Final Results to 27 March 2015

SnackTime plc ("the Company")

16 March 2016

Final Results

SnackTime plc today announces its final audited results for the period ended 27 March 2015.

The Annual Report is being despatched to shareholders today and will also be available from the Company's website, www.snacktime.com.

Financial Highlights

- Revenues decreased by 14% (2014 - decreased by 8.3%)

- Adjusted loss before finance income and charges, depreciation, exceptional items, amortisation, share option charges and tax of £1,110,277 (2014 - profit of £1,138,940)*

- Loss before taxation of £4,383,595 (2014 - Loss of £8,537,680)

- Net assets of £1,222,264 (2014 - £2,696,688) following goodwill and intangible impairment of £448,532 (2014 - £4,498,430)

- Gross profit has decreased from 55% to 54%.

- Net cash outflow from operating activities of £937,125 after exceptional items. (2014 - Inflow of £191,672)

- Administration expenses, before exceptional items, amortisation and share option expenses but including depreciation, increased by 2.8% to £11,087,636 (2014 - £10,784,838)**. Total administration expenses reduced by 30.6% to £12,755,675 (2014 - £18,391,103).

*- Arrived at from taking the Loss before tax, finance income and charges, exceptional items, amortisation and share option charges of £2,378,510 from the Statement of Comprehensive Income and adding back depreciation of £1,268,233

** - As set out on the Statement of Comprehensive Income

SNACKTIME PLC

chairman's statement

PERIOD ended 27 March 2015

I am belatedly presenting the audited results for the period ended 27 March 2015. It has been another difficult period in which the refinancing and restructuring of the Group have again been the over-riding priority. Revenues continued to decline and operating cash generation was not sufficient to meet our other cash needs putting considerable pressure on our team, our suppliers and our funders.

Despite these difficulties, the Group is looking to the future with the resolve that often results from tough times. Many of the hard decisions have been made, actions taken, and we have been very fortunate to receive such strong support from so many key stakeholders. This support has resulted in substantial funds being raised throughout 2014 and 2015 which is detailed later in this statement. It should be noted that this Chairman's statement covers a period of nearly 2 years up to March 2016.

Financials

Turnover for the period ended 27 March 2015 was down 14% to £16,167,197 (2014: £18,810,814) producing an operating loss before amortisation, share option charges and exceptional costs of £2,378,510 (2014: loss £427,433). The loss before taxation for the period was £4,383,595 (2014 - loss £8,537,680).

EBITDA before exceptional costs and share based payments for the period was a loss of £1,110,277 (2014: profit £1,156,250). Following exceptional costs of £1,432,835, including tangible and intangible impairments of £933,532 (2014: £6,578,644), the post-tax loss was £4,068,329 (2014: loss £7,741,521).

Gross margins decreased slightly to 54% (2014: 55%) while our distribution and administration costs before exceptional, share option costs and amortisation rose 3% to £11,087,636 (2014: £10,784,838).

Total administration costs for the period were £12,755,675 (2014 - £18,391,103).

Net finance charges decreased to £337,046 (2014: £503,982) and net borrowings at 31 March 2015 had decreased to £3,724,145 (2014: £4,806,200), including shareholder loans of £1,622,256 (2014: £1,622,256).

The final results are an EBITDA loss before exceptional items of £1,110,277, exceptional costs of £499,303 incurred during the period. This is in line with our announcement on 4 March 2016, but falls well behind the performance announced in July 2015 of an expected £280,000 EBITDA (after deducting additional provision of £270,000) and £650,000 for exceptional items. The difference has resulted from write-downs that have been necessary to ensure that our balance sheet does not over-state the underlying value of the assets and liabilities given the going concern position detailed in this report. These write-downs which have reduced the values of cash and stock in machines, inventories and debtors have resulted in an additional expense of £1,239,580 across the Group's EBITDA and exceptional costs compared to our period end management accounts. There is however no further cash impact from these adjustments and the underlying run-rate of our distribution and administration costs is today significantly below the £11,087,636 charge (before exceptional, share option costs and amortisation) for the year.

Audit

The long delay in announcing the results for the year has resulted from a breakdown in our internal controls and a lack of adequate accounting records in certain subsidiaries and the parent company. As a result, management were able to reconcile the closing group statement of financial position and company balance sheet but were not able to reconcile all the differences in the group statement of comprehensive income and the group statement of cash flows. The closing balances represented in our balance sheet are not in question, but any asset we have not been able to substantiate appropriately has been written-off. As a result BDO were unable to obtain the audit evidence they required over the categorisation of transactions in the Group Statement of Comprehensive Income and the Group Statement of Cash Flows and the related notes and they have issued a qualified opinion on the financial statements. Therefore, statutory and non-statutory performance measures extracted from these statements referred to in the Financial Highlights, this statement, Directors' Report and Strategic Report are subject to qualification. The Auditor's Report covers this in more detail.

SNACKTIME PLC

chairman's statement (CONTINUED)

PERIOD ended 27 March 2015

As a result of the above, the Company has taken a number of steps to improve the timeliness and accuracy of both financial and management reporting. These include the recruitment of an additional qualified accountant in Blackburn to focus on the vending division; the on-going relocation of all financial accounting (other than Drinkmaster) to Blackburn which is expected to complete this month;

further investment into the accounting system, specifically in the areas of fixed assets, purchase ledger and report writing; the development of a revenue assurance and data analysis function in

London to ensure the completeness and accuracy of amounts invoiced to customers; and the retention of interim staff to ensure the delivery of the 2016 audit in a timely and cost efficient manner.

Going Concern and Shareholder support

Further I would like to draw your attention to the matter of Going Concern which is again covered in the Auditor's Report. The Directors have drawn up these accounts as a going concern on the basis of a letter of support provided to them by the Company's majority shareholder Mr Belotserkovsky and the on-going support of the Co-operative Bank. The reasons supporting this position are outlined in the accounting policy note 1 as well as being an emphasis of matter within the Auditor's Report.

Re-financing

Throughout the reporting period and the remainder of 2015 calendar year, the Company was involved in re-structuring its balance sheet. This activity resulted in several transactions which are detailed below:-

In June 2014, Versatel Co Limited subscribed for 3.8 million new shares at 15 pence per share raising £570,000.

In October 2014, a second subscription by Versatel Co Limited for a further 12 million new shares also at 15 pence per share, raised £1,800,000 (gross) of further investment. This second subscription required a vote by the independent shareholders to approve the waiver of the provisions of Rule 9 of the City Code, which was duly passed at the General Meeting held on 28 October 2014.

Re-financing - Post Balance Sheet

In May 2015, £100,000 was raised through the placing of 1 million new shares at 10 pence per share with certain directors and senior management of the Company.

In December 2015, it was announced that the Company had raised approximately £3,024,645 through the issue of 40,746,451 new shares. Of the total, £1,050,000 was subscribed for by new and existing investors at 5 pence per share to provide working capital for the Group, with the balance raised through the conversion of loan notes and other creditor balances to strengthen the Group's balance sheet.

In February 2016, we announced the conversion of a further £57,290 of loan notes at 10 pence per share. Of the original £1,622,456 of redeemable or convertible loan notes with maturities in either 2015 or 2018, all but £80,166 have now been converted to equity, together with any accrued but unpaid interest and redemption premium.

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Further details of these subscriptions are available on our website, www.snacktime.com.

Amendments to the agreements with the Co-Operative Bank

Throughout this period, discussions have also continued with the Co-Operative Bank. Loan repayments have been sporadic, but by 27 March 2015 the outstanding balance had reduced to £2,050,939 which had reduced further to £1,829,995 by 29 February 2016. The £750,000 overdraft facility ran alongside the loan facility throughout the period.

SNACKTIME PLC

chairman's statement (CONTINUED)

PERIOD ended 27 March 2015

In February 2016, a new agreement was reached with the Co-Operative Bank to extend the Company's existing £750,000 overdraft facility to the end of 2016. In addition, agreement has been reached in respect of the secured loan facility to waive all covenant testing to the end of 2016, and fix the aggregate repayments due in calendar year 2016 to £350,000.

Based upon management's current forecasts, a covenant breach might occur in December 2016 when testing resumes. The existence of this potential breach and its remedy are referred to in the going concern note at various points throughout this Annual Report. Whilst the Co-operative Bank continues to show flexibility and support around the timing of our loan repayment schedule.

Suspension of Trading on AIM

On 17 September 2015, trading on AIM was suspended in the Company's shares due to it being unable to publish these accounts within 6 months of the year end, as required by the AIM Rules for Companies.

It is expected that following publication of these accounts, and announcement of the unaudited results for the six months ended 30 September 2015, trading will resume in the Company's shares on AIM in due course.

Strategy

During FY15, the focus has continued to be on stabilising sales, improving operations, reducing costs while refinancing the business. The vending market remains very competitive with evermore retail operations offering hot drinks in particular throughout the 24 hour day, resulting in an annual volume decline of c.5% as reported recently by the AVA (Automatic Vending Association). But despite this additional competition, new vending opportunities arise continuously as existing 3 and 5 year contracts come to an end, alongside new commercial facilities opening. There remains considerable opportunity. Our operated machine base is now stabilising and with an improved and more efficient operating platform we are dealing better with the challenges that taking on new business presents. The key elements of our strategy are as follows:-

Technology - We have been successful in gaining multiple public sector contracts by offering the very latest innovations the industry has to offer. Telemetry, NFC payments and smart phone loyalty applications are now a standard part of such offerings.

A growing Franchise network - with the support of our key brand partners Mars, Walkers and Coca Cola we can offer an attractive franchise proposition with strong growth potential to the right franchisee. Our increasingly professional franchise support team should allow us to expand our network for several years to come by attracting franchisees who themselves are committed to growing their own businesses.

The vending division is concentrating on public sites with higher footfall, city centres and building activity around existing sites. Density of operation is a significant contributor to profitability. Our exclusive range of Unicum vending equipment is giving us a unique offering for our customers. Ultimately success is driven by delivering consistent quality, from hygienic looking machines whenever required. 

Drinkmaster is now seeing a key shift in its core product and market. Seal Cup sales have overtaken those of the Drink Pac with considerable growth expected in export markets. The Seal Cup is seen as an ideal on the go or retail convenience solution. Notably, we are now starting to see exports develop which will provide additional significant opportunities for growth.

SNACKTIME PLC

chairman's statement (CONTINUED)

PERIOD ended 27 March 2015

Operations

In the Vending Division, represented by VMI and Simply Drinks, the disappointing results in the period ended 27 March 2015 have resulted in an £448,532 impairment of intangible assets charge based upon mid-term cash flow forecasts. 2015 saw a total review of support, sales and field structures. This has begun to drive another round of efficiencies and cost reductions, the full benefit of which will be seen during 2016. Our purchasing function has played a key role in the last 12 months in reducing costs, improving the quality of our products and maintaining supplier relationships through difficult times. The full benefits of these activities will take time to show through.

The 3 key depots in London, Blackburn and Corby (including Newport) have each been given greater autonomy and authority to provide the service their customers need locally. Behind the scenes they

are soon to be driven as individual profit centres. City centre and public sites have been a particular focus with some notable wins in the NHS more recently. Service remains key to a customer renewing their contract at the end of its term with greater attention being given to the levels of machine functionality, presentation and hygiene.

The Franchise Network has remained largely stable operating 80 areas nationally. 15 sales were made during 2015 on the back of some well executed sales and marketing activity, although many of these sales were replacing a departing franchisee. A new role of Franchise Business Development Manager was also added to the structure to allow more support for a new franchisee to ensure they are meeting their year 1 business plans. There remain 40 further areas of the country that could support a franchisee but the challenge is finding suitable candidates.

Drinkmaster sales fell further after March 2015 due particularly to the shake-up in their betting sector customers. This fall in profits has resulted in a £485,000 impairment of fixed assets being charged this year based upon our mid-term cash flow forecasts. More recently, we are beginning to recover again through the growth of new seal cup sales opening up export markets in particular. This new product is being focused on export, vending, retail and travel markets each of which has the potential to grow the revenue base and ensure there is less reliance on the gaming sector.

People

Over the last 2 years, the Board has had a number of changes as has the divisional senior management. The addition of Boris Belotserkovsky and Sergei Kornienko to the Board provides the Group with the necessary vending and technology skills and experience that will be required to deliver our strategy. The details of the various changes are as follows:-

In June 2014, Boris Belotserkovsky and Gillian White joined the Board following the first Versatel investment mentioned above. Disappointingly, Gillian White has already had to step-down due to conflicting responsibilities, but I would like to thank her for her contribution while she was with us.

In October 2014, Ian Forde resigned from the Board after 13 years. He co-founded the Company back in 2001 and I would like to thank him for his broad contribution to the development of the SnackTime Group.

SNACKTIME PLC

chairman's statement (CONTINUED)

PERIOD ended 27 March 2015

Also in October 2014, Michiel Slinkert resigned from the Board. He joined the Board when the Vendia UK Limited purchase was completed in September 2010. I would also thank him for his support during those 4 years.

In January 2015, Mark Stone joined the Board as Chief Executive Officer and Sergei Kornienko as a Non-executive Director of the Company. Mark Stone has since tendered his resignation and will leave the Company in April 2016. I would like to thank Mark for his contribution to the Group during a difficult period.

Tim James left the Board in November 2015 following 6 challenging years as our CFO. I would like to thank him also for his support and contribution to the Group.

From December 2015, Michael Maltby has assumed responsibility as Interim CFO and Company Secretary.

During the period ended 27 March 2015, Jon Stepto took over as Managing Director at Drinkmaster Limited following the departure of Paul Vickers who had run the company for the previous 9 years. I would like to thank Paul for his contribution. Andrew Hardhill stepped up to be Managing Director at Snack in the Box Limited, while Sue Sproston, Clive Smith and a number of other key people have left us during this period, all of whom I would like to wish well in their future careers.

Finally I would like to thank all of our staff, new and continuing, who have supported us through another period of intense change. The pressures of managing a business with insufficient working capital are enormous and this has made everybody's role that much harder. It is a credit to each one of them that we continue.

Current Trading & Prospects

The environment for the Group continues to be challenging and we remain focussed on delivering consistent quality products while managing costs, from "clean, full and working" machines, whenever a purchase is desired. 24 hour unmanned retailing. That said, we are convinced that the winners in the vending sector will be those who can harness new technologies such as wave and pay and telematics, where the active involvement of Uvenco provides us with a competitive advantage. With this in mind, we are encouraged by current trading and look forward to the future with increasing confidence.

Jeremy Hamer

Chairman

Date: 15 March 2016

SNACKTIME PLC

BOARD OF directors

PERIOD ended 27 March 2015

Executive Directors

Jeremy Hamer, Chairman, FCA. Jeremy is a Chartered Accountant who has spent many years involved in the operation, development and financing of a number of growth companies using AIM for investment capital. These included three companies in the food industry, Inter Link Foods Plc, Glisten Plc and Napier Brown Ltd. (now part of Real Good Food Company Plc, as is John F Renshaw Ltd.). He spent his early career in Holland with Coopers and Lybrand.

Mark Stone, Chief Executive Officer. Mark was appointed to his current position in October 2014 and has been involved in senior positions in the UK vending industry since 2012. In November 2015 he notified the Board that he would be stepping down for from his positions in April 2016.

Non-Executive Directors

Michael Jackson, Non-Executive Director, MA, FCA. Michael founded Elderstreet Investments Limited in 1990 and is its Executive Chairman. For the past 21 years, he has specialised in raising finance and investing in the smaller companies sector. Michael was Chairman of FTSE 100 Company, Sage Group plc for 12 years to August 2006. He is also a Director and investor in many other quoted and unquoted companies. Michael studied law at Cambridge University, and qualified as a chartered accountant with Coopers and Lybrand before spending five years in marketing for various US multinational technology companies. Michael was appointed as Non-Executive Chairman of SnackTime plc in April 2006 and stepped down to Non-Executive Director in May 2012.

Boris Belotserkovsky, Non-Executive Director. Boris is both a Russian and US citizen and is Chairman and sole owner of Uvenco (www.uvenco.ru), Russia's leading vending company. He also has material shareholdings in Oplata LLC and Transvend CJSC which are both involved in vending. Mr Belotserkovsky is a President of the Russian National Vending Association and a Managing Director and a member of the executive committee of the European Vending Association.

Sergei Kornienko, Non-Executive Director. Sergei Kornienko is a Russian citizen and has been the Chief Executive Officer of Uvenco, Russia's leading vending company since 2009.

SNACKTIME PLC

STRATEGIC report

PERIOD ended 27 March 2015

PRINCIPAL ACTIVITIES

The principal activities of the Group are the sale and operation of hot drink and snack vending machines, the operation of free on loan vending machines via a franchise division and the production and supply of "in-cup" drinks and associated equipment.

BUSINESS REVIEW AND FUTURE DEVELOPMENTS

The Chairman's statement sets out the review of the business in the year and future developments.

RISKS AND UNCERTAINTIES

The operation of a public listed company involves a series of inherent risks and uncertainties across a range of strategic, commercial, operational and financial areas. The Board has outlined their perception of particular risks and uncertainties facing the Group below. These risks and uncertainties could cause the actual results to vary from those experienced previously or described in forward looking statements within the annual report:

- Changing consumer trends

Since the acquisition of Vendia UK Limited the emphasis of SnackTime's sales has shifted towards hot drinks. This has reduced our exposure to the snack market which could be subject to future regulation relating to healthier eating. It is in the interests of the brands whose products we stock to develop either healthier snacks or to amend the recipe of their existing items to, for example, reduce fat and salt content as consumer tastes and trends change towards healthier products SnackTime's offering will evolve to meet that demand.

- Liquidity Risk

During the period to 27 March 2015 the Directors recognised that the Company could have significant liquidity risk given its level of borrowings and their repayment profiles. A number of steps were taken to address this risk culminating in securing two tranches of investment from Versatel Company Limited in new ordinary shares totalling £2.37 million (gross).

In June 2015, £100,000 was raised through the placing of 1 million shares at 10 pence per share with certain directors and managers of the Company.

In December 2015 it was announced that we had reached agreement with certain investors, loan note holders and creditors to raise in aggregate £3,024,645 through the issue of 40,746,451 new ordinary shares of 2 pence each in the Company. Of the total, £1,050,000 was subscribed for by new and existing investors at 5 pence per share in the form of new funds to provide working capital for the Group, with the balance raised through the conversion of loan notes and other creditor balances at 10 pence per share to strengthen the Group's balance sheet.

In February 2016 we announced the conversion of a further £57,290 of loan notes at 10 pence per share and more recently a further £5,000. Of the original £1.62 million of redeemable or convertible loan notes in either 2015 or 2018 all but £75,166 have now converted to equity.

This investment combined with the recovery in our EBITDA performance and current projections will serve to reduce the level of liquidity risk.

SNACKTIME PLC

STRATEGIC report

PERIOD ended 27 March 2015

- Litigation and dispute risk

From time to time, the Group may be involved in litigation. This litigation may include, but is not limited to, contractual claims, personal injury claims, employee claims and environmental claims. If a successful claim is pursued against the Group, the litigation may adversely impact the sales, profits or financial performance of the Group. Any claim, whether successful or not, may adversely impact on the Company's share price. There is a risk that should the Group seek redress against another party to its contracts by way of litigation or other dispute resolution processes, these processes may incur significant Group resources, the cost of pursuing such actions may be prohibitive and a successful result is not assured.

- General economic conditions

Changes in the general economic climate in which the Group operates may adversely affect the financial performance of the Group. Factors which may contribute to that general economic climate include the level of direct and indirect competition against the Group, industrial disruption, the rate of growth of the Group's sectors, interest rates and the rate of inflation.

- Covenants compliance

The Group's borrowing facilities at the year end date included a requirement to comply with certain specified covenants in relation to rolling quarterly EBITDA and asset cover. Prior to the year end the Group had commenced discussions with the Co-Operative Bank relating to revised facilities, in view of this it was agreed with the Co-Operative Bank that covenants would not be tested in March and similar agreements were made for subsequent months pending new arrangements being put in place.

On 7 November 2014 the Company entered into an agreement with the Co-operative Bank plc comprising a Term Loan of £2.05 million and an overdraft facility of £750,000. The Term Loan runs until January 2018, is subject to annual reviews and is repayable in ascending quarterly instalments commencing 30th April 2015. It is subject to an interest cover covenant and a debt service covenant. The overdraft is renewable annually.

A breach of these covenants could result in a significant proportion of the Group's borrowings becoming repayable immediately.

During the period to 27 March 2015 the Company breached these covenants and subsequently entered into negotiations with its bankers and in January 2016 the Company reached agreement with the Co-op to restructure the repayments of its debt and waive covenant testing until the fourth quarter of 2016.

The cash flow forecast indicates that the Group may breach the cash flow available for debt service covenant on the facility in December 2016. Under the terms of the loan agreement, the breach can be cured, through an injection of equity. Were the shareholders to decide not to cure, an event of default would arise which under the terms of the agreement would result in the total principal together with accrued interest and all other amounts accrued becoming payable on demand.

SNACKTIME PLC

STRATEGIC report (continued)

PERIOD ended 27 March 2015

- Cash flow

In the period to 27 March 2015 the Company has raised £2.37 million (gross) in the form of new ordinary shares issued to Versatel Company Limited. Since the period end a further two tranches of funding was raised totalling £1.15 million and full details of this fundraising are included throughout this report.

This investment will ensure that the Company is in a position to meet its liabilities and complete the next stage of the rationalisation commenced in 2012. Our forecasts indicate a positive trading cash flow and a proportion of the new monies will enable us to invest in the asset base to enhance future cash flows.

- Product price changes

The purchase price of products distributed by the Group can fluctuate from time to time, thereby potentially affecting the results of operations. Adverse economic conditions resulting and rising input prices may impact the Group's revenue and, as a result, its results.

The Group endeavours, whenever possible, to pass on price increases from its suppliers to its customers. The Group mitigates against the risk of holding overvalued inventory in a deflationary environment by managing stock levels efficiently and ensuring they are kept to a minimum.

The Group's exposure to interest rate risk, credit risk and liquidity risk are detailed in the Financial Instruments section of the Directors' report.

KEY PERFORMANCE INDICATORS

FINANCIAL INSTRUMENTS

The Group's financial instruments comprise convertible loan notes, a bank term loan and an overdraft facility, hire purchase and finance leases, cash and liquid resource, and various items arising directly from its operations, such as trade receivables and trade payables. The main purpose of these financial instruments is to finance the Group's operations.

The main risks arising from the Group's financial instruments are interest rate risk, credit risk and liquidity risk.

Full details of the Group's financial assets and liabilities are set out in Notes 18 - 20 and Note 25 to the financial statements.

SNACKTIME PLC

STRATEGIC report (continued)

PERIOD ended 27 March 2015

Interest rate risk

The Group's hire purchase contracts and convertible loan are at a fixed rate of interest and so cash flow is not affected by interest rate or cash flow risk. The Group was exposed to interest rate fluctuations on £21.5 million of its bank loans which have an interest rate of 6% above LIBOR. The remaining balance of the loan is fixed at 5.2%. Furthermore, the Group overdraft balance was exposed to an interest rate of 2.75% above LIBOR. The Directors have now refinanced the bank loans and overdraft facilities. See Note 30 for details. The Directors believe that interest rates are likely to remain low for the foreseeable future based upon current economic data.

Credit risk

The Group's principal financial assets are cash and trade receivables, the majority of which are cash. The credit risk associated with the cash is limited. A portion of sales are credit sales, some of which are to larger companies with which the Group has long standing relationships. The credit risk is minimised by ensuring that these relationships are nurtured and monies are collected as they fall due.

On-going management services fees due from the franchisees are in many cases secured over franchisees' properties in the event of non-payment. During the period a provision of £73,826 was made against trade receivables in the vending division which relates to historic debts that were not deemed recoverable.

GOING CONCERN

Accounting standards require the Directors to consider the appropriateness of the going concern basis when preparing the financial statements and if necessary to explain how they have reached their conclusion. The Directors have taken notice of the Financial Reporting Council guidance 'Going Concern and Liquidity Risk: Guidance for Directors of UK Companies.

The Group made a loss of £4.1m for the period ended 27 March 2015 and had net current liabilities of £3.5m and net assets of £1m as at that date. Since then, net funds of £3 m were raised through the issue of new shares which were paid through a combination of cash and the conversion of loan notes and other creditor balances. The Group's bank borrowings were also refinanced in December 2015, details of which you can find in Note 19 to the financial statements. Management have prepared a cash flow forecast for the period to December 2017, the starting position being based on unaudited management accounts to December 2016. Whilst the Directors have continued to reduce the operating costs of the Group and improve the performance of the vending estate there is limited cash headroom in the forecast. Should the Group's operating performance be lower than forecast a further injection of working capital may be required.

The loan agreement with The Cooperative Bank plc includes covenants testing covering cash flow available for debt service and EBITDA interest costs cover. Testing of these covenants is to take place from December 2016. The cash flow forecast indicates that the Group may breach the cash flow available for debt service covenant on the facility in December 2016. Under the terms of the loan agreement, the breach can be cured. Were the shareholders to decide not to cure, an event of default would arise which under the terms of the agreement would result in the total principal together with accrued interest and all other amounts accrued becoming payable on demand.

In order to satisfy themselves that the going concern basis remains appropriate the Directors have requested and been granted a non-binding letter of support from the Group's majority shareholder Mr Belotserkovsky that he will act as guarantor in respect of any cure that might be required in respect of the bank loans should a covenant breach occur and that he will provide further funds should there be a need for a further investment to support working capital during the next 12 months. The letter of support confirmed that he has access to the required funds to continue to provide financial support to the Group.

SNACKTIME PLC

STRATEGIC report (continued)

PERIOD ended 27 March 2015

GOING CONCERN CONTINUED..

The details set out above indicate the existence of material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. However, the Directors are of the opinion that the bank and the majority shareholder will continue to support the Group as they have each done in the recent past and hence it will continue as a going concern, meeting its liabilities as they fall due. The financial statements have therefore been prepared on a going concern basis.

EXCEPTIONAL ITEMS

Included within the financial statements are exceptional costs of £1,432,835 (2014 - £7,172,339).

Full details of exceptional costs are included in Note 5 of the financial statements. Exceptional costs relate to the following:

Exceptional costs in 2014 and 2015 denoted as redundancy costs follow the continued restructuring of the Group. Legal costs incurred incurred in 2014 followed the loss of an ongoing court case.

The majority of the remaining exceptional costs relate to the impairment of the vending division intangible assets as well as tangible fixed assets in Specialist Drinks.

This report was approved by the Board on 15 March 2016 and is signed on its behalf by

Jeremy Hamer

Chairman

SNACKTIME PLC

directors' report

PERIOD ended 27 March 2015

The Directors present their report and the audited financial statements for the period ended 27 March 2015.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing 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 elected to prepare the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and the company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 of the Group and Company and of the profit or loss of the Group for that period. The Directors are also required to prepare financial statements in accordance with the rules of the London Stock Exchange for companies trading securities on the AIM Market.

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 they have been prepared in accordance with IFRSs as adopted by the European Union, 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 requirements of 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.

Website publication

The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the on-going integrity of the financial statements contained therein.

PROVISION OF INFORMATION TO AUDITORS

Each of the persons who are Directors at the time when this Directors' report is approved has confirmed that:

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

- each Director has taken all the steps that ought to have been taken as a Director in order to be aware of any information needed by the Company's auditor in connection with preparing their report and to establish that the Company's auditor is aware of that information.

SNACKTIME PLC

directors' report (continued)

PERIOD ended 27 March 2015

DIVIDENDS

The Directors do not recommend payment of a dividend in respect of the period ended 27 March 2015 (2014: £Nil).

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DIRECTORS

The Directors who served during the year and their direct beneficial interest in the issued share capital were:

Of the above holdings the following were held via their individual SIPP's - I. Forde 50,000, J. Hamer 80,000, T. James 20,000 and M. Jackson 125,000.

At 27 March 2015, Versatel Company Limited, a company deemed to be part of the B Belotserkovsky "concert party" held 15,800,000 ordinary shares

M. Slinkert indirectly held a partial beneficial interest in 4,843,616 of ordinary shares in SnackTime plc, via his holding in Vendia Groep BV. This holding was purchased by Mrs V Belotserkovskaya subsequent to the year end.

M. Jackson indirectly held a beneficial interest in 1,792,256 ordinary shares in SnackTime plc via his Directorship at Elderstreet VCT plc.

J. Hamer had a de minimis interest via his holding in both Elderstreet VCT plc and Unicorn AIM VCT plc.

No other Directors who served during the year held beneficial interests in the Company.

Details of the Directors' share options and remuneration are shown in Note 8 to the financial statements.

SNACKTIME PLC

directors' report (continued)

PERIOD ended 27 March 2015

capital

The capital structure of the Group consists of debt, which includes the borrowings, finance leases and convertible loan notes disclosed in Note 19, cash and cash equivalents, and equity attributable to equity holders of the parent, comprising issued capital, warrant reserve, merger reserve, capital redemption reserve and retained earnings as disclosed in Note 23.

The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

SUBSTANTIAL INTERESTS

There were the following substantial interests (3% or more) in the Company's issued ordinary share capital as at 2nd January 2016

\* The Belotserkovsky Concert Party of which Versatel Company Limited is a part, holds an interest in 54.4% of the Company's issued ordinary share capital. Versatel Company Limited was deemed to be a part of the Concert Party as a result of the business relationship between its owner and Boris Belotserkovsky.

DIRECTORS' INDEMNITIES

The Company has paid £2,999 (2014 - £3,180) in respect of Directors' and Officers' indemnity insurance.

SNACKTIME PLC

directors' report (continued)

PERIOD ended 27 March 2015

REPORT ON CORPORATE GOVERNANCE

The Financial Conduct Authority requires listed companies (but not companies traded on AIM) incorporated in the UK to state in their report and accounts whether they comply with the UK Corporate Governance Code and identify and give reasons for any areas of non-compliance. The Group is listed on AIM and therefore no disclosures are required. However, the Board is aware of the requirements of the Code and the need for appropriate controls and systems to safeguard the Group's assets. Full compliance with the Combined Code is not appropriate because of the size and resource constraints within the Group and because of the relative cost benefit assessment of putting in place the additional procedures.

This is not a statement of compliance as required by the Combined Code and should therefore not be relied upon to give the disclosure which would normally be made.

The Group operates an effective Board which meets on a regular basis, generally each month.

The Board maintains an appropriate relationship with the Group's auditor through the Audit Committee. The auditor provides other services in addition to conducting the Group's audits as detailed in Note 4. Procedures are in place to ensure auditor independence is not compromised.

The remuneration packages for Executive Directors are structured to attract, motivate and retain Directors with the experience, capabilities and ambition required to achieve the Group's strategic aims. The Remuneration Committee is responsible for determining and reviewing the annual remuneration packages of Executive Directors. The committee that acted during the Financial Year comprised at various times the Non-Executive Directors Ian Forde, Michiel Slinkert and Michael Jackson.

The salaries of the Executive Directors are set by the committee and reviewed annually, taking into account the performance of the Group, and the individual, and salary increases given to other Group employees.

FINANCIAL INSTRUMENTS

Details of the Group's financial instruments are included within the Strategic Report on page 18.

EMPLOYEE INVOLVEMENT

The Group aims to improve the performance of the organisation through the development of its employees. Their involvement is encouraged by means of team working and improving communications throughout the Group.

The Group could be adversely impacted if it failed to manage health and safety effectively. The Board of the Group believes the safety of its employees, contractors and suppliers is fundamentally important. A Group compliance programme is in place which ensures that all legal obligations are adhered to. Health and safety is discussed at the monthly Board meetings.

SNACKTIME PLC

directors' report (continued)

PERIOD ended 27 March 2015

DISABLED EMPLOYEES

The Group is committed to equality of employment and its policies reflect a disregard of factors such as disability in the selection and development of employees. The Group is involved in various initiatives which promote a positive understanding of disability and the integration of the disabled into the workforce.

POST BALANCE SHEET EVENTS AND FUTURE DEVELOMENTS

Full details of post balance sheet events are disclosed in Note 30 of the financial statements.

Future developments are discussed in detail in the chairman's statements.

AUDITORS

BDO LLP have expressed their willingness to continue in office as auditor and a resolution proposing their reappointment will be submitted at the forthcoming Annual General Meeting.

This report was approved by the Board on 15 March 2016 and is signed on its behalf by

Jeremy Hamer

Chairman

 SNACKTIME PLC

REPORT OF THE independent AUDITOR

PERIOD ended 27 March 2015

INDEPENDENT AUDTOR'S REPORT TO THE MEMBERS OF SNACKTIME PLC

We have audited the financial statements of SnackTime plc for the year ended 27 March 2015 which comprise the Group Statement of Financial Position and Company Balance Sheet, the Group Statement of Comprehensive Income, the Group Statement of Cash Flows, the Group Statement of Changes in Equity and the related notes. The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been applied in preparation of the parent Company financial statements is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

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 auditors

As explained more fully in the statement of Directors' responsibilities, the Directors are responsible for the preparation of the 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 financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council's (FRC'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/auditscopeukprivate.

Basis for qualified opinion on financial statements

The audit evidence available to us was limited because of a breakdown in the Group's internal controls, together with a lack of adequate accounting records kept by the parent and certain subsidiary undertakings within the Group. This breakdown of internal control was due to the lack of accounting resource, particularly at head office and resulted in essential month and year end control account reconciliation procedures not being performed and the frequent absence of approval and review of transactions. Management did not address these deficiencies before our audit commenced and we therefore encountered numerous errors, unreconciled differences, unsubstantiated transactions and journals during the course of our initial audit. The completion of the audit was put on hold for several months to allow management time to rectify the deficiencies and correct the errors and differences. As a result of this process, management were able to reconcile the closing Group Statement of Financial Position and Company Balance Sheet but were not able to reconcile all the differences in the Group Statement of Comprehensive Income and the Group Statement of Cash Flows. We completed our audit but were unable to confirm or verify the remaining differences by alternative audit procedures. As a result we have been unable to obtain sufficient appropriate audit evidence over the categorisation of transactions in the Group Statement of Comprehensive Income and the Group Statement of Cash Flows and the related notes.

Qualified opinion on financial statements

In our opinion, except for the possible effects of matters described in the Basis for qualified opinion paragraph:

- the Financial Statements give a true and fair view of the state of the Group's and the parent company's affairs as at 27 March 2015 and of the group's loss for the year then ended;

- the Group Financial Statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

- the parent company's Financial Statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

- the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006.

Emphasis of Matter - going concern

In forming our opinion on the financial statements, we have considered the adequacy of the disclosures made in Note 1 to the financial statements concerning the Company's ability to continue as a going concern. Further funds may be required to finance the Company's working capital requirements. The Directors have signed an agreement for a debt facility which requires renewal in December 2016. The Directors are confident of obtaining an extension to the existing financing arrangements and that all outstanding liabilities can be met. There is however no guarantee that an agreement will be reached and that the current financing is adequate to cover all liabilities falling due. The above factors indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Company was unable to continue as a going concern.

Opinion on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In respect solely of the limitation of our work referred to above:

- we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

- adequate accounting records have not been kept by the parent company.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

- returns adequate for our audit have not been received from branches not visited by us; or

- the parent company financial statements are not in agreement with the accounting records and returns; or

- certain disclosures of directors' remuneration specified by law are not made.

Simon Brooker

For and on behalf of BDO LLP, statutory auditor

Reading

Date

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127)

All operations are continuing.

The Notes on pages 26 to 63 form part of these financial statements.

SNACKTIME PLC

Consolidated STATEMENT OF Changes in equity

 PERIOD ended 27 March 2015

The Notes on pages 26 to 63 form part of these financial statements.

SNACKTIME PLC

consolidated STATEMENT OF FINANCIAL POSITION

27 March 2015

These financial statements were approved by the Board of Directors and authorised for issue

on 15 March 2016.They were signed on its behalf by:

Jeremy Hamer

The Notes on pages 26 to 63 form part of these financial statements.

SNACKTIME PLC

CONSOLIDATED statement OF cash flowS

PERIOD ended 27 March 2015

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS

PERIOD ended 27 March 2015

General information

SnackTime plc is a public limited company incorporated in England and Wales under the Companies Act (registered number 06135746). The Company is domiciled in the United Kingdom and its registered address is 17 Rufus Business Centre, Ravensbury Terrace, London, SW18 4RL. The Company's shares are traded on the AIM market of the London Stock Exchange.

Basis of preparation

These consolidated financial statements are presented on the basis of International Financial Reporting Standards (IFRS) as adopted by the European Union and interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and have been prepared in accordance with AIM rules and the Companies Act 2006, as applicable to companies reporting under IFRS.

These consolidated financial statements have been prepared in accordance with the accounting policies set out in Note 2 and under the historical cost convention,

All companies in the Group use sterling as presentational and functional currency.

Going concern

Accounting standards require the Directors to consider the appropriateness of the going concern basis when preparing the financial statements and if necessary to explain how they have reached their conclusion. The Directors have taken notice of the Financial Reporting Council guidance 'Going Concern and Liquidity Risk: Guidance for Directors of UK Companies.

The Group made a loss of £4.1 million for the period ended 27 March 2015 and had net current liabilities of £3.5 million and net assets of £1 million as at that date. Since then, net funds of £3 million were raised through the issue of new shares which were paid through a combination of cash and the conversion of loan notes and other creditor balances. The Group's bank borrowings were also refinanced in December 2015, details of which you can find in Note 19 to the financial statements. Management have prepared a cash flow forecast for the period to December 2017, the starting position being based on unaudited management accounts to December 2016. Whilst the Directors have continued to reduce the operating costs of the Group and improve the performance of the vending estate there is limited cash headroom in the forecast. Should the Group's operating performance be lower than forecast a further injection of working capital may be required.

The loan agreement with The Cooperative Bank plc includes covenant testing covering cash flow available for debt service and EBITDA interest costs cover. Testing of these covenants is to take place from December 2016. The cash flow forecast indicates that the Group may breach the cash flow available for debt service covenant on the facility in December 2016. Under the terms of the loan agreement, the breach can be cured through an injection of equity. Were the shareholders to decide not to cure, an event of default would arise which under the terms of the agreement would result in the total principal together with accrued interest and all other amounts accrued becoming payable on demand..

In order to satisfy themselves that the going concern basis remains appropriate the Directors have requested and been granted a non-binding letter of support from the Group's majority shareholder Mr Belotserkovsky that he intends to support the Group in respect of any cure that might be required in respect of the bank loans should a covenant breach occur and that he will provide further funds should there be a need for a further investment to support working capital during the next 12 months. The letter of support confirmed that he has access to the required funds to continue to provide financial support to the Group.

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS

PERIOD ended 27 March 2015

Going concern (continued)

The details set out above indicate the existence of material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. However, the Directors are of the opinion that the bank and the majority shareholder will continue to support the Group as they have each done in the recent past and hence it will continue as a going concern, meeting its liabilities as they fall due. The financial statements have therefore been prepared on a going concern basis.

The following new standards have been adopted during the period

• IFRS 10 Consolidated Financial Statements

• IAS 27 (Revised) "Separate Financial Statements"

• Offsetting Financial Assets and Financial Liabilities - (Amendments to IAS 32)

• Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36)

The adoption of the above new standards has not had a material impact on the financial statements during the period ended 31 March 2015

New Standards and interpretations not yet adopted

At the date of authorisation of these financial statements, the directors have considered the standards and interpretations which have not been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the EU) and only IFRS 15 "Revenue from Contracts with Customers" was considered to be relevant. The Directors are still assessing whether the application of IFRS 15 once effective will have a material impact on the results of the Company.

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS

PERIOD ended 27 March 2015

Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The principal areas where judgement was exercised are as follows:

• Property, plant and equipment includes the value of the vending machine estate. The Directors annually assess both the residual value of these assets and the expected useful life of such assets.

• The Directors have estimated the useful economic lives of intangible assets. The economic lives and the amortisation rates are reviewed annually by the Directors.

• The Group receives branding fees to contribute to the installation and refurbishment of vending machines. The Directors are required to assess the amounts receivable at each reporting date and whether all the conditions have been met to enable these to be recognised.

• The sales from vending machines disclosed are recognised at the point of sale to the customer. At each year end, the Directors are required to make an estimate of sales where the vending machine has not been emptied or inspected at the year end date.

• The convertible loan notes disclosed in Note 19 have been split between the debt and equity element in accordance with IAS 32. This requires calculating the present value of the debt element using an effective interest rate. 12% was assumed to be an effective interest rate that would be charged on a similar loan by a third party.

• Share based payment and warrant valuations are based upon a Black-Scholes based model which requires various assumptions to be made as set out in Note 24.

• The dilapidation provisions are the costs of making good premises under the terms of the property lease agreements.

• An impairment of intangible and tangible fixed assets has the potential to significantly impact upon the Group's statement of comprehensive income for the year. In order to determine whether impairments are required the Directors estimate the recoverable amount of the intangibles. This calculation is based on the cash flow forecasts applicable to the Group of cash-generating units for the following financial year extrapolated over an eight year period assuming no growth. A discount factor, based upon the Group's weighted average cost of capital is applied to obtain a current value ('value in use'). The fair value less costs to sell of the cash generating unit is used if this results in an amount in excess of value in use. Any potential impairment is allocated first against intangible fixed assets and then against tangible fixed assets.

Estimated future cash flows for impairment calculations are based on management's expectations of future volumes and margins based on plans and best estimates of the productivity of the income generating unit in their current condition. Future cash flows therefore exclude benefits from major expansion projects requiring future capital expenditure.

Future cash flows are discounted using a discount rate based on the Group's weighted average cost of capital. The weighted average cost of capital is impacted by estimates of interest rates, equity returns and market related risks. The Group's weighted average cost of capital is reviewed on an annual basis.

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group's financial statements.

a) Basis of consolidation

The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings. The merger method of accounting was adopted in respect of the Group reconstruction involving SnackTime Plc and SnackTime UK Limited. The acquisitions of Snack in a Box Limited and Vendia UK Limited were accounted for using acquisition accounting in accordance with IFRS 3 "Business Combinations (Revised)".

Intra-group revenues and profits are eliminated on consolidation and all revenue and profit figures relate to external transactions only.

b) Revenue recognition

Revenue is measured by reference to the fair value of consideration received or receivable by the Group for goods and services supplied, excluding VAT and trade discounts. Revenue for goods sold from vending machines is recognised at the date of sale. Revenue in respect of installation and refurbishment of branded vending machines (branding fees) is recognised at the date of installation or refurbishment. Franchising fees are recognised when the franchisee starts trading. 

c) Income tax

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the balance sheet date. They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate, based on the taxable profit for the year.  

Deferred tax is recognised on all temporary differences. This involves comparison of the carrying amount of assets and liabilities in the consolidated financial statements with their respective tax bases. However, deferred tax is not provided on the initial recognition of goodwill, or 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 liabilities are provided for in full. Deferred tax assets and liabilities are calculated without discounting, at tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (tax laws) that have been enacted or substantively enacted by the balance sheet date. All changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where they relate to items that are charged or credited directly to equity in which case the related deferred tax is also charged or credited directly to equity. 

Tax losses available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax assets. Deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available against which the asset can be recognised and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

d) Cost of sales

Cost of sales represents amounts payable for supplies of products for resale.

e) Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment provisions.

Depreciation is provided to write off the cost, less the estimated residual value of property, plant and equipment by equal instalments over their estimated useful economic lives as follows:

Leasehold improvements - over the term of the lease

Plant & machinery - 10 - 25% straight line basis

Fixtures, fittings & equipment - 25% straight line basis

Motor vehicles - 25% straight line basis

Land and buildings - 2 - 4% straight line basis

Material residual value estimates are updated as required, but at least annually, whether or not the asset is revalued.

Impairment reviews of property, plant and equipment are undertaken if there are indications that the carrying values may not be recoverable or that the recoverable amounts may be less than the asset's carrying value.

f) Intangible assets

In accordance with 'IFRS 3 Business Combinations (Revised)', an intangible asset acquired in a business combination is deemed to have a cost to the Group of its fair value at the acquisition date.

After initial recognition, intangible assets are carried at deemed cost less any accumulated amortisation and any accumulated impairment losses. Impairment reviews are conducted annually from the first anniversary following acquisition, where indicators of impairment arise.

Brands are amortised to the income statement over their estimated economic life on a reducing balance basis. The average useful economic life of brands has been estimated at 10-15 years. The customer relationships are amortised on a straight line basis over its 15 year useful economic life.

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

g) Impairment of assets

Assets that have a finite useful life but that are not yet in use and are therefore not subject to amortisation or depreciation are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment annually and when events or circumstances suggest that the carrying amount may not be recoverable, an impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

Goodwill is allocated to cash-generating units ('CGU') for the purpose of impairment testing to the extent that it is possible to allocate goodwill to a CGU on a non-arbitrary basis. A CGU is identified at the lowest aggregation of assets that generate largely independent cash inflows, and that which is looked at by management for monitoring and managing the business.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in the statement of comprehensive income, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods. A reversal of an impairment loss is recognised immediately in the statement of comprehensive income, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. Impairment losses on goodwill are not reversed.

The gain or loss arising on the disposal of an asset is determined as the difference between the disposal proceeds and the carrying amount of the asset and is recognised in the income statement. Goodwill was fully impaired in the year ended 31 March 2014

h) Leases

Where a lease is entered into which entails taking substantially all the risks and rewards of ownership of an asset, the lease is treated as a finance lease. The asset is recorded in the balance sheet as an item of property, plant and equipment and is depreciated over the shorter of its estimated useful life or the term of the lease.

Future instalments under such leases, net of finance charges, are included within payables. Rentals payable are apportioned between the finance element, which is charged to the income statement, and the capital element, which reduces the outstanding obligation for future instalments. Land and building elements of lease agreements are separately assessed in accordance with IAS 17.

All other leases are treated as operating leases and the rentals payable are charged on a straight line basis to the income statement over the lease term.

i) Inventories

Inventories are stated at the lower of purchase cost from third parties and net realisable value on a first in first out basis. Costs of ordinarily interchangeable items are assigned using the first in, first out cost formula.

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

j) Cash and cash equivalents

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

k) Share-based payments

The Group has applied the requirements of IFRS 2 'Share-based payment', as amended by IFRIC Interpretation 2 - IFRS 2 Group and Treasury share transactions.

The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. Where services are from employees fair value is determined indirectly by reference to the fair value of the instrument granted. The fair value determined at the grant date of the equity settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior periods if share options ultimately exercised are different to that estimated on vesting. 

Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital.

Fair value is measured based upon a Black-Scholes pricing model.

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

l) Financial instruments

Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial liabilities are recorded initially at fair value, net of direct issue costs as an expense in the income statement with a corresponding credit to equity.

Financial liabilities are subsequently recorded at amortised cost using the effective interest method, with interest-related charges recognised as an expense in finance costs in the income statement. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are charged to the income statement on an accruals basis using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

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

Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual terms of the instrument.

Bank borrowings

Bank loans and overdrafts are initially recorded at fair value. Finance charges including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis to the income statement using the effective interest method and are added to the carrying value of the instrument to the extent that they are not settled in the period in which they arise.

Convertible Loan

Convertible loan notes, as disclosed in Note 19, have been split between debt and equity elements in accordance with IAS 32.

Trade payables

Trade payables are not interest bearing and are stated at their fair value on initial recognition. They are then accounted for using the effective interest rate method.

m) Equity instruments

Equity instruments, which are detailed below, issued by the Group are recorded at the proceeds received, net of direct costs except for warrants, share options and convertible loans which are recorded at fair value at the time of issue.

Equity comprises the following:

• "Share capital" represents the nominal value of equity shares.

• "Share premium" represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue.

• "Merger reserve" represents an amount arising on the consolidation which was accounted for in accordance with FRS 6.

• "Capital redemption reserve" which arose on the redemption of shares.

• "Retained earnings" represents retained profits.

• "Share option reserve" relates to the Company's share option scheme detailed in Note 24.

• "Equity element of compound financial instruments" represents the equity element of the convertible loan notes in Note 19.

• "Warrants reserve" represents the fair value at the time the warrants were issued.

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

n) Pensions

The Group did not contribute to personal pension plans for the Directors. Contributions were made to defined contribution pension schemes for certain employees. The amount charged to the Income Statement in the year represents the amount payable in respect of that year.

o) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the management team including the Chief Executive Officer.

p) Exceptional Costs

It is the Group's policy to show items that it considers are of a significant nature separately on the face of the Consolidated Statement of Comprehensive Income in order to assist the reader to understand the financial statements. The Group defines exceptional costs as items that are material in respect of their size and nature, for example, a major restructuring of the activities of the Group.

Summary details of exceptional costs are shown in Note 5.

q) Provisions

The Group recognises a provision where a legal or constructive obligation exists at the balance sheet date and a reliable estimate can be made of the likely outcome.

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

The Company operates wholly within the United Kingdom.

The analysis of auditor's remuneration is as follows:

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

Exceptional costs comprise of:

Exceptional costs in 2015 denoted as restructuring and redundancy costs following the continued restructuring of the Group. Legal costs incurred in the year to 31 March 2014 followed the loss of a court case.

The 2014 impairment of intangible assets includes the full impairment of the recognised goodwill across both the vending and specialist drinks division. The 2015 impairment relates to the brand and customer list intangibles as well as an impairment to the specialist drinks division. The impairments have arisen following continued difficult trading conditions and the loss of a key customer.

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

The emoluments of the Directors for the period were as follows:

Key management personnel are considered to be only the Company's Directors.

During the period ended 27 March 2015 pension contributions of £Nil (2014 - £Nil) were paid in respect of the highest paid Director.

The highest paid director received emoluments of £148,000 (2014: £142,500) in respect of their services for the period ended 27 March 2015.

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

Directors' interests in share options

Nil (2014 - Nil) options were granted to Directors during the period to 27 March 2015. Options have been granted to Directors whose performance and potential contribution were judged to be important to the operations of the Group, as incentives to maximise their performance and contribution.

The mid-market price of the ordinary shares on 27 March 2015 was 7.5 pence and the range during the year was 6.25 pence to 13.75 pence.

No Directors exercised any options during the year.

The average monthly number of people employed by the Group (including Executive Directors) during the year, analysed by category, were as follows:

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

The Group has three main reportable segments:

§ Specialist drinks - The manufacture and sale of single portion beverages called 'Drinkpacs' together with the sale of associated food and drink products.

§ Franchising - The marketing and franchising of operations in the provision of snack solutions.

§ Vending - Vending activities.

Factors that management used to identify the Group's reportable segments

The Group's reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different technology and marketing strategies.

Measurement of operating segment profit or loss, assets and liabilities

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.

The Group evaluates performance on the basis of profit or loss from operations but excluding non-recurring profits/losses, such as goodwill impairment, and the effects of share-based payments.

Inter-segment sales are priced on the same basis as sales to external customers, with an appropriate discount being applied to encourage use of group resources at a rate acceptable to local tax authorities. This policy was applied consistently throughout the period.

Segment assets exclude tax assets and assets used primarily for corporate purposes. Segment liabilities exclude tax liabilities. Details are provided in the reconciliation from segment assets and liabilities to the Group position.

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

As at 27 March 2015 there were £Nil non-current assets held outside of the United Kingdom (2014: £Nil).

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

Factors affecting tax (credit)/charge for the year:

The tax assessed for the year differs from the standard rate of corporation tax in the UK of 21% (2014: 23%). The differences are explained below:

There were no factors that may affect future tax charges.

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

The calculation of basic loss per share is calculated on the basis of the result for the year after tax, divided by the weighted average number of shares in issue for the period ended 27 March 2015 of 24,040,521 (2014 - 16,349,014).

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all potential dilutive ordinary. Potential dilutive ordinary shares arise from share options and convertible loans. For these, a calculation is performed to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the exercise price attached to outstanding share options. Thus the dilutive weighted average number of shares considers the number of shares that would have been issued assuming the exercise of the share options. If these are proved to be anti-dilutive (increase the potential earnings per share) they are omitted from the calculation. As the Group has made a loss in the current year the options, warrants and convertible loan notes are therefore anti-dilutive and diluted earnings per share are therefore not provided for the current year.

SNACKTIME PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

PERIOD ended 27 March 2015

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows: