(ii) has the right (whether conditional or absolute) to exercise or direct the exercise <strong>of</strong>the voting rights attaching to relevant securities or has general control <strong>of</strong> them;(iii) by virtue <strong>of</strong> any agreement to purchase, option or derivative, has the right or optionto acquire relevant securities or call for their delivery or is under an obligation totake delivery <strong>of</strong> them, whether the right, option or obligation is conditional orabsolute <strong>and</strong> whether it is in the money or otherwise; or(iv) is party to any derivative whose value is determined by reference to its price <strong>and</strong>which results, or may result, in his having a long position in it;(m)(n)“relevant securities” means ordinary shares (or derivatives referenced thereto) <strong>and</strong>securities convertible into or rights to subscribe for ordinary shares, options inrespect <strong>of</strong> ordinary shares (including traded options) or short positions in ordinaryshares in the Company <strong>and</strong>/or <strong>Avisen</strong> as appropriate; <strong>and</strong>“short position” means any short position (whether conditional or absolute <strong>and</strong>whether in the money or otherwise) including any short position under a derivative,any agreement to sell or any delivery obligation or right to require another personto purchase or take delivery.62
6.15.5 No agreement, arrangement or underst<strong>and</strong>ing (including any compensation arrangement) existsbetween any Director, recent director <strong>of</strong> Z GROUP, Shareholder or recent shareholder <strong>of</strong> ZGROUP having any connection with or dependence upon, or which is conditional upon, theAcquisition.6.15.6 There is no agreement, arrangement or underst<strong>and</strong>ing between the Concert Party <strong>and</strong> any otherperson pursuant to which any Ordinary Shares which they will acquire pursuant to the Acquisitionwill be transferred.6.15.7 There are no financing arrangements in place in connection with the Acquisition <strong>and</strong> there are noarrangements relating to payment <strong>of</strong> interest on, repayment <strong>of</strong>, or security for any liability(contingent or otherwise) <strong>of</strong> <strong>Avisen</strong> which depend to any significant extent on the business <strong>of</strong> theCompany.7. Directors’ Service Contracts7.1 On 7 January 2009 the Company entered into a service agreement with Marcus Hanke. The agreement isconditional on Admission <strong>and</strong> provides for Mr Hanke to act as the Chief Executive Officer <strong>of</strong> theEnlarged <strong>Group</strong> (with effect from Admission) on a salary <strong>of</strong> £120,000 per annum. He is also entitled to adiscretionary performance-related bonus <strong>of</strong> up to 100 per cent. <strong>of</strong> his basic salary, 50 per cent. <strong>of</strong> whichwill depend upon the achievement <strong>of</strong> personal objectives <strong>and</strong> the balance will depend on the achievementby the Enlarged <strong>Group</strong> <strong>of</strong> EBIT targets. In both cases, targets will be reviewed <strong>and</strong> set from time to timeby the Remuneration Committee in its absolute discretion <strong>and</strong> the Remuneration Committee willdetermine the payment <strong>and</strong> amount <strong>of</strong> any bonus at its absolute discretion, taking into account itsassessment <strong>of</strong> the achievement <strong>of</strong> these targets, as well as the individual performance <strong>and</strong> conduct in therelevant bonus year. The agreement is terminable on six months written notice by either party, <strong>and</strong>contains payment in lieu <strong>of</strong> notice <strong>and</strong> gardening leave provisions. Under the agreement Mr Hanke isentitled to 25 paid working days holiday each year <strong>and</strong> the benefit <strong>of</strong> private health insurance <strong>and</strong> lifeinsurance. Mr Hanke is subject to non-competition <strong>and</strong> non-solicitation for a period <strong>of</strong> six monthsfollowing termination <strong>of</strong> his employment with the Company, <strong>and</strong> a confidentiality undertaking that iswithout limit in time.7.2 On 7 January 2009 the Company entered into a service agreement with Andrew Turner. The agreement isconditional on Admission <strong>and</strong> provides for Mr Turner to act as an executive director with responsibilityfor s<strong>of</strong>tware distribution <strong>of</strong> the Enlarged <strong>Group</strong> (with effect from Admission) on a salary <strong>of</strong> £100,000 perannum. He is also entitled to a discretionary performance-related bonus <strong>of</strong> up to 100 per cent. <strong>of</strong> his basicsalary, 50 per cent. <strong>of</strong> which will depend upon the achievement <strong>of</strong> personal objectives <strong>and</strong> the balancewill depend on the achievement by the Enlarged <strong>Group</strong> <strong>of</strong> EBIT targets. In both cases, targets will bereviewed <strong>and</strong> set from time to time by the Remuneration Committee in its absolute discretion <strong>and</strong> theRemuneration Committee will determine the payment <strong>and</strong> amount <strong>of</strong> any bonus at its absolute discretion,taking into account its assessment <strong>of</strong> the achievement <strong>of</strong> these targets, as well as the individualperformance <strong>and</strong> conduct in the relevant bonus year. The agreement is terminable on six months writtennotice by either party, <strong>and</strong> contains payment in lieu <strong>of</strong> notice <strong>and</strong> gardening leave provisions. Under theagreement Mr Turner is entitled to 25 paid working days holiday each year <strong>and</strong> the benefit <strong>of</strong> privatehealth insurance <strong>and</strong> life insurance. Mr Turner is subject to non-competition <strong>and</strong> non-solicitation for aperiod <strong>of</strong> six months following termination <strong>of</strong> his employment with the Company, <strong>and</strong> a confidentialityundertaking that is without limit in time. Mr Turner’s agreement also contains an acknowledgement fromthe Company as to his existing business interests in WANdisco <strong>and</strong> allows his to devote no more than1 day per month to those interests.7.3 On 7 January 2009 the Company entered into a service agreement with Louis Peacock. The agreement isconditional on Admission <strong>and</strong> provides for Mr Peacock to act as an executive director with responsibilityfor European sales <strong>and</strong> operations <strong>of</strong> the Enlarged <strong>Group</strong> (with effect from Admission) on a salary <strong>of</strong>£100,000 per annum. He is also entitled to a discretionary performance-related bonus <strong>of</strong> up to 100 percent. <strong>of</strong> his basic salary, 50 per cent. <strong>of</strong> which will depend upon the achievement <strong>of</strong> personal objectives<strong>and</strong> the balance will depend on the achievement by the Enlarged <strong>Group</strong> <strong>of</strong> EBIT targets. In both cases,targets will be reviewed <strong>and</strong> set from time to time by the Remuneration Committee in its absolutediscretion <strong>and</strong> the Remuneration Committee will determine the payment <strong>and</strong> amount <strong>of</strong> any bonus at itsabsolute discretion, taking into account its assessment <strong>of</strong> the achievement <strong>of</strong> these targets, as well as theindividual performance <strong>and</strong> conduct in the relevant bonus year. The agreement is terminable on sixmonths written notice by either party, <strong>and</strong> contains payment in lieu <strong>of</strong> notice <strong>and</strong> gardening leaveprovisions. Under the agreement Mr Peacock is entitled to 25 paid working days holiday each year <strong>and</strong>63
the benefit <strong>of</strong> private health insurance <strong>and</strong> life insurance. Mr Peacock is subject to non-competition <strong>and</strong>non-solicitation for a period <strong>of</strong> six months following termination <strong>of</strong> his employment with the Company,<strong>and</strong> a confidentiality undertaking that is without limit in time.7.4 On 7 January 2009 the Company entered into a service agreement with Keith Jones. The agreement isconditional on Admission <strong>and</strong> provides for Mr Jones to act as an executive director with responsibility forAfrican, Middle Eastern <strong>and</strong> Asian sales <strong>and</strong> operations <strong>of</strong> the Enlarged <strong>Group</strong> (with effect fromAdmission) on a salary <strong>of</strong> ZAR 660,000 (R<strong>and</strong>) per annum. He is also entitled to a discretionaryperformance-related bonus <strong>of</strong> up to 100 per cent. <strong>of</strong> his basic salary, 50 per cent. <strong>of</strong> which will dependupon the achievement <strong>of</strong> personal objectives <strong>and</strong> the balance will depend on the achievement by theEnlarged <strong>Group</strong> <strong>of</strong> EBIT targets. In both cases, targets will be reviewed <strong>and</strong> set from time to time by theRemuneration Committee in its absolute discretion <strong>and</strong> the Remuneration Committee will determine thepayment <strong>and</strong> amount <strong>of</strong> any bonus at its absolute discretion, taking into account its assessment <strong>of</strong> theachievement <strong>of</strong> these targets, as well as the individual performance <strong>and</strong> conduct in the relevant bonusyear. The agreement is terminable on six months written notice by either party, <strong>and</strong> contains payment inlieu <strong>of</strong> notice <strong>and</strong> gardening leave provisions. Under the agreement Mr Jones is entitled to 25 paidworking days holiday each year <strong>and</strong> the benefit <strong>of</strong> private health insurance <strong>and</strong> life insurance. Mr Jones issubject to non-competition <strong>and</strong> non-solicitation for a period <strong>of</strong> 24 months following termination <strong>of</strong> hisemployment with the Company, <strong>and</strong> a confidentiality undertaking that is without limit in time. Mr Jones’sagreement is governed by South African law.7.5 On 4 September 2006 the Company entered into an executive service agreement with Duncan Neale. Theagreement provides for Mr Neale to act as a Finance Director <strong>of</strong> Z GROUP on a salary <strong>of</strong> £90,000 perannum. Additionally the agreement provides for a grant <strong>of</strong> £100,000 <strong>of</strong> stock options which have avesting period <strong>of</strong> one year from the date <strong>of</strong> grant to Mr Neale. Mr Neale is entitled under the agreement toan annual non-discretionary bonus such amount being determined by the Board according to certaincriteria. The agreement is terminable on three months’ written notice by either party <strong>and</strong> contains apayment in lieu <strong>of</strong> notice provision. Under the agreement Mr Neale is entitled to 25 paid working daysholiday each year. Mr Neale is subject to non-competition <strong>and</strong> non-solicitation for a period <strong>of</strong> threemonths following termination <strong>of</strong> his employment with the Company, <strong>and</strong> a confidentiality undertakingthat is without limit in time.7.6 On 7 January 2009 the Company entered into a new Non-Executive letter <strong>of</strong> appointment with JonClaydon. The agreement is conditional on Admission <strong>and</strong> provides for Mr Claydon to act asNon-Executive Chairman <strong>of</strong> the Enlarged <strong>Group</strong> (with effect from Admission) on an annual fee <strong>of</strong>£25,000 per annum. The appointment is for an initial period <strong>of</strong> one year <strong>and</strong> is terminable at any time(whether during the initial term or any subsequent term) by either party giving to the other no less thanthree months’ notice in writing. The agreement contains a confidentiality undertaking which is unlimitedin time.7.7 On 7 January 2009 the Company entered into a new Non-Executive letter <strong>of</strong> appointment with MarcusYeoman. The agreement is conditional on Admission <strong>and</strong> provides for Mr Yeoman to act as aNon-Executive Director <strong>of</strong> the Enlarged <strong>Group</strong> (with effect from Admission) on a fee <strong>of</strong> £1,200 perannum. The appointment is for an initial period <strong>of</strong> one year <strong>and</strong> is terminable at any time (whether duringthe initial term or any subsequent term) by either party giving to the other no less than three months’notice in writing. The agreement contains a confidentiality undertaking which is unlimited in time. On thesame date, the Company entered into a new consultancy agreement with Springtime Consultants Limited.The agreement is conditional on Admission <strong>and</strong> provides for Springtime Consultants Limited to providethe services <strong>of</strong> one or more <strong>of</strong> its staff, which at the date <strong>of</strong> the agreement is identified as being MarcusYeoman. The services are to provide a member <strong>of</strong> its staff to act as a non-executive director <strong>of</strong> theCompany, to advise the Company in connection with the development <strong>of</strong> the Company’s business <strong>and</strong> toprovide such other advisory services as the Company may from time to time reasonably require. TheCompany shall pay Springtime Consultants Limited a fee <strong>of</strong> £13,800 per annum (plus VAT if any),monthly in arrears, subject to prior receipt by the Company <strong>of</strong> an appropriate invoice. SpringtimeConsultants Limited agrees to indemnify the Company on an ongoing basis whether during or after thecurrency <strong>of</strong> this Agreement against (i) any dem<strong>and</strong>s for any income tax, National Insurance or similarcontribution, including any penalties or interest arising from any claim that Springtime ConsultantsLimited or any <strong>of</strong> its staff is or was an employee <strong>of</strong> the Company or generally arising as a result <strong>of</strong> its use<strong>of</strong> Springtime Consultants Limited <strong>and</strong>/or its staff to provide the services described in the agreement; (ii)any claim brought by any <strong>of</strong> its staff arising out <strong>of</strong> an allegation that they were employees <strong>of</strong> theCompany including without limitation any claim for unfair dismissal, wrongful dismissal, statutory orcontractual redundancy payments, statutory notice, unlawful discrimination, equal pay, unlawful64
deductions from wages, breach <strong>of</strong> the Working Time Regulations 1998 or breach <strong>of</strong> contract; <strong>and</strong> (iii) theCompany’s reasonable costs (on a full indemnity basis) <strong>of</strong> dealing with any such claim under (i) or (ii)above. The agreement contains certain confidentiality undertakings which are unlimited in time.Springtime Consultants Limited will at its own expense provide <strong>and</strong> maintain a policy <strong>of</strong> pr<strong>of</strong>essionalindemnity insurance covering it for liability to the Company in respect <strong>of</strong> loss or damage caused to it orany <strong>of</strong> its staff by any default in the provision <strong>of</strong> the services under the agreement <strong>of</strong> up to £1,000,000 perclaim. Springtime Consultants Limited shall be liable to the Company in respect <strong>of</strong> any loss or damagecaused to its business by any act or default by it or any <strong>of</strong> its staff in the provision <strong>of</strong> the services up to£1,000,000.7.8 On 30 April 2008 the Company entered into a Non-Executive letter <strong>of</strong> appointment with Ian Smith. Theagreement provides for Mr Smith to act as Non-Executive Director <strong>of</strong> Z GROUP with effect from18 March 2008 on a no-fees basis. The agreement provides for reimbursement all reasonable expenses toMr Smith. The appointment is for an initial period <strong>of</strong> one year <strong>and</strong> is terminable at any time (whetherduring the initial term or any subsequent term) by either party giving to the other no less than threemonths’ notice in writing. The agreement contains a confidentiality undertaking which is unlimited intime. Mr Smith will resign from the Board on Admission.7.9 The aggregate emoluments (including benefits in kind <strong>and</strong> pension contributions) <strong>of</strong> the Directors for theyear ending 28 February 2008 was £423,577 <strong>and</strong> it is estimated that, assuming Admission occurs, theaggregate emoluments <strong>of</strong> the New Board as employees or in respect <strong>of</strong> their services to the Enlarged<strong>Group</strong> (including benefits in kind <strong>and</strong> pension contributions, but excluding any performance-relatedbonuses) for the year ending 31 December 2009 (which will be the first full 12 month accounting period<strong>of</strong> the Enlarged <strong>Group</strong>) will amount to approximately £500,000 under the arrangements in force at thedate <strong>of</strong> this document.7.10 There are no Directors’ service contracts, or contracts in the nature <strong>of</strong> services, with the Company, otherthan those which expire or are terminable without payment <strong>of</strong> compensation on no more than 12 months’notice.7.11 Save as set out above, there are no existing or proposed service contracts between any Directors or<strong>Proposed</strong> Directors <strong>and</strong> the Company or <strong>Avisen</strong> <strong>and</strong> there are no such service contracts which have beenentered into or amended within six months <strong>of</strong> the date <strong>of</strong> this document.8. Additional Information on the New Board8.1 In addition to the Company, the Directors <strong>and</strong> the <strong>Proposed</strong> Directors hold or have held the followingdirectorships or are or have been partners in the following partnerships within the five years prior to thedate <strong>of</strong> this document:Director Current Directorships/Partnerships Past Directorships/PartnershipsJon ClaydonPirata London LimitedThe Glassmill Battersea LLPRiver House Investments LimitedRycote Developments LimitedOnly Hope Productions LimitedWork Club LimitedTargetbase Claydon Heeley LimitedG Plus Europe LimitedG Plus LimitedAgency Republic LimitedOnshare LimitedWeapon 7 <strong>Ltd</strong>Alcone Marketing <strong>Group</strong>Marcus YeomanSpringtime Consultants LimitedPowamatique LimitedEnables IT LimitedBright Futures <strong>Group</strong> PLCSecora PLCStoryboard Assets PLCSouth American MineralExploration LimitedPeacemaker EV LimitedPowabyke LimitedNorthern Bear PLCNCI Solutions LimitedDuncan Neale Z <strong>Group</strong> Investments Limited Net2Roam LimitedNew Onshare LimitedOnshare LimitedOnspeed NX LimitedTurbodial Limited65
Director Current Directorships/Partnerships Past Directorships/PartnershipsIan SmithMarcus HankeAndrew TurnerLouis PeacockKeith JonesANIX Business Systems LimitedANIX Computers LimitedANIX <strong>Group</strong> LimitedANIX Holdings LimitedBlue River Systems LimitedBroadblue Catamaran Sales LimitedBroadblue Catamarans LimitedDecorum Connect LimitedFBHG LimitedIntrinsic Networks LimitedMatrix Network Solutions LimitedNorwood Adam Technical ServicesLimited NetworkPosetiv LimitedRed Square LimitedStorage Fusion LimitedVBHG LimitedXploite IHC LimitedXploite Plc<strong>Avisen</strong> <strong>Group</strong> LimitedHealthcare Pr<strong>of</strong>essionals LimitedSolution Minds <strong>Ltd</strong>Solution Minds (UK) <strong>Ltd</strong>TagetCPM Limited<strong>Avisen</strong> <strong>Group</strong> Limited<strong>Avisen</strong> LimitedCompton Residents ManagementCompany LimitedCree LimitedDawnglen Investments(Proprietary) LimitedEnfourmen LimitedSolution Minds (UK) <strong>Ltd</strong>Solution Minds <strong>Ltd</strong>TagetCPM LimitedW<strong>and</strong>isco Limited<strong>Avisen</strong> <strong>Group</strong> LimitedDawnglen Investments(Proprietary) LimitedSolution Minds <strong>Ltd</strong>Solution Minds (UK) <strong>Ltd</strong>AST Connections LimitedCALYX UK LimitedCALYX CS LimitedEquip Technology LimitedNetwork Partners (Holdings) LimitedNorwood Adam Systems LimitedDataworkforce LimitedDecorum Networks LimitedFujin Technology Trading LimitedEzee Entertainment UK LimitedHarrierzeuros LimitedHarrierzeuros Storage SolutionsLimitedIkan LimitedItheon LimitedMCG Solutions LimitedMXC Integration LimitedNetwork Partners LimitedArnke Computing Limited<strong>Avisen</strong> Services LimitedEverymind LimitedInfokee LimitedIntelligent Solutions(Midl<strong>and</strong>s) LimitedDown Under Accounting LimitedDysfunctional Clothing (UK) LimitedFormzest LimitedLost Enterprises (Europe) LimitedAltivex 356 (Proprietary) Limited Salford <strong>Ltd</strong>Dawnglen InvestmentsTomahawk Consultants Limited(Proprietary) LimitedHarvey Jones Systems(Proprietary) LimitedJazz Spirit 1202 (Proprietary) LimitedRitzshelf 144 (Proprietary) LimitedTurquoise Moon Trading 398(Proprietary) LimitedXanadu Properties 245(Proprietary) Limited8.2 None <strong>of</strong> the Directors nor any <strong>of</strong> the <strong>Proposed</strong> Directors has:8.2.1 any unspent convictions in relation to indictable <strong>of</strong>fences;8.2.2 any bankruptcy order made against him or entered into any individual voluntary arrangements;66
8.2.3 been a director <strong>of</strong> a company which has been placed in receivership, compulsory liquidation,creditors’ voluntary liquidation, administration, been subject to a company voluntary arrangementor any composition or arrangement with its creditors generally or any class <strong>of</strong> its creditors whilsthe was a director <strong>of</strong> that company or within the 12 months after he ceased to be a director <strong>of</strong> thatcompany;8.2.4 been a partner in any partnership which has been placed in compulsory liquidation, administrationor been the subject <strong>of</strong> a partnership voluntary arrangement whilst he was a partner in thatpartnership or within the 12 months after he ceased to be a partner in that partnership;8.2.5 been the owner <strong>of</strong> any assets or a partner in any partnership which has been placed in receivershipwhilst he was a partner in that partnership or within the 12 months after he ceased to be a partnerin that partnership; or8.2.6 been publicly criticised by any statutory or regulatory authority (including recognised pr<strong>of</strong>essionalbodies) or been disqualified by a court from acting as a director <strong>of</strong> any company or from acting inthe management or conduct <strong>of</strong> the affairs <strong>of</strong> a company.8.3 As at 29 February 2008, 28 February 2007 <strong>and</strong> 28 February 2006, the Company had no employees(excluding the directors <strong>of</strong> the Company at that time).9. Share Option Schemes9.1 Summary <strong>of</strong> provisions <strong>of</strong> Z GROUP Share Option SchemesOn 21 June 2005 the Company introduced an EMI Plan approved by Her Majesty’s Revenue & Custom(“HMRC”) in order to allow selected employees to share in the success <strong>of</strong> the group <strong>and</strong> promotemotivation <strong>and</strong> retention. The EMI Plan <strong>of</strong>fers the opportunity <strong>of</strong> providing tax efficient share options.At the same time the Company introduced the Unapproved Plan (together with the EMI Plan, the “ShareOption Schemes”). The Unapproved Plan is identical to the EMI Plan in all respects except that thoseconditions that are relevant only to qualification for tax relief are disapplied. The Unapproved Plan is usedto provide share options to employees <strong>of</strong> the Company to the extent that they cannot qualify to receive taxadvantaged options under the EMI Plan.9.1.1 Grants <strong>of</strong> optionsOptions may be granted under the Share Option Schemes at the discretion <strong>of</strong> the New Board.Options may be granted only during the period <strong>of</strong> 42 days following:(a) the date <strong>of</strong> adoption <strong>of</strong> the Share Option Schemes by the Company; or(b) the day on which the Company makes an announcement <strong>of</strong> its financial results for the lastpreceding year, half year or other period financial results <strong>of</strong> the Company; or(c) any other date when the Directors resolve that exceptional circumstances justify the grant<strong>of</strong> options.9.1.2 EligibilityEvery full-time employee <strong>and</strong> director <strong>of</strong> the Company or any company in the <strong>Group</strong> will beeligible to participate in the EMI Plan at the discretion <strong>of</strong> the Board, provided he or she does nothave a material interest in the Company or any subsidiary. An individual will have a materialinterest if he or she, individually or together with associates, owns 30 per cent. or more <strong>of</strong> theshare capital <strong>of</strong> the relevant company.All employees <strong>and</strong> directors <strong>of</strong> the Company or any company in the <strong>Group</strong> will be eligible toparticipate in the Unapproved Plan at the discretion <strong>of</strong> the Board.Non-executive directors <strong>and</strong> third party consultants providing services to the Company or anycompany in the <strong>Group</strong> will be eligible to be granted options at the discretion <strong>of</strong> the Board.9.1.3 Exercise PriceOptions granted under the Share Option Schemes must have an exercise price no lower than thenominal value <strong>of</strong> an Ordinary Share.Options will not normally be granted under the Share Option Schemes with an exercise pricelower than the market value <strong>of</strong> the Ordinary Shares at the time <strong>of</strong> grant.67
9.1.4 Vesting <strong>and</strong> Performance CriteriaOptions may be granted subject to a time based vesting period <strong>and</strong> the Board may imposeperformance conditions that must be satisfied before options may be exercised, subject to rights toearly exercise in specific circumstances on the termination <strong>of</strong> employment or consultancy services<strong>of</strong> the option holder <strong>and</strong>/or takeover <strong>of</strong> the Company as noted below.9.1.5 Exercise <strong>of</strong> optionsAn option may only be exercised by the person to whom it was granted, or his personalrepresentative(s), <strong>and</strong> is not transferable.Options granted under the Share Option Schemes shall normally be exercisable only during aperiod beginning between one <strong>and</strong> three years from the date <strong>of</strong> grant <strong>and</strong> ending ten years after thedate <strong>of</strong> grant. No option shall be capable <strong>of</strong> exercise more than ten years from the date the optionis granted.In the case <strong>of</strong> a takeover <strong>of</strong> the Company the Board will have the discretion to amend or waive anyexisting performance measures/vesting criteria attaching to options granted under the ShareOption Schemes. Subject to that, the option holder will be able to exercise options within a period<strong>of</strong> forty days from the date when the takeover is completed.Option holders may also be able to ex<strong>change</strong> their options under the EMI Plan for options over theshares <strong>of</strong> the company making any takeover, where the statutory conditions for this treatment toapply are met.9.1.6 Limit <strong>of</strong> participationUnder the relevant legislation, a participant can only hold qualifying EMI options over OrdinaryShares with a market value <strong>of</strong> up to £120,000 as at date <strong>of</strong> grant. Any options granted in excess <strong>of</strong>this limit will be considered part <strong>of</strong> an unapproved scheme.9.1.7 Total number <strong>of</strong> shares availableIn any ten year rolling period, no more than 12 per cent. <strong>of</strong> the ordinary issued share capital <strong>of</strong> theCompany from time to time may be issued or allocated for subscription in total under the ShareOption Scheme nor in total under these Share Option Scheme <strong>and</strong> any other share incentive planoperated by the Company.9.1.8 Termination <strong>of</strong> Employment or ServicesIf an employee option holder ceases to hold <strong>of</strong>fice or employment with the Company or anycompany in the <strong>Group</strong> for any reason prior to the date <strong>of</strong> exercise all unvested options grantedunder the EMI Plan or the Unapproved Plan will normally lapse save that the Board shall have thediscretion to permit individuals to retain some or all <strong>of</strong> their options on leaving, <strong>and</strong> shall have thediscretion to amend or waive any applicable vesting <strong>and</strong>/or performance conditions. The Boardindicated upon its original admission to AIM that their discretion would be exercised only wherean employee option holder is a ‘‘good leaver’’ e.g. in the event <strong>of</strong> redundancy, injury, orretirement. Vested options may be exercised within a period <strong>of</strong> 40 days following termination <strong>of</strong>employment, or such other period as the Board may determine.If a third party consultant ceases to provide services to the Company or any company in the <strong>Group</strong>all unvested options granted under the Consultant Plan will lapse upon the date the agreement toprovide services terminates. Vested options may be exercised within a period <strong>of</strong> 40 days followingtermination <strong>of</strong> services, or such other period as the Board may determine.9.1.9 Variation <strong>of</strong> share capitalIn the event <strong>of</strong> a variation <strong>of</strong> share capital <strong>of</strong> the Company the Board may adjust the number <strong>of</strong>shares under option <strong>and</strong> the exercise price to reflect such variation. This adjustment shall besubject to confirmation by the auditors that such adjustment is fair <strong>and</strong> reasonable. In the case <strong>of</strong>the EMI Plan, such adjustment may need to be agreed in advance by HMRC.9.1.10 Alteration <strong>of</strong> the PlanThe Board may at any time alter or amend the provisions <strong>of</strong> the Share Option Scheme but, ingeneral, no alteration which is to the advantage <strong>of</strong> option holders (present <strong>and</strong> future) shall be68
made without the prior approval by ordinary resolution <strong>of</strong> the members <strong>of</strong> the Company in ageneral meeting.Any such alteration will not need to be so approved where it is in the opinion <strong>of</strong> the Board a minoramendment, to benefit the administration <strong>of</strong> the plan, to take account <strong>of</strong> a <strong>change</strong> in legislation orto maintain favourable tax treatment.9.1.11 PensionsBenefits provided to employees under the EMI Plan <strong>and</strong> the Unapproved Plan will not bepensionable.9.1.12 Grantor <strong>of</strong> optionsThe Company’s current intention is that only options to acquire newly issued Ordinary Shares willbe granted under the Share Option Scheme.In relation to the EMI Plan <strong>and</strong> the Unapproved Plan only, as an alternative an employee benefittrust may be established <strong>and</strong> the trustees requested to consider granting options to selectedemployees over shares held or to be purchased by the trustees. There is currently no employeebenefit trust.10. Material contracts10.1 The CompanyThere are no contracts (not being in the ordinary course <strong>of</strong> business) entered into by the Company in thelast two years which are or may be material or which contain any provision under which the Company hasany obligation or entitlement which is material to the Company as at the date <strong>of</strong> this document save asfollows:10.1.1 The Acquisition Agreement, pursuant to which the Company has agreed to acquire the entireissued share capital <strong>of</strong> <strong>Avisen</strong>, conditional on certain conditions precedent, including the passing<strong>of</strong> Resolutions numbered 1, 2, 3 <strong>and</strong> 4 <strong>and</strong> Admission occurring no later than 27 February 2009.The total consideration payable to the Vendors on Admission is to be satisfied by the issue <strong>of</strong> theConsideration Shares.The Vendors have each given certain representations <strong>and</strong> warranties customary for a transaction <strong>of</strong>this type which concern the business, assets <strong>and</strong> affairs <strong>of</strong> <strong>Avisen</strong> <strong>and</strong> its subsidiaries. Thewarranties relating to tax issues continue for seven years from completion <strong>of</strong> the Acquisition, <strong>and</strong>the non-tax warranties continue from completion <strong>of</strong> the Acquisition until three months followingthe publication <strong>of</strong> the audited consolidated accounts <strong>of</strong> the Enlarged <strong>Group</strong> for the year ending31 December 2009. Claims for breach <strong>of</strong> warranty are subject to a threshold provision, <strong>and</strong> a totalaggregate cap <strong>of</strong> £1,500,000. The Acquisition Agreement also contains certain indemnities fromthe Vendors concerning <strong>Avisen</strong>’s most recent <strong>acquisition</strong>s <strong>of</strong> Solution Minds (UK) <strong>Ltd</strong> <strong>and</strong> thebusiness <strong>and</strong> assets <strong>of</strong> Harvey Jones Systems (Proprietary) Limited, <strong>and</strong> a customary indemnity inrelation to corporation tax <strong>and</strong> other tax liabilities for the period prior to completion <strong>of</strong> theAcquisition.During the period from entering into the Acquisition Agreement to the earlier <strong>of</strong> completion <strong>of</strong> theAcquisition or termination the Vendors have each agreed to ensure that the business <strong>of</strong> <strong>Avisen</strong> <strong>and</strong>its subsidiaries is conducted in the ordinary <strong>and</strong> usual course <strong>and</strong> each <strong>of</strong> the Vendors has agreednot to take certain specified action in relation to the business without the consent <strong>of</strong> the Company.In addition, each <strong>of</strong> the Vendors has entered into non-competition <strong>and</strong> non-solicitation covenantsin respect <strong>of</strong> the business <strong>of</strong> <strong>Avisen</strong> <strong>and</strong> <strong>Avisen</strong>’s employees, clients <strong>and</strong> suppliers in the territoriesin which each <strong>of</strong> the Vendors are principally engaged with the <strong>Avisen</strong> <strong>Group</strong>. The restrictivecovenants continue for a period <strong>of</strong> 2 years from completion <strong>of</strong> the Acquisition.10.1.2 A Nominated Adviser <strong>and</strong> Broker Agreement dated 7 January 2009 between (1) the Company; (2)the New Board <strong>and</strong> (3) JEP pursuant to which JEP has agreed to act as nominated adviser <strong>and</strong>broker to the Company for the purposes <strong>of</strong> the AIM Rules <strong>and</strong> as financial adviser to theCompany. The appointment as nominated adviser continues for a fixed term <strong>of</strong> one year fromAdmission <strong>and</strong> thereafter is terminable on three months’ notice given by either the Company orJEP. The appointment as broker continues for a fixed term <strong>of</strong> one year following Admission <strong>and</strong>thereafter is terminable at any time on three months’ notice by either the Company or JEP. JEPwill receive an annual fee <strong>of</strong> £30,000 for its services as nominated adviser <strong>and</strong> an annual broking69
fee <strong>of</strong> £10,000, each <strong>of</strong> which is subject to a discounted rate for the initial six months followingAdmission.The agreement contains indemnities <strong>and</strong> warranties from the Company <strong>and</strong> warranties from theNew Board in favour <strong>of</strong> JEP together with provisions which enable JEP to terminate theagreement in certain circumstances prior to Admission, including, but not limited to,circumstances where any warranties are found not to be true or accurate in any material respects.If Admission takes place, for acting as the nominated adviser JEP will receive a fee <strong>of</strong> £100,000.Both Marcus Hanke <strong>and</strong> Andrew Turner have given certain undertakings in their capacity asDirectors <strong>and</strong> Shareholders in order to regulate their relationship with the Company, avoidpotential conflicts <strong>of</strong> interest <strong>and</strong> to ensure that the Board <strong>and</strong> the Company can, amongst otherthings, operate on an independent basis. Such undertakings shall remain effective for so long asMarcus Hanke <strong>and</strong> Andrew Turner hold between them Ordinary Shares representing 25 per cent.or more <strong>of</strong> the Company’s issued share capital.10.1.3 An undertaking dated 7 January 2009, given by each <strong>of</strong> the New Board <strong>and</strong> each <strong>of</strong> the Vendors infavour <strong>of</strong> (1) the Company <strong>and</strong> (2) JEP, pursuant to which such Shareholders have eachundertaken on behalf <strong>of</strong> themselves <strong>and</strong> others deemed to be connected with them, haveundertaken not to dispose <strong>of</strong> any Ordinary Shares, save in the event <strong>of</strong> an intervening court order,a takeover becoming or being declared unconditional, or as regards an individual, in the event <strong>of</strong>the death <strong>of</strong> an individual for a period <strong>of</strong> 12 months following Admission <strong>and</strong> for a further period<strong>of</strong> 12 months except with the prior written consent <strong>of</strong> JEP, which consent shall not beunreasonably withheld or delayed.10.1.4 A Trademark Assignment Agreement dated 7 January 2009 between (1) Marcus Hanke <strong>and</strong> (2) theCompany pursuant to which Marcus Hanke has agreed, conditional on Admission, to assigncertain trademarks <strong>and</strong> trademark applications (such as ‘<strong>Avisen</strong>’ ‘StrategyGPS’ <strong>and</strong> ‘PlanPoint’)which are relevant to the business <strong>of</strong> <strong>Avisen</strong> <strong>and</strong> currently registered in his name/pendingregistration in his name to the Company.10.1.5 A Domain Name Assignment Agreement dated 7 January 2009 between (1) Andrew Turner <strong>and</strong>(2) the Company pursuant to which Andrew Turner has agreed, conditional on Admission, toassign certain domain names which are relevant to the business <strong>of</strong> <strong>Avisen</strong> <strong>and</strong> are currentlyregistered in his name to the Company.10.1.6 On 22 December 2008 Jack Bekhor <strong>and</strong> Jamie True delivered irrevocable undertakings to theCompany <strong>and</strong> JEP in respect <strong>of</strong> their holdings <strong>of</strong> 3,947,325 Ordinary Shares each, respectively(both <strong>of</strong> which are registered in the names <strong>of</strong> Clachan Nominees Limited). They agreed, inter alia,that they will procure so far as they are able that the registered holder <strong>of</strong> their Ordinary Sharestakes all such action as shall be necessary for the terms <strong>of</strong> the undertaking to be complied with infull <strong>and</strong> procure that, to the extent they are able, that all votes attaching to the Ordinary Shares(together with any other Ordinary Shares to which they become the beneficial owner prior to theGeneral Meeting), be cast by the registered holder, at the General Meeting (<strong>and</strong> at anyadjournment there<strong>of</strong>): (i) against any resolution or proposal to adjourn the General Meeting, forthe purpose <strong>of</strong> materially amending the resolutions set out in the notice <strong>of</strong> General Meeting, orwhich may impede or prevent the passing <strong>of</strong> such resolutions <strong>and</strong> (ii) in favour <strong>of</strong> such resolutions.The undertakings shall be irrevocable before the earlier <strong>of</strong> (i) Admission <strong>and</strong> (ii) 28 February2009.10.1.7 On 7 January 2009, Jon Claydon <strong>and</strong> Ian Smith delivered irrevocable undertakings to theCompany <strong>and</strong> JEP in respect <strong>of</strong> their holdings <strong>of</strong> 1,729,170 (1,345,170 Ordinary Shares <strong>of</strong> whichare held directly by Jon Claydon <strong>and</strong> <strong>of</strong> which 384,000 Ordinary Shares are held in the name <strong>of</strong>Clachan Nominees Limited) <strong>and</strong> 2,388,428 (2,365,280 Ordinary Shares <strong>of</strong> which are registered inthe name <strong>of</strong> Pershing Nominees Limited <strong>and</strong> 23,148 Ordinary Shares <strong>of</strong> which are held directly byIan Smith) Ordinary Shares each, respectively. They agreed, inter alia, that they will procure s<strong>of</strong>ar as they are able that the registered holder <strong>of</strong> their Ordinary Shares takes all such action as shallbe necessary for the terms <strong>of</strong> the undertaking to be complied with in full <strong>and</strong> procure that, to theextent they are able, that all votes attaching to the Ordinary Shares (together with any otherOrdinary Shares to which they become the beneficial owner prior to the General Meeting), be castby the registered holder, at the General Meeting (<strong>and</strong> at any adjournment there<strong>of</strong>): (i) against anyresolution or proposal to adjourn the General Meeting, for the purpose <strong>of</strong> materially amending theresolutions set out in the notice <strong>of</strong> General Meeting, or which may impede or prevent the passing70
<strong>of</strong> such resolutions <strong>and</strong> (ii) in favour <strong>of</strong> such resolutions. The undertakings shall be irrevocablebefore the earlier <strong>of</strong> (i) Admission <strong>and</strong> (ii) 28 February 2009.10.1.8 A share purchase agreement dated 20 December 2007 between the Company <strong>and</strong> the joint chiefexecutive <strong>of</strong>ficers <strong>and</strong> directors <strong>of</strong> the Company, Jack Bekhor <strong>and</strong> Jamie True, for the sale <strong>of</strong> theentire share capital <strong>of</strong> each <strong>of</strong> its subsidiaries CallPal Limited, Net2Roam Limited, OnshareLimited <strong>and</strong> Turbodial Limited, which comprised substantially <strong>of</strong> all the trading assets <strong>of</strong> theCompany. The sale completed on 7 January 2007 having received shareholder approval for a cashconsideration <strong>of</strong> £60,000 payable at completion. Under the AIM Rules, the sale <strong>of</strong> the subsidiarieswas classified as a disposal resulting in a fundamental <strong>change</strong> <strong>of</strong> business <strong>and</strong> a related partytransaction. Under section 190 <strong>of</strong> the Companies Act 2006 the disposal was a substantial propertytransaction with the directors.10.1.9 A ten-year lease agreement dated 18 July 2006 between the Company <strong>and</strong> Vernon Street PropertyLimited for the rental <strong>of</strong> the premises at 31 Vernon Street, London W14 0RN for a rent <strong>of</strong>£200,000 per annum (subject to review) plus VAT, which has a break clause exercisable on itsfifth anniversary.10.1.10 A rent deposit deed dated 18 July 2006 between the Company <strong>and</strong> Vernon Street Property Limitedpursuant to the lease relating to the premises at 31 Vernon Street, London W14 0RN for an initialdeposit <strong>of</strong> £117,500.10.1.11 An assignment agreement dated 21 December 2007 for the lease <strong>of</strong> premises at 31 Vernon Street,London W14 0RN. The l<strong>and</strong>lord under the lease is not obliged to repay the rent deposit to theCompany until the assignee under the lease subsequently assigns the lease to a third party,terminates the lease in accordance with its terms or until the lease expires on 17 July 2016.10.2 <strong>Avisen</strong>There are no contracts (not being in the ordinary course <strong>of</strong> business) entered into by <strong>Avisen</strong> in the last twoyears which are or may be material or which contain any provision under which <strong>Avisen</strong> has anyobligation or entitlement which is material to <strong>Avisen</strong> as at the date <strong>of</strong> this document save as follows:10.2.1 A share purchase agreement dated 25 January 2008 between <strong>Avisen</strong> <strong>and</strong> Louis Peacock for thepurchase <strong>of</strong> the entire issued share capital <strong>of</strong> Solution Minds <strong>Ltd</strong> <strong>and</strong> Solution Minds (UK) <strong>Ltd</strong>.The cash consideration was to be satisfied by four cash instalments <strong>of</strong> £26,500, the last <strong>of</strong> which isdue to be paid on 25 January 2009, together with an adjustment <strong>of</strong> £2,089 based on the value <strong>of</strong>the completion net assets. In addition, Louis Peacock was issued 107,500 A Ordinary Shares in<strong>Avisen</strong>. Pursuant to the share purchase agreement, Solution Minds <strong>Ltd</strong> <strong>and</strong> Solution Minds (UK)<strong>Ltd</strong> became wholly owned subsidiaries <strong>of</strong> <strong>Avisen</strong>.10.2.2 An asset purchase agreement dated 2 November 2008, effective from 31 October 2008, betweenDawnglen Investments (Proprietary) Limited <strong>and</strong> Harvey Jones Systems (Proprietary) Limited <strong>and</strong>Keith Jones for the <strong>acquisition</strong> <strong>of</strong> the business <strong>and</strong> assets <strong>of</strong> Harvey Jones Systems (Proprietary)Limited. The consideration paid was the R<strong>and</strong> equivalent <strong>of</strong> £25,000. Pursuant to that agreementHarvey Jones Systems (Proprietary) Limited became a wholly owned subsidiary <strong>of</strong> <strong>Avisen</strong>.11. Litigation11.1 The CompanyThe Company is not involved in any governmental, legal or arbitration proceedings which may have orhave had during the 12 months preceding the date <strong>of</strong> this document a significant effect on the Company’sfinancial position <strong>and</strong>, so far as the Directors <strong>and</strong> the <strong>Proposed</strong> Directors are aware, there are no suchproceedings pending or threatened against the Company.11.2 <strong>Avisen</strong> <strong>and</strong> its subsidiaries<strong>Avisen</strong> <strong>and</strong> its subsidiaries are not involved in any governmental, legal or arbitration proceedings whichmay have or have had during the 12 months preceding the date <strong>of</strong> this document a significant effect ontheir financial position <strong>and</strong>, so far as the <strong>Proposed</strong> Directors are aware, there are no such proceedingspending or threatened against them.12. Working capitalThe New Board are <strong>of</strong> the opinion that, having made due <strong>and</strong> careful enquiry, the working capital available to theEnlarged <strong>Group</strong> will be sufficient for its present requirements, which is for at least 12 months from Admission.71
13. Taxation13.1 IntroductionThe information in this section is based on the Directors’ underst<strong>and</strong>ing <strong>of</strong> United Kingdom current taxlaw <strong>and</strong> HM Revenue & Customs’ published practice. The following should be regarded as a summary<strong>and</strong> should not be construed as constituting advice. Prospective shareholders are strongly advised to taketheir own independent tax advice but certain potential tax benefits are summarised below in respect <strong>of</strong> anindividual resident in the UK for tax purposes.On issue, the Ordinary Shares will not be treated as either “listed” or “quoted” securities for tax purposes.Provided that the Company remains one which does not have any <strong>of</strong> its shares quoted on a recognisedstock ex<strong>change</strong> (which for these purposes does not include AIM) <strong>and</strong> assuming that the Company remainsa trading company or the holding company <strong>of</strong> a trading group for UK tax purposes, the Ordinary Sharesshould continue to be treated as unquoted securities qualifying for certain reliefs from UK taxation.The following information is based upon the laws <strong>and</strong> practice currently in force in the UK <strong>and</strong>may not apply to persons who do not hold their Ordinary Shares as investments.13.2 Capital Gains Tax (“CGT”)13.2.1 DisposalsChanges were made to the rules relating to the holdings <strong>of</strong> shares from 6 April 1998 so that the“pooling” <strong>of</strong> shares (i.e. treating them as one asset) no longer applies. Therefore, any disposal <strong>of</strong>shares is treated on a last in, first out basis for the purposes <strong>of</strong> calculating gains which arechargeable to tax, subject to rules dealing with same day purchases or <strong>acquisition</strong>s within 30 days<strong>of</strong> a disposal.13.2.2 CGT Gift ReliefIf shares in an unquoted trading company or the holding company <strong>of</strong> a trading group, aretransferred, by an individual or by trustees other than at arm’s length, the deemed capital gain canbe “held over” (except in circumstances where the shares are transferred to a trust <strong>of</strong> which thetransferor is a beneficiary), i.e. the CGT liability is postponed until a subsequent arm’s lengthdisposal by the transferee, who effectively inherits the transferor’s base cost. The relief must beclaimed jointly by both the transferor <strong>and</strong> the transferee within five years <strong>and</strong> ten months <strong>of</strong> theend <strong>of</strong> the relevant tax year in which the gift was made <strong>and</strong> the transferee must be resident orordinarily resident in the UK <strong>and</strong> remain so for six years. Where the shares have not qualifiedthroughout the period <strong>of</strong> ownership as business assets, then the amount <strong>of</strong> the gain that can be heldover will be restricted. CGT gift relief will not currently apply since the Company is not a tradingcompany but may apply once the Acquisition has been completed. CGT gift relief is available inrespect <strong>of</strong> shares in an AIM company if that company is a trading company or the holdingcompany <strong>of</strong> a trading group.13.3 Inheritance Tax (“IHT”)Shares in qualifying trading companies or holding companies <strong>of</strong> a trading group can attract 100 per cent.business property relief from IHT provided that the shares are held for at least two years before achargeable transfer for IHT purposes. As the Company does not currently trade, business property reliefwill not be available but may apply once the Acquisition has been completed. The shares would onlyqualify for business property relief once they had been held for two years from the date the Companybecame a trading company or the holding company <strong>of</strong> a trading group. Business property relief applies toshares in an AIM company if that company is a trading company or the holding company <strong>of</strong> a tradinggroup. To the extent that the value <strong>of</strong> a shareholding is attributable to assets owned by the Company, butnot utilised for the purposes <strong>of</strong> its trade, the value qualifying for business property relief will be restricted.13.4 Income Tax13.4.1 Taxation <strong>of</strong> Dividends13.4.1.1 Under current UK tax legislation no tax is withheld from dividends paid by theCompany.13.4.1.2 UK resident individual shareholders are treated as having received income <strong>of</strong> anamount equal to the sum <strong>of</strong> the dividend <strong>and</strong> its associated tax credit, currently 10 percent. <strong>of</strong> the gross amount <strong>of</strong> the dividend <strong>and</strong> the tax credit (i.e. the tax credit will beone ninth <strong>of</strong> the dividend). The tax credit will effectively satisfy a UK residentindividual shareholder’s basic rate (but not higher rate) income tax liability in respect72
<strong>of</strong> the dividend. UK resident individual shareholders who are subject to tax at thehigher rate (currently 40 per cent.) will have to account for additional tax. The specialrate <strong>of</strong> tax set for higher rate taxpayers who receive dividends is 32.5 per cent. <strong>of</strong> thegross dividend (plus tax credit). After taking account <strong>of</strong> the 10 per cent. tax credit, sucha taxpayer would have to account for additional tax <strong>of</strong> 22.5 per cent. This is theequivalent <strong>of</strong> 25 per cent. <strong>of</strong> the net dividend received. In determining what tax ratesapply to a UK resident individual shareholder, dividend income is treated as his topslice <strong>of</strong> income.13.4.1.3 A UK resident (for tax purposes) corporate shareholder will generally not be liable toUK corporation tax on any dividend received <strong>and</strong> will be entitled for tax purposes totreat any such dividend as franked investment income.13.4.2 Loss ReliefIf a loss arises on the disposal <strong>of</strong> shares in a trading company, such shares being originallyacquired on a subscription for new shares, the loss may be relieved against income <strong>of</strong> that year orthe previous year (with priority for relief in the current year where income <strong>of</strong> both years isutilised). Any loss remaining after claiming relief against income, may be available for reliefagainst capital gains in either the current or subsequent years. The New Board believe that losseswill not be available for <strong>of</strong>fset against income to holders <strong>of</strong> existing ordinary share as theCompany does not currently trade.13.5 Stamp Duty <strong>and</strong> stamp duty reserve tax (“SDRT”)Transfers or sales <strong>of</strong> Ordinary Shares (other than transfers for no consideration) will be subject to advalorem stamp duty (payable by the purchaser <strong>and</strong> generally at the rate <strong>of</strong> 50p per £100 or part there<strong>of</strong>rounded up to the nearest £5) <strong>and</strong> an unconditional agreement to transfer such shares, if not completed bya duly stamped stock transfer form within two months <strong>of</strong> the day on which such agreement is made orbecomes unconditional, will be subject to SDRT (payable by the purchaser <strong>and</strong> generally at that rate).However, if within 6 years <strong>of</strong> the date <strong>of</strong> the agreement an instrument <strong>of</strong> transfer is executed pursuant tothe agreement <strong>and</strong> stamp duty is paid on that instrument, any liability to SDRT will be cancelled orrepaid.13.6 Enterprise Investment Scheme (“EIS”) approvalHMRC has confirmed that <strong>Avisen</strong> <strong>and</strong> its Subsidiaries, taken together as a group <strong>of</strong> companies, will meetthe trading requirements for EIS legislation. The Directors <strong>and</strong> <strong>Proposed</strong> Directors believe, therefore, thatthe Enlarged <strong>Group</strong> will also meet the trading requirements for EIS <strong>and</strong> shall seek clearance followingAdmission.13.6.1 EIS Income tax reliefIndividual investors eligible for EIS relief may be entitled to claim 20 per cent. income tax reliefon Ordinary Shares subscribed for, up to a maximum subscription <strong>of</strong> £500,000 in any tax year(subject to State Aid approval from the European Commission). Where shares are issued between6 April <strong>and</strong> 5 October, the investor may be able to relate back part <strong>of</strong> the EIS subscription, to betreated as made in the previous tax year. The amount carried back cannot exceed the lower <strong>of</strong>;– 50 per cent. <strong>of</strong> the investment,– £50,000,– the unused balance <strong>of</strong> the EIS limit for the previous year.13.6.2 Loss ReliefSubject to certain conditions, tax relief is available for a qualifying shareholder who realises a losson a disposal <strong>of</strong> ordinary shares on which EIS income tax relief (see (13.6.1) above) has beengiven <strong>and</strong> not withdrawn or CGT deferral relief (see (13.6.4) below) has been given <strong>and</strong> notwithdrawn. The amount <strong>of</strong> the loss (after taking account <strong>of</strong> the income tax relief initially obtained)can be set against a qualifying gain in the year <strong>of</strong> loss or following years or <strong>of</strong>fset against taxableincome in the tax year in which the disposal occurs or the preceding year.73
13.6.3 Capital Gains Tax exemptionProvided qualification for the EIS relief is maintained by the Company <strong>and</strong> by the individualinvestor for the relevant periods, broadly three years after the share issue, a pr<strong>of</strong>it made by theindividual investor on disposal <strong>of</strong> the shares after three years will be free <strong>of</strong> capital gains tax.13.6.4 EIS Capital Gains Tax DeferralIndividuals <strong>and</strong> certain trustees subscribing for Ordinary Shares may be entitled to claim deferral<strong>of</strong> tax on capital gains realised on assets disposed <strong>of</strong> within three years before, <strong>and</strong> up to one yearafter, the investment. The relief allows a shareholder to defer part or all <strong>of</strong> a gain made on adisposal that would normally crystallise a charge to tax. The amount <strong>of</strong> gain that can be deferred isrestricted to the amount <strong>of</strong> the reinvestment <strong>and</strong> the deferred gain falls into charge when there-invested shares are disposed <strong>of</strong>.13.6.5 EIS Tax Relief CertificatesThe Company intends to apply for formal approval following conclusion <strong>of</strong> the Acquisition or fourmonths after starting to trade, whichever is later. Upon receipt <strong>of</strong> authority from, HM Revenue &Customs, the relevant tax certificates will be issued to those eligible investors who request them.13.7 Venture Capital Trust (“VCT”) approvalHMRC has confirmed that <strong>Avisen</strong> <strong>and</strong> its Subsidiaries, taken together as a group <strong>of</strong> companies, will meetthe trading requirements for the VCT legislation. The Directors <strong>and</strong> <strong>Proposed</strong> Directors believe, therefore,that the Enlarged <strong>Group</strong> will also meet the trading requirements for the VCT legislation <strong>and</strong> shall seekclearance following Admission.14. Market quotationsThe following table shows the closing middle market quotation for the Existing Ordinary Shares as derived fromthe London Stock Ex<strong>change</strong> Daily Official List on the first dealing day <strong>of</strong> each month from 1 August 2008 to6 January 2009 being the latest date practicable prior to the publication <strong>of</strong> this document:DatePrice1 August 2008 7.00p1 September 2008 7.25p1 October 2008 7.25p3 November 2008 6.375p1 December 2008 5.50p2 January 2009 5.25p6 January 2009 5.25p15. General15.1 The accounting reference date <strong>of</strong> the Company is currently 28/29 February. The Company intends to<strong>change</strong> this to 31 December so that the current accounting reference period <strong>of</strong> the Company will end on31 December 2008.15.2 Horwath Clark Whitehill LLP has given <strong>and</strong> has not withdrawn its written consent to the issue <strong>of</strong> thisdocument with the inclusion <strong>of</strong> its name <strong>and</strong> reports in the form <strong>and</strong> context in which they appear <strong>and</strong>accepts responsibility for them. The reports from Horwath Clark Whitehill LLP are dated the same date asthis document. Horwath Clark Whitehill LLP is a member firm <strong>of</strong> the Institute <strong>of</strong> Chartered Accountantsin Engl<strong>and</strong> <strong>and</strong> Wales.15.3 JEP has given <strong>and</strong> has not withdrawn its written consent to the issue <strong>of</strong> this document with the inclusion<strong>of</strong> its name in the form <strong>and</strong> context which it appears.15.4 JEP, which is regulated by the Financial Services Authority, has its registered <strong>of</strong>fice at 10 FinsburySquare, London EC2A 1AD.15.5 There are no arrangements in force for the waiver <strong>of</strong> future dividends. There are no specified dates onwhich entitlement to dividends or interest thereon on Ordinary Shares arises.15.6 The total costs <strong>and</strong> expenses relating to the Proposals (including those fees <strong>and</strong> commissions referred to inparagraph 10 above) payable by the Company are estimated to amount to approximately £300,000(excluding VAT).74
15.7 No person (excluding pr<strong>of</strong>essional advisers otherwise disclosed in this document <strong>and</strong> trade suppliers) hasreceived, directly or indirectly, from the Enlarged <strong>Group</strong> within the 12 months preceding the date <strong>of</strong> thisdocument or has entered into any contractual arrangements (not otherwise disclosed in this document) toreceive, directly or indirectly, from the Enlarged <strong>Group</strong> on or after Admission fees totalling £10,000 ormore or securities in the Enlarged <strong>Group</strong> having a value <strong>of</strong> £10,000 or more calculated by reference to theexpected opening price or any other benefit with a value <strong>of</strong> £10,000 or more at the date <strong>of</strong> Admission.15.8 The financial information contained in this AIM Admission Document does not constitute statutoryaccounts <strong>of</strong> the Company within the meaning <strong>of</strong> Section 434 (3) <strong>of</strong> the 2006 Act.15.9 There has been no material <strong>change</strong> in the financial or trading position <strong>of</strong> the Company subsequent to28 February 2008, the date <strong>of</strong> the last published audited accounts <strong>of</strong> the Company. In addition, there hasbeen no significant <strong>change</strong> in the financial or trading position <strong>of</strong> the Company since 31 August 2008, thedate to which the latest interim financial information on the Company has been published. There has beenno significant or material <strong>change</strong> in the financial or trading position <strong>of</strong> <strong>Avisen</strong> since 30 September 2008,the date to which the last audited financial information on <strong>Avisen</strong> has been published.15.10 Save as disclosed in this document, as far as the Directors <strong>and</strong> <strong>Proposed</strong> Directors are aware there are noknown trends, uncertainties, dem<strong>and</strong>s, commitments or events that are reasonably expected to have amaterial effect on the Enlarged <strong>Group</strong>’s prospects for at least the current financial year.15.11 As far as the Directors <strong>and</strong> <strong>Proposed</strong> Directors are aware, there are no environmental issues that mayaffect the Enlarged <strong>Group</strong>’s utilisation <strong>of</strong> its tangible fixed assets.15.12 Save as disclosed in this document <strong>and</strong> in the audited annual report <strong>and</strong> accounts <strong>of</strong> the Company, whichare publicly available, in respect <strong>of</strong> the Company’s three previous financial years the Company has had noprincipal investments <strong>and</strong> there are no principal investments in progress <strong>and</strong> there are no principal futureinvestments on which the Board has made a firm commitment.15.13 Where information has been sourced from a third party this information has been accurately reproduced.So far as the Company, the Directors <strong>and</strong> the <strong>Proposed</strong> Directors are aware <strong>and</strong> are able to ascertain frominformation provided by that third party, no facts have been omitted which would render the reproducedinformation inaccurate or misleading.15.14 Save as disclosed in this document, there are no patents, intellectual property rights, licences or anyindustrial, commercial or financial contracts which are or may be material to the business or pr<strong>of</strong>itability<strong>of</strong> the Enlarged <strong>Group</strong>.16. Documents Available For InspectionCopies <strong>of</strong> the following documents may be inspected at the <strong>of</strong>fices <strong>of</strong> Orrick Herrington & Sutcliffe, Tower 42,Level 35, 25 Old Broad Street, London EC2N 1HQ, during the usual business hours on any weekday (Saturdays<strong>and</strong> public holidays excepted) from the date <strong>of</strong> this document until one month from the date <strong>of</strong> Admission:16.1 the current memor<strong>and</strong>um <strong>and</strong> articles <strong>of</strong> association <strong>of</strong> the Company <strong>and</strong> the proposed memor<strong>and</strong>um <strong>and</strong>articles <strong>of</strong> association <strong>of</strong> the Company, to be approved at the General Meeting;16.2 the memor<strong>and</strong>um <strong>and</strong> articles <strong>of</strong> association <strong>of</strong> <strong>Avisen</strong>;16.3 the audited financial statement <strong>of</strong> the Company for the two years ended 29 February 2008 <strong>and</strong> the interimresults <strong>of</strong> the Company for the six months ended 31 August 2008;16.4 the Accountants’ Report on <strong>Avisen</strong> reproduced in Part III <strong>of</strong> this document;16.5 the service contracts <strong>and</strong> letters <strong>of</strong> appointment referred to in paragraph 7 <strong>of</strong> this Part V;16.6 the irrevocable undertakings to vote in favour <strong>of</strong> the Resolutions at the General Meeting;16.7 the material contracts referred to in paragraph 10 above; <strong>and</strong>16.8 the written consents referred to in paragraph 15 above.Dated 7 January 2009Copies <strong>of</strong> this document are available to the public, free <strong>of</strong> charge, at the registered <strong>of</strong>fice <strong>of</strong> the Company<strong>and</strong> at the <strong>of</strong>fices <strong>of</strong> John East & Partners Limited, 10 Finsbury Square, London EC2A 1AD duringnormal business hours on any weekday (Saturdays <strong>and</strong> public holidays excepted) for a period <strong>of</strong> onemonth from the date <strong>of</strong> Admission.75
Notice <strong>of</strong> General MeetingZ GROUP plc(Registered in Engl<strong>and</strong> <strong>and</strong> Wales under company No: 5429800)NOTICE IS HEREBY GIVEN that a General Meeting <strong>of</strong> Z GROUP plc (“the Company”) will be heldat the <strong>of</strong>fices <strong>of</strong> Orrick, Herrington & Sutcliffe, Tower 42, Level 35, 25 Old Broad Street, LondonEC2N 1HQ at 10.00 a.m. on 30 January 2009 for the purpose <strong>of</strong> considering <strong>and</strong>, if thought fit, passingthe following resolutions <strong>of</strong> which resolutions 1 to 4 will be proposed as ordinary resolutions, <strong>of</strong> whichresolution 2 will be taken on a poll, <strong>and</strong> resolutions 5 to 8 as special resolutions:Ordinary Resolutions1. THAT, subject to the passing <strong>of</strong> resolutions 2, 3 <strong>and</strong> 4, the <strong>acquisition</strong> (“the Acquisition”) bythe Company <strong>of</strong> the whole <strong>of</strong> the issued share capital <strong>of</strong> <strong>Avisen</strong> on the terms <strong>and</strong> subject to theconditions set out in the agreement dated 7 January 2009 (“the Acquisition Agreement”)between (1) the Company <strong>and</strong> (2) shareholders <strong>of</strong> <strong>Avisen</strong> <strong>Group</strong> Limited <strong>and</strong> relateddocumentation to be entered into pursuant to the Acquisition Agreement as summarised in thecircular to Shareholders <strong>of</strong> the Company dated 7 January 2009 (“Admission Document”), be <strong>and</strong>are hereby approved for the purposes <strong>of</strong> Rule 14 <strong>of</strong> the AIM Rules with such minor amendmentsas the Directors may approve, <strong>and</strong> the Directors or any duly authorised committee <strong>of</strong> theDirectors be authorised to take all steps necessary or desirable to complete the Acquisition.2. THAT the waiver granted by the Panel on Takeovers <strong>and</strong> Mergers <strong>of</strong> the requirement underRule 9 <strong>of</strong> the City Code on Takeovers <strong>and</strong> Mergers that would otherwise arise on the members<strong>of</strong> the Concert Party (as defined in the Admission Document) to make a general <strong>of</strong>fer toshareholders <strong>of</strong> the Company as a result <strong>of</strong> the allotment <strong>and</strong> issue <strong>of</strong> new ordinary shares <strong>of</strong> 5peach in the capital <strong>of</strong> the Company (“Ordinary Shares”) to the Concert Party pursuant to theAcquisition (representing approximately 78.5 per cent. <strong>of</strong> the enlarged issued share capital <strong>of</strong> theCompany following such issue <strong>of</strong> new Ordinary Shares, as described in the AdmissionDocument <strong>of</strong> which this notice forms part, be <strong>and</strong> is hereby approved.3. THAT, the authorised share capital <strong>of</strong> the Company be <strong>and</strong> is hereby increased from £5,000,000to £10,000,000 by the creation <strong>of</strong> 100,000,000 new Ordinary Shares <strong>of</strong> £0.05, each, eachranking pari passu in all respects with the existing Ordinary Shares <strong>of</strong> £0.05 each in the capital<strong>of</strong> the Company.4. THAT, in substitution for any existing <strong>and</strong> unexercised authorities, the Directors be <strong>and</strong> theyare hereby generally <strong>and</strong> unconditionally authorised for the purposes <strong>of</strong> section 80 <strong>of</strong> theCompanies Act 1985 (“the 1985 Act”) to exercise all the powers <strong>of</strong> the Company to allotrelevant securities up to the amount <strong>of</strong> £6,173,542 provided this authority shall be limited to:(i) the allotment <strong>of</strong> 86,666,667 Ordinary Shares with a nominal value <strong>of</strong> £4,333,333pursuant to the terms <strong>of</strong> the Acquisition Agreement; <strong>and</strong>(ii) the allotment <strong>of</strong> Ordinary Shares up to an aggregate nominal value <strong>of</strong> £1,840,209.The authorities conferred by this resolution shall expire at the conclusion <strong>of</strong> the nextannual general meeting <strong>of</strong> the Company (unless previously renewed, varied or revokedby the Company in general meeting), provided that the Company may before such expirymake an <strong>of</strong>fer or agreement which would or might require relevant securities to beallotted after such expiry <strong>and</strong> the Directors may allot relevant securities in pursuance <strong>of</strong>such <strong>of</strong>fer or agreement notwithst<strong>and</strong>ing that the authority conferred hereby has expired(<strong>and</strong> in this resolution the expression “relevant securities” <strong>and</strong> reference to the allotment<strong>of</strong> relevant securities shall bear the same respective meanings as in section 80 <strong>of</strong> the 1985Act).76
Special Resolutions5. THAT, in substitution for any existing <strong>and</strong> unexercised authorities, the Directors be <strong>and</strong> theyare hereby empowered pursuant to section 95 <strong>of</strong> the Act to allot equity securities for cashpursuant to the authority conferred by resolution 4 above or by way <strong>of</strong> sale <strong>of</strong> treasury shares asif section 89(1) <strong>of</strong> the Act did not apply to any such allotment, provided that this power shall belimited to:(i)(ii)the allotment <strong>of</strong> equity securities in connection with a rights issue, open <strong>of</strong>fer or other prorata <strong>of</strong>fer <strong>of</strong> securities in favour <strong>of</strong> the holders <strong>of</strong> Ordinary Shares on the register <strong>of</strong>members at such record dates as the Directors may determine <strong>and</strong> other persons entitledto participate therein where the equity securities respectively attributable to the interests<strong>of</strong> the Ordinary Shareholders are proportionate (as nearly as may be) to the respectivenumbers <strong>of</strong> Ordinary Shares held or deemed to be held by them on any such record dates(which shall include the allotment <strong>of</strong> equity securities to any underwriter in respect <strong>of</strong>such issue or <strong>of</strong>fer), subject to such exclusions or other arrangements as the Directorsmay deem necessary or expedient to deal with fractional entitlements or legal or practicalproblems arising under the laws <strong>of</strong> any overseas territory or the requirements <strong>of</strong> anyregulatory body or stock ex<strong>change</strong> or by virtue <strong>of</strong> shares being represented by depositaryreceipts or any other matter whatever;the allotment <strong>of</strong> equity securities (otherwise than in sub-paragraph (i) above) to anyperson or persons up to an aggregate nominal amount <strong>of</strong> £552,063,provided that the authorities conferred by this resolution shall expire at the conclusion <strong>of</strong> thenext annual general meeting <strong>of</strong> the Company (unless previously renewed, varied or revoked bythe Company), save that the Company may, before such expiry, make an <strong>of</strong>fer or agreementwhich would or might require equity securities to be allotted after such expiry <strong>and</strong> the Directorsmay allot equity securities in pursuance <strong>of</strong> any such <strong>of</strong>fer or agreement notwithst<strong>and</strong>ing that thepower conferred hereby has expired <strong>and</strong> that all previous authorities under section 95 <strong>of</strong> the Actbe <strong>and</strong> they are hereby revoked (<strong>and</strong> in this resolution the expression “equity securities” <strong>and</strong>references to the “allotment <strong>of</strong> equity securities” shall bear the same respective meaning as insection 94 <strong>of</strong> the Act).6. THAT the name <strong>of</strong> the Company be <strong>change</strong>d to “<strong>Avisen</strong> plc”.7. THAT the Articles <strong>of</strong> Association <strong>of</strong> the Company be amended so as to be in the form producedto the meeting <strong>and</strong> initialled by the Chairman <strong>of</strong> the meeting for the purpose <strong>of</strong> identification.8. THAT the Memor<strong>and</strong>um <strong>of</strong> Association <strong>of</strong> the Company be amended by the deletion <strong>of</strong> clause1 <strong>and</strong> in substitution for its 1, the following be inserted:“The name <strong>of</strong> the Company is <strong>Avisen</strong> plc”BY ORDER OF THE BOARDRegistered Office31 Vernon StreetLondon W14 0RNDuncan NealeCompany Secretary7 January 200977
Notes:Entitlement to attend <strong>and</strong> vote1. Pursuant to Regulation 41 <strong>of</strong> the Uncertificated Securities Regulations 2001, the Company specifies that only those membersregistered on the Company’s register <strong>of</strong> members at:– 6.00 pm on 28 January 2009; or,– if this general meeting is adjourned, at 6.00 pm on the day two days prior to the adjourned meeting, shall be entitled toattend <strong>and</strong> vote at the general meeting.Poll2. Resolution 2 will be taken on a poll <strong>of</strong> independent shareholders in accordance with the requirements <strong>of</strong> the Panel on Takeovers <strong>and</strong>Mergers <strong>and</strong> accordingly Marcus Hanke <strong>and</strong> Marcus Yeoman will not vote on Resolution 2.Appointment <strong>of</strong> proxies3. As a member <strong>of</strong> the Company, you are entitled to appoint a proxy to exercise all or any <strong>of</strong> your rights to attend, speak <strong>and</strong> vote at themeeting <strong>and</strong> you should have received a proxy form with this notice <strong>of</strong> meeting. You can only appoint a proxy using the proceduresset out in these notes <strong>and</strong> the notes to the proxy form.4. A proxy does not need to be a member <strong>of</strong> the Company but must attend the meeting to represent you. Details <strong>of</strong> how to appoint theChairman <strong>of</strong> the meeting or another person as your proxy using the proxy form or via CREST are set out in the notes to the proxyform. If you wish your proxy to speak on your behalf at the meeting you will need to appoint your own choice <strong>of</strong> proxy (not theChairman) <strong>and</strong> give your instructions directly to them.5. If you do not give your proxy an indication <strong>of</strong> how to vote on any resolution, your proxy will vote or abstain from voting at his orher discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put beforethe meeting.Appointment <strong>of</strong> proxy using hard copy proxy form6. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote.To appoint a proxy using the proxy form, the form must be:– completed <strong>and</strong> signed;– sent or delivered to Capita Registrars at The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU; <strong>and</strong>– received by Capita Registrars no later than 10.00 a.m. on 28 January 2009 by an <strong>of</strong>ficer <strong>of</strong> the company or an attorney forthe company. Any power <strong>of</strong> attorney or any other authority under which the proxy form is signed (or a duly certified copy<strong>of</strong> such power or authority) must be included with the proxy form.Appointment <strong>of</strong> proxy via CREST7. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so byusing the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members <strong>and</strong> thoseCREST members who have appointed voting service provider(s), should refer to their CREST sponsor or voting service provider(s)who will be able to take the appropriate action on their behalf.In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a“CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Irel<strong>and</strong> Limited’s (formerlyCRESTCo’s) specifications <strong>and</strong> must contain the information required for such instructions, as described in the CREST Manual. Themessage, regardless <strong>of</strong> whether it constitutes the appointment <strong>of</strong> a proxy or an amendment to the instruction given to a previouslyappointed proxy, must in order to be valid, be transmitted so as to be received by Capita Registrars (ID RA 10) by no later than10.00 a.m. on 28 January 2009. No such message received through the CREST network after this time will be accepted. For thispurpose, the time <strong>of</strong> receipt will be taken to be the time (as determined by the timestamp applied to the message by the CRESTApplications Host) from which the registrars are able to retrieve the message by enquiry to CREST in the manner prescribed byCREST. After this time, any <strong>change</strong> <strong>of</strong> instructions to proxies appointed through CREST should be communicated to the appointeethrough other means.CREST members <strong>and</strong>, where applicable, their CREST sponsors or voting service provider(s) should note that Euroclear UK &Irel<strong>and</strong> Limited does not make available special procedures in CREST for any particular message. Normal system timings <strong>and</strong>limitations will therefore apply in relation to the input <strong>of</strong> CREST Proxy Instructions. It is the responsibility <strong>of</strong> the CREST memberconcerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting serviceprovider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure thata message is transmitted by means <strong>of</strong> the CREST system by any particular time. In this connection, CREST members <strong>and</strong>, whereapplicable, their CREST sponsors or voting service providers are referred, in particular, to those sections <strong>of</strong> the CREST Manualconcerning practical limitations <strong>of</strong> the CREST system <strong>and</strong> timings.The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) <strong>of</strong> theUncertificated Securities Regulations 2001.Appointment <strong>of</strong> proxy by joint members8. In the case <strong>of</strong> joint holders, where more than one <strong>of</strong> the joint holders purports to appoint a proxy, only the appointment submitted bythe most senior holder will be accepted. Seniority is determined by the order in which the names <strong>of</strong> the joint holders appear in theCompany’s register <strong>of</strong> members in respect <strong>of</strong> the joint holding (the first-named being the most senior).Changing proxy instructions9. To <strong>change</strong> your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut-<strong>of</strong>ftime for receipt <strong>of</strong> proxy appointments (see above) also apply in relation to amended instructions; any amended proxy appointmentreceived after the relevant cut-<strong>of</strong>f time will be disregarded.Where you have appointed a proxy using the hard-copy proxy form <strong>and</strong> would like to <strong>change</strong> the instructions using anotherhard-copy proxy form, please contact Capita Registrars on 0871 664 0300. Calls cost 10p per minute plus network extras.If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt <strong>of</strong> proxieswill take precedence.Termination <strong>of</strong> proxy appointments10. In order to revoke a proxy instruction (other than a CREST Proxy Instruction) you will need to inform Capita Registrars by sendinga signed hard copy notice clearly stating your intention to revoke your proxy appointment to The Registry, 34 Beckenham Road,Beckenham, Kent BR3 4TU. In the case <strong>of</strong> a member which is a company, the revocation notice must be executed under its commonseal or signed on its behalf by an <strong>of</strong>ficer <strong>of</strong> the company or an attorney for the company. Any power <strong>of</strong> attorney or any otherauthority under which the revocation notice is signed (or a duly certified copy <strong>of</strong> such power or authority) must be included with therevocation notice. Revocation <strong>of</strong> a CREST Proxy Instruction should be made in accordance with the CREST Manual.78
The revocation notice must be received by Capita Registrars no later than 10.00 a.m. on 28 January 2009.If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the paragraphdirectly below, your proxy appointment will remain valid.Appointment <strong>of</strong> a proxy does not preclude you from attending the meeting <strong>and</strong> voting in person. If you have appointed a proxy <strong>and</strong>attend the meeting in person, your proxy appointment will automatically be terminated.Corporate Representatives11. In order to facilitate voting by corporate representatives at the meeting, arrangements will be put in place at the Meeting so that:(i) if a corporate member has appointed the Chairman <strong>of</strong> the meeting as its corporate representative with instructions to voteon a poll in accordance with the directions <strong>of</strong> all the other corporate representatives for that member at the meeting, then,on a poll, those corporate representatives will give voting directions to the Chairman <strong>and</strong> the Chairman will vote (orwithhold a vote) as corporate representative in accordance with those directions; <strong>and</strong>(ii) if more than one corporate representative for the same corporate member attends the Meeting but the corporate member hasnot appointed the Chairman <strong>of</strong> the meeting as its corporate representative, a designated corporate representative will benominated, from those corporate representatives who attend, who will vote on a poll <strong>and</strong> the other corporate representativeswill give voting directions to that designated corporate representative.Corporate members are referred to the guidance issued by the Institute <strong>of</strong> Chartered Secretaries <strong>and</strong> Administrators on proxies <strong>and</strong>corporate representatives, available from www.icsa.org.uk, for further details <strong>of</strong> this procedure. The guidance includes a sampleform <strong>of</strong> representation letter to appoint the Chairman as a corporate representative as described in (i) above.Communication12. Except as provided above, members who have general queries about the meeting should contact Capita Registrars on 0871 664 0300(calls cost 10p per minute plus network extras). No other methods <strong>of</strong> communication will be accepted.You may not use any electronic address provided either:– in this notice <strong>of</strong> annual general meeting; or– any related documents (including the proxy form),to communicate with the Company for any purposes other than those expressly stated.79
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