INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2008

CHAIRMAN'S STATEMENT

Hertford International owns 100 per cent. of the issued share capital of CrewCard Networks ("CCN") which was incorporated on 27 April 2006. CCN was formed to take advantage of the expected rapid growth of the pre-paid card market and has positioned itself as a sales and marketing company.

Our business model is to develop several complementary brands, establish for CCN its own distribution network, and build an ongoing relationship with its card users, which will enable us to sell additional products and services.

Since the successful admission of the Company to AIM on 24 December 2007,, I am pleased to report the substantial progress made in product and business development during our first six month reporting period. I am also pleased to note that Lewis Findlay became the full time CEO in April, having worked closely with the Company, as interim manager, since last October. His energy, skill, and vision are already having a strong and positive influence across all aspects of the business.

This first period has not been active from a trading perspective, as reflected in the financial statement, but this has been deliberate to ensure that the suite of products coming to market, and the associated distribution networks, are of a quality to deliver substantial sales and shareholder value, which I now believe they are, with final delivery expected late summer.

The reason for the redefinition of the products has been a function of the rapidly changing rules relating to money laundering, and a recognition that despite these rules, the product must still be easily obtainable by all potential card holders. Further, the Company has developed value added functionality and services to improve the client proposition, as well as potential client value to the company. Therefore, the Company has postponed marketing the current product. One of the value added services the Company has developed is in the arena of telecoms and is expected to be launched in July this year.

The Directors believe that the refined Crewcard model potentially has global reach, and are actively discussing licensing and joint ventures with contributors in Europe and the Far East. CrewCard Networks is also developing relationships with banks in Europe and the Far East and is exploring opportunities in markets which contribute significantly to the international foreign workers population.

Part of CCN's proposed business strategy is to look at new technologies, payment systems and value added services that are intended to strengthen and enhance the value of the cardholder proposition.

The Board believes that the potential of the pre-debit card market is increasingly being recognised. This, coupled with our diversification strategy, presents the Company with a considerable opportunity for growth.

At the time of our admission to AIM, the board stated its belief that the listing would provide Hertford International with a greater profile and this is already proving beneficial in our commercial discussions. In addition, our public listing may give the Company access to further development capital in the future and the ability to make complimentary acquisitions. Your board remains committed to evaluating value enhancing acquisitions and will continue to explore suitable opportunities as they arise.

I would like to thank all of the staff for their efforts during the period and our shareholders for their support. I believe that we will be able to show that we have made useful progress in the development of our business in the second half of the year.

Paul Marks, Chairman

27 June 2008

 

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CONSOLIDATED INCOME STATEMENT FOR THE 6 MONTHS ENDED 31 MARCH 2008

	6 months to 31 March 2008 Unaudited£	4 months to 30 September 2007Audited£
Continuing operations
Revenue	89,877
Cost of sales	(81,803)
Gross profit	8,074	-
Administrative expenses	(531,234)	-
Exceptional costs	(212,232)	-
Operating loss	(735,392)	-
Investment income	16,344	-
Finance costs	(15,070)	-
Loss on ordinary activities before tax	(734,118)	-
Taxation	-	-
Loss for the period	(734,118)	-
Loss per share - basic	(2.5p)	-

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2008

	As at 31 March 2008 Unaudited £	As at 30 September 2007 Audited £
Non current assets
Property, plant and equipment	104,061	-
Goodwill	1,354,419	-
	1,458,480	-
Current assets
Inventories	81,441	-
Trade receivables	1,190	-
Other current assets	115,757	0.02
Cash and cash equivalents	1,117,455	-
	1,315,843	0.02
Current liabilities
Trade and other payables	(299,942)	-
Net current assets	1,015,901	-
Non-current liabilities
Non-current borrowings	(835,775)	-
Net assets	1,638,606	0.02
Equity
Share capital	426,750	0.02
Share premium	1,902,850	-
Retained earnings	(690,994)	-
Equity attributable to equity holders of the parent	1,638,606	0.02

CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 MARCH 2008

	6 months to 31 March 2008 Unaudited £	14 months to 30 September 2007 Audited £
Cash flows from operating activities
Loss before taxation	(734,118)	-
Adjustments for :
Depreciation	7,873	-
Investment income	(16,344)	-
Interest expense	15,070	-
Share based payment	43,124	-
Decrease in trade and other receivables	94,191	-
Decrease in inventories	1,241	-
Decrease in trade and other payables	(200,998)	-
Cash used in operations	(789,961)	-
Interest paid	(15,070)	-
Net cash used in operating activities	(805,031)	-
Cash flows from investing activities
Interest received	16,344	-
Purchase of property, plant and equipment	(3,660)	-
Net cash used in investing activities	12,684	-
Cash flows from financing activities
Convertible loans repaid	(93,198)	-
Issue of shares	2,003,000	-
Net cash from financing activities	1,909,802	-
Net increase in cash and cash equivalents	1,117,455	-
Cash and cash equivalents at beginning of period	-	-
Cash and cash equivalents at end of period	1,117,455	-

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 31 MARCH 2008

	Share capital £	Share premium £	Retained earnings £	Total £
As at 1 October 2007	0.02	-	-	0.02
Ordinary shares issued in the period	426,749.98	1,902,850.00	-	2,329,599.98
Loss for the period	-	-	(734,118.00)	(734,118.00)
Credit arising on share based payment	-	-	43,124.00	43,124.00
As at 31 March 2008	426,750.00	1,902,850.00	(690,994.00)	1,638,606.00

 

NOTES TO THE INTERIM REPORT FOR THE SIX MONTHS ENDED 31 MARCH 2008

1.Accounting policies

Basis of preparation:

The interim financial information for the six months ended 31 March 2008 has been prepared in accordance with the accounting policies that will apply for the year ended 30 September 2008 which will follow International Financial Reporting Standards (IFRS) and interpretations as endorsed by the European Union.

The interim financial information does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The comparatives for the period ended 30 September 2007 are not the company's full statutory accounts for that period. A copy of the statutory accounts for that period has been delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain a statement under Section 237 (2)-(3) of the Companies Act 1985.

IFRS transition:

The group's results for the six months ended 31 March 2008 are the first results to be reported under IFRS. The group's date of transition to IFRS is 12 July 2006 and the adoption date is 1 October 2007.

Basis of consolidation:

The consolidated financial statements incorporate the results of the company and its subsidiary undertakings as at 31 March 2008 and exclude all intra-group transactions and balances. The results of subsidiary undertakings are included from the date of acquisition. The results of subsidiary undertakings disposed of are included up to the date of disposal.

Goodwill:

Goodwill represents any excess of the cost of acquisition over the fair value of the identifiable assets and liabilities acquired. Goodwill is tested annually for impairment and is carried at cost less accumulated impairment losses.

Property, plant and equipment

Property, plant and equipment are stated at cost net of accumulated depreciation and any provision for impairment. Depreciation is provided at rates calculated to write off the cost, less an estimated residual value, of the assets over their estimated useful lives at the following rates:

Web site development	25% straight line
Office equipment	25% straight line
Motor vehicles	25% straight line

Inventories

Stocks are valued at the lower of cost and net realisable value.

Leased assets

Rentals under operating leases are charged to the income statement on a straight-line basis over the lease term. All of the group's current leases are operating leases.

Foreign currency

Foreign currency transactions are recorded at the rate of exchange at the time of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in the income statement.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand. Bank overdrafts are included within current liabilities unless there is a right of offset with cash balances.

Share based payments

Share options awarded to employees are measured at fair value at grant date using the Black-Scholes model. The fair value is expensed on a straight-line basis over the vesting period, based on an estimate of the number of options that will eventually vest. Cash-settled share based payment transactions result in the recognition of a liability at its current fair value.

 

2. Loss per share

	6 months to 31 March 2008 Unaudited £	14 months to 30 September 2007 Audited £
Loss before taxation	(734,118)	-
Weighted average number of shares in issue in the period	28,989,479	2
Basic loss per share	(2.5p)	-

There is no dilution per share in respect of the current year as the group has made a loss.

3. Share capital

Issued share capital:	No.	£
Ordinary shares of 1p at 1 October 2007	2	0.02
Issued in the period	42,674,998	426,749.98
Ordinary shares of 1p at 31 March 2008	42,675,000	426,750.00

On 21 November 2007, 32,659,998 Ordinary shares were issued as consideration for the acquisition of the whole of the issued share capital of Crewcard Network Limited. On 18 December 2007, 10,000,000 Ordinary shares were issued for a total consideration of £2,000,000. On 12 March 2008, 15,000 Ordinary shares were issued for a total consideration of £3,000.

4.  Transition to IFRS

Analysis of the financial statements for the period ended 30 September 2007, which were prepared under UK GAAP, shows that no adjustments are required to equity or profit as a result of the transition to IFRS.