As reported in the Chairman's statement, the Group has had a
challenging year and this, coupled with a change in strategic focus
and market conditions, has resulted in the impairment of a number
of the Group's assets and a loss for the period of GBP19,923,000.
Whilst the impairment of intangible assets and goodwill of
GBP15,807,000 is non cash, it is illustrative of the difficult
market the Group is operating in and the resultant pressure on cash
flows. In light of these events, the directors have prepared
cashflow forecasts for the period ending 31 January 2012 which are
aligned to the Group's revised strategy. The forecasts take account
of the revenues from the launch of online games in China which are
expected to generate significant revenues going forward in a
growing market. The forecasts also take account of cost reduction
measures that have been implemented in the business. Management
will take further steps to reduce the overhead base should this be
required to meet the working capital and cash flow requirements of
the group.
The forecasts, which have been sensitised to reflect the
uncertain market within which the Group operates, demonstrate that
the Group has adequate resources to continue to fund it's working
capital and cash flow requirements for the foreseeable future.
On this basis the financial statements have been prepared on a
going concern basis. The financial statements do not include any
adjustments that would result if the assumptions detailed above are
not met.
2 SEGmental analysis
An operating segment is a distinguishable component of the Group
that engages in business activities from which it may earn revenues
and incur expenses, whose operating results are regularly reviewed
by the Group's chief operating decision maker to make decisions
about the allocation of resources and assessment of performance and
about which discrete financial information is available.
Period ended 30 September Entertainment Entertainment
2010 Product Digital Other Unallocated Eliminated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
From external customers 2,826 11,148 687 - - 14,661
From other segments 8 - 249 - (257) -
Segment revenues 2,834 11,148 936 - (257) 14,661
(Loss) before taxation (170) (1,518) (17,763) (713) - (20,164)
======= ============= ============= =========== ========== =========
Period ended 30 September Entertainment Entertainment
2009 Product Digital Other Unallocated Eliminated Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
From external customers 5,569 18,307 3,192 - - 27,068
From other segments 21 - 222 - (243) -
Segment revenues 5,590 18,307 3,414 - (243) 27,068
(Loss) / profit before
taxation (158) 1,790 289 (787) - 1,134
======= ============= ============= =========== ========== =========
As at 30 September Entertainment Entertainment
2010 Product Digital Other Unallocated Eliminated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Assets 1,264 1,269 7,194 - - 9,727
Liabilities (279) (1,327) (783) - - (2,389)
Net Assets / (liabilities) 985 (58) 6,411 - - 7,338
======= ============= ============= =========== ========== =========
As at 30 September Entertainment Entertainment
2009 Product Digital Other Unallocated Eliminated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Assets 1,150 10,116 20,431 - - 31,697
Liabilities (265) (2,979) (1,870) - - (5,114)
Net Assets 885 7,137 18,561 - - 26,583
======= ============= ============= =========== ========== =========
As at 30 September Entertainment Entertainment
2010 Product Digital Other Unallocated Eliminated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Capital expenditure 7 58 2,122 - - 2,187
Amortisation/depreciation/
impairment 62 6,978 8,880 - - 15,920
======= ============= ============= =========== ========== =========
As at 30 September Entertainment Entertainment
2009 Product Digital Other Unallocated Eliminated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Capital expenditure 194 122 2,235 - - 2,551
Amortisation/depreciation
/impairment 226 36 806 - - 1,068
======= ============= ============= =========== ========== =========
The Group's revenue from external customers and it s geographic
allocation of non-current assets may be summarised as follows
30 September
30 September 2010 2009
Revenues Assets Revenues Assets
GBP000 GBP000 GBP000 GBP000
United Kingdom 35 2,274 907 12,534
China 11,389 7,204 18,165 18,397
Rest of World 3,237 249 7,996 766
Total 14,661 9,727 27,068 31,697
3 Taxation
2010 2009
GBP'000 GBP'000
United Kingdom corporation tax at 28% (2009
: 28%) (37) (4)
Adjustment in respect of prior year - (38)
Overseas taxation 97 271
Total current taxation 60 229
Deferred taxation
Origination of temporary differences (note
19) (301) (92)
Adjustments in respect of prior years - (5)
Taxation (credit) / charge for the year (241) 132
======= =======
The tax assessed for the year differs from the standard rate of
Corporation Tax in the UK as explained below:
2010 2009
GBP'000 GBP'000
(Loss) / Profit before tax (20,164) 1,134
--------- -------
(Loss) / Profit before tax multiplied by standard
rate of Corporation Tax in the
UK of 28% (2009: 28%) (5,646) 318
Effect of:
Expenses not deductible for tax purposes 3,475 157
Income not taxable for tax purposes (61) -
Movement in unrecognised deferred tax assets
(loss recognition) 1,868 (445)
Prior year deferred tax - (5)
Adjustment in respect of prior years - (38)
Profits taxed at 21% - (2)
Differences between UK and overseas tax rates (22) (65)
Overseas losses not recognised 145 212
Tax (credit) / charge for the year (241) 132
========= =======
4 EARNINGS per share
Basic and diluted earnings per share have been calculated in
accordance with IAS 33, which requires that earnings should be
based the net profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares is issued during
the period.
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the period.
The calculation of diluted earnings per share is based on the
basic earnings per share, adjusted to allow for the issue of shares
on the assumed conversion of all dilutive options.
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