FT8 PLC (FORMERLY EZYBONDS (UK) PLC)
("FT8" OR THE "COMPANY" AND TOGETHER WITH ITS SUBSIDIARIES THE "GROUP")
AUDITED RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2014
CHAIRMAN'S STATEMENT
The past year has been one of disappointment with the inability of the Ezybonds system to be made fully functional and operational. In addition the Directors of the Company have reassessed the Company's future direction given the extended timeline for financial outcomes and the restrictive nature of the formal Marketing and Promotions Agreement (MPA).
The combination of no income from the payment platform, the lack of income prospects looking forward and the business restrictions placed on EzyPromotions Limited under the MPA in terms of business options, meant that the Directors believe that FT8 Plc (Formerly Ezybonds (UK) Plc) could be placed at risk in the near to medium term if a new direction was not sought. The Directors decided to formally give notice to terminate the restrictive MPA on 18 March 2015.
In line with the disappointing failure of the Ezybonds payment platform to deliver revenues after around 10 years of work and the apparent public market damage to the brand image due to the failure of the system in the market place, especially in the USA, it has been necessary to write down the goodwill component that has been on the Company balance sheet in anticipation of significant but unfilled revenues being generated by the Ezybonds payment platform. The failure of the platform to deliver revenues has made the goodwill component redundant in terms of accounting standards and future practical business outcomes.
With the termination of the MPA, the Company is deemed to be an investing Company for the purpose of the ISDX Rules for Issuers. The Directors have accordingly been required to reassess the Company's business strategy and formulate a new business strategy that it is intended will provide a new market identity, multiple business income sources, short-term cash flows, longer-term growth opportunities and the potential to grow on an international basis within the finance and technology industry sectors. The outline of this investment strategy was announced on 19 March 2015 and further updates will be provided in due course as the strategy evolves. The Company must make an acquisition or have a business activity within 6 months of 19 March 2015 or trading in the Company's shares will be suspended.
On behalf of your directors I look forward to a strong, sustainable business and financial future that is aimed at rewarding all shareholders over the coming years.
Phillip J Pryor
Chairman
GROUP PROFIT & LOSS ACCOUNT
YEAR ENDED 31 DECEMBER 2014
| Note | 2014 | 2013 | |||||||
| £ | £ | ||||||||
| GROUP TURNOVER | |||||||||
| Discontinued operations | 330 | 4,095 | |||||||
| --------- | --------- | ||||||||
| Gross Profit | 330 | 4,095 | |||||||
| Administrative expenses | (53,837,723) | (525,954) | |||||||
| --------- | --------- | ||||||||
| OPERATING LOSS: | |||||||||
| Continuing operations | (559,442) | (525,954) | |||||||
| Discontinued operations | (53,277,951) | 4,095 | |||||||
| --------- | --------- | ||||||||
| GROUP OPERATING LOSS | (53,837,393) | (521,859) | |||||||
| Attributable to: | |||||||||
| Operating loss before exceptional items | (559,112) | - | |||||||
| Exceptional items | (53,278,281) | - | |||||||
| (53,837,393) | (521,859) | ||||||||
| Interest receivable | - | 16 | |||||||
| --------- | --------- | ||||||||
| LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION | (53,837,393) | (521,843) | |||||||
| Tax on loss on ordinary activities | - | - | |||||||
| --------- | --------- | ||||||||
| LOSS FOR THE FINANCIAL YEAR | (53,837,393) | (521,843) | |||||||
| ========= | ========= | ||||||||
| Earnings per share (pence) | |||||||||
| Basic | 3 | (0.10) | (0.01) | ||||||
| ========= | ========= | ||||||||
| Diluted | 3 | (0.10) | (0.01) | ||||||
| ========= | ========= | ||||||||
The group has no recognised gains or losses other than the results for the period as set out above.
The company has taken advantage of section 408 of the Companies Act 2006
not to publish its own Profit and Loss Account.
DETAILED GROUP PROFIT & LOSS
YEAR ENDED 31 DECEMBER 2014
| 2014 | 2013 | |||
| £ | £ | £ | £ | |
| TURNOVER | ||||
| License revenue received | 330 | 4,095 | ||
| COST OF SALES | ||||
| Direct costs | - | - | ||
| --------- | --------- | |||
| GROSS PROFIT | 330 | 4,095 | ||
| OVERHEADS | ||||
| Directors salaries | 260,386 | 96,991 | ||
| Office costs | 3,266 | 3,120 | ||
| Travel and subsistence | 64,510 | 86,480 | ||
| Telephone | 2,111 | 4,336 | ||
| Advertising, marketing consultancy and PR | 9,125 | 553 | ||
| Legal and professional fees | 113,246 | 199,555 | ||
| Accountancy fees | 54,978 | 95,451 | ||
| Auditors remuneration | 13,000 | 12,500 | ||
| Other | - | 1,067 | ||
| Bank charges | 1,004 | 1,038 | ||
| Foreign currency gains / losses (promo) | 37,816 | 24,863 | ||
| Impairment of goodwill | 53,278,281 | - | ||
| --------- | --------- | |||
| (53,837,723) | (525,954) | |||
| --------- | --------- | |||
| OPERATING (LOSS) | (53,837,393) | (521,859) | ||
| Bank interest receivable | - | 16 | ||
| --------- | --------- | |||
| LOSS ON ORDINARY ACTIVITIES | (53,837,393) | (521,843) | ||
| ========= | ========= | |||
GROUP BALANCE SHEET
YEAR ENDED 31 DECEMBER 2014
| 2014 | 2013 | ||||
| Note | £ | £ | £ | £ | |
| FIXED ASSETS | |||||
| Goodwill and Intangible assets | 4 | - | 47,060,572 | ||
| Tangible assets | 5 | - | - | ||
| --------- | --------- | ||||
| - | 47,060,572 | ||||
| CURRENT ASSETS | |||||
| Debtors | 7 | 20,700 | 7,483 | ||
| Cash at bank | 347,446 | 90,245 | |||
| --------- | --------- | ||||
| 368,146 | 97,728 | ||||
| CREDITORS Amounts falling due within one year | 8 | 28,445 | 74,407 | ||
| --------- | --------- | ||||
| NET CURRENT ASSETS | 339,701 | 23,321 | |||
| --------- | --------- | ||||
| TOTAL ASSETS LESS CURRENT LIABILITIES | 339,701 | 47,083,893 | |||
| ========= | ========= | ||||
| CAPITAL AND RESERVES | |||||
| Called-up equity share capital | 39,351,061 | 37,115,687 | |||
| Share premium account | 2,762,214 | 2,160,467 | |||
| Merger reserve | 4,413,320 | 1,114,329 | |||
| Other reserves | 17,400 | 17,400 | |||
| Share based payment reserve | 957,089 | - | |||
| Profit and loss account | (47,161,383) | 6,676,010 | |||
| --------- | --------- | ||||
| SHAREHOLDERS' FUNDS | 339,701 | 47,083,893 | |||
| ========= | ========= | ||||
These financial statements were approved by the directors and authorised for issue on ........................................, and are signed on their behalf by:
..................................................
Phillip J Pryor
GROUP CASH FLOW STATEMENT
YEAR ENDED 31 DECEMBER 2014
| 2014 | 2013 | |||
| £ | £ | |||
| NET CASH OUTFLOW FROM OPERATING ACTIVITIES | (618,290) | (422,397) | ||
| RETURNS ON INVESTMENTS AND SERVICING OF FINANCE | ||||
| Interest received | - | 15 | ||
| --------- | --------- | |||
| CASH OUTFLOW BEFORE FINANCING | (618,290) | (422,382) | ||
| FINANCING | ||||
| Issue of equity share capital | 875,491 | 5,486 | ||
| --------- | --------- | |||
| NET CASH INFLOW FROM FINANCING | 875,491 | 5,486 | ||
| --------- | --------- | |||
| INCREASE / (DECREASE) IN CASH | 257,201 | (416,896) | ||
| ========= | ========= |
RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM
OPERATING ACTIVITIES
| 2014 | 2013 | |||
| £ | £ | |||
| Operating profit/(loss) | (53,837,393) | (521,843) | ||
| (Increase) / decrease in debtors | (13,216) | 41,056 | ||
| (Decrease) / increase in creditors | (45,962) | 58,390 | ||
| Impairment of goodwill | 53,278,281 | - | ||
| --------- | --------- | |||
| Net cash outflow from operating activities | (618,290) | (422,397) | ||
| ========= | ========= | |||
| RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS | ||||
| 2014 | 2013 | |||
| £ | £ | |||
| Increase /(Decrease) in cash in the period | 257,201 | (416,896) | ||
| --------- | --------- | |||
| Movement in net funds in the period | 257,201 | (416,896) | ||
| ========= | ========= | |||
| Net funds at 1January 2014 | 90,245 | 507,141 | ||
| --------- | --------- | |||
| Net funds at 31 December 2014 | 347,446 | 90,245 | ||
| ========= | ========= | |||
| ANALYSIS OF CHANGES IN NET FUNDS | ||||
| At 1 Jan 2014 | Cash flows | At 31 Dec 2014 | ||
| £ | £ | £ | ||
| Net cash: | ||||
| Cash in hand and at bank | 90,245 | 257,201 | 347,446 | |
| --------- | --------- | --------- | ||
| Net funds | 90,245 | 257,201 | 347,446 | |
| ========= | ========= | ========= | ||
EXTRACTED NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2014
1. BASIS OF PREPARING THE FINANCIAL STATEMENTS
Going Concern
The Group generated a loss of £53,837,393 in the year ending 31 December 2014.
On 19 March 2015 EzyPromotions Limited gave notice to Ezybonds Inc of its termination of the agreement between EzyPromotions Limited and Ezybonds Inc as detailed in note 22.
FT8 Plc subsequent to the termination of the royalty agreement between EzyPromotions Limited and Ezybonds Inc have entered into discussions with parties with a view to generating significant alternative future income during the year ended 31 December 2015.
The Directors consider that the cash balances reported in these financial statements are adequate to fund the existing operating activities and meet creditors as they fall due for the 12 months following the signing of these accounts. Further committed funding facilities that are to be put in place in June and July 2015 will enable the group to fund additional future operating and investing activities over the forthcoming 12 months.
The Directors of the Group have concluded that the combination of these circumstances does mean the Group is able to continue trading within its current working capital position. Having considered any associated uncertainties, and given the potential to raise additional finance, the Directors have a reasonable expectation that the group has adequate resources to continue in operational existence for a period of 12 months from the date the financial statements were signed and as such have prepared the accounts on the going concern basis.
2. ACCOUNTING POLICIES
Basis of accounting
The financial statements have been prepared under the historical cost convention, and in accordance with applicable accounting standards.
Basis of consolidation
The Group financial statements comprise the financial statements for FT8 PLC and its subsidiary undertakings Ezymarketing Limited and EzyPromotions Limited. No profit and loss account is presented for FT8 PLC as permitted by Section 408 of the Companies Act 2006.
Turnover
The turnover shown within the profit and loss account represents the following components;
Income received in accordance with the license agreement held between Ezybonds Inc and EzyPromotions Limited
All income is stated net of VAT.
Goodwill
Goodwill arising from the purchase of subsidiary undertakings represents the excess of the fair value of the purchase consideration over the fair value of the net assets acquired.
The goodwill is capitalised as an intangible asset and amortised on a straight line basis from the time of acquisition over its useful economic life unless a permanent diminution in value occurs, in which case the goodwill is written down to the appropriate carrying value.
Amortisation
Amortisation is calculated to write off the cost of goodwill and the royalty entitlement over the period of its useful economic life as follows:-
Goodwill on acquisition of subsidiary undertakings and royalty entitlements - 20 years straight line
An impairment charge has been made in the year because the business to which the goodwill and royalty entitlement relates has not been able to conduct trading activities to the level intended.
Fixed asset investments
Fixed asset investments are included in the Company's balance sheet at cost after provision for any permanent diminution in value. The Company has taken advantage of Section 612 of the Companies Act 2006 and where consideration for purchase of a subsidiary undertaking includes the issue of shares, these have been included at nominal value.
Fixed assets
All fixed assets are initially recorded at cost.
Depreciation
Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:
Computer equipment - 33 1/3% per annum
Point of sale terminals - 20% per annum
Deferred taxation
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exceptions:
provision is made for tax on gains arising from the revaluation (and similar fair value adjustments) of fixed assets, and gains on disposal of fixed assets that have been rolled over into replacement assets, only to the extent that, at the balance sheet date, there is a binding agreement to dispose of the assets concerned. However, no provision is made where, on the basis of all available evidence at the balance sheet date, it is more likely than not that the taxable gain will be rolled over into replacement assets and charged to tax only where the replacement assets are sold;
provision is made for deferred tax that would arise on remittance of the retained earnings of overseas subsidiaries, associates and joint ventures only to the extent that, at the balance sheet date, dividends have been accrued as receivable;
deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Foreign currencies
Company
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items and on the retranslation of monetary items are taken to the profit and loss account. Exchange differences arising on non-monetary items, carried at fair value, are included in the profit and loss account, except for the differences arising on the retranslation of non-monetary items in respect of which gains and losses are recorded in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.
Group
For the purposes of preparing consolidated financial statements, the assets and liabilities of foreign subsidiary undertakings are translated at the exchange rates ruling at the balance sheet date. Profit and loss items are translated at the average exchange rates for the year, unless exchange rates fluctuated significantly in the year, in which case the exchange rates ruling at the dates of the transactions are used. Exchange differences arising are taken to the Group's foreign currency translation reserve. Such exchange differences are recognised in the profit and loss account in the year in which a foreign subsidiary undertaking is disposed of.
Goodwill and fair adjustments arising on the acquisition of a foreign subsidiary undertaking are treated as assets and liabilities of the foreign subsidiary and translated at the closing rate.
Financial instruments
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Investments
All investments are initially recorded at cost, being the fair value of the consideration given and including acquisition costs associated with the investment. All purchases and sales of investments are recognised using trade date accounting.
Investments classified as held-to-maturity are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in the profit and loss account when the investment in derecognised, or impaired, as well as through the amortisation process.
Investments are fair valued using quoted market prices, independent appraisals, discounted cash flow analysis or other appropriate valuation models at the balance sheet date.
Trade and other debtors
Trade and other debtors are recognised and carried forward at invoiced amounts less provisions for any doubtful debts. Bad debts are written off when identified.
Cash and cash equivalents
Cash and cash equivalents are included in the balance sheet at cost. Cash and cash equivalents comprise cash at bank and in hand and short term deposits with an original maturity of three months or less.
Interest-bearing loans and borrowings
All loans and borrowings are recognised initially at cost, which is the fair value of the consideration received, net of issue costs associated with the borrowing.
After initial recognition, interest-bearing loans and borrowings are measured at amortised cost using the effective interest method. Gains or losses are recognised in the profit and loss account when liabilities are derecognised or impaired, as well as through the amortisation process.
Derivative financial instruments
The group does not use derivative financial instruments such as foreign currency contracts and interest rate swaps to hedge its risks associated with interest rate and currency fluctuation risk.
3. EARNINGS PER SHARE
The basic earnings per ordinary share is calculated by dividing profit for the year less non-equity dividends and other appropriations in respect of non-equity shares by the weighted average number of equity shares outstanding during the year.
The diluted earnings per ordinary share is calculated by dividing profit for the year less non-equity dividends and other appropriations in respect of non-equity shares by the weighted average number of equity shares outstanding during the year (after adjusting both figures for the effect of dilutive potential ordinary shares).
The calculation of basic and diluted earnings per ordinary share is based upon the following data:
Earnings
| 2014 | 2013 | ||
| £ | £ | ||
| Earnings for the purposes of basic earnings per share | (53,837,393) | (521,843) | |
| --------- | --------- | ||
| Earnings for the purposes of diluted earnings per share | (53,837,393) | (521,843) | |
| ========= | ========= |
Number of shares
| 2014 | 2013 | |||||||
| No | No | |||||||
| Basic weighted average number of shares | 524,049,403 | 359,831,712 | ||||||
| --------- | --------- | |||||||
| Weighted average number of shares | ||||||||
| for the purposes of diluted earnings per share | 524,049,403 | 359,831,712 | ||||||
| ========= | ========= | |||||||
There have been no other transactions involving ordinary shares or potential ordinary shares since the reporting date and before the completion of these financial statements.
4. INTANGIBLE FIXED ASSETS
| Group | Goodwill | Royalty Entitlements | Total |
| £ | £ | £ | |
| COST | |||
| At 1Jan2014 | 24,560,572 | 22,500,000 | 47,060,572 |
| Additions | 6,217,709 | - | 6,217,709 |
| --------- | --------- | --------- | |
| At 31 December 2014 | 30,778,281 | 22,500,000 | 53,278,281 |
| ========= | ========= | ========= | |
| AMORTISATION | |||
| At 1 Jan 2014 | - | - | - |
| Impairment | 30,778,281 | 22,500,000 | 53,278,281 |
| --------- | --------- | --------- | |
| At 31 December 2014 | 30,778,281 | 22,500,000 | 53,278,281 |
| ========= | ========= | ========= | |
| NET BOOK VALUE | |||
| At 31 December 2014 | - | - | - |
| ========= | ========= | ========= | |
| At 1January2014 | 24,560,572 | 22,500,000 | 47,060,572 |
| ========= | ========= | ========= |
4. INTANGIBLE FIXED ASSETS (continued)
On consolidation the intangible fixed assets of the group are represented by two significant assets. These are goodwill on consolidation of £30,778,281 and Royalty Entitlements of £22,500,000 that are in addition to the original purchase of EzyPromotions Limited. Note 13 Debtors refers to the amount owing by EzyPromotions Limited to the parent company resulting from the purchase of the additional Royalty Entitlements. The Directors believe that this amount outstanding will not be serviced from future revenues and have written off the amount outstanding.
£30,778,281 of the goodwill above arises on the consolidation of EzyPromotions Limited into the group accounts. At the date of acquisition, EzyPromotions Limited has no identifiable assets or liabilities other than the worldwide marketing and distribution rights to the Intellectual Property of Ezybonds Inc. The entire fair value of the consideration of £53,278,281, which includes £6,217,709 of additions in the current year, has therefore been allocated to goodwill. The goodwill arising on the acquisition was attributable primarily to the fact that EzyPromotions Limited was originally granted a royalty entitling it to 15% of the fees generated by the Ezybonds online payment gateway.
Subsequent to the purchase of EzyPromotions Limited in 2005, there have been a number of additional royalty increments purchased from Ezybonds Inc for a total cost of £22,500,000. In June 2012 an additional 10% Royalty was purchased for the consideration of 50,000,000 Ezybonds UK Plc 10p fully paid shares. These increments amount to 45% of the fees generated by the Ezybonds online payment gateway. On consolidation the total entitlement to revenue is now 60% of the fees generated by Ezybonds. (Excluding revenue derived from funds held in the Bonus Pool Account).
The Directors have conducted an impairment review of the value of the carrying value of the investment in EzyPromotions Limited and royalty entitlements. As at 31 December 2014, the combined cost across the group of the investment in shares and royalty entitlements is £53,278,281. The Directors have carefully considered the royalty agreement secured by EzyPromotions Limited with Ezybonds Inc. The directors have concluded that they do not have sufficient confidence that the income expected to be generated under this agreement supports any investment in goodwill and thus consider all goodwill and royalty entitlements to be impaired.
5. TANGIBLE FIXED ASSETS
| Group | Computer equipment |
| £ | |
| COST | |
| At 1January 2014 and 31 December 2014 | 11,663 |
| ========= | |
| DEPRECIATION | |
| At 1January 2014 and 31 December 2014 | 11,663 |
| --------- | |
| NET BOOK VALUE | |
| At 31 December 2014 | - |
| ========= | |
| At 1 January 2014 | - |
| ========= | |
| Company | Computer equipment |
| £ | |
| COST | |
| At 1January 2013 and 31 December 2014 | 11,663 |
| ========= | |
| DEPRECIATION | |
| At 1January 2014 and 31 December 2014 | 11,663 |
| --------- | |
| NET BOOK VALUE | |
| At 31 December 2014 | - |
| ========= | |
| At 1 January 2014 | - |
| ========= |
6. INVESTMENTS
| Company | Investment in subsidiary undertakings | |||
| £ | ||||
| COST | ||||
| At 1January 2014 | 23,894,744 | |||
| Additions | 1,961,629 | |||
| --------- | ||||
| At 31 December 2014 | 25,856,373 | |||
| ========= | ||||
| AMOUNTS WRITTEN OFF | ||||
| At 1 January 2014 | 448,500 | |||
| Written off in year | 25,407,873 | |||
| --------- | ||||
| At 31 December 2014 | 25,856,373 | |||
| ========= | ||||
| NET BOOK VALUE | ||||
| At 31 December 2014 | - | |||
| ========= | ||||
| At 1 January 2014 | 23,446,244 | |||
| ========= | ||||
During the year ended 30 June 2006 the Group acquired 100% of the share capital of EzyPromotions Limited, a company registered in the Cook Islands. During the year ended 31 December 2014, shares were issued as further purchase consideration in respect of the settlement agreement, making the total cost £25,856,373.
As detailed in note 10 the Directors have conducted an impairment review of the value of the carrying value of the investment in EzyPromotions Limited and royalty entitlements. The Directors have carefully considered the royalty agreement secured by EzyPromotions Limited with Ezybonds Inc. The directors have concluded that they do not have sufficient confidence that the income expected to be generated under this agreement supports any value in the investment and thus consider the full investment value to be impaired.
Included within the investment cost brought forward, £448,500 relates to Ezymarketing Limited, a wholly owned subsidiary, which was acquired in December 2000 and is incorporated in Great Britain. In light of the fact that Ezymarketing Limited is no longer trading and has no immediate intentions to return to a trading position, full provision has been made against the asset.
Location of | Share | Profit / (Loss) | Shareholder Reserves | |
| Incorporation | Ownership | £ | £ | |
| Ezymarketing Ltd - 2014 | England & Wales | 100% | (14,957) | - |
| - 2013 | 100% | - | 14,957 | |
EzyPromotions Ltd - 2014 | Cook Islands | 100% | (22,994) | 3,357 |
| - 2013 | 100% | 3,028 | 26,362 |
7. DEBTORS
| Group | Company | |||
| 2014 | 2013 | 2014 | 2013 | |
| £ | £ | £ | £ | |
| Trade debtors | - | 7,483 | - | 7,483 |
| Other debtors | 20,700 | - | 20,700 | - |
| Amounts due from group undertakings | - | - | - | 22,496,778 |
| --------- | --------- | --------- | --------- | |
| 20,700 | 7,483 | 20,700 | 22,504,261 | |
| ========= | ========= | ========= | ========= | |
The amount owing from group undertakings includes an amount of £22,500,000 that relates to the purchase of the royalty increments that amount to 45% of the fees generated by the Ezybonds online payment gateway.
The Directors have carefully considered the royalty agreement secured by EzyPromotions Limited with Ezybonds Inc and have concluded that there is no expectation of generating revenue and as such EzyPromotions Limited will not be in a position to repay the debt and it has been fully provided against.
8. CREDITORS: Amounts falling due within one year
| Group | Company | |||
| 2014 | 2013 | 2014 | 2013 | |
| £ | £ | £ | £ | |
| Trade creditors | - | 74,407 | - | 74,407 |
| Amounts owed to group undertakings | - | - | - | 35,059 |
| Accruals and deferred income | 28,445 | - | 28,445 | - |
| --------- | --------- | --------- | --------- | |
| 28,445 | 74,407 | 28,445 | 109,466 | |
| ========= | ========= | ========= | ========= | |
9. EVENTS AFTER THE BALANCE SHEET DATE
The company announced on the 19 March 2015 that notice had been given to Ezybonds Inc terminating the Marketing and Promotions Agreement (MPA) dated 2 September 2005 (between Ezybonds Inc and EzyPromotions Limited as amended by deeds dated 3 February 2009, 21 August 2009, 14 January 2010, 19 June 2012, and a side letter dated 4 June 2014) no later than 28 April 2015.
The Directors believe the termination of the MPA will enable the company to pursue other opportunities that would have been unavailable if the MPA was in place.
10. AUDITED ACCOUNTS
We have audited the group and parent company financial statements ("the financial statements") of FT8 PLC and Subsidiaries for the year ended 31 December2013 which comprises the Group Profit and Loss Account, Group Balance Sheet and Company Balance Sheet, Group Cash Flow and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the company's shareholders, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's shareholders those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's shareholders as a body, for our audit work, for this report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITOR
As explained more fully in the Directors' Responsibilities Statement set out on page 9, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/private.cfm.
OPINION ON FINANCIAL STATEMENTS
In our opinion the financial statements:
give a true and fair view of the state of the group's and parent company's affairs as at 31December2013 and of the group's loss for the period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
EMPHASIS OF MATTER - Going concern
In forming our opinion on the financial statements which are not modified, we have considered the adequacy of the disclosures made in note 1 concerning the group ability to continue as a going concern.
Subsequent to the year end, having concluded that there was little confidence in the ability of the Marketing and Promotions Agreement with Ezybonds Inc to generate future revenues the directors have terminated the agreement. Consequently the directors have provided in full for the goodwill, royalty entitlements and in the parent company the investment and intercompany debt due from EzyPromotions Limited.
After allowing for this write off the Group has net assets of £339,701 and the Company has net assets of£336,344.
The termination of the contract has now given the directors the opportunity to pursue other avenues of revenue and as detailed in note 1 there are various projects and funding being considered. However, as at the point of signing the audit report nothing has been finalised and along with the other matters explained in note 1 to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern should they be unsuccessful in generating future revenue streams. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.
OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
JANICE MATTHEWS FCA (Senior Statutory Auditor)
For and on behalf of
MENZIES LLP
Chartered Accountants
& Statutory Auditor
Heathrow Business Centre
65 High Street
Egham
Surrey
TW20 9EY
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