Notes to the Financial Statements

Notes to the Financial Statements31 December 2006 continued20. Other reserves continuedCompanyMerger Translation Otherreserve reserve reserve Total$’000 $’000 $’000 $’000At 1 January 2005 – – – –Excess of par value of sharesissued over the book valueof the assets acquired (note 26) 5,730 – – 5,730Issue of options – – 141 141At 31 December 2005 5,730 – 141 5,871Effect of exchange rates – 1,518 – 1,518Share option costs 45 45At 31 December 2006 5,730 1,518 186 7,43421. Profit and loss accountGroup Company$’000 $’000At 1 January 2005 1,848 –Profit/(loss) for the year/period 876 (1,379)At 31 December 2005 2,724 (1,379)Profit/(loss) for the year 2,801 (904)At 31 December 2006 5,525 (2,283)The directors have not presented an individual profit and loss account for the Company, aspermitted by s230 of the Companies Act 1985.22. Balances and transactions with related partiesParties are considered to be related if one party has the ability to control the other party or exercisesignificant influence over the other party in making financial or operational decisions as defined byIAS 24 “Related Party Disclosures”.In considering each possible related party relationship, attention is directed to the substance of therelationship, not merely the legal form.42Related parties may enter into transactions which unrelated parties might not, and transactionsbetween related parties may not be effected on the same terms, conditions and amounts astransactions between unrelated parties.ZiRAX Annual Report & Accounts 2006