BOU.L Regulatory News (BOU)

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

26th June 2019

Bould Opportunities Plc

(AIM: BOU, "Bould Opportunities", the "Company" or "the Group"),

Full year results, Posting of Annual Report and Notice of AGM

Bould Opportunities Plc, from April 2019 an AIM Rule 15 Cash Shell, and formerly in 2018 the British designer and manufacturer of smart LED lighting solutions, announces its audited results for the year ended 31 December 2018.

In addition, the Group's Annual Report and Accounts for the year ended 31 December 2018 (the "Annual Report") will be posted to shareholders on 28 June 2018.

A Notice of the Group's Annual General Meeting ("AGM") will also be posted to shareholders with the Annual Report, and both will be available to download on Bould Opportunities website via http://www.BouldOpportunities.com shortly.

The AGM will be held at the offices of Goodman Derrick LLP, 10 St Bride Street, London EC4A 4AD on Thursday 8 August 2019 at 11am.

Financial overview

The Group substantially reduced its operations in 2018, and wound down its remaining business in the first part of 2019, becoming an AIM Rule 15 Cash Shell in April 2019. The financial results for 2018 were for the LED lighting solutions business, and in the 2018 financial statements these results have been allocated between the results of operations that were discontinued in 2018 and the remaining business that continued into the first part of 2019.

• For the continuing business;

- Revenues for full year 2018 down 75% to £0.07m (2017: £0.29m)

- Gross profit fell 45% to £0.04m (2017: £0.08m)

- Exceptional administrative expenses £0.50m (2017: £0.75m)

- Administrative expenses (excluding exceptional item) up 31% to £1.33m (2017: £1.04m)

- Loss from Continuing Operations of £1.61m (2017: loss £1.54m)

• Loss from Discontinued Operations of £0.44m (2017: loss £0.37m)

• Loss and total comprehensive income for year £2.06m (2017: loss £1.91m)

• Loss per share of 0.3p (2017: loss per share 0.9p)

• At 31 December 2018, net cash of £0.004m (2017: net debt £0.8m)

Post year end

• Announced its intention that PhotonStar Technology Limited would be wound down in an orderly way and would cease trading.

• Became an AIM Rule 15 Cash Shell.

• Raised gross proceeds of £1.15m via four issues of new shares, primarily to fund the Group whilst it considers its strategic direction and future investment opportunities.  

Allan Syms,  Chairman of Bould Opportunities, said:

'The Group is now in a good position to be able to consider new investment opportunities and is not hampered with any liability for its past loss-making operations. Sufficient working capital has been raised already in 2019 to fund current expenditure. The Directors will consider future funding when there is a clearer view of their proposals for the Group's best way forward from its current position as an AIM Rule 15 Cash Shell. The Group is seeking new investment opportunities in a number of business areas including the health sector.'

For further information:

Chairman's Statement

As your new Chairman, I am pleased to report to you on the group's activities in 2018 and on the many changes to the Group in that year, and in the year to date in 2019.

Overview 

In 2018 the Group underwent fundamental changes.

At the start of 2018, the group had three trading segments as well as the coordinating activities of the AIM quoted holding company. By the end of 2018, two of the three trading segments had been disposed of and the third segment had substantially reduced its activities.

In April 2019, a General Meeting confirmed the closure of the group's remaining trading segment, and so the group became an AIM Rule 15 cash shell ("Cash Shell") that is seeking new investment opportunities in a number of business areas including the health sector.

I will try and summarise in my own words some of the main reasons underlying this relatively sudden change in direction for the group.

For several years, as previously reported, sales had been falling in the group's main market for more traditional LED lighting fixtures. Whilst the overall market for LED lighting was expanding, the fall in the group's sales had been driven largely by increased competition from cheaper imported LED lighting products.

As a result, in 2017, the group had announced an ambitious change in its strategy - from being a group focused mainly on the sales of LED lighting fixtures to a group centered on retrofitting advanced LED lighting control services to buildings through IoT (the Internet of Things).

However, in 2018 it was the opinion of the Directors at that time that the Group had insufficient funds to fund both its continuing trading losses and to support its investment efforts to finalise the development of the new technology required for the IoT based new lighting control processes (its Halcyon product development platform).

The Group was unable to raise sufficient ongoing working capital and this triggered a series of disposals in 2018 that have resulted in the group becoming an AIM Rule 15 cash shell company by April 2019.

Now, in mid-2019, we are an exciting new group, with a new board of directors, with a new name, and with an initial cash fund that is seeking potential new rewarding investment opportunities. Funds were raised as detailed below.

Business review

As can be seen from the Directors and Advisors section, the current Directors were not on the Board during the financial year to 31 December 2018 and hence in order to fulfill their responsibilities for the financial statements the Directors have had to carry out more extensive enquiries than normal with the Group's advisers who were present at that time, and received necessary written representations where appropriate from them on key issues. I will now explain in more detail the main activities undertaken by the group in the financial year to 31 December 2018.

Before doing so, I would explain that in our 2018 consolidated Statement of Comprehensive Income, prepared according to IFRS accounting standards, we are required to show separately the results of the group's discontinued operations from its continuing operations at the year-end.

The discontinued operations at the end of 2018 were Camtronics Vale Limited, Photonstar LED Limited and Architectural Lighting & Controls Limited. And, the group's two continuing operations were Photonstar Technology Limited and the activities of the group's ultimate holding company.

Discontinued operations:

Camtronics Vale Limited ('Camtronics Vale') - Contract manufacturing

At the end of January 2018, in order to raise cash for the group and to reduce borrowings, the group decided to sell its contract manufacturing business, Camtronics Vale Limited, to its management for a cash consideration of £150,000, including deferred consideration, and a consideration of £521,000

from the novation of intergroup indebtedness. In the month before disposal Camtronics had sales of £133,000 and a trading loss of £15,000 (2017: 12 months sales of £1,679,000 and trading loss

(£86,000), and the group profit on disposal was £125,000. Whilst most of the deferred consideration has now been received, the final outcome of the overall group profit on disposal was somewhat less than the previously announced profit of £327,000.

Photonstar LED Limited - LED lighting fixtures business

During 2018, the group continued to struggle with its efforts to boost the sales of its traditional LED lighting products through its subsidiary Photonstar LED Limited. And, it was not possible to reduce overheads sufficiently to achieve profitability. This subsidiary already had net liabilities, and losses were increasing. As a result, a decision was taken to place this subsidiary into Administration at the end of October 2018, and a Liquidator was appointed to the company on 18 November 2018. The sales of this subsidiary for the 10 months to the end of October were £1,682,000 and its trading loss was £318,000 (2017: 12 months sales £2,575,000 and its trading loss £284,000). The appointment of the Liquidator stemmed any further losses, but crystallised net exceptional disposal impairments to the group of £128,000.

Architectural Lighting & Controls Limited ('ALC') - dormant subsidiary

ALC is a dormant subsidiary of Photonstar LED Limited, ALC's business having been transferred to its parent company soon after acquisition several years ago. The Liquidator of Photonstar LED Limited now controls ALC, and as a result the group's goodwill of £106,000 in respect of ALC has been written off.

Continuing operations:

Photonstar Technology Limited - Halcyon IoT and LED light engines

The development of the new Halcyon IoT platform being undertaken by Photonstar Technology Limited was progressing well in the first three quarters of 2018. New trial software had been released to multiple customer sites. However, development work had to be reduced in the fourth quarter of 2018 as a result of the group's diminishing cash resources. At that time, staff numbers were reduced, and a few months later in January 2019 the group announced that there would be an orderly wind down of the subsidiary's activities. There was only a small volume of Halcyon sales in 2018, £74,000 (2017: £293,000), and the trading losses before tax were £909,000 (2017: loss £822,000). In 2018, there was a prior year R&D tax credit of £118,000 (2017: £104,000). As a result of the pending closure, at the end of 2018, closure costs of £67,000 (2017: £Nil) were accrued, and all the assets of this subsidiary were fully impaired causing a 2018 impairment charge of £501,000 (2017: £748,000).

Bould Opportunities PLC (before 15 April 2019 called Photonstar LED Group Limited) - holding company for the group

This is the group's ultimate holding company. The financial commitments of the holding company and the extent of the intergroup re-charges were both reduced during 2018, eventually to a minimum level sufficient only to support the group's ongoing AIM listing. The net administration costs for the holding company in 2018 were £323,000 (2017: £35,000).

Financial overview

In summary, from a financial viewpoint, from 1 January 2018, through 2018, and to April 2019 the Group has transformed successfully from a trading Group that has been consuming all of its cash resources to a Cash Shell still quoted on AIM and considering new investment opportunities.

Much of the Group's business was either sold or closed down in 2018. And, full provision has been made in these 2018 financial statements for closing the remaining trading operations in the first quarter of 2019. So, the Group is now moving forward with confidence, and unencumbered from any ongoing liability for its past loss making, and cash consuming, activities.

As explained earlier in this report, under IFRS accounting, the results of the group are separated between continuing and discontinued operations, and prior year consolidated figures have been restated where appropriate.

For the continuing operations, group sales were £74,000 (2017: £293,000). The consolidated operating loss on continuing operations before exceptional items and tax in 2018 was £1,232,000 (2017: loss £896,000). There were exceptional impairment charges of £501,000 (2017: 748,000), and the consolidated operating loss for continuing operations after these exceptional items was £1,733,000 (2017: loss £1,644,000). In 2018 there was a research and development tax credit of £118,000 (2017: £104,000). The overall consolidated loss on continuing operations after tax was £1,615,000 (2017: loss £1,540,000).

The loss after tax on discontinued operations was £442,000 (2017: loss £370,000). Further details about each discontinued operation is set out earlier in my report and in Note 5 to the financial statements.

The group's total comprehensive loss for 2018 was £2,057,000 (2017: loss £1,910,000).

During 2018 focus was on completing the Halcyon product development and its roll out to customer test sites. Capitalised investment in product development in 2018 was £158,000 (2017: £440,000). The purchase of plant and equipment in 2018 amounted to £18,000 (2017: £27,000).

The net proceeds from the issue of shares in 2018 was £1,081,000 (2017: £2,000).

All of the group's borrowings were in operations that were subsequently discontinued in 2018 , and so no longer formed part of the Consolidated Balance Sheet at the 2018 year-end.

Post year end

In January 2019 the group announced its intention that Photonstar Technology Limited would cease trading and its activities would be wound down in an orderly way.

In March 2019 the name of the group's holding company was changed to Bould Opportunities PLC.

In April 2019 a General Meeting approved the closure of Photonstar Technology Limited. The group then became an AIM Rule 15 quoted cash shell and as such is required to make an acquisition or acquisitions which constitutes a reverse takeover under AIM Rule 14 (including seeking re-admission as an investing company (as defined under the AIM Rules)) on or before the date falling six months from completion of that General Meeting or be re-admitted to trading on AIM as an investing company under the AIM Rules (which requires the raising of at least £6 million of new equity funding) failing which, the Company's Ordinary Shares would be suspended from trading on AIM pursuant to AIM Rule 40. Admission to trading on AIM of the Company's shares would be cancelled six months from the date of suspension should the reason for the suspension not have been rectified.

All the directors of the Photonstar group have now resigned, and a new board of directors has been appointed. I would like to thank the departing directors and staff for all their significant efforts in their attempt to make Photonstar a success. It is disappointing that this was not to be. In June 2019 the sale of Photonstar Technology Limited was completed in accordance with the resolution passed at May's General Meeting.

Your new directors have confidence in the future of the Group. There have now been four issues of shares to date in 2019 raising £1,153,000 before expenses. The Group has announced that it is considering raising further funds in due course in order to fund future investment.

The Group is now in a good position to be able to consider new investment opportunities and is not hampered with any liability for its past loss-making operations. Sufficient working capital has been raised already in 2019 to fund current expenditure. The Directors will consider future funding when there is clearer view of their proposals for the Group's best way forward from its current position as an AIM Rule 15 Cash Shell.

Allan Syms

Chairman

26 June 2019

Strategic Report

The directors present their strategic report for the year ended 31 December 2018.

Business review

Principal risks and uncertainties

In the previous year's Strategic Report, a number of potential risks and uncertainties were highlighted that could impact on the Group's performance. The outcome of these risks and uncertainties in 2018 and 2019 year to date may be summarised:

· Going Concern - the Group had historically been loss making and similarly made a loss after tax of £1.91m in 2017. Whilst at that time the Board believed that the Group had sufficient resources available to continue operating for at least the next 12 months, this was predicated on the Group achieving an anticipated growth in the levels of sales and gross margin, which were themselves subject to operational and market uncertainty. This was further explained in Note 2.2 to the 2017 accounts. The outcome in 2018 was that there was increasing pressure on the Group's cash resources. Trading losses continued through 2018, and together with further expenditure on the Halcyon product development, there was a critical cash shortfall in the fourth quarter of 2018. As a result, the Group's subsidiary selling the LED light fixtures was placed in to liquidation in November 2018 and the number of staff employed on product development was significantly reduced. The disposals in 2018 resulted in all Group borrowings being eliminated. After the 2018 year-end, in January 2019, the group announced its intention to wind down its development operations. The closure of this remaining trade activity was confirmed at a General Meeting in April 2019, and the Group became a cash shell on AIM. In 2019 the Group has raised £1,153,000 cash before expenses from share issues - so, the Group has sufficient cash resources for its current minimal financial commitment to support its AIM listing. Potential new investment opportunities are being reviewed, and further fund raising is expected when investment plans are in place.

· Research & Development and Product Development activities - at the time of the 2017 Strategic Report, the directors were confident that the Group had the right people with the right skills and drive in order to execute its R&D and Product Development plan. There was no guarantee that these efforts would be successful, or that any such development work would be successfully translated into a commercial product or sales for the Group. In 2018, the next generation of new Halcyon software was successfully rolled out to customer sites. However, as explained above, development operations were curtailed in the fourth quarter of 2018 due to the Group's limited cash resources, and then closed down from January 2019.

· Market conditions and competition - In their 2017 report the directors explained that the Group operated in markets where there are many competing products and competing companies, many of whom had significantly greater resources than the Group. Whilst the Group endeavoured to differentiate its products from competitors on the basis of quality, performance and reliability, the Group found that our customers prefer to sacrifice such attributes in return for a lower price. In 2018 sales of the existing range of LED lighting products continued to fall, and there were fewer than expected sales for its new Halcyon products.

· In their 2017 Strategic Report the directors also listed other financial risks, including credit risk, interest rate risk and foreign exchange risk. None of these risks had a material impact on 2018 results and no such risk existed at the end of 2018.

After the 2018 year-end, all of the Group's business have ceased, and the directors have announced their intention to seek new investment opportunities for the Group, and any new investment is expected to require further funding from shareholders. The outcome of this plan cannot be predicted at the present time.

Key performance indicators (KPIs)

During 2018 the Group's directors used various key performance indicators to help understand the development, performance and position of the business. Ordinarily this was presented in the form of monthly management accounts and other management information (although other information was presented on an ad hoc basis as and when requested), and included, amongst others, the following indicators which the directors considered were key. The 2018 KPIs are for the whole of 2018 for the Halcyon & Light Engines business, and until operations were discontinued for contract Manufacturing (to January 2018) and the LED Light Fixtures business (to November 2018). The 2017 figures are all for the whole of each period.

Combined continuing and discontinued operations:

All of the actual performances of the above KPI's were compared monthly to those formulated in the Group's budget or latest forecast.

The major programme of investment in research and development continued to impact the net cash resources of the Group.

The main non-financial KPI was monitoring the progress of the new Halcyon trials.

Financial review

In 2018 there were significant changes to the Group's financial statements compared to the previous year as a result of selling the Contract Manufacturing business in January 2018 and the liquidation of the LED Light Fixtures business in November 2018. Comparative figures have been re-analysed where appropriate to do so.

Total Group sales, including in 2018 both continuing and discontinued operations, decreased to £1.88m (2017: £4.55m), the reduction reflecting the sale earlier in the year of the Group's Contract Manufacturing operations and the ongoing decline in sales, then liquidation in the fourth quarter, of the LED Light Fixtures business. Sales of the ongoing Halcyon & Light Engines business were disappointing at £74,000 (2017: £293,000).

The Board's annual review of tangible and intangible assets has resulted in an impairment charge in 2018 of £0.50m (2017: £0.84m).

In the Consolidated Statement of Comprehensive Income, the loss after tax of the continuing activities was £1.62m (2017: loss of £1.54m) - the continuing activities being the Halcyon & Light Engines business and the activities of the holding company. The loss of the discontinued operations referred to in the previous paragraph was £0.44m (2017: loss of £0.37m).

Basic and the diluted loss per share were 0.3p (2017: 0.9p).

During 2018, the Group made capital expenditure of £0.18m (2017: £0.47m) mainly on the development of the new Halcyon product.

The disposal of the discontinued businesses referred to above substantially reduced the 2018 year-end Balance Sheet amounts of the consolidated assets and liabilities.

In January 2019 the Group announced the planned closure of its remaining Halcyon & Light Engines business. This closure was confirmed at a General Meeting in April 2019, resulting in the Group becoming a cash shell on AIM.

After the 2018 year-end the Group has raised significant additional funds by share issues as explained in Note 31 on Subsequent Events.

The Group is currently reviewing potential new investment opportunities that may require future funding from shareholders. It is too early to predict the outcome of this plan.

This report was approved by the board on 26 June 2019 and was signed on its behalf by

Martin Lampshire

Non-Executive Director

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2018

The Company has elected to take the exemption under section 408 of the Companies Act 2006 to not present the Parent Company's statement of comprehensive income.

The loss for the Parent Company for the year was £1,702,000 (2017 loss: £4,587,000).

\* The comparative figures have been restated to show the results of continuing and discontinued operations (Note 5).

Registered number: 06133765 (England and Wales)

Consolidated Statement of Financial Position

As at 31 December 2018

The financial statements were approved and authorised for issue by the Board on 26 June 2019 and were signed on its behalf by:

Martin Lampshire

Non-Executive Director

Registered number: 06133765 (England and Wales)

Company Statement of Financial Position

As at 31 December 2018

The financial statements were approved and authorised for issue by the board on 26 June 2019 and were signed on its behalf by:

Martin Lampshire

Non-Executive Director

Consolidated Statement of Cash Flows for the year ended 31 December 2018

Company Statement of Cash Flows for the year ended 31 December 2018

Consolidated Statement of Changes in Equity

for the year ended 31 December 2018

Company Statement of Changes in Equity

for the year ended 31 December 2018

Notes to the financial statements for the year ended 31 December 2018

1 General information

Until November 2018 the principal activity of the Group was the design, development, manufacture and sale of LED light fixtures and light engines. From that date the business selling LED light fixtures was placed into liquidation and the Group's remaining business was the sale and development of light engines. The contract manufacturing business had been previously sold in January 2018. After the year end in January 2019, the Group announced its intention to close down its remaining business activity. This closure was confirmed at a General Meeting in April 2019 and the Group became an AIM Rule 15 cash shell.

The Company is a public limited liability company incorporated and domiciled in England and Wales and quoted on the Alternative Investment Market ('AIM'). In April 2019 the Company changed its name from Photonstar LED Group PLC to Bould Opportunities PLC.

The directors consider there to be no ultimate controlling shareholder of the Company.

The address of the registered office is New Liverpool House, 15 Eldon Street, London, EC2M 7LD and the registered number of the Company is 06133765.

2 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation

The financial statements of Bould Opportunities PLC have been prepared in accordance with the requirements of the AIM Rules and in accordance with International Financial Reporting Standards as adopted by the European Union, IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS and on a historical cost basis.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group and Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.

(a) New and amended standards adopted

 The accounting policies set out in the financial statements for the year ended 31 December 2018 have been applied consistently throughout the Group during the period, except for the adoption of the new pronouncements IFRS 9 "Financial Instruments" and IFRS 15 "Revenue from contracts with customers".

IFRS 9 "Financial Instruments" is effective for accounting periods beginning on or after 1 January 2018, and was adopted by the Group for the accounting period beginning 1 January 2018. The new standard replaces IAS 39 "Financial Instruments: Recognition & Measurement" and the changes introduced by the new standard can be grouped into the following three categories Classification & Measurement, Impairment and Hedging. The impact of the new standard in the Group was the following:

• Classification and measurement: IFRS 9 contains three principal classification categories for financial assets which are amortised cost, fair value through other comprehensive income ("FVOCI") and fair value through profit or loss ("FVTPL"). The standard eliminates the existing IAS 39 categories of held-to-maturity, loans and receivables and available-for-sale financial assets. There were no changes to net assets from changes in the measurement basis of financial assets.

• Impairment: IFRS 9 introduces an expected credit loss model which requires expected credit losses and changes to expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. Financial assets measured at amortised cost or FVOCI are subject to the impairment provisions of IFRS 9. The adoption of this standard has not resulted in any material changes in the level of provision for financial assets.

• Hedging: IFRS 9 introduces new hedge accounting requirements. IFRS 9 aligns hedge accounting relationships with the Group's risk management objectives and strategy. The Group does not apply hedge accounting, therefore there were no changes arising from the new standard.

IFRS15 is effective for accounting periods beginning on or after 1 January 2018, and was adopted by the Group for the accounting period beginning 1 January 2018. The standard requires entities to apportion revenue earned from contracts to individual performance obligations based on a five-step model. The adoption of this standard has not resulted in any material impact on reported profits.

(b) Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted.

The Group and Company has not adopted any standards or interpretations in advance of the required implementation dates and believes that its effect will not be material to the Group. It is not expected that the adoption of any other standards or interpretations which have been issued by the International Accounting Standards Board but have not been adopted will have a material impact on the 2019 financial statements.

The Group has considered the impact of new standards taking effect on or after 1 January 2019 including the impact of IFRS 16 Leases. The adoption of this new standard is not expected to have a material impact on the financial statements.

2.2 Going concern

The Directors have adopted the going concern basis in preparing the financial statements for the year to 31 December 2018. In reaching this conclusion, the Directors have considered for both the Company and the Group, current trading and the current and projected funding position for the period of just over 12 months from the date of approval of the financial statements through to 30 Jun 2020.

Current funding

The Group's cash balance as at 31 December 2018 was £4,000 and there were no borrowing facilities at that date. Soon after the year-end in January 2019 the Group announced the orderly closure of its remaining business. Subsequently, the Group's only activities are that of a holding company supporting its AIM listing as a Cash Shell and seeking new investment opportunities.

In order to progress these plans after the year end, there were five issues of new shares for cash raising £1,329,000 before issue expenses.

Projected funding

At the time of preparing these financial statements, the Group has closed all its trading businesses, and is a Cash Shell awaiting new investment opportunities. The Directors believe that since the year-end, through share issues, the Group has raised sufficient cash resources for over 12 months to support its contracted and committed working capital requirements as an AIM quoted Cash Shell.

The Directors have announced that they are seeking new investment opportunities, and have indicated that further investment may be expected from shareholders when suitable investments have been identified. It is too early to predict the outcome of these reviews of potential investment opportunities.

Conclusion

After taking account of the Group and Company's current funding position, its cash flow projections and the risks and uncertainties associated with these, the directors have a reasonable expectation that the Group and Company have access to adequate resources to continue in operational existence for the foreseeable future. For these reasons they continue to prepare the financial

statements on a going concern basis. These financial statements do not include any adjustments that would result from the going concern basis of preparation being inappropriate.

2.3 Consolidation

These financial statements are the consolidated financial statements of Bould Opportunities PLC and all of its subsidiaries ("the Group").

Business combinations

Business combinations are accounted for using the acquisition method. The consideration for acquisition is measured at the fair values of assets given, liabilities incurred or assumed, and equity instruments issued by the Company in order to obtain control of the acquiree (at the date of exchange). Costs such as professional fees incurred in connection with the acquisition are recognised in the statement of comprehensive income as incurred.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which it occurred, provisional amounts are reported for the items for which the accounting is

incomplete. During the measurement period, the provisional amounts recognised at the acquisition date are adjusted retrospectively to reflect new information obtained about the facts and circumstances that existed at the acquisition date and which, if known, would have affected the measurement of the amounts recognised at that date. The measurement period is the period from the acquisition date to the date by which complete information has been received about the facts and circumstances at the acquisition date, subject to a maximum of one year.

Subsidiaries

Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever the facts and circumstances indicate that there may be a change in any of these elements of control. De-facto control exists in situations where the company has the practical ability to direct the relevant activities of the investee without holding the majority of the voting rights.

Inter-company transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated.

2.4 Segmental reporting

IFRS 8 requires that segmental information be disclosed on the basis of information reported to the chief operating decision maker. The Group considers that the role of chief operating decision maker is performed by the Group's Board of Directors.

There were substantial changes to the Group's operations in 2018. From the start of 2018, the Group had different entities in the United Kingdom operating as wholly-owned subsidiaries. Their primary activities focused on the supply of LED lighting fixtures whilst transforming the Group to a future main focus as a LED lighting services business. The Group operated in three reporting segments, LED Lighting Fixtures - placed in to liquidation in November 2018, Halcyon and LED light engines - continuing in business through the whole of 2018, and Contract Manufacturing - sold in January 2018. Information on the segments and discontinued businesses consistent with the Group's internal reporting is provided in Note 5.

2.5 Foreign currency translation

The functional currency of the Company and each of its subsidiary companies is Sterling. Foreign currency assets and liabilities are converted into Sterling at the rates of exchange ruling at the end of the financial year. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

2.6 Investments in subsidiaries

Investments in subsidiaries are stated at cost less accumulated impairment.

2.7 Intangible fixed assets - patents, development costs, customer lists and goodwill

Patents and development costs

Acquired patents associated with internally developed intellectual property are recognised initially at cost. Patents have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost over their estimated useful lives (5 years).

The costs associated with acquiring patents relating to technology which are no longer integral to the product range planned for market are expensed to the statement of comprehensive income.

Development costs capitalised under IAS38 are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost over their estimated useful lives (5 years). Amortisation only commences when the asset is available for use.

Intangible amortisation is recognised within administrative expenses in the statement of comprehensive income.

Customer lists

Customer lists are stated at fair value on acquisition less amortisation recognised since acquisition.

Amortisation of customer lists is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

Architectural Lighting & Controls customer list - 6 years

Goodwill

Goodwill arising on acquisition is the residual cost of the acquisition after allocation of the consideration paid to the fair value of the net tangible and other intangible assets acquired. Goodwill valuation is subject to annual review for impairment and any write-down resulting from impairment is charged to the statement of comprehensive income.

2.8 Property, plant and equipment

All plant and equipment are stated at cost less accumulated depreciation. The cost of plant and equipment includes expenditure that is directly attributable to the acquisition of the assets.

Depreciation on all plant and equipment is calculated using the straight-line method to allocate cost less residual value over estimated useful life, as follows:

Plant and equipment 3 - 5 years

Residual values, remaining useful lives and depreciation methods are reviewed annually and adjusted if appropriate. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of comprehensive income. Repairs and maintenance expenditure is written off to the statement of comprehensive income as incurred.

2.9 Research and development

Expenditure on research is charged to the statement of comprehensive income as incurred. Expenditure on product development is capitalised as an intangible asset in the statement of financial position from the date that the expenditure incurred on the development meets all the capitalisation criteria detailed below:

· Technical feasibility of completing the asset so that it will be available for use or sale can be demonstrated;

· The intention to complete the asset and use or sell it can be demonstrated;

· The ability to use or sell the asset can be demonstrated;

· The ability to demonstrate how the asset will generate probable future economic benefits;

· The ability to demonstrate the availability of adequate technical, financial and other resources to complete the development and to use or sell the asset; and

· The ability to measure reliably the expenditure attributable to the asset during its development.

Expenditure on product development is expensed to the statement of comprehensive income as incurred where the capitalisation criteria are not met. Development costs recognised as an expense are not recognised as an asset in a subsequent period.

2.10 Impairment of non-financial assets

The Group assesses annually whether there is any indication that any of its assets have been impaired. If such indication exists, the asset's recoverable amount is estimated and compared to it carrying value. Where it is impossible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the smallest cash-generating unit to which the asset is allocated.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount an impairment loss is recognised immediately in the statement of comprehensive income, unless the asset is carried at a revalued amount, in which case the impairment loss is recognised as a decrease in the revaluation reserve to the extent of any previous surplus with any further loss being recognised in the statement of comprehensive income.

For goodwill, intangible assets that have an indefinite life and intangible assets not yet available for use, the recoverable amount is estimated annually or whenever there is an indication of impairment.

2.11 Trade receivables

Trade receivables are stated at the original invoice amount less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payment are considered indicators that the trade receivable is impaired. The carrying amount of the asset is reduced through the use of a provision account and the amount of the loss is recognised within administrative expenses in the statement of comprehensive income. Trade receivables are not discounted as the effect would be immaterial.

2.12 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first in, first out method. The cost of finished goods and work in progress comprises the purchase price including transport and handling costs and attributable manufacturing overheads.

Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

2.13 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments, with original maturities of three months or less.

2.14 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.15 Trade payables

Trade payables are non-derivative financial liabilities with fixed or determinable payments. Trade payables are included in current liabilities, except for maturities greater than 12 months after the statement of financial position date. These are classified as non-current liabilities. Trade payables are recognised at cost. They are not discounted as the effect would be immaterial.

2.16 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost with any difference between the proceeds (net of transaction costs) and the redemption value recognised in the statement of comprehensive income over the period of the borrowings using the effective interest rate method.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

2.17 Current and deferred income tax

Current income tax is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the countries where the Company's subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

2.18 Revenue

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services. Revenue is shown net of value added taxes, returns and rebates.

Revenue is recognised when the amount can be reliably measured and it is probable that future economic benefit will flow to the Group under the terms of any sale agreements. This normally corresponds to the date that goods are either despatched to customers, or in the case of ex-works customers the goods are available for collection. Revenue is not considered to be reliably measurable until all contingent clauses in sale agreements are met.

Details of the accounting policy for warranty and stock return provisions are in Note 2.22.

2.19 Government grants

Grants from the Government are recognised at their fair value where there is reasonable assurance that the grant will be received and that the Group will comply with all attached conditions.

Government grants relating to costs are deferred and recognised in other income in the statement of comprehensive income over the period necessary to match them with the costs that they are intended to compensate.

Capital grants that relate to specific capital expenditure are included in current and non-current liabilities as deferred income which is credited to the statement of comprehensive income over the related asset's useful life.

2.20 Operating leases

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. Contingent rentals arising under operating leases are recognised in the period in which they are incurred.

2.21 Share based payments

The Group operates an equity-settled, share-based compensation plan. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense and credited to the share option reserve within equity. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Options that lapse before vesting are credited back to income.

The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and, if applicable, share premium when the options are exercised.

2.22 Provisions

The Group's principal provisions relate to product warranties and stock returns from distributors.

Provisions are recognised when the Group has a present obligation as a result of an event that occurred in the past and the settlement of that obligation will result in an outflow of resources, but the timing of or amount that will be required to settle is uncertain. The amount recognised as a provision is the best estimate of the consideration which will be required to settle the obligation.

2.23 Financial instruments

i) Financial assets

From 1 January 2018 the Group and Company classifies its financial assets in the following measurement categories:

· those to be measured subsequently at fair value through profit or loss; and

· those to be measured at amortised cost.

The classification depends on the business model for managing the financial assets and the contracted terms of the cash flows. Financial assets are classified as at amortised cost only if both of the following criteria are met:

· the asset is held within a business model whose objective is to collect contracted cash flows; and

· the contractual terms give rise to cash flows that are solely payments of principal and interest.

Financial assets, including trade and other receivables and cash and bank balances, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in the consolidated income statement.

The Group and Company applies the simplified approach in calculating the expected credit losses (ECLs) as permitted by IFRS 9. Changes in credit risk is not tracked but instead a loss allowance is recognised at each reporting date based on the financial asset's; lifetime ECL

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in the consolidated income statement.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions

ii) Financial liabilities

Basic financial liabilities, including trade and other payables, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

The group does not hold or issue derivative financial instruments.

iii) Offsetting

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle to liability simultaneously.

2.4 Pensions

For defined contribution schemes the amount charged to the statement of comprehensive income is the contribution payable in the year. Differences between the contributions payable in the year and contributions actually paid are shown either as accruals or prepayments.

3 Financial risk

Many of the Group's risks were reduced significantly during 2018 as most of the Group's trading activities were curtailed.

3.1 Capital risk management

The Group monitors capital which comprises all components of equity (i.e. share capital, share premium, capital reduction reserve, share option reserve, and retained earnings/losses). Note 29 describes how capital is managed in respect of the debt to equity ratio.

3.2 Financial risk factors

The Group and Company's operations exposed it to a variety of financial risks that had included the effects of credit risk, liquidity risk and interest rate risk. The Group and Company had in place a risk management programme that attempted to limit the adverse effects on the financial performance of the Group and Company by monitoring levels of debt finance and the related finance costs. The Group and Company did not use derivative financial instruments to manage interest rate costs and as such, no hedge accounting was applied.

Given the size of the Group and Company, the directors did not delegate the responsibility of monitoring financial risk management to a sub-committee of the Board. The policies set by the board of directors were implemented by the Group and Company's finance department.

(a) Market risk

(i) Foreign exchange risk

The Group distributed and sold internationally and was exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar and Sterling. Foreign exchange risk arose from future commercial transactions and translation of foreign currency denominated monetary assets and liabilities. Foreign currency risk was managed via the purchase of raw materials and the sale of products in equivalent currencies. A sensitivity analysis was not performed because the Group's exposure to foreign exchange risk was not significant.

(ii) Price risk

The Group had periodic price reviews within distributor sales contracts that enabled it to reassess and adjust for price risk as part of contractual negotiations. Commodity price risk is assessed as medium as a result of the various supply alternatives available for key components. Any increase or decrease in commodity prices had a direct impact on EBITDA until sales prices can be renegotiated.

(b) Credit risk

The Group implemented policies that required appropriate credit checks on potential customers before sales were made. The Group's credit risk was primarily attributable to its trade receivables balance. The amounts presented in the statement of financial position are net of allowances for impairment.

(c) Liquidity risk

Liquidity risk was the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Group's financial liabilities included its borrowings and trade and other payables shown in Note 15. Responsibility for monitoring liquidity risk and for ensuring that Group members are adequately funded lies with the board of the Parent Company, Bould Opportunities PLC. 

(d) Interest rate cash flow risk

The Group had both interest-bearing assets and interest-bearing liabilities. Interest bearing assets comprised only cash balances, which earned interest at floating rates. Interest bearing liabilities comprised debt at fixed and floating rates.

4 Critical accounting estimates and judgements

In the preparation of the financial statements the directors must make estimates and assumptions that affect the asset and liability items and revenue and expense amounts recorded in the financial statements. These estimates are based on historical experience and various other assumptions that the Board believes are reasonable under the circumstances. The results of this form the basis for making judgements about the carrying value of assets and liabilities that are not readily available from other sources.

a) Accounting judgement

There were no judgments made.

b) Accounting estimate

The principal area where estimates have been made in the financial statements is in respect of intangible assets and the level of impairment required which is dependent on future revenue growth and margins (see note 32, Impairment Review).

Impairment of non-current assets

Determining whether intangible assets or plant and equipment are impaired requires an estimation of the value in use of those assets. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the business or asset and to apply a suitable discount rate in order to calculate present value. At the 2018 year end the only remaining non-current assets were in respect of the Halcyon and light engines business; these assets were impaired to zero as a result of the decision soon after the year end in January 2019 to close this business, and the assets were not expected to realise any value.

Stock provisions

The directors review at each reporting date the net realisable value of all stock. Where the cost of stock is believed to exceed its net realisable value, stock provisions are made to reduce cost to net realisable value, taking into account the costs of disposal. At the 2018 year end the only remaining stock was in respect of the Halcyon and light engines business; this asset was impaired to zero as a result of the decision soon after the year end in January 2019 to close the business, and the stock was not expected to realise any value.

Deferred tax

The Group has tax losses of £8.5m (2017: £10.4m) available for off-set against future taxable profits. In determining the value of the deferred tax asset that can be attributed to these losses, the directors have to estimate future taxable profits and the period over which the asset may be recovered. The directors consider the most up-to-date forecasts for the business and assess the risks inherent in achieving those forecasts. At the statement of financial position date, no deferred tax asset has been recorded. The deferred tax asset may be recognised in the future if there is an improvement in the forecast taxable profits.

Share based payments

See Note 13 which explains the methods used to estimate the fair value of share options granted.

5 Continuing and discontinued operations

5a Summary

5b Continuing operations - segmental information

 'Adjusted EBITDA for reportable segments' above is defined as EBITDA before share option charge and corporate expenses, and 'Adjusted EBITDA' below is defined as EBITDA before share option charge and exceptional item. Corporate expenses consist mainly of certain expenses of the parent undertaking such as legal, professional and consultancy costs related to the Group's listing on AIM and other central costs not allocated to business segments. Adjusted EBITDA, rather than the traditional EBITDA measure, is used as an alternative performance measure because it is a fairer approximation of operating cash flows.

Note that the Adjusted EBITDA reported in these financial statements is not considered to be a substitute for those figures reported under IFRS.

A reconciliation of the adjusted EBITDA to the loss before tax for continuing operations is as follows:

A reconciliation of the reportable segments' assets to the Group's total assets is as follows:

A reconciliation of the reportable segments' liabilities to the Group's total liabilities is as follows:

5c Discontinued operations

The Group's net loss on discontinued operations may be analysed as follows:

Additional financial information for each of these discontinued operations is set out below. This information incorporates the segmental results for the prior period.

5c Details of the sale of Camtronics Vale Limited

The financial performance and cash flow information presented are for the one month ended 31 January 2018 and for the year ended 31 December 2017.

Net cash outflow from operating activities:

Details of sale of subsidiary:

The carrying amounts of assets and liabilities as at the date of sale were:

The financial performance and cash flow information presented are for the 10 months ended 31 October 2018 and for the year ended 31 December 2017

Net cash outflow from operating activities:

5d Details as a result of the liquidation of Photonstar LED Ltd

Details of liquidation of subsidiary:

The carrying amounts of assets and liabilities as at the date of liquidation were:

5e Details as a result of a liquidator appointed to the parent company of Architectural Lighting and Controls Limited

Architectural Lighting & Controls Limited was a dormant subsidiary, and therefore had no income or expense or cash flows for the relevant reporting periods.

Details resulting from the liquidation of the parent company:

The carrying amounts of assets and liabilities as at the date of liquidation were:

6a Operating loss (continuing and discontinued operations)

6b Exceptional item (continuing operations)

Exceptional items are shown in the Statement of Comprehensive Income as an administrative expense.

6c Other Income

7 Investments in subsidiary undertakings

Note 32 sets out the group-level impairment review and concludes there should be an impairment charge to the consolidated balance sheet of £501,000 (2017: £836,000). In the Company's own financial statements, a provision for impairment has been recorded in order to adjust the book value of the Parent Company's investments to the value in use of the subsidiaries that is estimated in the Group's impairment review. This provision for impairment has no impact on the consolidated financial statements.

*Shares held by subsidiary Company.

The registered address for ongoing subsidiaries is New Liverpool House, 15 Eldon Street, London EC2M 7LD.

8 Property, plant and equipment

The Company has no property, plant and equipment. 

9 Intangible fixed assets

Group

Included within additions to development costs are costs of £172,000 (2017: £259,000) which are staff and other internal costs capitalised in the year.

Patents include the external third-party cost associated with the acquisition of patents for internally developed intellectual property and technical expertise. Intangible amortisation is recognised within administrative expenses in the statement of comprehensive income. The costs associated with acquiring patents relating to technology which are not integral to the product range planned for market have been expensed to the statement of comprehensive income during the period.

Goodwill of £119,000 consisting of £106,000 to the acquisition of Architectural Lighting and Controls Limited and £13,000 to the acquisition of Camtronics Vale Limited was written off during the year.

10 Inventories

11 Trade and other receivables

Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are classified as 'trade and other receivables' in the statement of financial position and are included in current assets, except for maturities greater than 12 months after the statement of financial position date. These are classified as non-current assets. The value of trade receivables shown above, in addition to the value of cash balances on deposit with counterparties (see Note 12), represents the Group's maximum exposure to credit risk. No collateral is held as security.

Amounts due from subsidiary undertakings represented net amounts provided to the Company's wholly owned subsidiary, PhotonStar Technology Limited. Receivables due from subsidiaries were unsecured and repayable on demand. 

The fair value of trade and other receivables approximate to the net book values stated above.

As of 31 December 2018, trade receivables of £nil (2017: £99,000) were past their due date of receipt.

As of 31 December 2018, trade receivables of £nil (2017: £28,000) were impaired. The individually impaired receivables relate to balances where it has been assessed that the receivable is not expected to be recovered. The ageing of these receivables is as follows:

The Group's trade and other receivables above are denominated in Sterling, and are pledged as security for the invoice finance borrowings disclosed in Note 15.

Movements on the provision for impairment of trade receivables are as follows:

12 Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and balances with banks and investments in readily accessible money market instruments. Cash and cash equivalents included in the consolidated and Company statement of cash flows comprise the following statement of financial position amounts.

An analysis of cash balances is provided in Note 33.

13 Share capital

Notes to the financial statements for the year ended 31 December 2018

13 Share capital (continued)

The following table reconciles the total nominal value of the shares in issue:

The following table reconciles the movements in share capital during the year: