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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Huy | LSE:HUY | London | Ordinary Share | GB00B06HJN03 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.85 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 7503E
Huy PLC
30 September 2008
HUY PLC (FORMERLY BLUE STAR MOBILE GROUP PLC)
ANNUAL REPORT
FOR THE YEAR ENDED 31 MARCH 2008
Huy plc are pleased to announce their final results for the year ended 31 March 2008 as follows. Copies of the accounts are available
from Huy's registered office at 116 Gloucester Place, London W1U 6HZ and from the website www.bluestarinternational.com. Details of a new
website in Huy's registered name will be announced shortly.
Enquiries:
Huy plc:
Michael Slater 07970 803822
Seymour Pierce:
John Depasquale/Matt Thomas 020 7107 8000
Chairman's statement
This is not the set of results that I would have wanted or anticipated presenting when I was last writing to you. The business has had a
very difficult year. A major promotion caused a significant issue with a specific customer which had a substantial impact on the promotional
business with the added risk of potential litigation. In addition the revamped US business failed to generate the anticipated level of
business and proved a further drag on the financial performance of the business.
The business saw turnover fall by 27% to £3.2m (2007: £4.4m) as a result of reduced promotional and sports management sales.
Gross profit fell by 29% to £1.3m (2007: £1.8m) and with operating costs rising by 12% the group's underlying operating loss before the
write off of £426,000 of goodwill was £641,000 (2007: profit £114,000). The cash position was not as severely impacted as working capital
movements generated £416,000.
The effects on the business were such that it was apparent that the business would need to reduce costs and raise additional funds, and
therefore the non executive members of the board concluded that it was in your best interests to accept the offer for the trading businesses
from the executive management. This included the assumption of any litigation liability arising from the abortive promotion.
If the Company does not make a reverse takeover within six moths of the sale of the operating companies, the Independent Directors will
seek to return residual cash to shareholders through a Members' Voluntary Liquidation to be approved at an EGM. At the same time that the
Company seeks shareholder approval for the Members' Voluntary Liquidation, the Company shall also seek shareholder approval for the
Company's listing on AIM to be cancelled. Cancellation would be effective from the business day following the EGM. The Independent Directors
of the Company do not have any experience in sourcing companies to acquire cash shells (as the Company is now classified) nor in looking for
reverse takeover targets. They will, however, work with their advisers in trying to source potential targets.
David Cromwell
Chairman
30 September 2008
The directors present their report and financial statements for the year ended 31 March 2008.
Principal activities and review of the business
The principal activity of HUY PLC (Formerly Blue Star Mobile Group PLC) was the provision of marketing services to corporate clients.
Following the disposal of its trading businesses the business is a cash shell listed on AIM.
The full details of the sale are outlined in note 22 to the accounts.
A review of the year and an indication of likely future developments are provided in the Chairman's report.
Principal risks and uncertainties
On 8th May 2008 the company sold it's trading subsidiaries to Bluestar International Limited, a company controlled by the executive
directors.
The ongoing risk and uncertainty is that the listed shell is unable to identify any new business opportunities and will therefore cease
to trade.
Key performance indicators
The directors consider that gross profit, operating profit, earnings per share and net cash are the key performance indicators of the
business. These figures are set out on the face of the Consolidated Income Statement and Consolidated Cashflow statement.
Results and dividends
The results for the period are set out on page 9.
The directors do not recommend the payment of a dividend
Directors
During the year the directors of the Company were as follows:
David Cromwell
Michael Slater
David Maclachlan (resigned 11 September 2008)
Steve Clarke (resigned 8 May 2008)
Adam Hayes (resigned 8 May 2008)
David Piper (resigned 8 May 2008)
Oliver Roxburgh (resigned 8 May 2008)
Directors' shareholdings
The directors who held office during the year had the following beneficial interests in the share capital of the company as at the close
of business on 31 March 2008:
Numberof shares Percentageholding
David Cromwell 807,373 2.7%
Michael Slater 400,000 1.4%
David Maclachlan 5,000,000 16.9%
+Steve Clarke 4,800,000 16.3%
+Adam Hayes* 515,790 1.7%
+David Piper 654,250 2.2%
+Oliver Roxburgh 500,000 1.7%
* 500,000 held jointly with his wife
Under the agreement to sell the trading businesses the executive directors (marked+) have agreed to redesignate their shares to deferred
shares with no rights at all, save for the repayment of nominal capital after (and only after) the weighted rights to repayment of all other
shareholders of their capital have been satisfied in full.
Executive share option scheme
Share options had been granted to managers. These lapsed one month following the sale of the trading businesses on 8th May 2008 with no
options being exercised.
Substantial shareholdings
The directors have been notified of the following holdings in excess of three per cent of the issued share capital of the Company as at
the close of business on 31 March 2008:
Numberof shares Percentageholding
Blue Star Media Ltd 3,500,000 11.85%
Barry Cash 1,500,000 5.08%
Dragon Valley 900,000 3.05%
Creditor payment policy
The Group does not have a written code or standard on payment practice. It negotiates terms with each of its suppliers. Payments are
then made to suppliers in accordance with those terms provided the supplier has carried out the agreed obligations in a satisfactory manner.
Trade creditor days at the year end were 17.4 days (2007: 30 days)
Financial Instruments
The Group does not hold derivative or financial instruments for trading purposes
It has only entered into forward exchange contracts for the purpose of managing receipts denominated in US dollars. At the year end none
were outstanding.
Financial Risk Factors
The Group's activities expose the Group to a number of risks including credit, liquidity and foreign currency risk. The Board manages
these risks through a risk management programme.
The Group's principal financial instruments comprise cash and short term deposits. The main purpose of these financial instruments is to
provide finance for the Group's operations. The Group has various other financial instruments, such as trade debtors and trade creditors
that arise directly from its operations.
Interest Rate risk
The Group's exposure to changes in interest rates relates primarily to cash at bank. Cash is held either on current or short term
deposits at a floating rate of interest determined by the relevant bank's prevailing base rate. The Company and Group seeks to obtain a
favourable interest rate on its cash balances through the use of bank deposits.
Foreign currency risk
The Group's financial assets and liabilities are denominated in sterling. It's international revenues are denominated in US dollars or
Euro. The Group holds US dollar and Euro accounts.
Market Price Risk
Investments are held at cost. In the opinion of the Directors the main future risks are market price fluctuation.
Foreign currency risk does, however, arise in relation to the consolidation process as the accounts of the foreign based entities are
translated into Sterling at the period end.
The primary risk arises from fluctuations in the value of the US $ against Sterling £. The Group has derived the following sensitivities
based on variations of 10% in the US $ against Sterling
31 March
2008 2007
£'000 £'000
Impact on equity and profit after tax
10% increase in US$ against Sterling (64) (73)
10% decrease in US$ against Sterling 78 89
Corporate Governance
HUY PLC (Formerly Blue Star Mobile Group PLC) is committed to maintaining high standards of corporate governance. The Company complies
with the combined code as modified by the recommendations of the Quoted Companies Alliance to the extent the Directors consider appropriate,
given the size of the Company, its current stage of development and the constitution of the Board.
The Board has appointed an Audit Committee whose primary role is the review of the Company's Interim and Annual Financial Statements
before submission to the Board for Approval. The Audit Committee also reviews reports from management and external auditors on accounting
and internal control matters. The Board has also established a Remuneration Committee, which is responsible for reviewing executive
remuneration and performance. Both the Audit and Remuneration Committees are made up of two Non-Executive Directors and are chaired by David
Cromwell.
Remuneration Report
The remuneration of each executive director is determined by the Remuneration Committee. This is composed solely of the non executive
directors and was chaired throughout the year by David Cromwell and Michael Slater.
The remuneration packages for Directors and senior managers have been structured so as to fairly compensate them for their contribution
to the Group and to encourage them to remain with the Group. The basic components of these packages include:
* Basic salary
* Share options
* Discretionary profit share bonus scheme
* Medical insurance
The Group has arranged a stakeholder pension plan which is available to all staff. The Group does not make any contributions to the
scheme.
All service contracts have notice periods of between two and twelve months.
Employment policy
It is the policy of the Group to operate a fair employment policy. No employees or job applicants are less favourably treated than any
other on the grounds of their sex, sexual orientation, age, marital status, religion, race, nationality, ethnic or national origin, colour
or disability and all appointments and promotions are determined solely on merit. The Directors encourage employees to be aware of all
issues affecting the Group and place considerable emphasis on employees sharing in its success through its employee share option and profit
share schemes.
Statement of Directors' responsibilities
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and
regulations.
UK Company law requires the directors to prepare Group and Company Financial Statements for each financial year. Under that law the
directors are required to prepare Group financial statements in accordance with International Financial Reporting Standards ("IFRS") as
adopted by the EU and have elected to prepare the Company financial statements in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the EU.
The Group financial statements are required by law and IFRS adopted by the EU to present fairly the financial position and performance
of the Group; the Companies Act 1985 provides in relation to such financial statements that references in the relevant part of that Act to
financial statements giving a true and fair view are references to their achieving a fair presentation.
The Company financial statements are required by law to give a true and fair view of the state of affairs of the Company.
In preparing each of the Group and Company financial statements, the directors are required to:
a. select suitable accounting policies and then apply them consistently;
b. make judgements and estimates that are reasonable and prudent;
c. state whether they have been prepared in accordance with IFRS adopted by the EU;
d. prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the Group and the Company will continue in business.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial
position of the Company and to enable them to ensure that the financial statements comply with the requirements of 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.
Disclosure of information to auditors
The directors who were in office on the date of approval of these financial statements have confirmed that, as far as they are aware,
there is no relevant audit information of which the auditors are unaware. Each of the directors have confirmed that they have taken all the
steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that
it has been communicated to the auditor.
Auditor
In accordance with section 385 of the Companies Act 1985, a resolution proposing that Adler Shine LLP be reappointed as auditors will be
put to the members at the AGM
On behalf of the board
*************
David Cromwell
Director
30 September 2008
We have audited the group and parent company financial statements (the "financial statements") of HUY Plc for the year ended 31 March
2008 set out on pages 9 to 34. These financial statements have been prepared under the accounting policies set out on pages 15 to 17.
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' responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European Union 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 International
Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements have
been properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in the
Directors' Report and Chairman's Statement is consistent with the financial statements.
In addition we report to you if, in our opinion, 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 other
transactions is not disclosed.
We read other information contained in the Annual Report and consider whether it is consistent with the audited financial statements.
The other information comprises only the Directors' Report, the Chairman's Statement and the Corporate Governance 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 International Standards on Auditing (UK and Ireland) 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 judgments made by the directors in the preparation of the financial statements, and
of whether the accounting policies are appropriate to the group's and company'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 financial statements 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 group financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union, of the state of
the group's affairs as at 31 March 2008 and of its loss for the year then ended;
* the parent company financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union as
applied in accordance with the provisions of the Companies Act 1985, of the state of the parent company's affairs as at 31 March 2008;
* the financial statements have been properly prepared in accordance with the Companies Act 1985; and
* the information given in the Directors' Report is consistent with the financial statements.
Emphasis of matter - Going concern
In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosure made in
note 1 to the financial statements concerning the company's ability to continue as a going concern. On 8th May 2008, the Company approved
the sale of its trading subsidiaries for a consideration of £225,000 and notified its shareholders that if the Company does not make a
reverse takeover within six months the independent directors will seek to return residual cash to shareholders through a Members' Voluntary
Liquidation. These conditions, along with the other matters explained in note 1 to the financial statements, indicate the existence of a
material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern. The financial statements
do not include the adjustments that would result if the Company was unable to continue as a going concern.
Adler Shine LLP
Chartered Accountants
Registered auditors
London
30 September 2008
Consolidated income statement for the year ended 31 March 2008
Year ended 31 March Year ended 31 March 2008 Year Restated
2008 (continuing) ended Year ended 31
(discontinuing) 31 March March
2008 2007
Note
£'000 £'000 £'000 £'000
Revenue 3 3,249 - 3,249 4,434
Cost of sales (1,949) - (1,949) (2,596)
gross profit 1,300 - 1,300 1,838
Administrative expenses (1,291) (650) (1,941) (1,712)
Share based payments charge - - - (12)
Impairment of goodwill - (426) (426) -
Operating (loss) /profit 4 9 (1,076) (1,067) 114
Interest receivable 5 - 6 6 9
Finance costs 6 (1) (1) (2) -
(Loss)/profit on ordinary 8 (1,071) (1,063) 123
activities before tax
Tax expense 9 (22) - (22) (39)
(Loss)/ profit for the year (14) (1,071) (1,085) 84
(Loss)/profit per share pence 10 (3.7) 0.28
Basic and diluted
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENDITURE FOR THE YEAR ENDED 31 MARCH 2008
Year Restated
ended 31 Year ended 31
March March
2008 2007
£'000 £'000
Exchange differences on translation of foreign 2 -
operations
Net profit recognised directly in equity 2 -
Loss for the period (1,086) 84
Total recognised income and expense for the (1,084) 84
financial period
Consolidated balance sheet as at 31 March 2008
As at As at As at Restated
31 March 31 March 31 As at
2008 2008 March 31 March
2008 2007
(discontinuing) (continuing)
Note
£'000 £'000 £'000 £'000
ASSETS
Non-current assets
Intangible assets 11 51 - 51 72
Goodwill 12 - - - 426
Property, plant and equipment 13 33 - 33 30
84 - 84 528
Current assets
Trade and other receivables 15 666 666 1,398
Cash and cash equivalents 69 4 73 274
735 4 739 1,672
LIABILITIES
Current liabilities
Trade and other payables 16 (870) (47) (917) (1,211)
(870) (47) (917) (1,211)
Net current (135) (43) (178) 461
(liabilities)/assets
NET (LIABILITIES)/ASSETS (51) (43) (94) 989
SHAREHOLDERS' EQUITY
Called up share capital - 17 - 295 295 295
equity
Share premium account - 1,225 1,225 1,225
Share based payments reserve - 21 21 21
Other reserves - (211) (211) (211)
Retained earnings (51) (1,373) (1,424) (341)
TOTAL EQUITY (51) (43) (94) 989
The financial statements were approved and authorised for issue by the board of directors on
30 September 2008 and signed on its behalf by:
***********..
David Cromwell
Director
Company balance sheet as at 31 March 2008
As at As at
31 March 31 March
2008 2007
Note £'000 £'000
ASSETS
Non-current assets
Investments available for sale 14 33 724
Current assets
Trade and other receivables 15 145 749
Cash and cash equivalents 4 137
149 886
LIABILITIES
Current liabilities
Trade and other payables 16 (52) (145)
(52) (145)
Net current assets 97 741
Non-current liabilities - -
NET ASSETS 130 1,465
SHAREHOLDERS' EQUITY
Called up share capital - equity 17 295 295
Share premium account 1,225 1,225
Share based payments reserve 21 21
Retained earnings (1,411) (76)
TOTAL EQUITY 130 1,465
The financial statements were approved and authorised for issue by the board of directors on
30 September 2008 and signed on its behalf by:
***********..
David Cromwell
Director
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2008
Year ended 31 March Year ended 31 March Year ended 31 March Year ended 31 March
2008 2008
Discontinuing Continuing
Note 2008 2007
£'000 £'000 £'000 £'000
Cash flows from operating
activities
Cash used in operations 18 (47) (138) (185) (112)
Net cash used in operating (47) (138) (185) (112)
activities
Cash flows from investing
activities
Purchase of tangible fixed (21) - (21) (23)
assets
Interest received 1 6 7 9
Interest paid (1) (1) (2) -
Net cash (used in)/from (21) 5 (16) (14)
investing activities
(Decrease) in cash and cash (68) (133) (201) (126)
equivalents
Reconciliation of net cash
flow to movement in net funds
(Decrease) in cash and cash (68) (133) (201) (126)
equivalents
Change in net funds
Net funds at start of period 19 137 137 274 400
Net funds at end of period 69 4 73 274
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 mARCH 2008
Share capital - Share based payments Profit
equity reserve and loss
Share premium Other reserves account Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2006 295 1,225 9 (211) (425) 893
Share based payments - - 12 - - 12
Profit for the year - - - - 62 62
At 1 April 2007 295 1,225 21 (211) (363) 967
Restatement following adoption - - - - 22 22
of IFRS
Revised 295 1,225 21 (211) (341) 989
Loss for the year - - - - (1,085) (1085)
Foreign currency translation - - - - 2 2
At 31 March 2008 295 1,225 21 (211) (1,424) (94)
COMPANY
Share capital- Share based payments Profit
equity reserve and loss
Share premium account
Total
£'000 £'000 £'000 £'000 £'000
At 1 April 2006 295 1,225 9 (64) 1,465
Share based payments - - 12 (12) -
At 1 April 2007 295 1,225 21 (76) 1,465
Loss for the year - - - (1,335) (1,335)
At 31 March 2008 295 1,225 21 (1,411) 130
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2008
GENERAL INFORMATION
HUY PLC is a PLC company domiciled in England and incorporated in the United Kingdom. Its registered office is 116 Gloucester Place,
London, W1U 6HZ
1. basis of preparation
The group has historically prepared its audited financial statements on the basis of UK generally accepted accounting practice ("UK
GAAP"). In the current year the group has adopted International Financial Reporting Standards ("IFRS") for the first time as the group is
required to present its annual consolidated financial statements in accordance with accounting standards adopted for use in the European
Union including International Accounting Standards ("IAS") and interpretations issued by the International Accounting Standards Board. The
financial statements include in note 23 reconciliations of th groups equity to IFRS at the date of transition of 1 April 2006 and a
comparative balance sheet date of 31 March 2007 and reconciliation of the Group's results for the comparative year ended 31 March 2007.
1.1 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by the Company made
up to 31 March 2008. The excess of cost of acquisition over the fair values of the Group's share of identifiable net assets acquired is
recognised as goodwill. Any deficiency of the cost of acquisition below the fair value of identifiable net assets acquired is recognised
directly in the income statement.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is
measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus
costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are initially measured at fair value at acquisition date irrespective of the extent of any minority interest.
The acquisition of Blue Star Mobile Limited has been treated as a reverse acquisition and the consolidated financial statements of the
group have been prepared on that basis.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective
date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with
those used by other members of the Group.
All intra-group transactions, balances, and unrealised gains on transactions between group companies are eliminated on consolidation.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
1.2 Standards issued but not yet effective
At the date of authorisation of these financial statements the following Standards and Interpretations which have not been applied in
these financial statements were in issue but not yet effective:
IFRS 8 Operating Segments (effective for periods beginning or after 1 January 2009)
IAS 23 Amendment * Borrowing costs (effective for periods beginning or after 1 January 2009)
IFRS 3 (Revised) * Business Combinations (effective for periods beginning or after 1 July 2009)
IFRS 2 (Revised) * Share based payment (effective for periods beginning or after 1 January
2009)
IAS 1 Presentation of financial statements (effective for periods beginning or after 1 January
2009)
IAS 27 Consolidated and separate financial statements (effective for periods beginning or after 1
July 2009)
IFRIC 12 Service Concession arrangements (effective for periods beginning or after 1 January
2008)
IFRIC 13 Customer Loyalty Programmes (effective for periods beginning or after 1 July 2008)
IFRIC 14 The limit on a Defined Benefit Asset, Minimum Funding Requirements and their
interaction. (effective for periods beginning or after 1 January 2009)
IAS 19 Employee Benefits (effective for periods beginning on or after 1 January 2009)
The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the
financial statements of the Group when the relevant standards and interpretations come into effect. The directors do not anticipate the
early adoption of any of the above standards.
Going Concern
Under the Going Concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future. On 8th May
2008, the Company approved the sale of its trading subsidiaries for a cash consideration of £225,000 and notified its shareholders that if
the Company does not make a reverse takeover within six months the independent directors will seek to return residual cash to shareholders
through a Members' Voluntary Liquidation.
The Directors consider that they will be able to realise the value of the remaining assets and discharge the liabilities of the Company
and it is on this basis that the going concern assumption has been applied in the preparation of the financial statements.
2. Accounting policies
2.1 Turnover
Turnover is the total amount receivable by the Group in the ordinary course of business with outside customers for services supplied,
excluding value added tax and trade discounts. Revenue is recognised upon delivery of goods and service income is recognised upon the
related service having been completed, milestone achieved or over the term of the contract where relevant.
2.2 Goodwill
Goodwill is subject to an impairment review each year.
2.3 Intangible and tangible fixed assets, amortisation and depreciation
Intangible and tangible fixed assets are stated at cost less amortisation/depreciation.
Amortisation is provided on all intangible fixed assets at rates calculated to write off the cost less estimated residual value over its
expected useful life. IP/Software is being amortised against the anticipated revenues from the IP/Software.
Depreciation is provided on all tangible fixed assts at rates calculated to write off the cost less estimated residual value over its
expected useful life, as follows:
- Fixtures, fittings & equipment - 33.33% Straight line basis
2.4 Deferred taxation
Deferred tax is provided in full on timing differences which result in an obligation at the balance sheet date to pay more tax, or a
right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing
differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which
they are included in the financial statements. Deferred tax is not provided on timing differences arising from the revaluation of fixed
assets where there is no commitment to sell the assets. Deferred tax assets are recognised to the extent that it is regarded as more likely
than not that they will be recovered. Deferred tax assets and liabilities are not discounted.
2.5 Financial Instruments
Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group has become a party to the
contractual provisions of the instrument.
2.6 Foreign currencies
Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Monetary
assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. Any exchange
differences are taken to the profit and loss account.
For consolidation purposes, the assets and liabilities of overseas subsidiaries are translated at closing exchange rates. Profit and
loss accounts of overseas subsidiaries are consolidated at the average exchange rate during the year.
2.7 Leased assets
Rentals payable under operating leases are charged to the profit and loss account on a straight-line basis over the lease term.
2.8 Cash and Cash equivalents
Cash and Cash equivalents comprise cash balances and deposits held on call with the bank.
3 SEGMENTAL INFORMATION
i.) Primary business segment
Revenue Year ended 31 March Year ended 31 March
2008 2007
(all discontinuing)
£'000 £'000
Brand & Product Marketing 1,426 1,723
Channel Marketing 1,168 1,345
Sports Marketing 655 1,366
3,249 4,434
Operating (loss) /profit Year ended 31 March Year ended 31 March Year ended 31 March Restated
Year ended
31 March
2008 2008 2008 2007
(discontinuing) (continuing)
£'000 £'000 £'000 £'000
Brand & Product Marketing (223) - (223) 199
Channel Marketing 136 - 136 186
Sports Marketing 96 - 96 119
Shared resources - (650) (650) (390)
Impairment of Goodwill (Sports - (426) (426) -
marketing)
9 (1076) (1,067) 114
ii Geographical analysis
Geographical analysis of sales by location of operating company:
Revenue Year ended 31 March Year ended 31 March
2008 2007
(all discontinuing)
£'000 £'000
UK 3,055 4,378
USA 175 56
China 19 -
3,249 4,434
Operating (loss)/profit Year ended 31 March Year ended 31 March Year ended 31 March Restated
Year ended
31 March
2008 2008 2008 2007
(discontinuing) (continuing)
£'000 £'000 £'000 £'000
UK 178 (1,076) (898) 190
USA (169) - (169) (76)
9 (1,076) (1,067) 114
Net (liabilities)/assets Year ended 31 March Year ended 31 March Year ended 31 March Restated
Year ended
31 March
2008 2008 2008 2007
(discontinuing) (continuing)
£'000 £'000 £'000 £'000
UK (152) (43) (195) 947
USA 43 - 43 42
China 58 - 58 -
(51) (43) (94) 989
4. Operating (loss)/profit
Year ended 31 March Restated
Year ended
31 March
2008 2007
£'000 £'000
Operating (loss)/profit is stated after
charging:
Amortisation of intangible assets 21 81
Depreciation of owned tangible assets 19 18
Auditors' remuneration - Audit 16 15
Auditors' remuneration - Tax 2 2
Exceptional item - Contract dispute 125 -
The exceptional item disclosed above relates to costs incurred on a major promotion for a specific customer which subsequently resulted
in a dispute. The risk of additional costs arising from any potential litigation has not been provided for within these accounts as
Bluestar International Ltd agreed to indemnify the Company as part of the sale of the subsidiaries referred to in Note 22.
5 Interest receivable
31 March 2008 31 March
2007
£'000 £'000
Bank Interest 6 9
6 9
6 Finance costs
31 March 2008 31 March
2007
£'000 £'000
Interest on bank loans and overdrafts 2 -
2 -
7 Directors' remuneration
31 March 2008 31 March
2007
£'000 £'000
Emoluments for qualifying services 532 390
Emoluments disclosed above include the amounts paid to the highest paid director of £150,000 (2007: £105,739).
No pension contributions are provided for any director.
M Slater received no remuneration for his role as a director but Nicholson Slater Ltd ( a firm in which he is a director) received
£24,000 for the provision of company secretarial and legal services.
8 Employees and staff costs
The average number of employees was as follows:
31 March 2008 31 March
2007
No. No.
Sales/Production/Development 16 15
Administration 5 5
21 20
Staff costs for the above employees were as follows:
31 March 2008 31 March
2007
£'000 £'000
Wages and salaries 1,097 906
Social security costs 123 106
Share based payments - 12
1,220 1,024
9 Taxation
31 March 2008 Restated
31 March
2007
£'000 £'000
Current tax charge - -
Deferred tax 22 39
Total Taxation 22 39
Factors affecting the tax charge for the
period
(Loss)/ Profit on ordinary activities before (1,063) 123
taxation
(Loss)/profit on ordinary activities before (213) 23
taxation
multiplied by smaller rate of corporation tax
of 20% (2007: 19%)
Effects of:
Non deductible expenses 142 2
Depreciation added back 8 18
Capital Allowances (7) (18)
Consolidation adjustments (54) 2
Deferred tax not recognised 151 14
Utilisation of losses (27) (41)
Movement in deferred tax provision 22 39
Total taxation 22 39
The Group has estimated losses of £581,720 available for carry forward against future trading profits.
On the basis of these financial statements no provision has been made for corporation tax.
10 Loss/(profit) per share
31 March 2008 31 March
2007
Basic
(Loss)/ profit attributable to ordinary (1,085) 84,000
shareholders (£'000)
Weighted average number of shares 29,528,163 29,528,163
(number)
Basic (loss)/profit per share (p) (3.70) 0.28
There was no dilutive effect from the share options outstanding during the year.
11 Intangible fixed assets
Group IP/Sotware Total
£'000 £'000
Cost
At 1 April 2007 153 153
At 31 March 2008 153 153
Amortisation
At 1 April 2007 81 81
Charge for the period 21 21
At 31 March 2008 102 102
Net book value
At 31 March 2008 51 51
At 31 March 2007 72 72
At 31 March 2006 - -
12 Goodwill
Total
Cost
At 1 April 2007 448
Goodwill arising on acquisition in the year -
At 31 March 2008 448
Amortisation
At 1 April 2007 44
Restated following adoption of IFRS (22)
Revised 22
Impairment charge 426
At 31 March 2008 448
Net book value
At 31 March 2008 -
At 31 March 2006 and 2007 426
13 Property, plant and equipment
GROUP
Fixtures
& Fittings
£'000
GROUP
Cost
At 1 April 2007 52
Additions 22
At 31 March 2008 74
Depreciation
At 1 April 2007 22
Charge for the period 19
At 31 March 2008 41
Net book value
At 31 March 2008 33
At 31 March 2007 30
At 31 March 2006 25
14 Investments available for sale
COMPANY
Subsidiary undertakings Total
£'000 £'000
Cost and net book value
At 1 April 2007 724 724
Impairment of investments (691) (691)
At 31 March 2008 33 33
Details of the investments in which the Company directly or indirectly holds 20% or more of the nominal value of any class of share
capital are as follows:
Name of company Proportion held Direct or indirect Nature of business Country of registration
holding
Blue Star Mobile Ltd 100% Direct Mobile Marketing UK
Blue Star Sport Ltd 100% Direct Sport & Event UK
marketing
Blue Star Mobile Inc 100% Direct Mobile Marketing USA
Blue Star Tech 100% Direct Mobile Marketing China
(Beijing)
The registered office of each company is:
Name of company Registered office
Blue Star Mobile Ltd 116 Gloucester Place, London, W1U 6HZ
Blue Star Sport Ltd 116 Gloucester Place, London, W1U 6HZ
Blue Star Mobile Inc Delaware, USA
Blue Star Tech (Beijing) Beijing, China
15 Trade and other receivables
Group Company
31 March 31 March
2008 2007 2008 2007
£'000 £'000 £'000 £'000
Trade receivables 436 1,023 - -
Amounts owed by - - 140 714
subsidiary
undertakings
Other receivables 23 22 - 7
Prepayments and 136 306 - 28
accrued income
Taxation 46 - 5 -
Deferred Tax 25 47 - -
666 1,398 145 749
16 Trade and other payables
Group Company
31 March 31 March
2008 2007 2008 2007
£'000 £'000 £'000 £'000
Trade payables 601 673 31 43
Taxation and social 104 108 - -
security
Other payables 12 10 - -
Accruals and 200 420 21 21
deferred income
Amounts owed to - - - 81
Group undertakings
917 1,211 52 145
17 Share capital
Group and Company
31 March
2008 2007
£'000 £'000
Authorised
100,000,000 Ordinary Shares of 1p each 1,000 1,000
Allotted, called up and fully paid
29,528,163 Ordinary Shares of 1p each 295 295
Share options
On 16 August 2005 the Company granted 1,050,000 £0.01 share options to certain Directors and employees. The options were exercisable at
£0.215 per Ordinary Share and may be exercised at any time after the third anniversary of listing. Exercise of the options is not subject to
performance criteria. No options have been exercised and following the disposal of the trading subsidiaries on 8th May 2008 all the options
have now lapsed.
On 21 September 2006 the Company granted 825,000 £0.01 share options to certain Directors, employees and third parties. The options were
exercisable at £0.1225 per Ordinary Share and may be exercised at any time after the third anniversary of grant. Exercise of the options is
not subject to performance criteria. No options have been exercised and following the disposal of the trading subsidiaries on 8th May 2008
all the options have now lapsed.
As all options have lapsed no charge has been taken to the income statement for the current year. (2007: £12,000)
18 Reconciliation of operating loss to net cash outflow from operating activities
31 March 31 March 31 March Restated
2008 2008 2008 31 March
2007
(Discontinuing) (Continuing)
£'000 £'000 £'000 £'000
Operating (loss)/ 9 (1,076) (1,067) 114
profit
Depreciation of 19 - 19 18
tangible assets
Amortisation of 21 - 21 81
intangible assets
Impairment of - 426 426 -
intangible assets
Share based payments - - - 12
Decrease/ (Increase) 682 28 710 (632)
in debtors
(Decrease)/ Increase (285) (9) (294) 295
in creditors within
one year
Intergroup transfers (493) 493 - -
Net cash (outflow) (47) (138) (185) (112)
from operating
activities
19 Analysis of net funds
31 March Cash flow Exchange movement 31 March
2007 2008
£'000 £'000 £'000 £'000
Cash at bank and in hand 274 (201) - 73
Net funds 274 (201) - 73
20 Financial Instruments
Financial risk management
The Group's activities expose the Group to a number of risks including credit, liquidity and foreign currency risk. The Board manages
these risks through a risk management programme.
The Group's principal financial instruments comprise cash and short term deposits. The main purpose of these financial instruments is to
provide finance for the Group's operations. The Group has various other financial instruments, such as trade debtors and trade creditors
that arise directly from its operations.
Interest Rate risk
The Company's exposure to changes in interest rates relates primarily to cash at bank. Cash is held either on current or short term
deposits at a floating rate of interest determined by the relevant bank's prevailing base rate. The company and group seeks to obtain a
favourable interest rate on its cash balances through the use of bank deposits.
Foreign currency risk
The Group's financial assets and liabilities are denominated in sterling. It's international revenues are denominated in US dollars or
Euro. The group holds US dollar and Euro accounts.
Market Price Risk
The investments are held at cost. In the opinion of the Directors the main future risks are market price fluctuation.
Foreign currency risk does, however, arise in relation to the consolidation process as the accounts of the foreign based entities are
translated into Sterling at the period end.
The primary risk arises from fluctuations in the value of the US $ against Sterling £. The Group has derived the following sensitivities
based on variations of 10% in the US $ against Sterling.
31 March
2008 2007
£'000 £'000
Impact on equity and profit after tax
10% increase in US$ against Sterling (64) (73)
10% decrease in US$ against Sterling 78 89
At the period end the Group's cash balances were held in the following currencies:
31 March 2008 31 March
2007
£'000 £'000
Sterling 39 138
Euro 1 8
US Dollar 33 128
73 274
Interest rate risk
The table below shows the Group's financial assets and liabilities split by those bearing floating rates and those that are non interest
bearing.
Floating Non interest bearing Total
Financial assets rate
£'000 £'000 £'000
2008
Cash and cash 73 - 73
equivalents
Trade receivables - 436 436
Other receivables - 94 94
Prepayments and - 136 136
accrued income
73 666 739
2007
Cash and cash 274 - 274
equivalents
Trade receivables - 1,023 1,023
Other receivables - 69 69
Prepayments and - 306 306
accrued income
274 1,398 1,672
Fixed Floating Non interest bearing Total
Financial rate rate
liabilities
£'000 £'000 £'000 £'000
2008
Trade payables - - 601 601
Taxation and social - 104 - 104
security
Other payables - - 12 12
Accruals and - - 200 200
deferred income
- 104 813 917
2007
Trade payables - - 673 673
Taxation and social - 108 - 108
security
Other payables - - 10 10
Accruals and - - 420 420
deferred income
- 108 1,103 1,211
The Group's exposure to changes in interest rates is not significant.
Credit risk
Credit risk predominantly arises from investments available for sale, trade and other receivables, and cash and cash equivalents. The
maximum exposure of the Group to credit risk is disclosed below. All financial assets have a fair value which is equal to their carrying
value.
31 March 2008 31 March
2007
£'000 £'000
Maximum exposure to credit risk
Cash and cash equivalents 73 274
Trade receivables 436 1,023
Other receivables 159 328
668 1,625
Liquidity risk
The Group seeks to manage liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash
assets safely and profitably. All cash and cash equivalents are immediately accessible. None of the financial assets is either past due or
impaired.
The maturity date of the Group's financial liabilities are shown below and are based on the period outstanding at the balance sheet date
up to the contractual maturity date.
Less than Between Between Total
6 months 6 months and 1 and 5
1 year years
2008
Trade payables 601 - - 601
Taxation and social security 104 - - 104
Other payables 12 - - 12
Accruals and deferred income 200 - - 200
917 - - 917
2007
Trade payables 673 - - 673
Taxation and social security 108 - - 108
Other payables 10 - - 10
Accruals and deferred income 420 - - 420
1,211 - - 1,211
21 Related party transactions
The transaction referred to in Note 22 is deemed a related party transaction. The related parties are the executive directors, Steven
Clarke, David Piper, Oliver Roxburgh and Adam Hayes.
22 Post balance sheet events
On 8th May 2008 the Company approved the sale of the trading subsidiaries for a total consideration
of £225,000. On completion the Buyer paid £175,000 to the Company. A further and final instalment of £50,000 will be paid by the Buyer
to the Company on expiry of six months after completion. The payment of this instalment is unconditional.
The Agreement contains basic warranties as to capacity and authority and title from the Company and no other warranties.
The Company's liability for a claim cannot exceed the level of the consideration and all claims must be brought within six months from
the date of completion.
The Buyer agrees to indemnify the Company against any loss it might suffer in respect of a number of matters. These include any
litigation, any claims in respect of properties occupied by the Company and any claims brought in respect of the operation of the Companies
while the Executive Board was running them and any claim in respect of the acts or omissions of individual members of the Executive Board.
This Agreement contains provisions requiring the Buyer to produce documentation effecting the valid transfer of the Company's wholly
owned non UK registered subsidiaries Blue Star Mobile Inc and Blue Star Beijing (Tech) Ltd in accordance with the laws of their
incorporation procuring that all necessary procedures under those laws have taken place in order to transfer ownership of them from the
Seller to the Buyer. If the Buyer fails to discharge its responsibilities under these provisions after three months following the signing of
the Agreement have passed, the Company may, under certain conditions, elect to take over these responsibilities at the Buyer's cost. If the
Company does not so elect, the Buyer remains responsible and if it has not fulfilled its responsibilities after the expiry of six months
following the signing of the Agreement, the Company may elect to take these over, at the Buyer's cost, unconditionally.
The Company and the Buyer have entered into a separate anti-embarrassment agreement whereby the Company will receive 25 per cent. of any
sale proceeds in excess of £225,000, if the Buyer or Blue Star Mobile Limited is sold within six months of the signing of the Agreement.
23 Transition to IFRS
The key differences between UK GAAP and IFRS that will impact the group are set out below.
The rules for the first time adoption of IFRS are set out in IFRS1 'First Time Adoption of International Financial Reporting Standards'.
The rules state that a company should use the same accounting policies in its opening IFRS balance sheet and throughout all periods
presented in its first IFRS financial statements.
Reconciliations
There is one change to the results of the group following the adoption of IFRS which arises from a change in treatment of Goodwill.
The following pages show the reconciliation of Profit under UK GAAP to Profit under IFRS for the the year ended 31 March 2007 and Equity
under UK GAAP to Equity under IFRS at 1 April 2006 and 31 March 2007.
Reconciliation of Profit from UK GAAP to IFRS
The effect of the transition to IFRS on Profit for the year ended 31 March 2007 is shown below.
Year ended 31 March 2007
Under Effect of transition to IFRS Under
UK GAAP IFRS
£'000 £'000 £'000
Revenue 4,434 - 4,434
Cost of sales (2,596) - (2,596)
gross profit 1,838 - 1,838
Administrative expenses (1,712) - (1,712)
Amortisation of intangible (22) 22 -
fixed assets
Share based payment charge (12) - (12)
Operating profit 92 22 114
Other interest receivable and 9 - 9
similar
income
Profit before tax 101 22 123
Tax expense (39) - (39)
Profit for the period 62 22 84
Profit per share p p p
Basic and diluted 0.21 0.07 0.28
£'000
Profit under UK GAAP 62
Reverse amortisation of 22
goodwill
Profit under IFRS 84
Reconciliation of Equity from UK GAAP to IFRS
The transition to IFRS had no effect on Equity as at 1 April 2006. The effect of the transition to IFRS on Equity as at 31 March 2007 is
set out below.
As at 31 March 2007
Under Effect of transition to IFRS Under
UK GAAP IFRS
£'000 £'000 £'000
ASSETS
Non-current assets
Intangible assets 72 - 72
Goodwill 404 22 426
Property, plant and equipment 30 - 30
506 22 528
Current assets
Trade and other receivables 1,398 - 1,398
Cash and cash equivalents 274 - 274
1,672 - 1,672
LIABILITIES
Current liabilities
Trade and other payables (1,211) - (1,211)
(1,211) - (1,211)
Net current assets 461 - 461
Non-current liabilities
Obligations under finance - - -
leases
NET ASSETS 967 22 989
SHAREHOLDERS' EQUITY
Called up share capital 295 - 295
Share premium account 1,225 - 1,225
Share based payments reserve 21 - 21
Other reserves (211) - (211)
Retained earnings (363) 22 (341)
TOTAL EQUITY 967 22 989
£'000
Equity under UK GAAP 967
Amortisation of goodwill 22
Equity under IFRS 989
This information is provided by RNS
The company news service from the London Stock Exchange
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