Trigg Mining Limited

marketing group plc

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

annual report and accounts 
for the year ended 31 December 2010

The  Mission  Marketing  Group  plc  is  a  national  network  of  creative  communications  Agencies  with  14 
offices across the UK.

The Group enables each Agency, its people and its Clients to access skills, tools and buying power in a 
collectively advantageous way whilst retaining their own distinct personality.

We continue to attract and develop talent from across the country; and through our onemissiontm initiative, 
we unite our Agencies and our people, integrate the specialist knowledge and capabilities of the whole 
group, stimulate collaborative working and achieve more.

Thanks to share ownership and incentive schemes, we are proud that every member of the missiontm can 
have a stake in the future of the Group.

Together we are the missiontm

April-Six is the UK’s leading technology marketing Agency working with the world’s biggest technology 
brands.

Big  Communications  is  a  full-service  communications  Agency  with  a  national  reputation  for  creative 
excellence.

Bray  Leino  is  a  UK  top  20  communications  group  specialising  in:  advertising,  digital  and  media; 
direct response; PR; events and training.

Fuse Digital is an award-winning, full-service digital communications Agency.

RLA is a full service Agency specialising in automotive and retail.

Robson Brown is the North of England’s premier integrated communications Agency.

Spark is a leading sales activation Agency working with the UK’s foremost brands.

Story is an award-winning brand development and direct communications Agency.

ThinkBDW  is  the  UK’s  leading  residential  property  marketing  Agency  and  the  largest  buyer  of  estate 
agency media in the country.

Each  Agency  has  proven,  long-term  ability  to  help  its  Clients  win.  All  boast  incredibly  talented  people 
whose creative business thinking and specialist knowledge complement those of their colleagues around 
the Group. And between them they have an impressive track record of delivering tangible results for our 
Clients and for our shareholders.

Being situated largely outside central London gives the missiontm  Agencies a real competitive advantage. 

We are where our Clients are, and like them we aim to benefit from lower establishment costs. We attract 
top-flight people who seek an exciting work environment enhanced by improved quality of life. We are 
well positioned to improve our already strong environmental credentials, and invest in technology that 
helps us work sustainably, efficiently and effectively.

Our people are motivated to deliver world-class solutions. As members of the missiontm, they help create 
our future and enjoy a personal stake in our continued success.

The Mission Marketing Group plc Annual Report

2

 
 
Contents

2010 Highlights 

Chairman’s Statement 

Financial Review 

Board of Directors  

Report of the Directors  

Corporate Governance 

Independent Auditors’ Report  

Consolidated Statement of Comprehensive Income  

Consolidated Balance Sheet 

Consolidated Cash Flow Statement 

Consolidated Statement of Changes in Equity 

Notes to the Consolidated Financial Statements  

Independent Auditors’ Report: Company 

Company Balance Sheet  

Notes to the Company Balance Sheet  

Notice of Annual General Meeting  

Advisors 

Annual General Meeting Form of Proxy  

4

5

6

8

9

14 

17

18

19

20

20

21

44

45

46

52

55

56

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The Mission Marketing Group plc Annual Report

The Mission Marketing Group plc (“TMMG” or “the missiontm”), the UK marketing communications group, 
sets out its audited financial statements for the full year ended 31 December 2010. 

2010 Highlights

Overview:

•  Successful refinancing of bank and acquisition liabilities completed

•  Board restructured to become more operator-led

•  Agencies working more closely together

•  Adverse economic impact on Client budgets largely offset by net new business wins 

•  Operating margins remain above industry average

Financial summary:

•  Operating income (“revenue”) unchanged, at £36.1m

•  Pre-exceptional operating profit £4.9m (2009: £5.6m)

•  Operating margins 14% (2009: 15%)

•  Working capital cash inflow of £0.9m vs outflow of £2.6m in prior year

•  Acquisition liabilities eliminated (2009: £3.9m) 

•  Total net debt/equity improved from 49% to 34%

The Mission Marketing Group plc Annual Report

4

 
 
 
 
 
 
 
 
 
 
 
Dear reader

Chairman’s Statement

2010 was a transitional year for the missiontm. Following the refinancing of the business and the restructuring 
of the Board to become more operator-led, we set clear goals for the future: to focus on our core business, 
to help our talented Agencies provide even greater value to our Clients, to improve our profitability through 
growth and cost reductions, to pay down debt and to encourage an atmosphere that drives success.

I am pleased with the degree to which each of these goals has been achieved through 2010 and I can 
confirm that they will continue to underpin our focus in the future. As a result we move into 2011 with 
greater confidence that the missiontm can enhance its position within the UK Marketing and Advertising 
sector. We have an enviable Client list which was added to during 2010 and top talent that was further 
strengthened throughout our Group.

I am especially pleased with the endeavours of our Board and our Agency management teams who have 
responded well through a difficult period by identifying new and exciting opportunities for our businesses 
and our Clients. The synergies between our individual Agencies are now being more fully exploited with 
them  working  more  closely  together  to  provide  solutions  and  unrivalled  expertise  and  service  to  our 
Clients.

Whilst  our  focus  remains  to  support  our  core  businesses,  new  ventures  and  opportunistic  purchases  - 
such as our recent acquisition of the Robson Brown brand - should help us further accelerate our growth 
in 2011 and beyond.

In  a  nutshell,  the  new  team  has  made  a  good  start  and  I  view  the  future  with  optimism,  albeit  of  the 
cautious variety.

David Morgan
Chairman

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The Mission Marketing Group plc Annual Report

 
 
 
 
 
 
Summary

Financial Review

The new Group structure, with a reduced head office and a more operational Board, together with the 
renewed focus towards further integration of the Group’s Agencies, organic growth, cost efficiencies and 
cash management, has yielded positive results in 2010 which are expected to continue into 2011. 

Trading, Statement of Income and Dividend

As widely predicted, the difficult economic backdrop resulted in another year in which pressures on Clients’ 
marketing budgets remained high. Although all the Group’s Agencies felt the effects of this pressure, the 
impact of post-election spending cuts across the public sector was particularly acute in the Group’s Events 
& Learning and PR activities, both of which experienced year-on-year declines in revenue. New business 
across the board was hard-fought and often won at lower margins than in previous years. Against this 
background, not to mention the distraction caused by the need to re-finance the Company, the Group’s 
financial performance was very satisfactory. 

Turnover for the financial year ended 31 December 2010 increased by 5% to £90.4m (2009: £86.0m), driven 
by the strong growth in media placement activity handled by ThinkBDW, our property-specialist Agency. 
ThinkBDW’s business model, of working with property Clients to improve their return on investment in both 
on-line and traditional newspaper media, continues to hold strong appeal in the market and ThinkBDW 
has achieved some excellent new business wins during the year. Not least among these were the Clients 
of a failing competitor, to whom ThinkBDW were able to offer virtually continuous service as it fell into 
Administration. 

Operating  income  (gross  profit)  remained  unchanged,  at  £36.1m.  The  impact  of  reductions  in  Client 
budgets was offset by net new business wins totalling £2.8m during the year. The strong improvement in 
operating income in the second half of the year reflected both new business wins and also the expected 
second-half bias in underlying Client activity. The lower gross margin achieved in 2010 (40% vs 42% in 
2009)  reflects  both  the  higher  proportion  of  media  in  the  business  mix  and  the  pressure  on  margins 
experienced by the industry as a whole.

Overhead costs remained under close scrutiny across the Group, yielding a 2% year-on-year reduction 
in non-staff costs as a result. In contrast, the increase of 3% in staff costs reflected increases in front-line 
staff to handle new business wins during the year, and the re-hiring of staff from the failed Robson Brown 
Agency  in  Newcastle.  While  the  pressure  on  margins  resulted  in  a  modest  decline  in  pre-exceptional 
operating profits, to £4.9m (2009: £5.6m), operating margins, at 14% (2009: 15%) remain above average 
for the industry. 

Exceptional costs totalling £1.2m were incurred on professional fees relating to the re-structuring and re-
scheduling of bank facilities and outstanding acquisition obligations, together with amounts payable as a 
result of staff restructuring across the Group. After exceptional costs, operating profits were £3.8m (2009: 
£0.9m after goodwill impairment charges of £4.0m).

Net  interest  payable  increased  to  £2.1m  (2009:  £1.7m),  as  a  consequence  of  the  bank  fees  and  higher 
interest  costs  resulting  from  the  debt  re-financing  required  in  April,  but  interest  costs  are  expected  to 
reduce over the coming year as a result of the settlement of all outstanding vendor loan note obligations 
during 2010 and the maturing of historic interest rate hedges over the course of 2011.

Pre-exceptional profit before tax was £2.8m (2009: £3.8m). After exceptional costs, profit before tax was 
£1.6m (2009: loss of £0.9m) and the profit after tax was £0.9m (2009: loss of £2.0m). Headline diluted EPS 
was 3.5p (2009: 7.8p) and diluted EPS was 1.6p (2009: loss per share 5.5p). 

In line with our continuing focus on cash retention the Board does not propose the payment of a year  
end dividend.

Balance Sheet and Cash Flow

During  the  period,  the  balance  sheet  was  restructured  such  that  the  Group  now  has  a  much  more 
comfortable  level  of  financial  leverage.  This  was  accomplished  by  converting  the  majority  of  the 
outstanding  vendor  debt  into  equity,  and  a  private  placing  of  £1.3m  cash  which  was  used  to  redeem 
outstanding  acquisition  debt  and  associated  interest.  At  31  December  2010,  all  outstanding  acquisition 

The Mission Marketing Group plc Annual Report

6

obligations had been settled, the Group had banking facilities committed until 2013, and the gearing ratio 
of total net debt (bank plus vendor debt) to equity had reduced from 49% to 34%. Net bank debt at 31 
December 2010 was £18.5m (2009: £20.1m). Cash balances were £1.4m (2009: £0.3m) and the Group 
also had available overdraft facilities of £2.0m.

Pre-exceptional  EBITDA,  a  common  approximation  for  underlying  cash  flow,  totalled  £5.6m  in  2010, 
resulting in year-end ratio of net bank debt to EBITDA (“leverage ratio”) of x3.3. With the Board’s continuing 
focus on the use of operating cash flows to reduce the Group’s bank debt, this ratio is expected to fall 
throughout 2011.

The 2010 year-end gearing ratio could have been even further improved had it not been for the substantial 
cash costs incurred during the year on bank and professional fees associated with the debt refinancings 
in  both  2009  and  2010,  and  also  staff  restructurings.  Savings  in  these  costs  in  2011  will  undoubtedly 
benefit cash flow and levels of gearing. Furthermore, while the greater emphasis on cash management 
throughout the Group resulted in a c20% reduction in working capital levels during 2010, further reductions 
are expected in the year ahead.

At 31 December 2010, the Board undertook its annual assessment of the value of goodwill and concluded 
that no impairment in the carrying value was required, reflecting the improved prospects for the Group’s 
Agencies. Capital expenditure, at £0.7m, was maintained at similar levels to 2009. 

Treasury Policy 

The Group’s policy is not to use any financial instruments for speculating but to use hedging of interest 
rates  and  currencies  appropriate  to  the  level  of  debt  and  trade  respectively.  As  a  result  of  interest  rate 
hedges taken out in prior years, some 48% of the Group’s debt is hedged under cap or cap-and-collar 
arrangements which limit the maximum interest rate that can be paid, but also puts a floor on the minimum 
that is paid. These hedges were entered into in a much higher interest rate era and are currently expensive 
hedges. When the remaining hedges expire during 2011, the Board will re-assess the appropriateness of 
replacement hedges in the light of pricing at the time.

The  Group  does  not  have  a  material  amount  of  its  turnover  in  foreign  currencies  and  natural  hedges 
are used where possible, matching revenues and costs in the same currency. Where this is not possible, 
appropriate currency hedging is considered. 

The Group operates a virtual cash pooling arrangement where the cash balances of all the Group Agencies 
are pooled to offset any overdrafts and give the maximum net balance to invest. The maximum amount of 
this net cash balance not needed for operational cash flow is placed on short term deposit.

Taxation

The effective tax rate, after adding back the notional IFRS interest charges and the goodwill impairment 
charge, which are not taxable, was 41.9% (2009: 35.7%).

Key Performance Indicators

The Group manages its internal operational performance by monitoring various key performance indicators 
(“KPIs’’). The KPIs are tailored to the level at which they are used and their purpose. The Group’s current 
focus is on: operating income generated by Client and business development; operating profit margins; 
and cash-related measures including bank covenant test headroom and the ratio of net debt to EBITDA. 

At the individual Agency level, the KPIs comprise profitability measures including achievement of annual 
budget and net/gross margin; productivity measures including gross profit, salary costs and net profit per 
head; working capital/cash measures including debtor, creditor, WIP and working capital days; meeting 
target cash balances and cash conversion.

Compliance

This  review  has  been  prepared  in  accordance  with  the  Accounting  Standards  Board’s  2006  Reporting 
Statement.

Peter Fitzwilliam
Finance Director

7

The Mission Marketing Group plc Annual Report

David Morgan Executive Chairman
David founded Bray Leino, the Group’s largest Agency, in 1974 and was its CEO until 2008. He became Non-
Executive Chairman of Bray Leino in 2008 and was appointed Chairman of the missiontm on 14 April 2010. 
Before founding Bray Leino he worked in a number of London advertising Agencies including Dorlands.

Board of Directors

Brian Child Senior Independent Non-Executive Director
Brian  has  extensive  and  in-depth  knowledge  of  the  UK  and  European  regional  Agency  market,  having 
served as CEO of McCann Erickson Manchester, and UK Group Chairman and Chief Executive Officer of 
Momentum Europe, First Chairman of the Marketeer Association, Non-Executive Director at ROI Ltd and 
the Yes Agency. Brian also has his own consultancy business working with SMEs in the marketing services 
sector and was appointed to the Board on flotation in 2006.

Stephen Boyd Independent Non-Executive Director
Stephen is currently Chairman of two AIM-listed companies, Pittards plc and Pure Wafer plc, in addition to 
holding a number of other Board positions. Stephen has a broad and extensive base of experience in the 
UK, Europe, USA and overseas and brings additional depth in corporate finance. Stephen was appointed 
to the Board in December 2009.

Chris Morris Non-Executive Director
Chris  adds  further  operational  experience  to  the  Board  as  a  founder  partner  of  Big  Communications 
Group, bought by the missiontm in 2005 prior to its AIM listing in 2006, where he is now Non-Executive 
Chairman. Chris has gained 30 years’ industry knowledge having previously been Managing Director of 
Cogent Elliott, one of the UK’s top three regional advertising Agencies. Chris was appointed to the Board 
in December 2009.

Dylan Bogg Executive Director
Dylan is the Chief Executive of Big Communications and was one of the founding partners of the Agency. 
He had built a successful business by the age of 24 and this was used as the bedrock for the launch of 
Big Communications in 1996. Formerly Executive Creative Director of the Big group he still oversees all 
creative output. Dylan was appointed to the Board on 14 April 2010.

Robert Day Executive Director
Robert is the Chief Executive of ThinkBDW, a company he founded as Robert Day Associates in 1987 at 
the age of 22. Re-branded ThinkBDW in 2004, Robert has led the company to its position as the leading 
property marketing specialist in the UK. The business was acquired by the missiontm in March 2007 and 
Robert joined the Board on 14 April 2010.

Peter Fitzwillam Finance Director
Peter is a Chartered Accountant and has over 25 years of financial and management advisory experience 
in both private and quoted companies across a range of industry sectors. He was Finance Director of 
Business Post Group plc (now UK Mail Group plc) from 1999 to 2006 and helped take it into the FTSE 250. 
Peter was appointed to the Board on 24 September 2010.

Bruce Hutton Executive Director
Bruce is the Chief Executive of Bray Leino. He joined Bray Leino in 1997, after initially working in financial 
services and then qualitative research.  In 2002 Bruce was appointed to the management team, responsible 
for new business and the inter-group cross fertilization of Clients and services. After leading the business 
through  a  reorganization  in  2004,  Bruce  was  appointed  Managing  Director  of  the  Agency  and  digital 
business. Then in 2008 he was appointed to the newly created role of Group Chief Executive, which also 
included responsibility for the PR, Events and Training divisions. He was appointed to the Board on 14 
April 2010.

Fiona Shepherd Executive Director
Fiona is the Chief Executive of April-Six and has worked in the technology industry for over 20 years, 
holding both Client and Agency positions and working with some of the world’s largest technology 
brands. Fiona was a founder partner of April-Six in 2000, founded on a passion for technology and a 
strong belief in customer centricity. Fiona joined the Board on 14 April 2010.

The Mission Marketing Group plc Annual Report

8

 
Report of the Directors 
for the year ended 31 December 2010

The  Directors  have  pleasure  in  presenting  their  report  and  the  financial  statements  of  The  Mission 
Marketing Group plc for the year ended 31 December 2010. 

Principal Activities 

The principal activities of the Group throughout the year continued to be marketing services, providing 
national and international Clients with award winning marketing, advertising and business communications.

Review of the Business and Future Developments

A  review  of  the  business  and  future  developments  is  provided  in  the  Chairman’s  Statement  and  the 
Financial  Review.    Information  concerning  Key  Performance  Indicators  is  included  within  the  Financial 
Review, and further risk management details are provided in the Report of the Directors, below.

Dividends

In line with the continuing focus on cash retention, the Board does not propose payment of a dividend. 

Directors 

The following Directors held office during the year;

Timothy Alderson 
Nicholas Bacon 
Dylan Bogg 
Stephen Boyd
Brian Child
Robert Day 
Iain Ferguson 
Peter Fitzwilliam 
Bruce Hutton 
David Morgan  
Christopher Morris 
Susan Mullen 
Fiona Shepherd      

resigned 15 April 2010 
resigned 24 September 2010
appointed 14 April 2010

appointed 14 April 2010
resigned 15 April 2010
appointed 24 September 2010
appointed 14 April 2010
appointed 14 April 2010

appointed 14 April 2010, resigned 16 November 2010
appointed 14 April 2010

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The Mission Marketing Group plc Annual Report

Directors’ Interests in Shares and Options 

The interests of the Directors and their families in the shares of the Company were as follows:

                                      Number of ordinary shares of 10p each

   31 December 2010 

on appointment

       31 December 2009 or 

Dylan Bogg 
Stephen Boyd 
Brian Child 
Robert Day 
Peter Fitzwilliam 
Bruce Hutton 
David Morgan  
Christopher Morris 
Fiona Shepherd      

883,453 
230,768 
23,463 
6,305,603 
287,181 
1,215,459 
5,844,150 
767,409 
1,216,123 

144,049
 -
23,463
634,876
153,847
295,851
2,713,325
138,612
1,139,199

The following unexercised options over shares were held by Directors:

Directors

1 January 
2010 (or on 
appointment)

Granted

Lapsed

Exercised

31 
December 
2010 

Date from 
which 
exercisable

Expiry date

Tim Alderson

75,000

-

(75,000)

-

-

40,246

Dylan Bogg

90,000*

-

Robert Day

-

60,000

-

-

-

Iain Ferguson

200,000

-

(200,000)

(40,246)

-

-

-

-

81,900

(81,900)

Bruce Hutton

170,000*

-

-

53,000

Christopher Morris 55,000*

-

Sue Mullen

Fiona Shepherd

-

-

25,000

21,000

-

-

-

-

-

-

-

-

-

-

-

-

Jul 2012

Jul 2019

May 2010 May 2020

90,000

Jul 2013

Jul 2019

60,000

Jul 2013

Jul 2020

-

-

Jul 2012

Jul 2019

May 2010 May 2020

170,000

Jul 2013

Jul 2019

53,000

Jul 2013

Jul 2020

55,000

Jul 2013

Jul 2019

25,000

Jul 2013

Jul 2020

21,000

Jul 2013

Jul 2020

All share options in existence at 31 December 2010 are nil-cost options granted under the Company’s 
Long Term Incentive Plan.

*During  the  year,  the  vesting  conditions  applying  to  these  options  were  simplified  such  that  they  are 
now  solely  dependent  upon  the  achievement  of  profit  targets  over  the  three  year  period  ending  
31 December 2012.

The Mission Marketing Group plc Annual Report

10

 
 
    
 
Substantial Shareholdings

Other than the Director’s interests disclosed above, as at 31 March 2011, notification had been received  
of the following interests in 3% or more of in the issued share capital of the Company:

Stephen Roy James 
Nicholas Bacon 

Share Capital

Number of shares 

% 

2,510,786 
2,449,648 

3.47%  
3.38%

Details of changes to the Company’s share capital during the year are set out in note 23 of the financial 
statements.

The  issued  share  capital  of  the  Company  at  the  date  of  this  report  is  72,460,444  Ordinary  shares.  
The  total  number  of  voting  rights  in  the  Company  is  72,460,444.  No  shares  were  purchased  by  the 
Company in the year. 

Directors’ Responsibilities

The  Directors  are  responsible  for  preparing  the  Annual  Report  and  the  Group  financial  statements  in 
accordance  with  applicable  law  and  International  Financial  Reporting  Standards  as  adopted  by  the 
European Union, and the Company financial statements in accordance with applicable law and United 
Kingdom accounting standards (United Kingdom Generally Accepted Accounting Practice).

Company  law  requires  the  Directors  to  prepare  Group  and  Company  financial  statements  for  each 
financial year. The Directors must not approve the financial statements unless they are satisfied they give 
a true and fair view of the state of affairs of the Group and Company and the profit or loss of the Company 
for that period. In preparing these financial statements, the Directors are required to: 

- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed, subject to any
   material departures disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to
   presume that the Group and Company will continue in business.

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

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

Statement of Compliance

The Directors believe that throughout the year and up to the date of approval of the financial statements 
the Group and the Company have complied with the provisions set out in Section 1 of the Combined 
Code on Corporate Governance as far as is practicable and appropriate for a public company of its size 
and nature.

11

The Mission Marketing Group plc Annual Report

 
  
 
 
 
 
    
Risk Management

As  part  of  its  risk  management  strategy,  the  Board  has  a  formal  process  of  delegated  authorities 
throughout  the  Group  and  specific  risks  are  reviewed  at  Board  meetings.    The  Group  is  continually 
developing appropriate key performance indicators to better monitor the past and future performance of 
each operating unit.

The Group’s principal operating risks and uncertainties are associated with the health of the UK economy 
and the retention of key customers. The impact of the difficult economic backdrop on the Group’s results 
during the year is commented on in the Financial Review; there is a risk that a further downturn will have 
an  adverse  effect  on  the  Group’s  performance  in  the  future.  The  Group  makes  efforts  to  mitigate  any 
adverse impact through strenuous new business activity and by reducing overheads wherever possible, 
always  recognising  that  there  is  a  level  below  which  overheads  cannot  be  reduced  without  customer 
service being affected. The risk of customer loss is mitigated due to the Group’s broad spread of Clients, 
with no individual Client representing more than 5% of revenue.

Details of specific financial risk management objectives and policies of the Group are set out in notes 1, 
15 and 28 to the financial statements. The exposure of the Group to credit risk, liquidity risk, interest rate 
risk and cash flow risk is also detailed in these notes, unless insignificant. In addition, further information 
on risk management policies is set out in the Corporate Governance Report.

The Environment

The business of the Group is delivering marketing and advertising related services to Clients. The direct 
and indirect impact of these services on the environment is negligible and considered low risk, however 
we continue to take action to reduce our environmental impact where viable.

Directors’ Indemnity Insurance

As permitted by Section 233 of the Companies Act 2006, the Company has purchased insurance cover 
on behalf of the Directors, indemnifying them against certain liabilities which may be incurred by them in 
relation to the Company.

Acquisitions and Post Balance Sheet Events

There  were  no  acquisitions  in  the  year  and  all  remaining  outstanding  liabilities  on  historic  acquisitions 
were extinguished during the year. There were no material post balance sheet events.

Policy on Payments to Creditors

The Group does not have a standard code for dealing specifically with the payment of creditors. The Group 
negotiates payment terms with its suppliers on an individual basis and settles its accounts in accordance 
with those terms. Trade creditors at the year end represented 37 days purchases.

Employee Policies

It is the Group’s policy not to discriminate between employees or potential employees on any grounds.  
The  Group  is  committed  to  full  and  fair  consideration  of  all  applications.  Selection  of  employees  for 
recruitment,  training,  development  and  promotion  are  based  on  their  skills,  abilities,  and  relevant 
requirements for the job. 

The Group places considerable value on the involvement of its employees and has continued its previous 
practice  of  keeping  them  informed  on  matters  affecting  them  as  employees  and  on  various  factors 
affecting the performance of the Group. Employees are consulted regularly on a wide range of matters 
affecting their current and future interests.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes 
and abilities of the applicant concerned. In the event of members of staff becoming disabled, every effort is 
made to ensure their employment with the Group continues and that the appropriate training is arranged. 
It  is  the  policy  of  the  Group  that  the  training,  career  development  and  promotion  of  disabled  persons 
should, as far as possible, be identical to that of other employees.

The Mission Marketing Group plc Annual Report

12

Political and Charitable Donations

During the year the Group made charitable donations of £16,369 (2009: £19,300) to help support worthy 
causes, including the North Devon Hospice and Help the Hospices, along with other regional and national 
charities. Various parts of the Group have also lent their professional marketing expertise during the year 
to help charities raise their profile. The Group did not make any political donations during the year.

 Auditor Independence

The auditors, Kingston Smith LLP, provided audit, corporate tax and non-audit services during the year. 
The Audit Committee is satisfied that non-audit services have not been at a level that would compromise 
objectivity and independence. In particular, the work has been segmented within Kingston Smith. 

Disclosure of Information to Auditors

So far as the Directors are aware, there is no relevant audit information of which the Group’s auditors are 
unaware. The Directors have taken all steps that they ought to have taken as Directors in order to make 
themselves aware of any relevant audit information and to establish that the Group’s auditors are aware 
of that information.

Auditors

Kingston  Smith  LLP  have  indicated  their  willingness  to  continue  in  office  and,  in  accordance  with  the 
provisions of the Companies Act 2006, it is proposed that they be re-appointed auditors to the Company 
for the ensuing year.

Going Concern

The Directors have considered and confirm that it is appropriate to adopt the financial statements on the 
basis that the Company and Group have adequate resources for the foreseeable future. Therefore the 
Company and the Group continue to adopt the going concern basis in preparing the financial statements.

Annual General Meeting

A notice convening the Annual General Meeting to be held on Monday 13 June 2011 at 12 noon is enclosed 
with this report.

On behalf of the Board

Peter Fitzwilliam 
Finance Director
31 March 2011

13

The Mission Marketing Group plc Annual Report

Corporate Governance

The Board of The Mission Marketing Group plc is collectively accountable to the Company’s shareholders 
for  good  corporate  governance.  The  Company  complies  with  the  Combined  Code  on  Corporate 
Governance May 2010 (the “Combined Code”) as far as is practicable and appropriate for a public company 
of its size and nature.  The Company also proposes to follow the guidelines on corporate governance of 
the Quoted Companies Alliance for AIM companies. 

Board of Directors

At 31 December 2010, the Board consisted of six Executive Directors and three Non-Executive Directors. 
Given the Group’s transition from a buy-and-build strategy to an operator-led focus, with the emphasis 
on  improvements  in  profitability  through  organic  growth  and  cost  reductions,  the  Board  considered  it 
appropriate  to  appoint  the  CEOs  of  each  of  the  Group’s  principal  Agencies  to  the  Board  and  to  elect 
David Morgan, the founder of the Group’s largest Agency, as Executive Chairman. David’s track record 
of running Bray Leino from formation in 1974 until he moved to a non-executive role in 2008, is very 
successful. He is well regarded both within the missiontm and within the industry and the Board concluded 
that, although combining the roles of Chairman and Chief Executive does not meet Combined Code “best 
practice”, his appointment as Executive Chairman was appropriate for the changed circumstances.

Brian  Child  and  Stephen  Boyd  are  Non-Executive  Directors  and  are  considered  to  be  independent  
of management and free from any business or other relationship with the Company other than owning 
shares. One Non-Executive Director, Chris Morris, is not considered to be independent of management 
by virtue of being a Board Director with operational roles in Big Communications Ltd and Fuse Digital Ltd. 

The Directors are collectively responsible for the strategic direction, investment decisions and effective 
control of the Group. There is a schedule of matters reserved for Board approval which includes, amongst 
other  things,  approval  of  the  Group’s  annual  budget,  acquisition  of  new  subsidiaries,  property  leases, 
significant  acquisitions  or  disposals  of  fixed  assets,  and  material  Client  contracts.  The  Board  meets  in 
person at least six times each year and has regular telephonic and electronic contact in between meetings. 

The Board is satisfied that it receives information of a quality and to a timetable that permits it to discharge 
its duties.

All  Directors  are  subject  to  election  by  Shareholders  at  the  first  opportunity  after  their  appointment.  
They are required to retire every three years and may seek re-appointment. 

The Board has established three committees to deal with specific aspects of the Company’s affairs. 

Audit Committee

The Audit Committee consists of the two independent Non-Executive Directors, with Stephen Boyd as 
Chairman. The Committee considers matters relating to the reporting of results, financial controls, and the 
cost and effectiveness of the audit process. It aims to meet at least twice a year with the Company’s external 
auditors in attendance. Other Directors attend as required. The terms of reference of the Committee are 
available on request.

The Audit Committee is satisfied that the Group’s auditors, Kingston Smith LLP, have been objective and 
independent of the Group. Kingston Smith LLP performs non-audit services for the Group in relation to 
tax and acquisitions but the Audit Committee is satisfied that their objectivity and independence is not 
impaired by such work. 

The Mission Marketing Group plc Annual Report

14

Remuneration Committee

The  Remuneration  Committee  consists  of  the  two  independent  Non-Executive  Directors,  with  Brian 
Child as Chairman. The Committee determines the remuneration of the Executive Directors and makes 
recommendations  to  the  Board  with  regard  to  remuneration  policy  and  related  matters.  The  Board 
maintains  a  policy  of  providing  executive  remuneration  packages  that  will  attract,  motivate  and  retain 
Directors of the calibre necessary to deliver the Group’s growth strategy and to reward them for enhancing 
shareholder value.

With the exception of Peter Fitzwilliam, whose services as Interim Finance Director are provided by VPF 
London Ltd, the Executive Directors’ remuneration packages consist of three elements:

•  basic salary and benefit package
•  performance-related  bonus  –  the  Company  operates  a  performance-related  bonus  scheme, 

related to the delivery of profit targets

•  share option incentives – details of share options granted to the Executive Directors at the  

discretion of the Remuneration Committee are shown in the Directors’ report.

Since Peter Fitzwilliam’s services are provided via VPF London Ltd, he is not eligible for benefits, performance 
related  bonuses  or  share  option  incentives.  The  Remuneration  Committee  reviews  the  components  of 
each Executive Director’s remuneration package annually. The remuneration and terms and conditions 
of appointment of the Non-Executive Directors are determined by the Board. No Director is involved in 
setting  his  or  her  own  remuneration.  The  Remuneration  Committee  meets  as  and  when  required.  The 
terms of reference of the Committee are available on request.

Nomination Committee

The  Nomination  Committee  consists  of  the  Company’s  Executive  Chairman,  David  Morgan,  as  the 
Committee Chairman, and the two Non-Executive Directors. The Committee is responsible for reviewing 
and making proposals to the Board on the appointment of Directors and meets as necessary. The terms 
of reference of the Committee are available on request.

Summary of Directors’ Attendance 

Board 
meetings

Remuneration 
Committee

Audit Committee

Nomination 
Committee

Entitled  
to attend Attended

Entitled  
to attend Attended

Entitled  
to attend Attended

Entitled
to attend

Attended

5

10

7

12

12

7

5

2

7

7

12

7

7

5

10

6

12

12

7

5

2

7

7

12

3

7

n/a

n/a

n/a

1

1

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

1

1

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

2

2

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

2

2

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

2

2

n/a

n/a

n/a

n/a

1

n/a

n/a

n/a

n/a

n/a

n/a

2

2

n/a

n/a

n/a

n/a

1

n/a

n/a

n/a

Timothy Alderson

Nicolas Bacon

Dylan Bogg

Stephen Boyd

Brian Child

Robert Day

Iain Ferguson

Peter Fitzwilliam

Bruce Hutton

David Morgan

Chris Morris

Susan Mullen

Fiona Shepherd

15

The Mission Marketing Group plc Annual Report

 
 
 
 
 
 
 
Shareholder Communications

The Company believes in good communication with shareholders. The Board encourages shareholders to 
attend its Annual General Meeting. The Chairman and the Finance Director meet analysts and institutional 
shareholders periodically in order to ensure that the strategy and performance of the Company are clearly 
understood, and they provide the first point of contact for any queries raised by shareholders. In the event 
that these Directors fail to resolve any queries, or where a Non-Executive Director is more appropriate, the 
Senior Independent Director, Brian Child, is available to meet shareholders.

Internal Financial Control

The Board is responsible for ensuring that the Group maintains a system of internal financial controls. The 
objective of the system is to safeguard Group assets, ensure proper accounting records are maintained and 
that the financial information used within the business and for publication is timely and reliable. Any such 
system can only provide reasonable, but not absolute, assurance against material loss or misstatement. 

The Board does not consider it would be appropriate to have its own internal audit function at the present 
time, given the Group’s size and the nature of its business. At present the internal audit of internal financial 
controls forms part of the responsibilities of the Group’s finance function.

All the day to day operational decisions are taken initially by the Executive Directors, in accordance with 
the Group’s strategy. The Executive Directors are also responsible for initiating commercial transactions 
and approving payments, save for those relating to their own employment. 

The key internal controls include the specific levels of delegated authority and the segregation of duties; 
the prior approval of all acquisitions; the review of pertinent commercial, financial and other information 
by the Board on a regular basis; the prior approval of all significant strategic decisions; and maintaining a 
formal strategy for business activities.

On behalf of the board

Peter Fitzwilliam 
Finance Director
31 March 2011

The Mission Marketing Group plc Annual Report

16

 
Independent Auditors’ Report to the Members of The Mission Marketing Group plc

We  have  audited  the  financial  statements  of  The  Mission  Marketing  Group  plc  for  the  year  ended  31 
December 2010 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated 
Balance Sheet, the Consolidated Cash Flow Statement, the Consolidated Statement of Changes in Equity 
and  the  related  notes.  The  financial  reporting  framework  that  has  been  applied  in  their  preparation  is 
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 
of the Companies Act 2006. Our audit work has been undertaken for no purpose other than to draw to the 
attention of the Company’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 Company and Company’s members as a body, for our work, for this report, or for 
the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the Directors’ Responsibilities Statement set out on page 11 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 Auditing Practices Board’s (APB’s) Ethical Standards for Auditors. 

Scope of the audit of the financial statements

An  audit  involves  obtaining  evidence  about  the  amounts  and  disclosures  in  the  financial  statements 
sufficient to give reasonable assurance that the financial statements are free from material misstatement, 
whether caused by fraud or error. This includes an assessment of: whether the accounting policies are 
appropriate to the Group’s circumstances and have been consistently applied and adequately disclosed; 
the reasonableness of significant accounting estimates made by the directors; and the overall presentation 
of the financial statements. 

Opinion on financial statements

In our opinion the Group financial statements:

•  give a true and fair view of the state of the Group’s affairs as at 31 December 2010 and of its 

profit for the year then ended;

•  have been properly prepared in accordance with IFRSs as adopted by the European Union; and
•  have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

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:

•  certain disclosures of directors’ remuneration specified by law are not made; or
•  we have not received all the information and explanations we require for our audit.

Other matter

We have reported separately on the parent company financial statements of The Mission Marketing Group 
plc for the year ended 31 December 2010. 

Cliff Ireton 
Senior Statutory Auditor   
for and on behalf of Kingston Smith LLP, Statutory Auditor  
141 Wardour St, 
London, W1F 0UT
31 March 2011

17

The Mission Marketing Group plc Annual Report

 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statement of Comprehensive Income 
for the year ended 31 December 2010 

Year ended 
31 December 
2010

Year ended 
31 December 
2009

Note

£’000

£’000

TURNOVER
Cost of sales

OPERATING INCOME

Operating expenses before exceptional items

OPERATING PROFIT BEFORE EXCEPTIONAL ITEMS
Goodwill impairment
Other exceptional costs

OPERATING PROFIT
Investment income
Finance costs
IFRS interest charges

PROFIT / (LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION
Taxation

PROFIT / (LOSS) FOR THE YEAR

Other comprehensive income

TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR

Basic earnings per share (pence)
Diluted earnings per share (pence)
Headline basic earnings per share (pence)
Headline diluted earnings per share (pence)

2

12
4

5
6
6

2,7
9

11
11
11
11

The earnings per share figures derive from continuing and total operations.

90,364

(54,292)

36,072

(31,155)

4,917

-
(1,154)
3,763
6
(2,147)
(5)

1,617

(680)

937

-

937

1.67
1.59
3.66
3.48

85,976

(49,837)

36,139

(30,573)

5,566

(3,995)
(705)
866
11
(1,799)
57

(865)

(1,097)

(1,962)

-

(1,962)

(5.54)
(5.54)
7.96
7.84

The Mission Marketing Group plc Annual Report

18

Consolidated Balance Sheet 
as at 31 December 2010

FIXED ASSETS
Intangible assets
Property, plant and equipment

CURRENT ASSETS
Work in progress
Trade and other receivables
Cash and short term deposits 

CURRENT LIABILITIES
Trade and other payables

Accruals

Corporation tax payable

Bank loans

Acquisition loan notes and shares

Acquisition contingent payments

NET CURRENT ASSETS / (LIABILITIES)

TOTAL ASSETS LESS CURRENT LIABILITIES

NON CURRENT LIABILITIES 
Bank loans
Obligations under finance leases
Acquisition contingent payments
Deferred tax liabilities

NET ASSETS

CAPITAL AND RESERVES
Called up share capital
Share premium account
Own shares
Staff remuneration reserve
Retained earnings

TOTAL EQUITY

Note

12
14

15
16

17

18

20

20

18
19
20
21

23

24
25

As at 
31 December 
2010  

As at 
31 December 
2009  

£’000

68,261
1,972

70,233

489
22,297
1,438

24,224

(8,687)

(10,726)

(342)

(3,000)

-

-

(22,755)

1,469

71,702

(16,903)
(96)
-
(2)

(17,001)

54,701

7,246
39,542
(1,259)
134
9,038

54,701

£’000

68,214
2,031

70,245

525
16,958
281

17,764

(10,585)

(2,729)

(810)

(2,443)

(314)

(2,621)

(19,502)

(1,738)

68,507

(17,914)
(153)
(1,000)
(21)

(19,088)

49,419

3,959
38,578
(1,398)
60
8,220

49,419

The financial statements were approved and authorised for issue on 31 March 2011 by the Board of 
Directors. They were signed on its behalf by:

Peter Fitzwilliam 
Director 

Company registration number: 05733632

19

The Mission Marketing Group plc Annual Report

Consolidated Cash Flow Statement
for the year ended 31 December 2010

OPERATING CASH FLOWS
Net finance costs 
Tax paid

Net cash inflow / (outflow) from operating activities

INVESTING ACTIVITIES
Proceeds on disposal of property, plant and equipment
Purchase of property, plant and equipment
Acquisition of subsidiaries
Acquisition of intangibles

Net cash outflow from investing activities

FINANCING ACTIVITIES
Repayments of acquisition liabilities
Movement in HP creditor and finance leases
Repayment of long term bank loans
Proceeds on issue of ordinary share capital
Financing and share issue costs

Net cash outflow from financing activities

Increase / (Decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Consolidated Statement of Changes in Equity
year ended 31 December 2010

Note

27

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000

5,438
(2,583)
(1,229)

1,626

16
(664)
(52)
-

(700)

(945)
(69)
(12)
1,279
(22)

231

1,157
281

1,438

£’000

3,315
(1,757)
(1,778)

(220)

48
(720)
(118)
(20)

(810)

(2,347)
215
(53)
1,000
(30)

(1,215)

(2,245)
2,526

281

Share 
capital
£’000

Share 
premium
£’000

Own  
shares
£’000

Retained 
earnings
£’000

Staff 
remuneration 
reserve
£’000

Total
£’000

Changes in equity

At 1 January 2009

3,308

36,643

(1,398)

9,129

800

48,482

New shares issued
Credit for share option scheme
Waiver of share options
Loss for the period

At 31 December 2009

New shares issued
Credit for share option scheme
Shares awarded to employees 
from own shares
Profit for the period

651
-
-
-

3,959

3,287
-
-

-

1,935
-
-
-

-
-
-
-

-
-
1,053
(1,962)

38,578

(1,398)

8,220

964
-
-

-

-
-
139

-
-
(119)

-

937

-
313
(1,053)
-

60

-
74
-

-

2,586
313
-
(1,962)

49,419

4,251
74
20

937

At 31 December 2010

7,246

39,542

(1,259)

9,038

134

54,701

The Mission Marketing Group plc Annual Report

20

Notes to the Consolidated Financial Statements

1. Accounting Policies 

Basis of preparation

The annual financial statements have been prepared in accordance with International Financial Reporting 
Standards (IFRS) adopted by the European Union.

The financial statements have been prepared on the historical cost basis.

Going concern

The  Board  has  substantially  strengthened  the  Group’s  balance  sheet  in  the  year.    Bank  debt  has  been 
rescheduled,  with  committed  facilities  available  to  2013,  acquisition  liabilities  have  been  eliminated 
through equity conversion and a placing of new shares, and the focus on cash management across the 
Agencies has resulted in stronger operating cash flows.  

The available banking facilities provide comfortable levels of headroom against the Group’s projected cash 
flows and the Directors accordingly consider that it is appropriate to continue to adopt the going concern 
basis in preparing these financial statements.

Basis of consolidation

The  Group’s  financial  statements  consolidate  the  financial  statements  of  the  Company  and  entities 
controlled  by  the  Company  (its  subsidiaries)  made  up  to  31  December  each  year.  Control  is  achieved 
where the Company has the power to govern the financial and operating polices of an investee entity so 
as to obtain benefits from its activities.

On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair 
values  at  the  date  of  acquisition.  Goodwill  represents  the  excess  of  acquisition  cost  over  the  fair  value 
of  the  Group’s  share  of  the  identifiable  net  assets  of  the  acquired  subsidiary  at  the  date  of  acquisition. 
Any deficiency of the cost of acquisition below the fair value of the identifiable net assets acquired (i.e. 
discount on acquisition) is credited to profit or loss in the period of acquisition.

The  results  of  subsidiaries  acquired  or  disposed  of  during  the  year  are  included  in  the  consolidated 
statement of comprehensive income from the effective date of acquisition or up to the effective date of 
disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring accounting 
policies used into line with those used by the Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Revenue and revenue recognition

Turnover is in respect of the provision of services including fees, commissions, rechargeable expenses and 
sales  of  materials  performed  subject  to  specific  contracts.  Where  recorded  turnover  exceeds  amounts 
invoiced to Clients, the excess is classified as accrued income.

Income is taken on fee income in the period to which it relates. Project income is recognised in the period in 
which the project is worked on. For projects which straddle the accounting year end, income is recognised 
to reflect the partial performance of the contractual obligations in accordance with IAS 18 Revenue. 

21

The Mission Marketing Group plc Annual Report

Income is recognised on the following basis:

•  Retainer fees are apportioned over the time period to which they relate.
•  Project income is recognised by apportioning the fees billed or billable to the time period for  
  which those fees were earned by relationship to the percentage of completeness of the project  

to which they relate.

•  Media commission is recognised when the advertising has been satisfactorily aired or placed.
•  Unbilled costs relating to contracts for services are included at rechargeable value in 

accrued income.

•  Unbilled costs relating to contracts for products are carried forward at the lower of cost and 
  net realisable value with no profit recognition.
•  Financial liabilities are released to income when the liability is extinguished.

Share-based payment transactions

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

Equity-settled  share-based  payments,  such  as  share  options,  are  measured  at  fair  value  at  the  date  of 
grant. The fair value determined at the grant date of the equity-settled share payments is expensed on a 
straight-line basis over the vesting period, based on the Group’s estimate of the number of shares that will 
eventually vest.

Fair value is measured by use of a Black Scholes model on the grounds that there are no market related 
vesting conditions. The expected life used in the model has been adjusted, based on the management‘s 
best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. 
Market price on any given day is obtained from external publicly available sources.

Pension costs

Retirement benefits to employees are provided by defined contribution schemes that are funded by the 
Group and employees. Payments are made to pension trusts that are financially separate from the Group. 

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the 
balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange 
ruling at the date of the transaction. Exchange differences are reflected in the profit or loss accordingly.

Goodwill

Goodwill  arising  from  the  purchase  of  subsidiary  undertakings  represents  the  excess  of  the  cost  of 
acquisition over the Group’s interest in the fair value of the identifiable assets, liabilities and contingent 
liabilities of the subsidiary acquired, and is capitalised in accordance with the requirements of IFRS 3. The 
Directors consider that it is not possible to reliably separate and value intangible assets relating to brand 
names,  customer  relationships  and  contractual  relationships.  Future  anticipated  payments  to  vendors 
in  respect  of  earn-outs  are  based  on  the  Directors’  best  estimates  of  these  obligations.  Earn-outs  are 
dependent on the future performance of the relevant business and are reviewed annually. The deferred 
consideration is discounted to its fair value in accordance with IFRS 3 and IAS 39. The difference between 
the fair value of these liabilities and the actual amounts payable are charged to profit or loss as notional 
finance costs over the life of the associated liability.

Goodwill is not amortised, but is reviewed annually for impairment. Goodwill impairment is assessed by 
comparing the carrying value of goodwill to the net present value of future cash flows derived from the 
underlying  assets  considering  forecast  cash  flows  over  an  initial  projection  period  of  up  to  three  years 
for  each  cash-generating  unit.  After  this  period,  growth  rates  equivalent  to  nominal  GDP  are  generally 
assumed.  In  accordance  with  IFRS  3  the  carrying  value  of  goodwill  will  continue  to  be  reviewed  for 
impairment on the basis stipulated and adjusted should this be required. Any impairment is recognised in 
profit or loss and is not subsequently reversed. 

The Mission Marketing Group plc Annual Report

22

 
 
 
 
 
 
 
 
Property, plant and equipment

Tangible  fixed  assets  are  stated  at  cost  less  accumulated  depreciation.  Depreciation  is  provided  on  all 
property, plant and equipment at rates calculated to write off the cost, less estimated residual value based 
on prices prevailing at the date of acquisition, of each asset evenly over its expected useful economic life, 
as follows:

Short leasehold property  
Motor vehicles 
Fixtures, fittings and office equipment 
Computer equipment 

Period of the lease
25% per annum
10-33% per annum
25-33% per annum

Assets  held  under  finance  leases  are  depreciated  over  their  expected  useful  lives  on  the  same  basis  as 
owned assets or, where shorter, the term of the relevant lease.

The  gain  or  loss  arising  on  the  disposal  of  an  asset  is  determined  as  the  difference  between  the  sales 
proceeds and the carrying amount of the asset and is recognised in profit or loss.

Work in progress

Work in progress is stated at the lower of cost and net realisable value and includes the costs of direct 
materials and purchases, and the costs of direct labour. Net realisable value is based on estimated invoice 
value less further costs expected to be incurred to completion.

Deferred taxation

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts 
of assets and liabilities in the financial statements and the corresponding tax bases used in the computation 
of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are 
generally recognised for all taxable temporary differences and deferred tax assets are recognised to the 
extent it is probable that taxable profits will be available against which deductible temporary differences 
can  be  utilised.  Such  assets  and  liabilities  are  not  recognised  if  the  temporary  differences  arise  from 
goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities 
in a transaction that affects neither the tax profit nor the accounting profit.

Deferred  tax  liabilities  are  recognised  for  taxable  temporary  differences  arising  on  investments  in 
subsidiaries, except where the Group is able to control the reversal of the temporary differences and it is 
probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the 
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the 
asset to be recovered.

Deferred  tax  is  calculated  at  the  tax  rates  that  are  expected  to  apply  in  the  period  when  the  liability  is 
settled or the asset is realised. Deferred tax is charged or credited in profit or loss, except when it relates 
to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred consideration

The  terms  of  an  acquisition  may  provide  that  the  value  of  the  purchase  consideration,  which  may  be 
payable in cash, shares or other security at a future date, depends on uncertain future events, such as the 
future performance of the acquired company. Where it is not possible to estimate the amounts payable 
with any degree of certainty, the amounts recognised in the financial statements represent a reasonable 
estimate  at  the  balance  sheet  date  of  the  amounts  expected  to  be  paid.  The  deferred  consideration  is 
discounted to a fair value. The difference between the fair value of the liabilities and the actual amounts 
payable are charged to the profit or loss as notional finance costs (calculated at annual rates of between 
4.5% and 5.5%) over the life of the associated liability. The rate used is the risk free rate applicable at the 
time of acquisition of the relevant entity. 

23

The Mission Marketing Group plc Annual Report

Where it becomes appropriate to increase or decrease a previous estimate of deferred consideration, an 
adjustment is made to the current year IFRS interest charge, such that the cumulative interest charged 
to  the  date  of  change  reflects  the  amount  of  interest  charge  that  would  have  been  expensed  had  the 
revised estimate of the deferred consideration been made at the date that the liability was first recognised.  
By so doing, the total interest expensed over the life of the liability is calculated as a function of the latest 
expectation and is not influenced by any previous estimates whether higher or lower, and fully reflects the 
intention of IFRS 3.

Financial instruments

Financial  assets  and  financial  liabilities  are  recognised  on  the  Group’s  balance  sheet  when  the  Group 
becomes a party to the contractual provisions of the instrument. Issue costs are offset against the proceeds 
of such instruments. 

Liabilities and equity

Financial  liabilities  and  equity  instruments  are  classified  according  to  the  substance  of  the  contractual 
arrangements entered into. An equity instrument is any contract that evidences a residual interest in the 
assets of the Group after deducting all of its liabilities. The Group has only one class of share in existence.

Finance costs

Finance  costs,  which  include  interest,  bank  charges  and  the  unwinding  of  the  discount  on  deferred 
consideration, are recognised in profit or loss in the year in which they are incurred. Bank debt renegotiation 
fees are amortised over the life of the loan facility.

Accounting estimates and judgements

The Group makes estimates and judgements concerning the future and the resulting estimates may, by 
definition,  vary  from  the  actual  results.  The  Directors  considered  the  critical  accounting  estimates  and 
judgements used in the financial statements and concluded that the main areas of judgement are:

•  Revenue recognition policies in respect of contracts which straddle the year end;
•  Contingent deferred payments in respect of acquisitions; 
•  Recognition and quantification of share based payments; and
•  Valuation of intangible assets.

These estimates are based on historical experience and various other assumptions that management and 
the Board of Directors believe are reasonable under the circumstances and are discussed, to the extent 
necessary, in more detail in their respective notes.

IFRS in issue but not applied in the current financial statements

The following IFRS and IFRIC Interpretations have been issued but have not been applied by the Group 
in preparing these financial statements as they are not as yet effective. The Group intends to adopt these 
Standards and Interpretations when they become effective, rather than adopt them early. None of these 
Standards and Interpretations are anticipated to have a significant impact on the Group.

IAS 24 (Revised), ‘Related party disclosures’, effective 1 January 2011
IFRS 9, ‘Financial instruments’, effective 1 January 2013
‘Classification of rights issues’ (amendment to IAS 32), effective 1 February 2010
IFRIC 19, ‘Extinguishing financial liabilities with equity instruments’, effective 1 July 2010
‘Prepayments of a minimum funding requirement’ (amendments to IFRIC 14), 

• 
• 
• 
• 
• 
  effective 1 January 2011
• 

Improvements to IFRSs (May 2010) which makes minor amendments to various Standards. 

A  number  of  IFRS  and  IFRIC  Interpretations  are  also  currently  in  issue  which  are  not  relevant  for  the 
Group’s activities and which have not therefore been adopted in preparing these financial statements.

The Mission Marketing Group plc Annual Report

24

 
 
 
 
 
 
 
 
 
 
 
 
 
2. Segmental Information 

Business Segmentation

For management purposes the Group had seven operating subsidiaries during the period: April-Six Limited, 
Big Communications Limited, Bray Leino Limited, Fuse Digital Limited, RLA Group Limited, Story UK Limited 
and Think BDW Limited. These have been divided into four business and operating segments as defined by 
IFRS 8 which form the basis of the Group’s primary reporting segments, namely: Branding, Advertising and 
Digital; Media; Events and Learning; and Public Relations. In the 2009 financial statements we disclosed a 
Branding and Advertising segment and a Digital segment separately. Digital has become such an integral 
part of our business that the distinction between these two segments has become increasingly blurred 
and  any  split  increasingly  arbitrary.  Accordingly,  the  two  segments  have  been  combined  into  a  single 
Branding,  Advertising  and  Digital  segment  in  the  current  year’s  financial  statements,  and  the  prior  year 
comparatives have been adjusted accordingly.

Year to 31 December 2010

£’000

£’000

£’000

£’000

£’000

Branding, 
Advertising 
& Digital

Media

Events & 
Learning

Public 
Relations

Group

Turnover

Operating income

Segmental operating profit

Unallocated corporate expenses
Operating profit before  
exceptional items
Other exceptional costs
Operating profit
Investment income
Finance costs
IFRS interest charges
Profit on ordinary activities  
before taxation 
Taxation
Loss for period

Other Information
Capital expenditure
Unallocated capital expenditure
Total capital expenditure

Depreciation and amortisation
Unallocated depreciation and 
amortisation
Total depreciation and amortisation

Balance Sheet
Assets
Segment assets
Unallocated corporate assets
Consolidated total assets
Liabilities
Segment Liabilities
Unallocated corporate liabilities
Consolidated total liabilities

44,163

26,916

4,820

33,565

10,025

3,434

1,035

3,799

199

2,611

1,923

91

465

47

127

516

44

97

24

45

19,705

6,134

1,001

423

13,521

5,996

781

332

90,364

36,072

6,145

(1,228)

4,917

(1,154)
3,763
6
(2,147)
(5)

1,617

(680)
937

663
1
664

702

23

725

27,263
67,194
94,457

20,630
19,126
39,756

Consolidated net assets

6,184

138

220

91

54,701

25

The Mission Marketing Group plc Annual Report

Unallocated  corporate  expenses  include  corporate  administration  expenses  necessary  for  a  quoted 
company. It is considered impractical to split the debt interest and notional IFRS charges into segments. In 
prior years, the Company levied an annual fee on one of its subsidiaries, reducing unallocated corporate 
expenses and the profits reported by the Branding and Advertising segment. This practice ceased in 2010 
and the prior year unallocated costs have been restated onto a consistent basis.

The  split  of  assets  and  liabilities  has  been  estimated,  but  is  not  considered  accurate  as  the  businesses 
are integrated. Unallocated corporate assets and liabilities include unallocated IFRS assets and liabilities, 
corporate assets and liabilities, Group cash reserves, drawn debt liabilities and payments due to vendors.

Year to 31 December 2009

Turnover
Operating income
Segmental operating profit
Unallocated corporate expenses
Operating profit before  
exceptional items
Goodwill impairment
Other exceptional costs
Operating profit
Investment income
Finance costs
IFRS interest charges
Loss on ordinary activities  
before taxation 
Taxation
Loss for period

Other Information
Capital expenditure
Unallocated capital expenditure
Total capital expenditure

Depreciation and amortisation
Unallocated depreciation and 
amortisation
Total depreciation and amortisation

Balance Sheet
Assets
Segment assets
Unallocated corporate assets
Consolidated total assets
Liabilities
Segment liabilities
Unallocated corporate liabilities
Consolidated total liabilities

Branding, 
Advertising 
& Digital

Media

Events & 
Learning

Public 
Relations

£’000

42,683
26,981
5,135

£’000

29,407
2,994
1,286

£’000

10,747
3,995
262

£’000

3,139
2,169
284

543

18

111

43

521

31

103

40

13,424

4,898

936

1,153

7,929

2,261

395

492

Group

£’000

85,976
36,139
6,967
(1,401)

5,566

(3,995)
(705)
866
11
(1,799)
57

(865)

(1,097)
(1,962)

715
5
720

695

35

730

20,411
67,598
88,009

11,077
27,513
38,590

Consolidated net assets

5,495

2,637

541

661

49,419

The Mission Marketing Group plc Annual Report

26

Geographical Segmentation

The Group’s operations are all based in the UK and substantially all the Group’s business is executed  
in the UK.

3. Reconciliation of Headline Profit to Reported Profit

Headline profit before finance costs,  
income from investments and taxation
Net finance costs

Headline profit before taxation

Adjustments
Redundancy and restructuring costs
Goodwill impairment
Other exceptional costs
IFRS interest (charges) / credits

Reported profit / (loss) before taxation

Headline profit before tax
Headline taxation 

Headline profit after taxation

Adjustments
Redundancy and restructuring costs
Goodwill impairment
Other exceptional costs
IFRS interest charges
Taxation impact

Reported profit / (loss) after taxation

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000

5,304
(2,141)

3,163

(387)
-
(1,154)
(5)

1,617

3,163
(1,111)

2,052

(387)
-
(1,154)
(5)
431

937

£’000

6,030
(1,788)

4,242

(464)
(3,995)
(705)
57

(865)

4,242
(1,424)

2,818

(464)
(3,995)
(705)
57
327

(1,962)

The IFRS interest charges relate to both the deferred consideration and the bank arrangement fees. 

4. Other Exceptional Costs

Bank refinancing costs
Restructuring costs

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000

470
684

1,154

£’000

705
-

705

Bank  refinancing  costs  consist  of  professional  fees  relating  to  the  restructuring  and  rescheduling  
of the bank facilities and outstanding acquisition obligations.

Restructuring costs consist of amounts payable for loss of office as a result of the restructuring of the 
Board and the exit of vendor management following refinancing.

27

The Mission Marketing Group plc Annual Report

              
    
  
5. Investment Income

Interest on bank deposits

6. Finance Costs and IFRS Interest Charges

Finance costs:
Interest on bank loans and overdrafts
Interest on loan notes
Amortisation of bank debt renegotiation fees

IFRS interest charges:
Finance cost of deferred consideration

7. Profit on Ordinary Activities before Tax

Profit on ordinary activities before taxation is stated after charging:

Depreciation of owned tangible fixed assets
Depreciation of tangible fixed assets held under finance leases
Amortisation of intangible assets
Profit on disposal of property, plant and equipment
Operating lease rentals - land and buildings
Operating lease rentals - plant and equipment
Operating lease rentals - other assets
Staff costs (see note 8)
Auditors’ remuneration
Loss / (Profit) on foreign exchange

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000

6

£’000

11

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000

(1,508)
(306)
(333)

(2,147)

£’000

(1,307)
(210)
(282)

(1,799)

(5)

57

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000

657
64
4
(14)
981
338
89
24,051
153
115

£’000

717
9
4
(10)
987
358
-
22,618
190
(79)

The Mission Marketing Group plc Annual Report

28

 
Auditors’ remuneration may be analysed by:

Audit fees
Taxation
Non-audit fees

Year to
31 December 
2010

Year to
31 December 
2009

£’000

£’000

110
20
23

153

143
25
22

190

Non-audit fees include advice on various International Financial Reporting Standards and advice in relation 
to business issues such as future deal structures and employee incentive schemes. 

8. Employee Information 

The number of Directors and staff employed by the Group as at year end, analysed by segment, was as 
follows:

Branding, Advertising & Digital
Media
Events and Learning
Public Relations
Unallocated

Year to 
31 December 
2010
Number
409
29
107
35
3

Year to 
31 December 
2009
Number
384
25
119
32
5

583

565

The aggregate employee costs of these persons for the relevant periods for which the companies results 
were consolidated were as follows:

Wages and salaries
Social security costs
Pension costs
Payments for loss of office

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000
20,562
2,150
618
721

24,051

£’000
19,915
2,182
521
-

22,618

29

The Mission Marketing Group plc Annual Report

    
 
 
Directors’ Remuneration

Included in the above are the following amounts paid to Directors for the periods in each year they were 
TMMG plc Directors. 

Salary / 
Fees

Compensation 
for loss  
of office

34,300

111,222

76,187

150,000

     - 

88,146

14,582

23,583

80,000

Bonus Benefits Pension

Total
31 December 
2010

Total
31 December 
2009

2,401

-

147,923

127,890

3,929

2,704

232,820

90,127

- 

- 

        -

23,400  

1,037

6,906

96,089

-

- 

- 

- 

- 

-

14,582

20,000

23,583

17,333  

141,462

-

- 58,000

3,462

-

-

-

-

      58,915 

217,936

-       4,124 

       -  

280,975

    234,162

35,971

92,083

85,708

75,300

59,224

82,916

-

-

-

-

-

-

- 

- 

10,150

- 

-

35,971

102,233

16,137

17,000

118,845

5,428

2,250

82,978

94,122

-

5,922

65,146

10,000

930

-

93,846

-

-

-

-

-

806,915 

479,158 68,000  47,598  34,782  

1,436,453  

   607,034  

-

-

- 

- 

- 

- 

-

-

-

-

Tim Alderson 
(note 1)

Nick Bacon  
(note 2)

Rt Hon. Francis 
Maude

Dylan Bogg  
(note 3)

Stephen Boyd 
(note 4)

Brian Child  
(note 5)

Robert Day  
(note 3)

Iain Ferguson 
(note 1)

Peter Fitzwilliam 
(note 6)

Bruce Hutton 
(note 3)

David Morgan 
(note 7)

Christopher 
Morris (note 8)

Sue Mullen  
(note 9)
Fiona Shepherd 
(note 3)

Notes:

1.  Tim Alderson and Iain Ferguson were Directors of TMMG plc until 15 April 2010.
2.  Nick Bacon, a Director until 24 September, was paid £7,115 as a TMMG plc Director and in addition was 

paid as a Director and employee of Bray Leino for his services there. 

3.  Dylan Bogg, Robert Day, Bruce Hutton and Fiona Shepherd, Directors since 14 April, were paid £nil as 
TMMG plc Directors, but were paid as Directors and employees of subsidiary companies for services 
rendered there.

4.  The  services  of  Stephen  Boyd  as  a  TMMG  plc  Director  were  provided  through  Stephen  Boyd  Ltd,  

a company controlled by him. 

5.  The services of Brian Child as a TMMG plc Director were provided through Brain Child Marketing Ltd, 

a company controlled by him.

6.  The services of Peter Fitzwilliam as a TMMG plc Director from 24 September were provided by VPF 

London Ltd, a company controlled by him. 

7.  David Morgan was appointed to the Board on 14 April.
8.  Chris Morris was paid £17,584 as a TMMG plc Director. In addition, he was paid as a Director of Big 
Communications Ltd and for his consulting services provided there, through a consultancy practice 
owned by him, Morris Marketing Consultancy.

9.  Sue Mullen, a Director from 14 April to 16 November, was paid £nil as a TMMG plc Director, but was 

paid as a Director and employee of Story UK Ltd for her services there.

The Mission Marketing Group plc Annual Report

30

9. Taxation

Current tax:
UK corporation tax at 28% (2009: 28%)
Adjustment for prior periods

Deferred tax:
Current year originating temporary differences
Adjustment for prior periods

Tax charge for the year

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000

£’000

711
50

761

(82)
1

680

947
199

1,146

(7)
(42)

1,097

Factors Affecting the Tax Charge for the Current Year:
The tax assessed for the year is higher than the standard rate of corporation tax in the UK.  
The differences are:

Profit / (Loss) on ordinary activities before tax

Profit on ordinary activities before tax at the standard rate of 
corporation tax of 28% (2009: 28.0%)

Effect of:
Non-deductible expenses
Depreciation in excess of Capital allowances
Adjustments to prior periods
Tax losses utilised
Movement on provisions
Goodwill impairment
Other short term timing differences
IFRS charges
Profits taxed at small company rates

Actual tax charge for the year

10. Dividends

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000

1,617

453

224
37
50
-
5
-
(90)
1
-

680

£’000

(865)

(242)

180
32
157
(74)
(16)
1,093
(6)
(16)
(11)

1,097

In line with the continuing focus on cash retention, the Board does not propose payment of a dividend 
(2009: nil). 

31

The Mission Marketing Group plc Annual Report

11. Earnings Per Share

The calculation of the basic and diluted earnings per share is based on the following data, determined  
in accordance with the provisions of IAS 33: “Earnings per Share”.

Earnings

Earnings for the purpose of reported earnings per share being net 
profit attributable to equity holders of the parent

Earnings for the purpose of headline earnings per share  
(see note 3)

Number of shares

Year to
31 December
2010

Year to
31 December
2009

£’000

£’000

937

(1,962)

2,052

2,818

Weighted average number of ordinary shares for the purpose of 
basic earnings per share 

56,024,579

35,409,542

Dilutive effect of securities:

Employee share options

Bank warrants

1,355,879

1,662,172

547,946

-

Weighted average number of ordinary shares for the purpose of 
diluted earnings per share

59,042,630

35, 957,488

Reported basis:

Basic earnings per share (pence)

Diluted earnings per share (pence)

Headline basis:

Basic earnings per share (pence)

Diluted earnings per share (pence)

1.67

1.59

3.66

3.48

(5.54)

(5.54)

7.96

7.84

Basic earnings per share includes shares to be issued subject only to time as if they had been issued at the 
beginning of the period. 

The  additional  consideration  shares  included  in  non  current  liabilities  at  31  December  2009  were  not 
included in the diluted earnings per share because the conditions for their issue had not been met in the 
period. Options issued are included in diluted earnings per share to the extent that the market price is 
above the exercise price in accordance with IAS 33.

Dilutive options are not incorporated into the reported diluted earnings per share calculation if the effect 
would be to lower the loss per share.

A reconciliation of the profit after tax on a reported basis and the headline basis is given in note 3.

The Mission Marketing Group plc Annual Report

32

12. Intangible Assets – Goodwill

At 1 January 2009
Adjustment to consideration
Goodwill impairment
At 31 December 2009
Adjustment to consideration
At 31 December 2010

£’000
74,495
(2,360)
(3,995)
68,140
51
68,191

The adjustments to consideration relate to changes in the estimated deferred consideration in the earn-
out period under the terms of the relevant sale and purchase agreement. 

In accordance with the Group’s accounting policies, an annual impairment test is applied to the carrying 
value of goodwill and other intangible assets. The review performed assesses whether the carrying value 
of goodwill is supported by the net present value of future cash flows derived from the underlying assets 
considering forecast cash flows over an initial projection period of three years for each cash-generating 
unit. After this period, a nil growth rate was assumed for all units. The discount rate used is the Group’s 
estimated pre-tax weighted average cost of capital, which is 5.4%. Similarly the cash flow projections used 
in the calculations are pre-tax.

Goodwill is comprised of the following substantial components:

April-Six Ltd
Big Communications Ltd/Fuse Digital Ltd
Bray Leino Ltd *
BroadSkill Ltd *
PCM Ltd *
Rhythmm Communications Group Ltd *
RLA Group Ltd
Story UK Ltd
The Driver Is Ltd *
Think BDW Ltd

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000
9,411
8,125
30,831
-
-
-
6,572
6,969
-
6,283

68,191

£’000
9,411
8,125
28,413
830
705
480
6,575
6,969
349
6,283

68,140

* The Driver Is Ltd, PCM Ltd, Rhythmm Communications Group Ltd and BroadSkill Ltd operations have 
been merged into the business of Bray Leino Ltd. All goodwill relating to these entities has therefore been 
reallocated to Bray Leino Ltd. 

Other Intangible Assets

Intellectual property rights

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000
70

£’000
74

Other  intangible  assets  consist  of  intellectual  property  rights  which  are  amortised  over  20  years. 
Amortisation of £4,000 (2009: £4,000) was charged in operating expenses before exceptional items. 

33

The Mission Marketing Group plc Annual Report

13. Subsidiaries

The  Group’s  principal  trading  subsidiaries  are  listed  below.  All  subsidiaries  are  100%  owned  and  all  are 
incorporated in the United Kingdom.

Subsidiary Undertaking

Nature of Business

Big Communications Limited
Fuse Digital Limited

Bray Leino Limited
Think BDW Limited

April-Six Limited

Story UK Limited
RLA Group Limited
Robson Brown Limited (formerly Triang 
Marketing Limited)

Brand planning and strategic development
New media marketing, including website design and 
advertising, SMS messaging, digital video and database 
management
Advertising, events and PR
Property marketing, providing advertising, media, brochures, 
signage, exhibitions, CGI, animation, intranet, photography
Integrated communications, specialising in the technology 
sector
Brand development and creative direct communication
Marketing and communications
Marketing and communications

In addition there are a number of wholly owned subsidiaries that are dormant or non-trading at the Balance 
Sheet date. Their results where relevant have been consolidated into the Group.

14. Property, Plant and Equipment

Cost or valuation
At 1 January 2009 
Additions
Disposals

At 31 December 2009
Additions
Disposal

At 31 December 2010

Depreciation 
At 1 January 2009
Charge for the Year
Disposals

At 31 December 2009
Charge for the Year
Disposals

At 31 December 2010

Net book value at 31 December 2010

Net book value at 31 December 2009

Short 
Leasehold 
Property

Fixtures 
& Fittings 
and Office 
Equipment

Computer 
Equipment

Motor 
Vehicles

£’000

£’000

£’000

£’000

1,303
75
-

1,378
85
(74)

1,389

785
119
-

905
97
(74)

928

461

473

2,185
255
(266)

2,174
69
(74)

2,169

1,453
151
(231)

1,373
177
(73)

1,477

692

801

2,359
336
(247)

2,448
474
(501)

2,421

1,639
404
(251)

1,791
396
(501)

1,686

735

657

274
54
(38)

290
36
(63)

263

169
52
(31)

190
51
(62)

179

84

100

Total

£’000

6,121
720
(551)

6,290
664
(712)

6,242

4,046
726
(513)

4,259
721
(710)

4,270

1,972

2,031

The net book amount includes £218,574 (2009: £287,030) in respect of assets held under finance lease 
agreements. The depreciation charged to the financial statements in the year in respect of such assets 
amounted to £63,927 (2009: £9,033). 

The Mission Marketing Group plc Annual Report

34

15. Trade and Other Receivables

Gross trade receivables
Less: Provision for doubtful debts

Other receivables
Prepayments and accrued income
Deferred tax asset

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000
15,668
(156)

15,512

224
6,499
62

22,297

£’000
14,161
(74)

14,087

609
2,262
-

16,958

An  allowance  has  been  made  for  estimated  irrecoverable  amounts  from  the  provision  of  services  of 
£156,000 (2009: £73,645). The Directors consider that the carrying amount of trade and other receivables 
approximates their fair value.

Credit Risk

The  Group’s  principal  financial  assets  are  bank  balances  and  cash,  trade  and  other  receivables  and 
investments, which represent the Group’s maximum exposure to credit risk in relation to financial assets.

The Group’s credit risk is primarily attributable to its trade receivables. In order to mitigate this risk, the 
Group  has  arranged  credit  insurance  on  certain  of  its  trade  receivables  as  deemed  appropriate  and  as 
contractually required. 

The credit risk on cash balances is limited because the counterparties are banks with high credit-ratings 
assigned by international credit-rating Agencies.

16. Cash and Short Term Deposits

Cash and short term deposits comprise cash held by the Group and short term bank deposits. 

17. Trade and Other Payables

Trade creditors
Finance leases
Other creditors
Social security costs
Value added tax

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000
5,447
68
342
632
2,198

8,687

£’000
7,426
80
1,423
615
1,041

10,585

Trade and other creditors principally comprise amounts outstanding for trade purchases and on-going 
costs. The Directors consider that the carrying amount of trade payables approximates their fair value.

35

The Mission Marketing Group plc Annual Report

18. Bank Overdrafts, Loans and Net Debt

Bank loan outstanding
Accumulated interest
Adjustment to amortised cost

Carrying value of loan outstanding
Less: Cash and short term deposits

Net bank debt

The borrowings are repayable as follows:
Less than one year
In one to two years
In more than two years but less than three years
In more than three years but less than four years

Accumulated interest
Adjustment to amortised cost

Less:  Amount  due  for  settlement  within  12  months  (shown 
under current liabilities)

Amount due for settlement after 12 months

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000
20,314
114
(525)

19,903
(1,438)

18,465

3,000
4,000
13,314
-

20,314

114
(525)

19,903

(3,000)

16,903

£’000
20,326
-
31

20,357
(281)

20,076

2,443
3,000
14,883
-

20,326

-
31

20,357

(2,443)

17,914

The adjustment to amortised cost relates to the amortisation of bank debt renegotiation fees over the life 
of the loan facility.

During the year an agreement was reached with the Group’s bankers to restructure the committed facilities 
from a revolving credit facility of £20.3m into a revolving credit facility of £17.3m, due for repayment by 
June 2013 on a quarterly basis starting June 2011, and a term loan facility of £3.0m with a bullet repayment 
on 31 December 2013. The total repayment maturity profile is shown above.

Interest on the old revolving credit facility was based on 1 month LIBOR plus 3.5%. Interest on the new 
revolving  credit  facility  is  payable  quarterly  by  reference  to  3  month  LIBOR  plus  4.125%,  subject  to  a 
downward ratchet on achievement of certain ratios of debt to EBITDA on an annual basis. Interest on the 
new term loan is calculated by reference to 3 month LIBOR plus 7.5% and is payable in full with the bullet 
repayment on 31 December 2013.

In addition to its committed facilities, the Group has available an overdraft facility of up to £2.0m with 
interest payable by reference to National Westminster Bank plc Base Rate plus 3.5% (on balances up to 
£2m) or 5.5% (on balances over £2m). 

There is a cross guarantee structure in place with the Group’s bankers by means of a fixed and floating 
charge over all of the assets of the Group companies in favour of the Royal Bank of Scotland plc and HSBC 
Bank plc.

All borrowings are in sterling.

The Mission Marketing Group plc Annual Report

36

19. Obligations under Finance Leases

Obligations under finance leases and hire purchase agreements are as follows:

In one year or less
Between two and five years

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000
68
96

164

£’000
80
153

233

Assets held under finance leases consist of office equipment. The fair values of the Group’s lease obligations 
approximate their carrying amount. 

The Group’s obligations under finance leases are secured by the lessor’s charge over the leased assets. 

20. Acquisition Loan Notes and Acquisition Contingent Payments

The  terms  of  an  acquisition  may  provide  that  the  value  of  the  purchase  consideration,  which  may  be 
payable in cash or shares or other securities at a future date, depends on uncertain future events such as 
the future performance of the acquired company. The Directors estimated that the liabilities for payments 
that may be due are as follows:

2009
Less than one year

Between one and two years

2010
Less than one year
More than one year

Initial 
Consideration 
Loan Notes
£’000

Additional 
Consideration 
Loan Notes
£’000

Additional 
Consideration 
Shares to be issued
£’000

314

-

314

-
-
-

2,465

1,000

3,465

-
-
-

156

-

156

-
-
-

Total

£’000

2,935

1,000

3,935

-
-
-

During the year, all of the Group’s outstanding consideration loan note liabilities were extinguished either 
by conversion into equity or by repayments from cash generated by a placing of shares.

37

The Mission Marketing Group plc Annual Report

21. Deferred Taxation

The  deferred  taxation  liability  of  £2,118  (2009:  £20,696)  recognised  in  the  financial  statements  is  set  
out below:

Accelerated capital allowances
Other timing differences

The movement in the year is analysed as follows:

As at 1 January
Credit to profit or loss

As at 31 December

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000
3
(1)

2

£’000
22
(1)

21

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000
21
(19)

2

£’000
70
(49)

21

As shown in note 15, there is a deferred tax asset of £62,000 (2009: nil) relating to accounting adjustments 
for IFRS.

22. Financial Commitments 

Operating Lease Commitments

As at 31 December the Group had annual commitments under non-cancellable operating leases as follows:

Group
Operating Leases which expire:
Within one year
Between two and five years
After more than five years

Year to 
31 December 
2010

Year to 
31 December 
2009

Land and 
buildings

£’000
7
622
355

984

Other

£’000
6
449
-

455

Land and 
buildings

£’000
59
759
254

1,072

Other

£’000
19
355
-

374

The Mission Marketing Group plc Annual Report

38

 
23. Share Capital

Authorised:

85,000,000 ordinary shares of 10p each (2009: 85,000,000 
ordinary shares of 10p each)

Allotted and called up:

72,460,444 ordinary shares of 10p each (2009: 39,590,954 
ordinary shares of 10p each)

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000

8,500

£’000

8,500

7,246

3,959

The increase in shares during the year arose from the issue of 9.8m ordinary shares as a placing to raise 
£1.3m and the issue of 23.0m shares in settlement of acquisition liabilities, both in June 2010.

Options

The Group has the following options in issue:  

At start of year Granted

Waived

Lapsed

At end of year

SAYE Scheme

582,695

-

(337,643)

-

245,052

TMMG Long Term Incentive Plan

1,250,000

616,000

- (390,000)

1,476,000

Bank warrants

- 2,333,434

-

-

2,333,434

The SAYE Scheme is available to all employees. The exercise price of share options outstanding under  
this scheme is 81.0p, being 90 percent of the market price of the underlying shares at the time of issue.

TMMG  Long  Term  Incentive  Plan  (“LTIP”)  was  created  to  incentivise  certain  key  employees.  During  the 
year, the vesting criteria applicable to the 1.25m options in issue at the start of the year, with a nil exercise 
price, were simplified such that they are now solely dependent upon the achievement of profit targets 
over the three year period ending 31 December 2012. A further 616,000 nil cost options were granted 
during the year with the same vesting criteria. Shares held in an Employee Benefit Trust (see note 24) will 
be used to satisfy share options exercised under The Mission Marketing Group Long Term Incentive Plan.

Warrants over 3% of the Group’s share capital were issued to the Group’s loan providers following the 
refinancing completed during the year. These outstanding warrants have a 10.0p exercise price.

24. Own Shares

At 1 January 2009
Acquired in the year

At 31 December 2009

Acquired in the year
Awarded to employees during the year

At 31 December 2010

No. of shares
1,695,094
-

1,695,094

-
(167,053)

1,528,041

£’000
1,398    
-

1,398

-
(139)

1,259

Shares  are  held  in  an  Employee  Benefit  Trust  to  meet  certain  requirements  of  The  Mission  Marketing 
Group Long Term Incentive Plan.

39

The Mission Marketing Group plc Annual Report

                   
25. Staff remuneration reserve account

The staff remuneration reserve account represents charges to the profit or loss required by IFRS 2 to 
reflect the cost of the options issued to the Directors and employees.

26. Share-based payments

Options

Fair  value  on  grant  date  is  measured  by  use  of  a  Black  Scholes  model.  The  valuation  methodology  is 
applied at each year end and the valuation revised to take account of any changes in estimate of the likely 
number of shares expected to vest. Details of the relevant option schemes are given in note 23. The key 
inputs are:

Risk free rate
Dividend yield

2010

1.2%
0.0%

2009

2.4%
0.0%

Volatility is based on the historical volatility of the share price over a 3 year trading period. The weighted 
average share price was 16.4p.

The Group recognised an expense of £74,002 in 2010 (2009: £313,000).

27. Reconciliation of Operating Profit to Operating Cash Flow

Operating profit
Depreciation and amortisation charges
Gain on disposal of property, plant and equipment
Non cash charge for share options and shares awarded
Non cash goodwill impairment
(Increase) / Decrease in receivables
Decrease in work in progress
Increase / (Decrease) in payables

Operating cash flow

28. Financial Assets and Liabilities

Year ended   
31 December 2010

Year ended   
31 December 2009

£’000
3,763
725
(14)
94
-
(5,277)
36
6,111

5,438

£’000
866
730
(10)
313
3,995
891
60
(3,530)

3,315

The Group’s financial instruments comprise cash and various forms of borrowings. As permitted by IAS 39, 
short-term debtors and creditors have been excluded. It does not enter into derivatives transactions such 
as interest rate swaps, forward rate agreements or forward currency contracts.

The  Group’s  activities  take  place  in  the  United  Kingdom  and  no  material  transactions  take  place  with 
overseas customers or suppliers in local currency. There was no material foreign currency exposure at the 
year end. 

The main purpose of the Group’s use of financial instruments is for day-to-day working capital and as 
part of the funding for past acquisitions. The Group financial policy and risk management objective is to 
achieve the best interest rates available whilst maintaining flexibility and minimising risk. The main risks 
arising from the Group’s use of financial instruments is interest rate risk and liquidity risk.

The Mission Marketing Group plc Annual Report

40

Interest Rate Risk

The operations of the Group generate cash and it funds acquisitions through a combination of retained 
profits and borrowings. The Group’s financial liabilities comprise a mixture of fixed rate guaranteed and 
unsecured loan notes and floating rate instruments. The bank loan’s interest rate is reset from time to time 
and accordingly is not deemed a fixed rate financial liability. 

Interest on the revolving credit facility of £17.3m is payable by reference to 3 month LIBOR plus 4.125%, 
subject to a downward ratchet on achievement of certain ratios of debt to EBITDA on an annual basis. 
Interest on the term loan of £3.0m is calculated by reference to 3 month LIBOR plus 7.5%. The interest 
rates payable are partially hedged by interest rate caps and collars entered into in 2007 and early 2008. At 
31 December 2010, two interest rate collars are in place, the first permitting £2,563,072 (2009: £3,606,000) 
of  notional  to  float  between  a  floor  of  4.35%  and  a  ceiling  of  5.75%  compared  to  3  month  LIBOR,  this 
collar maturing on 22 February 2011. The second collar permits £8,000,000 (2009: £8,000,000) to float 
between 4.83% and 5.75% and matures on 2 May 2011. The interest rate cap limits the interest rate payable 
on nil (2009: £4,786,000) of notional to 6.0% compared to LIBOR. The interest rate cap amortised in three 
monthly instalments and matured on 30 June 2010. The collar and cap arrangements are considered to 
be closely related to host debt contract.

Liquidity Risk

The Group’s financial instruments include a mixture of short and long-term borrowings. The Group seeks 
to ensure sufficient liquidity is available to meet working capital needs and the repayment terms of the 
Group’s financial instruments as they mature. 

Financial assets

Cash at bank maturing in less than one year or on demand 

Financial liabilities

Interest analysis:
Subject to floating rates
Subject to fixed rates

Maturity analysis:
One year or less, or on demand
After one year and within two years
After two years

£’000
Bank Loan and 
Overdraft

20,314 
- 

20,314 

3,000 
4,000 
13,314

20,314 

Year to 31 
December 2010
£’000

1,438 

Year to 31 
December 2010
£’000

£’000

Finance Leases

- 
164

164 

68 
96 
-

164 

Total

20,314
164

20,478

3,068
4,096
13,314

20,478

The Group’s bank loans and overdraft facility are floating rate borrowings and both facilities are secured 
by a fixed and floating charge over the assets of all Group companies.

All loan notes relating to acquisition deferred payments were settled during the year.

The fair value of the Group’s financial assets and liabilities is not considered to be materially different from 
their book values.

41

The Mission Marketing Group plc Annual Report

29. Pensions

The  Group  operates  ten  defined  contributions  pension  schemes.  The  pension  cost  charge  for  the  
year  represents  contributions  payable  by  the  Company  to  the  scheme  and  amounted  to  £617,762  
(2009:  £520,986).  At  the  end  of  the  financial  year  outstanding  contributions  amounted  to  £31,763  
(2009: £7,600). 

30. Leave pay accrual

No liability or expense has been recognised relating to untaken leave for any of the periods presented. 
The Group has a policy of not allowing days to be carried forward from one year to the next, unless in 
exceptional circumstances. In addition, no payment is made in lieu of untaken leave which is not carried 
forward. As a result, there is no material liability relating to untaken leave at year end. 

31. Post balance sheet events

There are no material post balance sheet events. 

32. Related party transactions

Parent company

Brian Child and Stephen Boyd receive their Non-Executive Director’s remuneration through Brain Child 
Marketing Ltd and Stephen Boyd Ltd respectively, entities of which they are interested parties. In addition, 
Principal  Ventures  Ltd,  an  entity  of  which  Stephen  Boyd  is  an  interested  party,  received  £41,000  of 
remuneration for services rendered in connection with the bank refinancing. Peter Fitzwilliam received his 
Director’s remuneration through VPF London Ltd, an entity of which he is an interested party. In addition, 
VPF London Ltd received £17,000 of remuneration for consultancy services.

Subsidiary undertakings

Bray  Leino  Ltd  is  contracted  to  pay  annual  rent  of  £60,000  (2009  -  £60,000)  to  Mrs  P  H  Morgan,  the 
wife of Mr D W Morgan, the Executive Chairman of The Mission Marketing Group plc. Bray Leino Ltd is 
also contracted to rent premises from Hannele Limited, in which Mr D W Morgan has a 100% beneficial 
interest,  for  an  annual  rent  of  £74,000.  Additionally,  during  the  year  a  consultancy  fee  of  £30,000  was 
paid to Hannele Limited in relation to these properties. Further premises are rented from a partnership 
in which Hannele Limited has a 50% interest, for an annual rent of £60,000. At the year end, no amounts 
were outstanding.

During  the  year  Bray  Leino  Ltd  outsourced  television  productions  to  the  value  of  £187,666  to  Sticky 
Productions, a business in which Mrs E K Hutton, the wife of Mr B W Hutton, an Executive Director of The 
Mission Marketing Group plc, has a 100% beneficial interest.

ThinkBDW Ltd is contracted to pay annual rent of £35,000 to Mr R Day, an Executive Director, and his 
brother, Mr A Day. At the year end the rent payable was 3 months in arrears.

Dylan Bogg, an Executive Director, is also a director of Premier Veterinary Group Ltd, a company which is 
also a Client of Big Communications Ltd. Sales from Big Communications Ltd to Premier Veterinary Group 
Ltd at arms length amounted to £82,539 (2009: £23,278). Included within trade debtors is £70,349 (2009: 
£nil) due from Premier Veterinary Group Ltd.

Big Communications Ltd paid rent during the year of £71,000 (2009: £53,250) to Dylan Bogg (Executive 
Director)  and  Christopher  Morris  (Non-Executive  Director).  In  addition,  Morris  Marketing  Consultancy, 
a  consultancy  practice  owned  by  Christopher  Morris,  invoiced  Big  Communications  Ltd  and  was  paid 
£45,719 (2009: £nil) during the year for services rendered. 

During  the  year  Big  Communications  Ltd  engaged  Kay  Bogg,  the  wife  of  Dylan  Bogg,  to  undertake 
marketing  services  activities  for  a  total  value  of  £21,280  (£2009:  £nil).  Big  Communications  Ltd  also 
engaged Susan Morris, the wife of Christopher Morris, to undertake marketing research activities in relation 
to Government’s Drink Aware campaign for a total value of £20,000 (2009: £nil).

The Mission Marketing Group plc Annual Report

42

33. Availability of Annual Report

Copies of the Annual Report for the year ended 31 December 2010 will be circulated to shareholders at 
least  21  days  ahead  of  the  Annual  General  Meeting  (“AGM”)  on  13  June  2011  and,  after  approval  at  the 
AGM, will be delivered to the Registrar of Companies. Further copies will be available from the Company’s 
registered office at 14-18 Noel Street, London, W1F 8GN and on the Group’s website, www.themission.
co.uk 

43

The Mission Marketing Group plc Annual Report

Independent Auditors’ Report to the Members of The Mission Marketing Group plc

We have audited the parent company financial statements of The Mission Marketing Group plc for the 
year ended 31 December 2010 which comprise the Parent Company Balance Sheet and the related notes. 
The financial reporting framework that has been applied in their preparation 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 for no purpose other than to draw to the 
attention of the Company’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 Company and Company’s members as a body, for our work, for this report, or for 
the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the Directors’ Responsibilities Statement set out on page 11 the directors are 
responsible for the preparation of the parent company 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 parent company 
financial statements in accordance with applicable law and International Standards on Auditing (UK and 
Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards 
for Auditors. 

Scope of the audit of the financial statements

An  audit  involves  obtaining  evidence  about  the  amounts  and  disclosures  in  the  financial  statements 
sufficient to give reasonable assurance that the financial statements are free from material misstatement, 
whether caused by fraud or error. This includes an assessment of: whether the accounting policies are 
appropriate to the parent company’s circumstances and have been consistently applied and adequately 
disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall 
presentation of the financial statements. 

Opinion on financial statements

In our opinion the parent company financial statements:

•  give a true and fair view of the state of the Company’s affairs as at 31 December 2010;
•  have been properly prepared in accordance with United Kingdom Generally Accepted 
  Accounting Practice; and
•  have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors’ Report for the financial year for which the financial 
statements are prepared is consistent with the parent company financial statements.

Matters on which we are required to report by exception

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:

•  adequate accounting records have not been kept by the parent company, or 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; or
•  we have not received all the information and explanations we require for our audit. 

Other matter

We have reported separately on the consolidated financial statements of The Mission Marketing Group plc 
for the year ended 31 December 2010. 

Cliff Ireton 
Senior Statutory Auditor   
for and on behalf of Kingston Smith LLP, Statutory Auditor  
141 Wardour Street
London
W1F 0UT
31 March 2011

The Mission Marketing Group plc Annual Report

44

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Company Balance Sheet
as at 31 December 2010

NON-CURRENT ASSETS
Intangible assets
Tangible assets
Investments

CURRENT ASSETS
Debtors
Cash at bank 

CREDITORS: Amounts falling due within 
one year

NET CURRENT LIABILITIES

Year to 
31 December 
2010  

Year to 
31 December 
2009  

Note

£’000

£’000

35
36
37

38

39

52
16
96,242

96,310

2,704
271

2,975

(8,886)

(5,911)

55
35
92,557

92,647

2,973
267

3,240

(23,914)

(20,674)

TOTAL ASSETS LESS CURRENT LIABILITIES

90,399

71,973

CREDITORS: Amounts falling due after more than one year

40

NET ASSETS

CAPITAL AND RESERVES
Called up share capital
Share premium account
Staff remuneration reserve
Profit and loss account

SHAREHOLDER’S FUNDS

(16,903)

73,496

(18,914)

53,059

43
43
44
44

7,246
39,542
134
26,574

73,496

3,959
38,578
60
10,462

53,059

The  financial  statements  were  approved  and  authorised  for  issue  on  31  March  2011  by  the  Board  of 
Directors. They were signed on its behalf by:

Peter Fitzwilliam 
Director 

Company registration number: 05733632

45

The Mission Marketing Group plc Annual Report

Notes to the Company Balance Sheet

34. Principal Accounting Polices

The financial statements are prepared in accordance with applicable United Kingdom law and accounting 
standards (United Kingdom Generally Accepted Accounting Practice). The principal accounting policies of 
the Company are set out below. The policies have remained unchanged from the previous year.

Accounting Convention

The financial statements have been prepared under the historical cost convention.

Going Concern

The  Board  has  substantially  strengthened  the  Group’s  balance  sheet  in  the  year.    Bank  debt  has  been 
rescheduled,  with  committed  facilities  available  to  2013,  acquisition  liabilities  have  been  eliminated 
through equity conversion and a placing of new shares, and the focus on cash management across the 
Agencies has resulted in stronger operating cash flows.  

The available banking facilities provide comfortable levels of headroom against the Group’s projected cash 
flows and the Directors accordingly consider that it is appropriate to continue to adopt the going concern 
basis in preparing these financial statements.

Deferred Taxation

Deferred  taxation  is  recognised  on  all  timing  differences  where  the  transactions  or  event  that  give  the 
Company an obligation to pay more tax in the future, or a right to pay less tax in the future, have occurred 
by the balance sheet date. Deferred tax assets are recognised when it is more likely than not that they 
will be recoverable. Deferred tax is measured using rates of tax that have been enacted or substantively 
enacted by balance sheet date.

Property, Plant and Equipment

Depreciation is provided on all property, plant and equipment at rates calculated to write off the cost, less 
estimated residual value based on prices prevailing at the date of acquisition, of each asset evenly over its 
expected useful economic life, as follows:

Short leasehold property  
Motor vehicles 
Fixtures, fittings and office equipment 
Computer equipment 

Period of the lease
25% per annum
10-33% per annum
25-33% per annum

Deferred Consideration

The terms of an acquisition may provide that the value of the purchase consideration, which may be payable 
in cash or shares at a future date, depends on uncertain future events such as the future performance 
of  the  acquired  company.  The  amounts  recognised  in  the  financial  statements  represent  a  reasonable 
estimate  at  the  balance  sheet  date  of  the  amounts  expected  to  be  paid  and  has  been  classified  in  the 
balance sheet in accordance with the substance of the transaction. Where the agreement gives rise to an 
obligation that may be settled by the delivery of a variable number of shares to meet a defined monetary 
liability, these amounts are disclosed as debt.

The Mission Marketing Group plc Annual Report

46

Investments

In  the  Company’s  financial  statements,  investments  in  subsidiary  undertakings  are  stated  at  cost  less 
provision for any impairment in value.

Lease Commitments

Rental costs under operating leases are charged against profits as incurred.

Profit of Parent Company

As permitted under Section 408 of the Companies Act 2006, the profit and loss account of the Company 
is not presented as part of these accounts. 

35. Intangible Assets

Intellectual property rights

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000
52

£’000
55

Intangible assets consist of intellectual property rights which are amortised over 20 years. The amortisation 
charge for the year was £3,000 (2009: 3,000).

36. Tangible Fixed Assets

Cost
At 1 January 2010
Additions
Disposals

At 31 December 2010

At 1 January 2010
Charge for the Year
Disposals

At 31 December 2010

Net book value at 31 December 2010

Net book value at 31 December 2009

Fixtures & Fittings Office Equipment

£’000

£’000

Total

£’000

59
1
(2)

58

37
13
(1)

49

9

22

33
- 
-

33

20 
6 
0

26 

7 

13 

92
1 
(2)

91

57 
19
(1)

75 

16 

35 

47

The Mission Marketing Group plc Annual Report

37. Investments

At 1 January 2010
Additions
Adjustments to consideration

At 31 December 2010

Net book amount at 31 December 2010

Net book amount at 31 December 2009

Shares in 
subsidiary 
undertakings

£’000

92,557
3,682
3

96,242

96,242

92,557

The adjustments to consideration relate to changes in the deferred consideration of completed acquisitions 
under the terms of the relevant sale and purchase agreements. 

The principal Group companies at 31 December 2010 are set out below. All subsidiaries are 100% owned 
and all are incorporated in the United Kingdom.

Subsidiary Undertaking

Nature of Business

Big Communications Limited
Fuse Digital Limited

Bray Leino Limited
Think BDW Limited

April-Six Limited

Story UK Limited
RLA Group Limited
Robson Brown Limited (formerly 
Triang Marketing Limited)

Brand planning and strategic development
New media marketing, including website design and 
advertising, SMS messaging, digital video and database 
management
Advertising, events and PR
Property marketing, providing advertising, media, brochures, 
signage, exhibitions, CGI, animation, intranet, photography
Integrated communications, specialising in the technology 
sector
Brand development and creative direct communication
Marketing and communications
Marketing and communications

The above list excludes details of non-trading dormant subsidiaries. 

38. Debtors

Amounts due from subsidiary undertakings
Prepayments
Other debtors

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000

2,650
24
30

2,704

£’000

2,914
59
-

2,973

The Mission Marketing Group plc Annual Report

48

39. Creditors: Amounts Falling Due Within One Year

Bank overdraft
Amounts due to subsidiary undertakings
Social security and other taxes
Accruals
Acquisition obligations (see note 42)
Bank loan (see note 41)
Other creditors

40. Creditors: Amounts Falling Due After More Than One Year

Acquisition obligations (see note 42)
Bank loan (see note 41)

41. Borrowings

Bank loan outstanding
Accumulated interest
Adjustment to amortised cost

Carrying value of loan outstanding
The borrowings are repayable as follows:
Less than one year
In one to two years
In more than two years but less than three years
In more than three years but less than four years

Accumulated interest
Adjustment to amortised cost

Less: Amount due for settlement within 12 months (shown 
under current liabilities)

Amount due for settlement after 12 months

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000

1,067
4,439
8
335
-
3,000
37

8,886

£’000

5,830
12,501
24
548
2,499
2,443
69

23,914

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000
-
16,903

16,903

£’000
1,000
17,914

18,914

Year to 
31 December 
2010

Year to 
31 December 
2009

£’000

£’000

20,314
114
(525)

19,903

3,000
4,000
13,314
-

20,314

114
(525)

19,903

(3,000)

16,903

20,326
-
31

20,357

2,443
3,000
14,883
-

20,326

-
31

20,357

(2,443)

17,914

49

The Mission Marketing Group plc Annual Report

During the year an agreement was reached with the Group’s bankers to restructure the committed facilities 
from a revolving credit facility of £20.3m into a revolving credit facility of £17.3m, due for repayment by 
June 2013 on a quarterly basis starting June 2011, and a term loan facility of £3.0m with a bullet repayment 
on 31 December 2013. The total repayment maturity profile is shown above.

Interest on the old revolving credit facility was based on 1 month LIBOR plus 3.5%. Interest on the new 
revolving  credit  facility  is  payable  by  reference  to  3  month  LIBOR  plus  4.125%,  subject  to  a  downward 
ratchet on achievement of certain ratios of debt to EBITDA on an annual basis. Interest on the new term 
loan is calculated by reference to 3 month LIBOR plus 7.5% and is payable with the bullet repayment on 
31 December 2013.

In addition to its committed facilities, the Group has available an overdraft facility of up to £2.0m with 
interest payable by reference to National Westminster Bank plc Base Rate plus 3.5% (on balances up to 
£2m) or 5.5% (on balances over £2m). 

As at 31 December 2010, Net Assets of the Group were £54,701,000 (2009: £49,419,000), and net 
borrowings under this Group arrangement amounted to £18,465,000 (2009: £20,325,884). 

All borrowings are in sterling.

42. Acquisition Obligations

The  terms  of  an  acquisition  may  provide  that  the  value  of  the  purchase  consideration,  which  may  be 
payable in cash or shares or other securities at a future date, depends on uncertain future events such as 
the future performance of the acquired company. The Directors estimated that the liability for payments 
that may be due are as follows:

2009
Less than one year
Between one and two years

2010
Less than one year
More than one year

Initial Consideration 
Loan Notes

£’000

317
-

317

-
-

-

Additional 
Consideration 
Loan Notes
£’000

2,182
1,000

3,182

-
-

-

Total

£’000

2,499
1,000

3,499

-
-

-

During  the  year,  all  of  the  Group’s  outstanding  consideration  loan  note  liabilities  were  extinguished  by 
conversion into equity and cash generated by a placing.

43. Share Capital and Share Premium

The  movements  on  these  items  are  disclosed  within  the  consolidated  statement  of  changes  in  equity 
within the consolidated financial statements.

The Mission Marketing Group plc Annual Report

50

44. Statement of Movements on Reserves

At 1 January 2009
Credit for share option scheme
Waiver of share options
Loss for the period

At 31 December 2009

Credit for share option scheme
Shares issued from EBT scheme
Profit / (loss) for the period

At 31 December 2010

Staff 
remuneration 
reserve

Profit and loss 
account

£’000

800
313
(1,053)
-

60

74
-
-

134

£’000

10,728
-
1,053
(1,319)

10,462

-
20
16,092

26,574

As permitted by Section 408 of the Companies Act 2006, the Company has not presented its own profit 
and  loss  account.  The  profit  for  the  financial  year  relating  to  the  Company  amounted  to  £16,092,000 
(2009: loss of £1,319,069).

45. Operating Lease Commitments

As at 31 December 2010 the Company had annual commitments under non-cancellable operating leases 
as follows:

Year to 
31 December  
2010

Year to 
31 December  
2009

   Land and Buildings

£’000
-
-
-

-

£’000
10
-
-

10

In one year or less
Between two and five years
In five years or more

46. Related party transactions

Details of related party transactions are disclosed in note 32 of the consolidated financial statements.

51

The Mission Marketing Group plc Annual Report

Notice of Annual General Meeting

NOTICE is hereby given that the Annual General Meeting of The Mission Marketing Group plc (the 
“Company”) will be held at 12 noon on Monday 13 June 2011 at Seymour Pierce, 20 Old Bailey, London, 
EC4M 7EN to transact the following business:

Ordinary Resolutions

1.  To receive the financial statements and the report of the Directors and the auditors for the year  

ended 31 December 2010.

2.  To elect Peter Fitzwilliam as a Director.

3.  To elect Christopher Goodwin as a Director.

4.  To re-appoint Kingston Smith LLP as auditors of the Company. 

5.  To authorise the Directors to fix the remuneration of Kingston Smith LLP.

Special Business

To consider and, if thought fit, to pass the following resolutions, as to which resolution 6 shall be proposed 
as an ordinary resolution and resolutions 7 and 8 shall be proposed as special resolutions:

6.  THAT the Directors be and are hereby generally and unconditionally authorised pursuant to Section 
551 of the Companies Act 2006 as amended (the “Act”) to exercise all the powers of the Company to 
allot shares in the Company and to grant rights to subscribe for, or to convert any security into, shares 
in  the  Company  up  to  an  aggregate  nominal  value  of  £2,391,194.60  being  33%  of  the  issued  share 
capital of the Company, provided that this authority shall expire at the conclusion of the next Annual 
General  Meeting  of  the  Company  after  the  passing  of  this  resolution,  save  that  the  Company  shall 
be entitled to make an offer or agreement before the expiry of such authority which would or might 
require shares to be allotted or any such rights to be granted, after such expiry and the Directors shall 
be entitled to allot shares or grant any such rights pursuant to any such offer or agreement as if this 
authority had not expired and all unexercised authorities previously granted to the Directors to allot 
shares or grant any such rights be and are hereby revoked provided that the resolution shall not affect 
the right of the Directors to allot shares or grant any such rights in pursuance of any offer or agreement 
entered into prior to the date of this resolution.

Special Resolutions

7.   THAT (subject to the passing of the resolution numbered 6 above) the Directors be and are hereby 
empowered pursuant to Section 570, Section 571 and Section 573 of the Act to allot equity securities 
(as  defined  in  Section  560  of  the  Act)  for  cash  pursuant  to  the  authority  conferred  by  resolution  6 
above as if Section 561 of the Act did not apply to any such allotment, provided that this power shall 
be limited to: 

i.   the  allotment  of  equity  securities  in  connection  with  a  rights  issue,  open  offer  or  other  offer  of 
securities  in  favour  of  the  holders  of  ordinary  shares  on  the  register  of  members  at  such  record 
date(s) as the Directors may determine where the equity securities respectively attributable to the 
interests  of  the  ordinary  shareholders  are  proportionate  (as  nearly  as  may  be)  to  the  respective 
numbers of ordinary shares held by them on any such record date(s), subject to such exclusions 
or  other  arrangements  as  the  Directors  may  deem  necessary  or  expedient  to  deal  with  treasury 
shares, fractional entitlements or legal or practical problems arising under the laws of any overseas 
territory or the requirements of any regulatory body or stock exchange or by virtue of shares being 
represented by depositary receipts or any other matter whatever; and 

ii.  the allotment (other than pursuant to sub-paragraph (i) above) to any person or persons of equity 
securities up to an aggregate nominal value of £724,604 being 10% of the issued share capital of the 
Company. 

The Mission Marketing Group plc Annual Report

52

 
This power shall expire upon the expiry of the general authority conferred by resolution 6 above, save 
that the Company shall be entitled to make an offer or agreement before the expiry of such power 
which would or might require equity securities to be allotted after such expiry and the Directors shall 
be entitled to allot equity securities pursuant to any such offer or agreement as if the power conferred 
hereby  had  not  expired  and  all  unexercised  authorities  previously  granted  to  the  Directors  to  allot 
equity securities be and are hereby revoked provided that the resolution shall not affect the right of 
the Directors to allot equity securities in pursuance of any offer or agreement entered into prior to the 
date of this resolution.

8.   THAT pursuant to section 701 of the Act and subject to, and in accordance with the Company’s Articles 
of Association, the Company be generally and unconditionally authorised to make market purchases 
(within the meaning of Section 693(4)of the Act) of ordinary shares of the Company provided that:

i.   the maximum number of ordinary shares hereby authorised to be acquired is   10,869,067 being 15% 

of the issued share capital; and

ii.  the minimum price which may be paid for an ordinary share is the nominal value of such share; and

iii. the maximum price which may be paid for an ordinary share is an amount equal to 105% of the 
average of the middle market quotations for an ordinary share in the Company as derived from The 
London Stock Exchange Daily Official List for the 5 business days immediately preceding the day on 
which such ordinary share is contracted to be purchased; and

iv. the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the 

Company held in 2012 or 18 months from the date of this resolution (whichever is earlier); and

v.  the  Company  may  make  any  purchase  of  its  ordinary  shares  pursuant  to  a  contract  concluded 
before the authority hereby conferred expires and which will or may be executed wholly or partly 
after the expiry of such authority; and

vi. all  ordinary  shares  purchased  pursuant  to  the  authority  conferred  by  this  resolution  8  shall 
be  cancelled  immediately  on  completion  of  the  purchase  or  held  in  treasury  (provided  that  the 
aggregate nominal value of shares held as treasury shares shall not at any time exceed 10 per cent 
of the issued share capital of the Company at any time).

By Order of the Board
Peter Fitzwilliam
3 May 2011

Notes to the Notice of Annual General Meeting, including explanatory notes to the Form of Proxy.

1.   A member entitled to attend and vote at the Annual General Meeting (“AGM”) may appoint one or more 
proxies (who need not be a member of the Company) to attend, speak and vote on his or her behalf. 
To appoint as your proxy a person other than the chairman of the meeting, insert their full name in 
the box. If you sign and return this proxy form with no name inserted in the box, the chairman of the 
meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the 
chairman, you are responsible for ensuring that they attend the meeting and are aware of your voting 
intentions. If you wish your proxy to make any commitments on your behalf, you will need to appoint 
someone  other  the  chairman,  and  give  them  relevant  instructions  directly.  In  order  to  be  valid  an 
appointment of proxy must be completed, signed and returned in hard copy form by post, by courier 
or  by  hand  to  the  Company’s  registrars,  Capita  Registrars,  PXS,  The  Registry,  34  Beckenham  Road, 
Beckenham, Kent BR3 4TU.

2.   A form of proxy is enclosed for use by shareholders and, if appropriate, must be deposited with the 
Company’s  registrars,  Capita  Registrars,  PXS,  The  Registry,  34  Beckenham  Road,  Beckenham,  Kent, 
BR3 4TU not less than 48 hours before the time of the AGM. Appointment of a proxy does not preclude 
a shareholder from attending the AGM and voting in person.

3.   Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, in order to be able to attend 
and vote at the AGM or any adjourned meeting, (and also for the purpose of calculating how many 
votes a person may cast) a person must have his/her name entered on the register of members of the 

53

The Mission Marketing Group plc Annual Report

 
Company by 12 noon on 11 June 2011 (or 12 noon on the date 2 days before any adjourned meeting). 
Changes to entries on the register of members after this time shall be disregarded in determining the 
rights of any person to attend or vote at the meeting.

4.   Shareholders should note that it is possible that, pursuant to requests made by shareholders of the 
Company under section 527 of the Companies Act 2006, the Company may be required to publish 
on a website a statement setting out any matter relating to: (i) the audit of the Company’s accounts 
(including the auditor’s report and the conduct of the audit) that are to be laid before the AGM; or 
(ii)  any  circumstance  connected  with  an  auditor  of  the  Company  ceasing  to  hold  office  since  the 
previous  meeting  at  which  annual  accounts  and  reports  were  laid  in  accordance  with  section  437 
of  the  Companies  Act  2006.  The  Company  may  not  require  the  shareholders  requesting  any  such 
website publication to pay its expenses in complying with sections 527 or 528 of the Companies Act 
2006. Where the Company is required to place a statement on a website under section 527 of the 
Companies Act 2006, it must forward the statement to the Company’s auditor not later than the time 
when it makes the statement available on the website. The business which may be dealt with at the 
AGM includes any statement that the Company has been required under section 527 of the Companies 
Act 2006 to publish on a website.

5.  A corporation which is a member can appoint one or more corporate representatives who may exercise, 
on its behalf, all its powers as a member provided that no more than one corporate representative 
exercises powers over the same share.

6.   Biographical details of the Directors are given in the Board of Directors section of the Annual Report.

7.   Copies  of  the  Directors’  service  contracts  with  the  Company  are  available  for  inspection  at  the 
registered office of the Company during usual business hours (Saturdays, Sundays and public holidays 
excepted) and will be available at the place of the AGM from 15 minutes prior to and during the AGM.

8.   The issued share capital of the Company is 72,460,444 Ordinary shares of 10 pence each. The total 

number of voting rights in the Company is 72,460,444.

9.   You may appoint more than one proxy provided each proxy is appointed to exercise rights attached 
to different shares. You may not appoint more than one proxy to exercise rights attached to any one 
share. To appoint more than one proxy, the proxy form should be photocopied and the name of the 
proxy to be appointed indicated on each proxy form together with the number of shares that such 
proxy is appointed in respect of. All copies of the proxy form should then be sent to Capita Registrars 
at the address given above.

10. To direct your proxy how to vote on the resolutions, mark the appropriate box with an ‘X’. To abstain 
from voting on a resolution, select the relevant “Withheld” box. A vote withheld is not a vote in law, 
which means that the vote will not be counted in the calculation of votes for or against the resolution. 
If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your 
proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is 
put before the meeting.

11. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only 
the appointment submitted by the most senior holder will be accepted. Seniority is determined by the 
order in which the names of the joint holders appear in the Company’s register of members in respect 
of the joint holding (the first-named being the more senior).

12. If you submit more than one valid proxy appointment, the appointment received last before the latest 

time for receipt of proxies will take precedence.

The Mission Marketing Group plc Annual Report

54

Advisors

Company Registration Number:  

05733632

Registered Office:  

Nominated Advisor and Broker:  

Auditors:  

Solicitors: 

Registrars: 

Company Secretary: 

Bankers: 

14-18 Noel Street
London 
W1F 8GN

Seymour Pierce Limited
20 Old Bailey
London 
EC4M 7EN

Kingston Smith LLP 
141 Wardour Street
London 
W1F 0UT

Lewis Silkin LLP
5 Chancery Lane
Clifford’s Inn
London
EC4A 1BL

Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU

Peter Fitzwilliam
The Mission Marketing Group plc
14-18 Noel Street
London
W1F 8GN

Royal Bank of Scotland plc
Corporate Banking
8th Floor
280 Bishopsgate
London
EC2M 4RB

HSBC Bank plc
Thames Gateway Corporate Banking Centre
1st Floor
60 Queen Victoria Street
London
EC4N 4TR

55

The Mission Marketing Group plc Annual Report

 
 
 
 
 
 
 
 
 
 
 
 
Form of Proxy

The Mission Marketing Group plc (“the Company”)
Annual General Meeting 

I/We  
(BLOCK CAPITALS)

    (full name)

of 
being member/members in the Company, hereby appoint the Chairman of the Meeting or (see note 1)

      (address)

as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to 
be held on 13 June 2011 and at any adjournment thereof.

For

Against

Vote 
Withheld

My/our proxy is to vote on the resolutions as follows:

Ordinary Resolutions

1. To receive the financial statements and the reports of the Directors     
  and auditors for the year ended 31 December 2010.

2. To elect Peter Fitzwilliam as a Director.

3. To elect Christopher Goodwin as a Director.

4. To re-appoint Kingston Smith LLP as auditors of the Company.

5. To authorise the Directors to fix the remuneration of Kingston  
  Smith LLP.

6. To authorise the Directors to allot shares pursuant to Section 551  
  of the Companies Act 2006.

Special Resolutions

7. To disapply statutory pre-emption rights pursuant to Section 570,  
  Section 571 and Section 573 of the Companies Act 2006.

8. To renew the Company’s authority to make market purchases of  

its  own ordinary shares.

Dated this   

Signature(s) 

 day of   

              2011

Please indicate how you wish your form of proxy to vote on the resolutions by inserting “X” in the 
appropriate space. In the case of a corporation the form of proxy must either be under its common seal 
(if any) or signed on its behalf by its duly authorised agent or officer.

The Mission Marketing Group plc Annual Report

56

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
        
Do not affix postage if posting in
Gt. Britain, Channel Islands or N. Ireland

Third fold and tuck in

BUSINESS REPLY SERVICE
Licence No. RSBH-UXKS-LRBC

First fold

Capita Registrars

PX5 34 Beckenham Road

Beckenham, Kent

BR3 4TU

Second fold

E
N
I
L
D
E
T
T
O
D
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O
L
A
R
A
E
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A
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P

 
 
 
 
 
marketing group plc
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14-18 Noel Street  London  W1F 8GN
T: 020 7758 3525  F: 020 7494 4996 
www.themission.co.uk