TIDMRAM
RNS Number : 3764N
RAM Active Media PLC
28 September 2012
For immediate release 28 September 2012
RAM ACTIVE MEDIA PLC
("RAM" or the "Company")
HALF YEARLY REPORT
AND
UNAUDITED FINANCIAL STATEMENTS
FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2012
CHAIRMAN'S STATEMENT
The interim results to June 30(th) 2011 announced today reflect
a position similar to prior year but with TrainFX Limited as a 30%
owned entity through the joint venture formed in December 2011. The
loss for the period is largely due to the seasonally quiet half
year for RAM Vision Limited and operational costs incurred in
setting up RAM Interactive Limited. The loss for the period
includes GBP195k of non-recurring costs incurred on legal fees,
some rationalisation costs and interest costs.
RAM Vision
The first half financial results were disappointing but mask a
number of operational and strategic successes in the first 6 months
which bode well for the longer term. Following the successful award
of Bluewater (Lend Lease) in 2011 we have seen increased interest
from the landowners in wishing to work with us. Bluewater retains
its signature site status and we wish to acquire further signature
Mall sites across the UK with all the major land owners.
The company set itself an aggressive target for new contracts
with retail malls in the UK and this is bearing fruit. The company
firmly anticipates increasing its media network by a minimum of 50%
by December 2012 across the major and independent mall owners.
Significant interest has been proffered from Land Securities,
Hammerson and Capital & Regional to install large iconic
screens across their estate to maximize sales revenues. We
anticipate reporting significant growth in the 3rd and 4th quarters
which will demonstrate increased yields for FY2013 onwards.
Based upon industry metrics and commercial rate cards the
directors of RAM Vision estimate that existing mall contracts have
an aggregate sales value potential of GBP21m over a 3 year period.
Key to our operational success is the acquisition of new malls
networks. Agencies and Brands buy critical mass and RAM must
continue to deliver a strong portfolio that will unlock this
revenue stream.
RAM Vision has also invested in a capital sales programme
following its success with Sovereign Land's Mall at Trinity
Wakefield. Further capital sales so far this year are Gainsborough
(Lincolnshire), and Stratford (East London). RAM Vision has
considerable expertise in the sourcing and installation of large
LED screens and will continue to develop its portfolio by
identifying premium retail sites which will commercially benefit
from these installations.
A strategic shift from employing capital expenditure to deploy
its signature iconic video walls has also allowed RAM Vision to
reduce its upfront working capital requirements and for the
forthcoming months will see it adopt lease financing to roll out
its expanding media network. We will continue to employ this
strategy to ensure we meet our targets in enhancing our position as
the UK's largest iconic network owner within the retail mall
environment. We firmly anticipate RAM Vision will be able to
achieve a gross footfall audience of 1 billion footfall per annum
thereby achieving robust sales revenues for its client
portfolio.
During the first 6 months we have reviewed our operating cost
base and as a direct result from this exercise we will see a
GBP500k costs saving in FY2013. Further efforts will be made to
ensure we operate both economically and effectively to avoid the
issues surrounding RAM Vision's formative years. Whilst FY2012 will
not see material savings due to our rationalisation and
restructuring programme it will ensure we are suitably positioned
to deliver strong revenues with proficient use of our internal
infrastructure.
Management changes have embraced the Company's new ethos and we
believe we are far better positioned to exploit the growing need
for real time high impact advertising - a key differentiator in the
market place, which should allow us to attract brands for greater
interactivity with their audience. Our National Sales are now
delivering consistent revenues with new brands utilising our
network, including: Sony Music, EON, Estee Lauder, Microsoft,
Renault, EMI Music, Virgin and Accurist.
RAM Vision will continue to expand its client portfolio in
utilising our screen network in the forthcoming months. Quarter 3
& 4 are historically stronger periods for our sector and
efforts will be maintained to ensure RAM Vision's brand is exposed
to the Specialist Agency network. Our Regional Sales strategy is
being revisited and we will generate more robust sales across the
expanded estate in the subsequent fiscal quarters. Overall RAM
Vision will deliver a consistent level of sales across a reduced
cost base thereby improving its performance for the latter part of
2012.
We firmly believe our buy & build strategy will deliver a
strong sustainable profit for RAM Vision over the ensuing months
into 2013 and allow us to enter positive cash-flow through
increased sales revenues across our expanded network.
The Digital Out of Home sector continues to see an increased
level of sales against other conventional advertising sales and RAM
Vision must ensure it is constantly evolving to achieve strong
sales in an increasingly competitive market. Further efforts will
be undertaken to ensure we reinforce our position in this sector to
consolidate our revenues and strive to deliver a profitable company
in the forthcoming fiscal years.
RAM Interactive
Following a substantive investment from our Joint Venture
Partners, Free Ray LLC in Dubai, who have secured an 18% equity
stake in the Group, RAM interactive has now been afforded a
material investment in terms of both 3D technology hardware and
working capital.
Its manufacturing partner Tridelity Systems DE have developed
and launched the world's first 3D (without glasses) Video Wall
which is primarily focused on the digital signage sector. RAM
Interactive deployed the video wall in a prominent broadcasting
venue for the London 2012 Olympics . The video wall delivered
significant interest to media executives and major brands that
viewed its commissioned content and the offering it presented as a
future new platform with broadcasting potential. We firmly believe
we will convert digital signage sales of the product in the
subsequent months.
We anticipate a gradual shift to 3D advertising in specific
venues to be an evolving process from a relatively low base as
clients understand the impact of alternative digital experiential
advertising material and the advances in the technology, which we
are at the forefront of.
Major brands are now in discussion with us to exploit this
technology in various arenas and we are confident of securing blue
chip clients in the subsequent months.
Further developments are in progress and we will be announcing
significant contracts in Q4 of 2012.
RAM Interactive will only invest in adopting proven technology,
as it does not wish to be consumed with working capital in research
and development projects. RAM Interactive will acquire the
distribution rights to effective advertising mediums that allow it
to cross into new market sectors thereby reducing the Group's
dependency on individual advertising channels.
We are currently engaged in several new projects, which will
result in us acquiring a new product range to exploit across both
the UK and Mainland Europe. Revenues will be generated via new
markets and we anticipate further investment from interested
parties. We anticipate several new UK sectors will adopt our
technology, which will also allow us to cross fertilise these
brands across other Group Companies.
RAM interactive will continue to explore the adoption and
exploitation of 3D technology and pursue the integration of this
technology across it existing portfolio.
We firmly believe we will have achieved significant adoption by
several leading brands within the next 6 months and create a
sustainable revenue and ultimately profitable model for future
years.
TrainFX
The first half of 2012 has seen significant changes in the
operation of TrainFX Ltd following the creation of the new joint
venture between RAM Trains and CETEC Europe Limited.
-- The injection of working capital has allowed TrainFX to
progress its R & D activities, which in turn has been bolstered
by the issuing of a grant by the Technology Strategy Board for
GBP240,000 towards the development of the next generation of energy
monitoring solutions for use on the UK rail network.
-- Inclusion in the Changzhou Evergreen Group (CEG) has raised
the international exposure of TrainFX giving it opportunities to
bid for contracts throughout the world. In particular in India
where CETEC has a wholly owned subsidiary which has been able to
present TraiFX's product range to a number of proposed new metro
projects.
-- The increased size of CEG has also allowed the Company to
expand its potential customer base to include new build
opportunities as well as its historical base of refurbishment
contracts.
During this period TrainFX has also continued to deliver its
contracts to First Great Western, First Capital Connect and LNWR
where the products have been very well received and have proved to
be reliable in their operation. Based on this stable platform
TrainFX is now progressing with multiple new opportunities, which
are expected to come to fruition as a part of the latest round of
new franchises being released by the authorities in the UK. Over
the next few years it is expected that the majority of the existing
passenger rail franchises will be re-let through a competitive
tendering process The first invitations to tender for these have
been released and it is anticipated that the broad content of these
will be followed in the new ones still to be released. As expected
these new franchises are very much focused on improved performance
with particular emphasis being given to improved passenger
information. This will include the requirement to comply with all
European legislation regarding PRM (People with Reduced Mobility) /
TSI (Technical Specification for Interoperability) and to enhance
the level of passenger information to include real-time and
integrated transport communications. All of these requirements fall
neatly into TrainFX's portfolio of products.
Based on the above the outlook for TrainFX looks promising as
the requirement for its products over the next few years grows:
-- Through the development of new products being taken to market.
-- In scale through expansion into international markets and new build opportunities
-- Increased demand as new franchise commitments for TrainFX's
products are undertaken as part of the reorganization of the UK
rail market.
There is little doubt that things have been much slower to
achieve than we would like or expected on all parts of the
business, which is reflected in the first half numbers. Most often
this is simply a function of long lead times dealing with larger
organisations and timing events outside our control. We have also
been carrying a bigger overhead than required at the time in
expecting a larger business to be developed. Nonetheless our
resolve to see these businesses flourish now seems to be paying
off. All three of the operating companies above are expected to
show very strong growth in sales into 2013 and for the group
overall to move into profits and cash flow positive next year,
following the last 3 years of investment. The Group is also engaged
in discussions with profiatble businesses in he sector with the
view to be a consolidator in the sector. These discussions are on
going. We believe the capital employed in the group will see a
return on investment in future years. Higher expected sales across
a growing network, combined with a lower forward overhead, a strong
management team and a number of exciting developments in the
pipeline gives the board great confidence in the year ahead.
T Baldwin
Chairman
RAM ACTIVE MEDIA PLC
CONSOLIDATED INCOME STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2012
6 Months 6 Months Year
to to to
30 June 30 June 31 Dec
2012 2011 2011
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Continuing operations
Revenue 471,489 1,714,147 2,858,415
Cost of sales (239,913) (1,123,949) (2,130,087)
-------------------------------- ------------ ------------ ------------
231,576 590,198 728,328
Administrative expenses (869,224) (1,623,043) (3,014,444)
Administrative expenses
- exceptional item - 212,087 (771,316)
-------------------------------- ------------ ------------ ------------
(637,648) (820,758) (3,057,432)
(Loss)/profit on disposal
of assets (2,069) 43,145 216,280
Loss on subsidiary acquisition (3,500)
-------------------------------- ------------ ------------ ------------
Operating Loss (643.217) (777,613) (2,841,152)
Finance income - - -
Finance expense (170,346) (116,449) (184,401)
-------------------------------- ------------ ------------ ------------
Net finance expense (170,346) (116,449) (184,401)
Share of loss of associate (130,018) - (17,620)
Loss before income tax (943,581) (894,062) (3,043,173)
Income tax expense - - -
-------------------------------- ------------ ------------ ------------
Loss for the period from
continuing operations (943,581) (894,062) (3,043,173)
-------------------------------- ------------ ------------ ------------
Earnings per share
-------------------------------- ------------ ------------ ------------
Basic earnings per share
- continuing and total
operations (0.1)p (0.6)p (3.9)p
Diluted earnings per share
- continuing and total
operations (0.1)p (0.6)p (3.9)p
-------------------------------- ------------ ------------ ------------
RAM ACTIVE MEDIA PLC
CONSOLIDATED STATEMENT COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2012
6 Months 6 Months Year
to to to
30 June 30 June 31 Dec
2012 2011 2011
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Loss for the period (943,581) (894,062) (3,043,173)
Other comprehensive income:
Changes in fair value
of available-for-sale
financial assets - - (62,825)
Other comprehensive income,
net of tax - - (62,825)
Total comprehensive income (943,581) (894,062) (3,105,998)
----------------------------- ------------ ------------ ------------
RAM ACTIVE MEDIA PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2012
6 Months 6 Months Year to
to to
30 June 30 June 31 Dec
2012 2011 2011
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
Assets
Non-current assets
Property, plant & equipment 415,345 368,621 442,297
Intangible assets 1,085,646 2,069,554 1,099,487
Investment in associate 117,114 - 163,636
Available-for-sale financial
assets 568,416 164,574 68,416
2,186,521 2,602,749 1,773,836
---------------------------------- ------------ ------------ ------------
Current assets
Inventory - 226,755 -
Trade and other receivables 1,029,758 911,722 562,429
Cash and cash equivalents 152,170 808,814 175,852
1,181,928 1,947,291 738,281
---------------------------------- ------------ ------------ ------------
Total assets 3,368,449 4,550,040 2,512,117
---------------------------------- ------------ ------------ ------------
Equity
Capital and reserves attributable
to equity holders of the
Company
Ordinary shares 4,441,305 2,608,930 2,673,930
Deferred shares 9,983,447 9,983,447 9,983,447
Share premium account 18,376,670 18,369,670 18,376,670
Merger reserve 68,500 327,272 65,000
Shares to be issued reserve 743,993 657,231 773,691
Retained earnings (32,239,459) (29,494,711) (31,379,375)
Minority interest in equity - - -
---------------------------------- ------------ ------------ ------------
Total equity 1,374,456 2,451,839 493,363
---------------------------------- ------------ ------------ ------------
Liabilities
Non current Liabilities
Borrowings 112,119 - 92,811
---------------------------------- ------------ ------------ ------------
112,119 - 92,811
Current liabilities
Trade and other payables 1,097,248 1,530,180 1,329,237
Borrowings 784,626 568,021 596,706
---------------------------------- ------------ ------------ ------------
1,881,874 2,098,201 1,925,943
---------------------------------- ------------ ------------ ------------
Total liabilities 1,993,993 2,098,201 2,018,754
---------------------------------- ------------ ------------ ------------
Total equity and liabilities 3,368,449 4,550,040 2,512,117
---------------------------------- ------------ ------------ ------------
RAM ACTIVE MEDIA PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Retained Shares Merger Total
Share premium earnings to be Reserve
capital issued
reserve
GBP GBP GBP GBP GBP GBP
Balance at
1 January
2011 11,197,502 16,546,420 (28,600,649) 634,663 327,272 105,208
Loss for year - - (3,043,173) - - (3,043,173)
Re-classification
of reserves
of disposed
subsidiaries - - 327,272 - (327,272) -
Other comprehensive
income:
Changes in
fair value
of available
for sale financial
assets - - (62,825) - - (62,825)
Transactions
with owners:
Issue of share
capital 1,459,875 1,912,125 - 35,000 65,000 3,479,000
Cost of share
capital issue - (88,875) - - - (88,875)
Share options
issued - - - 128,859 - 128,859
Convertible
loan-equity
component - - - (24,831) - (24,831)
Balance as
at 31 December
2011 12,657,377 18,376,670 (31,379,375) 773,691 65,000 493,363
--------------------- ----------- ----------- ------------- --------- ---------- ------------
Loss for the
period - - (943,581) - - (943,581)
Increase in
fair value
of proportionate
holding in
associate - - 83,497 - - 83,497
Other comprehensive
income:
Changes in - - - -
fair value - -
of available
for sale financial
assets
Transactions
with owners:
Issue of share
capital 1,767,375 - - (35,000) 3,500 1,735,875
Costs of issue - - - -
of share capital - -
Share options - - - -
issued - -
Convertible
loan-equity
component - - - 5,302 - 5,302
Balance as
at 30 June
2012 14,424,752 18,369,670 (32,239,459) 743,993 68,500 1,374,456
--------------------- ----------- ----------- ------------- --------- ---------- ------------
RAM ACTIVE MEDIA PLC
CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD ENDED 30 JUNE
2012
6 Months 6 Months Year
to to to
30 June 30 June 31 Dec
2012 2011 2011
(Unaudited) (Unaudited) (Audited)
GBP GBP
Cash flows from operating
activities
Loss before tax (943,581) (894,062) (3,105,998)
Adjustments for:
Depreciation 88,344 99,965 190,268
Goodwill impairment - - 983,404
Equity settled share based
payment transactions - - 128,859
Share of loss from associate 130,018 - 17,620
Net finance expense recognised
in profit or loss 170,346 116,449 184,401
Change in value of available
for sale financial assets - - 62,825
Loss on disposal of equipment/fixtures
and fittings 2,069 - 50,349
Loss on acquisition of 3,500 - -
subsidiary
Profit on disposal of
intangibles - - (130,091)
Profit on disposal of
financial assets - (43,145) (92,308)
---------------------------------------- ------------ ------------ ------------
(549,304) (720,793) (1,710,671)
Changes in working capital:
Decrease in inventories - 264,608 471,221
Decrease in trade and
other receivables 132,671 58,152 404,552
Decrease in trade and
other payables (231,987) (807,784) (1,053,127)
---------------------------------------- ------------ ------------ ------------
Cash used in operations (648,620) (1,205,817) (1,888,025)
Interest paid (170,346) (116,449) (184,401)
---------------------------------------- ------------ ------------ ------------
Net cash used in operating
activities (818,966) (1,322,266) (2,321,481)
---------------------------------------- ------------ ------------ ------------
Cash flows from investing
activities
Interest received - - -
Proceeds from sale of
investment - 43,145 125,641
Proceeds from sale of
subsidiary - - 33,000
Acquisition of equipment/fixtures
and fittings (49,621) (71,105) (150,572)
Acquisition of subsidiary
net of cash - - 73
Net cash from investing
activities (49,621) (27,960) 8,142
---------------------------------------- ------------ ------------ ------------
Cash flows from financing
activities
Proceeds from issue of
shares 632,375 3,218,125 3,225,125
Proceeds from issue of - 150,000 -
convertible notes
Proceeds from borrowings 289,406 50,000 300,000
Repayment of loans (76,876) (1,700,000) (1,725,904)
Net cash used in financing
activities 844,905 1,718,125 1,799,221
---------------------------------------- ------------ ------------ ------------
Increase/(decrease) in
cash equivalents (23,682) 367,899 (265,063)
Cash and cash equivalents
at beginning of the period 175,852 440,915 440,915
Cash and cash equivalents
at end of the period 152,170 808,814 175,852
---------------------------------------- ------------ ------------ ------------
RAM ACTIVE MEDIA PLC
NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE
2012
ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below. These
policies have been applied consistently to all the years presented
unless otherwise stated.
1.1 Basis of preparation
These interim statements have been prepared on a basis
consistent with International Financial Reporting Standards (IFRS).
They do not contain all of the information required for full
financial statements and should be read in conjunction with the
consolidated financial statements of the Group as at and for the
year ended 31 December 2011. These interim financial statements do
not constitute statutory accounts within the meaning of the
Companies Act.
The interim financial information have not been reviewed nor
audited by the auditors. The interim financial information was
approved by the Board of Directors on 30 July 2012. The information
for the year ended 31 December 2011 is extracted from the statutory
financial statements for that year which have been reported on by
the Group's auditors and delivered to the Registrar of Companies.
The audit report was unqualified.
The accounting policies applied by the Group in these interim
financial statements are the same as those applied by the Group in
its consolidated financial statements for the year ended and as at
31 December 2011.
The interim report is the responsibility of, and has been,
approved by the Directors. The Directors are responsible for
preparing the interim financial statements in accordance with the
AIM rules for Companies.
1.1.1 Going concern
During the six month period the Group made a loss of GBP943,581
and its current liabilities exceeded its current assets by
GBP699,946. The Board has a strategic plan for the next 3 years
which sees the Group move towards significant profitability.
Central to this are the doubling of the RAM Vision estate as
outlined in the Chairman's report whilst maintaining or improving
the level of advertising revenue; and the increased national and
international opportunities following the restructuring of
TrainFX.
The Group has successfully raised GBP1.73 million through an
equity placing, convertible loan and acquiring network assets for
equity consideration. The Group is now engaged in further
fundraising to improve the Group's financial position and provide
sufficient working capital for the foreseeable future. The
Directors believe that this will secure the Group's financial
future as the strategic plan for the next 3 years requires limited
equity funding.
1.2 Consolidation
(a) Subsidiaries
Subsidiary undertakings are all entities over which the Group
has the power to govern the financial and operating policies of the
subsidiary and, therefore, exercise control. The existence and
effect of both current voting rights and potential voting rights
that are currently exercisable or convertible are considered when
assessing whether control of an entity is exercised. Subsidiaries
are consolidated from the date at which the Group obtains the
relevant level of control and are de-consolidated from the date at
which control is relinquished.
The acquisition method of accounting is used for all business
combinations. On acquisition, the assets, liabilities and
contingent liabilities of the subsidiary are measured at their fair
values. The cost of the business combination is measured at the
fair value of the assets given, equity instruments issued and
liabilities incurred or assumed at the date of exchange, plus costs
directly attributable to the acquisition. Any excess of the cost of
the combination over the fair value of the Group's share of the
identifiable net assets acquired is recorded as goodwill. If the
cost of the combination is less than the fair value of the Group's
share of the identifiable net assets acquired, the difference is
credited to the income statement in the period of acquisition.
Where payment of part of the cost of the combination is
contingent on future events, for instance future profit streams of
the subsidiary acquired, a provision is recognised at the date of
acquisition if it is thought probable that such future events will
be achieved and the cost of the combination increased accordingly.
The provision is recognised at its fair value, discounted to
recognise the effect of the time value of money. The discount is
released over the period over which the future events are assessed
such that at the date of payment the provision is equal to the
amount of deferred consideration to be paid. The provision is
assessed at each reporting date and adjusted if expectations of the
amount payable have changed. Inter-company transactions and
balances between Group companies are eliminated on
consolidation.
Where a minority has retained an interest in a subsidiary, the
Group accounts for transactions with the minority which do not
result in a loss of control as equity transactions in accordance
with IAS 27 (revised). If the Company acquires an increase in the
stake it holds in an entity from a minority interest or disposes of
part of its stake, the carrying amounts of the controlling and
non-controlling interests shall be adjusted to reflect the changes
in their relative interests in the subsidiary. Any difference
between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received
shall be recognised directly in equity and attributed to the owners
of the parent. The minority's share of profit or loss,
comprehensive income and assets are shown in the consolidated
income statement, statement of comprehensive income and statement
of financial position as non-controlling interests.
The investments in subsidiaries represent the share capital
acquired less any provision for impairment. The carrying value of
investments in subsidiaries is reviewed for impairment if events or
changes in circumstances indicate the carrying value may not be
recoverable. Any impairment will be shown in the income statement
in administrative expenses.
(b) Associates
Associates are all entities over which the Group exercises
significant influence but does not exercise control. Investments in
associates are accounted for using the equity method of accounting
and are initially recognised at cost, which includes goodwill
identified on acquisition, net of any accumulated impairment loss.
The Group's share of its associate's profits or losses after
acquisition of its interest is recognised in the income statement
and cumulative post-acquisition movements are adjusted against the
carrying amount of the investment. Where the Group's share of
losses of an associate equals or exceeds the carrying amount of the
investment, the Group only recognises further losses where it has
incurred obligations or made payments on behalf of the
associate.
1.3 Segment reporting
In accordance with IFRS 8, segmental information is presented
based on the way in which financial information is reported
internally to the chief operating decision maker. The Group's
internal financial reporting is organised along product and service
lines and, therefore, segmental information has been presented
about business segments. A business segment is a group of assets
and operations engaged in providing products and services that are
subject to risks and returns which are different from those of
other business segments.
The Group has determined its reportable segments in accordance
with IFRS 8. In accordance with that standard the results of
certain operating segments may be aggregated if they are
sufficiently similar in nature. Where a business segment
contributes in excess of either 10% of total revenue, 10% of total
assets or 10% of the absolute amount of reported profit or loss, it
is disclosed as a separate segment. Because the Group has
determined that its reportable segments are based on products and
services, the disclosures specifically required by IFRS 8 in
respect of products and services are not separately disclosed.
Information regarding geographical revenues and non-current
assets is disclosed in note 5 to the financial statements.
1.4 Property, plant and equipment
All property, plant and equipment is stated at historical cost
less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
All assets are depreciated in order to write off the costs, less
anticipated residual values of the assets over their useful
economic lives on a straight line basis as follows:
-- Plant and machinery: 5-10 years
-- Network assets: 5 years
-- Fixtures and fittings: 5 years
-- Computer equipment: 3 years
Items of property, plant and equipment held under finance leases
are depreciated over the shorter of the lease term and the useful
economic life of the asset.
1.5 Intangible assets
Acquired intangible assets are shown at historical cost.
Acquired intangible assets have a finite useful life and are
carried at cost, less accumulated amortisation over the finite
useful life. All charges in the year are shown in income statement
in administrative expenses.
(a) Goodwill
Goodwill relating to acquisitions occurring prior to the date of
transition to IFRS is carried at the net book value at that date as
permitted by IFRS 1. Goodwill arising on acquisitions subsequent to
the date of transition is stated at cost. In both cases, goodwill
is not amortised, but is subject to an annual test for impairment.
Impairment testing is performed by the Directors as set out below.
Where impairment is identified, it is charged to the income
statement in that period.
(b) Concession rights
Concession rights are shown at historical cost. Concession
rights have a finite useful life and are carried at cost less
accumulated amortisation. Amortisation is calculated using straight
line method to allocate the cost of the concession rights over the
estimated useful life of five to ten years.
1.6 Impairment of non-financial assets
Assets that have an indefinite useful life, for example
goodwill, are not subject to amortisation but are instead tested
annually for impairment and are subject to additional impairment
testing if events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable.
Assets that are subject to depreciation or amortisation are
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. A review
for indicators of impairment is performed annually. An impairment
loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount. The recoverable amount is
the higher of an asset's fair value less costs to sell and value in
use. Any impairment charge is recognised in the income statement in
the year in which it occurs. When an impairment loss, other than an
impairment loss on goodwill, subsequently reverses due to a change
in the original estimate, the carrying amount of the asset is
increased to the revised estimate of its recoverable amount, up to
the carrying amount that would have resulted, net of depreciation,
had no impairment loss been recognised for the asset in prior
years
1.7 Financial assets continued
The Group classifies its financial assets as either at fair
value through profit and loss, or as available for sale financial
assets. The Group does not hold any held to maturity financial
assets or financial assets classified as loans and receivables.
The classification is dependent on the purpose for which the
financial assets are acquired and is determined by the Directors on
initial recognition.
Financial assets at fair value through profit or loss are
financial assets which are held for trading. A financial asset is
classified as at fair value through profit or loss if it is
acquired principally for the purpose of selling in the short term.
Derivatives are also classified as held for trading unless they are
designated as effective hedges. Such assets are classified as
current assets. Financial assets at fair value through profit or
loss are shown at fair value at each reporting date with changes in
fair value shown in the income statement.
Available for sale financial assets consist of equity
investments in other companies where the Group does not exercise
either control or significant influence. Available for sale
financial assets are shown at fair value at each reporting date
with changes in fair value being shown in the statement of
comprehensive income.
Where financial assets are quoted the fair value at each
reporting date is based on the quoted bid price at that date. Where
an available for sale financial asset consists of an equity
investment in an unquoted company where a reliable fair value
cannot be determined, such investments are shown at cost less
impairment.
1.8 Inventories
Inventories are stated at the lower of cost and net realisable
value. Net realisable value is the estimated selling price of the
stocks less any applicable costs to sell. Where net realisable
value of inventory is lower than the original acquisition cost or
other subsequent carrying amount, the amount of the inventory that
has been written down to net realisable value is recognised as an
expense in the period in which the write down occurs. When a write
down is reversed, the reversal is recognised in the income
statement in the period in which the reversal occurs and the amount
of inventories is increased accordingly.
The cost of inventories includes all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to
their present location and condition.
The Group does not hold any stock or finished goods. Inventory
refers to work in progress in subsidiaries.
1.9 Trade and other receivables
Trade receivables are amounts due from customers for merchandise
sold or services performed in the ordinary course of business. If
collection is expected in one year or less, they are classified as
current assets. If not, they are presented as non-current
assets.
Trade and other receivables are recognised at fair value
subsequently measured at amortised cost using the effective
interest method, less any appropriate allowance for estimated
irrecoverable amounts.
1.10 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and
other short term highly liquid deposits with original maturities of
three months or less. Bank overdrafts are shown within borrowings
in current liabilities on the balance sheet.
1.11 Share capital
Ordinary shares of the Company are classified as equity.
Mandatorily redeemable preference shares and other classes of share
where an obligation exists to transfer economic benefits are
classified as liabilities.
Costs directly attributable to issue of new shares are shown in
equity as a deduction.
1.12 Reserves
The Group financial statements include the following reserves:
share premium account, merger reserve, shares to be issued reserve
and retained earnings. Premiums paid on the issue of share capital,
less any costs relating to these, are posted to the share premium
account. The merger reserve arises when a premium arises on the
100% acquisition of a subsidiary and these are transferred to
retained earnings when the subsidiary ceases to trade or is
disposed off. The Company issues share options that are accounted
for as share-based payments; this charge is credited to the shares
to be issued reserve (see policy on share-based payments). Also the
Group classifies the liability elements of convertible loan notes
as part of the shares to be issued reserve.
1.13 Trade payables
Trade payables are recognised initially at fair value and are
subsequently measured at amortised cost using the effective
interest method. As the payment period of trade payables is short
future, cash payments are not discounted as the effect is not
material.
All borrowings are classified as current unless the Group has an
unconditional right to defer payment of the borrowings until at
least twelve months from the balance sheet date.
1.14 Borrowings
Interest-bearing borrowings are recognised initially at fair
value, net of any transaction costs incurred. Borrowings are
subsequently stated at amortised cost using the effective interest
method with any difference between the proceeds (net of transaction
costs) and the redemption value being recognised over the period of
the borrowings.
Borrowing costs incurred which are directly attributable to the
acquisition, construction or production of a qualifying asset are
capitalised as part of the cost of that asset.
The fair value of the liability portion of convertible loan
stock is determined using a market interest rate for a comparable
loan stock with no conversion option. This amount is recorded as a
liability on an amortised cost basis until the loan stock is
redeemed or converted. The remainder of the carrying amount of the
loan stock is allocated to the conversion option and shown within
equity.
1.15 Taxation
The tax expense for the year represents the total of current
taxation and deferred taxation. The charge in respect of current
taxation is based on the estimated taxable profit for the year.
Taxable profit for the year is based on the profit as shown in the
income statement, as adjusted for items of income or expenditure
which are not deductible or chargeable for tax purposes. The
current tax liability for the year is calculated using tax rates
which have either been enacted or substantially enacted at the
balance sheet date.
Deferred tax is provided in full, using the liability method on
temporary differences arising between the tax base of assets and
liabilities and their carrying values in the financial statements.
The deferred tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a
business combination that, at the time of the transaction, affects
neither accounting nor taxable profit or loss. Deferred tax is
determined using tax rates which have been enacted or substantially
enacted at the balance sheet date and are expected to apply when
the related deferred tax asset is realised or the deferred income
tax liability is settled.
Deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary differences can be utilised.
1.16 Share-based payments
The cost of share-based payment arrangements, which occur when
employees receive shares or share options, is recognised in the
income statement over the period over which the shares or share
options vest.
The expense is calculated based on the value of the awards made,
as required by IFRS 2, 'Share-based payment'. The fair value of the
awards is calculated by using the Black-Scholes option pricing
model taking into account the expected life of the awards, the
expected volatility of the return on the underlying share price,
the market value of the shares, the strike price of the awards and
the risk-free rate of return. The charge to the income statement is
adjusted for the effect of service conditions and non-market
performance conditions such that it is based on the number of
awards expected to vest. Where vesting is dependent on market-based
performance conditions, the likelihood of the conditions being
achieved is adjusted for in the initial valuation and the charge to
the income statement is not, therefore, adjusted so long as all
other conditions are met.
Where an award is granted with no vesting conditions, the full
value of the award is recognised immediately in the income
statement.
1.17 Provisions
Provisions are recognised in the balance sheet where there is a
legal or constructive obligation to transfer economic benefits as a
result of a past event. Provisions are discounted using a rate
which reflects the effect of the time value of money and the risks
specific to the obligation, where the effect of discounting is
material.
Provisions are measured at the present value of expenditures
expected to be required to settle the obligation using a pre-tax
that reflects current market assessments of the time, value of
money and the risks specific to the obligation. The increase in
provision due to the passage of time is recognised as interest
expense.
1.18 Revenue recognition
Revenue comprises the fair value of the consideration received
or receivable for the sale of goods and services in the ordinary
course of the Group's activities. Revenue is shown net of
value-added tax, returns, rebates and discounts and after
eliminating sales within the Group.
The Group recognises revenue when the amount of revenue can be
reliably measured, it is probable that future economic benefits
will flow to the entity and when specific criteria have been met
for each of the Group's activities. The Group bases its estimates
on historical results, taking into consideration the type of
customer, the type of transaction and the specifics of each
arrangement.
The majority of the Group's long term contract arrangements are
accounted for under IAS 11, 'Construction contracts'. Sales are
recognised as soon as performance targets have been achieved per
the agreed contracts. This is usually when title passes or
separately identifiable phase (milestone) of a contract or
development has been completed and accepted by the customer.
1.18 Revenue recognition continued
No profit is recognised on contracts until the outcome of the
contract can be reliably estimated. Profit is calculated by
reference to reliable estimates of contract revenue and forecast
costs after making suitable allowances for technical and other
risks related to performance milestones yet to be achieved. The
amount of profit attributable to the stage of completion of these
contracts is arrived at by reference to the estimated overall
profitability of the contract. When it is probable that total
contract costs will exceed total contract revenue, the expected
loss is recognised immediately as an expense.
In terms of revenue from media sales, key classes of revenue are
recognised on the following bases:
Class of revenue Recognition criteria
Advertising on transmission or display
Content production on delivery
1.19 Leases
On inception of a lease of an item of property, plant and
equipment, the terms and conditions of the lease are reviewed to
determine the appropriate classification for the lease. Where the
Group bears substantially all the risks and rewards of ownership of
the item, the lease is classified as a finance lease and the item
is capitalised within the appropriate class of property, plant and
equipment at the lower of the fair value of the leased item and the
minimum lease payments. Each lease payment is allocated between the
liability and finance charges so as to obtain a constant rate on
the finance balance outstanding. The outstanding capital element of
the lease payments is included within current and long term
payables as appropriate; the interest element of the lease payments
is charged to the income statement over the period of the lease so
as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period.
Leases where the risks and rewards of ownership are retained by
the lessor are classified as operating leases. Payments made under
operating leases, net of any incentives received from the lessor,
are charged to the income statement on a straight line basis over
the term of the lease.
Rental income received under operating leases is credited to the
income statement on a straight line basis over the lease term.
1.20 Pensions
The Company operates a defined contribution pension scheme under
which fixed contributions are payable. Pension costs charged to the
income statement represent amounts payable to the scheme during the
year.
2. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year.
6 Months 6 Months Year
to to to
30 June 30 June 31 Dec
2012 2011 2011
(Unaudited) (Unaudited) (Audited)
Loss attributable to equity
holders of the company
(GBP) (943,581) (894,062) (3,043,173)
Weighted average number
of ordinary shares in issue 716,061,591 145,981,971 205,227,507
Basic loss per share (pence
per share) (0.1) (0.6) (3.9)
------------------------------- ------------ ------------ ------------
As at 30 June 2012, the potentially dilutive ordinary shares
were anti-dilutive because the Group was loss-making.
3. BORROWINGS
On 20 April 2012 the board resolved to borrow GBP539,406.25 from
funds advised by Eden Corporate Finance Limited. GBP289,406.25 of
the amount borrowed was used to repay the previous loan GBP250,000
taken on 12 December 2011 plus accrued interest of GBP39,406.25.
This bridging loan was for working capital purposes and was secured
at an interest rate 5% per month and it is repayable in September
2012.
Contact:
Edward Adams, RAM Investment Group plc on 07967 008448
Tim Baldwin, RAM Investment Group plc on 0207 518 4303
Sandy Jamieson, Libertas Capital Corporate Finance Limited on
0207 569 9650
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUWABUPPGAM
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