Add
UEPS to Portfolio
Set Alert
Email to a
Friend
| |||
|
|
Quotes & Info
|
| UEPS > SEC Filings for UEPS > Form 8-K/A on 6-Nov-2008 | All Recent SEC Filings |
6-Nov-2008
Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
Report of Independent Registered Public Accounting Firm F-1
BGS Smartcard Systems AG audited financial statements for the year
ended December 31, 2007 comprising:
Consolidated Balance Sheet as of December 31, 2007 F-2
Consolidated Statement of Operations for the year ended F-3
December 31, 2007
Consolidated Statement of Movements in Shareholders' F-4
Equity for the year ended December 31, 2007
Consolidated Statement of Cash Flows for the year ended F-5
December 31, 2007
Notes to the Consolidated Financial Statements for the F-6
year ended December 31, 2007
BGS Smartcard Systems AG unaudited financial statements for the six
months ended June 30, 2008 and 2007 comprising:
Unaudited Consolidated Balance Sheets as of June 30, F-16
2008 and December 31, 2007
Unaudited Consolidated Statements of Operations for the six F-17
months ended June 30, 2008 and 2007
Unaudited Consolidated Statements of Movements in
Shareholders' Equity for the six months ended June 30, 2008 and 2007
F-18
Unaudited Consolidated Statements of Cash Flows for the six F-19
months ended June 30, 2008 and 2007
|
(b) Pro forma financial information.
Unaudited Pro Forma Combined Financial Statements for Net 1 UEPS
Technologies, Inc. comprising:
Unaudited Pro Forma Combined Balance Sheet as of June 30, 2008 F-32
Unaudited Pro Forma Combined Statement of Operations for the year F-33
ended June 30, 2008
Notes to Unaudited Pro Forma Combined Financial Statements F-34
(d) Exhibits
Exhibits Description
23.1 Consent of Deloitte & Touche (AT)
To the Board of Directors and Shareholders of BGS Smartcard Systems AG:
We have audited the accompanying consolidated balance sheet of BGS Smartcard Systems AG (an Austrian corporation) and its subsidiaries (collectively, the "Company") as of December 31, 2007, and the related consolidated statements of operations, movements in shareholders' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2007, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Deloitte Wirtschaftsprüfungs GmbH
Deloitte Wirtschaftsprüfungs GmbH
Vienna, Austria
November 6, 2008
BGS SMARTCARD SYSTEMS AKTIENGESELLSCHAFT
CONSOLIDATED BALANCE SHEET
as of December 31, 2007
2007
(In thousands,
except
share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents € 3,862
Restricted cash 722
Accounts receivable, net 5,277
Inventory 1,018
Deferred tax 43
Total current assets 10,922
LONG-TERM RECEIVABLES 25
PROPERTY, PLANT AND EQUIPMENT, net 274
INVESTMENT AVAILABLE FOR SALE 968
INTANGIBLE ASSETS, net 5
DEFERRED TAX 4,399
TOTAL ASSETS 16,593
LIABILITIES
CURRENT LIABILITIES
Accounts payable 30
Other payables 2,713
Income taxes payable 542
Total current liabilities 3,285
COMMITMENTS AND CONTINGENCIES -
TOTAL LIABILITIES 3,285
SHAREHOLDERS' EQUITY
COMMON STOCK
Authorized shares: 26,800 with zero par value;
Issued and outstanding shares: 26,800 2,000
ADDITIONAL PAID-IN CAPITAL 7,128
ACCUMULATED OTHER COMPREHENSIVE INCOME 34
RETAINED EARNINGS 4,146
TOTAL SHAREHOLDERS' EQUITY 13,308
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY € 16,593
|
See accompanying notes to consolidated financial statements.
BGS SMARTCARD SYSTEMS AKTIENGESELLSCHAFT
CONSOLIDATED STATEMENT OF OPERATIONS
for the year ended December 31, 2007
2007
(In thousands)
REVENUE € 17,244
EXPENSES
Cost of goods sold, IT processing, servicing and support 2,912
Selling, general and administration 7,396
Depreciation and amortization 136
OPERATING INCOME 6,800
INTEREST INCOME, net 142
INCOME BEFORE INCOME TAXES 6,942
INCOME TAX EXPENSE 1,627
NET INCOME BEFORE LOSS FROM EQUITY ACCOUNTED
INVESTMENTS 5,315
LOSS FROM EQUITY ACCOUNTED INVESTMENTS (278 )
NET INCOME € 5,037
|
See accompanying notes to consolidated financial statements.
BGS SMARTCARD SYSTEMS AKTIENGESELLSCHAFT
CONSOLIDATED STATEMENT OF MOVEMENTS IN SHAREHOLDERS' EQUITY
for the year ended December 31, 2007
Common stock
Accumu
lated
other
compre Compreh
Additional hensive ensive
Number paid in Retained income income
of shares Amount capital earnings (loss) Total (loss)
'000 '000 '000 '000 '000 '000 '000
Balance - 26,800 € 2,000 € 7,128 € 2,912 € 60 € 12,100
January 1, 2007
Net income 5,037 5,037 € 5,037
Dividends (3,803) (3,803)
paid
Movement in
foreign currency
translation (26) (26) (26)
reserve
Balance - 26,800 € 2,000 € 7,128 € 4,146 € 34 € 13,308 € 5,011
December 31,
2007
|
BGS SMARTCARD SYSTEMS AKTIENGESELLSCHAFT
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended December 31, 2007
2007
(In
thousands)
Cash flows from operating activities
Net income € 5,037
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 136
Profit on sale of property, plant and equipment (1 )
Loss from equity accounted investment 278
Increase in accounts receivable (1,630 )
Increase in inventory (808 )
Increase in accounts payable and other payables 1,323
Increase in taxes payable 244
Decrease in deferred taxes 550
Net cash provided by operating activities 5,129
Cash flows from investing activities
Capital expenditures (159 )
Movement in restricted cash (722 )
Proceeds from disposal of property, plant and equipment 19
Net cash used in investing activities (862 )
Cash flows from financing activities
Repayment of bank overdraft (637 )
Dividends paid (3,803 )
Net cash used in financing activities (4,440 )
Net decrease in cash and cash equivalents (173 )
Cash and cash equivalents - beginning of year 4,035
Cash and cash equivalents at end of year € 3,862
|
See accompanying notes to consolidated financial statements.
BGS SMARTCARD SYSTEMS AKTIENGESELLSCHAFT
Notes to the Consolidated Financial Statements
for the year ended December 31, 2007
(All amounts stated in thousands of euro, unless otherwise stated)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
BGS Smartcard Systems AG (the "Company") was founded in July 1997 in Vienna, Austria. The Company is a provider of software solutions for electronic payments based on micro-controller cards (so-called "smart cards"). The Company's products are marketed under the direct universal electronic transactions ("DUET") brand name. The Company's product line ranges from solutions for banks to payroll systems for companies and Internet banking as well as egovernment, micro finance and social services.
The Company focuses on the developing markets of the Commonwealth of Independent States ("CIS") and the Arabian region including North Africa as well as Asia and Latin America. These markets are developed directly by the Company and its subsidiaries in the Russian Federation and India as well as by sales partners in other countries. An Austrian subsidiary of the Company develops the Company's software products.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying consolidated financial statements include all majority owned subsidiaries over which the Company exercises control and have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").
Principles of consolidation
The consolidated financial statements include the accounts of the Company and its controlled subsidiaries, which are generally majority owned. The accounts of variable interest entities ("VIEs") as defined by Financial Accounting Standards Board (FASB) Interpretation No. 46(R), Accounting for Variable Interest Entities, ("FIN 46R"), are included in the consolidated financial statements, if required. All significant intercompany transactions and accounts have been eliminated in consolidation.
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Property, plant and equipment
Property, plant and equipment are shown at cost less accumulated depreciation. Property, plant and equipment are depreciated on the straight-line basis at rates which are estimated to amortize the assets to their anticipated residual values over their useful lives. Within the following asset classifications, the expected economic lives are approximately:
Computer and office equipment 3 to 5 years
Motor vehicles 5 to 8 years Furniture and fittings 5 to 10 years Plant and equipment 10 years |
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in income.
BGS SMARTCARD SYSTEMS AKTIENGESELLSCHAFT
Notes to the Consolidated Financial Statements
for the year ended December 31, 2007
(All amounts stated in thousands of euro, unless otherwise stated)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Leasehold improvement costs
Costs incurred in the adaptation of leased properties to serve the requirements of the Company are capitalized and amortized over the shorter of the term of the lease and the contract for which the lease has been entered into.
Sales taxes
Revenue and expenses are presented net of sales, use and value added taxes, as the case may be.
Income taxes
The Company provides for income taxes using the asset and liability method. This approach recognizes the amount of taxes payable or refundable for the current year, as well as deferred tax assets and liabilities for the future tax consequence of events recognized in the financial statements and tax returns. Deferred income taxes are adjusted to reflect the effects of changes in tax laws or enacted tax rates. The income tax rate during the year ended December 31, 2007 was 25%.
In establishing the appropriate income tax valuation allowances, the Company assesses the realizability of its net deferred tax assets, and based on all available evidence, both positive and negative, determines whether it is more likely than not that the net deferred tax assets or a portion thereof will be realized.
The Company has adopted FIN 48 for the period beginning January 1, 2007, the Company adopted Financial Accounting Standards Board ("FASB") Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109 ("FIN 48"), which clarifies the accounting for uncertainty in tax positions. Uncertain tax positions are recognized in the financial statements for positions which are considered more likely than not of being sustained based on the technical merits of the position on audit by the tax authorities. The measurement of the tax benefit recognized in the financial statements is based upon the largest amount of tax benefit that, in management's judgement, is greater than 50% likely of being realized based on a cumulative probability assessment of the possible outcomes. The Company has analyzed its uncertain tax positions and no adjustment is required.
The Company's policy is to include interest related to unrecognized tax benefits in interest income, net and penalties in selling, general and administration in the consolidated statements of operations.
Intangible assets
Intangible assets are shown at cost less accumulated amortization and are amortized over their useful lives, which vary between two and five years. Intangible assets are periodically evaluated for recoverability, and those evaluations take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists.
Inventory is valued at the lower of cost and market value. Cost is determined on a first-in, first-out basis.
Translation of foreign currencies
The functional currency of the Company's foreign subsidiaries is the local currency of the country in which the subsidiary operates. The reporting currency of the Company is the euro. The current rate method is used to translate the financial statements of the Company to euro. Under the current rate method, assets and liabilities are translated at the exchange rates in effect at the balance sheet date. Revenues and expenses are translated at average rates for the period. Translation gains and losses are reported in accumulated other comprehensive income in shareholders' equity.
Foreign exchange transactions are translated at the spot rate ruling at the date of the transaction. Monetary items are translated at the closing spot rate at the balance sheet date. Transactional gains and losses are recognized in income for the period.
BGS SMARTCARD SYSTEMS AKTIENGESELLSCHAFT
Notes to the Consolidated Financial Statements
for the year ended December 31, 2007
(All amounts stated in thousands of euro, unless otherwise stated)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue recognition
The Company recognizes revenue when:
º there is persuasive evidence of an agreement or arrangement;
º delivery of products has occurred or services have been rendered;
º the seller's price to the buyer is fixed or determinable;
º collectibility is reasonably assured.
The Company's principal revenue streams and their respective accounting treatments are discussed below:
Hardware sales
Revenue from hardware sales is recognized when risk of loss has transferred to the customer and there are no unfulfilled company obligations that affect the customer's final acceptance of the arrangement.
To the extent that sales of hardware are made in an arrangement that includes software that is more than incidental, the Company applies the guidance in American Institute of Certified Public Accountants Statement of Position 97-2, Software Revenue Recognition, as amended ("SOP 97-2"). This requires consideration of post contract maintenance and technical support or other future obligations which could impact the timing and amount of revenue recognized.
Revenue from the sale of software is recognized if all revenue recognition criteria have been met. Post contract maintenance and technical support in respect of software is negotiated and sold as a separate service and is recognized over the period such items are delivered.
Other income
Revenue from service and maintenance activities is charged to customers on a time-and-materials basis and is recognized in the statement of operations as services are delivered to customers.
Research and development expenditure
Research and development expenditures are charged to net income in the periods in which they are incurred. During the year ended December 31, 2007, the Company incurred research and development expenditures of €2,2 million.
Computer software development
Costs in respect of the development of software intended for sale to licensees is accounted for in accordance with Financial Accounting Standards Board ("FASB") Statement No. 86, Accounting for Costs of Computer Software to be Sold, Leased, or Otherwise Marketed ("FAS 86"). FAS 86 requires product development costs to be charged to expenses as incurred until technological feasibility is attained. Technological feasibility is attained when the Company's software has completed system testing and has been determined viable for its intended use. The time between the attainment of technological feasibility and completion of software development is generally short with immaterial amounts of development costs incurred during this period.
Costs in respect of the development of software for the Company's internal use are accounted for in accordance with Statement of Position 98-1 Accounting for the Costs of Computer Software Developed or Obtained for Internal Use ("SOP 98-1"), issued by the American Institute of Certified Public Accountants.
BGS SMARTCARD SYSTEMS AKTIENGESELLSCHAFT
Notes to the Consolidated Financial Statements
for the year ended December 31, 2007
(All amounts stated in thousands of euro, unless otherwise stated)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Recent accounting pronouncements not yet adopted as of December 31, 2007
In September 2006, the FASB issued Statement of Financial Accounting Standard ("SFAS") No. 157, Fair Value Measurements ("FAS 157"). FAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. FAS 157 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier adoption is permitted. The Company is currently assessing FAS 157 and does not expect the adoption of this standard to have a material impact on its financial position or results of operations.
In February 2008, the FASB issued FASB Statement of Position ("FSP") FAS 157-2, Effective Date of FASB Statement No. 157 ("FSP FAS 157-2") which delays the effective date of FAS 157 for all nonrecurring fair value measurements of nonfinancial assets and nonfinancial liabilities until fiscal years beginning after November 15, 2008. Entities are encouraged to adopt FAS 157 for measurements of nonfinancial assets and nonfinancial liabilities in its entirety as long as they have not yet issued financial statements during that year. An entity that chooses to adopt FAS 157 in its entirety must do so for all nonfinancial assets and nonfinancial liabilities within its scope. The Company is currently reviewing the impact of the adoption of FAS 157 for all non-financial assets and liabilities on its financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities -Including an Amendment of FASB Statement No. 115 ("FAS 159"). FAS 159 permits an entity to choose to measure many financial instruments and certain other items at fair value. The unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings at each subsequent reporting date. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs); and (c) is applied only to entire instruments and not to portions of instruments. FAS 159 is effective for fiscal years beginning after November 15, 2007 and for interim periods within those fiscal years. The Company is currently assessing FAS 159 and does not expect the adoption of this standard to have a material impact on its financial position or results of operations.
In December 2007, the FASB issued SFAS No. 141(revised 2007), Business Combinations ("FAS 141R"). FAS 141R replaces SFAS No. 141, Business Combinations ("FAS 141"). FAS 141R retains the fundamental requirements in FAS 141 that the acquisition method of accounting (defined in FAS 141 as the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. FAS 141R requires the acquiring entity in a business combination to recognize the assets acquired and liabilities assumed at the acquisition date. FAS 141R also requires acquisition-related costs to be recognized separately from the business combination. FAS 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company is currently assessing FAS 141R and has not yet determined the impact that the adoption of this standard will have on its financial position or results of operations.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements ("FAS 160"). FAS 160 establishes a single method of accounting for changes in a parent's ownership interest in a subsidiary that does not result in deconsolidation. FAS 160 clarifies that all of those transactions are equity transactions if the parent retains its controlling financial interest in the subsidiary. FAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or . . .
|
|