Annual Report 30 June 2007 - One Horizon Group

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16 NOTES TO THE FINANCIAL STATEMENTS 1. Accounting policies Basis of accounting The financial statements have been prepared, in US Dollars ($), under the historical cost convention and in accordance with applicable accounting standards under United Kingdom Generally Accepted Accounting Practice. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and all subsidiary undertakings. These are adjusted, where appropriate, to conform to Group accounting policies. Acquisitions are accounted for under the acquisition method and goodwill on consolidation is capitalised and written off over twenty years from the year of acquisition. The results of companies acquired or disposed of are included in the Group profit and loss account after or up to the date that control passes respectively. Group reconstructions are accounted for under the merger method, with any merger difference arising being shown as a movement on other reserves. As a consolidated Group profit and loss account is published, a separate profit and loss account for the Parent Company is omitted from the Group financial statements by virtue of section 230 of the Companies Act 1985. Entities in which the Group holds an interest on a long term basis and are jointly controlled by the Group and one or more other ventures under a contractual agreement are treated as joint ventures. In the Group financial statements, joint ventures are accounted for using the gross equity method. Turnover The turnover shown in the Group profit and loss account represents amounts invoiced during the period, exclusive of Value Added Tax. Goodwill Goodwill arising on acquisitions is classified as an asset on the balance sheet and amortised on a straight line basis over its estimated useful economic life of 20 years. It is reviewed for impairment when any events or changes in circumstances indicate that the carrying value may not be recoverable. Other intangible assets Other intangible assets acquired are capitalised at cost. Other intangible assets are amortised on a straight line basis over their estimated useful lives up to a maximum of 20 years. The carrying value of intangible assets is reviewed for impairment when any events or changes in circumstances indicate the carrying value may not be recoverable. Amortisation Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows: Goodwill: 5% per annum Other intangible assets: 5% per annum Fixed assets All fixed assets are initially recorded at cost. Depreciation Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows: Leasehold improvements over remaining lease term straight line Equipment 20-33% per annum straight line
1. Accounting policies (continued) Stocks Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Hire purchase agreements Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their fair value. The capital element of future payments is treated as a liability and the interest is charged to the Group profit and loss account on a straight line basis. Operating lease agreements Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease. Foreign currencies Assets and liabilities in other currencies are translated into U.S. Dollars at the rates of exchange ruling at the balance sheet date. Transactions in other currencies are translated into U.S. Dollars at the rate of exchange ruling at the date of the transaction. Exchange differences are taken into account in arriving at the operating profit. Deferred taxation Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exceptions: ● Provision is made for tax on gains arising from the revaluation (and similar fair value adjustments) of fixed assets, and gains on disposal of fixed assets that have been rolled over into replacement assets only to the extent that at the balance sheet date, there is a binding agreement to dispose of the assets concerned. However, no provision is made where, on the basis of all available evidence at the balance sheet date, it is more likely than not that the taxable gain will be rolled over into replacement assets and charged to tax only where the replacement assets are sold; ● Deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date. Financial instruments Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. 17
Page 1 and 2: Annual Report 30 June 2007 SatCom G
Page 3 and 4: CONTENTS Chairman’s statement 2 C
Page 5 and 6: CHIEF EXECUTIVE’S STATEMENT Highl
Page 7 and 8: DIRECTORS, OFFICERS AND ADVISERS Di
Page 9 and 10: Share options No Directors had inte
Page 11 and 12: ut not absolute, assurance with reg
Page 13 and 14: INDEPENDENT AUDITORS’ REPORT to t
Page 15 and 16: GROUP BALANCE SHEET As at 30 June 2
Page 17: GROUP CASH FLOW STATEMENT Year ende
Page 21 and 22: 4. Operating profit 30 June 2007 30
Page 23 and 24: 8. Earnings per share Basic earning
Page 25 and 26: 13. Tangible fixed assets Short Lea
Page 27 and 28: 15. Stocks Group Company 30 June 20
Page 29 and 30: 21. Deferred taxation The movement
Page 31 and 32: 24. Share capital Authorised share
Page 33 and 34: 27. Reconciliation of movements in
Page 35 and 36: HORIZON MOBILE COMMUNICATIONS HORIZ

Annual Report 30 June 2007 - One Horizon Group

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