Annual Report 30 June 2007 - One Horizon Group

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30 NOTES TO THE FINANCIAL STATEMENTS (continued) 25. Reserves Profit and loss Share premium Merger reserve account Group $000’s $000’s $000’s Balance brought forward 723 (10,884) 6,256 Profit for the year – – 2,959 Equity dividends paid – – (235) Arising on share issue 4,223 – – Issue costs (101) – – Balance carried forward 4,845 (10,884) 8,980 The acquisition by the Company of SatCom Distribution Limited and its subsidiaries in May 2004 was accounted for as a merger. Accordingly a debit merger reserve has been recognised in the consolidated balance sheet representing the difference between the consideration paid to acquire the Group and its net assets at the date of the transaction. Profit and loss Share premium account Company $000’s $000’s Balance brought forward 723 3,375 Profit for the year – (427) Equity dividends paid – (235) Arising on share issue 4,223 – Issue costs (101) – Balance carried forward 4,845 2,713 26. Contingent share capital Under the terms of the acquisition of Horizon Mobile Communications Group (“HMC”), SatCom have deferred consideration to pay, based on the gross profit achieved by HMC in the two years ended 31 December 2006. The deferred consideration is payable 50% in cash and subject to SatCom’s share price at the time of issue, 50% by the issue of new ordinary shares in SatCom at a 5% discount to the average closing mid-price over the previous month. Based on the forecast results, SatCom expects to have an obligation in deferred consideration of $1,000,000 of which 50% will be settled in new shares with a value of $500,000. On 26 September 2006, the Company paid $608,000 of this deferred consideration of which $304,000 was settled in shares and a provision for contingent shares brought forward of $214,000 was released. The remaining balance is expected to be paid by 31 October 2007, based on HMC’s 2006 results.
27. Reconciliation of movements in equity shareholders’ funds 30 June 2007 30 June 2006 $000’s $000’s Profit for the financial year 2,959 1,981 Dividends paid to equity shareholders (235) (78) 2,724 1,903 New equity share capital subscribed 4,925 1,038 7,649 2,941 Contingent share capital (note 26) (214) 714 Net movement in equity shareholders’ equity funds 7,435 3,655 Opening equity shareholders’ equity funds/(deficit) 2,059 (1,596) Closing equity shareholders’ equity funds 9,494 2,059 28. Reconciliation of operating profit to net cash inflow/(outflow) from operating activities 30 June 2007 30 June 2006 $000’s $000’s Operating profit 4,561 3,371 Amortisation 411 255 Depreciation 418 255 Increase in stocks (2,073) (943) Decrease in debtors (4,693) 1,488 Decrease in creditors 3,036 (5,474) Net cash inflow/(outflow) from operating activities 1,660 (1,048) 29. Analysis of changes in net (debt)/funds At 1 July 2006 Cash flows At 30 June 2007 $000’s $000’s $000’s Net cash: Cash in hand and at bank 1,901 (942) 959 Debt: Debt due within 1 year (1,281) 356 (925) Hire purchase agreements (18) (287) (305) (1,299) 69 (1,230) Net (debt)/funds 602 (873) (271) 31
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 and 18: GROUP CASH FLOW STATEMENT Year ende
Page 19 and 20: 1. Accounting policies (continued)
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: 24. Share capital Authorised share
Page 35 and 36: HORIZON MOBILE COMMUNICATIONS HORIZ

Annual Report 30 June 2007 - One Horizon Group

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