TIDMCLS
RNS Number : 2239W
Cheerful Scout PLC
16 November 2010
Cheerful Scout Plc / Index: AIM / Epic: CLS / Sector: Media
16 November 2010
Cheerful Scout Plc ('Cheerful' or 'the Company')
Final Results
Cheerful Scout Plc, the AIM-traded multi-media specialist, announces its results
for the year ended 30 June 2010.
Overview
· Successfully established a new corporate events division to broaden current
corporate communications offering
· Strengthened blue-chip client base and client sharing across divisions
having recruited key team members from Twentyfirst Century Communications
Limited
· Increased turnover of GBP1.8 million (2009: GBP1.3 million) and healthy
cash position of GBP632,200 (2009: GBP831,491)
· Building reputation as innovative provider of corporate communications
solutions particularly within the financial sector having won awards from IVCA
and New York Festival
· Integration of DVD subsidiary into On Screen division to streamline
offering and facilitate digital delivery to corporate clients
Chairman's Statement
Cheerful has made encouraging progress over the period, with an increased
turnover of GBP1.8 million and a small operating profit from trading, further to
acquiring assets from Twentyfirst Century Communications Limited ('Twentyfirst')
in January 2010. We continue to maintain close relationships with our clients
and have established a new corporate Events division enabling us to broaden our
offering to both new and existing clients. We have been successful in
implementing our core strategy focused on delivering high quality and innovative
brand and corporate communications through our On Screen and Events divisions,
something which has been recognised over the year through the winning of
industry awards.
Our Events and On Screen divisions have been working together very effectively
since the beginning of 2010, enabling us to successfully extend the scope of the
Company. The relationship between the two has been highly productive and we are
now able to offer a well-rounded service which combines events and on-screen
communications to project our clients' brand and corporate message.
Importantly, our On Screen division has been able to benefit from the Events
division's strong established relationships with a range of blue-chip clients.
We have been able to co-ordinate a range of projects for clients that have
included input from both divisions, such as a leading mobile telecom company and
an oil and gas major.
The On Screen division has continued to gain recognition for its work as a
dedicated provider of cutting edge communications solutions. We continue to
build upon our reputation, particularly amongst the financial services sector.
Cheerful was recognised for its ingenuity and quality at both the IVCA and New
York Festival Awards, winning gold for an internal communications video designed
and produced for a leading international investment bank.
Importantly, Cheerful has successfully maintained strong relationships with its
existing clients. We continue to work closely with government organisations
including the Central Office of Information ('COI') and the Directorate of
Optometric Continuing Education and Training ('DOCET') as training programmes
and internal communications continue to be of high importance to these bodies.
I am pleased to report that our increased activities over the past year have
strengthened our financials. We remain cash positive with reserves of
GBP632,200. Importantly, the addition of the Twentyfirst Events division
revenue, together with our increased client base and cost sharing, has enabled
us to improve our operating performance. Revenue has increased to GBP1,809,757
with pre tax profits of GBP1,144.
From July 2010, we have integrated the DVD side of our business into the On
Screen division of the Company. This has enabled us to offer digital delivery
to our corporate clients. We continue to streamline our On Screen offering to
evolve our business in line with the fast-moving media industry. The Board is
of the opinion that market conditions are stabilising and that our focus on two
operating divisions, On Screen and Events, together with our recognised
creativity and innovation and our strong client relationships, will position us
for further growth. In addition, we continue to assess various opportunities to
complement our existing business, accelerate growth, and improve our financial
performance.
Finally, I would like to thank the team for their hard work and dedication to
the Company and to shareholders for their continued support.
S Appleton
Chairman
15 November 2010
For further information contact:
+----------------------+----------------------+----------------+
| Gary Fitzpatrick | Cheerful Scout Plc | Tel: 020 7291 |
| | | 0444 |
+----------------------+----------------------+----------------+
| Mark Percy | Seymour Pierce | Tel: 020 7107 |
| | | 8030 |
+----------------------+----------------------+----------------+
| Catherine Leftley | Seymour Pierce | Tel: 020 7107 |
| | | 8030 |
+----------------------+----------------------+----------------+
| Elisabeth Cowell | St Brides Media & | Tel: 020 7236 |
| | Finance Ltd | 1177 |
+----------------------+----------------------+----------------+
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2010
+----------------------+-------+------------------+------------------+
| Continuing |Notes | 2010 | 2009 |
| operations | | | |
+----------------------+-------+------------------+------------------+
| | | GBP | GBP |
+----------------------+-------+------------------+------------------+
| | | | |
+----------------------+-------+------------------+------------------+
| Revenue | 2 | 1,809,757 | 1,269,788 |
+----------------------+-------+------------------+------------------+
| Cost of sales | | | |
| | | (1,132,142) | (820,026) |
+----------------------+-------+------------------+------------------+
| Gross profit | | 677,615 | 449,762 |
+----------------------+-------+------------------+------------------+
| Administrative | | (695,275) | (718,648) |
| expenses | | | |
+----------------------+-------+------------------+------------------+
| Operating loss | 3 | (17,660) | (268,886) |
+----------------------+-------+------------------+------------------+
| Finance income | 4 | 1,883 | 23,408 |
| | | | |
| Other income | 5 | 16,921 | - |
+----------------------+-------+------------------+------------------+
| Profit / (loss) | | 1,144 | (245,478) |
| before taxation | | | |
+----------------------+-------+------------------+------------------+
| Taxation | 6 | 49,082 | (475) |
+----------------------+-------+------------------+------------------+
| Total comprehensive | | 50,226 | (245,953) |
| income / (expense) | | | |
| for the year | | | |
| attributable to | | | |
| owners of the parent | | | |
+----------------------+-------+------------------+------------------+
| | | | |
| Earnings / (loss) | | | |
| per ordinary share: | | | |
+----------------------+-------+------------------+------------------+
| Basic | 9 | 0.63098p | (2.51451)p |
+----------------------+-------+------------------+------------------+
| Diluted | 9 | 0.63098p | (2.51451)p |
+----------------------+-------+------------------+------------------+
There were no other comprehensive income items.
Statement of Financial Position
As at 30 June 2010
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| |Notes | Group | | Company | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| | | 2010 | 2009 | 2010 | 2009 |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| | | GBP | GBP | GBP | GBP |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Non-current assets | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Intangible assets | 10 | 365,154 | 365,154 | - | - |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Property, plant and | 11 | 133,375 | 165,484 | - | - |
| equipment | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Investments in subsidiaries | 12 | - | - | 1,000,000 | 1,402,600 |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Deferred taxation | 7 | 39,832 | - | - | - |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| | | 538,361 | 530,638 | 1,000,000 | 1,402,600 |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Current assets | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Inventories | | 2,252 | 2,033 | - | - |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Trade and other receivables | 13 | 506,592 | 209,894 | 187,443 | 45,201 |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Cash and cash equivalents | 14 | 632,200 | 831,491 | 515,947 | 788,846 |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| | | 1,141,044 | 1,043,418 | 703,390 | 834,047 |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Total assets | | 1,679,405 | 1,574,056 | 1,703,390 | 2,236,647 |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Current liabilities | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Trade and other payables | 15 | (386,226) | (300,378) | (37,636) | (175,867) |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Net assets | | 1,293,179 | 1,273,678 | 1,665,754 | 2,060,780 |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Equity | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Share capital | 16 | 979,688 | 1,054,688 | 979,688 | 1,054,688 |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Special reserves | | - | - | - | - |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Capital redemption reserve | | 257,812 | 170,312 | 257,812 | 170,312 |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Retained earnings | | 55,679 | 48,678 | 428,254 | 835,780 |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Equity attributable to | | 1,293,179 | 1,273,678 | 1,665,754 | 2,060,780 |
| owners of the parent | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
Statement of Changes in Equity
As at 30 June 2010
+------------------------+-----------+-------------+------------+-------------+-----------+
| Group | Share | Special | Capital | Retained | Total |
| | capital | reserves | redemption | earnings | equity |
| | | | reserve | | |
+------------------------+-----------+-------------+------------+-------------+-----------+
| | GBP | GBP | GBP | GBP | GBP |
+------------------------+-----------+-------------+------------+-------------+-----------+
| At 1 July 2008 | 1,225,000 | 1,747,416 | - | (1,325,263) | 1,647,153 |
+------------------------+-----------+-------------+------------+-------------+-----------+
| Comprehensive expense | - | - | - | (245,953) | (245,953) |
| for the year | | | | | |
+------------------------+-----------+-------------+------------+-------------+-----------+
| | - | (1,747,416) | - | 1,747,416 | - |
| Transfer of special | | | | | |
| reserves to retained | | | | | |
| earnings | (170,312) | - | 170,312 | (127,522) | (127,522) |
| | | | | | |
| Purchase of own shares | | | | | |
+------------------------+-----------+-------------+------------+-------------+-----------+
| At 30 June 2009 | 1,054,688 | - | 170,312 | 48,678 | 1,273,678 |
+------------------------+-----------+-------------+------------+-------------+-----------+
| At 1 July 2009 | 1,054,688 | - | 170,312 | 48,678 | 1,273,678 |
+------------------------+-----------+-------------+------------+-------------+-----------+
| Comprehensive income | - | - | - | 50,226 | 50,226 |
| for the year | | | | | |
+------------------------+-----------+-------------+------------+-------------+-----------+
| Purchase of own shares | (87,500) | - | 87,500 | (43,225) | (43,225) |
+------------------------+-----------+-------------+------------+-------------+-----------+
| Issue of new shares | 12,500 | - | - | - | 12,500 |
+------------------------+-----------+-------------+------------+-------------+-----------+
| At 30 June 2010 | 979,688 | - | 257,812 | 55,679 | 1,293,179 |
+------------------------+-----------+-------------+------------+-------------+-----------+
| Company | Share | Special | Capital | Retained | Total |
| | capital | reserves | redemption | earnings | equity |
| | | | reserve | | |
+------------------------+-----------+-------------+------------+-------------+-----------+
| | GBP | GBP | GBP | GBP | GBP |
+------------------------+-----------+-------------+------------+-------------+-----------+
| At 1 July 2008 | 1,225,000 | 1,747,416 | - | (192,072) | 2,780,344 |
+------------------------+-----------+-------------+------------+-------------+-----------+
| Comprehensive expense | - | - | - | (592,042) | (592,042) |
| for the year | | | | | |
+------------------------+-----------+-------------+------------+-------------+-----------+
| Transfer of special | - | (1,747,416) | - | 1,747,416 | - |
| reserves to retained | | | | | |
| earnings | | | | | |
+------------------------+-----------+-------------+------------+-------------+-----------+
| Purchase of own shares | (170,312) | - | 170,312 | (127,522) | (127,522) |
+------------------------+-----------+-------------+------------+-------------+-----------+
| At 30 June 2009 | 1,054,688 | - | 170,312 | 835,780 | 2,060,780 |
+------------------------+-----------+-------------+------------+-------------+-----------+
| At 1 July 2009 | 1,054,688 | - | 170,312 | 835,780 | 2,060,780 |
+------------------------+-----------+-------------+------------+-------------+-----------+
| Comprehensive expense | - | - | - | (364,301) | (364,301) |
| for the year | | | | | |
+------------------------+-----------+-------------+------------+-------------+-----------+
| Purchase of own shares | (87,500) | - | 87,500 | (43,225) | (43,225) |
+------------------------+-----------+-------------+------------+-------------+-----------+
| Issue of shares | 12,500 | - | - | - | 12,500 |
+------------------------+-----------+-------------+------------+-------------+-----------+
| At 30 June 2010 | 979,688 | - | 257,812 | 428,254 | 1,665,754 |
+------------------------+-----------+-------------+------------+-------------+-----------+
Following a board resolution on 3 November 2009, the Company transferred its
special reserves of GBP1,747,416 to retained earnings following the expiry of
the undertaking given to the High Court of Justice in 2006.
Statement of Cash Flows
For the year ended 30 June 2010
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| |Notes | Group | | Company | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| | | 2010 | 2009 | 2010 | 2009 |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| | | GBP | GBP | GBP | GBP |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Cash flows from operating | | | | | |
| activities | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Profit / (loss) before | | 1,144 | (245,478) | (364,301) | (592,042) |
| taxation | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Depreciation | | 68,908 | 71,259 | - | - |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Amortisation of intangibles | | - | 46,518 | - | - |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Gain on sale of property, | | - | (20,242) | - | - |
| plant and equipment | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Impairment of investment in | | - | - | 401,908 | 500,000 |
| subsidiaries | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Finance income | | (1,883) | (23,408) | (1,823) | (22,866) |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| | | 68,169 | (171,351) | 35,784 | (114,908) |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Increase / (decrease) in | | 85,848 | (72,743) | (138,231) | 152,527 |
| trade and other payables | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Decrease / (increase) in | | (296,698) | 222,860 | (142,242) | (33,703) |
| trade and other receivables | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Decrease / (increase) in | | (219) | 196 | - | - |
| inventories | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Taxation received | | 9,250 | 34,286 | - | - |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Cash (used) / generated | | (133,650) | 13,248 | (244,689) | 3,916 |
| from operating activities | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Cash flows from investing | | | | | |
| activities | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Finance income | | 1,883 | 23,408 | 1,823 | 22,866 |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Purchase of property, plant | 11 | (36,799) | (82,832) | - | - |
| and equipment | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Proceeds from sale of | | - | 20,242 | - | - |
| property, plant and | | | | | |
| equipment | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Investments in subsidiaries | | - | - | 692 | (2,000) |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Cash (used) / generated in | | (34,916) | (39,182) | 2,515 | 20,866 |
| investing activities | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Cash flows from financing | | | | | |
| activities | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Purchase of own shares | | (43,225) | (127,522) | (43,225) | (127,522) |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Issue of shares | | 12,500 | - | 12,500 | - |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Cash used in financing | | (30,725) | (127,522) | (30,725) | (127,522) |
| activities | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Net decrease in cash and | | (199,291) | (153,456) | (272,899) | (102,740) |
| cash equivalents | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Cash and cash equivalents | | 831,491 | 984,947 | 788,846 | 891,586 |
| at beginning of year | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
| Cash and cash equivalents | 14 | 632,200 | 831,491 | 515,947 | 788,846 |
| at end of year | | | | | |
+-----------------------------+-------+-----------+-----------+-----------+-----------+
Notes to the Consolidated Financial Statements
For the year ended 30 June 2010
1. Accounting policies
Cheerful Scout plc is a public limited company incorporated in the United
Kingdom. The Company is domiciled in the United Kingdom and its principal place
of business is 25/27 Riding House Street, London, W1P 7PB. The Company's
Ordinary Shares are traded on the Alternative Investment Market.
The principal accounting policies adopted in the preparation of the financial
statements are set out below. The policies have been consistently applied to
all the years presented, unless otherwise stated.
Going concern
The Group's business activities, together with the factors likely to affect its
future development and performance are set out in the review of business
contained in the Chairman's Statement. The Group's financial statements show
details of its financial position including, in note 22, details of its
financial instruments and exposure to risk.
After reviewing the Group's budget for the next financial year, other medium
term plans and considering the risks outlined in note 22, the Directors, at the
time of approving the financial statements, have a reasonable expectation that
the Group has adequate resources to continue in operational existence for the
foreseeable future and have therefore used the going concern basis in preparing
the financial statements.
Basis of Preparation
The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European
Union, and with those parts of the Companies Act 2006 applicable to companies
reporting under IFRS.
The following new standards, amendments to standards and interpretations,
applied for the first time from 1 July 2009.
· IAS 1 (Revised) 'Presentation of Financial Statements'. The revised
standard has introduced terminology chances (including revised titles for the
financial statements) and changes in the format and content of the financial
statements.
· IFRS 8 'Operating segments'. IFRS 8 replaces IAS 14 'Segment Reporting'.
The Group concluded that its operating segments determined in accordance with
IFRS 8 are the same as the business segments previously identified under IAS 14.
· IFRS 2 (Amended) 'Share based payments'. The amendment to IFRS 2 clarifies
the definition of vesting conditions and prescribes the treatment for an award
that is cancelled. This amendment did not have an impact on the financial
position or performance of the group.
Adopted IFRSs not yet applied
At the date of authorisation of this report, the following standards, which have
not been applied in this report, were issued but not yet effective.
· IFRS 1 (Amended) 'First time adoption of International Financial Reporting
Standards', effective 1 January 2010.
· IFRS 2 (Amended) 'Share-based payments', effective 1 January 2010.
· IFRS 3 (Amended) 'Business Combinations', effective 1 July 2010.
· IFRS 5 (Amended) 'Non-current assets held for sale and discontinued
operations', effective 1 January 2010.
· IFRS 9 'Financial Instruments', effective 1 January 2013.
· IAS 7 (Revised) 'Statement of cash flows', effective 1 January 2010.
· IAS 17 (Revised) 'Leases', effective 1 January 2010.
· IAS 24 (Revised) 'Related Party Disclosures', effective 1 January 2011.
· IAS 27 (Amended) 'Consolidated and separate financial statements',
effective 1 July 2010.
· IAS 32 (Amended) 'Financial instruments', effective 1 February 2010.
· IAS 36 (Revised) 'Impairment of assets', effective 1 January 2010.
Management does not believe that the application of these standards, where
applicable, will have an impact on the financial statements, except for the
requirement of additional disclosures.
Basis of consolidation
The Group financial statements consolidate those of the Company and all of its
subsidiary undertakings drawn up to 30 June 2010. Subsidiaries are entities
over which the Group has the power to control the financial and operating
policies so as to obtain benefits from their activities. Subsidiaries are fully
consolidated from the date on which control is transferred until the date that
such control ceases.
Intra-group transactions, balances and unrealised gains and losses on
transactions between group companies are eliminated.
Revenue
Revenue represents amounts (excluding value added tax) derived from the
provision of services to third party customers in the course of the Group's
ordinary activities. Revenue is measured at the fair value of consideration
received taking into account any trade discounts and volume rebates. Revenue
for all business segments is recognised when the Group has earned the right to
receive consideration for its services.
Intangible assets - goodwill
All business combinations are accounted for by applying the acquisition method.
Goodwill acquired represents the excess of the fair value of the consideration
and associated costs over the fair value of the identifiable net assets
acquired.
After initial recognition, goodwill is measured at cost less any accumulated
impairment losses. At the date of acquisition, the goodwill is allocated to
cash generating units, usually at business segment level or statutory company
level as the case may be, for the purpose of impairment testing and is tested at
least annually for impairment. On subsequent disposal or termination of a
business acquired, the profit or loss on termination is calculated after
charging the carrying value of any related goodwill.
Intangible assets - development costs
Development expenditure is written off to the income statement in the year in
which it is incurred, unless the directors are satisfied as to the technical,
commercial and financial viability of individual projects. In this situation,
the expenditure is deferred and amortised over the period during which the
Company is expected to benefit. Development costs of current projects is
amortised over 4 years.
Property, plant and equipment
Property, plant and equipment is stated in the financial statements at cost less
accumulated depreciation and any impairment value. Depreciation is provided to
write off the cost less estimated residual value of property, plant and
equipment over its expected useful life (which is reviewed at least at each
financial year end), as follows:
+--------------------------+------------------------------------+
| | |
| Leasehold land and | straight line over the life of the |
| buildings | lease (5 years) |
| | |
+--------------------------+------------------------------------+
| Fixtures, fittings and | 25% straight line |
| equipment | |
+--------------------------+------------------------------------+
Any gain or loss arising on the derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the
asset) is included in the income statement in the year that the asset is
derecognised.
Fully depreciated assets still in use are retained in the financial statements.
Impairment
The carrying amounts of the Group's assets are reviewed at each balance sheet
date to determine whether there is any indication of impairment. If any such
indication exists, the assets' recoverable amount is estimated. For goodwill
and intangible assets that have an indefinite useful life and intangible assets
that are not yet available for use, the recoverable amount is estimated at each
annual balance sheet date and whenever there is an indication of impairment.
An impairment loss is recognised whenever the carrying amount of an asset or its
cash-generating unit exceeds its recoverable amount. Impairment losses are
recognised in the income statement in those expense categories consistent with
the function of the impaired asset.
Operating leases
Rentals under operating leases are charged to the Income Statement on a straight
line basis over the period of the lease.
Investments
Fixed asset investments are stated at cost less provision for diminution in
value.
Inventories
Inventories are stated at the lower of cost and net realisable value.
Trade and other receivables
Trade and other receivables are stated initially at fair value and subsequently
measured at amortised cost less any provision for impairment.
Trade and other payables
Trade payables are recognised initially at fair value and subsequently measured
at amortised cost.
Cash and cash equivalents
Cash comprises, for the purpose of the Cash Flow Statement, cash in hand and
deposits payable on demand and bank overdrafts. Cash equivalents are short-term
highly liquid investments that are readily convertible to known amounts of cash
and that are subject to an insignificant risk of changes in value. Cash
equivalents normally have a date of maturity of 3 months or less from the
acquisition date.
Finance income
Financial income consists of interest receivable on funds invested. It is
recognised in the Income Statement as it accrues.
Taxation
Income tax on the profit or loss for the periods presented comprises current and
deferred tax. Current tax is the expected tax payable on the taxable income for
the year, using rates enacted or subsequently enacted at the balance sheet date,
and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. The following temporary differences are not provided for:
the initial recognition of goodwill; the initial recognition of assets or
liabilities that affect neither accounting nor taxable profit other than in a
business combination; the differences relating to investments in subsidiaries to
the extent that they will probably not reverse in the foreseeable future. The
amount of deferred tax provided is based on the expected manner of realisation
or settlement of the carrying amount of assets and liabilities, using tax rates
enacted or subsequently enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the assets can be
utilised.
Pension costs
The Group does not operate a pension scheme for its employees. It does however,
make contributions to the private pension arrangements of certain employees.
These arrangements are of the money purchase type and the amount charged to the
income statement represents the contributions payable by the Group for the
period.
Financial instruments
The Group does not enter into derivative transactions and does not trade in
financial instruments. Financial assets and liabilities are recognised on the
Balance Sheet when the Group becomes a party to the contractual provision of the
instrument.
Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated
into sterling at the rates of exchange ruling at the balance sheet date.
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction. All differences are taken to the income statement.
Share-based payments
The Group has applied the transitional provisions of IFRS 2 only to awards of
equity instruments made after 7 November 2002 that had not vested by 1 July
2006.
The fair value of equity rights is estimated using the Binomial model at the
date of grant to key employees and is dependent on factors such as the exercise
price, expected volatility, option price and risk free interest rate. The fair
value is then amortised through the Income Statement on a straight-line basis
over the vesting period. Expected volatility is determined based on the
historical share price volatility for the Company. Further information is given
in note 20 to the financial statements.
Significant judgements and estimates
The preparation of the Group's financial statements in conforming with IFRS
required management to make judgements, estimates and assumptions that effect
the application of policies and reported amounts in the financial statements.
These judgements and estimates are based on management's best knowledge of the
relevant facts and circumstances. Information about such judgements and
estimation is contained in the accounting policies and / or notes to the
financial statements and the key areas are summarised below:
a) Depreciation rates are based on the estimated useful lives and residual
value of the assets involved.
b) The impairment review of goodwill is based on the estimation of future cash
flows and discount rates in order to calculate the present value of the cash
flows.
c) The Group operates share incentive schemes as detailed in note 20. In
order to calculate the annual charge in accordance with IFRS 2, management are
required to make a number of assumptions and include, amongst others, volatility
and expected life of options.
2. Revenue and segment information
Revenue and segmental profit has been disclosed by three operating segments of
On Screen, DVD & Interactive and Events in the manner that the information is
presented to the Board of Directors, being the Chief Operating Decision Makers,
in accordance with IFRS 8.
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| | On | On | DVD & | DVD & | Events | Events | Total | Total |
| | Screen | Screen | Interactive | Interactive | | | | |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Revenue | 979,859 | 885,240 | 278,120 | 384,548 | 551,778 | - | 1,809,757 | 1,269,788 |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Segment | 117,758 | (62,668) | (93,855) | (91,310) | 58,711 | - | 82,614 | (153,978) |
| results | | | | | | | | |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Unallocated | | | | | | | (100,274) | (114,908) |
| expenses | | | | | | | | |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Operating loss | | | | | | | (17,660) | (268,886) |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Finance income | | | | | | | 1,883 | 23,408 |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Other income | | | | | | | 16,921 | - |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Taxation | | | | | | | 49,082 | (475) |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Profit / | | | | | | | 50,226 | (245,953) |
| (loss) for the | | | | | | | | |
| year | | | | | | | | |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| | | | | | | | | |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Segment assets | 446,047 | 410,494 | 379,207 | 359,497 | 293,507 | - | 1,118,761 | 769,991 |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Unallocated | | | | | | | 560,644 | 804,065 |
| assets | | | | | | | | |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Total assets | 446,047 | 410,494 | 379,207 | 359,497 | 293,507 | - | 1,679,405 | 1,574,056 |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| | | | | | | | | |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Segment | (149,298) | (59,991) | (47,311) | (24,367) | (81,178) | - | (277,787) | (84,358) |
| liabilities | | | | | | | | |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Unallocated | | | | | | | (108,439) | (216,020) |
| liabilities | | | | | | | | |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Total | (149,298) | (59,991) | (47,311) | (24,367) | (81,178) | - | (386,226) | (300,378) |
| liabilities | | | | | | | | |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| | | | | | | | | |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Capital | 17,236 | 41,416 | 17,236 | 41,416 | 2,327 | - | 36,799 | 82,832 |
| expenditure | | | | | | | | |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
| Depreciation | 33,949 | 82,147 | 33,949 | 35,630 | 1,010 | - | 68,908 | 117,777 |
| and | | | | | | | | |
| amortisation | | | | | | | | |
+----------------+-----------+----------+-------------+-------------+----------+--------+-----------+-----------+
The geographical analysis of turnover and assets by geographical location of
customer is as follows:
+-----------------+-----------+-----------+--------+--------+--------+------+-----------+-----------+
| Geographical | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
| market | | | | | | | | |
+-----------------+-----------+-----------+--------+--------+--------+------+-----------+-----------+
| | UK | UK | Europe | Europe | USA | USA | Total | Total |
+-----------------+-----------+-----------+--------+--------+--------+------+-----------+-----------+
| | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP |
+-----------------+-----------+-----------+--------+--------+--------+------+-----------+-----------+
| Revenue | 1,789,719 | 1,216,687 | - | 53,101 | 20,038 | - | 1,809,757 | 1,269,788 |
+-----------------+-----------+-----------+--------+--------+--------+------+-----------+-----------+
| | | | | | | | | |
+-----------------+-----------+-----------+--------+--------+--------+------+-----------+-----------+
| Segment assets | 361,760 | 100,839 | - | 56 | - | - | 361,760 | 100,895 |
+-----------------+-----------+-----------+--------+--------+--------+------+-----------+-----------+
| Unallocated | | | | | | | 1,317,645 | 1,473,161 |
| assets | | | | | | | | |
+-----------------+-----------+-----------+--------+--------+--------+------+-----------+-----------+
| Total assets | | | | | | | 1,679,405 | 1,574,056 |
+-----------------+-----------+-----------+--------+--------+--------+------+-----------+-----------+
| | | | | | | | 36,799 | 82,832 |
| | | | | | | | | |
| Capital | | | | | | | | |
| expenditure - | | | | | | | | |
| unallocated | | | | | | | | |
+-----------------+-----------+-----------+--------+--------+--------+------+-----------+-----------+
3. Operating loss
+-----------------------------------------------+---------+---------+
| Operating loss is stated after charging: | 2010 | 2009 |
+-----------------------------------------------+---------+---------+
| | GBP | GBP |
+-----------------------------------------------+---------+---------+
| Amortisation of intangible assets | - | 46,518 |
+-----------------------------------------------+---------+---------+
| Depreciation of property, plant and equipment | 68,908 | 71,259 |
+-----------------------------------------------+---------+---------+
| Fees payable to the Company's auditor in | | |
| respect of: | | |
+-----------------------------------------------+---------+---------+
| Audit of the Company's annual accounts | 6,000 | 5,000 |
+-----------------------------------------------+---------+---------+
| Audit of the Company's subsidiaries | 12,000 | 10,000 |
+-----------------------------------------------+---------+---------+
| Operating leases | 97,245 | 109,233 |
+-----------------------------------------------+---------+---------+
4. Finance income
+-----------------------------------------------+---------+---------+
| | 2010 | 2009 |
+-----------------------------------------------+---------+---------+
| | GBP | GBP |
+-----------------------------------------------+---------+---------+
| Interest income | 1,883 | 23,408 |
+-----------------------------------------------+---------+---------+
5. Other income
+-----------------------------------------------+---------+---------+
| | 2010 | 2009 |
+-----------------------------------------------+---------+---------+
| | GBP | GBP |
+-----------------------------------------------+---------+---------+
| Rental income | 16,921 | - |
+-----------------------------------------------+---------+---------+
6. Taxation
+----------------------------------------------+----------+-----------+
| | 2010 | 2009 |
+----------------------------------------------+----------+-----------+
| | GBP | GBP |
+----------------------------------------------+----------+-----------+
| The tax (credit) / charge comprises: | | |
+----------------------------------------------+----------+-----------+
| | | |
+----------------------------------------------+----------+-----------+
| Current tax | | |
| | | |
+----------------------------------------------+----------+-----------+
| Adjustment to prior years | (9,250) | 475 |
+----------------------------------------------+----------+-----------+
| | | |
+----------------------------------------------+----------+-----------+
| | (9,250) | 475 |
+----------------------------------------------+----------+-----------+
| | | |
+----------------------------------------------+----------+-----------+
| Deferred tax | | |
+----------------------------------------------+----------+-----------+
| Current year | (39,832) | - |
+----------------------------------------------+----------+-----------+
| | (39,832) | - |
+----------------------------------------------+----------+-----------+
| | | |
+----------------------------------------------+----------+-----------+
| Total tax (credit) / charge in the statement | (49,082) | 475 |
| of comprehensive income | | |
+----------------------------------------------+----------+-----------+
| Factors affecting the tax (credit) / charge | | |
| for the year | | |
+----------------------------------------------+----------+-----------+
| Profit / (loss) on ordinary activities | 1,144 | (245,478) |
| before taxation | | |
+----------------------------------------------+----------+-----------+
| Profit / (loss) on ordinary activities | | |
| before taxation multiplied by standard rate | | |
+----------------------------------------------+----------+-----------+
| of UK corporation tax of 21% (2009: 21%) | 240 | (51,550) |
+----------------------------------------------+----------+-----------+
| Effects of: | | |
+----------------------------------------------+----------+-----------+
| Non deductible expenses | 8,043 | 81 |
+----------------------------------------------+----------+-----------+
| Depreciation and impairment losses | 14,471 | 14,914 |
+----------------------------------------------+----------+-----------+
| Capital allowances | (13,772) | (18,055) |
+----------------------------------------------+----------+-----------+
| Research and development | - | 8,093 |
+----------------------------------------------+----------+-----------+
| Other tax adjustments | - | (4,146) |
+----------------------------------------------+----------+-----------+
| Losses utilised | (13,165) | - |
+----------------------------------------------+----------+-----------+
| Losses carried forward | 4,183 | 50,663 |
+----------------------------------------------+----------+-----------+
| Deferred tax asset recognition | (39,832) | - |
+----------------------------------------------+----------+-----------+
| Adjustment to prior years | (9,250) | 475 |
+----------------------------------------------+----------+-----------+
| | (49,322) | 52,025 |
+----------------------------------------------+----------+-----------+
| Total taxation (credit) / charge | (49,082) | 475 |
+----------------------------------------------+----------+-----------+
The Group has estimated losses of GBP647,885 (2009: GBP691,027) available to
carry forward against future trading profits.
7. Deferred taxation
+----------------------------------------------+---------+----------+
| | 2010 | 2009 |
+----------------------------------------------+---------+----------+
| | GBP | GBP |
+----------------------------------------------+---------+----------+
| Property, plant and equipment temporary | (2,450) | - |
| differences | | |
+----------------------------------------------+---------+----------+
| Temporary differences | 2,624 | - |
+----------------------------------------------+---------+----------+
| Losses | 39,658 | - |
+----------------------------------------------+---------+----------+
| | 39,832 | - |
+----------------------------------------------+---------+----------+
| At 1 July | - | - |
+----------------------------------------------+---------+----------+
| Transfer to statement of comprehensive | 39,832 | - |
| income | | |
+----------------------------------------------+---------+----------+
| At 30 June | 39,832 | - |
+----------------------------------------------+---------+----------+
A deferred tax asset has been recognised in respect of previously unrecognised
trading losses. These are expected to be utilised given the return to
profitability and future trading prospects. The deferred tax asset is expected
to be realised after more than one year.
8. Loss attributable to members of the parent company
As permitted by section 408 of the Companies Act 2006, the parent Company's
Statement of Comprehensive Income has not been included in these financial
statements. The retained loss for the financial year of the holding company was
GBP364,301 (2009: GBP592,042).
9. Earnings / (loss) per ordinary share
Basic earnings per share are calculated by dividing the profit or loss
attributable to owners of the parent by the weighted average number of ordinary
shares outstanding during the year.
Diluted earnings per share are calculated by dividing the profit or loss
attributable to owners of the parent by the weighted average number of ordinary
shares outstanding during the year plus the weighted average number of ordinary
shares that would have been issued on the conversion of all dilutive potential
ordinary shares into ordinary shares.
The following reflects the income and share data used and dilutive earnings per
share computations:
+-------------------------------------+-------------+-------------+
| | 2010 | 2009 |
+-------------------------------------+-------------+-------------+
| | GBP | GBP |
+-------------------------------------+-------------+-------------+
| Profit / (loss) attributable to | 50,226 | (245,953) |
| owners of the parent | | |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Basic weighted average number of | 7,959,966 | 9,781,336 |
| shares | | |
+-------------------------------------+-------------+-------------+
| Dilutive potential ordinary shares: | | |
+-------------------------------------+-------------+-------------+
| Employee share options | - | - |
+-------------------------------------+-------------+-------------+
| Diluted weighted average number of | 7,959,966 | 9,781,336 |
| shares | | |
+-------------------------------------+-------------+-------------+
Employee share options do not have a dilutive effect on the weighted average
number of shares in 2009 and 2010 as the exercise price of the share options is
in excess of the average market price of the ordinary shares.
After the reporting period, the Company granted a total of 1,200,000 share
options to a number of employees. The options were granted at a price of 8.75
pence each. The options vest after 3 years and can be exercised in the period
commencing on the third anniversary of the date of grant through until the tenth
anniversary of the date of grant.
10. Intangible fixed assets
+----------------------+-------------+--------------+-------------+
| Group | Goodwill | Development | Total |
| | | Costs | |
+----------------------+-------------+--------------+-------------+
| | GBP | GBP | GBP |
+----------------------+-------------+--------------+-------------+
| Cost | | | |
+----------------------+-------------+--------------+-------------+
| At 1 July 2008 | 2,728,292 | 186,069 | 2,914,361 |
+----------------------+-------------+--------------+-------------+
| At 30 June 2009 | 2,728,292 | 186,069 | 2,914,361 |
+----------------------+-------------+--------------+-------------+
| At 1 July 2009 | 2,728,292 | 186,069 | 2,914,361 |
+----------------------+-------------+--------------+-------------+
| Development costs | - | (186,069) | (186,069) |
| written off | | | |
+----------------------+-------------+--------------+-------------+
| At 30 June 2010 | 2,728,292 | - | 2,728,292 |
+----------------------+-------------+--------------+-------------+
| Impairment and | | | |
| amortisation | | | |
+----------------------+-------------+--------------+-------------+
| At 1 July 2008 | 2,363,138 | 139,551 | 2,502,689 |
+----------------------+-------------+--------------+-------------+
| Amortisation | - | 46,518 | 46,518 |
+----------------------+-------------+--------------+-------------+
| | 2,363,138 | 186,069 | 2,549,207 |
| At 30 June 2009 | | | |
+----------------------+-------------+--------------+-------------+
| At 1 July 2009 | 2,363,138 | 186,069 | 2,549,207 |
+----------------------+-------------+--------------+-------------+
| Development costs | - | (186,069) | (186,069) |
| written off | | | |
+----------------------+-------------+--------------+-------------+
| | 2,363,138 | - | 2,363,138 |
| At 30 June 2010 | | | |
+----------------------+-------------+--------------+-------------+
| Net book value | | | |
+----------------------+-------------+--------------+-------------+
| At 1 July 2008 | 365,154 | 46,518 | 411,672 |
+----------------------+-------------+--------------+-------------+
| At 30 June 2009 | 365,154 | - | 365,154 |
+----------------------+-------------+--------------+-------------+
| At 1 July 2009 | 365,154 | - | 365,154 |
+----------------------+-------------+--------------+-------------+
| | 365,154 | - | 365,154 |
| At 30 June 2010 | | | |
+----------------------+-------------+--------------+-------------+
Development costs
Development costs in relation to the Group's nVision Presenter product have been
amortised over its expected useful life of four years. As this product is no
longer in use, the development costs have been written off in full during the
year.
Impairment
The impairment test for goodwill involved the determination of recoverable
amounts based upon cash flow projections, the annual business plan and
directors' long term estimates based on past experience and external estimates
related to market growth. The key assumptions used are as follows: -
Discount rate 3.1 %
Year on year growth 3.0% (on projected
figures for 2011)
Number of annual cash flows considered 5
There was no impairment in the year.
11. Property, plant and equipment
+---------------------+--------------+-------------+------------+
| Group | Leasehold | Fixtures, | Total |
| | land | fittings | |
+---------------------+--------------+-------------+------------+
| | and | and | |
| | buildings | equipment | |
+---------------------+--------------+-------------+------------+
| | GBP | GBP | GBP |
+---------------------+--------------+-------------+------------+
| Cost | | | |
+---------------------+--------------+-------------+------------+
| At 1 July 2008 | 146,578 | 843,397 | 989,975 |
+---------------------+--------------+-------------+------------+
| Additions | 10,485 | 72,347 | 82,832 |
+---------------------+--------------+-------------+------------+
| Disposals | - | (100,428) | (100,428) |
+---------------------+--------------+-------------+------------+
| At 30 June 2009 | 157,063 | 815,316 | 972,379 |
+---------------------+--------------+-------------+------------+
| At 1 July 2009 | 157,063 | 815,316 | 972,379 |
+---------------------+--------------+-------------+------------+
| Additions | - | 36,799 | 36,799 |
+---------------------+--------------+-------------+------------+
| At 30 June 2010 | 157,063 | 852,115 | 1,009,178 |
+---------------------+--------------+-------------+------------+
| Depreciation | | | |
+---------------------+--------------+-------------+------------+
| At 1 July 2008 | 146,578 | 689,486 | 836,064 |
+---------------------+--------------+-------------+------------+
| | 988 | 70,271 | 71,259 |
| Charge for the year | | | |
+---------------------+--------------+-------------+------------+
| Disposals | - | (100,428) | (100,428) |
+---------------------+--------------+-------------+------------+
| | 147,566 | 659,329 | 806,895 |
| At 30 June 2009 | | | |
+---------------------+--------------+-------------+------------+
| At 1 July 2009 | 147,566 | 659,329 | 806,895 |
+---------------------+--------------+-------------+------------+
| | 2,072 | 66,836 | 68,908 |
| Charge for the year | | | |
+---------------------+--------------+-------------+------------+
| | 149,638 | 726,165 | 875,803 |
| At 30 June 2010 | | | |
+---------------------+--------------+-------------+------------+
| Net book value | | | |
+---------------------+--------------+-------------+------------+
| At 1 July 2008 | - | 153,911 | 153,911 |
+---------------------+--------------+-------------+------------+
| At 30 June 2009 | 9,497 | 155,987 | 165,484 |
+---------------------+--------------+-------------+------------+
| At 1 July 2009 | 9,497 | 155,987 | 165,484 |
+---------------------+--------------+-------------+------------+
| At 30 June 2010 | 7,425 | 125,950 | 133,375 |
+---------------------+--------------+-------------+------------+
The gross carrying amount of fully depreciated property, plant and equipment
still in use is as follows:
+--------------------------------+----------------+-----------------+
| Cost | 2010 | 2009 |
+--------------------------------+----------------+-----------------+
| | GBP | GBP |
+--------------------------------+----------------+-----------------+
| Leasehold land and buildings | 146,578 | 146,578 |
+--------------------------------+----------------+-----------------+
| Fixtures, fittings and | 577,459 | 695,724 |
| equipment | | |
+--------------------------------+----------------+-----------------+
| | 724,037 | 842,302 |
+--------------------------------+----------------+-----------------+
12. Non-current assets - Investments
+--------------------------------+-------------+------------+-----------+
| Company | Shares in | Loans to | Total |
| | subsidiary | subsidiary | |
+--------------------------------+-------------+------------+-----------+
| | GBP | GBP | GBP |
+--------------------------------+-------------+------------+-----------+
| Cost | | | |
+--------------------------------+-------------+------------+-----------+
| At 1 July 2008 | 3,144,813 | 200,000 | 3,344,813 |
+--------------------------------+-------------+------------+-----------+
| Additions | - | 2,000 | 2,000 |
+--------------------------------+-------------+------------+-----------+
| At 30 June 2009 | 3,144,813 | 202,000 | 3,346,813 |
+--------------------------------+-------------+------------+-----------+
| At 1 July 2009 | 3,144,813 | 202,000 | 3,346,813 |
+--------------------------------+-------------+------------+-----------+
| Repayment | - | (692) | (692) |
+--------------------------------+-------------+------------+-----------+
| At 30 June 2010 | 3,144,813 | 201,308 | 3,346,121 |
+--------------------------------+-------------+------------+-----------+
| Provision | | | |
+--------------------------------+-------------+------------+-----------+
| At 1 July 2008 | 1,444,213 | - | 1,444,213 |
+--------------------------------+-------------+------------+-----------+
| | 300,000 | 200,000 | 500,000 |
| Impairment | | | |
+--------------------------------+-------------+------------+-----------+
| | | | |
+--------------------------------+-------------+------------+-----------+
| At 30 June 2009 | 1,744,213 | 200,000 | 1,944,213 |
| | | | |
+--------------------------------+-------------+------------+-----------+
| At 1 July 2009 | 1,744,213 | 200,000 | 1,944,213 |
+--------------------------------+-------------+------------+-----------+
| | 400,600 | 1,308 | 401,908 |
| Impairment | | | |
+--------------------------------+-------------+------------+-----------+
| | | | |
+--------------------------------+-------------+------------+-----------+
| At 30 June 2010 | 2,144,813 | 201,308 | 2,346,121 |
| | | | |
| | | | |
+--------------------------------+-------------+------------+-----------+
| Net book value | | | |
+--------------------------------+-------------+------------+-----------+
| At 1 July 2008 | 1,700,600 | 200,000 | 1,900,600 |
+--------------------------------+-------------+------------+-----------+
| At 30 June 2009 | 1,400,600 | 2,000 | 1,402,600 |
+--------------------------------+-------------+------------+-----------+
| At 1 July 2009 | 1,400,600 | 2,000 | 1,402,600 |
+--------------------------------+-------------+------------+-----------+
| | | | |
+--------------------------------+-------------+------------+-----------+
| At 30 June 2010 | 1,000,000 | - | 1,000,000 |
+--------------------------------+-------------+------------+-----------+
Holdings of more than 20%
The Company holds more than 20% of the share capital of the following companies:
+----------------------------+------------------+----------+---------+
| Company | Country of | Shares | |
| | | held | |
+----------------------------+------------------+----------+---------+
| | registration | | |
+----------------------------+------------------+----------+---------+
| | or incorporation | Class | % |
+----------------------------+------------------+----------+---------+
| Subsidiary undertakings | | | |
+----------------------------+------------------+----------+---------+
| Cheerful Scout Productions | England and | Ordinary | 100 |
| Limited (formerly | Wales | | |
| Centralfix Limited) | | | |
+----------------------------+------------------+----------+---------+
| nVision Technology Limited | England and | Ordinary | 100 |
| | Wales | | |
+----------------------------+------------------+----------+---------+
| Business Data Interactive | England and | Ordinary | 60 |
| Limited | Wales | | |
+----------------------------+------------------+----------+---------+
The principal activity of these undertakings for the last relevant financial
year was as follows:
+----------------------------+--------------------------------------+
| Company | Principal activity |
+----------------------------+--------------------------------------+
| Cheerful Scout Productions | Provision of business communication |
| Limited | services |
+----------------------------+--------------------------------------+
| nVision Technology Limited | Provision of event management |
| | services |
+----------------------------+--------------------------------------+
| Business Data Interactive | Development of business gaming |
| Limited | software |
+----------------------------+--------------------------------------+
13. Trade and other receivables
+----------------------------+---------+---------+---------+--------+
| | Group | | Company | |
+----------------------------+---------+---------+---------+--------+
| | 2010 | 2009 | 2010 | 2009 |
+----------------------------+---------+---------+---------+--------+
| | GBP | GBP | GBP | GBP |
+----------------------------+---------+---------+---------+--------+
| Trade receivables | 361,760 | 100,895 | - | - |
+----------------------------+---------+---------+---------+--------+
| Related party receivables | - | - | 179,756 | 15,238 |
+----------------------------+---------+---------+---------+--------+
| Other receivables | 35,722 | 36,864 | 2,821 | 14,744 |
+----------------------------+---------+---------+---------+--------+
| Prepayments and accrued | 109,110 | 72,135 | 4,866 | 15,219 |
| income | | | | |
+----------------------------+---------+---------+---------+--------+
| | 506,592 | 209,894 | 187,443 | 45,201 |
+----------------------------+---------+---------+---------+--------+
Other receivables include GBP34,543 (2009: GBP34,543) for a rental deposit which
is secured by a charge in favour of the landlords. All trade and other
receivables are expected to be recovered within 12 months of the balance sheet
date. The fair value of trade and other receivables is the same as the carrying
values shown above.
14. Cash and cash equivalents
+----------------------------+---------+---------+---------+---------+
| | Group | | Company | |
+----------------------------+---------+---------+---------+---------+
| | 2010 | 2009 | 2010 | 2009 |
+----------------------------+---------+---------+---------+---------+
| | GBP | GBP | GBP | GBP |
+----------------------------+---------+---------+---------+---------+
| Bank balances | 632,200 | 831,491 | 515,947 | 788,846 |
+----------------------------+---------+---------+---------+---------+
| Cash and cash equivalents | 632,200 | 831,491 | 515,947 | 788,846 |
+----------------------------+---------+---------+---------+---------+
| | | | | |
+----------------------------+---------+---------+---------+---------+
| Cash and cash equivalents | 632,200 | 831,491 | 515,947 | 788,846 |
| in the statement of cash | | | | |
| flows | | | | |
+----------------------------+---------+---------+---------+---------+
15. Trade and other payables
+----------------------------+---------+---------+---------+---------+
| | Group | | Company | |
+----------------------------+---------+---------+---------+---------+
| | 2010 | 2009 | 2010 | 2009 |
+----------------------------+---------+---------+---------+---------+
| | GBP | GBP | GBP | GBP |
+----------------------------+---------+---------+---------+---------+
| Trade payables | 176,205 | 160,796 | 27,005 | 149,166 |
+----------------------------+---------+---------+---------+---------+
| Related party payables | - | - | 1 | 1 |
+----------------------------+---------+---------+---------+---------+
| Taxes and social security | 22,355 | 15,133 | 250 | - |
| costs | | | | |
+----------------------------+---------+---------+---------+---------+
| Other payables | 57,534 | 69,599 | - | - |
+----------------------------+---------+---------+---------+---------+
| Accruals and deferred | 130,132 | 54,850 | 10,380 | 26,700 |
| income | | | | |
+----------------------------+---------+---------+---------+---------+
| | 386,226 | 300,378 | 37,636 | 175,867 |
+----------------------------+---------+---------+---------+---------+
All trade and other payables are expected to be settled within 12 months of the
balance sheet date. The fair value of trade and other payables is the same as
the carrying values shown above.
16. Share capital
+----------------------------+------------------+------------------+
| | 2010 | 2009 |
+----------------------------+------------------+------------------+
| | GBP | GBP |
+----------------------------+------------------+------------------+
| Authorised | | |
+----------------------------+------------------+------------------+
| 28,000,000 Ordinary shares | 3,500,000 | 3,500,000 |
| of 12.5p each | | |
+----------------------------+------------------+------------------+
| | | |
+----------------------------+------------------+------------------+
| | | |
+----------------------------+------------------+------------------+
| Allotted, called up and | Number | Ordinary shares |
| fully paid | | |
+----------------------------+------------------+------------------+
| | | GBP |
+----------------------------+------------------+------------------+
| At 1 July 2008 | 9,800,000 | 1,225,000 |
+----------------------------+------------------+------------------+
| Purchase of own shares | (1,362,500) | (170,312) |
+----------------------------+------------------+------------------+
| At 30 June 2009 | 8,437,500 | 1,054,688 |
+----------------------------+------------------+------------------+
| Purchase of own shares | (700,000) | (87,500) |
+----------------------------+------------------+------------------+
| Issue of shares | 100,000 | 12,500 |
+----------------------------+------------------+------------------+
| At 30 June 2010 | 7,837,500 | 979,688 |
+----------------------------+------------------+------------------+
On 14 July 2009, the Company purchased 500,000 of its own Ordinary 12.5p shares
for cancellation. The price paid per share amounted to 5p and the total
consideration paid was GBP25,000. On 26 March 2010, the Company purchased
200,000 of its own Ordinary 12.5p shares for cancellation. The price paid per
share amounted to 9p and the total consideration paid was GBP18,000. Total
transaction costs amounted to GBP225.
On 2 December 2009, the Company issued 100,000 Ordinary 12.5p shares at par
value.
See note 20 for details of share options outstanding.
17. Financial commitments
Total future minimum lease payments under non-cancellable operating lease
rentals are payable as follows:
+------------------------------------------+------------+------------+
| | Land and | |
| | Buildings | |
+------------------------------------------+------------+------------+
| | 2010 | 2009 |
+------------------------------------------+------------+------------+
| | GBP | GBP |
+------------------------------------------+------------+------------+
| Not later than one year | 110,000 | 110,000 |
+------------------------------------------+------------+------------+
| Later than one year and not later than | 174,167 | 284,167 |
| five years | | |
+------------------------------------------+------------+------------+
18. Directors' emoluments
The remuneration of Directors of the Company is set out below.
+-----------+------------+----------+----------+----------+--------+--------+
| | Salary or | Salary | Pensions | Pensions | Total | Total |
| | fees | or fees | | | | |
+-----------+------------+----------+----------+----------+--------+--------+
| | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
+-----------+------------+----------+----------+----------+--------+--------+
| | GBP | GBP | GBP | GBP | GBP | GBP |
+-----------+------------+----------+----------+----------+--------+--------+
| P Litten | 50,000 | 75,000 | 26,250 | - | 76,250 | 75,000 |
+-----------+------------+----------+----------+----------+--------+--------+
| S | 10,000 | 8,000 | - | - | 10,000 | 8,000 |
| Appleton | | | | | | |
+-----------+------------+----------+----------+----------+--------+--------+
| N J | | 1,500 | - | - | 1,500 | 1,500 |
| Newman | 1,500 | | | | | |
+-----------+------------+----------+----------+----------+--------+--------+
| R L Owen | 7,500 | 7,500 | - | - | 7,500 | 7,500 |
+-----------+------------+----------+----------+----------+--------+--------+
| | 69,000 | 92,000 | 26,250 | - | 95,250 | 92,000 |
+-----------+------------+----------+----------+----------+--------+--------+
Fees for N J Newman are charged by Harris & Trotter LLP, a firm in which he is a
member. See note 21.
No directors had interests in share based incentive schemes.
19. Employee information
The average monthly number of employees (including directors) employed by the
Group during the year was:
+------------------------------------------+------------+------------+
| Number of employees | 2010 | 2009 |
+------------------------------------------+------------+------------+
| | | |
+------------------------------------------+------------+------------+
| | Number | Number |
+------------------------------------------+------------+------------+
| Production | 14 | 13 |
+------------------------------------------+------------+------------+
| Administration | 6 | 4 |
+------------------------------------------+------------+------------+
| | 20 | 17 |
+------------------------------------------+------------+------------+
The aggregate payroll costs of these employees charged in the Statement of
Comprehensive Income was as follows:
+------------------------------------------+------------+------------+
| Employment costs | 2010 | 2009 |
+------------------------------------------+------------+------------+
| | GBP | GBP |
+------------------------------------------+------------+------------+
| Wages and salaries | 559,299 | 553,021 |
+------------------------------------------+------------+------------+
| Social security costs | 61,948 | 60,715 |
+------------------------------------------+------------+------------+
| Pension costs | 52,672 | 172 |
+------------------------------------------+------------+------------+
| | 673,919 | 613,908 |
+------------------------------------------+------------+------------+
20. Share based payments
The Company has set up an EMI Share option scheme for key employees. The maximum
term of current arrangements under the EMI scheme ends on 27 October 2014. Upon
vesting, each option allows the holder to purchase one ordinary share at the pre
agreed option price.
Details of the number of share options and the weighted average exercise price
outstanding during the year are as follows:
+----------------------+----------+-----------+---------+-----------+
| | Number | Weighted | Number | Weighted |
| | of | average | of | average |
| | options | exercise | options | exercise |
| | | price | | price |
+----------------------+----------+-----------+---------+-----------+
| | 2010 | 2010 | 2009 | 2009 |
+----------------------+----------+-----------+---------+-----------+
| | | GBP | | GBP |
+----------------------+----------+-----------+---------+-----------+
| Outstanding at | 249,600 | 0.31 | 249,600 | 0.31 |
| beginning of the | | | | |
| year | | | | |
+----------------------+----------+-----------+---------+-----------+
| Lapsed during the | (14,000) | (0.19) | - | - |
| year | | | | |
+----------------------+----------+-----------+---------+-----------+
| Outstanding at end | 235,600 | 0.32 | 249,600 | 0.31 |
| of the year | | | | |
+----------------------+----------+-----------+---------+-----------+
The exercise price of options outstanding at the year-end ranged between
GBP0.1875 and GBP0.625 (2009: GBP0.1875 and GBP0.625) and their weighted average
contractual life was 4 years (2009: 4 years).
The Group issues equity-settled share-based payments to employees.
Equity-settled share-based payments are measured at fair value at the date of
grant. The fair value as determined at the grant date of equity-settled
share-based payments is expensed on a straight line basis over the vesting
period, based on the Group's estimate of shares that will eventually vest.
Fair value is measured by using the Binomial model. The expected life used in
the model has been adjusted based on management's best estimate for the effect
of non-transferability, exercise restrictions and behavioural considerations.
The fair value of the options is calculated using the Binomial model making the
following assumptions:
+--------------------------+---------------------------------------+
| Grant date | 28 October 2004 |
+--------------------------+---------------------------------------+
| Share price at grant | 16.25p |
| date | |
+--------------------------+---------------------------------------+
| Exercise price | 18.75p |
+--------------------------+---------------------------------------+
| Expected life | 4 years |
+--------------------------+---------------------------------------+
| Contractual life | 10 years |
+--------------------------+---------------------------------------+
| Risk free rate | 6% |
+--------------------------+---------------------------------------+
| Expected volatility | 43% |
+--------------------------+---------------------------------------+
| Expected dividend rate | 0% |
+--------------------------+---------------------------------------+
| Fair value option | 5.9868p |
+--------------------------+---------------------------------------+
No expense has been recognised in the Consolidated Statement of Comprehensive
Income for share based payments in respect of employee share options as, in the
opinion of the directors, the amounts are considered immaterial.
After the reporting period, the Company granted a total of 1,200,000 share
options to a number of employees. The options were granted at a price of 8.75
pence each. The options vest after 3 years and can be exercised in the period
commencing on the third anniversary of the date of grant through until the tenth
anniversary of the date of grant.
21. Related party transactions
The Group has a related party relationship with its subsidiaries and its
directors.
Details of transactions between the Company and its subsidiaries are as follows:
+------------------------------------------+------------+------------+
| | 2010 | 2009 |
+------------------------------------------+------------+------------+
| | GBP | GBP |
+------------------------------------------+------------+------------+
| Management fees charged to subsidiaries | | |
+------------------------------------------+------------+------------+
| Cheerful Scout Productions Limited | 100,000 | - |
+------------------------------------------+------------+------------+
| nVision Technology Limited | 35,000 | - |
+------------------------------------------+------------+------------+
| | 135,000 | - |
+------------------------------------------+------------+------------+
| Amounts owed by subsidiaries | | |
+------------------------------------------+------------+------------+
| Total amount owed by subsidiaries | 381,064 | 202,000 |
+------------------------------------------+------------+------------+
| Less provision | (201,308) | (200,000) |
+------------------------------------------+------------+------------+
| | 179,756 | 2,000 |
+------------------------------------------+------------+------------+
| Amounts owed to subsidiaries | - | 15,238 |
+------------------------------------------+------------+------------+
Cheerful Scout Plc is a guarantor for a lease entered into by Cheerful Scout
Productions Limited, its subsidiary undertaking.
During the year, the Company's investment in its subsidiary, Cheerful Scout
Productions Limited, was impaired by GBP400,000 (2009: GBP300,000).
Harris and Trotter LLP is a firm in which N J Newman is a member. The amounts
charged to the Group for professional services and the balance outstanding at
the reporting date is as follows:
+------------------------------------------+------------+------------+
| Harris and Trotter LLP - charged during | 2010 | 2009 |
| the year | | |
+------------------------------------------+------------+------------+
| | GBP | GBP |
+------------------------------------------+------------+------------+
| Cheerful Scout plc | 13,745 | 25,750 |
+------------------------------------------+------------+------------+
| Cheerful Scout Productions Limited | 17,380 | 7,100 |
+------------------------------------------+------------+------------+
| nVision Technology Limited | 3,273 | - |
+------------------------------------------+------------+------------+
| | 34,398 | 32,850 |
+------------------------------------------+------------+------------+
| | | |
+------------------------------------------+------------+------------+
| Harris and Trotter LLP - balance | 2010 | 2009 |
| outstanding at the reporting date | | |
+------------------------------------------+------------+------------+
| | GBP | GBP |
+------------------------------------------+------------+------------+
| Cheerful Scout plc | 1,763 | 16,963 |
+------------------------------------------+------------+------------+
| Cheerful Scout Productions Limited | 8,072 | - |
+------------------------------------------+------------+------------+
| | 9,835 | 16,963 |
+------------------------------------------+------------+------------+
The compensation of key management (including directors) of the Group is as
follows:
+------------------------------------------+------------+------------+
| | 2010 | 2009 |
+------------------------------------------+------------+------------+
| | GBP | GBP |
+------------------------------------------+------------+------------+
| Short-term employee benefits | 115,778 | 167,737 |
+------------------------------------------+------------+------------+
| Post-employment benefits | 52,500 | - |
+------------------------------------------+------------+------------+
| | 168,278 | 167,737 |
+------------------------------------------+------------+------------+
At the reporting date, the following amounts are due to directors:
+------------------------------------------+------------+------------+
| | 2010 | 2009 |
+------------------------------------------+------------+------------+
| | GBP | GBP |
+------------------------------------------+------------+------------+
| S Appleton | 10,000 | - |
+------------------------------------------+------------+------------+
22. Financial instruments
The Group is exposed to risks that arise from its use of financial instruments.
There have been no significant changes in the Group's exposure to financial
instrument risk, its objectives, policies and processes for managing those from
previous periods. The principal financial instruments used by the Group, from
which financial instrument risk arises, are trade receivables, cash and cash
equivalents and trade and other payables.
Credit risk
Credit risk arises principally from the Group's trade receivables. It is the
risk that the counterparty fails to discharge its obligation in respect of the
instrument. The maximum exposure to credit risk at 30 June 2010 was GBP361,760
(2009: GBP100,895). Trade receivables are managed by policies concerning the
credit offered to customers and the regular monitoring of amounts outstanding
for both time and credit limits. At the year end, the credit quality of trade
receivables is considered to be satisfactory.
Liquidity risk
Liquidity risk arises from the Group's management of working capital. It is the
risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due. The Group's policy is to meet its liabilities
when they fall due. The Group monitors cash flow on a regular basis. At the
year end, the Group has sufficient liquid resources to meets its obligations of
GBP386,226 (2009: GBP300,378).
Market risk
Market risk arises from the Group's use of interest bearing financial
instruments. It is the risk that the fair value of future cash flows of a
financial instrument will fluctuate. At the year end, the cash and cash
equivalents of the Group was GBP632,200 (2009: GBP831,491). The Group ensures
that its cash deposits earn interest at a reasonable rate.
Fair value of financial assets
The Group's book value of the financial assets equates to their fair values.
23. Pension costs defined contribution
The Group makes pre-defined contributions to employees' personal pension plans.
Contributions payable by the Group for the year were GBP52,672 (2009: GBP172).
24. Control
The Company is controlled by P Litten.
25. Events after the reporting date
After the reporting period, the Company granted a total of 1,200,000 share
options to a number of employees. The options were granted at a price of 8.75
pence each. The options vest after 3 years and can be exercised in the period
commencing on the third anniversary of the date of grant through until the tenth
anniversary of the date of grant.
26. Notice of AGM
The Annual General Meeting of Cheerful Scout Plc will be held at 25-27 Riding
House Street, London W1W 7DU on 13 December 2010 at 10.30 a.m. A formal notice
of AGM along with the Annual Report and Accounts will be sent to shareholders.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UVAWRROAAAAA
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