Exhibit 99.1
Kamera Content AB
Corporate Identity Number 556666-2135
This document is a translation of the original Swedish document.
Annual report for the financial year 2006
The Board of Directors and the managing director herewith submit the Annual Report and consolidated accounts.
Page | ||
- Independent auditor’s report | 2 | |
- Administration Report | 3 | |
- Consolidated balance sheet | 5 | |
- Consolidated income statement | 7 | |
- Parent company balance sheet | 8 | |
10 | ||
- Combined parent company and group Notes to the Accounts | 11 |
Unless otherwise stated, all amounts are in thousands of SEK.
1
AUDIT REPORT
To the general meeting of the shareholders of
Kamera Content AB
Company registration number 556666-2135
I have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the board of directors and the managing director of Kamera Content AB for the financial year 2006-01-01—2006-12-31. These accounts and the administration of the company and the application of the Annual Accounts Act when preparing the annual accounts are the responsibility of the board of directors and the managing director. My responsibility is to express an opinion on the annual accounts, the consolidated accounts and the administration based on my audit.
I conducted my audit in accordance with generally accepted auditing standards in Sweden. Those standards require that I plan and perform the audit to obtain reasonable assurance that the annual accounts and the consolidated accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their application by the board of directors and the managing director and significant estimates made by the board of directors and the managing director when preparing the annual accounts, as well as evaluating the overall presentation of information in the annual accounts and the consolidated accounts. As a basis for my opinion concerning discharge from liability, I examined significant decisions, actions taken and circumstances of the company in order to be able to determine the liability, if any, to the company of any board member or the managing director. I also examined whether any board member or the managing director has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. I believe that my audit provides a reasonable basis for my opinion set out below.
The annual accounts and the consolidated accounts have been prepared in accordance with the Annual Accounts Act and, thereby, give a true and fair view of the company’s and the group’s financial position and results of operations in accordance with generally accepted accounting principles in Sweden. The statutory administration report is consistent with the other parts of the annual accounts.
I recommend to the general meeting of shareholders that the income statements and balance sheets of the parent company and the group be adopted, that the profit of the parent company be dealt with in accordance with the proposal in the administration report and that the members of the board of directors and the managing director be discharged from liability for the financial year.
Stockholm 23rd of May 2007
Maria Jalkenäs
Authorized public accountant
Grant Thornton Sweden AB
2
Administration report
Information regarding the operations
This Annual report covers the financial year 2006/01/01-2006/12/31.
Kamera Content collaborates with copyright owners e.g. Associated Press Television News (APTN) and offers publicists, practicing on the digital media market, administration and distribution of video contents such as news, sports and entertainment for publishing on the Internet or in mobile networks.
Result and financial position
The company’s turnover for the financial year 2006/01/01-2006/12/31 amounts to kSEK 16 237
The operating profit/loss is negative, kSEK -6 815
Significant events during the financial year
In January 2006 a new share issue, collecting 9,9 MSEK was carried out. Through this issue the owner constellation has changed. The new share issue was made to enable a more offensive strategy. At the same time as the issue both A- and B-shares were split 1:10.
During the financial year the operations have grown and developed favorably. The turnover rose to 16 237 kSEK from 9 215 kSEK in 2005. The number of customers has risen and the company now has 58 customers in 27 different countries.
In February 2006 the company Kamera (S) PTE.LTD was founded. The new company is a subsidiary, which is owned by 95% by Kamera Content AB. The company will translate and produce contents for markets in Asia.
In March 2006 the company Swegypt Company for Telecommunication (S.A.E) was founded. The new company is a subsidiary, which is owned by 55% by Kamera Content AB. The company will translate and produce contents for the Pan-Arabic market.
Significant events after the end of the financial year
In January 2007 the distribution agreement between Kamera and Associated Press (AP) was prolonged to 2010/12/31.
In January 181 000 B-shares of Kamera’s own possession were sold to a new owner, with the condition to turn the shares into A-shares. The sale brought in 4 525 kSEK before transaction costs.
Group structure
Kamera Content AB is the parent company of a group consisting of two subsidiaries, Swegypt Company for Telecommunication (S.A.E) (Corporate Identity Number: 200-039-784) and Kamera (S) PTE.LTD (Corporate Identity Number: 200604451W). Swegypt Company for Telecommunication (S.A.E) is owned by 55 % and Kamera (S) PTE.LTD is owned by 95% by Kamera Content AB.
3
Result and financial position
The result from the group’s and parent company’s operations and the financial position at the end of the financial year are presented in the following income statement and balance sheet including notes to the accounts.
The amounts in the annual report are stated in kSEK.
Proposed appropriation of profits
Means at the disposition of the annual general meeting: | ||||
Balanced profits from preceding years | -11 739 | |||
Premium at the new share issue 2006/03/15 | 8 997 340 | |||
Net loss for the year | -6 944 060 | |||
2 041 541 | ||||
Proposed appropriation of accumulated profit | ||||
To be carried forward | 2 041 541 | |||
2 041 541 |
4
Consolidated Balance Sheet (kSEK) | Note | 2006-12-31 | |||||
Assets | |||||||
Fixed assets | |||||||
Intangible assets | |||||||
Capitalized software development expenses | 6 | 663 | |||||
Goodwill | 7 | 1 624 | |||||
2 287 | |||||||
Tangible fixed assets | |||||||
Equipment and computers | 8 | 1 067 | |||||
Total fixed assets | 3 354 | ||||||
Current assets | |||||||
Current receivables | |||||||
Accounts receivable - trade | 2 962 | ||||||
Other current receivables | 112 | ||||||
Prepaid expenses and accrued income | 9 | 1 218 | |||||
4 292 | |||||||
Cash and bank balances | 1 285 | ||||||
Total current assets | 5 577 | ||||||
Total assets | 8 929 | ||||||
Equity and liabilities | |||||||
Equity | 10 | ||||||
Share capital | 227 | ||||||
Restricted reserves | 336 | ||||||
Translation difference | -186 | ||||||
Non-restricted reserves | 8 986 | ||||||
Net income for the year | -7 589 | ||||||
1 774 | |||||||
Minority’s share | 201 | ||||||
Provisions | |||||||
Negative goodwill | 5 | 359 | |||||
Total provisions | 359 | ||||||
Long-term liabilities | |||||||
Liabilities to credit institutions | 11 | 2 000 |
5
Consolidated Balance Sheet (kSEK) | Note | 2006-12-31 |
Total long-term liabilities | 2 000 | ||||||
Current liabilities | |||||||
Other current liabilities | 619 | ||||||
Accounts payable – trade | 1 938 | ||||||
Accrued expenses and deferred income | 12 | 2 038 | |||||
Total current liabilities | 4 595 | ||||||
Total equity and liabilities | 8 929 | ||||||
Pledged assets | 13 | 2 000 | |||||
Contingent liabilities | None |
6
Consolidated Income Statement (kSEK) | Note | 2006 | |||||
Gross profit | 2, 3 | 2 226 | |||||
Operating expenses | |||||||
Personnel costs | 4 | -9 670 | |||||
Depreciation | -855 | ||||||
Dissolving of negative goodwill | 5 | 443 | |||||
Operating income | -7 856 | ||||||
Income from financial items | |||||||
14 | |||||||
Interest expenses | -142 | ||||||
Total income from financial items | -128 | ||||||
Income after financial items | -7 984 | ||||||
Minority’s share of profit/loss | 396 | ||||||
Net loss for the year | -7 589 |
7
Parent Company’s Balance Sheet | Note | 2006-12-31 | 2005-12-31 | |||||||
Assets | ||||||||||
Fixed assets | ||||||||||
Intangible fixed assets | ||||||||||
Capitalized software development expenses | 6 | 662 783 | - | |||||||
x§Goodwill | 7 | 1 623 869 | 1 062 075 | |||||||
2 286 652 | 1 062 075 | |||||||||
Tangible fixed assets | ||||||||||
Equipment and computers | 8 | 517 730 | 245 986 | |||||||
Financial fixed assets | ||||||||||
Participations in Group companies | 15 | 929 746 | - | |||||||
Total fixed assets | 3 734 128 | 1 308 061 | ||||||||
Current assets | ||||||||||
Current receivables | ||||||||||
Accounts receivable - trade | 2 855 944 | 2 983 067 | ||||||||
Other current receivables | 36 717 | 99 462 | ||||||||
Prepaid expenses and accrued income | 9 | 1 264 317 | 139 030 | |||||||
4 156 978 | 3 221 559 | |||||||||
Cash and bank balances | 1 085 005 | 1 836 711 | ||||||||
Total current assets | 5 241 983 | 5 058 270 | ||||||||
Total assets | 8 976 111 | 6 366 331 | ||||||||
Equity and liabilities | ||||||||||
Equity | 16 | |||||||||
Restricted equity | ||||||||||
Share capital | 226 700 | 181 700 | ||||||||
Statutory reserve | 336 444 | 336 444 | ||||||||
563 144 | 518 144 | |||||||||
Non-restricted equity | ||||||||||
Loss brought forward | -11 980 | 3 599 956 | ||||||||
Share premium reserve | 8 997 940 | - | ||||||||
Net loss for the year | -6 944 060 | -3 611 935 | ||||||||
2 041 900 | -11 979 | |||||||||
Total equity | 2 605 044 | 506 165 | ||||||||
Long-term liabilities | 11 | |||||||||
Liabilities to credit institutions | 2 000 000 | - | ||||||||
Total long-term liabilities | 2 000 000 | 0 | ||||||||
Current liabilities | ||||||||||
Advance payments from customers | - | 1 280 000 | ||||||||
Accounts payable – trade | 1 985 399 | 1 559 663 | ||||||||
Liabilities to Group companies | 92 924 | - |
8
Parent Company’s Balance Sheet | Note | 2006-12-31 | 2005-12-31 | |||||||
Other current liabilities | 523 199 | 423 000 | ||||||||
Accrued expenses and deferred income | 12 | 1 769 545 | 2 597 503 | |||||||
Total current liabilities | 4 371 067 | 5 860 166 | ||||||||
Total equity and liabilities | 8 976 111 | 6 366 331 | ||||||||
Pledged assets | 13 | 2 000 000 | None | |||||||
Contingent liabilities | None | None |
9
Parent company’s Income Statement | Note | 2006-01-01 -2006-12-31 | 2004-09-13 -2005-12-31 | |||||||
Gross profit | 2, 3, 14 | 2 668 532 | 744 330 | |||||||
Operating expenses | ||||||||||
Personnel costs | 4 | -8 761 851 | -4 256 098 | |||||||
Depreciation of tangible and intangible assets | -722 229 | -78 561 | ||||||||
Operating income | -6 815 548 | -3 590 329 | ||||||||
Income from financial items | ||||||||||
Other interest income | 13 368 | 20 005 | ||||||||
Interest expenses and exchange rate differences | -141 880 | -41 611 | ||||||||
Total income from financial items | -128 512 | -21 606 | ||||||||
Income after financial items | -6 944 060 | -3 611 935 | ||||||||
Net loss for the year | -6 944 060 | -3 611 935 |
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Combined parent company and group Notes to the Accounts
Note 1 | Accounting and valuation principles |
The accounts have been prepared in accordance with the Annual Accounts Act. Adopted accounting principles comply with the standards set out by the Swedish Accounting Standards Board.
The accounting principles remain unchanged compared with the previous year.
Consolidated accounts
Subsidiaries where the parent company directly or indirectly possess more than 50% of the votes, or in any other way posses a significant influence, are included in the consolidated accounts.
The group’s financial statement is prepared according to the purchase method, which means that the subsidiaries’ equity at the date of acquisition, adopted as the difference between assets and liabilities fair value, is eliminated as a whole. Only post-acquisition equity from the subsidiary is thus included in the group’s own equity.
Companies acquired during the year are included in the group’s accounts related to post-acquisition amounts.
Inter-Company profits are eliminated as a whole.
Shares in subsidiaries are accounted in the parent company’s financial statement with possible write-downs deducted. Only received dividends based on post-acquisition earnings are accounted as dividend from subsidiaries.
The consolidated accounts have been prepared using the acquisition method in accordance with Recommendation RR1:00 of the Swedish Financial Accounting Standards Council and includes all subsidiaries.
Revenue recognition
The Company’s revenue recognition for current account work is based on completed work, in line with BFN’s main heading in BFNAR 2003:3. Ongoing, not invoiced service assignments are recognized in the balance sheet at the rate of calculated invoice value of accrued work.
The company is, in line with BFN’s main heading in BFNAR 2003:3, recognizing revenues from completed service assignments based on fixed pricing at the rate of completed work, “percentage of completion”. At the calculation of accrued profit the degree of completion has been calculated as accrued expenses at the closing day, in relation to the calculated sum of expenses to complete the assignment.
Financial fixed assets
Financial assets which are intended to be held over a long period of time are reported at acquisition cost. If a financial fixed asset has, on balance sheet date, a value lower than its book value, the value of the asset is written down to lower value if it can be assumed that such reduction in value is permanent.
Accounts receivable
Accounts receivable are reported as current assets at the amounts expected to be received after deductions for individually-assessed bad debts.
Receivables
Receivables with a maturity of more than 12 months after the closing date are stated as fixed assets, other receivables as current assets. Receivables are stated at the amount that, after an individual assessment, is calculated to be paid.
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Foreign currencies
Receivables and liabilities in foreign currencies are valued at the closing day to the rate of exchange. Profit and loss of receivables and liabilities relating to operations are offset under other operating income or other operating expenses. Transactions in foreign currency are translated at the transaction day rate of exchange.
Tangible fixed assets
Tangible fixed assets are reported at acquisition cost reduced by the amount of depreciation. Expenses for improving the performance of the assets beyond their original level increase the asset's reported value. Expenses for repairs and maintenance are reported as costs.
The straight-line method of depreciation is utilized for all types of tangible fixed assets. The following periods of depreciation are applied:
Equipment | 3 years |
Computers | 3 years |
Write-downs
If there are indications of a decrease in value of an asset or a group of assets, an assessment of its carrying amount is made. When the carrying amount exceeds the calculated recoverable amount, the carrying amount is immediately written down to the recoverable amount.
Intangible assets
Goodwill
Expenses for acquired operations are balanced and depreciated linearly over its assessed useful life, normally up to five years.
Negative Goodwill
Negative group goodwill consists of the amount of the acquisition value that exceeds the fair value of the company’s share of acquired net assets. Negative goodwill is accounted for as other provisions. To the extent that negative goodwill is combined with expectations of future losses and expenses that have been identified in the acquisition and that can be measured in a reliable manner, but do not represent identifiable liabilities, the negative goodwill is accounted in the income statement when the future losses and expenses are realized. Dissolving of negative goodwill is disclosed in the income statement as a reduction of Operating expenses.
Expenses for the development of software
All expenses for the development or maintenance of software are normally expensed immediately. Expenses that are directly connected to identifiable and unique software controlled by the company, including probable financial benefits exceeding expenses within one year, are however capitalized as intangible assets. Capitalized expenditure for the development of software is depreciated linearly over its useful life, in the case of Kamera Content estimated to three years.
Write-downs of intangible assets If there are indications of a decrease in value of an asset or a group of assets, an assessment of its carrying amount is made, including goodwill. When the carrying amount exceeds the calculated recoverable amount, the carrying amount is immediately written down to the recoverable amount.
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Note 2 | Remuneration to auditors |
Group | Parent Company | |||||||||
2006-01-01 -2006-12-31 | 2006-01-01 -2006-12-31 | 2004-09-13 -2005-12-31 | ||||||||
Audit | ||||||||||
Lindebergs Grant Thornton | 40 | 40 000 | 51 000 | |||||||
Other services | ||||||||||
Lindebergs Grant Thornton | 34 | 33 909 | 6 000 | |||||||
Total | 74 | 73 909 | 57 000 |
Note 3 | Abridged Income Statement |
The Income statement is, in accordance with ÅRL 3 chapter 11 §, disclosed in an abridged state due to reasons of competition. The parent company’s net sales was 16 237 kSEK (9 215 kSEK). The group’s net sales was 16 286 kSEK.
Note 4 | Personnel |
Group | Parent Company | |||||||||
2006-01-01 -2006-12-31 | 2006-01-01 -2006-12-31 | 2004-09-13 -2005-12-31 | ||||||||
Average number of employees | ||||||||||
Women (Sweden) | 6 | 6 | 3 | |||||||
Men (Sweden) | 15 | 15 | 7 | |||||||
Men (Egypt) | 6 | - | - | |||||||
Women (Egypt) | 1 | - | - | |||||||
Women (Singapore) | 1 | - | - | |||||||
Total | 29 | 21 | 10 | |||||||
Salaries, remunerations, social costs and pension expenses | ||||||||||
Salaries and remunerations for Board of Directors and managing director | 483 | 483 318 | 335 000 | |||||||
Total salaries and remunerations to other employees | 5 801 | 5 801 000 | 2 785 000 | |||||||
Salaries and remunerations Swegypt Company for Telecommunication (S.A.E) | 333 | - | - | |||||||
Salaries and remunerations Kamera (S)PTE.LTD | 574 | - | - | |||||||
7 191 | 6 284 318 | 3 120 000 | ||||||||
Pension expenses for Board of Directors and managing director | 40 | 39 511 | - | |||||||
Statutory and contractual social security contributions | 1 946 | 1 946 000 | 1 010 000 | |||||||
Pension expenses, other employees | 142 | 141 772 | - | |||||||
Total | 9 319 | 8 411 601 | 4 130 000 |
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Members of the Board and senior management
2006 | 2005 | ||||||||||||
Group | Number on balance sheet date | of whom men | Number on balance sheet date | of whom men | |||||||||
Members of the Board | 12 | 100 | % | ||||||||||
Managing Director and other senior managers | 6 | 67 | % |
2006 | 2005 | ||||||||||||
Parent Company | Number on balance sheet date | of whom men | Number on balance sheet date | of whom men | |||||||||
Members of the Board | 5 | 100 | % | 4 | 100 | % | |||||||
Managing Director and other senior managers | 4 | 75 | % | 4 | 75 | % |
Absence due to illness
Parent Company | |||||||
2006 | 2005 | ||||||
0,7 | % | 3 | % | ||||
- Long term absence due to illness * | 0 | % | 0 | % |
* Long term absence refers to a period of 60 consecutive days or more.
Other categories consist of fewer than 10 employees why information about these categories is not disclosed.
Note 5 | Negative goodwill |
Group | Parent Company | |||||||||
2006-01-01 -2006-12-31 | 2006-01-01 -2006-12-31 | 2004-09-13 -2005-12-31 | ||||||||
Negative goodwill originating from the acquisition of Swegypt plt | 802 | - | - | |||||||
Dissolving of negative goodwill | -443 | - | - | |||||||
Closing residual value according to plan | 359 | 0 | 0 |
Note 6 | Capitalized software development expenses |
Group | Parent Company | |||||||||
2006-01-01 -2006-12-31 | 2006-01-01 -2006-12-31 | 2004-09-13 -2005-12-31 | ||||||||
Opening acquisition cost | - | - | - | |||||||
Capitalization for the year | 852 | 852 152 | - | |||||||
Closing accumulated acquisition cost | 852 | 852 152 | - |
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Group | Parent Company | |||||||||
2006-01-01 -2006-12-31 | 2006-01-01 -2006-12-31 | 2004-09-13 -2005-12-31 | ||||||||
Opening depreciations | - | - | - | |||||||
Depreciation for the year | -189 | -189 369 | - | |||||||
Closing accumulated depreciation | -189 | -189 368 | - | |||||||
Closing residual value according to plan | 663 | 662 783 | - |
Note 7 | Goodwill |
Group | Parent Company | |||||||||
2006-01-01 -2006-12-31 | 2006-01-01 -2006-12-31 | 2004-09-13 -2005-12-31 | ||||||||
Opening acquisition cost | 1 093 | 1 093 085 | - | |||||||
- Acquisition | 923 | 922 751 | 1 093 085 | |||||||
Closing accumulated acquisition cost | 2 016 | 2 015 836 | 1 093 085 | |||||||
-Opening depreciation | -31 | -31 000 | - | |||||||
-Depreciation | -361 | -361 000 | -31 010 | |||||||
Closing accumulated depreciation | -392 | -392 000 | -31 000 | |||||||
Closing residual value according to plan | 1 624 | 1 623 836 | 1 062 075 |
Note 8 | Equipment and computers |
Group | Parent Company | |||||||||
2006-01-01 -2006-12-31 | 2006-01-01 -2006-12-31 | 2004-09-13 -2005-12-31 | ||||||||
Opening acquisition cost | 294 | 294 000 | - | |||||||
Changes during the year | ||||||||||
-Purchases | 1 126 | 444 000 | 293 537 | |||||||
Closing accumulated acquisition cost | 1 420 | 738 000 | 293 537 | |||||||
Opening depreciation | -48 | -47 551 | - | |||||||
-Depreciation | -306 | -171 608 | -47 551 | |||||||
Closing accumulated depreciation | -354 | -219 159 | -47 551 | |||||||
Closing residual value according to plan | 1 067 | 518 841 | 245 986 |
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Note 9 | Prepaid expenses and accrued income |
Group | Parent Company | |||||||||
2006-12-31 | 2006-12-31 | 2005-12-31 | ||||||||
Accrued income | 749 | 749 360 | 71 000 | |||||||
Other prepaid expenses | 469 | 514 956 | 68 000 | |||||||
1 218 | 1 264 316 | 139 000 |
Note 10 | Change in Group equity |
Group | Share- capital | Statutory reserve | Translation difference | Non- restricted reserves and Net profit/loss for the year | Total equity | |||||||||||
Equity 2006/01/01 | 182 | 336 | - | -12 | 506 | |||||||||||
New share issue | 45 | - | - | 8 998 | 9 043 | |||||||||||
Translation difference | - | - | -186 | - | -186 | |||||||||||
Net income for the year | - | - | - | -7 589 | -7 589 | |||||||||||
Equity 2006-12-31 | 227 | 336 | -186 | 1 397 | 1 774 |
Note 11 | Borrowing |
Group | Parent Company | |||||
2006-12-31 | 2006-12-31 | 2005-12-31 | ||||
Long-term liabilities | ||||||
Liabilities to credit institutions | 2 000 | 2 000 000 | - | |||
Total interest-bearing liabilities | 2 000 | 2 000 000 | 0 |
The loan as a whole is raised from Almi företagspartner and has duration of 48 months.
Note 12 | Accrued expenses and deferred income |
Group | Parent Company | |||||||||
2006-12-31 | 2006-12-31 | 2005-12-31 | ||||||||
Accrued royalty expenses | 725 | 725 000 | 503 000 | |||||||
Accrued additional purchase price | - | - | 963 000 | |||||||
Accrued consulting expenses | - | - | 181 000 | |||||||
Accrued vacation pay, social expenses included | 456 | 455 633 | 225 000 | |||||||
Accrued social security contributions | 181 | 181 015 | 114 000 | |||||||
Deferred income | 104 | 104 000 | 525 000 | |||||||
Other items | 572 | 304 000 | 86 000 | |||||||
Total | 2 038 | 1 769 648 | 2 597 000 |
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Note 13 | Pledged assets |
Group | Parent Company | |||||||||
2006-12-31 | 2006-12-31 | 2005-12-31 | ||||||||
For own provisions and liabilities | ||||||||||
Floating charges | 2 000 | 2 000 000 | - | |||||||
designated to liabilities to credit institutions | ||||||||||
Total pledged assets | 2 000 | 2 000 000 | 0 |
Note 14 | Transactions with related parties |
Purchases and sales between Group companies
The percentages of purchases and sales regarding Group companies are listed below
Purchase Swegypt Company for Telecommunication
(S.A.E)): 31
Sales: 0
The same pricing principles apply to purchases and sales conducted between Group companies as with transactions with external parties.
Note 15 | Participations in subsidiaries |
Group | Number of shares | Registered office | Proportion of equity | Book value | |||||||||
Kamera (S) PTE.LTD | 190 000 | Singapore | 95 | % | 930 | ||||||||
Swegypt Company for Telecommunication (S.A.E) | 687 500 | Kairo | 55 | % | 0 |
Note 16 | Change in equity |
Share- capital | Share premium reserve | Revaluation reserve | Statutory reserve | Share premium reserve | Non- restricted equity | Total equity | |||||||||
Amount brought forward 2006 | 182 | - | - | 336 | - | -12 | 506 | ||||||||
45 | - | - | - | 8 998 | - | 9 043 | |||||||||
Net income for the year | - | - | - | - | - | -6 944 | -6 944 | ||||||||
Equity 2006/12/31 | 227 | - | - | 336 | 8 998 | -6 956 | 2 605 |
The share capital consists of 2 086 000 A-shares at a par value of 0,1 SEK and 181 000 B-shares at a par value of 0,1 SEK.
The company holds 181 000 own B-shares.
17
Note 16 | Summary of significant differences between Swedish GAAP and U.S. GAAP |
The annual financial statements included herein of Kamera Content AB were prepared in accordance with accounting principles generally accepted in Sweden (Swedish GAAP) which differ in certain significant respects from U.S. GAAP, as described below.
1. Intangible assets
In accordance with Swedish GAAP, the Company amortizes intangible assets based on their statutory useful lives, which is 3 years for goodwill and 3-5 years for capitalized development expenditures.
Under US GAAP intangible assets are amortized over their expected useful lives, which can sometimes be different from the statutory useful lives.
Negative goodwill is required to be disclosed as a provision under Swedish GAAP and reversals be netted e.g. against future losses in the acquired entity.
Under US GAAP this would be disclosed as a reduction of the fair value of assets acquired and hence affecting depreciation.
2. Revenue recognition
In accordance with Swedish GAAP, the Company recognizes revenue when earned. In certain situations, revenue can be recognized upon receipt of payment, while in other situations, revenue is recognized ratably over the contract period. The requirements for recognizing revenue upfront or ratably can vary from the revenue recognition requirements under US GAAP.
Under US GAAP, revenue is recognized in accordance with Staff Accounting Bulletin No. 104, Revenue Recognition and Statement Of Position No. 97-2, Software Revenue Recognition which requires revenue only be recognized when the following criteria have been met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller´s price to the buyer is fixed or determinable, and collectibility is probable. For certain arrangements that involve multiple deliverables revenue for each deliverable can be recognized individually if certain separation criteria are met. If elements cannot be separated, revenue must be bundled and recognized ratably over time.
3. Exchange differences
In accordance with Swedish GAAP, the Company recognizes exchange differences in the same way as in US GAAP with exception for translation differences which are not recognized as other comprehensive income but booked against equity.
Under US GAAP, assets and liabilities are translated into the entities reporting currency at the prevailing rate of exchange at the balance sheet date and revenue, costs and expenses are translated at the average exchange rate during the period. Translation gains and losses are reflected as other comprehensive income on the balance sheet. Assets and liabilities held by foreign subsidiaries that are in currencies other than the foreign subsidiaries´functional currency are remeasured at the prevailing rate of exchange at the balance sheet date. Gains and losses from remeasurement are included in the determination of net income.
4. Capitalization of development expenditures
Swedish GAAP allows for expenditures during the development phase to be capitalized as intangible assets if it is probable, with a high degree of certainty, that they will result in future economic benefits for the Company.
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Under US GAAP all costs incurred to establish technological feasibility are charged to expense when incurred in accordance with Statement of Financial Accounting Standards No. 2, Accounting for Research and Development Costs. Software development costs incurred subsequent to establishing technological feasibility but prior to general release shall be capitalized.
19