Eco City Vehicles : Final Results and Notice of Annual General Meeting



5 June 2014

Eco City Vehicles PLC

('ECV' or 'the Company')

Announcement of annual results for the Year ended 31 December 2014

Notice of Annual General Meeting

The board of directors of ECO City Vehicles plc ('the Board') announces that the Annual Report and Accounts for the year ended 31 December 2014 are being distributed today to ordinary shareholders of the Company, together with the notice of the Annual General Meeting of the Company (the 'AGM') to be held at the offices of Allenby Capital at 3 St. Helen's Place, London EC3A 6AB on 30 June, 2015 at 11am (the 'Notice').

A copy of the Annual Report and Accounts and the Notice can be found on the Company's website athttp://www.ecocityvehicles.com.

Eco City Vehicles PLC announces its audited results for the year ended 31 December 2014.

· On 23 September 2014 Mercedes-Benz informed KPM-UK Taxis Plc ('KPM'), the Company's subsidiary, that it was terminating its stocking facilities and trading agreements with immediate effect. On 19 September 2014 the trading in the Company's shares was suspended and on 24 September 2014 the directors placed KPM into administration.

· One80 Limited ('One80') the Company's intellectual property subsidiary, was placed in administration on 24 September 2014 by its directors.

· On 6 October 2014 the Company filed a notice of intention to appoint an administrator for the Company and the resignation of Jonathan Moritz from the board.

· On 14 November 2014 the Company announced the appointment of Allenby Capital Limited as Nominated Adviser & Broker and the resignation of Peter DaCosta as a director of the Company.

· On 17 October 2014 the Company was placed in administration by its directors. On 1 December 2014 the administrators issued a proposal for a Company Voluntary Arrangement ('CVA') to the Company's creditors and shareholders following discussions with a number of potential investors. The CVA proposals were approved by the Company's shareholders and creditors on 22 December 2014. Following the approval of the CVA proposal the Company exited administration and entered into CVA. Management and control of the Company returned to its directors, John Swingewood and Ran Oren. The former Joint Administrators continued as Joint Supervisors of the CVA for the purpose of its implementation.

· On 24 December 2014 the Company issued a circular and a notice of General Meeting to its shareholders setting out proposals to raise funds in total of £250,000 by means of private placing of up to £250,000 of convertible loan notes ('CLN'). £143,000 of the proceeds of the subscription has been applied to fund the CVA proposals. The proposals, including resolutions for the reorganisation and consolidation of the Company's shares, were approved on 20 January 2015, and the Company began its new activity as an investing company, seeking a suitable operating company to acquire by way of a share exchange.

· Trading in the Company's Shares was restored on AIM on 03 March 2015.

Following the implementation of the CVA the Company has become an investing company. The Company's new investing policy is to invest and/or acquire companies and/or assets in the telecommunications, media and technology sectors where the Board believes there are opportunities for growth which, if achieved, will be earnings enhancing for shareholders.

Commenting on the results, John Swingewood, Chairman, said

'The market conditions became very difficult for London taxi sales and unfortunately the Company was unable to continue trading in these conditions. Subsequently the Board has worked hard to restructure the business to enable it to become an investing company that hopefully in the long term will return value to the Company's existing and new shareholders following the completion of the above mentioned CLN subscription.'

A copy of the Company's annual accounts is now available on the Company' website and has been posted out to shareholders.

Enquiries:

CHAIRMAN'S REVIEW

Introduction

2014 was a difficult year for everybody involved in the Company, with the administration first of our operating subsidiaries, followed by the Company itself, but following the difficult restructuring, which was not completed until after the year end, we now face the future with a renewed sense of optimism. As an investing company, we are hopeful of identifying a suitable company to acquire by way of a share exchange, and look forward to communicating this to shareholders in the future.

The results reflect the position prior to ECV entering and subsequently exiting administration on 22 December 2014 by way of a Company Voluntary Arrangement ('CVA'), following approval by both creditors and shareholders. Shareholders subsequently also approved the refinancing through the issue of CLN's described earlier, and the Company's shares returned to trading on AIM on 3 March 2015 as an investing company.

The annual accounts for the year ended 31 December 2014 reflect the former operating activities of the Group as discontinued activities.

Management, Employees and Board

On 5 March 2014 the Company announced that Trevor Parker had stepped down from the Board to pursue other interests and the appointment of Ran Oren as non-executive director.

On 6 October 2014 Jonathan Moritz resigned from his position as Finance Director of the Company and other subsidiaries.

On 16 November Peter DaCosta resigned from the board as non executive director.

Future Outlook

Following the implementation of the CVA the Company has become an investing company. The Company's new investing policy is to invest and/or acquire companies and/or assets in the telecommunications, media and technology sectors where the Board believes there are opportunities for growth which, if achieved, will be earnings enhancing for shareholders

John Swingewood

Chairman

3 June 2015

STRATEGIC REPORT

Principal Activities

Eco City Vehicles PLC entered administration on 17 October 2014 and subsequently exited administration on 22 December 2014 by way of a Company Voluntary Arrangement ('CVA'), following approval by both creditors and shareholders.

On 24 December 2014 the Company issued a circular and a notice of General Meeting to its shareholders setting out proposals to raise funds totalling of £250,000 by means of a private placing of CLN's. £143,000 of the proceeds of the subscription has been applied to fund the CVA. The proposals also included resolutions for the reorganisation and consolidation of the Company's shares. All resolutions were approved at the General Meeting.

The placing of the CLN's was successful and the share reorganisation implemented following the successful return of the company's ordinary shares from suspension on 3 March 2015

Prior to the administration the Group ownedintellectual property used for the conversion of Mercedes Benz vans into licensed taxis, and ran a licensed taxi dealership, with related driver solutions and after-sales services, from its main site in East London. The dealership's activities comprised new vehicle sales, used vehicle sales, vehicle servicing, vehicle parts distribution, taxi meter fitting and calibration, and a bodyshop repair centre. The Group also ran its own taxi rental fleet, with around 45 vehicles out on hire by 30 June 2014. The new vehicle business operated under a dealer agreement with Mercedes Benz covering Vito taxis. Its servicing and parts activities operated under dealer agreements both with Mercedes Benz and with the London Taxi Company. The servicing and parts agreement with Mercedes Benz covered commercial vehicles as well as taxis. The Mercedes Benz Vito taxi was converted for Mercedes Benz by a 3rd party vehicle conversion company which operated under licence from the Group's intellectual property subsidiary One80 Ltd. These activities were terminated by Mercedes Benz with immediate effect on 23 September 2014.The annual accounts for the year ended 31 December 2014 reflect activities of the Group as discontinued activities.

Key performance indicators

In future periods the directors will set KPI's aligned with the achievement of the Company's new investing policies.

Business Strategy

Following the approval of the CVA proposal the Company exited administration and entered into CVA. Management and control of the Company returned to its directors, John Swingewood and Ran Oren. The former Joint Administrators will continue in a different role as Joint Supervisors of the CVA for the purpose of its implementation

On 24 December 2014 the Company issued a circular and a notice of General Meeting to its shareholders setting out proposals to raise funds in total of £250,000 by means of private placing of up to £250,000 CLN's. £143,000 of the proceeds of the subscription have since been applied to fund the CVA proposals.

As the Company no longer has a trading activity, the Company has become an investing company. The Company's strategy is to invest in and/or acquire companies and/or assets in the telecommunications, media and technology sectors where the Board believes there are opportunities for growth which, if achieved, will be earnings enhancing for Shareholders.

Principal Risks and Uncertainties

The Board of Directors continuously identify, monitor and manage potential risks and uncertainties relating to the Group. The risks are inherent in all business. The list below sets out certain risk factors which could have an impact on the Group's long term performance. The list is not presumed to be exhaustive, and by its nature is subject to change.

The main risks arising from Group's operations are dependence on key personnel and breakdown of internal control due to fraud or error. The Directors review and agree policies for managing each of these risks and they are summarised below:

Dependence on key personnel

The Group depends upon the expertise and continued service of key executives. The Group ensures that the key personnel are retained by offering competitive pay.

Internal control

The Group does not employ an internal audit function but ongoing review of systems and adherence to these systems is undertaken by the Directors.

Post balance sheet events

On 20 January 2015 all the resolutions set out in the proposal above were approved by the Company's shareholders

The Board has decided to continue with the current name Eco City Vehicles PLC until a suitable acquisition is completed.

The Company's shares returned to trading on AIM on 3 March 2015.

Ran Oren

Director

Company number04998151

eco city vehicles plc

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2014

eco city vehicles plc

Consolidated Statement of Financial Position

As at 31 December 2014

eco city vehicles plc

Consolidated Statement of Changes in Equity

As at 31 December 2014

eco city vehicles plc

Consolidated Statement of Cash Flows

For the year ended 31 December 2014

1. Accounting policies

The principal accounting policies adopted in preparation of the Group's financial statements are set out below.

Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS and IFRIC Interpretations) issued by the International Accounting Standards Board (IASB) as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies preparing their financial statements under IFRS.

The financial statements have been prepared using the measurement basis specified by IFRS for each type of asset, liability, income and expense. The measurement bases are more fully described in the detailed accounting policies below.

The preparation of financial statements, in conformity with general accepted accounting principles under IFRS, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results may ultimately differ from those estimates.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these consolidated financial statements.

Going concern

The Group has prepared detailed forecasts taking account of actual results to date and its current run rate on a prudent basis. On 24 December 2014 the Company issued a circular and a notice of General Meeting to its shareholders setting out proposals to raise funds in total of £250,000 by means of private placing of up to £250,000 CLN's. £143,000 of the proceeds of the subscription have been applied to fund the CVA proposals. Taking into account the proceeds from the issue of CLN's after the balance sheet date and based on available forecasts, the directors' consider the going concern basis of preparation to be appropriate.

Basis of consolidation

The financial statements incorporate the financial statements of the Company and subsidiaries controlled by the Company made up to the year ended 31 December 2014.

Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the financial statements from the date that control commences until the date that control ceases.

On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to profit and loss in the period of acquisition.

The results of subsidiaries acquired or disposed of during the year are included in the Consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.

All intra-Group transactions, balances, income, expenses and unrealised gains are eliminated when preparing the historical financial information. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Business combinations

Business combinations are accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 (r2008) are recognised at their fair value at the acquisition date.

The Group has not applied IFRS 3 (r2008) 'Business Combinations' retrospectively to business combinations prior to 1 January 2010.

For business combinations completed on or after 1 January 2010, cost comprised the fair value of assets given, liabilities assumed and equity instruments issued, plus the amount of any non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree. Contingent consideration is included in cost at its acquisition date fair value and, in the case of contingent consideration classified as a financial liability, remeasured subsequently through profit and loss. For business combinations completed on or after 1 January 2010, direct costs of acquisition are recognised immediately as an expense.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of comprehensive income. Where fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.

Standards, amendments and interpretations to published standards not yet effective

At the date of approval of these financial statements, no standards and interpretations which were in issue but not yet effective are expected to have a material impact on the financial statements of the Group.

Discontinued operations

The Group classifies discontinued operations as major lines of business, geographical areas of business or subsidiaries companies that are held for resale or that are not continuing to trade. Such operations are measured at the lower of their carrying amount and fair value less costs to sell or to distribute. Costs to distribute are the incremental costs directly attributable to the distribution, excluding the finance costs and income tax expense.

Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the statement of profit or loss. Additional disclosures are provided in Note 22.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales-related taxes.

Sales of goods comprise new and used taxis sales and related parts. These sales are recognised when the substantial risks and rewards are transferred, this is when the goods are delivered.

Sales of services comprise servicing and repairs of taxis and sales of bodyshop repairs comprise repairs of taxis. These sales are recognised as services are provided.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

Cash and cash equivalents

For the purpose of the cash flow statement, cash and cash equivalents comprise cash at bank, cash in hand, deposits with a maturity of three months or less from inception and bank overdrafts. Any bank overdrafts would be shown within Borrowings in Current Liabilities on the Balance Sheet.

Segmental reporting

Operating segments have been identified on the basis of internal reports that are regularly reviewed by the chief operating decision maker to allocate resources and assess performance.

Impairment of assets

At each balance sheet date, the Directors review the carrying amounts of the Group's tangible and intangible assets, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amounts of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of the money and the risks specific to the asset which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Impairment losses recognised for cash-generating units, to which goodwill has been allocated, are credited initially to the carrying amount of goodwill. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in the prior period. A reversal of an impairment loss is recognised in the Consolidated statement of comprehensive income immediately.

Goodwill and intangible assets with an indefinite life are not amortised but are reviewed annually for impairment. Any charge is recognised as a profit or loss.

Financial equity

Financial instruments issued by the Group are treated as equity (i.e. forming part of shareholders' funds) only to the extent that they meet the following two conditions:

· they include no contractual obligations upon the Group to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Group; and

· where the instrument will or may be settled in the Company's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Company's own equity instruments or is a derivative that will be settled by the Company exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. Equity comprises the following:

· 'Share capital' represents the nominal value of equity shares.

· 'Share premium' represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue.

· 'Reverse acquisition reserve' represents the excess of the fair value of the deemed cost of acquisition over the issued share capital and share premium of the combined entity.

· 'Revaluation reserve' represents Group assets that are deemed to have an increase or decrease on their original book value.

· 'Retained deficit' represents losses of the Group brought forward.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit or loss for the year. Taxable profit or loss differs from net profit as reported in the Consolidated statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current and deferred tax is calculated using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit or loss, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the Consolidated statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Non-recurring Items

These are items of income or expense which are presented separately due to their nature, size or incidence. The separate reporting of such items helps provide a better indication of the Group's underlying business performance.

Estimation of uncertainty

In the process of applying the Group's accounting policies the items requiring management estimation and judgement that have the most significant risk of causing material adjustments to the amounts recognised in the financial statements are described below:

Estimation:

-Impairment

An impairment loss recognised for the amount by which the asset's or cash-generating unit's carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows, management make assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the Group's assets within the next financial year. In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.

Judgement:

- Going concern

Management consider whether the Group has sufficient working capital to continue trading for at least twelve months. To determine working capital, management estimates expected future cash flows for each cash generating unit. In the process of estimating future cash flows management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the Group's working capital in the next twelve months.

2. Segmental analysis

For management purposes, the Group is organised into two business segments based on the nature of the business. The Group's reportable segments are now as follows:

- Continuing, which relates to the parent company

- Discontinued, which relates to the groups subsidiary companies.

Revenue reported represents revenue generated from external customers. Sales between segments in the year are eliminated for reporting purposes.

There are no external customers that individually represent 10% or more of the entity's revenues.

The accounting policies of the reportable segments are the same as the Group's accounting policies. Segment profit represents the gross profit earned by each segment without allocation of central administration, profits of associates, investment revenue and income tax expense. Other income, finance costs and finance income are allocated to the department incurring them where possible. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

Note: Prior years have been restated to reflect a change in management accounting allocations in the reportable segments.

For the purposes of monitoring segment performance and allocating resources between segments:

· Prior year has been restated to reflect a change in management account allocations

· The Group operates entirely within the United Kingdom, and all revenues arise from this geographical area.

3. a) Operating loss

Operating loss has been arrived at after charging/ (crediting):

3. b) Other income

During the year the Group received the following other operating income

3. c)Non-recurring items

The operating loss for the year ended 31 December 2014 of £2.8m in total is stated after non-recurring items totalling £2.3m shown below

During 2014 the parent company and two of its subsidiaries entered administration, with another subsidiary entering liquidation. Impairment of assets associated with these companies resulted in a non-recurring cost of 2.08m

4. Employee remuneration

4.1 Employee benefits expensed & employee numbers

5. Directors' emoluments

The remuneration of the executive directors was paid through KPM-UK Taxis Plc, a subsidiary of Eco City Vehicles Plc of which they were also directors. Ran Oren, in his role as FinanceDirector, is paid through a service company.

6. Finance income and costs

7. Tax credit

There is no provision for UK Corporation tax due to the administration of the Group companies and subsequent CVA of the parent company.

8. Loss per share

An adjusted loss per share is presented which excludes non-recurring items, and therefore reflects the underlying business performance. The dilutitive effect of share based payments is not disclosed as the results for the year were a loss.

After the balance sheet date, and as more fully described in note 25, the Company's shareholder's approved certain refinancing and capital restructuring events which have the effect, inter alia, of reducing the number of ordinary shares in issue from 471,336,521 at the balance sheet date to 28,770,692 at the date of approval of the financial statements. The refinancing and capital restructuring will have a material effect on future reported loss/earnings per share.

9. Property, plant and equipment

This compares to the property, plant and equipment in the previous reporting period as follows:

Due to the administration and/or liquidation of the parent company and some subsidiaries, the assets have been impaired to nil value during the year. Further details are shown within note 22.

The net book value of assets under hire purchase contracts are as follows:

10. Intangible assets

Due to the administration of the parent company the administration and/or liquidation of some subsidiaries, the intangible assets have been impaired to nil value during the year. Further details are shown within note 22.

This compares to the intangible assets in the previous reporting period as follows:

11. Goodwill

Due to the administration and/or liquidation of the parent company and some subsidiaries, goodwill has been impaired to nil value during the year. Further details are shown within note 22.

12. Inventories

Inventories recognised in the statement of financial position can be analysed as follows: