Mobile Streams Regulatory News (MOS)

14 October 2015

Mobile Streams plc ("Mobile Streams", the "Group" or the "Company")

Replacement re: Audited Final Results

The following amendments have been made to the "Audited Final Results" announcement released on 12 October at 07.00 under RNS No 8874B.

· Financial Highlights - the commentary includes a statement highlighting that the EBITDA for the year ended 30 June 2015 includes the release of a provision of £0.34m related to the liquidation of a German subsidiary in 2013 (as disclosed in note 23, page 51).

· Financial Highlights - the commentary includes a statement highlighting that the final audited numbers reflect positive adjustments relating to tax provisions that the Company had previously made in Argentina and Europe. These adjustments only relate to prior periods (please refer to the accounting policies, page 16, second paragraph).

· Financial Highlights - the figure for cash as at 30 June 2015 has been amended to £2.1m to be consistent with the balance sheet disclosure (please refer to page 5 and 26). The figure of £2.9m previously referred to reflects cheques written during the year in respect of amounts payable to suppliers which cleared the Company's bank accounts after the year end.

· Financial Highlights - the Net Income has been amended to £0.34m (from £0.19m reported before).

· Consolidated Statement of Financial Position shows a reclassification between retained earnings and translation reserve as at 30 June 2015. This amendment decreases retained earnings by £0.68m and increases the translation reserve by £0.68m.

· Consolidated Statement of Comprehensive Income. The translation reserve movement has been amended by £0.68m to reflect the reclassification referred to above.

· Note 21 Segmental Reporting the segmental results for the year ended 30 June 2014 (page 48) have been amended to include a share based payment charge of £328k as a separate line item below Trading EBITDA in line with the presentation of the share based payment charge in the segmental results for the year ended 30 June 2015.

All other details remain unchanged.

Financial highlights:

· Revenues of £29.1m (2014: £48.6m)

· EBITDA* of £1.1m (2014: 0.7m)

· Profit before tax £0.83m (2014: £0.15m)

· Profit after tax of £0.34m (2014: loss of £0.55m)

· Basic earnings per share of 0.908 per share (2014: loss of 1.479p per share)

· £2.1m in cash, with no debt (2014: £3.0m)

· Live mobile internet subscription services in Argentina, Colombia, Mexico and Brazil along with newly launched services in India and Nigeria

*Calculated as profit before tax, interest, amortisation, depreciation, share compensation expense and impairment of assets.

The final audited numbers reflect positive adjustments relating to tax provisions that the Company had previously made in Argentina and Europe. These adjustments only relate to prior periods (please refer to the accounting policies, page 16, second paragraph). The EBITDA for the year ended 30 June 2015 includes the release of a provision of £0.34m related to the liquidation of a German subsidiary in 2013.

The full report and accounts for the year ended 30 June 2015 will be sent to shareholders today.

Outlook

Mobile Streams continues with its strategy of diversifying its revenues into new markets beyond Argentina and Latin America, especially India and Nigeria. Any further devaluation of the Argentinian peso would have a negative impact on the Company's future performance. These diversification plans will require investment during the rest of the year which will be reflected in reduced short term profitability. Cash as at the beginning of October 2015 was at a level of around £1.7m, reflecting investments made in the development and launch of the new markets and services.

The Company's new Indian subsidiary Mobile Streams India Private Limited is being set up, and the Company has signed direct contracts for mobile internet billing with two of the three largest local Indian mobile operators, reaching approximately 350 million mobile customers. Once these contracts have been fully executed and implemented, the Company expects to launch its subscription services in India. In Nigeria, the Company has launched with mobile billing available with one of the four largest local mobile operators. 

The Company has launched some new advertising funded mobile services. These services include its mobile social network http://www.terrenal.com in Latin America. Moreover, Mobile Streams has launched a mobile games store globally at http://www.mobilegaming.com that is entirely ad-supported and free to use for consumers. Consumers can play each and any game an unlimited number of times as long as they watch a pre-role ad each time they play a game. Mobile Streams developed a proprietary games wrapper that allows consumers to play games for free in this way. Mobile Streams has signed up several hundred games for the launch of the service. 

Simon Buckingham, founder and CEO, said: "We feel that the Company is now well placed from a product and market perspective to embrace and extend its longstanding expertise in mobile internet services. We are therefore confident about the Company's future prospects."

Enquiries

About Mobile Streams 

Mobile Streams licenses and distributes a wide range of mobile content including games and apps that are retailed around the world, primarily in emerging markets. The Company's main operations are in Latin America and in particular Argentina, with recent expansion into India and Nigeria. Its shares are traded on the AIM market of the London Stock Exchange under the symbol MOS LN.

Chairman's Statement:

The Board of Mobile Streams plc presents its audited accounts for the financial year ended 30 June 2015.

The past twelve months has seen Mobile Streams plc (the "Group" or the "Company") continue with its strategy to develop a content offering across a wide range of mobile devices in a number of large emerging markets direct to consumers. This is in addition to our original business of providing content to mobile network operators and other business partners. The operating performance of the business reflects our substantial positioning in Argentina and Latin America. It also reflects the cost of working with Argentinian currency control rules.

Group revenue for the year ended 30 June 2015 was £29.1m (2014: £48.6m). Trading EBITDA* was £1.1m for year (2014: £0.7m). Profit before tax was £0.8m (2014: £0.2m). Much of the reduction in revenues is attributable to Argentina. Revenue in Argentina (which equates to 87% of our revenue) on a constant currency basis decreased by 22% from AR$440m to AR$343m. Challenges in Argentina spurred the Company to develop new premium content products, and funded products, and to diversify into new emerging markets.

Our operations outside Europe represent more than 99% of the overall revenues for the period. Latin America represents 99% (see note 21) of the total revenues for the year. Of this some 87% was in Argentina.

During 2012, Argentina modified its regulations regarding the international transfer of funds which restricted the Group's ability to transfer cash out of the country. As of 30 June 2013, more than 73% of the Group's cash was in Argentina. Following a strategic decision to mitigate capital risk and diversify our sources of cash generation (principally to countries with more flexible capital controls such as Mexico and Colombia), Mobile Streams has reduced the proportion of its cash within Argentina to 4% as of 30 June 2015. 

Mobile Streams enters the new financial year with a clear focus on continuing to expand its operating base in Latin America and in open mobile internet services for apps and games in new large emerging markets including India and Nigeria. The Directors do not propose a payment of a dividend (2014: £Nil). In the new financial year, the majority of revenues are once again expected to be generated in Latin America.

Despite the challenges in Argentina, the Board believes that the Group is well positioned to deliver growth in shareholder returns with established and newly developed ad funded and premium products and strong trading relationships, complemented by broader market growth in developing markets, which represent our key targets for future growth. We are long established experts in mobile content.

Roger ParryChairman

*Calculated as profit before tax, interest, amortisation, depreciation, share compensation expense and impairment of assets.

STRATEGIC REPORT

Mobile Streams PLC (AIM: MOS), the global mobile media company, is pleased to provide an update to its shareholders on its performance for the 12 months ended 30 June 2015.

BUSINESS REVIEW

Operating Review

Mobile Streams' performance during the financial year ended 30 June 2015 was driven primarily from Mobile Internet sales in Latin America.

Group revenue for the year ended 30 June 2015 was £29.1m. The gross profit was £7.7m and decreased by 46% during the year (year ended 30 June 2014: £14.2m). The gross profit margin decreased from 29.3% to 26.4% due to increased marketing (Direct to Consumer) costs related to Mobile Internet.

Selling, marketing and administrative expenses were £6.9m, a 51% decrease on the year ended 30 June 2014. Revenues are generated from two principal business activities: the sale of mobile content through mobile operators (Mobile Operator Sales) and the sale of mobile content over the internet (Mobile Internet Sales). Additionally, the Group is engaged in the provision of consulting and technical services (Other Service Fees).

During the period, both the Group's Mobile Internet revenues and its Mobile Operator revenues decreased. As consumers steadily update their phones from legacy feature and flip phone models to smartphones, they have generally used the operator content portals less. Consumers generally use independent portals, as well as the open mobile internet, more actively.

The Argentine peso suffered a modest devaluation against the British Pound during the year (3.66% for the 12 months ended on 30 June 2015). The financial results and balances of all group entities that have a functional currency different from the presentation currency are translated into the presentation currency, and these exchange differences are recognised as a separate component of equity (cumulative translation reserve). On disposal of a subsidiary the corresponding cumulative exchange differences will be charged or credited to the income statement as a separate component of equity (cumulative translation reserve).

Mobile Internet Sales

The Group anticipated the shift to the open Mobile Internet business model several years ago and added new products at new price points in new markets.

The group had experienced growth and then stabilization in 2013-2014 in Mobile Internet sales as consumers used their mobile devices to purchase mobile content subscriptions. After that, the business model (based on mobile internet) shifted to a model based on the operator platforms; and the revenue based on internet decreased. This was mostly the result of the devaluation of the Argentine peso during 2014 market in Argentina during the 2014 to 2015 financial year, resulting in a fall in sales.

 Latin America, primarily Argentina, accounted for the majority of revenues.

STRATEGIC REPORT

Mobile Operator Sales

The Group has several contracts with mobile operators that allow the distribution of content through their mobile portals, although the revenue has been reduced by more than 40% year on year partially due to the fact that consumers prefer to use the open mobile internet services on their smartphones and partly because of our own increased focus on mobile internet services.

There was a reduction in the number of consumer visitors to these portals, which has been a continuing trend for several years. Our teams share and implement the best retailing practices in order to increase the conversion of visitors into customers to mitigate the natural decline in this revenue stream as the market changes.

Financial Review

Group revenue for the year ended 30 June 2015 was £29.1m, a 40% decrease on the previous year (2014: £48.6m).

Gross profit was £7.7m, a decrease of 46% during the year (2014: £14.2m). The gross profit margin decreased from 29% to 26% due to increased marketing (Direct to Consumer) costs related to Mobile Internet.

Selling, marketing and administrative expenses were £6.9m, a 51% decrease on the year ended 30 June 2014 (2014: £14.2m).

The Group recorded a profit after tax of £337k for the year ended 30 June 2015 (2014: loss £0.5m). Basic earnings per share improved to a profit of 0.908 pence per share (2014: loss of 1.479 pence per share). Adjusted earnings per share (excluding interest, depreciation, amortisation, impairments and share compensation expense) increased to 1.560 pence per share (2014: 0.515 pence per share).

The Group had cash of £2.1m at 30 June 2015, with no debt (£3.0m of cash with no debt as at 30 June 2014). Argentina cash was £80k at 30 June 2015 (2014: £453k)

Financial performance

STRATEGIC REPORT

Key performance indicators ("KPI's")

The KPIs used by the Group are Trading EBITDA*, variance in revenue and gross profit. Management review these on a regular basis, largely by reference to budgets and reforecasts. Trading EBITDA was £1.1m for the year ended on June 2015, and it was £0.7m for the year ended in June 2014.

Earnings before tax, interest, amortisation, depreciation, share compensation expense and impairment of assets (Trading EBITDA*) measured exactly as stated. All tax, interest, amortisation, depreciation, share compensation expense and impairment of assets entries in the income statement are added back to profit after tax in calculating this measure.

Growth in revenue is a measure of how we are building our business. Our goal is to achieve year-on-year growth. Although revenue decreased 40% during the year, like for like revenue on a constant currency basis actually decreased by 22%.

Gross profit as a percentage of revenue is a measure of our profitability. Gross profit was £7.7m for the year ended in June 2015, a decrease of 46 %. (2014: £14.2m).

Strategy

Our business model is generating revenues though relationships with mobile operators and content aggregators and retailing directly to the consumer. Mobile Streams have developed expertise in selling content to consumers in developing markets. We enjoyed great success in gaining market share in Argentina but our results have suffered from the currency issues described.

In addition to expanding its mobile internet subscription services from Latin America into India and Nigeria, the Company has launched some ad funded mobile services. These services include its mobile social network http://www.terrenal.com in Latin America. Moreover, Mobile Streams has launched a mobile games store globally at http://www.mobilegaming.com that is entirely ad-supported and free to use for consumers. Consumers can play each and any game an unlimited number of times as long as they watch a pre-roll ad each time they play a game. Mobile Streams developed a proprietary games wrapper that allows consumers to play games for free in this way. Mobile Streams has signed up several hundred games for the launch of the service. 

Principal risks and uncertainties

The nature of the Group's business and strategy makes it subject to a number of risks.

The Directors have set out below the principal risks facing the business.

Contracts with Mobile Network Operators (MNOs)

While Mobile Streams maintains relationships with numerous MNOs in the various territories, a small number of operators account for a high portion of the Group's business.

As the Group grows, management are using geographic and product diversity to counter this risk.

* Calculated as profit before tax, interest, amortisation, depreciation, share compensation expense and impairment of assets.

STRATEGIC REPORT

Contracts with rights holders

The majority of content provided by Mobile Streams is licensed from rights holders. While Mobile Streams is not dependent on any single rights holder for its entertainment content, termination, non-renewal or significant renegotiation of a contract could result in lower revenue.

The Group continues to enter into new content licensing arrangements to mitigate these risks.

Competition

Competition from alternative providers could adversely affect operating results through either price pressures, or lost custom. Products and pricing of competitors are continuously monitored to ensure the Group is able to react quickly to changes in the market.

Fluctuations in currency exchange rates

Approximately 99% of the Group's revenue relates to operations outside the UK. The Group is therefore exposed to foreign currency fluctuations and the financial condition of the Group may be adversely impacted by foreign currency fluctuations. See note on page 7 "Financial risk management objectives and policies".

The Group has operations in Europe, Asia Pacific, North America and Latin America and recently in Africa and India. As a result, it faces both translation and transaction currency risks.

Currency exposure is not currently hedged, though the Board continuously reviews its foreign currency risk exposure and potential means of combating this risk.

Dependencies on key executives and personnel

The success of the business is substantially dependent on the Executive Directors and senior management team.

The Group has incentivised all key and senior personnel with share options and has taken out a Key Man insurance policy on its Chief Executive Officer, Simon Buckingham.

Intellectual property rights

The protracted and costly nature of litigation may make it difficult to take a swift or decisive action to prevent infringement of the Group's intellectual property rights.

Although the Directors believe that the Group's content and technology platform and other intellectual property rights do not infringe the IP rights of others, third-parties may assert claims of infringement which could be expensive to defend or settle. The Group holds suitable insurance to reduce the risk and extent of financial loss.

Technology risk

A significant portion of the future revenues are dependent on the Group's technology platforms. Instability or interruption of availability for an extended period could have an adverse impact on the Group's financial position.

Mobile Streams has invested in resilient hardware architecture and continues to maintain software control processes to minimise this risk.

Management controls and reporting procedures and execution

The ability of the Group to implement its strategy in a competitive market requires effective planning and management control systems. The Group's future growth will depend upon its ability to expand whilst improving exposure to operational, financial and management risk.

STRATEGIC REPORT

Going concern risk

The current uncertain economic climate and changing market place may impact the Group's cash flows and thereby its ability to pay its creditors as they fall due.

A principal responsibility of management is to manage liquidity risk, as detailed in Note 25 to the financial statements. The Group uses annual budgeting, forecasting and regular performance reviews to assess the longer term profitability of the Group and make strategic and commercial changes as required ensuring cash resources are maintained.

Argentina's Government imposed currency controls at the beginning of 2012 which continue to inhibit the repatriation of funds to the parent company. Management made the appropriate actions to mitigate this risk and has moved its finance operations to Argentina to help ensure stability and continuity.

Financial risk management objectives and policies

The Group uses various financial instruments. These include cash and various items, such as trade receivables and trade payables that arise directly from its operations. The numerical disclosures relating to these policies are set out in notes to the financial statements.

The existence of these financial instruments exposes the Group to a number of financial risks, which are described in more detail below. The Group does not currently use derivative products to manage foreign currency or interest rate risks.

The main risks arising from the Group's financial instruments are market risk, currency risk, liquidity risk and credit risk. The Directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous periods.

Market risk

Market risk encompasses three types of risk, being currency risk, fair value interest rate risk and price risk. In this review interest rate and price risk have been ignored as they are not considered material risks to the business.

Liquidity risk

The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.

The aforementioned capital flow restrictions imposed by the Argentinian government severely restrict the Argentina subsidiary from transferring funds to the Group´s parent company for the payment of dividends or for services rendered. This risk is being mitigated by the launch of similar businesses to Argentina in Colombia and Mexico where the cross border transfer of funds is not restricted. Vendor related payments can be made from Argentina on behalf of other subsidiaries.

The Group currently has no borrowing arrangements in place and prepares cash flow forecasts which are reviewed at Board meetings to monitor liquidity.

Credit risk

The Group's principal financial assets are bank deposits, cash and trade receivables. The credit risk associated with the bank deposits and cash is limited as the counterparties have high credit ratings assigned by international credit-rating agencies. The principal credit risk arises therefore from the Group's trade receivables. Most of the Group's trade receivables are large mobile network operators or media groups. Whilst historically credit risk has been low management continuously monitors its financial assets and performs credit checks on prospective partners.

The Argentina Division delivered a decreased revenue performance in line with the market expectations. The division represented 87% of the revenues of the Group.

Argentina revenue decreased 22% in Argentine Pesos terms; from AR$440 Million to AR$342 Million; but the reported British Pound figures shows a 38% decrease in revenue; from £40.5M to £25.3M.

Future Developments

In addition to expanding its mobile internet subscription services from Latin America into India and Nigeria, the Company has launched some ad funded mobile services. These services include its mobile social network http://www.terrenal.com in Latin America. Moreover, Mobile Streams has launched a mobile games store globally at http://www.mobilegaming.com that is entirely ad-supported and free to use for consumers. Consumers can play each and any game an unlimited number of times as long as they watch a pre-role ad each time they play a game. Mobile Streams developed a proprietary games wrapper that allows consumers to play games for free in this way. Mobile Streams has signed up several hundred games for the launch of the service. 

The Strategic Report, encompassing pages 3 to 8, was approved by the Board and signed on its behalf by:

Enrique Benasso

Chief Financial Officer

13 October 2015

DIRECTORS' REPORT

The principal activity of the Group is the sale of content for distribution on mobile devices. The Company is registered in England and Wales under company number 03696108.

Results and dividends

The trading results and the Group's financial position for the year ended 30 June 2015 are shown in the attached financial statements, and are discussed further in the Strategic Report.

The Directors have not proposed a dividend for this year (2014: £nil).

Directors and their interests

The present membership of the Directors of the Company (the "Board" or the "Directors"), together with their beneficial interests in the ordinary shares of the Group, is set out below. All Directors served on the Board throughout the year.

DIRECTORS' REPORT

Options

The table below summarises the exercise terms of the various options over ordinary shares of £0.002 (year ended 30 June 2014: £0.002) which have been granted and were still outstanding at 30 June 2015.

The remuneration of each of the Directors for the period ended 30 June 2015 is set out below:

Benefits comprise medical health insurance.

Post balance sheet events

There have been no significant post balance sheet events.

DIRECTORS' REPORT

Going Concern

The Group had cash balances of £2.1m at the year end (2014:£3.0m) and no borrowings. Having reviewed cash flow forecasts and budgets for the year ahead the Directors have a reasonable expectation that the Group has sufficient resources to continue in operational existence for the foreseeable future. During the year ended 30 June 2012, Argentina modified its laws on the cross border intercompany transfer of funds. Management have made the proper changes to mitigate this risk and have moved the finance operations to Argentina to help ensure stability and continuity. The risk is also mitigated by the launch of similar businesses in markets such as Colombia and Mexico where the cross border transfer of funds is not restricted. For these reasons, the Board consider Mobile Streams to be a going concern. No material uncertainties or events that may cast significant doubt about the ability of the Group to continue as a going concern have been identified by the Directors.

Directors' Responsibilities Statement

The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the group financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs) and have elected to prepare the parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (UK GAAP). Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company and Group for that period. In preparing these financial statements, the Directors are required to:

§ select suitable accounting policies and then apply them consistently;

§ make judgements and accounting estimates that are reasonable and prudent;

§ state whether applicable International Financial Reporting Standards / UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

§ prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors confirm that:

§ in so far as each Director is aware, there is no relevant audit information of which the Company's auditor is unaware; and

§ each Director has taken all steps that he ought to have taken to make himself aware of any relevant audit information and to establish that the auditor is aware of that information.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Auditor

Grant Thornton UK LLP has indicated their willingness to continue in office, and a resolution that they be re-appointed will be proposed at the annual general meeting.

On behalf of the Board

Enrique Benasso

Chief Financial Officer

13 October 2015

We have audited the consolidated financial statements of Mobile Streams Plc for the year ended 30 June 2015 which comprise the accounting policies, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated cash flow statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and auditor

As explained more fully in the Directors' Responsibilities Statement, the Directors are responsible for the preparation of the consolidated financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the consolidated financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the FRC's website at www.frc.org.uk/apb/scope/private.cfm.

Opinion on financial statements

In our opinion the consolidated financial statements:

§ give a true and fair view of the state of the group's affairs as at 30 June 2015 and of its profit for the year then ended;

§ have been properly prepared in accordance with IFRSs as adopted by the European Union; and

§ have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Strategic Report and the Directors' Report for the financial period for which the group financial statements are prepared is consistent with the group financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report to you if, in our opinion:

§ certain disclosures of Directors' remuneration specified by law are not made; or

§ we have not received all the information and explanations we require for our audit.

Other matter

We have reported separately on the parent company financial statements of Mobile Streams Plc for the year ended 30 June 2015.

Christopher Smith

Senior Statutory Auditor

for and on behalf of Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

London

13 October 2015

ACCOUNTING POLICIES

Summary of significant accounting policies

Basis of preparation

The Group financial statements consolidate those of the parent company and all of its subsidiary undertakings drawn up to 30 June 2015. They have been prepared in accordance with applicable International Financial Reporting Standards as adopted by the EU and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. All references to IFRS in these statements refer to IFRS as adopted by the EU.

The historical cost convention has been applied as set out in the accounting policies.

Disclosure of prior year restatement

The group's 2014 tax charge, tax payable and retained earnings have been restated to correct the overstatement of income tax payable in Argentina for 2014 and earlier periods. The restatement has resulted in a reduction of £14,000 in the group's tax charge for the year ended 30 June 2014, an increase of £783,000 in the group's retained earnings brought forward at 1 July 2013 and a reduction of £797,000 in the group's tax payable at 30 June 2014. As a consequence the group's loss per share and diluted loss per share for the year ended 30 June 2014 have both reduced by 0.038 pence per share and have been restated as 1.479 pence per share.

The basic and diluted earnings per share:

Consolidation

Subsidiaries are all entities over which the Group has the power to govern the operating and financial policies generally accompanying a shareholding of more than half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control is lost.

Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated in full. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Subsidiaries' accounting policies have been changed where necessary to ensure consistency with the policies adopted by the Group.

The separate financial statements and related notes of the Company are presented on pages 49-54, which are prepared in accordance with UK GAAP.

Foreign currency translation

(a) Presentational currency

The consolidated and parent company financial statements are presented in British pounds. The functional currency of the parent entity is also British pounds.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date the transaction occurs. Any exchange gains or losses resulting from these transactions and the translation of monetary assets and liabilities at the balance sheet date are recognised in the income statement, except to the extent that a monetary asset or liability represents a net investment in a subsidiary when exchange differences arising on translation are recognised in equity within the translation reserve. Amount due from or to subsidiaries are treated as part of net investment in the subsidiary when settlement is neither planned nor likely to occur in the foreseeable future.

Foreign currency balances are translated at the year-end using exchange rate prevailing at the year-end.

ACCOUNTING POLICIES

(c) Group companies

The financial results and position of all group entities that have a functional currency different from the presentation currency of the Group are translated into the presentation currency as follows:

i assets and liabilities for each balance sheet are translated at the closing exchange rate at the date of the balance sheet

ii income and expenses for each income statement are translated at average exchange rates (unless it is not a reasonable approximation to the exchange rate at the date of transaction)

iii all resulting exchange differences are recognised as a separate component of equity (cumulative translation reserve)

Property, plant and equipment

All property, plant and equipment (PPE) is stated at cost, less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the purchase of the items.

Depreciation is calculated to write off the cost of property, plant and equipment less estimated residual value on a straight line basis over its estimated useful life. The following rates and methods have been applied:

Each asset's residual value and useful life is reviewed, and adjusted if required, at each balance sheet date. The carrying amount of an asset is written down immediately to its recoverable amount if the carrying amount is greater than its estimated recoverable amount.

Gains/losses on disposal of assets are determined by comparing proceeds received to the carrying amount. Any gain/loss is recognised in the income statement.

ACCOUNTING POLICIES

Going Concern

The Group had cash balances of £2.1m at the year ended (2014: £3.0m) and no borrowings (2014: no borrowings). Having reviewed cash flow forecasts and budgets for the year ahead the Directors have a reasonable expectation that the Group has sufficient resources to continue its operations for the foreseeable future. During the year ended 30 June 2012 Argentina modified its laws on the cross border intercompany transfer of funds. Management have made changes to mitigate this risk including the launch of similar businesses in Colombia and Mexico where cross border transfers of funds are not restricted. For these reasons, the Board consider Mobile Streams to be a going concern. No material uncertainties or events that may cast significant doubt about the ability of the Group to continue as a going concern have been identified by the Directors.

Intangible assets

(a) Goodwill

Goodwill represents the excess of the cost of a business combination over the fair value of net identifiable assets of the acquired entity at the date of acquisition. This goodwill for subsidiaries is included in intangible assets. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Goodwill is allocated to cash-generating units for impairment testing. 

(b) Assets acquired through business combinations

These consist of customer relationships, technology based assets and non-compete agreements acquired through business combinations. To meet this definition, the intangibles must be identifiable either by being separable, or by arising from contractual or other legal rights. Intangibles acquired through business combinations are recognised at fair value. Where a reliable estimate of useful life of the intangible can be obtained, the intangible asset is to be amortised using the straight line basis, over the useful life. Where there is an indication of impairment of intangibles, the intangible will be tested for impairment. The estimated useful lives of these assets are:

 (c) Media content and Media platform development

Media content and Media platform development represent intangible assets that have been acquired from third parties and also that are internally generated, including capitalised direct staff costs. Content and platform expenditure is charged against income in the year in which it is incurred unless it meets the recognition criteria of IAS 38 Intangible Assets. To meet the criteria of an intangible asset the Group must demonstrate the following criteria:

- the technical feasibility of completing the asset so that it will be available for use,

- its intention to complete the intangible (or sell it),

- its ability to use or sell the intangible,

- that the intangible will generate future economic benefit,

- that adequate resources are available to complete the intangible, and

- the expenditure can be reliably measured.

Intangible assets, if capitalised, are amortised on a straight-line basis over the period of the expected benefit. Amortisation commences when the asset is ready for use.

ACCOUNTING POLICIES

(d) Appitalism

Appitalism development represents intangible assets that have been internally generated, including capitalised direct staff costs. To meet the intangible asset criteria the group must demonstrate the technical feasibility of completing the asset so that it will be available for use, its intention to complete the intangible (or sell it), its ability to use or sell the intangible, that the intangible will generate future economic benefit, adequate resources to complete the intangible and the expenditure can be reliably measured. Intangible assets, if capitalised, are amortised on a straight line basis, and reviewed annually for indicators of impairment.

 (e) Software

Software represents assets that have been acquired from third parties. To meet the criteria for recognition the intangible asset must be both identifiable and either separable, or arise from contractual or other legal rights. Intangible assets acquired from third parties are stated at cost less accumulated amortisation and impairment losses. Where a reliable estimate of useful life of the intangible can be obtained, the intangible asset is to be amortised using the straight line basis, over the useful life. Where there is an indication of impairment of intangible assets with a definite life, the intangible will be tested for impairment. The estimated useful life of acquired software is 2 years.

Amortisation is included in "Administrative expenses" in the income statement.

Impairment of assets

Assets that have an indefinite useful life, such as goodwill, are not subject to amortisation, but are instead tested annually for impairment and also tested whenever an event or change in situation indicates that the carrying amount may not be recoverable. Assets that are subject to amortisation are also tested for impairment whenever an event or change in situation indicates that the carrying amount may not be recoverable. An impairment loss is recognised in the income statement as the amount by which the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is determined by the higher of the fair value of an asset less costs to sell and the value in use. In order to assess impairment, assets are grouped at the lowest levels for which separate cash flows can be identified (cash generating units).

Impairment charges are included in the "Administrative expenses" in the income statement.

Taxation

Current tax is the tax currently payable based on taxable profit for the year.

Deferred income tax is provided, using the liability method, on temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future.

Deferred income tax is determined using tax rates known by the balance sheet date and that are expected to apply when the deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred tax liabilities are provided in full. There is no discounting of assets or liabilities.

Changes in deferred tax assets or liabilities are recognised as a component of the tax expense in the income statements, except where they relate to items that are charged or credited directly to equity or other comprehensive income, in which case the related deferred tax is also charged or credited directly to equity or other comprehensive income.

ACCOUNTING POLICIES

Provisions

Provisions, including those for legal claims, are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of economic benefits will be required to settle the obligation and the amount can be reliably estimated.

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the balance sheet date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.

Financial Assets

a) Cash and cash equivalents

Cash and cash equivalents include cash on hand, demand deposits held with financial institutions and other short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

b) Trade and other receivables

Trade receivables are included in trade and other receivables in the balance sheet. Trade receivables are recognised initially at fair value and later measured at amortised cost using the effective interest method, less any provision for impairment. An impairment provision for trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the terms of the receivables. The provision is calculated as the difference between the receivable's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement. Subsequent recoveries of amounts previously written off are credited in the income statement

Financial Liabilities

Financial liabilities are obligations to pay cash or deliver other financial assets and are recognised when the Group becomes a party to the contractual provisions of the instrument. All financial liabilities are recorded initially at fair value, net of direct issue costs.

A financial liability is derecognised only when the obligation is extinguished, that is, when the obligation is discharged or cancelled or expires.

The Group's financial liabilities consist of trade and other payables, which are measured subsequent to initial recognition at amortised cost using the effective interest rate method. 

All interest-related charges are reported in the income statement as finance costs.

Revenue recognition

As at 30 June 2015, the Group was organised into four geographical segments: Europe, North America, Latin America, and Asia Pacific. Revenues are from external customers only and are generated from three principal business activities: the sale of mobile content through Mobile Operator Services (Mobile Operator Sales), the sale of mobile content over the internet (Mobile Internet Sales) and the provision of consulting and technical services (Other Service Fees).

ACCOUNTING POLICIES

Revenue includes the fair value of sale of goods and services, net of value added tax, rebates and discounts and after eliminating intercompany sales within the Group. Revenue is recognised as follows:

a) Mobile Operator Sales & Mobile Internet Sales

Revenue from the sale of goods is recognised when a Group entity has delivered media content to the end consumer, who has accepted the product and collectability of the related receivable is reasonably assured from the customer.

b) Other Service Fees

Revenue is recognised in the accounting period in which the services are rendered, by reference to the stage of completion of the specific transaction, on the basis of the actual service provided as a proportion of the total services to be provided.

c) Interest Income

Interest receivable is recognised in the income statement using the effective interest method. If the collection of interest is considered doubtful, it is deferred and excluded from interest income in the income statement.

d) Deferred Income

Revenue that has been collected from customers but where the above conditions are not met is recorded in the Statement of Financial Position under accruals and deferred income and released to the income statement when the conditions are met.

Share based payments

Employees (including Directors) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares ('equity-settled transactions').

The Group has applied the requirements of IFRS 2 (Amended) Share-based Payments to all grants of equity instruments.

The cost of equity settled transactions with employees is measured by reference to the fair value at the grant date of the equity instruments granted. The fair value is determined by using the Black-Scholes model.

The cost of equity-settled transactions is recognised in the income statement, together with a corresponding increase in retained earnings, over the periods in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ('vesting date'). At each balance sheet date before vesting the cumulative expense is calculated, representing the extent to which the vesting period has expired and management's best estimate of the achievement or otherwise of non-market conditions and of the number of equity instruments that will ultimately vest. Market conditions are taken into account in determining the fair value of the options granted, at grant date, and are subsequently not adjusted for. The movement in cumulative expense since the previous balance sheet date is recognised in the income statement, with a corresponding entry in equity.

No expense or increase in equity is recognised for awards that do not ultimately vest. Awards where vesting is conditional upon a market condition are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are charged to the share premium account.

ACCOUNTING POLICIES

Leased assets

In accordance with IAS 17, all the Group's leases are determined to be operating leases and the payments made under them are charged to the income statement on a straight line basis over the lease term. Lease incentives are spread over the term of the lease.

Operating leases are leases in which the risks and rewards of ownership are not transferred to the lessee.

a) Called up share capital

Called up share capital represents the aggregate nominal value of ordinary shares in issue.

b) Share premium

The share premium account represents the incremental paid up capital above the nominal value of ordinary shares issued.

c) Translation Reserve

The translation reserve represents the cumulative translation adjustments on translation of foreign operations.

Standards and Interpretations

There are no new standards or interpretations which have been adopted by the European Union that have a material impact on the current period or are expected to have a material impact on future periods.

The financial statements were approved by the Board of Directors and are signed on its behalf by:

Enrique Benasso

Chief Financial Officer

1. General information

Mobile Streams Plc (the Company) and its subsidiaries (together 'the Group') sell digital content, primarily for distribution on wireless devices. The Group has subsidiaries in Europe, Asia, North America and Latin America. The Group has made various strategic acquisitions to build its market share in these regions.

The Company is a public limited company incorporated and domiciled in the United Kingdom. The address of its registered office is 125 Wood Street, London, EC2V 7AW.

The Company is listed on the London Stock Exchange's Alternative Investment Market.

These consolidated financial statements have been approved for issue by the Board of Directors on October 13, 2015.

2. Critical accounting estimates and judgements

Estimates and judgements are evaluated on a regular basis and are based on historical experience and other factors, such as expectations of future events that are believed to be reasonable under the circumstances.

2.1 Critical accounting estimates, judgements and assumptions

The Group makes estimates and assumptions concerning the future. These estimates, by definition, will rarely equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Estimates

 (a) Accrued revenue and accrued content costs

Estimation is required by management to determine the value of accrued revenue and accrued content cost liability which is based on the content delivery to its customers. Due to the timing of confirmation of delivery of content to its customers from the service providers, management estimation is applied to determine the level of accrued revenue and accrued content liability to be recognised within the financial statements until confirmation is received.

Judgement

(b) Risk of currency

As mentioned before, the Argentinian government has imposed restrictions on certain cross border transactions, including the remitting of cash back to the Group's parent company in the UK. While the Argentinian subsidiary is currently unable to freely transfer cash back to its parent company, there are mechanisms by which cash can be transferred indirectly, albeit at a discount on the official exchange rate. Restrictions on currency controls haven't changed during the year, although the Government has allowed some derivative transactions that can be used to remit cash out of the country.

The results and financial position of the Argentinian subsidiary are translated into Sterling at official exchange rates for inclusion in the Group's consolidated financial statements. The directors have considered whether dual exchange rates might exist, with a second 'effective' exchange rate arising from the mechanism through which cash can be remitted, and whether the results and position of the Argentinian subsidiary should be translated at this second rate on consolidation. The directors are of the opinion that using the official exchange rate is most appropriate because:

• the Group has no requirement to transfer cash from Argentina to the UK and is not projected to have any such requirement for the foreseeable future;

• the directors do not expect the currency restrictions to remain in place indefinitely and it is unlikely that the Group would remit cash to its parent unless this could be achieved at the official exchange rate; and

• the Group is currently able to utilise the cash held in Argentina to support the trading activities of certain other companies within the Group without restriction (see note 15).

(c) Income taxes

The Group is subject to income taxes in various jurisdictions. Judgement is required in determining the worldwide provision for income taxes. There are many transactions/calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome is different to what is initially recorded, such differences will impact the income tax and deferred tax provisions. 

(d) Deferred taxation

Judgement is required by management in determining whether the Group should recognise a deferred tax asset. Management consider whether there is sufficient certainty its tax losses available to carry forward will ultimately be offset against future earnings, this judgement impacts on the degree to which deferred tax assets are recognised (see note 17).

3. Services provided by the group's auditor and network firms

4. Operating profit

5. Finance income

6. Finance EXPENSE

7. Directors' and Officers' remuneration

The Directors are regarded as the key management personnel of Mobile Streams Plc.

Charges in relation to remuneration received by key management personnel for services in all capacities during the Year ended 30 June 2015 are as follows:

8. Directors and employees

Staff costs during the year were as follows:

The average number of employees during the year to June 2015 was as follows:

9. EARNINGS/ (LOSS) PER SHAREBasic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.

The adjusted EPS has been calculated to reflect the underlying profitability of the business by excluding non-cash charges for depreciation, amortisation, impairments and share compensation charges.

10. income tax expense

The tax charge is based on the loss for the year and represents:

11. DIVIDENDS

No dividends were paid or proposed during the current year or prior year.

12. PROPERTY, PLANT AND EQUIPMENT

13. Goodwill AND INTANGIBLE ASSETS

The Group impaired in full the remaining value of goodwill attributable to Mobile Streams (Hong Kong) Limited and its subsidiaries in Singapore and Australia which make up the Asia Pacific operating segment at June 2014.