TIDMBGTI
RNS Number : 6463I
BgenuineTec Inc.
16 March 2010
FOR IMMEDIATE RELEASE
16 March 2010
BgenuineTec Inc
("BgenuineTec" or "the Company")
Preliminary Results for the year ended 31 December 2009
BgenuineTec Inc (AIM:BGTI) today announces its preliminary results for the year
ended 31 December 2009.
Financial highlights
+----------+-------------------------------------------------------------+
| · | Revenues increased to JPY44.33 million (GBP0.30 million) |
| | (FY 2008: JPY25.46 million (GBP0.17 million) |
+----------+-------------------------------------------------------------+
| · | Gross loss reduced to JPY20.53 million (GBP0.14 million) |
| | (FY 2008: JPY76.72 million (GBP0.52 million) |
+----------+-------------------------------------------------------------+
| · | Loss from operations reduced to JPY286.11 million (GBP1.95 |
| | million) (FY 2008: JPY 496.52 million (GBP3.39 million) |
+----------+-------------------------------------------------------------+
| · | Loss before tax reduced to JPY380.67 million (GBP2.60 |
| | million) (FY 2008: JPY 537.92 million (GBP3.67 million) |
+----------+-------------------------------------------------------------+
| · | Basic loss per share JPY5.48 (GBP0.04) (FY 2008: JPY 11.51 |
| | (GBP0.08) |
+----------+-------------------------------------------------------------+
Operational highlights
+----------+--------------------------------------------------------------+
| · | Successful integration of BeyondLSI Inc. (Japan) technology |
| | |
+----------+--------------------------------------------------------------+
| · | Formation of business alliances with Shenyang Beyond LSI |
| | Inc. (China), DDS Inc.(Japan) and Fingerprint Cards AB |
| | (Sweden). |
+----------+--------------------------------------------------------------+
| · | Development of Fingerprint algorithm for advance mobile |
| | phone sensors |
+----------+--------------------------------------------------------------+
| · | Successful launch for Module business with Fingerprint Area |
| | Sensor of Fingerprint Cards AB (Sweden) |
+----------+--------------------------------------------------------------+
| · | Release of a new access control system with SDGate-V |
| | |
+----------+--------------------------------------------------------------+
Commenting on the results, Taketoshi Kashiwabara, Chairman of BgenuineTec Inc,
said:
"2009 has been a challenging year for BgenuineTec. Notwithstanding the trading
environment during the year, we have successfully managed to reduce losses and I
would like to confirm my commitment to fund the business through these difficult
times."
For further information, please contact:
+----------------------------------------+---------------------+
| BgenuineTec Inc (Japan) | |
+----------------------------------------+---------------------+
| Taketoshi Kashiwabara (Chairman) | +81-3-5652-0321 |
+----------------------------------------+---------------------+
| Toshiya Kurita Japan (Chief Financial | +81-3-5652-0321 |
| Controller) | |
+----------------------------------------+---------------------+
| | |
+----------------------------------------+---------------------+
| Nominated Adviser | |
+----------------------------------------+---------------------+
| Charles Stanley Securities | |
+----------------------------------------+---------------------+
| Russell Cook | +44 (0) 20 7149 |
| Dugald J Carlean | 6000 |
+----------------------------------------+---------------------+
| | |
+----------------------------------------+---------------------+
| Media Enquiries | |
+----------------------------------------+---------------------+
| Cubitt Consulting | |
+----------------------------------------+---------------------+
| Chris Lane / James Verstringhe | +44 (0) 20 7367 |
| | 5100 |
+----------------------------------------+---------------------+
Background Note on BgenuineTec Inc.
On 14 July 2006, BgenuineTec Inc.(AIM; BGTI) was the first Japanese company to
be admitted to trading on AIM. It offers fingerprint authentication products to
companies and individuals that wish to establish high levels of security using
biometrics.
Biometrics uses a physical attribute of the body, such as a fingerprint to
identify and verify the individual with the aim of making individual
authentication efficient and secure.
The Company offers a range of fingerprint authentication products and systems,
from an integrated system to a mobile device. The Company designs and outsources
the production of these products and can tailor them to individual client
specific needs and applications.
Biometric applications provide convenient and reliable security which reduces
the cost associated with the failure of conventional authentication methods. The
principal factor which distinguishes biometrics from conventional password based
authentication is the enhanced security level it provides while maintaining the
privacy of individual users.
BgenuineTec Inc
("BgenuineTec" or "the Company")
Preliminary Results for the year ended 31 December 2009
Chairman's Statement
2009 has been a challenging year for the Company. To maximise the BgenuineTec's
resources in light of the global economic downturn and the difficult trading
environment, the Board took decisive action to focus the Company's activities on
the volume business with LSI (large scale integration chip) solutions for mobile
phones and note PCs and the application business with module solutions for
Networks and door locks
Demand for biometric identification products is increasing, especially in the
fields of information security, financial transactions, security systems and
medical treatment. There is also considerable demand for fingerprint
authentication on mobile phones and note PCs. To date, the provision of
reasonably priced and secure solutions for the aforementioned industries has not
been widely available. BgenuineTec's objective is to see that personal
authentication is installed on all small portable devices that are used every
day. To do this, the Company is focused on exploring high quality, low cost
solutions for volume applications such as mobile phones and Note PCs.
During the year, the Company has successfully formed alliances with various
companies, in particular with a number of fingerprint identification partners,
with which we will develop a global marketing strategy. In particular the
alliances with Shenyang BeyondLSI Inc. and DDS Inc. are typical cases for the
module business in the Chinese market and for the network business in Japanese
markets. As a result of an alliance with a major overseas company, which is
planning to use BgenuineTec's technology to develop a range of products, we are
optimistic that that this will generate substantial revenues during the course
of the next one to two years.
Profit and Loss Account
For the year ended 31 December 2009, revenues increased by 74.1% to JPY 44.3
million (GBP0.30 million) from JPY 25.46 million (GBP0.17 million). Gross losses
have reduced from JPY 76.7 million (GBP0.52 million) in 2008 to JPY 20.5 million
(GBP0.14 million) in 2009. The Board has taken strong measures to address the
Company's cost base in order to create a sustainable business model for the
Company. Selling, general and administrative expenses were reduced in the year
from JPY 423.9 million (GBP2.9 million) in 2008 to JPY 272.3 million (GBP1.9
million).
As a result the operating loss was reduced by 42.4% to JPY 286.1 million from
JPY 496.5 million and the loss before tax was to JPY 380.7 million (GBP2.6
million) from JPY 537.9 million (GBP3.7 million).
The loss per share was JPY 5.5 (GBP0.04) compared to the loss per share of JPY
11.5 (GBP0.08) in 2008.
Balance Sheet
The Balance Sheet reflects, where appropriate, asset write downs for Inventory
of JPY 100.5 million (GBP0.69 million), Trade receivables totalling JPY 14.6
million (GBP0.1 million) and non-current assets of JPY 34.0 million (GBP 0.23
million). Total net assets at the year end were a loss of JPY 78.2 million
(-GBP0.53 million), compared to JPY 155 million (GBP1.05 million) at 31 December
2009.
The financial statements have been prepared by management on a going concern
basis and do not reflect any adjustments that would be necessary if the going
concern assumption was incorrect. The Board believes that the going concern
assumption is currently valid based on its view of the Company's future trading
and its continued ability to access equity finance. An exchange rate of GBP1 =
JPY 146.53 has been used throughout this statement.
Outlook
The Company's fingerprint business incorporates core components including
software algorithms, sensors, engine LSI and modules, which are the embedded
systems required for effective fingerprint authentication. Above all, sensors
are an important factor in our business. Even though we can handle optical area
sensors of the classical type, which are still useful in some application
fields, sensors at low cost and high performance are needed to penetrate the
world markets. We aim to expand the alliances with leading sensor companies and
work on joint projects to provide competitive solutions to the world market.
This financial year, we plan to strengthen our sales team for both our core
component business, especially the module business, and our local products such
as network solutions, door locks and OA equipment (e.g. fax machines,
telecopiers, scanners). We have set up two sales divisions for both global and
local markets. These teams are supported by technical engineers, headed by the
Chief Executive and the Chief Technical Officer.
In the difficult economic situation, we are planning to use our technical skills
and to work closely with our partners to develop new products for overseas
markets and establish a firm base for the company to increase sales and return
the company to profit. My confidence in our ability to do so is reflected in my
commitment to my fellow directors and to our shareholders to fund the company
through to profitability and I will be supporting another funding to ensure that
BgenuineTec has resources in place to continue its development.
Taketoshi Kashiwabara
Chairman
16 March 2010.
BgenuineTec Inc
Consolidated income statements for the years ended 31 December 2009 and 2008
+----------------+--------+-----------+-----------+-------------+-------------+
| | NOTES | Year | Year | Year | Year |
+----------------+--------+-----------+-----------+-------------+-------------+
| | | Ended | Ended | Ended | |
| | | 31/12/09 | 31/12/08 | 31/12/09 | Ended |
| | | | | | 31/12/08 |
+----------------+--------+-----------+-----------+-------------+-------------+
| | | JPY'000 | JPY'000 | STG | STG |
| | | | | (?) | (?) |
+----------------+--------+-----------+-----------+-------------+-------------+
| Revenue | 2/24 | 44,329 | 25,455 | 302,528 | 173,716 |
+----------------+--------+-----------+-----------+-------------+-------------+
| Cost | 4 | (64,858) | (102,175) | (442,631) | (697,295) |
| of | | | | | |
| sales | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Gross | | (20,529) | (76,720) | (140,103) | (523,579) |
| profit | | | | | |
| (loss) | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Other | | 6,770 | 4,123 | 46,202 | 28,141 |
| operating | | | | | |
| income | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Sales | 4 | (50,694) | (131,250) | (345,967) | (895,725) |
| and | | | | | |
| marketing | | | | | |
| expenses | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| General | 4 | (192,723) | (160,900) | (1,315,245) | (1,098,068) |
| and | | | | | |
| administrative | | | | | |
| expenses | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Research | 4 | (28,929) | (131,768) | (197,424) | (899,257) |
| and | | | | | |
| development | | | | | |
| expenses | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Loss | 4 | (286,105) | (496,515) | (1,952,537) | (3,388,488) |
| from | | | | | |
| operations | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Finance | 6 | - | 3,092 | - | 21,106 |
| income | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Finance | 5 | (23,526) | (25,016) | (160,552) | (170,725) |
| costs | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Net | | (23,526) | (21,924) | (160,552) | (149,619) |
| finance | | | | | |
| costs | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Impairment | 13 | (64,869) | - | (442,700) | - |
| of | | | | | |
| investment | | | | | |
| in equity | | | | | |
| accounted | | | | | |
| investee | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Share | 13 | (6,167) | (19,484) | (42,088) | (132,971) |
| of | | | | | |
| loss | | | | | |
| of | | | | | |
| investment | | | | | |
| in equity | | | | | |
| accounted | | | | | |
| investee | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Loss | | (380,667) | (537,923) | (2,597,877) | (3,671,078) |
| before | | | | | |
| tax | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Income | 18 | - | - | - | - |
| tax | | | | | |
| expense | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Loss | | (380,667) | (537,923) | (2,597,877) | (3,671,078) |
| for | | | | | |
| the | | | | | |
| year | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Attributable | | | | | |
| to: | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Equity | | (380,667) | (537,923) | (2,597,877) | (3,671,078) |
| holders | | | | | |
| of the | | | | | |
| Company | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Minority | | - | - | - | - |
| interests | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Loss | 7 | | | | |
| per | | | | | |
| share | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
| Basic | | (5.48) | (11.51) | (0.04) | (0.08) |
+----------------+--------+-----------+-----------+-------------+-------------+
| Diluted | | - | - | - | - |
+----------------+--------+-----------+-----------+-------------+-------------+
| | | | | | |
+----------------+--------+-----------+-----------+-------------+-------------+
+--------------------+-------+-----------+-----------+-------------+-------------+
| Consolidated statement of comprehensive income |
+--------------------------------------------------------------------------------+
| for the the years ended 31 | | | |
| December 2009 and 2008 | | | |
+----------------------------------------+-----------+-------------+-------------+
| | NOTES | 2009 | 2008 | 2009 | 2008 |
+--------------------+-------+-----------+-----------+-------------+-------------+
| | | JPY'000 | JPY'000 | ? | ? |
| | | | | (Note 5) | (Note 5) |
+--------------------+-------+-----------+-----------+-------------+-------------+
| Loss for the | | (380,667) | (537,923) | (2,597,877) | (3,671,078) |
| period | | | | | |
+--------------------+-------+-----------+-----------+-------------+-------------+
| Other | | | | | |
| comprehensive | | | | | |
| income | | | | | |
+--------------------+-------+-----------+-----------+-------------+-------------+
| Financial assets | | | | | |
| available for | | | | | |
| sale: | | | | | |
+--------------------+-------+-----------+-----------+-------------+-------------+
| -Change in fair | 12 | - | 425 | - | 2,897 |
| value | | | | | |
+--------------------+-------+-----------+-----------+-------------+-------------+
| -Income tax | | - | - | - | - |
| expense | | | | | |
+--------------------+-------+-----------+-----------+-------------+-------------+
| Other | | - | 425 | - | 2,897 |
| comprehensive | | | | | |
| income for the | | | | | |
| period | | | | | |
+--------------------+-------+-----------+-----------+-------------+-------------+
| Total | | (380,667) | (537,498) | (2,597,877) | (3,668,181) |
| comprehensive loss | | | | | |
| for the period | | | | | |
+--------------------+-------+-----------+-----------+-------------+-------------+
| | | | | | |
+--------------------+-------+-----------+-----------+-------------+-------------+
| Attributable to: | | | | | |
+--------------------+-------+-----------+-----------+-------------+-------------+
| Equity holders of | | (380,667) | (537,498) | (2,597,877) | (3,668,181) |
| the Company | | | | | |
+--------------------+-------+-----------+-----------+-------------+-------------+
| Minority interests | | - | - | - | - |
+--------------------+-------+-----------+-----------+-------------+-------------+
BgenuineTec Inc
Consolidated statements of changes in equity for the years ended 31 December
2009 and 2008
+------------+--------------------------------------------------------------------+
| | Attributable to equity holder of the company |
+------------+--------------------------------------------------------------------+
| | JPY'000 |
+------------+--------------------------------------------------------------------+
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
| | | Share | Share | Fair | Share | Deficit | Total | |
| | NOTES |capital |premium | value | option | | equity | STG |
| | | | |reserve |reserve | | | (?) |
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
| Balance as | | 713,614 | 472,255 | (425) | 12,337 | (826,272) | 371,509 | 2,535,377 |
| at 1 | | | | | | | | |
| January | | | | | | | | |
| 2008 | | | | | | | | |
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
| Share | 16 | 154,000 | 154,000 | - | - | - | 308,000 | 2,101,959 |
| issued | | | | | | | | |
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
| Share | | - | (1,091) | - | - | - | (1,091) | (7,446) |
| issuance | | | | | | | | |
| costs | | | | | | | | |
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
| Fair value | 12 | - | - | 425 | - | - | 425 | 2,897 |
| adjustments | | | | | | | | |
| of | | | | | | | | |
| available-for-sale | | | | | | | | |
| investments | | | | | | | | |
| | | | | | | | | |
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
| Share | 16 | - | - | - | 13,630 | - | 13,630 | 93,025 |
| option | | | | | | | | |
| costs | | | | | | | | |
| charged to | | | | | | | | |
| income for | | | | | | | | |
| the year | | | | | | | | |
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
| Net loss | 17 | - | - | - | - | (537,923) | (537,923) | (3,671,078) |
| for the | | | | | | | | |
| year | | | | | | | | |
| | | | | | | | | |
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
| Balance as | | 867,614 | 625,164 | - | 25,967 | (1,364,195) | 154,550 | 1,054,734 |
| at 1 | | | | | | | | |
| January | | | | | | | | |
| 2009 | | | | | | | | |
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
| Share | 16 | 79,220 | 79,220 | - | - | - | 158,440 | 1,081,280 |
| issued | | | | | | | | |
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
| Share | | - | (634) | - | - | - | (634) | (4,325) |
| issuance | | | | | | | | |
| costs | | | | | | | | |
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
| Fair value | 12 | - | - | - | - | - | - | - |
| adjustments | | | | | | | | |
| of | | | | | | | | |
| available-for-sale | | | | | | | | |
| investments | | | | | | | | |
| | | | | | | | | |
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
| Share | 16 | - | - | - | (9,917) | - | (9,917) | (67,680) |
| option | | | | | | | | |
| costs | | | | | | | | |
| charged to | | | | | | | | |
| income for | | | | | | | | |
| the year | | | | | | | | |
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
| Net loss | 17 | - | - | - | | (380,667) | (380,667) | (2,597,877) |
| for the | | | | | | | | |
| year | | | | | | | | |
| | | | | | | | | |
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
| Balance as | | 946,834 | 703,750 | - | 16,050 | (1,744,862) | (78,228) | (533,868) |
| at | | | | | | | | |
| 31 | | | | | | | | |
| December | | | | | | | | |
| 2009 | | | | | | | | |
+--------------------+-------+---------+---------+---------+---------+-------------+-----------+-------------+
BgenuineTec Inc
Consolidated statement of financial position as at 31 December 2009 and 2008
+-------------------+--------+-------------+-------------+--------------+-------------+
| | NOTES | 2009 | 2008 | 2009 | 2008 |
+-------------------+--------+-------------+-------------+--------------+-------------+
| | | JPY'000 | JPY'000 | STG | STG |
| | | | | (?) | (?) |
+-------------------+--------+-------------+-------------+--------------+-------------+
| ASSETSNon-current | | | | | |
| assets | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Property, | 8 | 3,133 | 4,214 | 21,379 | 28,755 |
| plant and | | | | | |
| equipment | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Investment | 12 | 6,446 | 6,446 | 43,991 | 43,990 |
| securities | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Investments | 13 | - | 68,036 | - | 464,315 |
| in equity | | | | | |
| accounted | | | | | |
| investee | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Goodwill | 10 | - | 7,200 | - | 49,137 |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Intangible | 11 | 19,856 | 4,858 | 135,510 | 33,154 |
| assets | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Other | 9 | 4,574 | 4,636 | 31,220 | 31,640 |
| non-current | | | | | |
| assets | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| | | 34,009 | 95,390 | 232,100 | 650,991 |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Current | | | | | |
| assets | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Inventories | 14 | 17,680 | 51,727 | 120,660 | 353,013 |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Trade | 15/24 | 14,649 | 43,442 | 99,970 | 296,475 |
| and | | | | | |
| other | | | | | |
| receivables | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Cash | 15 | 804 | 45,237 | 5,486 | 308,721 |
| and | | | | | |
| cash | | | | | |
| equivalents | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| | | 33,133 | 140,406 | 226,116 | 958,209 |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Total | | 67,142 | 235,796 | 458,216 | 1,609,200 |
| assets | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| LIABILITIES | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Current | | | | | |
| liabilities | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Borrowings | 15/24 | 166 | - | 1,135 | - |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Trade | 19/24 | 143,604 | 81,246 | 980,029 | 554,466 |
| and | | | | | |
| other | | | | | |
| payables | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Provision | 22 | 1,600 | - | 10,920 | - |
| for asset | | | | | |
| retirement | | | | | |
| obligation | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| | | 145,370 | 81,246 | 992,084 | 554,466 |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Net | | (112,237) | 59,160 | (765,917) | 403,743 |
| current | | | | | |
| assets | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Total | | 145,370 | 81,246 | 992,084 | 554,466 |
| liabilities | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Net | | (78,228) | 154,550 | (533,868) | 1,054,734 |
| assets | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| EQUITY | | | | | |
| | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Share | 16 | 946,834 | 867,614 | 6,461,708 | 5,921,068 |
| capital | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Share | 16 | 703,750 | 625,164 | 4,802,770 | 4,266,454 |
| premium | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Fair | 12 | - | - | - | - |
| value | | | | | |
| reserve | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Share | 16 | 16,050 | 25,967 | 109,538 | 177,218 |
| option | | | | | |
| reserve | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Deficit | 17 | (1,744,862) | (1,364,195) | (11,907,884) | (9,310,006) |
+-------------------+--------+-------------+-------------+--------------+-------------+
| Total | | (78,228) | 154,550 | (533,868) | 1,054,734 |
| equity | | | | | |
+-------------------+--------+-------------+-------------+--------------+-------------+
BgenuineTec Inc
Consolidated Statement of cash flows for the years ended 31 December 2009 and
2008
+--------------+--------+-----------+-----------+-------------+----------------+
| | NOTES | Year | Year | Year | Year |
| | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| | | Ended | Ended | Ended | |
| | | 31/12/09 | 31/12/08 | 31/12/09 | Ended 31/12/08 |
+--------------+--------+-----------+-----------+-------------+----------------+
| | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| | | JPY'000 | JPY'000 | STG | STG |
| | | | | (?) | (?) |
+--------------+--------+-----------+-----------+-------------+----------------+
| OPERATING | | | | | |
| ACTIVITIES | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| Cash | 20 | (154,370) | (225,105) | (1,053,506) | (1,536,241) |
| used | | | | | |
| in | | | | | |
| operations | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| Interest | | (36) | 76 | (247) | 524 |
| received | | | | | |
| (paid), | | | | | |
| net | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| NET | | (154,406) | (225,029) | (1,053,753) | (1,535,717) |
| CASH | | | | | |
| USED | | | | | |
| IN | | | | | |
| OPERATING | | | | | |
| ACTIVITIES | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| INVESTING | | | | | |
| ACTIVITIES | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| Expenditure | | - | (3,897) | - | (26,597) |
| on product | | | | | |
| development | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| Purchase | | (19,048) | - | (129,991) | - |
| of | | | | | |
| intangible | | | | | |
| assets | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| Acquisition | | (3,000) | (30,450) | (20,474) | (207,807) |
| of | | | | | |
| associate | | | | | |
| company | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| Purchase | | (25,000) | - | (170,613) | - |
| of | | | | | |
| investment | | | | | |
| security | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| Proceeds | | 1,924 | 1,644 | 13,130 | 11,224 |
| from | | | | | |
| sales of | | | | | |
| investment | | | | | |
| securities | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| Expenditure | | (22,888) | (13,400) | (156,197) | (91,449) |
| lending | | | | | |
| collection | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| Proceeds | | 20,000 | - | 136,491 | - |
| from | | | | | |
| lending | | | | | |
| made | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| NET | | (48,012) | (46,103) | (327,654) | (314,629) |
| CASH | | | | | |
| USED | | | | | |
| IN | | | | | |
| INVESTING | | | | | |
| ACTIVITIES | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| FINANCING | | | | | |
| ACTIVITIES | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| Proceeds | | 166 | - | 1,135 | - |
| from | | | | | |
| short-term | | | | | |
| borrowings | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| Proceeds | | 157,807 | 306,909 | 1,076,957 | 2,094,512 |
| on issue | | | | | |
| of new | | | | | |
| shares, | | | | | |
| net of | | | | | |
| issuance | | | | | |
| cost | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| NET | | 157,973 | 306,909 | 1,078,092 | 2,094,512 |
| CASH | | | | | |
| FROM | | | | | |
| FINANCING | | | | | |
| ACTIVITIES | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| NET | | (44,445) | 35,777 | (303,315) | 244,166 |
| INCREASE | | | | | |
| (DECREASE) | | | | | |
| IN CASH | | | | | |
| AND CASH | | | | | |
| EQUIVALENTS | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| EFFECT | | 12 | (55) | 80 | (377) |
| OF | | | | | |
| EXCHANGE | | | | | |
| RATE | | | | | |
| FLUCTUATIONS | | | | | |
| ON CASH HELD | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| CASH | | 45,237 | 9,515 | 308,721 | 64,932 |
| AND | | | | | |
| CASH | | | | | |
| EQUIVALENTS | | | | | |
| AT | | | | | |
| BEGINNING | | | | | |
| OF YEAR | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| CASH | 15 | 804 | 45,237 | 5,486 | 308,721 |
| AND | | | | | |
| CASH | | | | | |
| EQUIVALENTS | | | | | |
| AT END OF | | | | | |
| YEAR | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
| | | | | | |
+--------------+--------+-----------+-----------+-------------+----------------+
BgenuineTec Inc
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+----------+----+------------------------------------------------------------+
| | | |
| | | BgenuineTec Inc, hereafter "the Company", is a company |
| | | incorporated and domiciled in Japan. The legal form of |
| | | the Company is a limited liability corporation called |
| | | "Kabushiki-kaisha". The Company designs and manufactures |
| | | a range of fingerprint authentication technologies and |
| | | products to companies and individuals that wish to |
| | | establish high levels of security in various applications |
| | | using biometrics. The business activity also includes R&D |
| | | and sales of fingerprint systems and components. |
| | | |
| | | The consolidated financial statements of the Company have |
| | | been prepared in accordance with International Financial |
| | | Reporting Standards ("IFRS"), as adopted by the EU. The |
| | | designation "IFRSs" also includes all valid International |
| | | Accounting Standards (IASs). All interpretations of the |
| | | International Financial Reporting Interpretations |
| | | Committee (IFRIC) mandatory for the financial year 2009 |
| | | have also been applied. Pound sterling amounts included |
| | | herein are given solely for convenience and are stated, as |
| | | matter of arithmetical computation only, at the rate of |
| | | JPY146.53=GBP1, the approximate exchange rate at 31 |
| | | December 2009. The translation should not be construed as |
| | | representations that the Japanese yen amounts have been, |
| | | could have been, or could in the future be, converted into |
| | | pounds sterling. |
| | | |
| | | The principal accounting policies adopted are set out |
| | | below. |
| | | |
+----------+----+------------------------------------------------------------+
| | | Going-concern |
| | | |
| | | These consolidated financial statements have been prepared |
| | | by management on the basis of generally accepted |
| | | accounting principles applicable to a "going concern", |
| | | which assumes the Company will continue in operation for |
| | | the foreseeable future and will be able to realise its |
| | | assets and discharge its liabilities in the normal course |
| | | of operations. |
| | | |
| | | The Company posted net loss of JPY382 million in the year |
| | | ended 31 December 2009, mainly due to poor sales results |
| | | of JPY44 million and impairment loss on investment in |
| | | associate company of JPY64 million. |
| | | |
| | | The poor sales resulted from the internal restructuring of |
| | | the sales and development divisions, the worldwide |
| | | recession and a deferred order from a major client. |
| | | |
| | | To enable the Company to rectify the continued |
| | | loss-making, the Company is either in the process of |
| | | carrying out or going to carry out following actions in |
| | | 2009. |
| | | |
| | | a. Readjust the product mix by introducing technologies |
| | | and products from the associated Company "Beyond LSI Inc". |
| | | b. Restructuring sales organization and strengthen sales |
| | | manpower. |
| | | c. Strengthen management. |
| | | d. Enhancing core technology and penetrating overseas |
| | | market. |
| | | |
| | | To expand its business, the Company needs additional |
| | | funding of JPY 180 million in 2010 from the date of |
| | | signing of these accounts. Further to this, additional JPY |
| | | 100 million is necessary in terms with investors. Fund |
| | | raising of JPY 156 million is planned in the first half |
| | | of 2010, and JPY 24 million in second half of 2010. |
| | | Fundamental to the Going Concern assumption is a belief by |
| | | the Board that it can raise such equity. |
| | | |
| | | These consolidated financial statements do not reflect |
| | | adjustments that would be necessary if the going concern |
| | | assumption was not appropriate because the Company has a |
| | | firm conviction to achieve sales and operating profits in |
| | | 2010 and 2011 by execution of above actions, and the |
| | | fund-raising in 2010 as mentioned above. |
| | | |
| | | If the going concern assumption were not appropriate for |
| | | the consolidated financial statements, then adjustment |
| | | would be necessary to the carrying values of the assets |
| | | and liabilities, the reported revenues and expenses, and |
| | | classifications used in the consolidated statement of |
| | | financial position. |
| | | |
+----------+----+------------------------------------------------------------+
+----------+----+------------------------------------------------------------+
| | | Basis of consolidationEquity method |
| | | Associates are those entities in which the Company has |
| | | significant influence, but not control, over the financial |
| | | and operating policies. Significant influence is presumed |
| | | to exist when the Company holds between 20% and 50% of the |
| | | voting power of another entity. Associates are accounted |
| | | for using the equity method (equity accounted investees) |
| | | according to IAS28 (Investments in Associates). The |
| | | consolidated financial statements include the Company's |
| | | share of the income and expenses of equity accounted |
| | | investees, after adjustments to align the accounting |
| | | policies with those of the Company, from the date that |
| | | significant influence commences until the date that |
| | | significant influence ceases. When the Company's share of |
| | | losses exceeds its interest in an equity accounted |
| | | investee, the carrying amount of that interest (including |
| | | any long-term investments) is reduced to nil and the |
| | | recognition of further losses is discontinued except to |
| | | the extent that the Company has an obligation or has made |
| | | payments on behalf of the investee. |
+----------+----+------------------------------------------------------------+
+----------+----+------------------------------------------------------------+
| | | GoodwillGoodwill arising on business combination |
| | | represents the excess of the cost of acquisition over the |
| | | fair value of the identifiable assets and liabilities of a |
| | | transferor at the date of acquisition. In respect of |
| | | equity accounted investees, the carrying amount of |
| | | goodwill is included in the carrying amount of the |
| | | investment. |
| | | Goodwill is recognised as an asset and reviewed for |
| | | impairment at least annually. Any impairment is |
| | | recognised immediately in the income statement and is not |
| | | subsequently reversed. |
| | | The Company has only single cash generating unit for the |
| | | purpose of impairment testing. |
+----------+----+------------------------------------------------------------+
+----------+----+------------------------------------------------------------+
| | | Revenue recognitionRevenue arises from sales of goods. |
| | | Revenue is measured at the fair value of the consideration |
| | | received or receivable and represents amounts receivable |
| | | for goods and services provided in the normal course of |
| | | business, net of discounts and consumption taxes. |
| | | Sales of goods are recognised when goods are delivered and |
| | | title has passed. |
+----------+----+------------------------------------------------------------+
+----------+----+------------------------------------------------------------+
| | | LeasingLeases are classified as finance leases whenever |
| | | the terms of the lease transfer substantially all the |
| | | risks and rewards of ownership to the lessee. All other |
| | | leases are classified as operating leases. There was no |
| | | asset under finance lease as of the balance sheet date. |
| | | Rentals payable under operating leases are charged to |
| | | income on a straight-line basis over the term of the |
| | | relevant lease. |
+----------+----+------------------------------------------------------------+
+----------+----+------------------------------------------------------------+
| | | Foreign currenciesThe Company's functional and |
| | | presentational currency is Japanese Yen ("JPY"). |
| | | Transactions in currencies other than Japanese Yen are |
| | | recorded at the rates of exchange prevailing on the dates |
| | | of the transactions. At the balance sheet date, monetary |
| | | assets and liabilities that are denominated in foreign |
| | | currencies are retranslated at the rates prevailing on the |
| | | balance sheet date. Non-monetary assets and liabilities |
| | | carried at fair value that are denominated in foreign |
| | | currencies are translated at the rates prevailing at the |
| | | date when the fair value was determined. Gains and losses |
| | | arising on retranslation are included in the income |
| | | statement for the year. |
+----------+----+------------------------------------------------------------+
+----------+----+------------------------------------------------------------+
| | | TaxationThe tax expense represents the sum of the tax |
| | | currently payable and deferred tax. |
| | | The tax currently payable is based on taxable profit for |
| | | the year. Taxable profit differs from net profit as |
| | | reported in the income statement because it excludes items |
| | | of income or expense that are taxable or deductible in |
| | | other years and it further excludes items that are never |
| | | taxable or deductible. The Company's liability for |
| | | current tax is calculated by using tax rates that have |
| | | been enacted or substantively enacted by the balance sheet |
| | | date. |
| | | Deferred tax is the tax expected to be payable or |
| | | recoverable on differences between the carrying amount of |
| | | assets and liabilities in the financial statements and the |
| | | corresponding tax bases used in the computation of taxable |
| | | profit, and is accounted for using the balance sheet |
| | | liability method. Deferred tax liabilities are recognised |
| | | for all taxable temporary differences and deferred tax |
| | | assets are recognised to the extent that it is probable |
| | | that taxable profits will be available against which |
| | | deductible temporary differences can be utilised. Such |
| | | assets and liabilities are not recognised if the temporary |
| | | difference arises from goodwill on the initial recognition |
| | | of goodwill or an asset or liability, which is not part of |
| | | a business combination and at the time of recognition did |
| | | not affect accounting or taxable profit. |
| | | The carrying amount of deferred tax assets is reviewed at |
| | | each balance sheet date and reduced to the extent that it |
| | | is no longer probable that sufficient taxable profits will |
| | | be available to allow all or part of the assets to be |
| | | recovered. |
| | | Deferred tax is calculated at the tax rates that are |
| | | expected to apply to the period when the asset is realised |
| | | or the liability is settled. Deferred tax is charged or |
| | | credited in the income statement, except when it relates |
| | | to items credited or charged directly to equity, in which |
| | | case the deferred tax is also dealt with in equity. |
+----------+----+------------------------------------------------------------+
+----------+----+------------------------------------------------------------+
| | | Property, plant and equipmentProperty, plant and equipment |
| | | are stated at cost less accumulated depreciation and any |
| | | recognised impairment loss. |
| | | Depreciation is charged so as to write off the cost or |
| | | valuation of assets, other than land and properties under |
| | | construction, over their estimated useful lives, using the |
| | | straight-line method, on the following basis: |
| | | |
| | | Leasehold improvement |
| | | 10%-17% |
| | | Fixtures and equipment |
| | | 17%-50% |
| | | The gain or loss arising on the disposal or retirement of |
| | | an asset is determined as the difference between the sales |
| | | proceeds and the carrying amount of the asset and is |
| | | included in the income statement for the year. |
+----------+----+------------------------------------------------------------+
+----------+----+------------------------------------------------------------+
| | | Other non-current assets |
| | | Other non-current assets consist of lease deposits for |
| | | office premises and long-term prepaid expenses, which are |
| | | stated at historical cost minus unrefunded amounts. |
| | | |
+----------+----+------------------------------------------------------------+
+----------+----+------------------------------------------------------------+
| | | Development costs |
| | | Development costs concerning software programs developed |
| | | externally are capitalised and measured initially at |
| | | purchase cost and amortised on a straight-line basis over |
| | | their estimated useful lives (3 years). |
| | | An internally generated intangible asset arising from the |
| | | Company's biometric technology business development is |
| | | recognised only if all of the following conditions are |
| | | met: |
| | | · an asset is created that can be identified |
| | | (such as software and new processes); |
| | | · it is probable that the asset created will |
| | | generate future economic benefits; and |
| | | · the development cost of the asset can be |
| | | measured reliably. |
| | | Internally generated intangible assets are amortised on a |
| | | straight-line basis over their useful lives. |
| | | Expenditure on research activities is recognised as an |
| | | expense in the period in which it is incurred. |
+----------+----+------------------------------------------------------------+
+----------+----+------------------------------------------------------------+
| | | Patents, exclusive sales rights and trademarksPatents and |
| | | trademarks are measured initially at purchase cost and |
| | | amortised on a straight-line basis over their estimated |
| | | useful lives (8 years). Exclusive sales rights are not |
| | | amortised since there is substantially no period for |
| | | termination in the agreement. |
+----------+----+------------------------------------------------------------+
+----------+----+------------------------------------------------------------+
| | | Impairment of tangible and intangible assets excluding |
| | | goodwillAt each balance sheet date, the Company reviews |
| | | the carrying amounts of its tangible and intangible assets |
| | | to determine whether there is any indication that those |
| | | assets have suffered an impairment loss. If any such |
| | | indication exists, the recoverable amount of the asset is |
| | | estimated in order to determine the extent of the |
| | | impairment loss (if any). Where the asset does not |
| | | generate cash flows that are independent from other |
| | | assets, the Company estimates the recoverable amount of |
| | | the cash-generating unit to which the asset belongs. An |
| | | intangible asset with an indefinite useful life is tested |
| | | for impairment annually and whenever there is an |
| | | indication that the asset may be impaired. |
| | | Recoverable amount is the higher of fair value less costs |
| | | to sell and value in use. In assessing value in use, the |
| | | estimated future cash flows are discounted to their |
| | | present value using a pre-tax discount rate that reflects |
| | | current market assessments of the time value of money and |
| | | the risks specific to the asset for which the estimates of |
| | | future cash flows have not been adjusted. |
| | | If the recoverable amount of an asset (or cash-generating |
| | | unit) is estimated to be less than its carrying amount, |
| | | the carrying amount of the asset (cash-generating unit) is |
| | | reduced to its recoverable amount. An impairment loss is |
| | | recognised as an expense immediately, unless the relevant |
| | | asset is carried at a revalued amount, in which case the |
| | | impairment loss is treated as a revaluation decrease. |
| | | Where an impairment loss subsequently reverses, the |
| | | carrying amount of the asset (cash-generating unit) is |
| | | increased to the revised estimate of its recoverable |
| | | amount, but so that the increased carrying amount does not |
| | | exceed the carrying amount that would have been determined |
| | | had no impairment loss been recognised for the asset |
| | | (cash-generating unit) in prior years. A reversal of an |
| | | impairment loss is recognised as income immediately, |
| | | unless the relevant asset is already carried at a revalued |
| | | amount, in which case the reversal of the impairment loss |
| | | is treated as a revaluation increase. |
+----------+----+------------------------------------------------------------+
| | | |
+----------+----+------------------------------------------------------------+
+----------+----+------------------------------------------------------------+
| | | InventoriesInventories are stated at the lower of cost and |
| | | net realisable value. Cost comprises direct materials, |
| | | transportation and any other incidental costs incurred for |
| | | purchase. Cost is calculated using the weighted average |
| | | method.Net realisable value represents the estimated |
| | | selling price less all estimated costs to completion and |
| | | costs to be incurred in marketing, selling and |
| | | distribution. |
+----------+----+------------------------------------------------------------+
| | | |
+----------+----+------------------------------------------------------------+
+----------+----+------------------------------------------------------------+
| | | Financial instruments |
+----------+----+------------------------------------------------------------+
| | | Financial assets and financial liabilities are recognised |
| | | on the Company's statement of financial position when the |
| | | Company has become a party to the contractual provisions |
| | | of the instrument. |
+----------+----+------------------------------------------------------------+
| | | Trade receivablesTrade receivables are recognised at fair |
| | | value and subsequently measured at amortised cost and are |
| | | classified as loans and receivables in accordance with |
| | | IAS39 Financial Instruments:Recogniton and Measurement. |
| | | |
| | | Assessments are made regularly as to whether there is any |
| | | objective evidence that trade receivables may be impaired. |
| | | Where there is objective evidence of impairment, the |
| | | recoverable amount is calculated by estimating the present |
| | | value of the future cash flows discounted using the |
| | | effective interest rate. Any impairment losses identified |
| | | from the impairment test are recognised as an expense in |
| | | the income statement. |
| | | |
+----------+----+------------------------------------------------------------+
| | | Investments securitiesInvestments are recognised and |
| | | derecognised on a trade date where a purchase or sale of |
| | | an investment is under a contract whose terms require |
| | | delivery of the investment within the time frame |
| | | established by the market concerned, and are initially |
| | | measured at cost, including transaction costs. |
| | | Investment securities classified as available-for-sale are |
| | | remeasured at fair value. Gains and losses arising from |
| | | the changes in the fair values of available-for-sale |
| | | investments are recognised directly in the fair value |
| | | reserve in equity, until the investment is sold or |
| | | otherwise disposed of or until it is determined to be |
| | | impaired. The fair value of an available-for-sale |
| | | investment is based on its quoted bid price in an active |
| | | market at the balance sheet date. The fair value of |
| | | available-for-sale investment with no quated bid price is |
| | | based on fair value of future cash flows discounted using |
| | | the market rate of interest. |
| | | In accordance with IAS 39, assessments are made regularly |
| | | as to whether there is any objective evidence that |
| | | investments securities may be impaired. Cumulative losses |
| | | identified after carrying out an impairment test are |
| | | removed from the fair value reserve in equity and |
| | | recognised as an expense in the income statement. |
+----------+----+------------------------------------------------------------+
| | | Trade payablesTrade payables are classified as other |
| | | liabilities in accordance with IAS 30, initially |
| | | recognised at fair value and subsequently measured at |
| | | amortised cost using the effective interest method. |
+----------+----+------------------------------------------------------------+
| | | Equity instrumentsOrdinary shares are classified as equity |
| | | instruments and are recorded at the fair value, net of |
| | | direct issue costs. Equity instruments are not |
| | | subsequently remeasured. |
| | | |
| | | In accordance with IAS39 (Financial Instruments: |
| | | Recognition and Measurement), assessments are made |
| | | regularly as to whether there is any objective evidence |
| | | that a financial asset or group of assets may be impaired. |
| | | Impairment losses identified after carrying out an |
| | | impairment test are recognised as an expense. Gains and |
| | | losses on available-for-sale investments are recognised |
| | | directly in equity until the financial asset is disposed |
| | | of or is determined to be impaired, at which time the |
| | | cumulative loss previously recognised in equity is |
| | | included in loss for the year. |
+----------+----+------------------------------------------------------------+
+----------+----+------------------------------------------------------------+
| | | Share-based paymentsThe Company operates an equity-settled |
| | | share-based payment scheme. Equity-settled share-based |
| | | payments are measured at fair value of the share options |
| | | at the date of grant. The fair value determined at the |
| | | grant date is expensed on a straight-line basis over the |
| | | vesting period with a corresponding increase in equity, |
| | | based on the Company's estimate of the number of options |
| | | that will eventually vest. |
| | | Fair value is measured by use of a Black-Scholes model, |
| | | taking into account the terms and conditions upon which |
| | | the options were granted. |
+----------+----+------------------------------------------------------------+
+----------+----+-----------------------------------------------------------+
| | | Critical accounting estimates and judgements |
| | | Estimates and judgements are continually evaluated and |
| | | are based on historical experience and other factors, |
| | | including expectations of future events that are believed |
| | | to be reasonable under the circumstances. |
| | | |
| | | Critical accounting estimates and assumptions |
| | | |
| | | The Company makes estimates and assumptions concerning |
| | | the future. The resulting accounting estimates and |
| | | assumptions will, by definition, seldom equal to the |
| | | related actual results. The estimates and assumptions |
| | | that have a significant risk of causing a material |
| | | adjustment to the carrying amounts of assets and |
| | | liabilities within the next financial year are discussed |
| | | below. |
| | | |
| | | The Company is subject to income taxes at city and |
| | | national level within Japan. Significant judgement is |
| | | required in determining the provision for income taxes. |
| | | There are many transactions and calculations for which |
| | | the ultimate tax determination is uncertain during the |
| | | ordinary course of business. The Company recognises |
| | | liabilities for anticipated tax audit issues based on |
| | | estimates of whether additional taxes will be due. Where |
| | | the final tax outcome of these matters is different from |
| | | the amounts that were initially recorded, such |
| | | differences will impact the income tax and deferred tax |
| | | provisions in the period in which such determination is |
| | | made. |
+----------+----+-----------------------------------------------------------+
| | | Provisions |
| | | Provisions are recognized when the Company has a present |
| | | legal or constructive obligation as a result of past |
| | | events and it is probable that an outflow of economic |
| | | benefits will be required to settle the |
| | | obligation. Provisions are measured and recorded as the |
| | | best estimate of the expenditure required settling the |
| | | present obligation at the balance sheet date. |
| | | |
| | | Asset retirement obligation |
| | | |
| | | In accordance with a contractual obligation to a landlord |
| | | to dismantle and remove leasehold improvements from a |
| | | leased office at the end of the lease contract, a |
| | | provision for asset retirement obligation is recognised. |
+----------+----+-----------------------------------------------------------+
+----------+----+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Amendments to IFRS standards and interpretations Adoption of new and revised standards |
| | | The following new and revised Standards and Interpretations have been adopted in these financial statements. The adoption has not had any significant impact on the amounts reported in these financial statements but may affect the accounting for future transactions or arrangements. |
| | | |
| | | The Company has adopted IAS 1 Presentation of Financial Statements (revised 2007), which is applicable for annual reporting periods beginning on or after 1 January 2009. Initial application of this standard did not affect any of the amounts recognized in the financial statements, but changed the presentation of the statement of comprehensive income and statement of changes in equity. There was no change in accounting policy relating to recognition or measurement due to the initial adoption of this standard. |
| | | |
| | | In January 2008, the IASB published the amendments to IFRS 2 (Shared-based Payment: Vesting Conditions and Cancellations). The amendments clarify the definition of vesting conditions for the purposes of IFRS 2, introduce the concept of 'non-vesting' conditions, and clarify the accounting treatment for cancellations. As a result of the changes in the definition of exercise conditions, non-exercise conditions are now to be taken into account when measuring the fair value of the equity instruments granted. The application does not have any material impact on the earnings poison of the Company. |
| | | |
| | | The principle change to the IAS 23(as revised in 2007) Borrowing Costs was to eliminate the option to expense all borrowing costs that can be classified as directly related to the acquisition, construction or production of qualifying assets. In this case, qualifying assets are considered to exist if a substantial period of time is required to ready the particular asset for use or sales. The application has no impact to the Company. |
| | | Standards and Interpretations in issue but not yet effective |
| | | At the date of authorization of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases had not been adopted by the EU): |
| | | IFRS 2 (amended) Group Cash-Settled Share Based |
| | | Payment Transactions |
| | | IFRS 3 (revised 2008) Business Combinations |
| | | IAS 27 (revised 2008) Consolidated and Separate Financial |
| | | Statements |
| | | IAS 39 (amended) Eligible Hedged Items |
| | | IFRIC 17 Distributions of Non-cash Assets to |
| | | Owners |
| | | Improvements to IFRSs Amendments to IFRS 5 Non-current |
| | | (2008) Assets Held for Sales and |
| | | Discontinued Operations |
| | | Improvements to IFRSs Amendments to IFRS 2 Share-based |
| | | (2009) Payments and IFRS 3 Business |
| | | Combinations (revised 2008) |
| | | Improvements to IFRSs Amendments to IAS 38 Intangible |
| | | (2009) Assets |
| | | Improvements to IFRSs Amendments to IFRIC 9 Reassessment |
| | | (2009) of Embedded Derivatives |
| | | Improvements to IFRSs Amendments to IFRIC 16 Hedges of a |
| | | (2009) Net Investment in a Foreign |
| | | Operation |
| | | Improvements to IFRSs Amendments to IFRS 5 Non-current |
| | | (2009) Assets Held for Sale and |
| | | Discontinued Operations |
| | | Improvements to IFRSs Amendments to IFRS 8 Operating |
| | | (2009) Segments |
| | | Improvements to IFRSs Amendments to IAS 1 Presentation of |
| | | (2009) Financial Statements |
| | | Improvements to IFRSs Amendments to IAS 7 Statement of |
| | | (2009) Cash Flows |
| | | Improvements to IFRSs Amendments to Amendments to IAS 17 |
| | | (2009) Leases |
| | | Improvements to IFRSs Amendments to IAS 36 Impairment of |
| | | (2009) Assets |
| | | Improvements to IFRSs Amendments to IAS 39 Financial |
| | | (2009) Instruments: Recognition and |
| | | Measurement |
| | | |
+----------+----+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
BgenuineTec Inc
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
FOR the years ended 31 December 2009 and 2008
+----------+----+-----------------------------------------------------------+
| | 1 | PRESENTATION OF FINANCIAL STATEMENTS |
+----------+----+-----------------------------------------------------------+
| | | The consolidated financial statements have been prepared |
| | | in accordance with International Financial Reporting |
| | | Standards. |
| | | |
+----------+----+-----------------------------------------------------------+
| | | These consolidated financial statements are presented in |
| | | Japanese Yen since that is the currency in which the |
| | | majority of the Company's transactions are denominated. |
| | | |
+----------+----+-----------------------------------------------------------+
+----------+----+-------------------------------------+----------+----+------------+
| | 2 | REVENUE | | |
+----------+----+-------------------------------------+----------+-----------------+
| | | An analysis of the Company's | JPY'000 |
| | | revenue is as follows: | |
+----------+----+-------------------------------------+----------------------------+
| | | | Year ended | Year ended |
| | | | 31/12/09 | 31/12/08 |
+----------+----+-------------------------------------+---------------+------------+
| | | Continuing operations - sale of | 44,329 | 25,455 |
| | | goods: | | |
+----------+----+-------------------------------------+---------------+------------+
| | | Total revenue | 44,329 | 25,455 |
+----------+----+-------------------------------------+---------------+------------+
| | | | | | |
+----------+----+-------------------------------------+----------+----+------------+
+--------+--------+----------------+
| | 3 | Segment |
| | | Information |
+--------+--------+----------------+
| | | Business |
| | | segmentsFor |
| | | management |
| | | reporting |
| | | purposes, |
| | | the Company |
| | | is |
| | | currently |
| | | organised |
| | | as a single |
| | | operating |
| | | division, |
| | | that is, |
| | | biometric |
| | | technology. |
| | | This division |
| | | is the basis |
| | | for segment |
| | | information. |
| | | Principal |
| | | activity is |
| | | to be engaged |
| | | in research |
| | | and |
| | | development |
| | | and sales of |
| | | biometric |
| | | technology |
| | | products |
| | | including |
| | | biometric |
| | | certification |
| | | and |
| | | authentication |
| | | services, |
| | | physical |
| | | access |
| | | systems, |
| | | fingerprint |
| | | image sensors |
| | | and relating |
| | | software. |
| | | Due to the |
| | | single |
| | | segment, the |
| | | segment |
| | | information is |
| | | not reported |
| | | here. |
+--------+--------+----------------+
+--------+--------+---------------+
| | | Geographical |
| | | segmentsThe |
| | | Company's |
| | | operations |
| | | are located |
| | | only in |
| | | Japan and |
| | | there was |
| | | substantially |
| | | no |
| | | exportation |
| | | from Japan. |
+--------+--------+---------------+
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | 4 | LOSS FROM OPERATIONS |
+---------------------------------------------+------------+----------------------------------------------------------------------------------+
| | | Loss from operations has been arrived at after charging: |
| | | |
+---------------------------------------------+------------+----------------------------------------------------------------------------------+
| | | |
+---------------------------------------------+------------+----------------------------------------------------------------------------------+
| | | | JPY'000 | |
+---------------------------------------------+------------+---------------------------------------------+-------------------------+----------+
| | | | Year ended | Year ended | |
| | | | 31/12/09 | 31/12/08 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Staff costs (see below numbers of staff) | | | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Salaries and wages | 92,321 | 83,021 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Share option expense | (9,917) | 13,631 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Social security costs | 5,723 | 7,701 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | | 88,127 | 104,353 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | | | | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Depreciation | 1,081 | 3,541 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Impairment of property, plant and equipment | - | 1,929 | |
| | | (note 1, described below) | | | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Amortisation | 430 | 27,954 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Impairment of intangible assets | -7,200 | | |
| | | (note 1, described below) | | 34,604 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Auditors' remuneration | | | |
| | | -audit for annual report | | | |
| | | -other | 6,190 | 5,286 | |
| | | | - | - | |
+ + +---------------------------------------------+------------+------------+----------+
| | | | 6,190 | 5,286 | |
| | | | | | |
+---------------------------------------------+------------+---------------------------------------------+------------+---------------------------------------------+------------+
| | | Research and development | 4,785 | 24,196 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Advisory fees | 28,701 | 18,212 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Purchased goods | 34,867 | 17,619 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Write-down of inventories | 15,843 | 86,502 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Subcontractors fees | 20,949 | 56,112 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Travel expenses | 11,613 | 9,688 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Operating lease expenses (Note 23) | 12,821 | 13,219 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Advertising and public relation expenses | 15,177 | 19,758 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Allowance for doubtful receivables | 37,479 | 101,219 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Provision for asset retirement obligation | 1,600 | - | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Others | 50,341 | 1,901 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
| | | Total | 337,204 | 526,093 | |
+---------------------------------------------+------------+---------------------------------------------+------------+------------+----------+
(note 1) Certain assets in the year ended 31December 2009 and 2008 have been
impaired since it is no longer considered recoverable from the Company's
continuing operations.
+----------+--+----------------------------------+-----------+-----------+
| | | NUMBER OF STAFF |
+----------+--+----------------------------------------------------------+
| | | The average monthly number of employees including |
| | | executive directors for the year for each of the |
| | | Company's principal functions was as follows: |
+----------+--+----------------------------------------------------------+
| | | | Number |
+----------+--+----------------------------------+-----------------------+
| | | | Year | Year |
| | | | ended | ended |
| | | | 31/12/09 | 31/12/08 |
+----------+--+----------------------------------+-----------+-----------+
| | | Engineers | 3 | 2 |
+----------+--+----------------------------------+-----------+-----------+
| | | Head office and administration | 3 | 4 |
+----------+--+----------------------------------+-----------+-----------+
| | | | 6 | 6 |
+----------+--+----------------------------------+-----------+-----------+
+----------+---+--------------------------------+-----------+-----------+
| | 5 | FINANCE COSTS | JPY'000 |
+----------+---+--------------------------------+-----------------------+
| | | | Year | Year |
| | | | ended | ended |
| | | | 31/12/09 | 31/12/08 |
+----------+---+--------------------------------+-----------+-----------+
| | | Interest on borrowings, net of | 36 | - |
| | | interest earned | | |
+----------+---+--------------------------------+-----------+-----------+
| | | Foreign exchange loss, net | 413 | - |
+----------+---+--------------------------------+-----------+-----------+
| | | Loss on sale of investment | 23,076 | 1,724 |
| | | security | | |
+----------+---+--------------------------------+-----------+-----------+
| | | Loss on devaluation of | 1 | 23,292 |
| | | investment security (Note 12) | | |
+----------+---+--------------------------------+-----------+-----------+
| | | | 23,526 | 25,016 |
+----------+---+--------------------------------+-----------+-----------+
+----------+----+--------------------------------+------------+----------+
| | 6 | FINANCE INCOME |
| | | |
+----------+----+--------------------------------------------------------+
| | | | JPY'000 |
+----------+----+--------------------------------+-----------------------+
| | | | Year ended | Year |
| | | | 31/12/09 | ended |
| | | | | 31/12/08 |
+----------+----+--------------------------------+------------+----------+
| | | Interest earned, net of | - | 77 |
| | | interest incurred | | |
+----------+----+--------------------------------+------------+----------+
| | | Foreign exchange gain, net | - | 3,015 |
+----------+----+--------------------------------+------------+----------+
| | | | - | 3,092 |
+----------+----+--------------------------------+------------+----------+
+----------+---+---------------------+-------------+-----+--------+--------------+
| | 7 | EARNINGS PER SHARE | | |
+----------+---+---------------------+-------------------+-----------------------+
| | | The calculation of the basic and diluted earnings per share is |
| | | based on the following data: |
+----------+---+-----------------------------------------------------------------+
| | | Earnings | JPY'000 |
+----------+---+-----------------------------------+-----------------------------+
| | | | Year ended | Year ended |
| | | | 31/12/09 | 31/12/08 |
+----------+---+-----------------------------------+--------------+--------------+
| | | Earnings for the purposes of | (380,667) | (537,923) |
| | | basic earnings per share (net | | |
| | | loss for the year attributable to | | |
| | | equity holders) | | |
+----------+---+-----------------------------------+--------------+--------------+
| | | Effect of dilutive potential | - | - |
| | | ordinary shares | | |
| | | (note 1, described below) | | |
+----------+---+-----------------------------------+--------------+--------------+
| | | Earnings for the purposes of | (380,667) | (537,923) |
| | | diluted earnings per share | | |
+----------+---+-----------------------------------+--------------+--------------+
| | | | | |
+----------+---+-----------------------------------+--------------+--------------+
| | | Number of shares | Year ended | Year ended |
| | | | 31/12/09 | 31/12/08 |
+----------+---+-----------------------------------+--------------+--------------+
| | | Weighted average number of | 69,417,630 | 46,753,624 |
| | | ordinary shares for the purposes | | |
| | | of basic earnings per share | | |
+----------+---+-----------------------------------+--------------+--------------+
| | | Effect of dilutive potential | - | - |
| | | ordinary shares: | | |
| | | - share option (note 1, | | |
| | | described below) | | |
+----------+---+-----------------------------------+--------------+--------------+
| | | Weighted average number of | 69,417,630 | 46,753,624 |
| | | ordinary shares for the purposes | | |
| | | of diluted earnings per share | | |
+----------+---+-----------------------------------+--------------+--------------+
| | | |
| | | (note 1) Share options which the Company and associated |
| | | company held has anti-dilutive effect on earnings per share for |
| | | the years. |
| | | |
+----------+---+-----------------------------------------------------------------+
| | | | | | | |
+----------+---+---------------------+-------------+-----+--------+--------------+
+----------+--+----------------+-+----------+-------------+-----------+-----------+-------------+
| | 8| PROPERTY, PLANT AND EQUIPMENT |
+----------+--+---------------------------------------------------------------------------------+
| | | | | JPY'000 |
+----------+--+----------------+------------+---------------------------------------------------+
| | | | | Leasehold | Plant | Fixtures | Total |
| | | | |Improvement | & | & | |
| | | | | |Machinery |Equipment | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | COST OR VALUATION | | | |
+----------+--+-------------------------------------------+-----------+-----------+-------------+
| | | At 1 January | | 3,757 | 171 | 17,934 | 21,862 |
| | | 2008 | | | | | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | Additions | | - | - | - | - |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | Disposal | | | | | |
| | | -disposal | | - | - | - | - |
| | | -impairment | | - | (37) | (1,892) | (1,929) |
| | | (note 1, | | | | | |
| | | described below) | | | | | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | At 1 January | | 3,757 | 134 | 16,042 | 19,933 |
| | | 2009 | | | | | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | Additions | | - | - | - | - |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | Deductions | | | | | |
| | | -disposal | | - | - | - | - |
| | | -impairment | | - | - | - | - |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | At 31 December | | 3,757 | 134 | 16,042 | 19,933 |
| | | 2009 | | | | | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | | | | | | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | ACCUMULATED DEPRECIATION | | | |
+----------+--+-------------------------------------------+-----------+-----------+-------------+
| | | At 1 January | | 309 | 93 | 11,777 | 12,179 |
| | | 2008 | | | | | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | Charge for the | | 399 | 41 | 3,100 | 3,540 |
| | | year | | | | | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | Disposal | | - | - | - | - |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | At 1 January | | 708 | 134 | 14,877 | 15,719 |
| | | 2009 | | | | | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | Charge for the | | 400 | - | 681 | 1,081 |
| | | year | | | | | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | Disposal | | - | - | - | - |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | At 31 December | | 1,108 | 134 | 15,558 | 16,800 |
| | | 2009 | | | | | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | | | | | | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | NET BOOK VALUE | | | |
+----------+--+-------------------------------------------+-----------+-----------+-------------+
| | | At 31 December | | 2,649 | - | 484 | 3,133 |
| | | 2009 | | | | | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | At 31 December | | 3,049 | - | 1,165 | 4,214 |
| | | 2008 | | | | | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | | | | | | |
+----------+--+------------------+----------+-------------+-----------+-----------+-------------+
| | | (note 1) A part of property, plant and equipment relating to specific |
| | | research and development has been impaired by estimating future cash |
| | | flows since they were considered not to be recoverable. |
+----------+--+---------------------------------------------------------------------------------+
| | | | | | | | | |
+----------+--+----------------+-+----------+-------------+-----------+-----------+-------------+
+----------+----------+----------------------------------------+----------+----------+
| | 9 | OTHER NON-CURRENT ASSETS |
+----------+----------+--------------------------------------------------------------+
| | | | JPY'000 |
+----------+----------+----------------------------------------+---------------------+
| | | | Year | Year |
| | | | ended | ended |
| | | | 31/12/09 | 31/12/08 |
+----------+----------+----------------------------------------+----------+----------+
| | | Lease deposit for office premises | | |
+----------+----------+----------------------------------------+----------+----------+
| | | Beginning balance | 4,574 | 4,673 |
+----------+----------+----------------------------------------+----------+----------+
| | | Addition | - | 270 |
+----------+----------+----------------------------------------+----------+----------+
| | | Disposal | - | (369) |
+----------+----------+----------------------------------------+----------+----------+
| | | Ending balance | 4,574 | 4,574 |
+----------+----------+----------------------------------------+----------+----------+
| | | Long-term prepaid expense | | |
+----------+----------+----------------------------------------+----------+----------+
| | | Beginning balance | 62 | 185 |
+----------+----------+----------------------------------------+----------+----------+
| | | Addition | - | - |
+----------+----------+----------------------------------------+----------+----------+
| | | Amortisation | (62) | (123) |
+----------+----------+----------------------------------------+----------+----------+
| | | Ending balance | - | 62 |
+----------+----------+----------------------------------------+----------+----------+
| | | Total | 4,574 | 4,636 |
+----------+----------+----------------------------------------+----------+----------+
+----------+----+-----------------------------------------------+---------+
| | 10 | GOODWILL |
+----------+----+---------------------------------------------------------+
| | | | JPY'000 |
+----------+----+-----------------------------------------------+---------+
| | | COST | |
+----------+----+-----------------------------------------------+---------+
| | | At 1 January 2008 | 12,500 |
+----------+----+-----------------------------------------------+---------+
| | | Additions | - |
+----------+----+-----------------------------------------------+---------+
| | | Deductions | |
| | | - impairment (note 1, described below) | (5,300) |
+----------+----+-----------------------------------------------+---------+
| | | At 1 January 2009 | 7,200 |
+----------+----+-----------------------------------------------+---------+
| | | Additions | - |
+----------+----+-----------------------------------------------+---------+
| | | Deductions | |
| | | - impairment (note 1, described below) | (7,200) |
+----------+----+-----------------------------------------------+---------+
| | | At 31 December 2009 | - |
+----------+----+-----------------------------------------------+---------+
| | | |
| | | (note 1) The Company reviewed Goodwill for impairment |
| | | for the period ended December 31, 2009 and 2008 by |
| | | estimating future cash flows. As a result, impairment |
| | | loss of JPY 7,200,000 and JPY5, 300,000 were recognized |
| | | as of December 31, 2009 and 2008 respectively as they |
| | | were considered not to be recoverable. |
+----------+----+-----------------------------------------------+---------+
+----------+--+-+------------------+-------------+------------+-----------+----------------+----------+
| | 11 | INTANGIBLE ASSETS |
+----------+----+-------------------------------------------------------------------------------------+
| | | | JPY'000 |
+----------+----+------------------+------------------------------------------------------------------+
| | | | Development | Patents | Exclusive | Total |
| | | | costs | & | sales | |
| | | | | trademarks | right | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | COST | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | At 1 January | 68,693 | 50,318 | 3,429 | 122,440 |
| | | 2008 | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | Additions | 3,897 | - | - | 3,897 |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | Deductions | | | | |
| | | -impairment | (7,385) | (18,489) | (3,429) | (29,303) |
| | | (note 1) | - | (20,400) | - | (20,400) |
| | | -other | | | | |
| | | (returned) | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | At 1 January | 65,205 | 11,429 | - | 76,634 |
| | | 2009 | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | Additions | - | 19,048 | - | 19,048 |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | Deductions | | | | |
| | | -disposal | (65,205) | - | - | (65,205) |
| | | -impairment | - | - | - | - |
| | | | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | At 31 December | - | 30,477 | - | 30,477 |
| | | 2009 | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | AMORTISATION | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | At 1 January | 39,922 | 5,000 | - | 44,922 |
| | | 2008 | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | Charge for the | 21,602 | 5,252 | - | 26,854 |
| | | year | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | At 1 January | 61,524 | 10,252 | - | 71,776 |
| | | 2009 | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | Charge for the | (61,524) | 369 | - | (61,155) |
| | | year | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | At 31 December | - | 10,621 | - | 10,621 |
| | | 2009 | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | CARRYING AMOUNT | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | At 31 December | - | 19,856 | - | 19,856 |
| | | 2009 | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | At 31 December | 3,681 | 1,177 | - | 4,858 |
| | | 2008 | | | | |
+----------+----+------------------+-------------+------------+-----------+---------------------------+
| | | | |
+----------+--+----------------------------------------------------------------------------+----------+
| | | (note 1) A part of intangible assets relating to specific | |
| | | research and development has been impaired by estimating future | |
| | | cash flows since they were considered not to be recoverable. A | |
| | | part of intangible assets relating to parents & trademarks and | |
| | | exclusive sales right has been impaired by estimating future cash | |
| | | flows since they substantially became ineffective. | |
+----------+--+----------------------------------------------------------------------------+----------+
| | | | | | | | | |
+----------+--+-+------------------+-------------+------------+-----------+----------------+----------+
+----------+----+----------------------------------+--------+------------+
| | 12 | INVESTMENT SECURITIES | | |
+----------+----+----------------------------------+--------+------------+
| | | Available-for-sale investments | | |
| | | | | JPY'000 |
+----------+----+----------------------------------+--------+------------+
| | | At 1 January 2008 | | 32,682 |
+----------+----+----------------------------------+--------+------------+
| | | Acquired | | - |
+----------+----+----------------------------------+--------+------------+
| | | Disposed | | (2,944) |
+----------+----+----------------------------------+--------+------------+
| | | Impairment | | (23,292) |
+----------+----+----------------------------------+--------+------------+
| | | Increase in fair value | | - |
+----------+----+----------------------------------+--------+------------+
| | | At 1 January 2009 | | 6,446 |
+----------+----+----------------------------------+--------+------------+
| | | Acquired | | - |
+----------+----+----------------------------------+--------+------------+
| | | Disposed | | - |
+----------+----+----------------------------------+--------+------------+
| | | Impairment | | - |
+----------+----+----------------------------------+--------+------------+
| | | Increase in fair value | | - |
+----------+----+----------------------------------+--------+------------+
| | | At 31 December 2009 | | 6,446 |
+----------+----+----------------------------------+--------+------------+
| | | | |
+----------+----+----------------------------------+---------------------+
| | | |
| | | Available-for-sale investments represent shares in |
| | | Secure Generation Ltd. (Japan, non-listed), which the |
| | | Company acquired through the issue of 86,700 new |
| | | ordinary shares in 2007. The Company owns 6.5% of |
| | | Secure Generation Ltd. at the balance sheet date. The |
| | | Company determined to record JPY23,292,000 of |
| | | impairment loss for the investment for the year ended |
| | | 31 December 2008 remeasured at fair value of future |
| | | cash flows discounted using the market rate of |
| | | interest. |
| | | |
+----------+----+----------------------------------+--------+------------+
+----------+----+----------------------------------------------------------+
| | 13 | EQUITY ACCOUNTED INVESTEE |
+----------+----+----------------------------------------------------------+
| | | |
| | | The Company acquired 40% of share of Beyond LSI, Ltd at |
| | | December 2007 and additional 20.49% shares at June 2008. |
| | | Although the Company's ownership at 31 December 2008 was |
| | | 60.49%, taking into account the potential voting rights |
| | | (i.e. share options) which are exercisable at the date, |
| | | the ownership would be reduced to 48.62% when assessing |
| | | whether the Company has the power to govern the |
| | | financial and operating policies of the investee (IAS27, |
| | | paragraph 14). Based on an evaluation of the extent of |
| | | control over the investee, it is not consolidated but |
| | | accounted for using the equity method by the Company. |
| | | The Company's share of loss in its equity accounted |
| | | investee for the year ended 31 December 2009 was JPY |
| | | 3,167,000 (2008: JPY 26,491,000). |
| | | |
| | | The Company acquired 30% of share of ASD Inc. at March |
| | | 2009. The Company's share of loss in its equity |
| | | accounted investee for the year ended 31 December 2009 |
| | | was JPY 3,000,000. ASD Inc. was established by the |
| | | ex-Director, Mr.Kiyomoto. |
+----------+----+----------------------------------------------------------+
| | | |
| | | Summary financial information for equity accounted |
| | | investees, not adjusted for the percentage ownership |
| | | held by the Company: |
+----------+----+----------------------------------------------------------+
+------------+----------+----------+-------+----------+----------+----------+------+-------------+-------------+-------------+----------+
| 2009 | Owner- | Current | Non- | Total assets | Current | Non- | Total | |
| | ship | Assets | current assets | |liabilities | current |liabilities | |
| | | | | | |liabilities | | |
+------------+ + + + + + + +----------+
| (Unit: | | | | | | | | |
| JPY'000) | | | | | | | | |
+------------+----------+------------------+---------------------+-----------------+-------------+-------------+-------------+----------+
| Beyond LSI | 24.93% | 42,045 | 4,672 | 46,717 | 66,851 | 158,932 | 225,783 | |
| Ltd. | | | | | | | | |
+------------+----------+------------------+---------------------+-----------------+-------------+-------------+-------------+----------+
| | Revenues | Expenses | Loss | | |
+------------+ + + +------------------------------------------------+----------+
| | | | | | |
+------------+---------------------+------------------+---------------------+------------------------------------------------+----------+
| | 28,507 | 32,970 | 4,463 | | |
+------------+---------------------+------------------+---------------------+------------------------------------------------+----------+
| | | | | | | | | | | | |
+------------+----------+----------+-------+----------+----------+----------+------+-------------+-------------+-------------+----------+
+------------+----------+----------+-------+----------+----------+----------+------+-------------+-------------+-------------+----------+
| 2009 | Owner- | Current | Non- | Total assets | Current | Non- | Total | |
| | ship | Assets | current assets | |liabilities | current |liabilities | |
| | | | | | |liabilities | | |
+------------+ + + + + + + +----------+
| (Unit: | | | | | | | | |
| JPY'000) | | | | | | | | |
+------------+----------+------------------+---------------------+-----------------+-------------+-------------+-------------+----------+
| ASD Inc. | 30.00% | 2,061 | 411 | 2,472 | 5,049 | 10,000 | 15,049 | |
+------------+----------+------------------+---------------------+-----------------+-------------+-------------+-------------+----------+
| | Revenues | Expenses | Loss | | |
+------------+ + + +------------------------------------------------+----------+
| | | | | | |
+------------+---------------------+------------------+---------------------+------------------------------------------------+----------+
| | 7,660 | 23,404 | 15,744 | | |
+------------+---------------------+------------------+---------------------+------------------------------------------------+----------+
| | | | | | | | | | | | |
+------------+----------+----------+-------+----------+----------+----------+------+-------------+-------------+-------------+----------+
+------------+----------+----------+-------+----------+------+----------+--------+-------------+-------------+-------------+----------+
| 2008 | Owner- | Current | Non- | Total | Current | Non- | Total | |
| | ship | Assets | current assets |assets |liabilities | current |liabilities | |
| | | | | | |liabilities | | |
+------------+ + + + + + + +----------+
| (Unit: | | | | | | | | |
| JPY'000) | | | | | | | | |
+------------+---------------------+------------------+-----------------+--------+-------------+-------------+-------------+----------+
| Beyond LSI | 60.49% | 13,929 | 14,919 |28,848 | 78,815 | 162,972 | 241,787 | |
| Ltd. | | | | | | | | |
+------------+---------------------+------------------+-----------------+--------+-------------+-------------+-------------+----------+
| |Revenues | Expenses | Loss | | |
+------------+ + + +-------------------------------------------------------------+----------+
| | | | | | |
+------------+----------+------------------+-----------------+-------------------------------------------------------------+----------+
| | 11,767 | 54,722 | 42,955 | | |
+------------+----------+------------------+-----------------+-------------------------------------------------------------+----------+
| | | | | | | | | | | | |
+------------+----------+----------+-------+----------+------+----------+--------+-------------+-------------+-------------+----------+
+----------+----+-------------------------------+------+----------+-----------+
| | 14 | INVENTORIES | |
+----------+----+-------------------------------+-----------------------------+
| | | | JPY'000 |
+----------+----+--------------------------------------+----------------------+
| | | | Year | Year |
| | | | ended | ended |
| | | | 31/12/09 | 31/12/08 |
+----------+----+--------------------------------------+----------+-----------+
| | | Raw Materials (note 1, described | 7,967 | 26,063 |
| | | below) | | |
+----------+----+--------------------------------------+----------+-----------+
| | | Finished goods (note 2, described | 9,713 | 25,664 |
| | | below) | | |
+----------+----+--------------------------------------+----------+-----------+
| | | | 17,680 | 51,727 |
+----------+----+--------------------------------------+----------+-----------+
| | | | | | |
+----------+----+-------------------------------+------+----------+-----------+
(note 1) As of 31 December 2009 and 2008, raw materials have been written
down by JPY 29,175,000 and 30,578,000 to their net realisable value.
(note 2) As of 31 December 2009 and 2008, finished goods have been written
down by JPY 71,325,000 and 55,925,000 to their net realisable value.
+----------+--+---------------------------------------+----------+----------+
| | 15| OTHER FINANCIAL ASSETS | |
+----------+--+---------------------------------------+---------------------+
| | | Trade and other receivables comprise | JPY'000 |
| | | of the following items; | |
+----------+--+---------------------------------------+---------------------+
| | | | Year | Year |
| | | | ended | ended |
| | | | 31/12/09 | 31/12/08 |
+----------+--+---------------------------------------+----------+----------+
| | | Trade accounts receivable | 7,053 | 6,516 |
+----------+--+---------------------------------------+----------+----------+
| | | Prepaid expenses | 2,423 | 2,697 |
+----------+--+---------------------------------------+----------+----------+
| | | Advance payments to third party | - | 3,119 |
+----------+--+---------------------------------------+----------+----------+
| | | Short-term lending to related party | - | 13,400 |
| | | (Note 24) | | |
+----------+--+---------------------------------------+----------+----------+
| | | Other receivables | - | 2,060 |
+----------+--+---------------------------------------+----------+----------+
| | | Consumption tax recoverable | 5,173 | 15,650 |
+----------+--+---------------------------------------+----------+----------+
| | | Total | 14,649 | 43,442 |
+----------+--+---------------------------------------+----------+----------+
The average credit period on sales of goods is 75 days. Trade receivables and
other receivables are shown as fair values after deduction of the likely
uncollectible value amounting to JPY13,192,000 and JPY8,000,000 respectively at
31 December 2009. The directors consider that the carrying amount of trade and
other receivables approximates their fair value.
+----------+---+----------------------------------------------------------+
| | | |
+----------+---+----------------------------------------------------------+
| | | Cash and cash equivalents comprise cash and short-term |
| | | deposits held by the Company treasury function. The |
| | | carrying amount of these assets approximates to their |
| | | fair value. |
| | | |
+----------+---+----------------------------------------------------------+
| | | Credit risk - The Company's principal financial assets |
| | | are bank balances and cash, investment securities, and |
| | | trade and other receivables, which represent the |
| | | Company's maximum exposure to credit risk in relation to |
| | | financial assets. |
| | | The Company's credit risk is primarily attributable to |
| | | its trade receivables. The amounts presented in the |
| | | statement of financial position are recognised at fair |
| | | value and subsequently measured by estimating the |
| | | present value of cash flows discounted using the |
| | | effective interest rate if impaired. The Company |
| | | analyses default risks and customer relations regularly |
| | | in order to minimize credit risk of trade receivables. |
| | | The credit risk on liquid funds is limited because the |
| | | counterparties are banks with high credit-ratings |
| | | assigned by international credit-rating agencies. |
| | | The Company has a concentration of credit risk, with |
| | | exposure spread over only several counterparties and |
| | | customers. |
| | | Financial risk - The Company has no significant interest |
| | | risk. The Company is exposed to transactions in |
| | | currencies other than Japanese Yen. The Company has a |
| | | liquidity risk, which is described at Going Concern in |
| | | the summary of significant accounting policies. |
| | | The balances under foreign currencies as at 31 December |
| | | 2009 and 2008 were bank deposits of JPY 131,000 (SEK |
| | | 10,276.19) and JPY 120,000 (SEK 10,276.19), and |
| | | receivables of nil and JPY 2,185,000 (USD 24,000), and |
| | | payables of JPY 5,355,000 (USD 15,390.00 and STG |
| | | 26,993.58) and JPY 1,239,000 (USD 9,000.00 and STG |
| | | 3,150.00). There were no formal risk management |
| | | policies in place other than management monitoring the |
| | | level of transactions denominated in foreign currencies. |
| | | |
+----------+---+----------------------------------------------------------+
+----------+----+--------------------+-------------+---------+-------------+---------+
| | 16 | SHARE CAPITAL | | | | |
+----------+----+--------------------+-------------+---------+-------------+---------+
| | | | 2009 | 2009 | 2008 | 2008 |
| | | | Number | JPY'000 | Number | JPY'000 |
+----------+----+--------------------+-------------+---------+-------------+---------+
| | | Ordinary shares | | | | |
| | | with no nominal | | | | |
| | | value | | | | |
+----------+----+--------------------+-------------+---------+-------------+---------+
| | | Authorised: | 125,600,000 | N/A | 125,600,000 | N/A |
+----------+----+--------------------+-------------+---------+-------------+---------+
| | | | | | | |
+----------+----+--------------------+-------------+---------+-------------+---------+
| | | Issued and fully | 18,740,000 | 79,220 | 20,531,595 | 154,000 |
| | | paid: | | | | |
+----------+----+--------------------+-------------+---------+-------------+---------+
| | | Balance at the | 78,723,821 | 946,834 | 59,983,821 | 867,614 |
| | | year end | | | | |
+----------+----+--------------------+-------------+---------+-------------+---------+
+----------+----+---------------------------------------------------------+
| | | |
| | | |
| | | |
| | | On 5 March 2008, the Company issued 1,500,000 shares |
| | | and allocated them to the management by a Board |
| | | resolution. After such issuance, the aggregate number |
| | | of issued shares was 40,952,226. 50% of the total paid |
| | | amount of JPY 15,000,000 was allocated to share capital |
| | | and the rest was allocated to share premium. |
| | | |
| | | On 26 June 2008, the Company issued 6,625,000 shares |
| | | and allocated them to an institutional investor and the |
| | | management by a Board resolution. After such issuance, |
| | | the aggregate number of issued shares was 47,577,226. |
| | | 50% of the total paid amount of JPY 53,000,000 was |
| | | allocated to share capital and the rest was allocated |
| | | to share premium. |
| | | |
| | | On 25 September 2008, the Company issued 714,285 shares |
| | | and allocated them to the management by a Board |
| | | resolution. After such issuance, the aggregate number |
| | | of issued shares was 48,291,511. 50% of the total paid |
| | | amount of JPY 10,000,000 was allocated to share capital |
| | | and the rest was allocated to share premium. |
| | | |
| | | On 21 November 2008, the Company issued 11,692,310 |
| | | shares and allocated them to the some institutional |
| | | investors and management by a Board resolution. After |
| | | such issuance, the aggregate number of issued shares |
| | | was 59,983,821. 50% of the total paid amount of JPY |
| | | 76,000,000 was allocated to share capital and the rest |
| | | was allocated to share premium. |
| | | |
| | | On 2 March 2009, the Company issued 4,200,000 shares |
| | | and allocated them to an institutional investor and the |
| | | management by a Board resolution. After such issuance, |
| | | the aggregate number of issued shares was 64,183,821. |
| | | 50% of the total paid amount of JPY 42,000,000 was |
| | | allocated to share capital and the rest was allocated |
| | | to share premium. |
| | | |
| | | On 6 April 2009, the Company issued 1,000,000 shares |
| | | and allocated them to an institutional investor and the |
| | | management by a Board resolution. After such issuance, |
| | | the aggregate number of issued shares was 65,183,821. |
| | | 50% of the total paid amount of JPY 10,000,000 was |
| | | allocated to share capital and the rest was allocated |
| | | to share premium. |
| | | |
| | | On 29 May 2009, the Company issued 2,500,000 shares and |
| | | allocated them to an institutional investor and the |
| | | management by a Board resolution. After such issuance, |
| | | the aggregate number of issued shares was 67,683,821. |
| | | 50% of the total paid amount of JPY 25,000,000 was |
| | | allocated to share capital and the rest was allocated |
| | | to share premium. |
| | | |
| | | On 30 June 2009, the Company issued 2,500,000 shares |
| | | and allocated them to an institutional investor and the |
| | | management by a Board resolution. After such issuance, |
| | | the aggregate number of issued shares was 70,183,821. |
| | | 50% of the total paid amount of JPY 25,000,000 was |
| | | allocated to share capital and the rest was allocated |
| | | to share premium. |
| | | |
| | | On 27 August 2009, the Company issued 5,200,000 shares |
| | | and allocated them to an institutional investor and the |
| | | management by a Board resolution. After such issuance, |
| | | the aggregate number of issued shares was 75,383,821. |
| | | 50% of the total paid amount of JPY 36,400,000 was |
| | | allocated to share capital and the rest was allocated |
| | | to share premium. |
| | | |
| | | On 21 October 2009, the Company issued 3,340,000 shares |
| | | and allocated them to an institutional investor and the |
| | | management by a Board resolution. After such issuance, |
| | | the aggregate number of issued shares was 78,723,821. |
| | | 50% of the total paid amount of JPY 20,040,000was |
| | | allocated to share capital and the rest was allocated |
| | | to share premium. |
| | | |
| | | |
| | | The Company has one class of ordinary shares, which |
| | | carry no right to fixed income. |
| | | The ordinary shares rank equally for voting and rights |
| | | to dividends. |
| | | |
| | | EQUITY-SETTLED SHARE-BASED COMPENSATION |
| | | |
| | | The shareholders' meeting authorised the share option |
| | | plan as at 31 January 2006. 2,000 options in total |
| | | equivalent to the 1,000 shares per option were granted |
| | | to all Directors, employees and Company's consultants |
| | | for no consideration. The options can be exercised |
| | | commencing from January 31, 2008 to January 30, 2016 at |
| | | JPY 10 per share. Of 2,000 options, 1,820 options were |
| | | actually allotted to the eligible persons. |
| | | |
| | | In addition, shareholders' meeting authorised the share |
| | | option plan as at 29 June 2007. 1,500 options in total |
| | | equivalent to the 750 shares per option were granted to |
| | | all Directors, employees and Company's consultants for |
| | | no consideration. The options can be exercised |
| | | commencing from June 30, 2009 to June 29, 2010 at JPY |
| | | 107 per share. Of 1,500 options, 1,460 options were |
| | | actually allotted to the eligible persons. |
| | | |
| | | Share-based compensation was measured at fair value of |
| | | the share options at the date of grant. The fair value |
| | | determined at the grant date was expensed on a |
| | | straight-line basis over the vesting period, based on |
| | | the Company's estimate of shares that will eventually |
| | | vest. Fair value was measured by use of |
| | | the Black-Scholes model, taking into account the terms |
| | | and conditions upon which the options were granted. |
| | | |
| | | |
+----------+----+---------------------------------------------------------+
+----------+----+-------------------------------------+---------+-----------+
| | | Details of share options granted during the year ended |
| | | 31 December 2006, and the assumptions used in the |
| | | Black-Scholes model are as follows: |
+----------+----+-----------------------------------------------------------+
| | | | Number | Number |
| | | | of | of |
| | | | Options | shares |
| | | | | |
+----------+----+-------------------------------------+---------+-----------+
| | | Number of share options granted as | 900 | 900,000 |
| | | of 31 December 2008 | | |
+----------+----+-------------------------------------+---------+-----------+
| | | Forfeited during the year | (320) | (320,000) |
+----------+----+-------------------------------------+---------+-----------+
| | | Outstanding as of 31 December 2009 | 580 | 580,000 |
+----------+----+-------------------------------------+---------+-----------+
| | | | | |
+----------+----+-------------------------------------+---------+-----------+
| | | Fair value of share at measurement | 10 | JPY/share |
| | | date | | |
+----------+----+-------------------------------------+---------+-----------+
| | | Equity-settled share-based payment | 3.14 | JPY/share |
| | | fair value | | |
+----------+----+-------------------------------------+---------+-----------+
| | | Exercise price | 10 | JPY/share |
+----------+----+-------------------------------------+---------+-----------+
| | | Weighted average exercise price | 10 | JPY/share |
+----------+----+-------------------------------------+---------+-----------+
| | | Expected volatility | 23.26 | % p.a. |
+----------+----+-------------------------------------+---------+-----------+
| | | Option life | 120 | Month |
+----------+----+-------------------------------------+---------+-----------+
| | | Expected dividends | nil | |
+----------+----+-------------------------------------+---------+-----------+
| | | Risk-free interest rate | 0.8 | % |
+----------+----+-------------------------------------+---------+-----------+
| | | |
+----------+----+-----------------------------------------------------------+
| | | The expected volatility is based on historical |
| | | volatility of similar listed entities since the |
| | | Company was not listed when the options were granted. |
| | | The options are granted under a service condition. |
| | | There are no market conditions associated with the |
| | | option granted. |
+----------+----+-------------------------------------+---------+-----------+
+----------+----+-------------------------------------+---------+-----------+
| | | Details of share options granted during the year ended |
| | | 31 December 2007 and the assumptions used in the |
| | | Black-Scholes model are as follows: |
+----------+----+-----------------------------------------------------------+
| | | | Number | Number |
| | | | of | of |
| | | | Options | shares |
| | | | | |
+----------+----+-------------------------------------+---------+-----------+
| | | Number of share options as of 31 | 820 | 820,000 |
| | | December 2008 | | |
+----------+----+-------------------------------------+---------+-----------+
| | | Forfeited during the year | (420) | (420,000) |
+----------+----+-------------------------------------+---------+-----------+
| | | Outstanding as of 31 December 2009 | 400 | 400,000 |
+----------+----+-------------------------------------+---------+-----------+
| | | | | |
+----------+----+-------------------------------------+---------+-----------+
| | | Fair value of share at measurement | 53.8 | JPY/share |
| | | date | | |
+----------+----+-------------------------------------+---------+-----------+
| | | Equity-settled share-based payment | 31.0313 | JPY/share |
| | | fair value | | |
+----------+----+-------------------------------------+---------+-----------+
| | | Exercise price | 107 | JPY/share |
+----------+----+-------------------------------------+---------+-----------+
| | | Weighted average exercise price | 107 | JPY/share |
+----------+----+-------------------------------------+---------+-----------+
| | | Expected volatility | 128.6 | % p.a. |
+----------+----+-------------------------------------+---------+-----------+
| | | Option life | 30 | Month |
+----------+----+-------------------------------------+---------+-----------+
| | | Expected dividends | nil | |
+----------+----+-------------------------------------+---------+-----------+
| | | Risk-free interest rate | 1.0 | % |
+----------+----+-------------------------------------+---------+-----------+
| | | |
+----------+----+-----------------------------------------------------------+
| | | The options are granted under a service condition. |
| | | There are no market conditions associated with the |
| | | option granted. |
+----------+----+-------------------------------------+---------+-----------+
+----------+----+----------------------------------------+---------------+
| | 17 | DEFICIT |
+----------+----+--------------------------------------------------------+
| | | | JPY'000 |
+----------+----+----------------------------------------+---------------+
| | | Balance at 1 January 2008 | (826,272) |
+----------+----+----------------------------------------+---------------+
| | | Net loss for the year | (537,923) |
+----------+----+----------------------------------------+---------------+
| | | Balance at 1 January 2009 | (1,364,195) |
+----------+----+----------------------------------------+---------------+
| | | Net loss for the year | (380,667) |
+----------+----+----------------------------------------+---------------+
| | | Balance at 31 December 2009 | (1,744,862) |
+----------+----+----------------------------------------+---------------+
| | | | |
+----------+----+----------------------------------------+---------------+
+----------+----+------------------------------------------------------+
| | 18 | DEFERRED TAX |
+----------+----+------------------------------------------------------+
+-----------------------------------------+-----------+--+----------+
| As of 31 December 2009, the Company has unused tax losses of |
| JPY 1,210,860,000 available to offset against future profits. |
| No deferred tax asset has been recognized in respect of such |
| unused tax losses due to the unpredictability of future profit |
| streams. The unrecognized tax losses of JPY8,742,000, JPY |
| 137,271,000, JPY319,834,000, JPY469,987,000 and JPY275,026,000 |
| will expire in 2012, 2013, 2014, 2015 and 2016 respectively. |
+-------------------------------------------------------------------+
| | | |
+-----------------------------------------+--------------+----------+
| Details of deferred tax assets and | | |
| liabilities are as follows: | | |
+-----------------------------------------+--------------+----------+
| | JPY'000 |
+-----------------------------------------+-------------------------+
| | Year | Year ended |
| | ended | 31/12/08 |
| | 31/12/09 | |
+-----------------------------------------+-----------+-------------+
| Tax loss carry forward | 492,820 | 393,998 |
+-----------------------------------------+-----------+-------------+
| Impairment loss on receivables | 58,847 | 58,848 |
+-----------------------------------------+-----------+-------------+
| Impairment loss on investment | - | 9,480 |
| securities | | |
+-----------------------------------------+-----------+-------------+
| Impairment loss on tangible assets | - | 770 |
+-----------------------------------------+-----------+-------------+
| Impairment loss and loss on disposal of | 537 | 11,754 |
| intangible assets | | |
+-----------------------------------------+-----------+-------------+
| Inventory reserve | 40,904 | 35,206 |
+-----------------------------------------+-----------+-------------+
| Differences in depreciation and | 8,984 | 1,994 |
| amortization for tax purposes | | |
+-----------------------------------------+-----------+-------------+
| Liabilities for expenses disallowed | 19,706 | 3,450 |
| until paid | | |
+-----------------------------------------+-----------+-------------+
| Equity-settled share-based transactions | - | 7,211 |
| | | |
+-----------------------------------------+-----------+-------------+
| Loss of share of equity method investee | 36,915 | 9,224 |
+-----------------------------------------+-----------+-------------+
| Provision for asset retirement | 651 | - |
| obligation | | |
+-----------------------------------------+-----------+-------------+
| Others | - | 70 |
+-----------------------------------------+-----------+-------------+
| Deferred tax assets total | 659,364 | 532,005 |
+-----------------------------------------+-----------+-------------+
| | | |
+-----------------------------------------+-----------+-------------+
| Share issuance costs | 17,535 | 14,827 |
+-----------------------------------------+-----------+-------------+
| Deferred tax liabilities total | 17,535 | 14,827 |
+-----------------------------------------+-----------+-------------+
| | | |
+-----------------------------------------+-----------+-------------+
| Net of deferred tax assets and | 641,829 | 517,178 |
| liabilities | | |
+-----------------------------------------+-----------+-------------+
| Valuation allowance | (641,829) | (517,178) |
+-----------------------------------------+-----------+-------------+
| Deferred tax assets on statement of | - | - |
| financial position | | |
+-----------------------------------------+-----------+-------------+
| | | |
+-----------------------------------------+-----------+-------------+
| Tax reconciliation: | | |
+-----------------------------------------+-----------+-------------+
| | | |
+-----------------------------------------+-----------+-------------+
| Reported loss before taxation | (380,667) | (537,923) |
+-----------------------------------------+-----------+-------------+
| Tax rate at 40.7% | (154,931) | (218,934) |
+-----------------------------------------+-----------+-------------+
| Impact of non-deductible expenses | 30,280 | 454 |
+-----------------------------------------+-----------+-------------+
| Impact of prior year's reported loss | (517,178) | (298,698) |
| before taxation | | |
+-----------------------------------------+-----------+-------------+
| Valuation allowance | 641,829 | 517,178 |
+-----------------------------------------+-----------+-------------+
| Tax charge for the period | - | - |
+-----------------------------------------+-----------+-------------+
| | | |
+-----------------------------------------+-----------+-------------+
| | | | |
+-----------------------------------------+-----------+--+----------+
+----------+----+--------------------------------------------------------+
| | 19 | OTHER FINANCIAL LIABILITIES |
+----------+----+--------------------------------------------------------+
| | | Trade and other payables comprise the following items. |
+----------+----+--------------------------------------------------------+
+------------------------------------------+----------+----------+
| | |
| | JPY'000 |
+------------------------------------------+---------------------+
| | Year | Year |
| | ended | ended |
| | 31/12/09 | 31/12/08 |
+------------------------------------------+----------+----------+
| Trade accounts payable | 5,118 | 979 |
+------------------------------------------+----------+----------+
| Accrued expenses | 9,096 | 8,844 |
+------------------------------------------+----------+----------+
| Withholding income tax for employees | 13,722 | 3,295 |
+------------------------------------------+----------+----------+
| Miscellaneous tax payable | 2,895 | 2,886 |
+------------------------------------------+----------+----------+
| Due to employees and directors (Note 24) | 4,977 | 4,929 |
+------------------------------------------+----------+----------+
| Other payables (Note 24) | 107,796 | 60,313 |
+------------------------------------------+----------+----------+
| Total | 143,604 | 81,246 |
+------------------------------------------+----------+----------+
| | | |
+------------------------------------------+----------+----------+
The average credit period for trade purchases is 45 days.
The Directors consider that the carrying amount of trade payables and other
payables approximates to their fair value.
+----------+----+-------------------------------------+-----------+-----------+
| | 20 | RECONCILIATION OF LOSS FROM OPERATIONS TO NET CASH USED |
| | | IN OPERATING ACTIVITIES |
+----------+----+-------------------------------------------------------------+
| | | | JPY'000 |
+----------+----+-------------------------------------+-----------------------+
| | | | 2009 | 2008 |
+----------+----+-------------------------------------+-----------+-----------+
| | | Loss for the year | (380,667) | (537,923) |
+----------+----+-------------------------------------+-----------+-----------+
| | | Adjustments for: | | |
+----------+----+-------------------------------------+-----------+-----------+
| | | Depreciation of property, plant & | 1,081 | 3,541 |
| | | equipment | | |
+----------+----+-------------------------------------+-----------+-----------+
| | | Amortisation of intangible assets | 430 | 26,977 |
| | | and long-term prepaid expense | | |
+----------+----+-------------------------------------+-----------+-----------+
| | | Loss on disposal of intangible | 3,681 | - |
| | | assets | | |
+----------+----+-------------------------------------+-----------+-----------+
| | | Impairment loss of tangible assets | - | 1,929 |
+----------+----+-------------------------------------+-----------+-----------+
| | | Impairment loss of goodwill and | 7,200 | 34,604 |
| | | other intangible assets | | |
+----------+----+-------------------------------------+-----------+-----------+
| | | Impairment loss of investment in | 64,869 | - |
| | | associate company | | |
+----------+----+-------------------------------------+-----------+-----------+
| | | Loss on sale of investment security | 23,076 | 1,724 |
+----------+----+-------------------------------------+-----------+-----------+
| | | Loss on devaluation of investment | 1 | 23,292 |
| | | security | | |
+----------+----+-------------------------------------+-----------+-----------+
| | | Finance costs, net | 36 | (77) |
+----------+----+-------------------------------------+-----------+-----------+
| | | Share option expense | (9,917) | 13,630 |
+----------+----+-------------------------------------+-----------+-----------+
| | | Foreign exchange (gain) / loss on | (12) | 55 |
| | | cash held | | |
+----------+----+-------------------------------------+-----------+-----------+
| | | Share of loss of equity method | 6,167 | 19,484 |
| | | investee | | |
+----------+----+-------------------------------------+-----------+-----------+
| | | Operating cash flows before | (284,055) | (412,764) |
| | | movements in working capital | | |
+----------+----+-------------------------------------+-----------+-----------+
| | | Decrease in inventories | 34,046 | 65,742 |
+----------+----+-------------------------------------+-----------+-----------+
| | | Decrease in receivables | 15,394 | 106,492 |
+----------+----+-------------------------------------+-----------+-----------+
| | | Increase in allowance of doubtful | 16,287 | - |
| | | receivable | | |
+----------+----+-------------------------------------+-----------+-----------+
| | | Increase in payables | 62,358 | 15,425 |
+----------+----+-------------------------------------+-----------+-----------+
| | | Increase in provision for asset | 1,600 | - |
| | | retirement obligation | | |
+----------+----+-------------------------------------+-----------+-----------+
| | | Cash used in operations | (154,370) | (225,105) |
+----------+----+-------------------------------------+-----------+-----------+
+----------+----+----------------------------------------------------------+
| | 21 | CONTINGENT LIABILITIES |
+----------+----+----------------------------------------------------------+
| | | The Company is subject to 3 legal proceedings and |
| | | claims, which arise, in the ordinary course of their |
| | | business. If the defence against the action is |
| | | unsuccessful, legal damages could totally be estimated |
| | | to JPY48, 800,000. The Company believes that adequate |
| | | provision has been made in the financial statements for |
| | | any liability. The Company expects to have a sufficient |
| | | ground to successfully defend these legal actions or the |
| | | outcome of the action. In the opinion of management, the |
| | | amount of ultimate liability with respect to theses |
| | | actions will not materially affect the financial |
| | | position of the Company. |
| | | |
+----------+----+----------------------------------------------------------+
+----------+----+----------------------------------------------------------+
| | 22 | PROVISIONS |
+----------+----+----------------------------------------------------------+
| | | |
| | | Asset Retirement Obligation |
| | | |
| | | The Company made a provision for asset retirement |
| | | obligation amounted to JPY1,600,000 during the fiscal |
| | | year ended 31 December 2009 in respect of the Company's |
| | | obligation to the landlord to dismantle and remove |
| | | leasehold improvements from a leased office at the end |
| | | of the lease contract. |
| | | |
+----------+----+----------------------------------------------------------+
+----------+----+----------------------------------------------------------+
| | 23 | OPERATING LEASE |
| | | |
| | | The Company leases its office premises and warehouse |
| | | under cancellable lease terms. Such contracts may be |
| | | cancelled with 3 months advance notice. All other lease |
| | | agreements are non-cancellable contracts. The total |
| | | lease expense for the years ended 31 December 2009 and |
| | | 2008 amounted to JPY 12,821,000 and JPY 13,219, |
| | | respectively. |
| | | Future minimum lease payments including other operating |
| | | lease contract for the years ended 31 December 2009 and |
| | | 2008 amounted to JPY 7,080,000 and JPY 7,760,000, |
| | | respectively. |
+----------+----+----------------------------------------------------------+
+----------+----+-------------------------------------+----------+---------+
| | | | JPY'000 |
+----------+----+-------------------------------------+--------------------+
| | | | 2009 | 2008 |
+----------+----+-------------------------------------+----------+---------+
| | | No later than 1 year | 6,865 | 7,044 |
+----------+----+-------------------------------------+----------+---------+
| | | Later than 1 year and not later | 215 | 716 |
| | | than 5 years | | |
+----------+----+-------------------------------------+----------+---------+
| | | Later than 5 years | - | - |
+----------+----+-------------------------------------+----------+---------+
| | | | 7,080 | 7,760 |
+----------+----+-------------------------------------+----------+---------+
+----+-----------------------------+-----+------+------+-----+----+-----+-----+
| 24 | RELATED PARTY TRANSACTIONS | | | | | | | |
+----+-----------------------------+-----+------+------+-----+----+-----+-----+
| | Transactions between the Company and its related parties are disclosed |
| | below. |
+----+-----------------------------+-----+------+------+-----+----+-----+-----+
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | 2009 | Mr. | Mr. | Mr. | Mr. | Mr. | Fuji |Techno-imagia | Beyond |
| | | Kashiwa- | Kunieda | Li | Evans | Kiyomoto |Digital | | LSI, |
| | | bara |(Director) |(Director) |(Director) |(Director) |Imaging | | Inc. |
| | |(Director) | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | | | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | (Unit:JPY'000) | | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | Sales | - | - | - | - | - | - | 1,064 | 1,560 |
| | of | | | | | | | | |
| | goods | | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | Purchase | - | - | - | - | - | 4,170 | - | - |
| | of goods | | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | Interest | - | - | - | - | - | - | - | 294 |
| | earned | | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | Interest | 1 | - | - | - | - | - | - | - |
| | incurred | | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | Long-term | - | - | - | - | - | - | - | 2,888 |
| | lending | | | | | | | | |
| | made to | | | | | | | | |
| | related | | | | | | | | |
| | party | | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | Short-term | 35,500 | - | - | - | - | - | - | - |
| | borrowing | | | | | | | | |
| | due form | | | | | | | | |
| | related | | | | | | | | |
| | party | | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | Investment | - | - | - | - | - | - | - | - |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | Patent | - | - | - | - | - | - | - | 19,048 |
| | purchased | | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | Allocation | 85,240 | - | - | - | - | - | - | - |
| | of new | | | | | | | | |
| | shares to | | | | | | | | |
| | third | | | | | | | | |
| | party | | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | Amounts | - | - | - | - | - | - | 1,117 | 16,288 |
| | owed by | | | | | | | | |
| | related | | | | | | | | |
| | parties | | | | | | | | |
| | at year | | | | | | | | |
| | end | | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | Allowance | - | - | - | - | - | - | (1,117) | (16,288) |
| | for | | | | | | | | |
| | doubtful | | | | | | | | |
| | receivable | | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | Amounts | 166 | 3,000 | 2,500 | 2,435 | 13,548 | 9,286 | - | 361 |
| | owed to | | | | | | | | |
| | related | | | | | | | | |
| | parties | | | | | | | | |
| | at year | | | | | | | | |
| | end | | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
| | | | | | | | | | |
+----------+----------------+------------+------------+------------+------------+------------+---------+---------------+----------+
+----------+----------------+------------+------------+------------+---------------+---------------+---------+---------------+---------+---------+--------+
| | 2008 | Mr. | Mr. | Mr. | Mr. | Mr. | Fuji |Techno-imagia | I-O |Finger- |Beyond |
| | | Kashiwa- | Kiyomoto | Evans | Cho | Takahashi |Digital | |Network | Print | LSI, |
| | | bara |(Director) |(Director) |(ex-Director) |(ex-Director) |Imaging | | | Cards | Inc. |
| | |(Director) | | | | | | | | AB | |
+----------+----------------+------------+------------+------------+---------------+---------------+---------+---------------+---------+---------+--------+
| | | | | | | | | | | | |
+----------+----------------+------------+------------+------------+---------------+---------------+---------+---------------+---------+---------+--------+
| | | | | | | | | | | | |
+----------+----------------+------------+------------+------------+---------------+---------------+---------+---------------+---------+---------+--------+
| | (Unit:JPY'000) | | | | | | | | | | |
+----------+----------------+------------+------------+------------+---------------+---------------+---------+---------------+---------+---------+--------+
| | Sales | - | - | - | - | - | - | 1,325 | - | - | 3,896 |
| | of | | | | | | | | | | |
| | goods | | | | | | | | | | |
| | in the | | | | | | | | | | |
| | year | | | | | | | | | | |
+----------+----------------+------------+------------+------------+---------------+---------------+---------+---------------+---------+---------+--------+
| | Purchase | - | - | - | - | - | - | - | - | - | - |
| | of goods | | | | | | | | | | |
| | or | | | | | | | | | | |
| | services | | | | | | | | | | |
| | in the | | | | | | | | | | |
| | year | | | | | | | | | | |
+----------+----------------+------------+------------+------------+---------------+---------------+---------+---------------+---------+---------+--------+
| | Consulting | - | - | - | - | - | 6,667 | - | - | - | - |
| | fee | | | | | | | | | | |
| | charged to | | | | | | | | | | |
| | income | | | | | | | | | | |
+----------+----------------+------------+------------+------------+---------------+---------------+---------+---------------+---------+---------+--------+
| | Short-term | - | - | - | - | - | - | - | - | - | 13,400 |
| | lending | | | | | | | | | | |
| | made to | | | | | | | | | | |
| | related | | | | | | | | | | |
| | party | | | | | | | | | | |
| | in the | | | | | | | | | | |
| | year | | | | | | | | | | |
+----------+----------------+------------+------------+------------+---------------+---------------+---------+---------------+---------+---------+--------+
| | Patent | - | - | - | - | - | - | - | 20,400 | - | - |
| | returned | | | | | | | | | | |
+----------+----------------+------------+------------+------------+---------------+---------------+---------+---------------+---------+---------+--------+
| | Interest | - | - | - | - | - | - | - | - | - | 12 |
| | earned | | | | | | | | | | |
+----------+----------------+------------+------------+------------+---------------+---------------+---------+---------------+---------+---------+--------+
| | Amounts | - | - | - | - | - | - | - | - | - | 13,400 |
| | owed by | | | | | | | | | | |
| | related | | | | | | | | | | |
| | parties | | | | | | | | | | |
| | at year | | | | | | | | | | |
| | end | | | | | | | | | | |
+----------+----------------+------------+------------+------------+---------------+---------------+---------+---------------+---------+---------+--------+
| | Amounts | 9,255 | 15,415 | - | 8,800 | 6,375 | - | - | - | - | - |
| | owed to | | | | | | | | | | |
| | related | | | | | | | | | | |
| | parties | | | | | | | | | | |
| | at year | | | | | | | | | | |
| | end | | | | | | | | | | |
+----------+----------------+------------+------------+------------+---------------+---------------+---------+---------------+---------+---------+--------+
| | | | | | | | | | | | |
+----------+----------------+------------+------------+------------+---------------+---------------+---------+---------------+---------+---------+--------+
Technoimagia is one of the related parties of the Company because Mr. Taketoshi
Kashiwabara owns the Company at 54.9% (54.4% in 2008) and also owns Technoimagia
at 37.5% (37.5% in 2008) directly and indirectly through his controlling
company, Fuji Digital Imaging.
Other related parties include:
* Fuji Digital Imaging: Mr Taketoshi Kashiwabara owns 20.1% (20.1% in 2008) but
substantially controls Fuji Digital Imaging
* Fingerprint Cards AB (Sweden): Technoimagia owns 23.3% (23.3% in 2008) through
Technoimagia Sweden AB
* I-O Network: Mr. Shoichi Kiyomoto was a representative Director of the
Company until February 2009 and he owns 66.6% of I-O Network (66.6% in 2008).
l Sales of goods to related parties were made at the Company's usual list
prices.
l Purchases were made at market price discounted to reflect the quantity of
goods purchased or service rendered.
l All short-term borrowings/lending bear interests, which are subject to the
loan rate offered by Japanese banks.
l Amounts owed to directors/ex-directors at 31 December 2008 and 2007 mainly
consist of unpaid directors remuneration.
+----------+----+----------+---------------------------------------+----------+----------+-------------+
| | | Remuneration of key management personnel | | |
+----------+----+--------------------------------------------------+----------+------------------------+
| | | The remuneration of the Directors, who are the key management personnel of the |
| | | Company, is set out below in aggregate for each of the categories specified in IAS |
| | | 24 Related Party Disclosures. |
| | | |
+----------+----+--------------------------------------------------------------------------------------+
| | | | JPY'000 |
+----------+---------------+---------------------------------------+-----------------------------------+
| | | | 2009 | 2008 |
+----------+---------------+---------------------------------------+---------------------+-------------+
| | | Short-term employee benefits | 38,537 | 39,348 |
+----------+---------------+---------------------------------------+---------------------+-------------+
| | | Share-based payment | - | 8,327 |
+----------+---------------+---------------------------------------+---------------------+-------------+
| | | Total remuneration to directors | 38,537 | 47,675 |
+----------+---------------+---------------------------------------+---------------------+-------------+
| | | There were no Directors' transactions except for remuneration, stock issuance |
| | | subscription and short-term borrowing by the Company (see above). |
+----------+----+--------------------------------------------------------------------------------------+
| | | | | | | |
+----------+----+----------+---------------------------------------+----------+----------+-------------+
+-----+-------------------------------------------------------------+
| 25 | SUBSEQUENT EVENTS |
+-----+-------------------------------------------------------------+
| | |
| | Sale of associate company |
| | |
| | The Company has decided to sold all the shares of Beyond |
| | LSI Inc which is its associate company to a third party in |
| | 1st quarter 2010. It results in JPY1,465,000 of revenue on |
| | sale of investment in associate company. |
| | |
| | |
| | |
+-----+-------------------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EANDKFSLEEEF
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