Final Results

Mirada plc Preliminary Results for the 15 Months to 31 March 2008 Mirada plc ("Mirada" or "the Group"), the interactive media and games group with operations in London, Milan and Madrid, announces its Preliminary results for the 15 months to 31 March 2008. Highlights * Acquisition of Fresh Interactive Technologies S.A., a Spanish-based company + Successful integration, combined Group now on track with new direction * Fund raising completed on 25 February 2008 resulting in a cash injection of £12.8 million into the Group * Group restructured to + Better enable the Group to focus on B2B transactions with a product based strategy + Identify and implement cost savings measures + Focus on operating only four business units: Gaming, Media, Touch and Connect * Strengthened balance sheet due to: + The cash from both the placing and that held by Fresh + The conversion of convertible loans totalling £5.21 million owed by the Group into ordinary shares + Goodwill of £4.1 million arising from the acquisition of Fresh * Disposal of two dating companies owned by the Group have resulted in a profit of £576,000 * Retained loss for the period decreased to £20.56 million (2006: £26.63 million) * Management has been successful in implementing cost control programmes and operational changes that have strongly positioned the Group for the future José-Luis Vázquez, CEO, Mirada, commented: "There has been a significant transformation over the last year in the Group's shareholder structure. We have skilled core investors helping the management team, both financially and commercially, and providing huge support to our international expansion. Indeed trading over the past few months show clear progress towards our financial objectives. The Mirada brand is gaining recognition in the UK, Europe and further afield. With a keen eye on margin growth and continued commitment to skilled personnel in technology development, sales and operations, the Directors believe they can profitably exploit the highly positive reception the Group has received from existing and potential customers." 30 July 2008 Enquiries: Mirada PLC +44 (0) 207 942 7942 Jose Luis Vazquez, CEO Haggie Financial LLP +44 (0) 207 417 8989 Nicholas Nelson/Kathy Boate Nicholas.nelson@haggie.co.uk Seymour Pierce Limited +44 (0) 207 107 8000 Mark Percy/Parimal Kumar Chairman's Statement The 15 month period under review was dominated by negotiations leading to the restructuring of the Group. The conclusion was an important strategic acquisition of Fresh Interactive Technologies S.A. ("Fresh") and a fund raising of £12.8 million to strengthen the Group's balance sheet, to provide working capital, to invest in new products and services as well as assist in financing the proposed international expansion. As part of the negotiation process, the Board prepared a detailed plan to restructure and improve the method of trading. This plan included cost savings, the improvement of the Group's sales structure, focusing activities on business-to-business ("B2B") instead of business-to-consumer ("B2C") transactions, implementing a successful transition to a product based strategy, and expansion into the international market place. The plan has in the main since been implemented and the Directors foresee the resulting benefits flowing through to the income statement during the year ending 31 March 2009. As part of the restructuring and following on from the valuation of the Group arising from the refinancing, a review was made of the carrying values of the goodwill held on the balance sheet. The result of the review was to impair the goodwill by £12 million. Financial Overview For the 15 months ended 31 March 2008 the continuing operations of the Group showed a loss before interest, tax, depreciation, amortisation, restructuring and share-based payment charges of £4.46 million compared to a £0.54 million loss in the year ended 31 December 2006. A significant part of this movement relates to the fact that in 2006 there was a one-off credit to cost of sales of £1.7 million in relation to a negotiated reduction in contractual liabilities relating to bandwidth and transmission costs. In addition, two major factors contributed to this deterioration. Firstly, the management focus on the refinancing and restructuring of the Group, and secondly the significant uncertainty which existed in our commercial sector concerning the Group's financial viability. Consequently, it is only since the completion of the acquisition of Fresh, the refinancing and the subsequent restructuring of the management team, that significant commercial opportunities that were in negotiation during the period under review were in fact consummated. Loss before interest, tax, depreciation, amortisation, restructuring and share-based payment charges is a performance measure used internally by management to manage the operations of the Group and removes the impact of one off and non-cash items (see note 4 for a reconciliation of this measure to statutory captions). After deducting depreciation, amortisation, restructuring and share based payment charges, the retained loss for the period equalled £20.56 million (2006: loss of £26.63 million). Future results will no longer include such large one-off and non-cash expenses, because the Directors consider that no further impairment of goodwill will be necessary, the Group has repaid all loans which incurred high financing fees and that as at 31 March 2008 the Group had substantially completed its restructuring. As outlined in the CEO's statement, the Group has structured itself into four business units: Gaming, Media, Touch and Connect. As this change only occurred after the February 2008 refinancing, the following reviews will cover the divisions reviewed in previous annual reports. Games & Gambling The net profit for this division equalled £1.66 million compared to £2.01 million in 2006. The major reason for this decrease was the fall in the net income recorded by the fixed odds gaming business from £2.46 million in 2006 to £1.30 million. This decrease was largely offset by the improvement in the profit recorded in the Group's B2B gaming business which was a result of the Group's change in focus from its own brand to concentrating on becoming a supplier to other brand owners. Management expect this improvement in the Group's B2B gaming business to continue in the coming years. Interactive Services Gross profit has reduced to £3.1 million in the 15 months ended 31 March 2008 from £4.7 million in 2006. Taking into account the impact of the £1.7 million reduction in contracted liabilities, the underlying trading has remained constant. Dating In December 2007 the Group disposed of its 100% shareholding in Yoomedia Dating Group Ltd for a cash consideration of £250,000. In September 2007 the Group placed Finlaw 532 Ltd (which traded under the name Avenues) into receivership. These two transactions have given rise to a profit on disposal/liquidation of £ 576,000. The Group no longer operates in the dating sector. First time adoption of IFRS These are the Group's first financial statements to be reported under International Financial Reporting Standards ("IFRS"). As part of the transition to IFRS the directors were required to restate the 31 December 2006 balance sheet and income statement. During the work performed for the transition to IFRS, the directors also conducted a review of the carrying values of major assets and liabilities held in the balance sheet and identified any possible adjustments which were needed to be made against these carrying values. One of the major changes in presentation required under IFRS is that revenues from fixed odds gaming must no longer be shown gross of customer winnings. The result is that the revenue and cost of sales recognised in the income statement for the 15 months ended 31 March 2008 and the year ended 31 December 2006 have been reduced by £43.6 million and £43.5 million respectively. February restructuring On 25 February 2008, the Company announced that all the resolutions relating to the restructuring had been passed. Full details of these resolutions are included in the circular dated 31 January 2008 which is available on the Group website www.mirada.tv. The main resolutions included: * the Company's name being changed to Mirada plc; * £8.37 million raised via the placing of ordinary shares for cash; * the acquisition of Fresh for shares. Immediately prior to the completion of the acquisition, Fresh had received an equity cash investment of €6 million from Barings Private Equity Partners Espana S.A.; * convertible loans owed by the Group totalling £5.21 million being converted into ordinary shares; and * a share capital reorganisation. The restructuring has resulted in the Group's net asset position being substantially improved compared to the balance sheet reported in the 31 December 2007 interim statement. This improvement arose from: * the Group receiving £12.8 million in cash from both the placing and the cash held by Fresh; * the conversion of the convertible loans; and * goodwill arising from the acquisition of Fresh. The Group now has a strong balance sheet and once again, management can focus 100% of their efforts on trading. Board changes As part of the restructuring, José Luis Vázquez and Rafael Martín Sanz were appointed to the Board on 25 February 2008. José Luis Vázquez has taken the position of Chief Executive Officer. On the same date Jeremy Fenn and John Swingewood stepped down from the Board and I became part-time Executive Chairman. On 27 March 2008 it was announced that Neil MacDonald had resigned from the Board and from his position as Chief Operating Officer. Outlook The constraints we had previously experienced in being able to leverage our technical expertise and exploit opportunities in our market place have now been removed. Subject to there being no major changes to market conditions there is no reason why results in the future should not reflect this new reality. Michael Sinclair Chairman 29 July 2008 Chief Executive Officer's Report The past five months, following the acquisition of Fresh, have been both exciting and encouraging. The new management team has made excellent headway with a changed strategic philosophy and a carefully designed turnaround plan towards a healthier financial position. The people skills born from the combination of YooMedia and Fresh, provided a foundation to enable the emergence of Mirada as a future leader in its niche sector. Management systems An initial aim was to unify and maintain strict management reporting and tracking controls thus enabling management to carefully track the profitability of the different areas of the Group. Graham Duncan, Chief Financial Officer, who joined the Group approximately 12 months ago, has been integral to this process, coordinating his efforts with the business development managers and the new Chief Technical Officer, José Gozalbo. The turnaround plan, created and carefully studied during the months prior to the merger, and fully aligned with the objectives of both old and new investors, has been pivotal to the first months' activity. Central costs have been cut and a reshaping of certain activities has served to dramatically improve the financial health of the Group. Every expense and investment made has been subject to critical review to ensure that they are oriented towards a clear objective of efficiency. The Board believes there is more that can be done; further areas of cost reduction have been identified and will be implemented without compromise to the goal of growing profitability. Indeed, the Directors have been encouraged to see the different areas of the Group evolving as a cohesive unit with the same vision shared by management and staff alike. The emergence of a skilled and motivated team requires further mention. The new Vice President of Sales and Business Development, Aldo Campinos, has shown great success in boosting sales potential with a focus on international distribution capabilities, with new Gaming and Media Directors, Paul Marchong and Antonio Rodríguez, offering great expertise in their respective areas. Additionally, the synergies between Mirada and Fresh have been clearly demonstrated during the past months with the Group's operating centres in Exeter, London, Madrid and Milan working closely on development and distribution of products and services. As part of the turnaround plan, the Group's London operations will move to a single site in Wapping, which, from the end of July 2008, will become Mirada's head office. Following the review of the management systems, several Key Performance Indicators ("KPIs") have been identified. These will be used in assessing the financial performance of the Group and its four business units. The main KPIs include: * operational margins of the business units after the allocation of research and development costs and central overheads; * the return on investment of the internal development costs incurred in the creation of its new product portfolio; and * the increase in margins generated through product distribution and international sales These KPIs will enable the Group to understand on a timely basis areas where the Group is surpassing expectations and, just as importantly, areas which may be underperforming. This will allow the Group to focus its efforts on maximising its earnings. Strategic Vision There are three key elements driving the future of Mirada: * an aim to produce the best quality products for the interactive audiovisual market, complemented with a high level of after market support; * the creation of a strong sales and business development team to generate global partnership agreements and to support the international product distribution; and * continued integration of the four business units (Media, Gaming, Touch and Connect) over a common platform, capable of collecting interaction experience, creating knowledge and improving the service experience on offer to customers. The Directors hold the view that the audiovisual and technology services sector, suffers from a lack of differentiation and low barriers to entry. Consequently, high competition, low margins and reduced overseas business opportunities have become endemic amongst Mirada's competition. The Directors' aim is the generation of products based on the valuable assets and IP now owned by the Group and the identification of the market trends based upon close relationships with some of the leading customer groups in Europe. As already mentioned, the creation of an international business development team demonstrates the Board's commitment to increasing sales into Europe and the rest of the world. Our product-based strategy will give the Group an advantage over many of its competitors due to the fact that, as the products have already been developed, we can meet the customer needs on a more timely basis. This will enable the Group to achieve its anticipated increase in revenues without any compromise to the margins earned. The Directors are pleased to see an out performance on internal targets and recently a new office in Milan was opened providing the means for further international growth. The Group has opened doors into a range of potential customer groups throughout the world but notably the Middle East, South East Asia, Latin America and Western and Eastern Europe. As mentioned above, the Group has now structured itself into 4 business units: Mirada Gaming Our gaming business unit is dedicated to the provision of products and services for the gaming market, with special focus on the creation of multichannel content and technology for the major on-line gaming players in the market. The Group's product development team is working on the development of a new generation of gaming products for the Group's key customers. These products are being designed to enable the user to access games via the most relevant devices, PCs with broadband internet access, mobile phones and via digital TV set-top-boxes. Our aim is sell these products across the global market. These products will be show cased on Mirada's on interactive gaming channel, Monte Carlo Roulette, which is broadcast on Sky channel 863. This channel will enable the Group to test new products and demonstrate the capabilities of these products to potential customers. Mirada Media The Media division addresses the needs of the different players in the audiovisual value-chain, digital TV providers, broadcasters and content producers. Our main products are oriented to the navigation and commercialisation of content on the pay TV platforms, and to providing interactive products and services for customers have their own channels and content, for example NHS or ITV. For the Media business unit, customers have been providing encouraging feedback about the Group's enhanced Video-on-Demand products. The revitalisation of the Group's studios at Wapping has served to generate new profitable agreements, based on the usage of our facilities and technical support for customers using the production capabilities. This is only one example of newly identified revenue streams from the appropriate monetisation of the valuable resources within the Group. Mirada Touch Mirada's Touch business unit provides products and services for the interactive advertising market. Touch's customers are brands and interactive agencies. As the business unit's current activities are the provision of mobile phone marketing services in the highly competitive UK market, it is the objective of the management to expand into the overseas market and focus on new product-based strategy. Mirada Connect The Connect business unit comprises the Group's transactional activities including agreements with APCOA, NCP and Meteor, the 3 largest parking services providers in the UK. Having solved the required technical integration steps, early revenues coming from the cashless mobile parking technologies used trials taking place in two of Meteor's London Midland train station car parks are surpassing our initial expectations. Going forward, management believe that the Group's international focus could lead to the Connect business expanding into other countries, especially as existing customers do have a presence in the overseas market place. Outlook There has been a significant transformation over the last year in the Group's shareholder structure. We have skilled core investors helping the management team, both financially and commercially, and providing huge support to our international expansion. Indeed trading over the past few months show clear progress towards our financial objectives. The Mirada brand is gaining recognition in the UK, Europe and further afield. With a keen eye on margin growth and continued commitment to skilled personnel in technology development, sales and operations, the Directors believe they can profitably exploit the highly positive reception the Group has received from existing and potential customers. José-Luis Vázquez Chief Executive Officer 29 July 2008 Consolidated Income Statement 15 months ended 31 March 2008 15 months ended 31 March 2008 Year ended 31 December 2006 Continuing Discontinued Total Continuing Discontinued Total operations operations operations operations Note £000 £000 £000 £000 £000 £000 Revenue 3 12,504 1,049 13,553 13,859 2,918 16,778 Cost of sales (8,242) (485) (8,727) (9,131) (1,495) (10,626) Gross profit 4,262 564 4,826 4,728 1,423 6,152 Net gaming income 1,304 - 1,304 2,459 - 2,459 Other income - profit on 6 - 576 576 - - - disposal Depreciation (1,486) (5) (1,491) (1,178) (98) (1,276) Amortisation of deferred (10) - (10) (2,535) (95) (2,630) development costs Impairment of goodwill (12,000) - (12,000) (16,427) - (16,427) Restructuring costs (960) (76) (1,036) (2,107) (881) (2,988) Share based payment charge (205) - (205) (488) - (488) Other administrative expenses (10,024) (906) (10,930) (7,731) (2,163) (9,895) Total administrative costs (24,685) (987) (25,672) (30,466) (3,237) (33,704) Operating (loss)/profit 4 (19,119) 153 (18,966) (23,279) (1,814) (25,093) Finance income 2 - 2 3 - 3 Finance expense (1,575) (24) (1,599) (1,507) (36) (1,543) Loss before taxation (20,692) 129 (20,563) (24,783) (1,850) (26,633) Taxation - - - - - - Loss for the financial period (20,692) 129 (20,563) (24,783) (1,850) (26,633) Loss per share 15 months ended Year ended 31 March 2008 31 December 2006 £ £ From continuing operations - basic & diluted 7 9.02 42.64 From continuing and discontinued operations - basic & diluted 7 8.96 45.82 The above amounts are attributable to the equity holders of the parent. Consolidated Statement of Recognised Income and Expense 15 months ended 31 March 2008 15 months ended Year ended 31 March 2008 31 December 2006 £000 £000 Loss for the period (20,563) (26,633) Currency translation differences 260 - Total recognised income and expense (20,303) (26,633) for the period Attributable to equity holders of the (20,303) (26,633) parent Consolidated Balance Sheet As at 31 March 2008 Note 31 March 31 December 2008 2006 £000 £000 Property, plant and equipment 822 2,123 Goodwill 8 17,574 25,521 Intangible assets 8 557 - Investments - 18 Non-current assets 18,953 27,662 Trade & other receivables 3,149 4,437 Cash and cash equivalents 7,154 139 Current assets 10,303 4,576 Total assets 29,256 32,238 Loans and borrowings (234) - Trade and other payables (8,776) (9,559) Current liabilities (9,010) (9,559) Net current assets/ 1,293 (4,983) (liabilities) Total assets less current 20,246 22,679 liabilities Interest bearing loans and borrowings (19) (5,229) Provisions (8) (81) Other non-current payables (450) - Deferred income - (2,271) Non-current liabilities (477) (7,581) Total liabilities (9,487) (17,140) Net assets 19,769 15,098 Equity attributable to equity holders of the company Share capital 9 34,923 13,878 Shares to be issued 281 281 Share premium 79,731 78,479 Other reserves 5,036 2,574 Retained earnings (100,202) (80,114) Equity 19,769 15,098 These financial statements were approved and authorised for issue on 29 July 2008. Signed on behalf of the Board of Directors Michael Sinclair José-Luis Vázquez Chairman Chief Executive Office Consolidated Cash Flow Statement 15 months ended 31 March 2008 15 months Year ended ended 31 March 31 December 2008 2006 Note £000 £000 Cash flows from operating activities Loss for the period (20,563) (26,633) Adjustments for: Depreciation of property, plant and 1,491 1,276 equipment Amortisation and impairment of goodwill and 12,010 19,057 intangible assets Impairment of investments (18) - Foreign exchange 225 - Profit on sale of discontinued operations (576) - Profit on disposal of property, plant and (7) - equipment Share-based payment charges 205 488 Finance income (2) (3) Finance expense 1,599 1,543 Cash flow relating to restructuring - 2,988 provisions Operating cash flows before movements in (5,636) (1,284) working capital Decrease in trade and other receivables 1,609 1,202 Decrease in trade and other payables (2,611) (569) Cash used in operations (6,638) (651) Interest and similar expenses paid (303) (1,004) Net cash used in operating activities (6,941) (1,655) Cash flows from investing activities Interest and similar income received 2 3 Costs of acquisition of subsidiary (442) - Net cash acquired with subsidiary 4,330 - Disposal of subsidiary, net of overdrafts 253 - disposed Purchases of property, plant and equipment (96) (1,024) Proceeds from disposal of property, plant 8 - and equipment Purchases of other intangible assets - (705) Net cash generated from/(used in) investing 4,055 (1,726) activities Cash flows from financing activities Issue of ordinary share capital 10,009 2,008 Costs of issue of ordinary share capital (61) - Issue of convertible loans 650 6,000 Repayment of loans (664) (1,000) Repayment of capital element of finance (267) (117) leases Net cash generated from financing activities 9,667 6,891 Net increase in cash and cash equivalents 6,781 3,510 Cash and cash equivalents at the beginning 139 (3,371) of the period Cash and cash equivalents at the end of the 10 6,920 139 period Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less. Notes to the Accounts 1. General information Mirada plc is a company incorporated in the United Kingdom under the Companies Act 1985. The address of the registered office is 6 & 7 Princes Court, Wapping Lane, London, E1W 2DA. The Group's financial statements for the 15 months ended 31 March 2008, from which this financial information has been extracted, and for the comparative year ended 31 December 2006 are prepared in accordance with International Financial Reporting Standards ('IFRS'). The financial information shown in the announcement for the 15 months ended 31 March 2008 and the year ended 31 December 2006 set out above does not constitute statutory accounts but is derived from those accounts. The results have been prepared using accounting policies consistent with those used in the preparation of the statutory accounts. The financial information contained in this announcement does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 December 2006 have been delivered to the registrar of companies and those for the 15 months ended 31 March 2008 will be delivered shortly. The auditors have reported on the accounts for the 15 months ended 31 March 2008; their reports were unqualified, did not contain statements under s 237(2) or (3) of the companies act 1985, and did not contain any matters to which the auditors drew attention without qualifying their report. Copies of this announcement are available at the registered offices of the Company for a period of 14 days from the date hereof. 2. Significant accounting policies -Basis of accounting The principal accounting policies adopted in the preparation of this preliminary announcement are set out below. While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Group expects to publish full financial statements that comply with IFRSs on 30 July 2008. This is the first year in which group is preparing its financial information in accordance with Adopted IFRSs, having previously used UK accounting standards. The date of transition to IFRS is 1 January 2006. In addition to the previous transitional adjustments that were disclosed in the interim report for the 6 months to 30 June 2007 which was published on 28 September 2007, the Group has identified further adjustments that have reduced net assets at 1 January 2006 and 31 December 2006 by an additional £2.35 million and £3.53 million respectively, and increased the loss for the financial year ended 31 December 2006 by an additional £1.18 million. Further details of these adjustments can be found in the annual financial statements for the 15 months ended 31 March 2008 which are expected to be published on 30 July 2008. -Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 March 2008 and 31 December 2006. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. The Group income statement includes the results of subsidiaries acquired or disposed of during the period 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 the group. All intra-group transactions, balances, income and expenses are eliminated on consolidation. -Business combinations The acquisition of subsidiaries or trade and assets, is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued or to be issued, by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date. Goodwill arising on acquisition is recognised as an asset and initially measured at cost and is accounted for according to the policy below. The Group has taken the exemption conferred in IFRS 1, "First-time Adoption of International Financial Reporting Standards", not to restate business combinations prior to the transition date of 1 January 2006 under IFRS 3. -Goodwill Goodwill represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets, intangible fixed assets and liabilities of a subsidiary, or acquired sole trade business at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in the Group income statement and is not subsequently reversed. For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. On disposal of a subsidiary the attributable amount of goodwill is included in the determination of the profit or loss on disposal. Goodwill arising on acquisitions before the date of transition to IFRS has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date and subsequently as required by the provisions of IAS 36 "Impairment of Assets". -Intangible assets Intangible assets with a finite useful life represent items which have been separately identified under IFRS 3 arising in business combinations, or meet the recognition criteria of IAS 38, "Intangible Assets". Intangible assets acquired as part of a business combination are initially recognised at their fair value less amortisation and any impairment losses. Intangible assets that meet the recognition criteria of IAS 38, "Intangible Assets" are carried at cost less amortisation and any impairment losses. Intangible assets comprise of completed technology and acquired software. Amortisation: Amortisation of intangible assets acquired in a business combination is calculated over the following periods on a straight line basis: Completed technology - over a useful life of 4 years Amortisation of other intangible assets (computer software) is calculated using the straight-line method to allocate the cost of the asset over its estimated useful life, which equates to 25% to 50% per annum. Internally-generated intangible assets - research and development expenditure: Expenditure on research activities is recognised as an expense in the period in which it is incurred. Any internally-generated intangible asset arising from the Group's development projects are recognised only if all of the following conditions are met: - The technical feasibility of completing the intangible asset so that it will be available for use or sale. - The intention to complete the intangible asset and use or sell it. - The ability to use or sell the intangible asset. - How the intangible asset will generate probable future economic benefits. Among other things, the Group can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset. - The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset. - Its ability to measure reliably the expenditure attributable to the intangible asset during its development. Internally-generated intangible assets are amortised on a straight-line basis over their useful lives of four years. Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred. -Impairment of tangible and intangible assets excluding goodwill At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in the income statement as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior periods. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. -Revenue recognition Interactive service revenues: Interactive service revenues are divided into 3 types, fixed-priced contracts, self-billing revenues and development contracts including the sale of licences. Fixed-price contract revenues are recognised as these services are provided or in accordance with the contract. Revenue is recognised when the significant risks and rewards of products and services have been passed to the buyer and can be measured reliably. In respect of self-billing revenues, the Group are informed by the customer of the amount of revenue to invoice and the revenues are recognised in the period these services are provided. Where the revenue relates to the sale of a licence, the licence element of the sale is recognised as income when the following conditions have been satisfied: - the software has been provided to the customer in a form that enables the customer to utilise it; - the ongoing obligations of the Group to the customer, aside from the maintenance, are minimal; and - the amount payable by the customer is determinable and there is a reasonable expectation of payment. Net gaming revenues: Revenue is recognised to the extent that it is probable that economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is recognised in the accounting periods in which the gaming transactions occurred. Net Gaming Revenue is defined as being the difference between bets placed by members less amounts won by members. All gaming revenue is generated in the United Kingdom. -Foreign exchange The individual financial statements of each group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the result and the financial position of each group company are expressed in pounds sterling, which is the functional currency of the Company, and the presentation currency for the consolidated financial statements. On translation of balances into the functional currency of the entity in which they are held, exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the period. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity. For the purpose of presenting consolidated financial statements, the assets and liabilities of the group's foreign operations are transitioned at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange relates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the date of transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the group's foreign exchange reserve. Such translation differences are recognised as income or an expenses in the period in which the operations is disposed of. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. The group has elected to treat goodwill and fair value adjustments arising on acquisitions before the date of transition to IFRS as sterling denominated assets and liabilities. 3. Segmental reporting A segment is a distinguishable component of the Group that is engaged in providing products or services within a particular economic environment. The principal activities of the Group are divided into the following business segments; games and gambling, interactive services and dating. These segments are the basis on which the management analyses Group's performance. 15 months ended Year ended 31 March 31 December 2008 2006 £'000 £'000 Segment Revenue Games and gambling 3,922 4,864 Interactive services 8,582 8,996 Dating* 1,049 2,918 Consolidated revenue 13,553 16,778 Gross profit Games and gambling 1,192 44 Interactive services 3,070 4,685 Dating* 564 1,423 Consolidated 4,826 6,152 Net fixed odds gaming income 1,304 2,459 Segment result for period Games and gambling 1,657 2,097 Interactive services 845 870 Dating* (447) (1,850) Unallocated central costs (22,618) (27,750) Consolidated loss for the period (20,563) (26,633) *The Group ceased all its operations in the dating sector during the period. There is no significant inter-segment revenue included in the segments which is required to be eliminated. Up until 25 February 2008 on the acquisition of Fresh, a business located in Spain with the Euro as its functional currency, the operations of the Group were based in the UK and as a consequence, for the 15 months ended 31 March 2008 the directors consider that the Group operated in only one geographical segment but in three business segments. In the opinion of the directors, the results for one month of trade of Fresh included within the consolidated income statement are not significant enough to warrant separate segmental disclosure within the 2008 Report and Financial Statements. As at 31 March 2008 Fresh had net assets of £5.3 million including cash of £ 4.76 million. 4. Operating loss Reconciliation of operating loss for continuing operations to loss before interest, taxation, depreciation, amortisation, restructuring and share-based payment charges: 15 months Year ended ended 31 December 31 March 2008 2006 £000 £000 Operating loss (19,119) (23,279) Depreciation 1,486 1,178 Amortisation of deferred development costs 10 2,535 Impairment of goodwill 12,000 16,427 Restructuring costs 960 2,107 Share based payment charge 205 488 Loss before interest, taxation, depreciation, (4,458) (544) restructuring, and share-based payment charges Adjusted loss before interest, taxation, depreciation, amortisation, restructuring and share-based payment charges has been presented to provide additional information to the reader. 5. Restructuring costs The restructuring costs, included within administrative expenses, are detailed below: 15 months ended Year ended 31 March 31 December 2008 2006 £000 £000 Recognised in arriving at operating loss: Restructuring costs 1,036 2,988 During the 15 months ended 31 March 2008 the Group incurred restructuring costs in relation to the refinancing and restructuring which was completed on 25 February 2008. The main elements of which contributed to the restructuring costs consisted of professional fees in relation to the placing, the conversion of convertible loans and the share consolidation, and redundancy costs in relation to the reorganisation of senior management team. During the period the Group also incurred redundancy costs relating to the discontinuation of the Group's dating activities. The restructuring costs of £2,988,000 recorded for the year ended 31 December 2006 include costs incurred in the restructuring of the Group's dating business and the loss on closure of YooPlay Ltd and MMTV Ltd, and the associated redundancy costs and legal fees. 6. Discontinued operations The discontinued columns in the income statement reflect the fact that the Group has ceased all its operations in the dating sector which had previously traded through its subsidiaries Yoomedia Dating Group Ltd and Finlaw 532 Ltd. On 13 December 2007 the Group sold its 100% shareholding in Yoomedia Dating Group Limited for a cash consideration of £250,000. On 15 October 2007 the Group placed Finlaw 532 Ltd (which traded under the name Avenues) into liquidation. The gain on the disposal of Yoomedia Dating Group Ltd and liquidation of Finlaw 532 Ltd was determined as follows: Yoomedia Dating Finlaw 532 Ltd Group Ltd £000 £000 £000 £000 Consideration - cash 250 - Net liabilities disposed of: Goodwill - 15 Property, plant and equipment 20 - Trade and other receivables 37 42 Bank loan and overdraft (3) (2) Trade and other payables (142) (293) (88) (238) Gain on disposal 338 238 The net cash flow comprises: Cash received 250 - Bank overdraft disposed of 3 2 253 2 The cash flow statement includes the following amounts relating to discontinued operations: 2008 2006 £000 £000 Operating activities (42) 41 Investing activities (8) (17) Net (decrease)/increase in cash and cash (50) 24 equivalents 7. Loss per share 15 months ended 31 March 2008 Year ended 31 December 2006 Continuing Discontinued Continuing & Continuing Discontinued Continuing & operations operations discontinued operations operations discontinued operations operations (Loss)/profit for period (£20,692,000) £129,000 (£20,563,000) (£24,783,000) (£1,850,000) (£26,633,000) Weighted 2,295,329 2,295,329 2,295,329 581,251 581,251 581,251 average number of shares Basic & diluted (£9.02) £0.06 (£8.96) (£42.64) (£3.18) (£45.82) EPS The weighted average number of shares in issue in both the current and comparative periods have been adjusted to reflect the share consolidation which took place on 25 February 2008, further details on the share consolidation are given in note 9. The Company has 391,258 (2006: 102,124) potentially dilutive ordinary shares being share options issued to staff, share warrants and shares contracted to be issued. These have not been included in calculating the diluted earnings per share as the effect is anti-dilutive. The deferred shares are not included in the earnings per share or diluted earnings per share. These shares have no voting rights and are non-convertible and therefore do not form part of the ordinary share capital used for the loss per share calculation. 8. Intangible assets Deferred Completed Total Goodwill development costs Technology Intangible assets £000 £000 £000 £000 Cost At 1 January 2007 4,481 - 4,481 41,475 Acquired with subsidiary undertaking - 539 539 - Additions - - - 4,068 Disposed with discontinued operation - - - (15) Foreign exchange - 28 28 - At 31 March 2008 4,481 567 5,048 45,528 Accumulated amortisation At 1 January 2007 4,481 - 4,481 15,954 Provided during the period - 10 10 - Provision for impairment - - - 12,000 Foreign exchange - - - - At 31 March 2008 4,481 10 4,491 27,954 Net book value At 31 March 2008 - 557 557 17,574 At 31 December 2006 - - - 25,521 Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are expected to benefit from that business combination. After recognition of impairment losses, the carrying amount of goodwill had been allocated as follows: 2008 2006 £000 £000 The Gaming Channel Ltd ("TGC") 5,251 5,251 Digital Interactive Television Group Ltd ("DITG") 8,255 20,255 Fresh Interactive Technologies S.A. ("Fresh") 4,068 - Yoomedia Dating Group Ltd ("YMDG") - 15 17,574 25,521 The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market. The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next four years and extrapolates cash flows for the following five years based on an estimated growth rate of 2.5%. This rate does not exceed the average long-term growth rate for the relevant markets. The rate used to discount the forecast pre-tax cash flows is 20%. Following the impairment review the carrying value of goodwill for DITG was impaired by £12,000,000. No other impairment was considered to be appropriate. There was an impairment of £16,427,000 in the year ended 31 December 2006. This consisted of impairments of the carrying value of goodwill for TGC and DITG of £9.55 million and £1.22 million respectively and full impairments in relation to YMDG, MMTV Ltd, Viavision Ltd and GoPlay Ltd. The goodwill held by Yoomedia Dating Group Ltd was disposed of with the sale of the company on 13 December 2007. Details on the calculation of the carrying value of the goodwill for Fresh Interactive Technologies S.A. are included in note 11. 9. Share capital In order for the refinancing to take place, on 25 February 2008 Mirada completed a reorganisation of its capital structure. This reorganisation consisted of two stages: First, each issued 1p Ordinary Share was subdivided into one Ordinary Share of 0.1p each and nine A Deferred Shares of 0.1p each. The A Deferred Shares have the same rights as the existing 1p Deferred Shares, that is no right to vote, only limited rights to participate in dividends and only limited deferred rights on any return of capital. Second, every 1,000 0.1p Ordinary Shares were consolidated into 1 Ordinary Share of £1.00 each. Authorised but unissued Ordinary Shares of 1p each were also consolidated, every 100 unissued Ordinary Shares of 1p were consolidated into 1 Ordinary Share of £1.00 each. Immediately before the capital reorganisation took place there were 912,242,053 1p Ordinary Shares in issue. Immediately after the capital reorganisation there were 912,242 £1.00 Ordinary Shares and 8,210,178,477 0.1p A Deferred Shares in issue. A breakdown of the authorised and issued share capital in place as at 31 March 2008 is as follows: 2008 2008 2006 2006 No. £'000 No. £'000 Authorised Ordinary shares of £1 each 25,789,822 25,790 1,200,000,000 12,000 (2006: 1p) A Deferred shares of 0.1p 8,210,178,477 8,210 - - each Deferred shares of 1p each 900,000,000 9,000 900,000,000 9,000 9,135,968,299 43,000 2,100,000,000 21,000 Allotted, called up and fully paid Ordinary shares of £1 each 19,805,485 19,805 696,964,276 6,970 (2006: 1p) A Deferred shares of 0.1p 8,210,178,477 8,210 - - each Deferred shares of 1p each 690,822,639 6,908 690,822,639 6,908 8,920,806,601 34,923 1,387,786,915 13,878 During the period and prior to the capital reorganisation the following share issues took place: Date of Notice Total Shares Nominal Share Issued Value Premium i. Placings: 21 February 2007 £762,500 67,777,777 £677,778 £84,722 26 July 2007 £375,000 37,500,000 £375,000 - 8 August 2007 £500,000 50,000,000 £500,000 - £1,637,500 155,277,777 £1,552,778 £84,722 ii. Debt conversion 9 May 2007 £250,000 25,000,000 £250,000 - 9 May 2007 £250,000 25,000,000 £250,000 - 16 May 2007 £100,000 10,000,000 £100,000 - £600,000 60,000,000 £600,000 - Following the capital reorganisation on 25 February 2008, the following share issues took place: Description Total Shares Nominal Share Issued Value Premium i. Capitalisation of directors fees: - M Sinclair £250,000 228,061 £228,061 £21,939 - N MacDonald £22,500 20,525 £20,525 £1,975 - J Swingewood £50,000 45,612 £45,612 £4,388 - J Fenn £15,000 13,684 £13,684 £1,316 £337,500 307,882 £307,882 £29,618 ii. Debt conversion £5,211,403 4,754,063 £4,754,063 £457,340 iii. Placing £8,371,875 7,637,178 £7,637,178 £734,697 iv. Acquistion of Fresh £6,180,436 6,180,436 £6,180,436 - IT* v. Capitalisation of £15,000 13,684 £13,684 £1,316 creditor *Acquisition of Fresh IT Under the provisions of s131 of the Companies Act 1985, the premium that arose on the shares issued as consideration in the acquisition of Fresh Interactive Technologies S.A. has been taken to the merger reserve in the consolidated balance sheet. No premium has been recognised in the company balance sheet as the shares have been recorded at nominal value. The mid-market price of Mirada's shares on 25 February 2008 equalled £1.40 meaning that the premium equalled £0.40 per share. Therefore £2,472,174 has been taken to the merger reserve (£0.40 multiplied by the consideration of 6,180,436 ordinary shares). Further details on the acquisition of Fresh are provided in note 11. Below is a reconciliation of the movements in the ordinary share capital and share premium balances during the 15 months ending 31 March 2008: Description Number of Nominal Share shares Value Premium £000 £000 Balance at 1 January 2007 696,964,276 6,970 78,479 Movements prior to capital reorganisation: i. Placings less share issue 155,277,777 1,553 24 costs ii. Debt conversion 60,000,000 600 - Balance at date of capital 912,242,053 9,123 78,503 reorganisation Balance on completion of share 912,242 912 78,503 reorganisation Movements post capital reorganis ation: i. Capitalisation of directors 307,882 308 30 fees ii. Debt conversion 4,754,063 4,754 457 iii. Placing 7,637,178 7,637 735 iv. Acquisition of Fresh IT 6,180,436 6,180 - v. Capitalisation of creditor 13,684 14 1 Other: Reserves movement on conversion - - 5 of loans Balance at 31 March 2008 19,805,485 19,805 79,731 10. Notes supporting cash flow statement Cash and cash equivalents comprise: 2008 2006 £000 £000 Cash available on demand 7,154 139 Overdrafts (234) - 6,920 139 Net cash increase in cash and cash equivalents 6,781 3,510 Cash and cash equivalents at beginning of 139 (3,371) period Cash and cash equivalents at end of period 6,920 139 Significant non-cash transactions are follows: 2008 2006 £000 £000 Investing activities: Equity consideration for business combination 8,653 1,250 Financing activities: Convertible loans converted into equity 5,811 1,101 Debt converted to equity 338 500 6,149 1,601 -Cash and cash equivalents Cash and cash equivalents are held in the following currencies: 2008 2006 £000 £000 Sterling 2,352 139 Euro 4,802 - Total 7,154 139 Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value. 11. Acquisitions during the period On 25 February 2008 the Group acquired 100% of the voting equity instruments of Fresh Interactive Technologies S.A. which is a leading provider of interactive digital television solutions to the Spanish and Hispanic markets. Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill are as follows: Book Fair value Fair value adjustments value to Group £000 £000 £000 Provisional value of fair assets acquired: Property, plant and equipment 102 - 102 Completed technology 324 215 539 Receivables 381 - 381 Cash 4,555 - 4,330 Bank overdrafts (225) Payables (325) - (325) 4,812 215 5,027 Consideration paid: 6,180,436 Ordinary Shares of £1 each 8,653 Costs of acquisition 442 9,095 Goodwill (note 8) 4,068 The fair value of the shares issued was determined by reference to their quoted market price of £1.40 at the date of acquisition. The fair values of receivables and payables are the same as the IFRS carrying amounts immediately prior to the acquisition. One category of intangible assets was identified in relation to completed technology which consisted of capitalised internal development costs in relation to Fresh's interactive television software. The fair value of the intangible was valued at the estimated cost of replacing Fresh's internally generated software and IP. The main factors leading to a recognition of goodwill are, the presence of certain intangible assets such as the assembled workforce of the acquired entity which do not qualify for separate recognition, synergistic cost savings and the opportunity for the group to market its variety of products in the Spanish and Hispanic markets. Had the acquisition of Fresh taken place on 1 January 2007 rather than 25 February 2008 the Group would have recorded extra revenue of £1.6 million and an increase in the loss for the financial period of £160,000. 12. Events after the balance sheet date On 23 April 2008, as confirmed by an Order of the High Courts of Justice, Mirada plc cancelled its share premium account and its capital redemption reserves against its profit and loss reserve.

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