Final Results -6-

+--------------------------------------+----------------------------+-------------------------+ 
| ASIC Intellectual property rights    | 3 years                    | Cost                    | 
+--------------------------------------+----------------------------+-------------------------+ 
| SocialGO Intellectual property       | 5 years                    | Cost                    | 
| rights                               |                            |                         | 
+--------------------------------------+----------------------------+-------------------------+ 
| Goodwill                             | Annual impairment reviews  | Fair value - purchase   | 
|                                      |                            | accounting              | 
+--------------------------------------+----------------------------+-------------------------+ 
 
Impairment of Intangible Assets 
 
 
Impairment tests on goodwill and assets in the course of construction are 
undertaken annually at the financial year end. Other non-financial assets are 
subject to impairment tests whenever events or changes in circumstances indicate 
that their carrying amount may not be recoverable. Where the carrying value of 
an asset exceeds its recoverable amount (i.e. the higher of value in use and 
fair value less costs to sell), the asset is written down accordingly. Where it 
is not possible to estimate the recoverable amount of an individual asset, the 
impairment test is carried out on the asset's cash-generating unit (i.e. the 
lowest group of assets in which the asset belongs for which there are separately 
identifiable cash flows). 
 
 
Impairment charges are included in the administrative expenses line item in the 
consolidated income statement, except to the extent they reverse gains 
previously recognised in the consolidated statement of 
recognised income and expense. 
 
 
Consideration of impairment indicators and an impairment test (if required) may 
be performed at any time during an annual period, provided it is performed at 
the same time every year. Different intangible asset may be tested for 
impairment at different times. The Board of Bright Things consider impairment of 
intangible assets annually at the balance sheet date. 
 
 
Internally generated intangible assets (research and development costs) 
 
 
Research and development 
 
 
Expenditure on internally developed products is capitalised if it can be 
demonstrated that: 
 
 
  *  it is technically feasible to develop the product for it to be sold; 
  *  adequate resources are available to complete the development; 
  *  there is an intention to complete and sell the product; 
  *  the group is able to sell the product; 
  *  sale of the product will generate future economic benefits; and 
  *  expenditure on the project can be measured reliably. 
 
 
 
Capitalised development costs are amortised straight-line over the useful 
economic life being the period that prudently simulates the flow of revenues 
from a typical product. At the close of each fiscal year products are reviewed 
for any loss of value where there is an indication of impairment. Where the 
expected contribution made by a product does not exceed the expected total cost 
of development then an impairment provision is made. The amortisation expense is 
included within administrative expenses in the consolidated income statement. 
 
 
Development expenditure not satisfying the above criteria and expenditure on the 
research phase of internal projects are recognised in the consolidated income 
statement as incurred. 
 
 
Deferred taxation 
 
 
Deferred tax assets and liabilities are recognised where the carrying amount of 
an asset or liability in the balance sheet differs from its tax base, except for 
differences arising on: 
 
 
  *  the initial recognition of goodwill; and 
  *  the initial recognition of an asset or liability in a transaction which is not a 
  business combination and at the time of the transaction affects neither 
  accounting or taxable profit. 
 
 
 
Recognition of deferred tax assets is restricted to those instances where it is 
probable that future taxable profit will be available against which the 
difference can be utilised. 
 
 
The amount of the asset or liability is determined using tax rates that have 
been enacted or substantively enacted by the balance sheet date and are expected 
to apply when the deferred tax liabilities/(assets) are settled/(recovered). 
 
Deferred tax assets and liabilities are offset when the group has a legally 
enforceable right to offset current tax assets and liabilities and the deferred 
tax assets and liabilities relate to taxes levied by the same tax authority on 
either: 
 
 
  *  the same taxable group company; or 
  *  different group entities which intend either to settle current tax assets and 
  liabilities on a net basis, or to realise the assets and settle the liabilities 
  simultaneously, in each future period in which significant amounts of deferred 
  tax assets or liabilities are expected to be settled or recovered. 
 
 
 
Property, plant and equipment 
 
 
Property, plant and equipment are stated at cost net of accumulated depreciation 
and provision for impairment. Depreciation is provided on all property plant and 
equipment, at rates calculated to write off the cost less estimated residual 
value, of each asset on a straight-line basis over its expected useful life. The 
residual value is the estimated amount that would currently be obtained from 
disposal of the asset if the asset were already of the age and in the condition 
expected at the end of its useful economic life. 
 
 
The method of depreciation for each class of depreciable asset is: 
 
 
Computer equipment                                  -    3 years straight line 
Office fixtures, fittings & equipment              -    3 years straight line 
 
 
The carrying value of tangible fixed assets is assessed annually and any 
impairment is charged to the income statement. 
 
 
Taxation 
 
 
Corporation tax payable is provided on taxable profits at prevailing rates. 
 
 
Licence fees 
 
 
Licence fees payable to organisations for use of their Intellectual Property are 
charged to the income statement over their useful economic lives, which, to the 
Group, equates to the forecast period of product sales. Management regularly 
reviews the carrying value of such licences. All licence fees in these Group 
financial statements have been charged to the income statement as incurred. 
 
 
Royalties payable 
 
 
Royalties are accounted for as payable when units of hardware or software are 
sold into the sales channel by our distributor and calculated in accordance with 
the commercial terms entered into with licensors 
 
 
Segmental information 
 
 
The Group operates in the following main business segments: SocialGO; 
Interactive DVD software ASIC chips; ASIC sales development kit;     Sales of 
component parts from stock; and Bubble hardware and software. 
 
 
The Group's primary reporting format is business segments. All amounts relate to 
continuing activities. 
 
 
 
 
+--------------------------+----------+---------+----------+-----------+-------------+----------+-----------+----------+ 
|  Year ended 31 March     |          |         |          |           |             |          |           |          | 
|  2009                    |          |         |          |           |             |          |           |          | 
+--------------------------+----------+---------+----------+-----------+-------------+----------+-----------+----------+ 
|                          |          |         |  Business Segments   |             |          |           |          | 
+--------------------------+----------+---------+----------------------+-------------+----------+-----------+----------+ 
|                          |   Bubble |    ASIC |    i-DVD |   Sale of |  ASIC sales | SocialGO |       Not |   Total  | 
|                          | hardware |   chips | software | component | development |          | allocated |          | 
|                          |      and |         |          |     stock |         kit |          |           |          | 
|                          | software |         |          |           |             |          |           |          | 
+--------------------------+----------+---------+----------+-----------+-------------+----------+-----------+----------+ 
|                          | GBP'000  | GBP'000 | GBP'000  |  GBP'000  |     GBP'000 |  GBP'000 |   GBP'000 | GBP'000  | 
|                          |          |         |          |           |             |          |           |          | 
+--------------------------+----------+---------+----------+-----------+-------------+----------+-----------+----------+ 
|                          |          |         |          |           |             |          |           |          | 
+--------------------------+----------+---------+----------+-----------+-------------+----------+-----------+----------+ 
|  Total segment revenue   |       -  |       - |       21 |         - |           - |        9 |         - |      30  | 
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|                          |          |         |          |           |             |          |           |          | 
+--------------------------+----------+---------+----------+-----------+-------------+----------+-----------+----------+ 
|  Cost of sales           |       -  |       - |      (3) |       (2) |           - |     (43) |         - |    (48)  | 
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|                          |          |         |          |           |             |          |           |          | 
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