29th Sep 2008 16:44
The directors present their report and the financial statements of the company for the year ended 31 March 2008.
PRINCIPAL ACTIVITIES AND BUSINESS REVIEW
The principal activity of the company during the year continued to be that of selling predominately Indian music through physical formats of music cassettes and compact disks and publishing of music in key international markets through traditional and modern distribution channels.
The profit for the year, after taxation, amounted to ‚£35,043 (2007 - ‚£141,800). The company experienced a drop in its physical sales during the year ended 31 March 2008. This was as the result of the worldwide trend of reducing sales of physical products. This decrease was not compensated with a corresponding rise in the digital sales. The sales revenue in the current year dropped to ‚£1,076,183 (2007 - ‚£1,312,476).
There was an increase in revenues from exploitation of Catalogues since there were a number of innovative product offerings in various countries. The company continued its initiatives to penetrate the mainstream markets of North America and Canada and similarly in the European market, namely Germany and the UK.
Publishing incomes in the current year were around the same level of ‚£581,298 for the current year (2007 - ‚£593,395). This was as the result of the company's efforts to proactively work with the collection societies and market the company's repertoire. Further, the cost optimisation efforts have witnessed all round reduction in the operating costs. As was the case in the previous year, the board does not propose a dividend in respect of the year ending 31 March 2008 as a result of the accumulated losses.
OUTLOOK FOR 2008-09
The Internet is now a key distribution channel for legitimate digital music sales, and the mobile phone is also evolving into an important channel for digital music. Online sales of digital music represented almost 9% of the total worldwide music market in 2007. According to the International Federation of the Phonographic Industry (IFPI), paid-for digital single downloads reached 480 million in 2007, which is more than double the number of digital singles downloaded in 2007. Technology is moving towards greater usage of wireless technology for hand held devices, which augers well for the music download business as it gives people music on the move and obviates the need for pc based consumption of entertainment. Your Company in association with its parent, Saregama India Limited will place its focus to tap business opportunities in the evolving scenario of the international music industry. Looking forward, the market conditions for sale of physical products will remain competitive and somewhat uncertain, but by tapping the strength of Saregama's vast catalogue and planned new releases, the Company will make every attempt to excel its performance both in fields of recorded music and digital & publishing.
AUDITED PROFIT & LOSS ACCOUNTFor the year ended 31 March 2008. 31/03/08 31/03/07 (GBP'000) (GBP'000)TURNOVER 1,076 1,314Cost Of Sales (545) (560)GROSS PROFIT 531 754Administrative Expenses (483) (603)OPERATING PROFIT 48 151Interest Receivable - -Interest Payable (13) (9)PROFIT ON ORDINARYACTIVITIES BEFORE TAXATION 35 142Taxation - -Note 2PROFIT ON ORDINARYACTIVITIES AFTER TAXATION 35 142
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Basic profit per share 0.35 p 1.42 pNote 3Diluted profit per share 0.35 p 1.42 pNote 3
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All of the company's activities are classed as continuing. The company has no recognised gains or losses other than those shown in the profit and loss account.
AUDITED BALANCE SHEETAs at 31 March 2008. 31/03/08 31/03/07 (GBP'000) (GBP'000)FIXED ASSETSTangible 1 2Intangible Note 1 1,100 1,200CURRENT ASSETSStocks 171 138Debtors 589 376Cash at Bank and in Hand 56 41 816 555CreditorsAmounts falling due within a year (299) (173)NET CURRENT ASSETS 517 382TOTAL ASSETS LESS CURRENT LIABILITIES 1,619 1,584NET ASSETS 1,619 1,584REPRESENTED BYCAPITAL AND RESERVESShare Capital 100 100Share Premium 2,391 2,391Profit and Loss Account (872) (907) 1,619 1,584AUDITED CASH FLOW STATEMENTFor the year ended 31 March 2008 31/03/08 31/03/07 (GBP'000) (GBP'000)
Net cash inflow/(outflow) from
operating activities (69) 55
Returns on investments and servicing
of finance (13) (9)Taxation (14) -Capital expenditure - -Increase/(decrease) in cash in the period (86) 46Reconciliation of net cash flow to movement in net debtIncrease/(decrease) in cash in the period (86) 46Net debt at 1 April 2007 13 (33)Net funds/(debt) at 31 March 2008 (86) 13
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The financial information presented above for the year ended 31 March 2008 does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. They have been prepared using accounting policies consistent with those applied in preparing the financial statements for the year ended 31 March 2008, on which the auditors gave an unqualified opinion.
The directors of the issuer accept responsibility for this announcement.
Expenditure incurred by the company in the acquisition of distribution rights is capitalised and then amortised. The capitalised expenditure is amortised over the term of the licence unless the term is unspecified in which case a period not exceeding 5 years is applied. The licence fee under the licence agreement amounting to GBP 2,000,000 is being amortised in equal annual installments over its useful life of 20 years.
2. TAXATION
The tax charge for the year is on the basis of the anticipated tax rates applying for the full year.
3. EARNINGS PER SHARE
Basic and diluted loss per share has been calculated by dividing the profit after tax by the weighted average number of shares in issue throughout the period of 9,985,000 (year ended 31 March 2007: 9,985,000).
4. COPIES OF AUDIT REPORT
Copies of this report are available to the public at the registered office of Saregama Plc, Unit 3, Bush Industrial Estate, Standard Road, Park Royal, London NW10
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