Bglobal : Financial Statements for the year ended 31 March 2014

for the year ended

31 March 2014

Company Number: 5950551

2 Bglobal plc | Report & Accounts | Officers And Professional Advisers

DIRECTORS
J Grant - Chairman (appointed 15 August 2013)
P B Kennedy - Chairman (ceased 15 August 2013) T Jackson-Smith - Chief Executive Officer
N B Kennedy - Chief Financial Officer (ceased 22 October 2013) J H Newman - Senior Independent Non- Executive Director
S Fawkes - Independent Non- Executive Director
SECRETARY
N J Makinson
REGISTERED OFFICE
Suites 46 & 47
Manor Court Salesbury Hall Road Ribchester
Preston
PR3 3XU
NOMINATED ADVISER AND BROKER
Charles Stanley Securities
131 Finsbury Pavement
London
EC2A 1NT
SOLICITOR
Travers Smith LLP
10 Snow Hill London EC1A 2AL
AUDITORS
Grant Thornton UK LLP
4 Hardman Square
Manchester
M3 3EB
REGISTRAR
Computershare Investor Services PLC The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ

Bglobal plc | Report & Accounts | Chairman's Statement 3

Chairman's Statement

When I was appointed by the shareholders in August last summer it was clear to me that there was significant value in Bglobal that was not being reflected by its share price. With the support of the current board and the commitment of all of the management teams throughout the group, as I write this today, I am pleased that the value we have realised from the sale of B Global Metering and of Utiligroup reflects more closely the impact of the substantial work that has been done over the past year.
I set out in my statement on 10 December 2013, as part of the interim results, the steps which had been undertaken to that point. Significant costs had been removed from Bglobal's head office, the business was re-focused on its customers and strict cash management procedures had been put in place. By the year end in March, the benefits of some of those changes
were starting to be seen in the underlying performance of elements of the business. Staff channelled their energies into projects which had a short-to-medium prospect of financial return, such as sales of Utiligroup's software, and longer term projects were progressed at an appropriate pace to ensure that potential new business could be presented as an opportunity to the potential buyers of our businesses.
The current board's focus has always been on enhancing shareholder value and, as recent announcements have demonstrated, our work on the Group's business divisions was part of
a wider strategy to realise that value. Without the work we undertook as part of the strategic review and the costs that we removed from the Group, it would not have been possible to complete the sales at all, let alone at attractive valuations.
We received a number of approaches for different combinations of business units from bidders, who had different strategic goals. Throughout, the board's approach was to analyse those bids with a view to ascertaining their successful delivery, not just in terms of execution risk, but also in terms of the ultimate return of cash to shareholders. KPMG assisted the board in conducting a very thorough marketing exercise for each of the Group's key business units. The board maintained all of the business divisions for minimal additional cost during this period. However, it soon became clear that closing Nutech and Bsmart was the most effective way of delivering shareholder value and this was done swiftly with minimal disruption to the other ongoing businesses. The Board's decisions have been vindicated by the completion
of the prompt sales of both B Global Metering and Utiligroup on sensible terms and at acceptable values.
It has clearly not been a quiet year for the Group and I would like to thank all the staff, who united to work with an excellent team of advisors, to deliver our year end results and these two significant transactions. I personally am extremely grateful for the support of shareholders and my colleagues on the board during this period of change and uncertainty.
Our focus now is to return money back to shareholders as quickly and in the most tax efficient and cost effective manner as possible, details of which are contained in the circular sent to the shareholders on 10 July 2014.

John Grant

Chairman

10 July 2014

4 Bglobal plc | Report & Accounts | Chief Executive's Statement

Chief Executive's Statement

The year ended 31 March 2014 saw the start of a number of significant changes for the Group with the focus being on enhancing shareholder value. A strategic review was carried out in the autumn of 2013 and as a consequence of that review, the Group has since the year-end disposed of its two main subsidiaries, B Global Metering and Utiligroup. The remaining businesses, Nutech Training and Bsmart Energy Services were closed down during the period. Accordingly, apart from Bglobal plc, all of
the other businesses within the Group have been classified as discontinued for the purposes of these accounts.
Revenue for the year ended 31 March 2014 from discontinued operations was £12.83 million (2013: £11.58 million - excluding Utilisoft Pty). The EBITDA loss for discontinued operations was £0.78 million before the £1.02m impairment charge (2013: £0.18 million before separately identifiable items). At the year-end the Group had cash balances of
£1.77 million (including assets held for sale) (2013: £3.02 million) and borrowings of £0.94 million (including assets held for sale) (2013: £0.97 million). Following the two disposals referred to above and after having repaid the loan and borrowing facilities that the
Group had with Synergy Capital and Barclays Bank plc, the Group currently has cash balances (net of £1.98 million of costs and expenses incurred in carrying out the strategic review, in the sale of Bglobal Metering and Utiligroup, in closing down Nutech and Bsmart, and in dealing with certain shareholder and restructuring costs) of, in aggregate,
£16.4 million.

Software and related services

Utiligroup performed well in the year with turnover increasing by over 50% to £6.70 million (2013: £4.41 million excluding Utilisoft Pty) and EBITDA increasing by 79% to £1.38 million (2013: £0.77 million before separately identifiable items). The business continued to build up a strong recurring revenue stream, which now stands at £5.44 million per annum. The 'Supplier in a Box™' proposition continued to prove popular and in the year ended 31 March 2014, Utiligroup brought three new entrants into the UK energy market through this model. Each of these transactions includes an up-front fee and the sale of software and services thereby adding to Utiligroup's recurring revenue stream.

Metering and data services

B Global Metering failed to meet the Board's expectations and saw its revenue fall by
22% to £5.76 million (2013: £7.42 million) with the EBITDA loss increasing by 49% to
£1.41 million in the period. The Board did remove significant cost from the business and sales did start to improve in the last quarter of the financial year as a number of energy suppliers sought to comply with the mandate to install smart meters into the premises of their larger industrial and commercial customers, so that by the year-end, the company was trading almost at breakeven on a monthly basis.

Bglobal plc | Report & Accounts | Chief Executive's Statement 5

Energy management services

Bsmart showed promise at the start of the financial year but this proved a false dawn and the decision was therefore taken to close this business down. In the year ended 31
March 2014, Bsmart's revenue increased to £0.47 million (2013: £0.07 million). However, its loss before tax was largely unaltered at £0.31 million (2013: £0.30 million).

Training Services

The delay in the mass rollout of smart meters severely impacted Nutech Training and revenue increased only slightly to £0.12 million (2013: £0.09 million) with the loss before tax increasing to £0.46 million (2013: £0.31 million). It was clear to the Board that this business was no longer sustainable and accordingly the decision was taken to close it down with effect from 31 March 2014.

Since the end of the financial year, B Global Metering has been sold to Energy Assets Group plc for a cash consideration of £2.3 million and Utiligroup has been sold to a new company backed by NorthEdge Capital LLP for a cash consideration of £16.1 million. The Board intends to return cash to shareholders as soon as possible and will be writing to shareholders today with proposals and timing in this regard.
Finally, I would like to thank the Board and staff for their support during a very challenging period for the Group. I am confident that both B Global Metering and Utiligroup will flourish under their new owners and that the people in those businesses will thrive and continue to make the most of the opportunities that present themselves.

Tim Jackson-Smith

Chief Executive Officer

10 July 2014

6 Bglobal plc | Report & Accounts | Financial Review

Financial Review

The financial statements for 31 March 2014 have been prepared on the basis of Bglobal operating as a continuing operation in order to meet any claims that may arise under the warranties and indemnities that were given as part of the sale of B Global Metering and of Utiligroup.
B Global Metering was sold to Energy Assets Group plc on 17 April 2014 for a total consideration of £2.3 million. Utiligroup was sold on 20 June 2014 to a new company backed by NorthEdge Capital LLP for a total consideration of £16.1 million. Accordingly, both of these companies have been classified as discontinued for the purposes of these accounts.
Nutech Training and Bsmart Energy Solutions are classified as discontinued as the closure of these operations was initiated prior to 31 March 2014.
Group revenue from discontinued operations was £12.83 million (2013: £14.23 million) predominantly as a result of loss of revenue within the metering business (see note 9). Utiligroup's turnover increased significantly to £6.70 million (2013: £4.41 million), and it
was particularly pleasing to see its recurring revenue continuing to grow strongly rising by over 50% to £5.44 million (2013: £3.61 million).
The revenue from the Metering and Data segment fell to £5.76 million (2013: £7.42 million). Bsmart saw turnover increase to £0.47 million (2013: £0.07 million) and Nutech Training saw a slight increase in turnover from £0.09 million in 2013 to £0.12 million in the year ended 31 March 2014.
The Group's loss after tax for the year ended 31 March 2014 was £4.17 million (2013: £3.31 million). During the year ended 31 March 2014, £1.02m of intangible assets were impaired within
B Global Metering Limited. These related to development work conducted on domestic
electricity and gas meters and also work a radio based billing solution suitable for multi- tenanted sites. The Board felt that an impairment was required due to the limited interest shown by the market in these products.

As at 31 March 2014, the Group had cash balances of £1.77 million (including assets held for sale) (2013: £3.02 million) and borrowings of £0.94 million (including assets held
for sale), being £0.65 million in continuing operations and £0.29 million in discontinued operations (2013: £0.97 million, being £0.95 million in continuing operations and £0.02 million in discontinued operations). The statement of consolidated cashflows shows the movements in funds during the year.
As has previously been noted, since the end of the financial year B Global metering and Utiligroup have both been sold and the proceeds of those sales, totalling £18.4m, have been received by the Group.

During the year ended 31 March 2014, the Board focused on reducing costs across the Group, particularly central costs and costs within the metering business as well as introducing strict cash management procedures in order to properly monitor and control the cash within the Group.
Within the central Plc costs during the year £0.13 million was expensed in conducting the strategic review and a further £0.13 million spend in undertaking the general meetings in removing the previous Chairman.
The underlying Plc costs have fallen from £0.59 million per annum (after £1.10 million income for management recharges to subsidiaries) to £0.46 million (after £0.98 million recharge income), excluding the one-off costs above.

James H Newman

Senior Independent Director

Bglobal plc | Report & Accounts | Strategic Report 7

Strategic Report

The Board's strategy is to return the capital realised on the sale of its Metering and Software businesses to shareholders in as an effective way as possible and further details of this are contained in the circular sent to shareholders on 10 July 2014.

As a result of these disposals and the closure of the Group's remaining businesses, the Group no longer faces any trading risks. However, it does face the risk of potential claims being made pursuant to the warranties and indemnities that Bglobal plc gave under the sale and purchase agreements that were entered into with the buyers of B Global Metering and Utiligroup. This represents the principal risk and uncertainty face the Group.
The warranties and indemnities are customary for transactions of this nature and, in respect of the Utiligroup disposal, are more limited in extent and duration than would ordinarily be the case. Disclosure was made against warranties where appropriate and limitations on liability were incorporated to further protect the Group.

Key Performance Indicators

The Group, during the year to 31 March 2014, monitored the following KPIs to ensure the business performed in line with expectations, that issues are identified promptly and that efficiency measures can be quantified:
• revenue growth;
• recurring revenue %;
• annual licence charge run rate;
• gross margin %;
• operating margin %;
• fixed overheads and non-trading costs;
• split of revenue between metering and data services and software and related services;
• daily/weekly/monthly meter installation volumes;
• cost per meter installation;
• enrolment rates on training courses;
• pay-back period on energy saving offerings;
• cash balances on a weekly basis.

During the year ended 31 March 2014, Group's most important assets were its employees, clients and intellectual property rights ("IPR"):
• employees were recruited carefully to address the needs of the business.
Appropriate training was provided to support the development of employees;
• the needs of the Group's clients were continually discussed and re-defined to ensure that the Group met its objective of providing an industry-leading service;
• the Group had controls in place to safeguard the IPR that it owned. The Group also had established procedures to maintain its appropriate accreditations. The Group also recognised the importance of its IT infrastructure and back office systems to deliver its services. The Group had the appropriate controls in place to secure its data and maximise the operational efficiency of its systems.

8 Bglobal plc | Report & Accounts | Strategic Report

Controls exist to ensure information is made available to enable management to monitor the performance of the Group.
The controls address the financial performance of the Group based on monthly management accounts which include details of sales, gross margin and other overhead costs. Other key statistics reported regularly includes the number of installations, new customers taking up existing software products, new software product projects, sales prospects and operational performance in supplying data.
As has previously been noted, the Group disposed of or closed its remaining businesses after 31 March 2014 and the above points reflect the controls in place up to closure or disposal of those businesses. The closures of Nutech Training Limited and Bsmart Energy Solutions Limited were initiated prior to 31 March 2014.

The Group's results are set out in the Consolidated Statement of Comprehensive
Income on page 18 and are explained within the Financial Review on page 6 in the fourth paragraph. A full review of the Group's activities is included in paragraphs 2 to 4 of the Chairman's statement and the Group performance paragraphs of the Chief Executive's statement.
Future developments of the Group are included in paragraph 6 of the Chairman's statement and the outlook paragraph of the Chief Executive's statement.
Signed on behalf of the board;

Tim Jackson-Smith

Chief Executive Officer

10 July 2014

Bglobal plc | Report & Accounts | Directors' Report 9

Directors' Report

This information has been prepared solely to assist shareholders to assess the Board's strategies and their potential to succeed. It should not be relied on by any other party or for other purposes. Forward-looking statements have been made up to the date of this report and such forward-looking statements should be regarded with caution because of the inherent uncertainties in economic trends and business risks.
The directors submit their report and consolidated financial statements of Bglobal plc for the year ended 31 March 2014.

The trading results for the year and the Group's financial position at the end of the year are shown in the attached financial statements. The directors do not recommend a final dividend but are proposing a return of capital to shareholders, details of which are set out in the circular sent to shareholders on 10 July 2014.
A description of the trading results and future developments is contained in the financial review on page 6.

At 31 March 2014 the Group had borrowings including a convertible loan of £0.65 million and a bank loan of £0.29 million. Subsequent to the year-end, the Group fully paid off these loans. The Group maintains a centralised treasury function, which operates under policies and guidelines approved by the Board. These cover funding, management of foreign exchange exposure and interest rate risk. The purpose is to manage the financial risks of the business effectively and to secure the most cost effective funding.

Further information on credit, liquidity and interest rate risks can be found in note 21.

The Group's corporate social responsibility report can be found on its website, www.bglobalplc.com.

The directors of the Company during the year were as follows: J Grant (appointed 15 August 2013)
P B Kennedy (ceased 15 August 2013) T Jackson-Smith
N B Kennedy (ceased 22 October 2013) J H Newman
S Fawkes

Following the disposal and closure of the trading businesses, all trading businesses within the Bglobal Group have been classified as discontinued and only central costs classified as continuing as they will continue in existence for more than 12 months from the date of these financial statements. The prior year comparatives in the Consolidated Statement of Comprehensive Income have been adjusted accordingly.

10 Bglobal plc | Report & Accounts | Directors' Report

At 31 March 2014, the directors had the following beneficial interests in the Company's shares:

There is third party indemnity insurance in place for the directors of the Company.

As at 4 July 2014, other than the directors' beneficial interests there were the following substantial shareholdings:

The total number of issued shares at 31 March 2014 was 106,307,871 (2013: 106,307,871).

Subsequent to 31 March 2014 B Global Metering Limited and Utiligroup Limited were sold for £2.3 million and £16.1 million gross consideration respectively.
In addition 18,571 options were exercised on 16 June 2014 and a further 30,952 on 1 July
2014 under the Group SAYE scheme.

The Group invested in the research and development of further smart metering and utility software products. It also used the services of highly regarded development consultancies to supplement the internal resource. In the opinion of the directors, continuity of investment in this area was essential for the maintenance of the Group's market position and for future growth within the software business only, thus the development costs previously capitalised in the Metering business have been fully impaired as the market for domestic metering
and sub metering solutions using B Global Metering's in house developed solutions was deemed not to be certain in the short term. The impairment charge to the statement of comprehensive income totalled £1.02 million.

Bglobal plc | Report & Accounts | Directors' Report 11

The Group recognises and seeks to encourage the involvement of its employees, with
the aim being the recruitment, motivation and retention of quality employees throughout the Group. An approved share option scheme is in place operated within the Enterprise Management Incentive Scheme, as well as an unapproved option scheme and a Save As You Earn share option scheme.
The Group's employment policies, including the commitment to equal opportunity, are designed to attract, retain and motivate employees regardless of sex, race, religion or disability. Equality of treatment includes full and fair assessment of applications and extends to training and continuing career development.
The Group is committed to ensuring and communicating the requirements for a safe and healthy working environment for all employees, consistent with health and safety legislation and, wherever practicable, gives full consideration to applications for employment from disabled persons.

Notwithstanding the proposed return of capital to shareholders, the directors consider that the Group has sufficient financial resources and that, accordingly, the use of the going concern basis of accounting is appropriate. The directors believe that the Group is well placed to manage its business risks successfully (see the Financial Risk Management
disclosures in the Strategic Report), such risks being potential claims under the warranties and indemnities given to the buyer of each of B Global Metering and Utiligroup. The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.

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 to prepare the financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. 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 judgments and accounting estimates that are reasonable and prudent;
• state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy
at any time the financial position of the company 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 Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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