Information  X 
Enter a valid email address

Hyper Entertainment PLC (HYE)

  Print   

Friday 30 May, 2008

Hyper Entertainment PLC

Final Results


                                                                    30 MAY 2008

                            HYPER ENTERTAINMENT PLC                            

                          ("Hyper" or "the Company")                           

                                 FINAL RESULTS                                 

Highlights

  * Revenue increased by 79% to £335,141 (2006: £187,483)
   
  * Profit after Tax of £21,035 (2006: Loss £251,020)
   
  * Largest contract win in Company's history achieved in 2007
   
Principal activities and review of the business

During the year under review the Company's turnover increased by 79% to £
335,141 (2006: £187,483) and there was an increase in gross profit by 106% to £
199,194 (2006: £96,763). The overall profit before tax is £21,445 (2006: Loss £
232,775). The year started slowly, but in June 2007 Hyper secured the largest
contract in its history with ALDAR Properties PJSC in Abu Dhabi, UAE.

The three year contract involves Hyper providing ALDAR with strategic alliance,
sponsorship strategy and implementation advice for its biggest project, Yas
Island. In addition, Hyper extended its existing contract with the
Shakespeare's Globe Theatre and won three new clients; the Ian Fleming
Centenary, Horseworld (United Kingdom) and The Deep (Los Angeles, California).
The directors anticipate the announcement of three to four new agreements for
the provision of strategic advice by the Summer of 2008.

In addition, during 2007 Hyper completed the closure of its office in the
United States. It also discontinued the production of the HyperBowl computer
game, sales of which had declined because Vista, Microsoft's new operating
program, does not support the software.

Hyper's presence in the Middle East is now providing new business opportunities
that the Company hopes to exploit during the current year. During 2008 Hyper is
considering the option to open an office in Abu Dhabi to support its work with
ALDAR and to maximise other Middle Eastern opportunities that arise. The team
is also expanding its business advisory services into the online and digital
media realm, helping clients to maximise online business opportunities through
portals such as virtual worlds and other similar sites.

Principal risks and uncertainties

Hyper is reducing its exposure to the slowing European markets by expanding its
reach in the Middle East where several major projects are being developed. It
is also expanding its range of services in order to broaden its potential
client base. The sales cycle entailed in obtaining the larger, usually more
profitable, consulting engagements continues to be the key risk to the
business. On larger contracts the sales cycle can last up to 12-18 months which
can result in periods with little or no revenue generated. The Company tries to
mitigate against this uneven income stream by controlling overhead costs and
seeking smaller contracts which have a shorter sales cycle to smooth income
generation.

Key performance indicators

Maintaining flexibility in staffing through the use of sub-contractors and
maintaining a tight control of administrative fees is critical for improving
cashflow and profitability.

Future developments

The company, while focusing on the implementation of the contract with ALDAR
Properties, continues to seek new business. The Company anticipates that two to
three new contracts can be secured in the first half of 2008 and a further two
to three contracts in the second half of the year. The directors foresee an
expansion of full-time staff in 2008 in order to fulfill current contractual
obligations.

The Company continues its business development activities and is currently
participating in several tenders for potential clients in the United Kingdom,
the Middle East and Europe.

HYPER ENTERTAINMENT PLC                                                       
                                                                              
CONSOLIDATED PROFIT AND LOSS ACCOUNT                                          
                                                                              
FOR THE YEAR ENDED 31 DECEMBER 2007                                           
                                                                              
                                                   2007                2006   
                                                                              
                            Notes                     £                   £   
                                                                              
Turnover                      2                                               
                                                                              
Continuing operations                329,535             187,482              
                                                                              
Discontinued activities                5,606                   -              
                                                                              
                                      ───────             ───────             
                                                                              
                                               335,141             187,482    
                                                                              
Cost of sales                                 (135,947)            (90,719)   
                                                                              
                                                ───────             ───────   
                                                                              
Gross profit                                   199,194              96,763    
                                                                              
Administrative expenses                       (172,505)           (325,052)   
                                                                              
                                                ───────             ───────   
                                                                              
Operating profit/(loss)       4                                               
                                                                              
Continuing operations                 45,749            (228,289)             
                                                                              
Discontinued activities              (19,060)                  -              
                                                                              
                                      ───────             ───────             
                                                                              
                                                26,689            (228,289)   
                                                                              
Other interest receivable                          959               1,655    
and similar income                                                            
                                                                              
Interest payable and          5                 (6,203)             (6,141)   
similar charges                                                               
                                                                              
                                                ───────             ───────   
                                                                              
Profit/(loss) on ordinary                       21,445            (232,775)   
activities before taxation                                                    
                                                                              
Tax on profit/(loss) on       7                   (410)            (18,245)   
ordinary activities                                                           
                                                                              
                                                ───────             ───────   
                                                                              
Profit/(loss) on ordinary                       21,035            (251,020)   
activities after taxation                                                     
                                                                              
                                                ═══════             ═══════   
                                                                              
Earnings/(loss) per share     6                   0.32p             (3.88p)   
                                                                              

HYPER ENTERTAINMENT PLC                                                        
                                                                               
STATEMENT OF RECOGNISED GAINS AND LOSSES                                       
                                                                               
FOR THE YEAR ENDED 31 DECEMBER 2007                                            
                                                                               
                                                   2007                 2006   
                                                                               
                                                      £                    £   
                                                                               
Profit/(loss) for the                           21,035             (251,020)   
financial year                                                                 
                                                                               
Currency translation differences on foreign      3,792               (9,440)   
currency net investments                                                       
                                                                               
                                                ───────              ───────   
                                                                               
Total recognised gains and losses relating to   24,827             (260,460)   
the year                                                                       
                                                                               
                                                ═══════              ═══════   
                                                                               

HYPER ENTERTAINMENT PLC                                                       
                                                                              
BALANCE SHEETS                                                                
                                                                              
AS AT 31 DECEMBER 2007                                                        
                                                                              
                                            Group              Company        
                                                                              
                                          2007      2006      2007      2006  
                                                                              
                              Notes          £         £         £         £  
                                                                              
Fixed assets                                                                  
                                                                              
Tangible assets                 9         986     2,856       986     1,260   
                                                                              
                                       ───────   ───────   ───────   ───────  
                                                                              
                                          986     2,856       986     1,260   
                                                                              
                                       ───────   ───────   ───────   ───────  
                                                                              
Current assets                                                                
                                                                              
Debtors                        11     121,481    84,877   121,481    84,877   
                                                                              
Cash at bank and in hand               62,919    28,440    62,919    19,657   
                                                                              
                                       ───────   ───────   ───────   ───────  
                                                                              
                                      184,400   113,317   184,400   104,534   
                                                                              
Creditors: amounts falling     12    (143,255)  (97,473) (116,424)  (80,841)  
due within one year                                                           
                                                                              
                                       ───────   ───────   ───────   ───────  
                                                                              
Net current assets                     41,145    15,844    67,976    23,693   
                                                                              
                                       ───────   ───────   ───────   ───────  
                                                                              
Total assets less current              42,131    18,700    68,962    24,953   
liabilities                                                                   
                                                                              
Creditors: amounts falling     13     (69,798)  (71,194)        -         -   
due after more than one year                                                  
                                                                              
                                       ───────   ───────   ───────   ───────  
                                                                              
                                      (27,667)  (52,494)   68,962    24,953   
                                                                              
                                       ═══════   ═══════   ═══════   ═══════  
                                                                              
Capital and reserves                                                          
                                                                              
Called up share capital        14      66,568    66,568    66,568    66,568   
                                                                              
Share premium account          15     205,541   205,541   205,541   205,541   
                                                                              
Profit and loss account        15    (299,776) (324,603) (203,147) (247,156)  
                                                                              
                                       ───────   ───────   ───────   ───────  
                                                                              
Shareholders' funds            16     (27,667)  (52,494)   68,962    24,953   
                                                                              
                                       ═══════   ═══════   ═══════   ═══════  
                                                                              
Approved by the Board and authorised for issue on 30 May 2008                 
                                                                              
Wendy Rosenthal                                                               
                                                                              
Director                                                                      

HYPER ENTERTAINMENT PLC                                                        
                                                                               
CONSOLIDATED CASH FLOW STATEMENT                                               
                                                                               
FOR THE YEAR ENDED 31 DECEMBER 2007                                            
                                                                               
                                              2007                  2006       
                                                                               
                                            £          £          £         £  
                                                                               
Net cash (outflow)/inflow from                   33,998             (103,164)  
operating activities                                                           
                                                                               
Returns on investments and                                                     
servicing of finance                                                           
                                                                               
Interest received                        959                 1,655             
                                                                               
Interest paid                           (478)                 (760)            
                                                                               
                                      ───────               ───────            
                                                                               
Net cash outflow for returns on                     481                  895   
investments and servicing of                                                   
finance                                                                        
                                                                               
Taxation                                              -                 (435)  
                                                                               
Capital expenditure and financial investment                                   
                                                                               
Payments to acquire investments            -                  (748)            
                                                                               
                                      ───────               ───────            
                                                                               
Net cash (outflow)/inflow for                         -                 (748)  
capital expenditure                                                            
                                                                               
                                                 ───────              ───────  
                                                                               
Net cash (outflow)/inflow before                 34,479             (103,452)  
management of liquid resources and                                             
financing                                                                      
                                                                               
Financing                                                                      
                                                                               
Issue of ordinary share capital            -               110,864             
                                                                               
Cost of share issue                        -               (24,210)            
                                                                               
Repayment of long term bank loan           -                (5,192)            
                                                                               
Net cash outflow from financing                       -               86,654   
                                                                               
                                                 ───────              ───────  
                                                                               
Increase/(decrease) in cash in the               34,479              (16,798)  
year                                                                           
                                                                               
                                                 ═══════              ═══════  
                                                                               

HYPER ENTERTAINMENT PLC                                                        
                                                                               
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT                                  
                                                                               
FOR THE YEAR ENDED 31 DECEMBER 2007                                            
                                                                               
1  Reconciliation of operating profit/(loss) to net           2007       2006  
   cash inflow/(outflow) from operating activities                             
                                                                               
                                                                 £          £  
                                                                               
   Operating profit/(loss)                                 26,689   (228,289)  
                                                                               
   Depreciation of tangible assets                            274        739   
                                                                               
   Loss on disposal of tangible assets                      1,398          -   
                                                                               
   (Increase)/decrease in debtors                         (36,604)    87,625   
                                                                               
   Increase in creditors within one year                   39,647     59,164   
                                                                               
   Net effect of foreign exchange differences               2,594     16,729   
                                                                               
                                                           ───────    ───────  
                                                                               
   Net cash inflow/(outflow) from operating activities     33,998   (103,164)  
                                                                               
                                                           ═══════    ═══════  
                                                                               
2  Analysis of net debt            1 January  Cash flow      Other         31  
                                        2007              non-cash   December  
                                                           changes       2007  
                                                                               
                                           £          £          £          £  
                                                                               
   Net cash:                                                                   
                                                                               
   Cash at bank and in hand          28,440     34,479          -     62,919   
                                                                               
                                     ───────    ───────    ───────    ───────  
                                                                               
                                     28,440     34,479          -     62,919   
                                                                               
                                     ═══════    ═══════    ═══════    ═══════  
                                                                               
3  Reconciliation of net cash flow to movement in net         2007       2006  
   debt                                                                        
                                                                               
                                                                 £          £  
                                                                               
   Increase/(decrease) in cash in                          34,479    (16,798)  
   the year                                                                    
                                                                               
                                                           ───────    ───────  
                                                                               
   Movement in net debt in the year                        34,479    (16,798)  
                                                                               
   Opening net funds                                       28,440     45,238   
                                                                               
                                                           ───────    ───────  
                                                                               
   Closing net funds                                       62,919     28,440   
                                                                               
                                                           ═══════    ═══════  
                                                                               

HYPER ENTERTAINMENT PLC                                                        
                                                                               
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                 
                                                                               
FOR THE YEAR ENDED 31 DECEMBER 2007                                            
                                                                               
1     Accounting policies                                                      
                                                                               
1.1   Accounting convention                                                    
                                                                               
      The financial statements are prepared under the historical cost          
      convention.                                                              
                                                                               
      The nature of the company's business is such that there can be           
      considerable unpredictable variation in the timing of cash inflows. The  
      directors have prepared projected cash flow information for the year 2008
      and 2009. After making appropriate enquiries, the directors consider that
      the Company has adequate resources to continue in operational existence  
      for the forseeable future. On this basis, the directors consider it      
      appropriate to prepare the financial statements on the going concern     
      basis.                                                                   
                                                                               
1.2   Compliance with accounting standards                                     
                                                                               
      The financial statements are prepared in accordance with applicable      
      United Kingdom Accounting Standards (United Kingdom Generally Accepted   
      Accounting Practice), which have been applied consistently (except as    
      otherwise stated).                                                       
                                                                               
1.3   Basis of consolidation                                                   
                                                                               
      The consolidated profit and loss account and balance sheet include the   
      financial statements of the company and its subsidiary undertakings made 
      up to 31 December 2007. The results of subsidiaries sold or acquired are 
      included in the profit and loss account up to, or from the date control  
      passes. Intra-group sales and profits are eliminated fully on            
      consolidation.                                                           
                                                                               
1.4   Turnover                                                                 
                                                                               
      Turnover represents amounts receivable for consultancy services net of   
      VAT.                                                                     
                                                                               
1.5   Goodwill                                                                 
                                                                               
      Acquired goodwill is written off in equal annual instalments over its    
      estimated useful economic life.                                          
                                                                               
1.6   Tangible fixed assets and depreciation                                   
                                                                               
      Tangible fixed assets are stated at cost less depreciation. Depreciation 
      is provided at rates calculated to write off the cost less estimated     
      residual value of each asset over its expected useful life, as follows:  
                                                                               
      Fixtures, fittings & equipment   Reducing balance - 5 to 7 years         
                                                                               
1.7   Investments                                                              
                                                                               
      Fixed asset investments are stated at cost less provision for diminution 
      in value.                                                                
                                                                               
1.8   Deferred taxation                                                        
                                                                               
      Deferred taxation is provided in full in respect of taxation deferred by 
      timing differences between the treatment of certain items for taxation   
      and accounting purposes. The deferred tax balance has not been           
      discounted.                                                              
                                                                               
1.9   Foreign currency translation                                             
                                                                               
      Monetary assets and liabilities denominated in foreign currencies are    
      translated into sterling at the rates of exchange ruling at the balance  
      sheet date. Transactions in foreign currencies are recorded at the rate  
      ruling at the date of the transaction. All differences are taken to      
      profit and loss account.                                                 
                                                                               

HYPER ENTERTAINMENT PLC                                                                
                                                                                       
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                             
                                                                                       
FOR THE YEAR ENDED 31 DECEMBER 2007                                                    
                                                                                       
2  Turnover                                                                            
                                                                                       
   The total turnover of the group for the year has been derived from its              
   principal activity.                                                                 
                                                                                       
   Segmental analysis by geographical area                                             
                                                                                       
   The analysis by geographical area of the group's turnover is set out as below:      
                                                                                       
                                                                    2007          2006 
                                                                                       
                                                                       £             £ 
                                                                                       
   Geographical segment                                                                
                                                                                       
   United Kingdom                                               164,562       140,846  
                                                                                       
   United States of America                                       5,606        46,637  
                                                                                       
   United Arab Emirates                                         164,973             -  
                                                                                       
                                                                 ───────       ─────── 
                                                                                       
                                                                335,141       187,483  
                                                                                       
                                                                 ═══════       ═══════ 
                                                                                       
3  Cost of sales and net operating expenses                                            
                                                                                       
                                 2007                              2006                
                                                                                       
                   Continuing Discontinued    Total  Continuing Discontinued   Total   
                                                                                       
                            £            £         £          £            £        £  
                                                                                       
   Cost of sales     126,201        9,746   135,947     90,719            -   90,719   
                                                                                       
   Administrative    157,585       14,920   172,505    325,052            -  325,052   
   expenses                                                                            
                                                                                       
                      ───────      ───────   ───────    ───────      ───────  ───────  
                                                                                       
                     283,786       24,666   308,452    415,771            -  415,771   
                                                                                       
                      ═══════      ═══════   ═══════    ═══════      ═══════  ═══════  
                                                                                       
4  Operating loss                                                    2007          2006
                                                                                       
                                                                        £             £
                                                                                       
   Operating loss is stated after charging:                                            
                                                                                       
   Depreciation of tangible assets                                   274           739 
                                                                                       
   Loss on disposal of tangible assets                             1,398             - 
                                                                                       
   Loss on foreign exchange transactions                           7,370           168 
                                                                                       
   Fees payable to the group's auditor for the audit of the        4,000         8,000 
   group's annual accounts (company £4,000; 2006: £8,000)                              
                                                                                       
                                                                  ═══════       ═══════
                                                                                       
5  Interest payable                                                  2007          2006
                                                                                       
                                                                        £             £
                                                                                       
   On bank loans and overdrafts                                      478           760 
                                                                                       
   Other interest                                                  5,725         5,381 
                                                                                       
                                                                  ───────       ───────
                                                                                       
                                                                   6,203         6,141 
                                                                                       
                                                                  ═══════       ═══════
                                                                                       

HYPER ENTERTAINMENT PLC                                                        
                                                                               
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                     
                                                                               
FOR THE YEAR ENDED 31 DECEMBER 2007                                            
                                                                               
6   Earnings per share                                                         
                                                                               
    Basic earnings/(loss) per ordinary share has been calculated using the     
    weighted average number of shares in issue during the financial period. The
    weighted average number of ordinary shares in issue was 6,469,398 (2006 -  
    6,469,398).                                                                
                                                                               
7   Taxation                                                  2007       2006  
                                                                               
                                                                 £          £  
                                                                               
    Domestic current year tax                                                  
                                                                               
    U.K. corporation tax                                      410        435   
                                                                               
    Adjustment for prior years                                  -     (7,874)  
                                                                               
                                                           ───────    ───────  
                                                                               
    Current tax charge                                        410     (7,439)  
                                                                               
    Deferred tax                                                               
                                                                               
    Deferred tax adjust re previous year                        -     25,684   
                                                                               
                                                           ───────    ───────  
                                                                               
                                                              410     18,245   
                                                                               
                                                           ═══════    ═══════  
                                                                               
    Factors affecting the tax charge for the year                              
                                                                               
    Profit/(loss) on ordinary activities before            21,445   (232,775)  
    taxation                                                                   
                                                                               
                                                           ═══════    ═══════  
                                                                               
    Profit/(loss) on ordinary activities before             6,434    (69,833)  
    taxation multiplied by standard rate of UK                                 
    corporation tax of 30.00% (2006 - 30.00%)                                  
                                                                               
                                                           ───────    ───────  
                                                                               
    Effects of:                                                                
                                                                               
    Non deductible expenses                                 1,610     17,118   
                                                                               
    Depreciation add back                                      82        221   
                                                                               
    Tax losses utilised                                   (14,808)         -   
                                                                               
    Adjustments to previous periods                             -    (12,432)  
                                                                               
    Tax losses carried forward                              7,092     57,487   
                                                                               
                                                           ───────    ───────  
                                                                               
                                                           (6,024)    62,394   
                                                                               
                                                           ───────    ───────  
                                                                               
    Current tax charge                                        410     (7,439)  
                                                                               
                                                           ═══════    ═══════  
                                                                               
    The group has estimated losses of £ 123,500 (2006 - £ 169,000) available   
    for carry forward against future trading profits.                          
                                                                               
    The deferred tax asset not provided at 30% on the grounds that the         
    recovery could not be foreseen with resonable certainty was £34,500.       
                                                                               

HYPER ENTERTAINMENT PLC                                                         
                                                                                
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                      
                                                                                
FOR THE YEAR ENDED 31 DECEMBER 2007                                             
                                                                                
8   Profit/(loss) for the financial year                                        
                                                                                
    As permitted by section 230 of the Companies Act 1985, the holding company's
    profit and loss account has not been included in these financial statements.
    The profit/(loss) for the financial year is made up as follows:             
                                                                                
                                                                 2007       2006
                                                                                
                                                                    £          £
                                                                                
    Holding company's profit/(loss) for the financial year    44,009   (254,852)
                                                                                
                                                              ═══════    ═══════
                                                                                

HYPER ENTERTAINMENT PLC                                                         
                                                                                
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                      
                                                                                
FOR THE YEAR ENDED 31 DECEMBER 2007                                             
                                                                                
9   Tangible fixed assets                                                       
                                                                                
    Group                                                                       
                                                                                
                                                                       Fixtures,
                                                                                
                                                                      fittings &
                                                                                
                                                                       equipment
                                                                                
                                                                               £
                                                                                
    Cost                                                                        
                                                                                
    At 1 January 2007                                                      8,391
                                                                                
    Disposals                                                            (6,975)
                                                                                
                                                                         ───────
                                                                                
    At 31 December 2007                                                    1,416
                                                                                
                                                                         ───────
                                                                                
    Depreciation                                                                
                                                                                
    At 1 January 2007                                                      5,535
                                                                                
    On disposals                                                         (5,379)
                                                                                
    Charge for the year                                                      274
                                                                                
                                                                         ───────
                                                                                
    At 31 December 2007                                                      430
                                                                                
                                                                         ───────
                                                                                
    Net book value                                                              
                                                                                
    At 31 December 2007                                                      986
                                                                                
                                                                         ═══════
                                                                                
    At 31 December 2006                                                    2,856
                                                                                
    Tangible fixed assets                                                       
    (continued)                                                                 
                                                                                
    Company                                                                     
                                                                                
                                                                       Fixtures,
                                                                                
                                                                      fittings &
                                                                                
                                                                       equipment
                                                                                
                                                                               £
                                                                                
    Cost                                                                        
                                                                                
    At 1 January 2007 & 31 December                                        1,416
    2007                                                                        
                                                                                
                                                                         ───────
                                                                                
    Depreciation                                                                
                                                                                
    At 1 January 2007                                                        156
                                                                                
    Charge for the year                                                      274
                                                                                
                                                                         ───────
                                                                                
    At 31 December 2007                                                      430
                                                                                
                                                                         ───────
                                                                                
    Net book value                                                              
                                                                                
    At 31 December 2007                                                      986
                                                                                
                                                                         ═══════
                                                                                
    At 31 December 2006                                                    1,260
                                                                                
                                                                         ═══════
                                                                                

HYPER ENTERTAINMENT PLC                                                        
                                                                               
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                     
                                                                               
FOR THE YEAR ENDED 31 DECEMBER 2007                                            
                                                                               
10  Fixed asset investments                                                    
                                                                               
    Company                                                                    
                                                                               
                                                                      Shares in
                                                                               
                                                                          group
                                                                               
                                                                   undertakings
                                                                               
                                                                              £
                                                                               
    Cost                                                                       
                                                                               
    At 1 January 2007 & at 31 December 2007                             52,157 
                                                                               
                                                                        ───────
                                                                               
    Provisions for diminution in value                                         
                                                                               
    At 1 January 2007 & at 31 December 2007                             52,157 
                                                                               
                                                                        ───────
                                                                               
    Net book value                                                             
                                                                               
    At 31 December 2007                                                      - 
                                                                               
                                                                        ═══════
                                                                               
    At 31 December 2006                                                      - 
                                                                               
                                                                        ═══════
                                                                               
    In the opinion of the directors, the aggregate value of the company's      
    investment in subsidiary undertakings is not less than the amount included 
    in the balance sheet.                                                      
                                                                               
    Holdings of more than 20%                                                  
                                                                               
    The company holds more than 20% of the share capital of the following      
    companies:                                                                 
                                                                               
    Company                         Country of                 Shares held     
                                    registration or                            
                                    incorporation                              
                                                                               
                                                          Class               %
                                                                               
    Subsidiary undertakings                                                    
                                                                               
    Hyper Entertainment Inc         USA                   Pref Stock       100 
                                                                               
    The principal activity of these undertakings for the last relevant         
    financial year was as follows:                                             
                                                                               
                                    Principal activity                         
                                                                               
    Hyper Entertainment Inc         Entertainment consultancy                  
                                                                               
    On 15 January 2008, Hyper Entertainment Inc filed with the Californian     
    Board of Equalization for the dissolution of Hyper Entertainment Inc       
    effective 31 December 2007.                                                
                                                                               

HYPER ENTERTAINMENT PLC                                                       
                                                                              
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                    
                                                                              
FOR THE YEAR ENDED 31 DECEMBER 2007                                           
                                                                              
11  Debtors                                                                   
                                                                              
                                            Group               Company       
                                                                              
                                           2007      2006       2007      2006
                                                                              
                                              £         £          £         £
                                                                              
    Trade debtors                       76,223    65,637     76,223    65,637 
                                                                              
    Other debtors                        6,551    14,340      6,551    14,340 
                                                                              
    Prepayments and accrued income      38,707     4,900     38,707     4,900 
                                                                              
                                        ───────   ───────    ───────   ───────
                                                                              
                                       121,481    84,877    121,481    84,877 
                                                                              
                                        ═══════   ═══════    ═══════   ═══════
                                                                              
12  Creditors : amounts falling due within one year                           
                                                                              
                                            Group               Company       
                                                                              
                                           2007      2006       2007      2006
                                                                              
                                              £         £          £         £
                                                                              
    Trade creditors                     54,682    53,724     54,682    53,723 
                                                                              
    Corporation tax                        410         -          -         - 
                                                                              
    Taxes and social security costs     31,664     6,364     31,631     6,265 
                                                                              
    Directors current accounts           4,441     4,441          -         - 
                                                                              
    Other creditors                      5,825         -          -         - 
                                                                              
    Accruals and deferred income        46,233    32,944     30,111    20,853 
                                                                              
                                        ───────   ───────    ───────   ───────
                                                                              
                                       143,255    97,473    116,424    80,841 
                                                                              
                                        ═══════   ═══════    ═══════   ═══════
                                                                              

HYPER ENTERTAINMENT PLC                                                         
                                                                                
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                      
                                                                                
FOR THE YEAR ENDED 31 DECEMBER 2007                                             
                                                                                
13  Creditors : amounts falling due after more than one year                    
                                                                                
                                             Group                Company       
                                                                                
                                           2007       2006       2007       2006
                                                                                
                                              £          £          £          £
                                                                                
    Other loans                         69,798     71,194          -          - 
                                                                                
                                        ═══════    ═══════    ═══════    ═══════
                                                                                
    Analysis of loans                                                           
                                                                                
    Wholly repayable within five        69,798     71,194          -          - 
    years                                                                       
                                                                                
                                        ───────    ───────    ───────    ───────
                                                                                
                                        69,798     71,194          -          - 
                                                                                
                                        ═══════    ═══════    ═══════    ═══════
                                                                                
    Loan maturity analysis                                                      
                                                                                
    In more than one year but not        7,290     14,870          -          - 
    more than two years                                                         
                                                                                
    In more than two years but not      29,158     51,299          -          - 
    more than five years                                                        
                                                                                
    In more than five years             33,350     69,532          -          - 
                                                                                
                                        ═══════    ═══════    ═══════    ═══════
                                                                                
    The above amount relates to royalties payable to LTMA Inc. pursuant to the  
    Memorandum of Understanding dated 2 November 2001. The total amount         
    outstanding at the year end was US$139,596 (2006 - US$139,596). The loan    
    amount is subject to 7% interest on the outstanding balance. The royalties  
    payable to LTMA Inc. was assumed by the Company with effect 1 January 2008. 
                                                                                
14  Share capital                                                2007       2006
                                                                                
                                                                    £          £
                                                                                
    Authorised                                                                  
                                                                                
    20,000,000/10,000,000 Ordinary share capital of 1p       200,000    100,000 
    each                                                                        
                                                                                
                                                              ═══════    ═══════
                                                                                
    Allotted, called up and fully paid                                          
                                                                                
    6,656,840 Ordinary share capital of 1p each               66,568     66,568 
                                                                                
                                                              ═══════    ═══════
                                                                                
    On 14 December 2007, the authorised share capital of the Company was        
    increased to £200,000 by the creation of 10,000,000 ordinary shares of 1p   
    each.                                                                       
                                                                                
    The company's shares are listed on PLUS Markets, a share trading market     
    operated by PLUS Markets Group Plc which is a Prescribed Market for the     
    purposes of S.118 Financial Services and Markets Act 2000.                  
                                                                                

HYPER ENTERTAINMENT PLC                                                        
                                                                               
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                     
                                                                               
FOR THE YEAR ENDED 31 DECEMBER 2007                                            
                                                                               
15  Statement of movements on reserves                                         
                                                                               
    Group                                                                      
                                                                               
                                                            Share Profit and   
                                                          premium       loss   
                                                          account    account   
                                                                               
                                                                £          £   
                                                                               
    Balance at 1 January 2007                            205,541   (324,603)   
                                                                               
    Profit for the year                                        -     21,035    
                                                                               
    Foreign currency translation differences                   -      3,792    
                                                                               
                                                          ───────    ───────   
                                                                               
    Balance at 31 December 2007                          205,541   (299,776)   
                                                                               
                                                          ═══════    ═══════   
                                                                               
    Company                                                                    
                                                                               
                                                            Share Profit and   
                                                          premium       loss   
                                                          account    account   
                                                                               
                                                                £          £   
                                                                               
    Balance at 1 January 2007                            205,541   (247,156)   
                                                                               
    Profit for the year                                        -     44,009    
                                                                               
                                                          ───────    ───────   
                                                                               
    Balance at 31 December 2007                          205,541   (203,147)   
                                                                               
                                                          ═══════    ═══════   
                                                                               

HYPER ENTERTAINMENT PLC                                                        
                                                                               
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                     
                                                                               
FOR THE YEAR ENDED 31 DECEMBER 2007                                            
                                                                               
16  Reconciliation of movements in shareholders' funds          2007       2006
                                                                               
    Group                                                          £          £
                                                                               
    Profit/(Loss) for the financial year                     21,035   (251,020)
                                                                               
    Other recognised gains and losses                         3,792     (9,440)
                                                                               
    Proceeds from issue of shares                                 -     84,492 
                                                                               
                                                             ───────    ───────
                                                                               
    Net addition to/(depletion in) shareholders' funds       24,827   (175,968)
                                                                               
    Opening shareholders' funds                             (52,494)   123,474 
                                                                               
                                                             ───────    ───────
                                                                               
    Closing shareholders' funds                             (27,667)   (52,494)
                                                                               
                                                             ═══════    ═══════
                                                                               
                                                                2007       2006
                                                                               
    Company                                                        £          £
                                                                               
    Profit/(Loss) for the financial year                     44,009   (254,852)
                                                                               
    Proceeds from issue of shares                                 -     84,492 
                                                                               
                                                             ───────    ───────
                                                                               
    Net addition to/(depletion in) shareholders' funds       44,009   (170,360)
                                                                               
    Opening shareholders' funds                              24,953    195,313 
                                                                               
                                                             ───────    ───────
                                                                               
    Closing shareholders' funds                              68,962     24,953 
                                                                               
                                                             ═══════    ═══════
                                                                               
17  Directors' emoluments                                       2007       2006
                                                                               
                                                                   £          £
                                                                               
    Emoluments for qualifying services                       64,017     46,500 
                                                                               
                                                             ═══════    ═══════
                                                                               
18  Transactions with directors                                                
                                                                               
    The following directors had interest free loans during the year. The       
    movement on these loans are as follows:                                    
                                                                               
                                                  Amount outstanding    Maximum
                                                                               
                                                     2007       2006    in year
                                                                               
                                                        £          £          £
                                                                               
    Wendy Rosenthal                                4,441      4,441      4,441 
                                                                               
    The loan is interest free.                                                 
                                                                               

HYPER ENTERTAINMENT PLC                                                         
                                                                                
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                      
                                                                                
FOR THE YEAR ENDED 31 DECEMBER 2007                                             
                                                                                
19  Employees                                                                   
                                                                                
    Number of employees                                                         
                                                                                
    The average monthly number of employees (including directors) during the    
    year was:                                                                   
                                                                                
                                                                 2007       2006
                                                                                
                                                               Number     Number
                                                                                
    Directors                                                      4          4 
                                                                                
    Administration                                                 -          1 
                                                                                
                                                              ───────    ───────
                                                                                
                                                                   4          5 
                                                                                
                                                              ═══════    ═══════
                                                                                
    Employment costs                                             2007       2006
                                                                                
                                                                    £          £
                                                                                
    Wages and salaries                                        64,017    105,754 
                                                                                
    Social security costs                                      5,547      3,424 
                                                                                
                                                              ───────    ───────
                                                                                
                                                              69,564    109,178 
                                                                                
                                                              ═══════    ═══════
                                                                                
20  Control                                                                     
                                                                                
    There is no one controlling party.                                          
                                                                                
21  Related party transactions                                                  
                                                                                
    Group                                                                       
                                                                                
    During the year, the Company paid £5,000 to Michael Swinney in respect of   
    consultancy fee for the ongoing projects. At the year end, the amount owed  
    to Michael Swinney was £nil.                                                
                                                                                


                                                                                                                     

a d v e r t i s e m e n t