One Media iP Group plc
Annual Report 2008

Plain-text annual report

One Media Publishing Group Plc Consolidated Financial Statements For the year ended 31 October 2008 Company No.5799897 One Media Publishing Group PLC Company Information Directors Michael Anthony Infante JP Nigel Smethers Scott Cohen Secretary Nigel Smethers Registered Office Office 313/314 Main Administration Building Pinewood Studios Pinewood Road Iver Heath Buckinghamshire SL0 0NH Corporate Advisors Dowgate Capital Advisers Limited Solicitors Bankers Registrars Auditors 46 Worship Street London EC2A 2EA Marriott Harrison 12 Great James Street London WC1N 3DR Barclays Bank Plc Media centre 27 Soho Square London W1D 3QR Share Registrars Ltd 9 Lion and Lamb Yard Farnham Surrey GU9 7LL Kingston Smith LLP Chartered accountants Devonshire House 60 Goswell Road London EC1M 7AD One Media Publishing Group PLC Contents Chairman's statement Directors' report Independent auditors' report Consolidated profit and loss account Consolidated balance sheet Company balance sheet Consolidated cash flow statement Notes to the consolidated cash flow statement Page 1 - 2 3- 5 6 - 7 8 9 10 11 12 Notes to the consolidated financial statements 13 - 23 One Media Publishing Group PLC Chairman's Statement For the year ended 31 October 2008 I am pleased to be able to make this my first report to you as interim Chairman of the Group. Firstly, I would like to thank Paul Evans for his Chairmanship since One Media launched in 2006. We wish Paul continued success with his other business activities which we know to be very demanding on his time. In selecting a new non-executive director, it is our intention to look within the music publishing industry. We are still in a great time of evolution within our industry and, coupled with dramatic shifts in distribution models reported in the press over the last half year, we need to embrace and monetise these changes Over the last year, the group has made further acquisitions of music catalogues. The most significant additions of music catalogues have been announced on the Plus market news service and are now yielding returns in both the digital and traditional routes to market. Content will continue to be the driver for the Group's activities together with delivering an efficient model of monetising our music assets. As predicted by the Group at flotation, meeting the demands for the emerging digital market is beginning to be centre of the Group’s revenue source. One Media was founded to capitalise on this market in 2006 demonstrating foresight that the old model of distribution would alter as time elapsed from the traditional format of CD to the digital file format of the MP3. Significant changes have been seen in the distribution model for the older formats, highlighted by the collapse of EUK, THE, Pinnacle, Woolworths and Zavvii. Whilst being disturbing to the industry at large, this also brings greater opportunities and a new customer base to digital distribution. Digital revenues now represent 51% of the Group’s turnover, an increase from 21% from the year ending 31 October 2007. Our relationships with the many digital stores that we supply is growing with over 2,300 albums now listed and generating income on ITunes, Napster, Amazon, the Emusic, Verizon Real Networks and Tesco, to name just a few. Our relationship with The Orchard (NASDAQ), world’s largest digital distributor, goes from strength to strength. I would like to thank Nigel Smethers and Scott Cohen for their continued support to the company and indeed to all our subsidiary directors both in the UK and in North America. The UK team has made great progress in all aspects of the business and has embraced the technical and marketing requirements needed to drive the business forward. In North America, our directors continue to build relationships with the major players for the longer term growth of the Group’s activities. Review of Activities Since our last year end report we have increased the head count of the Group to meet the administrative demands and internal marketing activities required to increase communication with our B2B customers. We now have six full time members of staff operating out of Pinewood Studios supporting both UK and North American activities. We maintain a relentless watch on ‘overheads’ whilst investing for growth in both people and technology. Our ‘ingestion team’, headed by Philip Miles, has to a great extent written our software themselves thus avoiding costly third party involvement. We have also suspended our outsourced financial PR as share trading markets appear to be less receptive during this time of economic unrest. page 1 One Media Publishing Group PLC Directors' Report For the year ended 31 October 2008 The directors have pleasure in presenting their report and financial statements for the year ended 31 October 2008. Principal activities The principal activities of the Group throughout the year were the acquisition and licensing of audio-visual intellectual copyrights and publishing for distribution through the new emerging digital downloading medium and through traditional media outlets. The group is a B2B content supplier to the major downloading music retailers, a traditional music licensor to the record industry and a supplier of music to the film and TV industries. The group continues to believe that the creation of it's own dedicated consumer website is not yet of interest as that is the primary activity of its major customers. The group outsources digital content through The Orchard its strategic partner for downloading services. Business review and future developments A detailed review of the business in the year and future developments is given in the Chairman's statement on pages 1 and 2. Whilst the group focuses on downloading the traditional routes to market are not being ignored. But with the ever changing retail scene being accelerated by the much publicised national and global economic problems there is risk as well as great potential. The risk of piracy and abuse to copyright are ever present in the music industry. Piracy of music is more prevalent in the pop/chart sectors but with the groups music aimed primarily at a different buying market the risks are less. The last year has seen significant changes in the market for trading music catalogues, making valuations more difficult and increasingly subjective, and with the "credit crunch" restricting the ability to raise additional funds for development capital growth through catalogue acquisition may be restricted. The traditional risk associated with customer insolvency, and inability or unwillingness to pay debts continues to be a threat which the group constantly monitors. This has not however prevented the results for the year being adversely affected by bad debts as reported elsewhere. The group has continued to enter into representative deals with independent record labels and content owners to market their rights in the digital arena and to invest in copyrights and intellectual property that are considered to attract a suitable and sustainable rate of return. The key performance indicators the directors use to monitor the perfomance of the group include : Costs and number of tracks "ingested". Growth in the customer base and margins achieved on sales activity. Overhead to turnover growth. Value and volume of "downloads". Share price movements and changes in shareholders are constatntly monitored as a major contributor to long term planning. Directors' liabilty insurance The Group provides professional indemnity insurance for directors and key staff. Results and dividend A loss of £89,350 is reported (2007: £27,364) after providing £59,300 for bad debts (2007: £21,000). The directors do not recommend the payment of a dividend. page 3 One Media Publishing Group PLC Directors' Report (continued) For the year ended 31 October 2008 Directors The following directors held office during the year : Michael Anthony Infante JP Scott Cohen Nigel Smethers (appointed 8 July 2008) Paul John Evans (resigned 3 March 2009) Keith Springall (resigned 8 July 2008) Directors and their interests The directors' interests (including family interests) in the shares of the company were as follows : At 31 October 2008 Nos 500,000 17,966,737 - - - Ordinary share of 0.5p each At 31 October 2007 Nos 500,000 15,800,000 500,000 - - Warrants in Ordinary shares of 0.5p each At 31 October 2008 at 2p each Nos 500,000 4,000,000 500,000 - - at 1p each Nos 8,000,000 At 31 October 2007 at 2p each Nos 500,000 4,000,000 500,000 - - at 1p each Nos 8,000,000 Paul John Evans Michael Anthony Infante JP Keith Springall Nigel Smethers Scott Cohen Paul John Evans Michael Anthony Infante JP Keith Springall Nigel Smethers Scott Cohen Michael Anthony Infante JP The warrants expire on 25 September 2009. Post balance sheet events A number of music catalogue acquisitions have been made since the year end. The principal changes are detailed in note 24. page 4 Independent Auditors' Report to the Shareholders of One Media Publishing Group PLC We have audited the group and parent company financial statements of One Media Publishing Group PLC for the year ended 31 October 2008 which comprise the Consolidated Profit and Loss Account, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Cash Flow Statement and related notes. These financial statements have been prepared under the historical cost convention and the accounting policies set out therein. This report is made solely to the group's members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been undertaken for no purpose other than to draw to the attention of the group's members those matters which we are required to include in an auditors' report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party other than the group and the group's members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of the directors and auditors The directors' responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of Directors' Responsibilities. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in the Directors' Report and the Chairman's Statement is consistent with the financial statements. In addition we report to you, if, in our opinion, the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and other transactions is not disclosed. We read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. This information comprises only the Directors' Report and the Chairman's statement. We consider if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information. the implications for our report page 6 One Media Publishing Group PLC Consolidated Profit and Loss account For the year ended 31 October 2008 Note Year ended 31 October 2008 £ Year ended 31 October 2007 £ Turnover - continuing activities Cost of sales Gross profit Administration expenses Operating (loss) Interest payable Interest receivable (Loss) on ordinary activities before taxation Taxation (Loss) for the year Basic and fully diluted (loss) per share 2 3 4 4 5 18 8 615,677 (274,732) 340,945 (439,041) (98,096) (660) 9,406 (89,350) - (89,350) (0.10)p 412,507 (127,267) 285,240 (323,208) (37,968) (2,519) 13,123 (27,364) - (27,364) (0.03)p The profit and loss account has been prepared on the basis that all operations are continuing activities. There are no recognised gains or losses other than the loss for the financial year. The total figures for continuing activities for the year ended 31October 2007 included the following amounts in relation to acquisitions : Turnover £124,591: Cost of sales of £13,106; Administrative expenses £53,478: and interest receivable £83. page 8 One Media Publishing Group PLC Consolidated Cash Flow Statement For the year ended 31 October 2008 Note Year ended 31 October 2008 £ £ Year ended 31 October 2007 £ £ Net cash outflow from operating activities 1 (66,027) (71,808) Return on investments and servicing of finance Interest received Interest paid Capital expenditure and financial investments Investments in licenses Investment in fixed assets Sale of motor vehicle Acquisition 3 Acquisition of subsidiary Cash acquired with subsidiary Financing Issue of ordinary shares (Decrease) in cash Cash at the beginning of the year Cash at the end of the year 9,406 (660) 13,123 (2,519) 8,746 10,604 (150,596) (15,092) - (11,270) - (114,838) (7,103) 3,000 (165,688) (118,941) (366,552) 1,800 (11,270) (364,752) - (234,239) 408,812 174,573 344,760 (200,137) 608,949 408,812 page 11 One Media Publishing Group PLC Note to the Consolidated Cash Flow Statement For the year ended 31 October 2008 1 Reconciliation of operating loss to net cash outflow from operating activities Operating (loss) Depreciation and amortisation Loss on sale of motor vehicle (Increase) in debtors Increase in creditors Net cash outflow from operating activities 2 Analysis of net debt Net cash : Cash at bank and in hand Debt : Hire purchase liabilities Year ended 31 October 2008 £ Year ended 31 October 2007 £ (98,096) 62,965 - (101,467) 70,571 (66,027) (37,968) 37,368 1,025 (83,252) 11,019 (71,808) At Other At 31 October 2007 Cash flows £ £ non-cash changes £ 31 October 2008 £ 408,812 (234,239) - 174,573 Debt falling due within one year - 1,239 (9,958) (8,719) Net Debt 408,812 (233,000) (9,958) 165,854 3 Reconciliation of net cash flow to movement in debt Decrease in cash in year Cash inflow from increase in hire purchase New hire purchase facility Movement in net debt in year Opening net debt Closing net debt 4 Acquisition of subsidiary Year ended 31 October 2008 £ (234,239) 1,239 (233,000) (9,958) (242,958) 408,812 165,854 During the year a further £11,270 was spent in finalising the acquisition of the subsidiary acquired in the year ended 31 October 2007. There were no adjustments to the net assets acquired as a result of this further expenditure. page 12 One Media Publishing Group PLC Notes to the Consolidated Financial Statements For the year ended 31 October 2008 1 Accounting policies Accounting basis and standards The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards. Basis of consolidation The consolidated accounts incorporate the accounts of the company and all of its subsidiary undertakings. Where subsidiaries are acquired or sold during the year the group profit and loss account includes the results for the part of the year for which they were subsidiaries. The company has taken advantage of section 230 of the Companies Act 1985 and consequently the profit and loss account of the parent company is not presented as part of these accounts. All subsidiaries are consolidated using the acquisition method. Turnover Turnover represents the value of goods and digital income generated in the accounting period and is recognised either when goods are delivered and title passed or, in the case of digital income, when reported to the company. Turnover excludes VAT. Estimates of revenue are based on the extent the group has performed its contractual obligations. Goodwill Goodwill is determined by comparing the amount paid on the acquisition of a business and the aggregate fair value of its separable net assets, and is written off over its economic life estimated at 20 years. Licences Licences are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal amounts over the life of the licences (between 26 months and 20 years). Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less accumulated depreciation. Cost includes an estimate of expense incurred in developing software systems with an ongoing value to the group. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows : Furniture and fixtures Office equipment 33.33% straight line 33.33% straight line Investment in subsidiary Investment in subsidiary undertakings is shown at cost, less any provision for impairment. page 13 One Media Publishing Group PLC Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2008 1 Accounting policies (continued) Deferred taxation Deferred taxation is provided for on a full provision basis on all timing differences which have arisen but not reversed at the balance sheet date. No timing differences are recognised in respect of (i) property revaluation surpluses where there is no commitment to sell the asset; (ii) gains on sale of assets where those assets have been rolled over into replacement assets; and (iii) additional tax which would arise if profits of overseas subsidiaries are distributed except where otherwise required by accounting standards. A deferred tax asset is not recognised to the extent that the transfer of economic benefit in future is uncertain. Any assets and liabilities recognised have not been discounted. Foreign currency Transactions in foreign currency are recorded at the rate of exchange on the date the transaction occurs. Monetary assets and liabilities denominated in foreign currency are reported at the rate of exchange ruling on the balance sheet date. Hire purchase Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their fair value. The capital element of the future payments is treated as a liability and the interest is charged to the profit and loss account at a constant rate of charge on the capital repayments outstanding. Leases Rentals payable under operating leases are charged against revenue on a straight line basis over the lease term. page 14 One Media Publishing Group PLC Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2008 2 Turnover Turnover is the amount attributable to the group's principal activity undertaken in the United Kingdom. The geographic split of group sales is as follows : United Kingdom North America and Canada Europe Other 3 Operating loss Operating loss is stated after charging : Directors' remuneration Amortisation of goodwill Amortisation of licences Depreciation of fixed assets Operating lease - office rent Auditors' remuneration - audit fees Auditors' remuneration - taxation Bad debts 4 Interest receivable and payable Bank interest payable Interest payable to a related party Year ended 31 October 2008 £ Year ended 31 October 2007 £ 131,173 332,063 144,764 7,677 615,677 151,744 106,983 144,238 9,542 412,507 Year ended 31 October 2008 £ Year ended 31 October 2007 £ 72,187 23,385 31,734 7,846 22,498 15,000 3,000 59,300 42,565 17,009 17,902 2,457 15,475 15,375 1,500 21,000 Year ended 31 October 2008 £ Year ended 31 October 2007 £ 660 - 660 488 2,031 2,519 Bank interest received 9,406 13,123 page 15 One Media Publishing Group PLC Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2008 5 Taxation Analysis of charge for the year Current tax UK corporation tax at 28% (2007: 30%) Year ended 31 October 2008 £ Year ended 31 October 2007 £ - - The standard rate of tax for the year, based on the UK standard rate of corporation tax is 28% (2007: 30%). The actual tax charge for the current year is less than the standard rate for the reasons set out in the following reconciliation : Reconciliation of current tax charge Year ended 31 October 2008 £ Year ended 31 October 2007 £ (Loss) on ordinary activities before tax (89,350) (27,364) Tax on loss on ordinary activities at 28% (2007: 30%) Effects of unrelieved tax losses (25,018) 25,018 - (8,209) 8,209 - The group has estimated losses of £167,700 (2007 £85,800) available for carry forward against future trading profits. No deferred taxation asset has been provided in respect of the losses carried forward as their future recoverability is not certain. 6 Employee information Staff costs, including directors' remuneration, were as follows : Year ended 31 October 2008 Year ended 31 October 2007 £ £ Directors' emoluments Fees paid to directors Wages and salaries Social security costs 42,780 29,407 157,206 12,656 242,049 19,296 23,269 80,000 7,899 130,464 page 16 One Media Publishing Group PLC Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2008 6 Employee information (continued) The average monthly number of group employees (including executive and non-executive directors) during the year was as follows : Year ended 31 October 2008 Year ended 31 October 2007 Office and management 8 4 7 Parent company profit and loss account The loss for the year to 31 October 2008 dealt within in the financial statements of the parent company was £133,411 (2007: £105,602). As permitted by section 230 of the Companies Act 1985, no separate profit and loss account is prepared for the parent company. 8 Loss per share The calculation of the loss per share is based on the loss for the financial period of £89,350 (2007 : £27,364) divided by the weighted average number of shares in issue 91,371,339 (2007 : 78,678,114). The diluted loss per share is identical to that used for the basic loss per share as the exercise of options would have the effect of reducing the loss per share and therefore is not dilutive under Financial Reporting Standard 22 "Earnings per share". 9 Intangible assets - group Cost At 1 November 2007 Additions At 31 October 2008 Amortisation At 1 November 2007 Charge for the year At 31 October 2008 Net book value At 31 October 2008 At 1 November 2007 Goodwill Licences £ £ Total £ 435,394 11,270 189,787 150,596 625,181 161,866 446,664 340,383 787,047 17,205 23,385 22,637 31,734 39,842 55,119 40,590 54,371 94,961 406,074 286,012 692,086 418,189 167,150 585,339 page 17 One Media Publishing Group PLC Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2008 10 Tangible assets - group Cost At 1 November 2007 Additions At 31 October 2008 Depreciation At 1 November 2007 Charge for the year At 31 October 2008 Net book value At 31 October 2008 At 1 November 2007 Office equipment £ Furniture and fittings £ Total £ 10,683 22,123 3,546 1,688 14,229 23,811 32,806 5,234 38,040 1,624 6,384 1,446 1,462 3,070 7,846 8,008 2,908 10,916 24,798 2,326 27,124 9,059 2,100 11,159 Hire purchase agreements Included within the net book value of £27,124 is £8,576 (2007: £nil) relating to assets held under hire purchase agreements. The depreciation charged in the year in respect of assets held under hire purchase agreements amounted to £1,383 (2007: £nil). 11 Investment in subsidiaries Cost At 1 November 2007 Additions At 31 October 2008 Company Total £ 482,547 11,270 493,817 Country of registration or incorporation Class Shares held % One Media Publishing Limited England and Wales Collecting Records LLP One Media Publishing Inc. England and Wales Canada Ordinary Ordinary 100% 100% 100% The company's investment at the balance sheet date is 100% of the share capital of the unlisted company One Media Publishing Limited, the unlisted company One Media Publishing Inc. and the Limited Liability Partnership Collecting Records LLP. page 18 One Media Publishing Group PLC Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2008 12 Debtors Group 2008 2007 Group Company 2008 Company 2007 £ £ £ £ Amounts : owed by group undertakings Trade debtors Other debtors Prepayments - 160,257 107,519 11,145 - 48,461 116,550 12,443 186,910 - 16,666 - 168,948 - 11,845 - 278,921 177,454 203,576 180,793 13 Creditors : amounts falling due within one year Amounts : owed to group undertakings Trade creditors Social security and other taxes Accruals Other creditors Lease and hire purchase 14 Creditors : amounts falling due greater than one year Lease and hire purchase Group Group 2008 2007 Company 2008 Company 2007 £ £ £ £ - 55,819 10,736 18,708 104,569 4,027 - 20,457 8,407 59,096 31,301 - - 16,550 - 9,618 - - 9,214 6,446 - 14,611 15,995 - 193,859 119,261 26,168 46,266 Group Group 2008 2007 Company 2008 Company 2007 £ £ £ £ 4,692 4,692 - - - - - - 15 Commitments under hire purchase agreements Future commitments under hire purchase agreements are as follows : Amounts payable within 1 year Amounts payable between 1 and 2 years Amounts payable between 3 and 5 years Group 2008 4,027 4,027 665 8,719 2007 £ - - - - Group Company 2008 Company 2007 £ - - - - - - - - page 19 One Media Publishing Group PLC Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2008 16 Financial instruments The group's financial instruments comprise some cash and liquid resources and various items, such as trade debtors, trade creditors etc. which directly arise from its operations. The main purpose of these financial instruments is to provide finance for its operations. Trade and other short term debtors and creditors are not discussed further in this note. The main risks arising from the group's financial instruments are interest rate risk, liquidity risk and foreign exchange risk. The policies for managing each of these risks, adopted during the period of the report, are summarised below. These policies have remained unchanged throughout the period covered by the report. Interest rate risk The group finances its operations through the cash derived from its issue of equity shares. It did not enter into any interest rate derivatives transactions to manage interest rate risk. Liquidity risk As regards liquidity, the group's policy has been to retain cash surpluses not required for day to day operations in interest bearing deposit accounts. Foreign currency risk The group operates in the UK but receives substantial portions of its income in foreign currency. Material exchange rate risks in such sales contracts will be covered as appropriate. The group had no forward currency contracts in the period. Interest rate risk profile of financial assets and financial liabilities : Financial assets The group had no financial assets, excluding short term debtors, other than cash deposits, which are held as part of the group's financial arrangements. Cash deposits are held in short term or overnight deposit accounts. Maturity of financial liabilities The maturity profile of the group's financial liabilities at 31 October 2008 was as follows: In one year or less on demand Greater than one year 2008 £ 193,859 4,692 198,551 2007 £ 119,261 - 119,261 page 20 One Media Publishing Group PLC Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2008 17 Share capital Group and company Authorised : 2008 £ 2007 £ 200,000,000 ordinary shares of 0.5p each 1,000,000 1,000,000 Issued : 91,371,399 (2007 : 91,371,339) ordinary shares of 0.5p each 456,857 456,857 At 31 October 2008 the following warrants were outstanding : Year of grant 2006 2006 Period of subscription 3 years 3 years Nos of shares 10,000,000 6,000,000 16,000,000 Price per share 1p 2p No warrants were exercised during the period. 18 Reserves Group Balance at 1 November 2007 Retained (loss) for the year Share premium account £ Profit and loss account £ Total £ 663,000 - (56,354) (89,350) 606,646 (89,350) Balance at 31 October 2008 663,000 (145,704) 517,296 page 21 One Media Publishing Group PLC Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2008 19 Reserves Company Balance at 1 November 2007 Retained (loss) for the year Share premium account £ Profit and loss account £ Total £ 663,000 - (129,288) (133,411) 533,712 (133,411) Balance at 31 October 2008 663,000 (262,699) 400,301 20 Reconciliation of movements in shareholders' funds Group £ Company £ (Loss) for the year Opening shareholders' funds 21 Pension scheme (89,350) 1,063,503 974,153 (133,411) 990,569 857,158 The group does not operate or contribute into any pension schemes from the assets of the company. 22 Financial commitments At 31 October 2008 the group was committed to making the following payments under non-cancellable operating leases in the year to 31 October 2009 : Operating leases which expire : 2008 £ Group Company 2008 £ Land and buildings Group 2007 £ Company 2007 £ Within one year Within two to five years 22,070 - - - 13,700 - - - page 22 One Media Publishing Group PLC Notes to the Consolidated Financial Statements (continued) For the year ended 31 October 2008 23 Related party transactions The company has taken advantage of the exemption in FRS8 Related Party transactions in respect of disclosure of transactions with group companies. 24 Post balance sheet events On 4 February 2009 the group announced the signing of three new digital music catalogues with various owners. All the tracks will be distributed by the group's digital partner The Orchard. (i) For an initial term of ten years, the group has acquired the rights on a royalty sharing basis for the exclusive worldwide digital distribution of over 1,200 hours of classical music tracks. Known as the Red Note catalogue, it includes some of the world’s best known classics by various composers, including the 100 composers Tchaikovsky, Beethoven, Schubert and Mendelssohn to name just included in the deal. four out of (ii) In a separate and contrasting deal and for an initial consideration of £10,000, plus an onward royalty, the group has acquired the license rights for over 60 live music tracks performed by: The Sex Pistols, Lou Reed, Paul Weller, T.REX, Iggy Pop and other New Wave music from the 1970’s. (iii) Finally, for an initial consideration of £6,000 plus an onward royalty, the group has acquired a further 1,000 tracks of World Music, Folk Songs and Show Musicals. On 24th February 2009 the group announced a further significant licensing deal with EMI Music Publishing Ltd. For an initial term of one year, automatically renewing thereinafter, One Media has made available to EMI its catalogue of rights that are both published by EMI and others. Over 15% of the master rights owned or controlled by One Media are published by EMI. These tracks, plus thousands of others not published by EMI will be marketed via EMI’s network of offices worldwide. The deal, which is based on a royalty sharing basis will offer greater visibility to One Media’s audio library to the many ‘music synchronization buyers’ that regularly license music for film, TV, and advertising purposes via the EMI model. page 23 

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