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RNS Number:4230J
Gaming Corporation PLC
31 March 2003
Gaming Corporation plc ("the Company")
The following is the text of the annual report and accounts which are available
at the Company's registered office, 2.10 The Plaza, 535 Kings Road, London SW10
0SZ, (tel 020 7349 4300) until 30 April 2003. The annual report and accounts are
also available to download from the Company's website www.gamingcorp.net.
Gaming Corporation plc
Annual Report and Accounts
Year ended 30 September 2002
Highlights
* Turnover of #842,593 for the year ended 30 September 2002, representing
an increase of 103%
* Casino.co.uk Internet portal now generating over 75,000 unique users
sessions per month
* Successful launch of the online casino operation in December 2002 using
state-of-the-art software from Boss Media AB
* Onthebox.com established as a market leading tv listings application
with customers including BT, News International and Granada
Directors, secretary and advisers
Directors David Rogers, non-executive chairman
Justin Drummond, chief executive
Peter Williams, finance director
Charles Black, director
Company secretary Peter Williams
Nominated adviser Grant Thornton
Grant Thornton House
Melton Street
Euston Square
London NW1 2EP
Broker Evolution Beeson Gregory Limited
The Registry
Royal Mint Court
London EC3N 4LB
Auditors Gerald Edelman
Chartered Accountants
25 Harley Street
London W1G 9BR
Lawyers Hardwick Stallards
Centurion House
37 Jewry Street
London EC3N 2ER
Bankers Barclays Bank PLC
Corporate Banking
Po Box 673, Town Gate House
Church Street East
Woking
Surrey GU21 1XW
Registered office 2.10 The Plaza
535 Kings Road
London SW10 0SZ
Registered number 4058698
Chairman's Statement
Introduction
The Board of Gaming Corporation plc is pleased to present the results of the
group for the year ended 30 September 2002.
The group has continued to make significant progress during 2002, having focused
its operations on its gaming activities. The Casino.co.uk Internet portal has
continued to produce profitable growth whilst increasing its customer base
considerably. The site now provides marketing services to many of the World's
leading gaming companies including MGM Mirage, Ladbrokes and Victor Chandler.
In December 2002 the company launched an online casino at play.casino.co.uk
using state-of-the-art casino software developed by Boss Media AB, a leading
supplier of gaming applications. The casino provides a multiplayer environment
coupled with an integrated payment system and is backed up with multi-lingual 24
/7 customer support.
Onthebox continues to cement its market leading position and now provides its
tv-listings application to BT, News International, Granada and several other
regional ITV companies.
Financial Summary
The results for the year ended 30 September 2002 show consolidated turnover of
#842,593 (2001: #415,833), a loss attributable to the members of the Group for
the year of #2,444,956 (2001: #349,696) and a loss for the period before
goodwill amortisation and impairment of #369,159 (2001: #13,586). At the end of
the period, net assets were #1,689,077 (2001: #4,274,505).
Board changes
During the period Ian Ryden and John Maundrell resigned as non-executive
directors in order to focus on their other business interests. The Board would
like to thank Ian and John for all the hard work, support and advice provided to
the Board and the group.
Current Trading and Prospects
Despite the continued difficult economic conditions these results show that
Gaming Corporation plc has continued to make solid progress towards the stated
aim of achieving significant revenue growth and sustained profitability. The
group is now far more focussed and operates in a sector that is predicted to
grow rapidly over the next few years.
David Rogers
Chairman
Directors
David Rogers, Non-Executive Chairman
David Rogers, aged 54, has wide business experience and in recent years has been
involved with a number of public companies in the technology sector. He was a
director of Internet Music & Media plc, a company admitted to AIM, and until
February 2000 was a director of Virtual Internet plc, a company which was
admitted to the official list of the London Stock Exchange. He has spent the
majority of his working life in the property industry, predominantly in the City
of London as a partner in City commercial property agents and surveyors, Furze
Rogers and Partners.
Justin Drummond, Chief Executive
Justin Drummond, aged 29, founded Gaming Corporation in March 2000. The company
was admitted to AIM in May 2001 following the reverse takeover of Chrome
Technology plc, an investment company. Justin began his business career in 1994
when he established his first marketing business.
Peter Williams, Finance Director
Peter Williams, aged 36, is a qualified Chartered Accountant. His career
includes corporate finance with Rea Brothers, finance director with Virtual
Internet plc where he oversaw the company's AIM flotation and consultancy advice
to a number of Internet companies, including Asseenonscreen plc (now a company
admitted to AIM) and zapcasino.com (part of Gaming Insight plc).
Charles Black, Director
Charles Black, aged 31, qualified as a barrister in 1996, specialising in media
and company law. In 1998 he set up Nasstar Limited, a design and software
business whose clients include the pop group Jamiroquai. Charles joined Gaming
Corporation in May 2000 and played an active role in the reverse takeover of
Chrome Technology plc in May 2001.
Directors' report
The directors present their report and accounts for the year ended 30 September
2002.
Results and dividends
The consolidated loss for the period, after taxation and minority interests, was
#2,444,956. The directors do not recommend the payment of an ordinary dividend
for the period, which leaves a loss of #2,444,956 to be transferred to reserves.
Principal activities and review of the business
The principal activity of the company is as a holding company. Companies within
the group at the date of these accounts operate an on-line casino, a casino
portal website, an on-line TV listings platform and an IT recruitment business.
On 12 August 2002, the company changed its name from Xworks plc to Gaming
Corporation plc.
On 30 October 2002 Gaming Corporation plc disposed of its entire interest in
Nasstar Limited (formerly known as Space 7 Limited) for nominal consideration to
Charles Black, a director of Gaming Corporation plc.
The Chairman's Statement on page 4 comments on the business performance of the
group for the period covered by these accounts.
Presentation of group results
The group accounts consolidate the results of Gaming Corporation plc and its
subsidiary undertakings from their respective dates of acquisition.
Going concern
After making enquiries, the directors have a reasonable expectation that the
group has adequate resources to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt the going concern
basis in preparing the accounts.
The disclosures required by Financial Reporting Standard No. 18 in relation to
the Directors' going concern assessment are set out in note 1 to the accounts.
Future developments
The Chairman's Statement on page 4 comments on the group's future strategy.
Directors and their interests
The directors during the period and their beneficial interests in the share
capital of the company were as follows:
At 30 September 2002 At 30 September 2001
Ordinary shares Options Ordinary shares Options Notes
No. No. No. No.
C Black 2,756,104 500,000 2,681,104 500,000 (ii)
J Drummond 5,355,487 1,000,000 5,355,487 1,000,000 (ii)
J Maundrell 100,000 550,000 100,000 550,000 (i)
D Rogers 100,000 550,000 100,000 550,000 (i)
I Ryden 50,000 200,000 50,000 200,000 (i)
P Williams 3,763,341 675,000 3,763,341 675,000 (ii)
(i) The options were issued on 16 October 2000 and may be
exercised at any time between 1 August 2001 and 16 October 2003. The exercise
price is 10p per share.
(ii) The options were issued on 1 May 2001. These options will
become exercisable in three equal tranches from the first, second and third
anniversary of their date of grant until 30 April 2011. The price at which the
options are to be exercisable is 10p in the second year following grant, 11p in
the third year following grant and 12p in the fourth and subsequent years
following grant.
(iii) J Maundrell resigned as a director on 18 August 2002.
(iv) I Ryden resigned as a director on 31 March 2002.
C Black and P Williams retire by rotation as directors and, being eligible,
offer themselves for re-election at the forthcoming Annual General Meeting.
The market price of the company's shares at 30 September 2002 was 2.25p and the
range during the year was 1.75p to 6.5p.
Major interests in shares
At 10 March 2003, the following major interests in shares have been disclosed to
the company:
Ordinary shares Shareholding
No. %
Jason Drummond 16,334,236 26.6
Barnard Nominees Limited 10,000,000 16.3
Pershing Keen Nominees Limited 6,883,384 11.2
Clydesdale Bank Custodian Nominees Limited 5,770,000 9.4
Justin Drummond 5,355,487 8.7
P Williams 4,030,007 6.6
C Black 3,144,992 5.1
Boss Media AB 3,100,000 5.1
No other person has notified an interest in the ordinary shares of the company
required to be disclosed to the company in accordance with sections 198 to 208
of the Companies Act 1985.
Corporate governance
Whilst the company has not formally adopted the Combined Code, it does regard
corporate governance as important and has, therefore, constituted Audit and
Remuneration committees.
Audit committee
An audit committee has been established which is composed of the company's
non-executive Directors and chaired by David Rogers. It is charged with making
recommendations to the Board on the appointment of auditors and the audit fee,
for reviewing the conduct and control of the annual audit and for reviewing the
operation of the internal financial controls. It also has responsibility for the
proper reporting of the financial performance of the company and its
subsidiaries and for reviewing financial statements prior to publication. At
least one meeting a year will take place with the auditors without executive
Board members being present.
Remuneration committee
A remuneration committee has been established which is composed of the company's
non-executive
Directors and chaired by David Rogers. It reviews the performance of the
executive Directors and sets the scale and structure of their remuneration and
the basis of their service agreements with due regard to the interests of
shareholders. It will also determine the allocation of share options to
employees.
Creditor payment policy and practice
It is the company's policy that payments to suppliers are made in accordance
with agreed terms and conditions between the company and its suppliers, provided
that all trading terms and conditions have been complied with. At 30 September
2002, the company had an average of 35 days purchases outstanding in trade
creditors.
Auditors
On 11 March 2003 Gerald Edelman, Chartered Accountants, were appointed as
auditors of the company, in place of Ernst & Young LLP. A resolution to
reappoint Gerald Edelman, Chartered Accountants, as auditors will be put to the
members at the Annual General Meeting.
By order of the Board.
P Williams
Company Secretary
28 March 2003
Statement of Directors' responsibilities in respect of the accounts
Company law requires the directors to prepare accounts for each financial period
which give a true and fair view of the state of affairs of the company and of
the Group and of the profit or loss of the Group for that period. In preparing
those accounts, the directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgements and estimates that are reasonable and prudent; and
* state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the accounts.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Group and which enable them to ensure that the accounts comply with the
Companies Act 1985. They are also responsible for safeguarding the assets of
the Group and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Independent Auditors' Report to the Members of Gaming Corporation plc
We have audited the group's financial statements for the year ended 30 September
2002, which comprise the Group Profit and Loss Account, the Group Balance Sheet,
the Company Balance Sheet, the Group Statement of Cash Flows and the related
notes 1 to 25. These financial statements have been prepared on the basis of
the accounting policies set out therein.
This report is made solely to the company's members, as a body, in accordance
with Section 235 of the Companies Act 1985. Our audit work has been undertaken
so that we might state to the company's members those matters we are required to
state to them in an auditor's report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company's members as a body, for our audit work,
for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors' responsibility for preparing the Annual Report and the financial
statements in accordance with applicable United Kingdom law and accounting
standards are set out in the Statement of Directors' Responsibilities.
Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and United Kingdom Auditing
Standards.
We report to you our opinion as to whether the financial statements give a true
and fair view and are properly prepared in accordance with the Companies Act
1985. We also report to you if, in our opinion, the Directors' Report is not
consistent with the financial statements, if the company has not kept proper
accounting records, if we have not received all the information and explanations
we require for our audit, or if information specified by law regarding
directors' remuneration and transactions with the group is not disclosed.
We read other information contained in the Annual Report and consider whether it
is consistent with the audited financial statements. This other information
comprises the Directors' Report and Chairman's Statement. We consider the
implications for our report if we become aware of any apparent misstatements or
material inconsistencies with the financial statements. Our responsibilities do
not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom Auditing Standards
issued by the Auditing Practices Board. An audit includes examination, on a test
basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and
judgements made by the directors in the preparation of the financial statements,
and of whether the accounting policies are appropriate to the group's
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the accounts are free from
material misstatement, whether caused by fraud or other irregularity or error,
in forming our opinion we also evaluated the overall adequacy of the
presentation of information in the financial statements.
Opinion
In our opinion the financial statements give a true and fair view of the state
of affairs of the company and of the group as at 30 September 2002 and of the
loss of the group for the year then ended and have been properly prepared in
accordance with the Companies Act 1985.
Gerald Edelman
Chartered Accountants
Registered Auditor
London
28 March 2003
Group profit and loss account
For the year ended 30 September 2002
12 months 13 months
2002 2001
Notes # #
as restated
Turnover 2 842,593 415,833
Turnover - continuing activities 678,521 252,439
Turnover - discontinued activities 164,072 163,394
Cost of sales (308,663) (146,462)
Gross profit 533,930 269,371
Selling and distribution costs (25,297) (9,212)
Administrative expenses:
before goodwill amortisation (925,259) (483,119)
goodwill amortisation (810,552) (336,110)
impairment of goodwill (1,265,245) -
(3,001,056) (819,229)
Group operating loss attributable to continuing activities (2,271,157) (569,982)
Group operating loss attributable to discontinued (221,266) 10,912
activities
Group operating loss 3 (2,492,423) (559,070)
Interest receivable and similar income 5,680 43,562
Interest payable and similar charges 6 (22,773) (6,200)
Loss on ordinary activities before taxation (2,509,516) (521,708)
Taxation 7 64,137 171,698
Loss on ordinary activities for the period (2,445,379) (350,010)
Minority interest 423 314
Loss for the period attributable
to members of the parent company
21 (2,444,956) (349,696)
Loss per share - basic & diluted 8 5.27p 1.38p
Loss per share - adjusted 8 0.79p 0.05p
There were no other recognised gains and losses for the period.
Balance sheets
As at 30 September 2002
Group Group Company Company
2002 2001 2002 2001
Notes # # # #
as restated as restated
Fixed assets
Intangible assets 10 1,634,443 3,718,157 - -
Tangible assets 11 78,669 107,916 - -
Investments 12 2,523 2,523 1,507,445 3,234,958
1,715,635 3,828,596 1,507,445 3,234,958
Current assets
Debtors 13 513,293 370,758 865,105 727,192
Cash at bank and in hand 104,801 438,252 80,451 412,318
618,094 809,010 945,556 1,139,510
Creditors: amounts falling due
within one year 14 (625,868) (546,039) (181,382) (99,963)
Net current liabilities (7,774) 262,971 764,174 1,039,547
Total assets less current liabilities 1,707,861 4,091,567 2,271,619 4,274,505
Creditors: amounts falling due
after more than one year 15 (18,784) (40,443) - -
Net assets 1,689,077 4,051,124 2,271,619 4,274,505
Capital and reserves
Called up share capital 20 2,356,920 2,313,892 2,356,920 2,313,892
Share premium account 21 705,865 665,561 705,865 665,561
Other reserve 21 1,422,065 1,422,065 1,422,065 1,422,065
Profit and loss account 21 (2,794,652) (349,696) (2,213,231) (127,013)
Shareholders' funds 1,690,198 4,051,822 2,271,619 4,274,505
Minority interests (1,121) (698) - -
22 1,689,077 4,051,124 2,271,619 4,274,505
Net asset value per ordinary share 8 3.36p 8.75p 4.52p 9.24p
J Drummond (Chief Executive)
Peter Williams (Finance Director) 28 March 2003
Group statement of cash flows
For the year ended 30 September 2002
12 months 13 months
2002 2001
Notes # #
Net cash outflow from operating activities 23(a) (360,109) (567,538)
Returns on investments and servicing of finance
Interest received 5,680 43,562
Interest paid (22,773) (6,200)
(17,093) 37,362
Taxation
Corporation tax paid - -
Capital expenditure
Payments to acquire tangible fixed assets (25,063) (39,558)
Proceeds of disposal of tangible fixed assets 2,373 -
Payments to acquire intangible assets - (64)
(22,690) (39,622)
Acquisitions and disposals
Acquisition of subsidiary undertakings - (390,827)
Net overdrafts acquired with subsidiary undertakings - (307,362)
- (698,189)
Net cash outflow before financing (399,892) (1,267,987)
Financing
Issue of ordinary share capital 83,332 1,683,653
Issue costs - (126,266)
Increase in loans 6,736 (1,495)
90,068 1,555,892
(Decrease)/increase in cash 23(b) (309,824) 287,905
Group statement of cash flows
For the year ended 30 September 2002
Reconciliation of net cash flow to movement in net funds
2002 2001
# #
(Decrease)/increase in cash (309,824) 287,905
(Increase)/decrease in long term loans (6,736) 1,495
Change in net (debt)/funds resulting from cash flows (316,560) 289,400
Loans acquired with acquisitions - (41,938)
Movement in net (debt)/funds (316,560) 247,462
Net funds at 1 October 2001 (2001: 18 August 2000) 247,462 -
Net (debt)/funds at 30 September 2002 (69,098) 247,462
Notes to the accounts
As at 30 September 2002
1. Accounting policies
Fundamental accounting concept - going concern
The accounts have been prepared on the assumption that the group is a going
concern. The accounts of the group for the year ended 30 September 2002 show a
loss for the period of #2,444,956. Of this loss, #2,075,797 is represented by
the amortisation and impairment of goodwill, which does not affect the operating
cash flows of the group. Since the year end, the company has also disposed of
its entire shareholding in Nasstar Limited (formerly Space 7 Limited), which
made a loss during the period covered by these financial statements.
At the date of approving these financial statements, the group's ability to
continue as a going concern reflects the following:
* The group's ability to meet its future working capital requirements
is dependent on the group being able to generate further growth in revenues and
free cash flow from its continuing activities over the levels already achieved,
particularly from the group's online casino and casino portal website;
* The continuing availability of banking facilities; and
* The collection of debtors and payment of creditors on a timely basis
or subject to agreed payment schedules.
The Directors are confident, particularly in view of the group's financial
performance since the year end, that the group will generate the necessary level
of sales and will resolve satisfactorily the matters referred to above. On this
basis, in the opinion of the Directors, the accounts have been properly prepared
on the assumption that the group is a going concern. In making this assessment
the directors have had due regard to the net funds available to the group.
Basis of preparation
The financial information has been prepared under the historical cost convention
and in accordance with applicable United Kingdom accounting standards.
Basis of consolidation
The group accounts consolidate the results of Gaming Corporation plc and its
subsidiary undertakings from their respective dates of acquisition.
No profit and loss account is presented for Gaming Corporation plc as permitted
by section 230 of the Companies Act 1985.
Goodwill
Goodwill arising on consolidation represents the excess of fair value of the
consideration paid over the fair value of the identifiable net assets acquired.
Goodwill has been capitalised and amortised on a straight line basis over its
estimated useful economic life. The expected useful economic life is five years.
Goodwill is reviewed for impairment at the end of the first full financial year
following the acquisition and in other periods if events or changes in
circumstances indicate that the carrying value may not be recoverable.
Depreciation
Depreciation is provided on the following tangible fixed assets at rates
calculated to write off the cost or valuation, less estimated residual value
based on prices prevailing at the date of acquisition or revaluation, of each
asset evenly over its expected useful life as follows:
Fixtures and fittings 25% reducing balance
Office equipment 25% reducing balance
Computer equipment 33.3% per annum
Web-sites 33.3% per annum
The carrying values of tangible fixed assets are reviewed for impairment in
periods if events or changes in circumstances indicate the carrying value may
not be recoverable.
Intangible fixed assets
Amortisation is provided on the following intangible fixed assets at rates
calculated to write off the cost or valuation, less estimated residual value
based on prices prevailing at the date of acquisition or revaluation, of each
asset evenly over its expected useful life as follows:
Trademarks
10% per annum
The carrying values of intangible fixed assets are reviewed for impairment in
periods if events or changes in circumstances indicate the carrying value may
not be recoverable.
Fixed asset investments
Fixed asset investments are carried at cost.
The carrying values of fixed asset investments are reviewed for impairment in
periods if events or changes in circumstances indicate the carrying value may
not be recoverable.
Deferred taxation
The accounting policy in respect of deferred tax has been changed to reflect the
requirements of FRS 19. Deferred tax is provided in full in respect of taxation
deferred by timing differences between the treatment of certain items for
taxation and accounting purposes. Deferred tax assets are only recognised when
they are regarded as recoverable. The group has not adopted a policy of
discounting deferred tax assets and liabilities.
The adoption of the standard requires a prior year adjustment to be made to
recognise the asset which existed at the start of the financial year and which
was not recognised under the old accounting policy. This has increased debtors
and retained profits by #171,698. Comparative figures for 2001 have been
restated.
Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction or at the contracted rate if the transaction is covered by a
forward exchange contract. Monetary assets and liabilities denominated in
foreign currencies are retranslated at the rate of exchange ruling at the
balance sheet date.
Leasing
Rentals payable under operating leases are charged in the profit and loss
account on a straight line basis over the lease term.
Cost of share option schemes
In accordance with UITF Abstract 17,"Employee Share Schemes", the company
recognises a charge to the profit and loss account for the amount by which the
fair market value of any share options or benefits likely to be issued exceeds
their respective exercise price on the date of the grant. These costs are
recognised on a straight line basis over the period to which they relate.
In accordance with UITF Abstract 25,"National Insurance Contributions on Share
Option Gains", the company provides for national insurance contributions on
options granted or benefits likely to be issued on or after 6 April 1999 under
its Unapproved Share Option Schemes. Provision is made over the vesting period
of the options or benefits likely to be issued at the prevailing rate of
employer's national insurance, on the difference between the period end share
value and the grant price, being the
directors' best estimate of the ultimate liability at each period end.
Capital instruments
Shares are included in shareholders' funds. Other instruments are classified as
liabilities if they contain an obligation to transfer economic benefit and if
not they are included in shareholders' funds.
2. Turnover and segmental analysis
Turnover represents the amounts derived from the provision of goods and services
which fall within the group's ordinary continuing and discontinued activities,
stated net of value added tax. The turnover, profit before tax and net assets
of the group are attributable to one business segment, the provision of
internet-based technology and consultancy products and services. The Group
operates within one geographical segment, the United Kingdom. Turnover includes
#678,521 (2001: #252,439) in relation to continuing activities and #164,072
(2001: #163,394) in relation to discontinued activities.
3. Operating loss
The operating loss is stated after charging:
Group Group
2002 2001
# #
Auditors' remuneration - audit services 17,500 20,000
Auditors' remuneration - non audit services 15,000 -
Depreciation of tangible fixed assets 50,667 19,729
Amortisation of intangible fixed assets 308 144
Amortisation of goodwill 810,552 336,110
Impairment of goodwill 1,265,245 -
Operating lease rentals - land and buildings 44,503 19,775
Operating lease rentals - computer equipment 5,088 5,845
Administrative expenses before goodwill #723,103 (2001: #368,659) in relation to
continuing activities and #202,156 (2001: #114,460) in relation to discontinued
activities.
4. Directors' emoluments
Group Group
2002 2001
# #
Emoluments 182,025 133,410
Included in the above are ex-gratia payments to directors of #5,125. Details of
directors' options are disclosed in the directors' report.
5. Staff costs
Group Group
2002 2001
# #
Wages and salaries 518,210 298,782
Social security costs 43,634 28,204
561,844 326,986
The average monthly number of employees during the period was as follows:
Group Group
2002 2001
No. No.
Management 3 4
Sales and marketing 6 3
Technical 5 3
Administration 1 1
15 11
At 30 September 2002 the group had a total of 12 employees.
6. Interest payable and similar charges
Group Group
2002 2001
# #
Bank loans and overdrafts 22,773 6,200
7. Taxation
Group Group
2002 2001
# #
as restated
Corporation tax - -
Deferred tax credit (64,137) (171,698)
Current tax credit (64,137) (171,698)
Reconciliation of tax charge/(credit)
Loss on ordinary activities before taxation (2,509,516) (521,708)
Tax credit on loss on ordinary activities before taxation
at standard rate of 19per cent.
(476,808) (99,125)
Factors affecting tax credit:
Expenses not deductible for tax purposes 725 2,711
Depreciation of tangible assets 9,685 7,287
Amortisation and impairment of goodwill 394,401 63,861
Capital allowances (3,181) (4,721)
Tax losses not deferred 11,041 40,533
Tax losses brought forward - (182,244)
Tax credit per profit and loss account (64,137) (171,698)
8. Loss and net asset value per ordinary share
Group Group
2002 2001
# #
The calculation of loss per ordinary share is based on the
effective weighted average number of shares in issue during
the period 46,406,851 25,323,221
The adjusted loss per share is based on the loss after tax and
before goodwill amortisation:
Loss after tax and minority interests as reported 2,444,956 349,696
Goodwill (2,075,797) (336,110)
369,159 13,586
The calculation of net asset value per ordinary share is based on a net asset
value of #1,689,077 (2001: #4,051,124) and 50,258,400 (2001: 46,277,835)
ordinary shares in issue at 30 September 2002.
9. Loss attributable to members of the parent company
The loss after tax dealt with in the accounts of the parent company was
#2,086,218.
10. Intangible fixed assets
Group Goodwill Trademarks Total
# # #
Cost:
At 1 October 2001 4,052,752 1,659 4,054,411
Adjustment for the period (7,609) - (7,609)
At 30 September 2002 4,045,143 1,659 4,046,802
Amortisation:
At 1 October 2001 336,110 144 336,254
Provided during the period 810,552 308 810,860
Impairment 1,265,245 - 1,265,245
At 30 September 2002 2,411,907 452 2,412,359
Net book value:
At 30 September 2002 1,633,236 1,207 1,634,443
At 30 September 2001 3,716,642 1,515 3,718,157
Goodwill arising on the consolidation of Xworks (UK) Limited is being amortised
over the directors' estimate of its useful economic life of five years.
11. Tangible fixed assets
Group Furniture and Office Computer Web-sites Total
fittings equipment equipment
# # # #
#
Cost:
At 1 October 2001 32,694 9,489 66,309 73,140 181,632
Additions 1,799 - 14,044 9,220 25,063
Disposals (4,003) - (1,595) - (5,598)
At 30 September 2002 30,490 9,489 78,758 82,360 201,097
Depreciation:
At 1 October 2001 10,709 3,264 35,799 23,944 73,716
Provided during the period 5,025 1,552 21,733 22,357 50,667
Disposals (1,221) - (734) - (1,955)
At 30 September 2002 14,513 4,816 56,798 46,301 122,428
Net book value:
At 30 September 2002 15,977 4,673 21,960 36,059 78,669
At 30 September 2001 21,985 6,225 30,510 49,196 107,916
12. Fixed asset investments
Group
At 30 September 2002, the Group had an investment in Wundercars Limited of
#2,523, representing 10.44 per cent. of the issued share capital of that
company.
Company
#
At 1 October 2001 3,234,958
Adjustment to cost (7,609)
Write-down in cost of investment
Xworks (UK) Limited and subsidiary undertakings (1,553,517)
Nasstar Limited (formerly Space 7 Limited) (166,387)
At 30 September 2002 1,507,445
On 30 October 2002, the group disposed of its entire shareholding in Nasstar
Limited for nominal consideration to Charles Black, a director of Gaming
Corporation plc.
In the directors' opinion the aggregate value of the investments in subsidiary
undertakings is not less than the amount at which it is stated in the balance
sheet.
Subsidiary undertakings
The subsidiary undertakings of the company are set out below. Each company is
incorporated in Great Britain and none of the subsidiary undertakings are listed
or were listed at the period end.
Percentage Held by
Held
Xworks (UK) Limited 100 per cent. Gaming Corporation plc
Nasstar Limited (formerly Space 7 Limited) 100 per cent. Gaming Corporation plc (83.2 per cent.)
Xworks (UK) Limited (16.8 per cent.)
Careerplus Limited 97.5 per cent. Xworks (UK) Limited
Xworks Limited (formerly Quantum Products Limited) 100 per cent. Xworks (UK) Limited
Onthebox.com Limited (D) 72 per cent. Xworks (UK) Limited
Chemserve Group plc (D) 100 per cent. Xworks (UK) Limited
Chemserve.net Limited (D) 100 per cent. Chemserve Group plc
All Group entities are involved with the provision of technology and consultancy
services, except where indicated as dormant (D). Since the year end, the group
has sought to dissolve each of the dormant companies noted above.
13. Debtors
Group Group Company Company
2002 2001 2002 2001
# # # #
as restated as restated
Trade debtors 136,942 98,774 - -
Other debtors 25,062 80,729 16,000 55,754
Prepayments 115,454 3,545 101,917 231
Deferred tax (see note 17) 235,835 171,698 94,899 29,278
Amounts owed by associated undertakings - 16,012 - -
Amounts owed by subsidiary undertakings - - 652,289 641,929
513,293 370,758 865,105 727,192
14. Creditors: amounts falling due within one year
Group Group Company Company
2002 2001 2002 2001
# # # #
Bank loans and overdrafts (see note 16) 155,115 150,347 - -
Trade creditors 143,838 77,506 26,252 14,374
Taxes and social security costs 219,653 213,132 96,975 33,323
Amounts owed to subsidiary undertakings - - 8,760 32,996
Other creditors 30,948 33,427 10,987 12,770
Accrued expenses 76,314 71,627 38,408 6,500
625,868 546,039 181,382 99,963
15. Creditors: amounts falling due after more than one year
Group Group Company Company
2002 2001 2002 2001
# # # #
Bank loans and overdrafts (see note 16) 18,784 40,443 - -
16. Loans
Group
The maturity of overdrafts and loans is as follows:
Group Group
2002 2001
# #
Amounts falling due:
In one year or less or on demand 155,115 150,347
Between one and two years 18,784 40,443
173,899 190,790
At 30 September 2002, bank overdrafts of Xworks (UK) Limited and Nasstar Limited
with Barclays Bank PLC were guaranteed by Gaming Corporation plc. Bank
overdrafts and loans of Nasstar Limited with Coutts and Co. were secured on a
property owned by C Black, a director of the company. Since the year end and
following the disposal of Nasstar Limited, the group's banking facilities have
been re-negotiated such that the facilities available to the group are
unsecured.
17. Deferred tax
Group
2002 2001
# #
as restated
At 1 October 2001 (2001: 18 August 2000) (171,698) -
Tax credit for the year (64,137) (171,698)
At 30 September 2002 (235,835) (171,698)
Deferred taxation provided in the financial statements is as follows:
Tax losses carried forward (235,835) (171,698)
Company
2002 2001
# #
as restated
At 1 October 2001 (2001: 18 August 2000) (29,278) -
Tax credit for the year (65,621) (29,278)
At 30 September 2002 (94,889) (29,278)
18. Obligations under operating leases
Group
Annual commitments under non-cancellable operating leases are as follows::
Land and Land and Other Other
buildings buildings 2002 2001
2002 2001 # #
# #
Operating leases which expire:
Within one year - - - 3,523
In two to five years 37,760 37,760 1,508 2,995
37,760 37,760 1,508 6,518
19. Financial instruments
The group's financial instruments comprise fixed asset investments, cash,
overdrafts, loans and various items, such as debtors and creditors, that arise
directly from its operations. It is and has been throughout the period of
review, the group's policy that financial derivatives shall not be used. As a
result, the group has not used interest rate hedges and currency swaps during
the year. The main risks arising from the group's financial instruments are
interest rate risk and liquidity risk. The group monitors its interest rate risk
on cash deposits primarily through cash flow forecasting. During the year it was
the group's policy to invest in short term deposits maturing on a weekly basis.
Short term debtors and creditors have been excluded from the following
disclosures.
Interest rate risk
The group finances its operations through shareholder equity, overdrafts, loans
and working capital. Throughout the year the group's exposure to interest rate
fluctuations was on its cash deposits, overdrafts and loans, which were all held
at floating rates of interest.
Interest rate risk profile of financial assets and liabilities
The interest rate profile of the group's financial assets and liabilities was:
Floating Floating Non-interest Floating Floating Non-interest
rate rate bearing rate rate bearing
financial financial financial financial financial financial
assets liabilities asset assets liabilities asset
2002 2002 2002 2001 2001 2001
# # # # # #
Sterling 104,801 (173,899) 2,523 438,252 (190,790) 2,523
Interest on cash, overdrafts and loans is based on floating rates linked to
LIBOR.
Liquidity risk
The group's objective is to maintain a balance between longer and shorter term
funding to match its working capital and investment requirements through the use
of overdrafts and loans. The maturity of financial liabilities is disclosed
below.
Floating Floating
rate rate
financial financial
liabilities liabilities
2002 2001
# #
In one year or less or on demand 155,115 150,347
Between one and two years 18,784 40,443
173,899 190,790
Fair value of financial instruments
The group's financial instruments, which comprise fixed asset investments, cash,
overdrafts and loans are carried at cost, which approximates to their fair value
and which are respectively disclosed in notes 12, 16 and 22.
20. Share capital
2002 2002 2001 2001
#
No. # No.
Authorised:
Ordinary shares of 1p each 214,586,400 214,586 - -
Ordinary shares of 5p each - - 80,000,000 4,000,000
Deferred shares of 4p each 46,358,400 1,854,336 - -
Allotted, called-up and fully paid:
Ordinary shares of 1p each 50,258,400 502,584 - -
Ordinary shares of 5p each - - 46,277,835 2,313,892
Deferred shares of 4p each 46,358,400 1,854,336 - -
2,356,920 2,313,892
(i) On 30 November 2001, the company issued 77,851 ordinary
shares of 5p each to employees/former employees in respect of bonus share
entitlements at 6.5p per share.
(ii) On 12 August 2002 each ordinary share of 5p each was
sub-divided into one ordinary share of 1p and one deferred share of 4p each.
The rights of the deferred shares are such that they are in effect valueless.
(iii) On 24 September 2002, the company issued 3,100,000 new
ordinary shares of 1p each at 2p per share to Boss Media.
(iv) On 30 September 2002, 800,000 ordinary shares were issued at
2p per share.
(v) 12,681,481 warrants to subscribe for new ordinary shares at
10p each were issued in May 2001. During the year, 2,714 new ordinary shares
were issued in respect of the exercise of warrants. As at 30 September 2002,
19,245 of these warrants had been exercised. The warrants may be exercised at
any time up to 30 April 2003.
The company has issued options under share option arrangements and under an
unapproved share option scheme. At 30 September 2002, options outstanding under
these schemes are as follows:
Share option arrangements Unapproved share option plan
Options outstanding 1,300,000 2,175,000
Options exercise price 10p 10p in the second year following grant,
11p in the third year following grant and
12p in the fourth and subsequent years
following grant
Exercise period 1 August 2001 to 16 October 2003 In three equal tranches 12 months, 24
months and 36 months from date of grant,
1 May 2001 until 30 April 2011
Date of grant 16 October 2000 1 May 2001
No options under either arrangement had been exercised at 30 September 2002.
21. Reserves
Group Share Other Profit and
premium Reserve loss account
account #
# #
At 1 October 2001 665,561 1,422,065 (521,394)
Prior year adjustment - - 171,698
At 1 October 2001 as restated 665,561 1,422,065 (349,696)
Retained loss for the period - - (2,444,956)
Arising on issue of new shares 40,304 - -
At 30 September 2002 705,865 1,422,065 (2,794,652)
Company Share Other Profit and
premium Reserve loss account
account #
# #
At 1 October 2001 665,561 1,422,065 (156,291)
Prior year adjustment - - 29,278
At 1 October 2001 as restated 665,561 1,422,065 (127,013)
Retained loss for the period - - (2,086,218)
Arising on issue of new shares 40,304 - -
At 30 September 2002 705,865 1,422,065 (2,213,231)
22. Reconciliation of movements in shareholders' funds
Group
#
At 1 October 2001 3,879,426
Prior year adjustment 171,698
At 1 October 2001 as restated 4,051,124
Total recognised gains and losses (2,444,956)
New shares issued 83,332
Minority interest (423)
At 30 September 2002 1,689,077
Company
#
At 1 October 2001 4,245,227
Prior year adjustment 29,278
At 1 October 2001 as restated 4,274,505
Total recognised gains and losses (2,086,218)
New shares issued 83,332
At 30 September 2002 2,271,619
23. Notes to the statement of cash flows
(a) Reconciliation of operating loss to net cash outflow from operating
activities
2002 2001
# #
Operating loss (2,492,423) (559,070)
Depreciation 50,667 19,729
Loss on disposal of fixed assets 1,270 -
Amortisation of intangible fixed assets 308 144
Amortisation of goodwill 810,552 336,110
Impairment of goodwill 1,265,245 -
Decrease in stock - 7,756
Increase in debtors (78,398) (71,594)
Increase in creditors 82,670 (300,613)
(360,109) (567,538)
(b) Analysis of changes in net funds
1 October Cash flow 30
2001 September
2002
# # #
Cash at bank and in hand 438,252 (333,451) 104,801
Bank overdrafts (148,742) 23,627 (125,115)
Net cash 289,510 (309,824) (20,314)
Loans (42,048) (6,736) (48,784)
247,462 (316,560) (69,098)
24. Related party transactions
The company has taken advantage of the exemption available under FRS 8 not to
disclose transactions with other members of the group.
25. Capital commitments
At the year end there were no capital commitments authorised by the Board or
otherwise.
Notice of annual general meeting
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Gaming Corporation plc
("Company") will be held at 2.10, The Plaza, 535 Kings Road, London SW10 0SZ at
10am on 30 April 2003 for the following purposes:
1. To receive the directors' report and accounts of the Company for the
year ended 30 September 2002 and the auditors' report thereon.
2. To re-elect Charles Black as a director of the Company who retires by
rotation and being eligible offers himself for re-election.
3. To re-elect Peter Williams as a director of the Company who retires by
rotation and being eligible offers himself for re-election.
4. To re-appoint Gerald Edelman as auditors of the Company and to authorise
the directors to fix their remuneration.
By order of the Board
P Williams
Company Secretary
28 March 2003
Registered office: 2.10 The Plaza, 535 Kings Road, London SW10 0SZ
Notes:
1. A member of the Company, entitled to attend and vote at the above
meeting may appoint one or more proxies to attend and, on a poll, vote instead
of him. A proxy need not be a member of the Company.
2. To be valid the form of proxy together with any power of attorney or
other authority (if any) under which it is signed or a notarially certified copy
of such authority must be deposited at the offices of the Company's registrars,
Capita IRG plc, PO Box 25, Beckenham, Kent BR3 4BR, not less than 48 hours
before the time fixed for the meeting or any adjournment thereof. Completion of
and return of the form of proxy will not preclude a member from attending and
voting in person.
3. Pursuant to regulation 34 of the Uncertificated Securities Regulations
1995, members will be entitled to vote at the meeting if they are registered on
the Company's register of members 48 hours before the time fixed for the meeting
or any adjournment thereof.
4. Copies of the Directors' service contracts and the register of
Director's interests in shares of the Company kept in accordance with section
325 of the Companies Act 1985 will be available for inspection at the registered
office of the Company during nominal business hours on any weekday from the date
of this notice until the date of the meeting and at the place of the meeting for
15 minutes prior to and during the meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UASOROWROOAR
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