Final Results

Independent auditor's report to the members of RAM Investment Group plc 

We have audited the group and parent company financial statements of RAM Investment Group plc for the period ended 31 May 2008 which comprise the Group Income Statement, The Group and Parent Company Balance Sheets, the Group Cash Flow Statements, The Group and Parent Company Statement of Change in Shareholders' Equity and the related notes. These financial statements have been prepared under the accounting policies set out therein. 

This report is made solely to the Company's members, as a body, in accordance with Section 495 and 496 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed. 

Respective responsibilities of the directors and auditors 

The directors' responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and International Financial Reporting Standards (IFRSs) as adopted for use in the European Union and for being satisfied that the financial statements give a true and fair view are set out in the Statement of Directors' responsibilities. 

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). 

We report to you our opinion as to whether the financial statements have been properly prepared in accordance with the relevant financial reporting framework, have been prepared in accordance with the Companies Act 2006 and, as regards the group financial statements, give a true and fair view. We also report to you whether in our opinion, whether the information given in the Directors' Report is consistent with the financial statements. 

In addition we report to you if, in our opinion, the company has not kept adequate accounting records, if we have not received all the information and explanations we required for our audit, or if certain disclosures of director's remuneration specified by law are not made.

We review whether the Corporate Governance Statement reflects the company's compliance with the nine provisions of the 2006 Combined Code specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to consider whether the board's statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the group's corporate governance procedures or its risk and control procedures. 

We read other information contained in the Annual Report, and consider whether it is consistent with the audited financial statements. This other information comprises only the Chairman's Statement and the Directors' Report. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information. 

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the group's and company's circumstances, consistently applied and adequately disclosed. 

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. 

Opinion

In our opinion: 

the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union as applied in accordance with the provisions of the Companies Act 2006;

the financial statements have been prepared in accordance with the Companies Act 2006 and, as regards the group financial statements;

the financial statements give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2008 and of the group's loss for the period then ended;

the information given in the directors' report is consistent with the financial statements.

Emphasis of matter - Going Concern

In forming our opinion which is not qualified, we have considered the adequacy of the disclosures made in the financial statements concerning the Group's ability to continue as a going concern. We have considered the Group's cashflow projections for the next 12 months which indicate that the Group's future solvency is dependent on the New Board being successful in raising funds in order to implement its investment strategy. In our opinion, there is inherent uncertainty with regard to the New Board's future plans which casts doubt on the Group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern. 

Anna Bulmer (Senior Statutory Auditor)

For and on behalf of Newman Peters, Statutory Auditor

Chartered Accountants & Registered Auditors

19 Fitzroy Square

London W1T 6EQ

22 June 2009

7 Months to

12 Months to 

31 Dec 2008

31 May 2008

Note

£

£

Continuing operations

Administrative expenses

(88,717)

(173,064)

Write off of intra-Group debt

-

Operating Loss

(88,717)

(173,064)

Finance income

3

620

4,766

Net change in fair value of available-for-sale financial assets

8

(10,408)

(514,600)

Finance expense

3

(1,249)

(31,754)

Net finance (expense)/income

(11,037)

(541,588)

Realised gain on disposal of financial assets

5

393,600

-

Profit / (Loss) before income tax

293,846

(714,652)

Income tax expense

4

-

-

Profit/ (loss) for the year from continuing operations

293,846

(714,652)

Profit/loss per share

Basic and diluted profit/loss per share

From continuing operations

15

2.2p

(12.6)p

The notes on pages 14 to 24 are an integral part of these consolidated financial statements.

There are no recognised gains and losses other than those passing through the income statement.

31 Dec 2008

31 May 2008

Note

£

£

Assets

Current assets

Trade and other receivables

7

21,832

5,955

Available-for-sale financial assets 

8

219,592

66,392

Cash and cash equivalents

9

29,865

32,241

271,289

104,588

Total assets

271,289

104,588

Equity

Capital and reserves attributable to equity holders of the company

Ordinary shares

12

133,153

56,779

Deferred shares

12

9,983,447

9,983,447

Share premium account

11,601,271

11,372,145

Retained earnings

(21,592,568)

(21,886,414)

Total equity

125,303

(474,043)

Liabilities

Current liabilities

Borrowings

11

-

443,528

Trade and other payables

10

145,986

135,103

145,986

578,631

Total liabilities

145,986

578,631

Total equity and liabilities

271,289

104,588

The financial statements were approved by the Board on 22 June 2009.

T Baldwin

Director

The accompanying notes are an integral part of this Consolidated Balance Sheet.

31 Dec 2008

31 May 2008

Note

£

£

Assets

Non-current assets

Available-for-sale investments

6

2

2

2

2

Current assets

Trade and other receivables

7

21,832

5,955

Available-for-sale financial assets

8

219,592

66,392

Cash and cash equivalents

9

29,865

32,241

271,289

104,588

Total assets

271,291

104,590

Equity

Capital and reserves attributable to equity holders of the company

Ordinary shares

12

133,153

56,779

Deferred shares

12

9,983,447

9,983,447

Share premium account

11,601,271

11,372,145

Retained earnings

(21,592,566)

(21,886,412)

Total equity

125,305

(474,041)

Liabilities

Current liabilities

Borrowings

11

-

443,528

Trade and other payables

10

145,986

135,103

145,986

578,631

Total liabilities

145,986

578,631

Total equity and liabilities

271,291

104,590

The financial statements were approved by the Board on 22 June 2009.

T Baldwin

Director

The accompanying notes are an integral part of this Balance Sheet.

GROUP

Share capital

Share premium

Retained earnings

Total

£

£

£

£

Balance at 1 June 2008

10,040,226

11,372,145

(21,886,414)

(474,043)

Profit for the year

- 

- 

293,846

293,846

Shares issued during the year

76,375

229,125

-

305,500

Balance at 31 December 2008

10,116,601

11,601,270

(21,592,568)

125,303

COMPANY

Share capital

Share premium

Retained earnings

Total

£

£

£

£

Balance at 1 June 2008

10,040,226

11,372,145

(21,886,412)

(474,041)

Profit for the year

- 

- 

293,846

293,846

Shares issued during the year

76,375 

229,125 

305,500

Balance at 31 December 2008

10,116,601

11,601,270

(21,592,566)

125,305

GROUP

Share capital

Share premium

Retained earnings

Total

£

£

£

£

Balance at 1 June 2007

10,040,226

11,372,145

(21,171,762)

240,609

Loss for the year

- 

- 

(714,652)

(714,652)

Total recognised income and expense

- 

- 

(714,652)

(714,652)

Balance at 31 May 2008

10,040,226

11,372,145

(21,886,414)

(474,043)

COMPANY

Share capital

Share premium

Retained earnings

Total

£

£

£

£

Balance at 1 June 2007

10,040,226

11,372,145

(21,282,067)

130,304

Loss for the year

- 

- 

(604,345)

(604,345)

Total recognised income and expense 

-

-

(604,345)

(604,345)

Balance at 31 May 2008

10,040,226

11,372,145

(21,886,412)

(474,041)

Group and Company

7 Months to

12 Months to

31 Dec 2008

31 May 2008

Note

£

£

Cash flows from operating activities

Profit / (loss) before tax

293,846

(714,652)

Adjustments for:

Depreciation

-

580

Write off of office equipment

-

1,860

Minority interest

-

(25)

Net finance income recognised in profit or loss

3

629

26,988

Change in financial assets

8

10,408

514,600

Gain on disposal of financial assets

5

(393,600)

-

(88,717)

(170,649)

Changes in working capital:

(Increase)/decrease in trade and other receivables

(15,878)

)

29,539

Increase in trade and other payables

31,097

46,251

Cash used in operations

(73,498)

(94,859)

Interest paid

3

(1,249)

(4,645)

Net cash used in operating activities

(74,747)

(99,504)

Cash flows from investing activities

Acquisition of financial assets

(230,000)

-

Interest received

3

620

4,766

Net cash (used in)/ generated from investing activities

(229,380)

4,766

Cash flows from financing activities

Proceeds from issue of shares

305,500

-

Repayment of other short term loans

(3,749)

(7,081)

Net cash generated from/ (used in) financing activities

301,751

(7,081)

(Decrease) in cash equivalents

(2,376)

(101,819)

Cash and cash equivalents at beginning of year

32,241

134,060

Cash and cash equivalents at end of year

29,865

32,241

1. ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS's as adopted by the EU), IFRIC Interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, and financial assets and financial liabilities at fair value through the profit and loss.

Status of Accounts

The figures shown for the period ended 31 December 2008 are audited but do not constitute statutory financial statements within the meaning of the Companies Act 1985. The financial statements for the year ended 31 December 2007 have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under s.237(2) or (3) of the Companies Act 1985.

Going Concern

The Directors are aware that the Group's future solvency is dependent on their being successful in raising funds in order to implement the Group's investment strategy. Since the end of the accounting period there has been considerable progress made towards achieving the Group's objectives, as set out in Note 18 "Subsequent Events". The Directors have considered the forecasts for the twelve month period from the date of signing these financial statements and believe that the Group's financial resources will be sufficient to enable the Group to continue in operation for the foreseeable future. Therefore the Directors consider it appropriate to prepare the financial statements on a going concern basis.

Revenue

Revenue represents amounts receivable for goods and services net of VAT and trade discounts.

Basis of consolidation

The consolidated profit and loss account and balance sheet include the financial statements of the Company and its subsidiary undertakings made up to 31 December 2008, subject to the exceptional treatment of Ram Media Limited (See Note 8 - Available-for-sale investments). Intra-group sales and profits are eliminated fully on consolidation.

Company profit and loss account

The Company has taken advantage of the exemption allowed under Section 408 of the Companies Act 2006 and has not presented its own profit and loss account in these financial statements. The Company's profit for the period was £293,846 (May 2008 - loss of £604,345).

Financial instruments 

Non-derivative financial instruments 

Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, including service concession receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial instruments are measured as described below.

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. 

Available-for-sale financial assets

The Group's investments in equity securities and certain debt securities are classified as available-for-sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses, and foreign currency differences on available-for-sale monetary items, are recognised directly in equity. When an investment is derecognised, the cumulative gain or loss in equity is transferred to profit or loss.

Financial assets at fair value through profit or loss

An instrument is classified at fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. Financial instruments are designated at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group's documented risk management or investment strategy. Upon initial recognition attributable transaction costs are recognised in profit or loss when incurred. Financial instruments at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss.

Other

Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses.

Finance income and expenses

Finance income comprises interest income on funds invested (including available-for-sale financial assets), dividend income, gains on the disposal of available-for-sale financial assets, changes in the fair value of financial assets at fair value through profit or loss, and gains on hedging instruments that are recognised in profit or loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group's right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, dividends on preference shares classified as liabilities, changes in the fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets, and losses on hedging instruments that are recognised in profit or loss. All borrowing costs are recognised in profit or loss1 using the effective interest method.

Foreign currency gains and losses are reported on a net basis.

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 transaction. Exchange differences are taken into account in arriving at the operating result. 

Income tax 

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

2. PROFIT / LOSS BEFORE TAX

7 Months to

12 Months to

31 Dec 2008

31 May 2008

£

£

Profit / loss before taxation is stated after charging:

Depreciation of property, plant and equipment

-

580

Auditors' remuneration

10,000

13,000

Loss on disposal of fixed assets

-

1,860

3. FINANCE INCOME AND EXPENSE

7 Months to

12 Months to

31 Dec 2008

31 May 2008

£

£

Bank interest receivable

620

4,766

Interest payable on bank loans and overdrafts

(1,249)

(4,645)

On convertible loan stock

-

(27,109)

Net finance expense recognised in profit or loss

(629)

(26,988)

4. INCOME TAX EXPENSE

7 Months to

12 Months to

31 Dec 2008

31 May 2008

£

£

Current tax expense

Current year

-

-

-

-

Reconciliation of effective tax rate

-

-

Profit / (loss) for the year

293,846

(714,652)

Total income tax expense

-

-

Profit / (loss) excluding income tax

293,846

(714,652)

Income tax using the Company's standard rate of corporation tax of 28% (2007 - 30%)

82,277

(200,103)

Effect of:

Non-deductible expenses - depreciation add-back

-

162

Tax incentives - capital allowances

52

(150)

Tax loss utilised

(85,138)

-

Inter company balance write-off

-

(30,886)

Other tax adjustments

2,809

230,977

-

-

5. Gain/(Loss) on disposal of financial assets

7 Months to

12 Months to

31 Dec 2008

31 May 2008

£

£

Convertible loan written off

393,600

-

393,600

-

6. AVAILABLE-FOR-SALE INVESTMENT

COMPANY

Shares in Group undertakings

Cost

£

At 1 June 2008

2

Disposal during the year

-

At 31 December

2

The Company holds more than 20 percent of the ordinary share capital of the following companies:

Company

Country of incorporation

Percentage shareholding of ordinary shares

Principal activity

Divedome Limited

UK

100%

Property and Leisure company

RAM Media Limited

UK

100%

Media rights exploitation

Ram Television Limited**

UK

100%

Dormant

Divedome Limited did not trade during the year. 

The process to strike off RAM Television Limited from the register of companies has been commenced. It has never traded.

** Held by subsidiary undertaking.

Excluded Subsidiary

Ram Media Limited

On 4 May 2007 Malcolm Cohen and Antony David Nygate (both of BDO Stoy Hayward LLP, 8 Baker Street, London W1U 3LL) were appointed Joint Administrators of RAM Media Limited. Although RAM Media Limited remains wholly owned by RAM Investment Group plc it is now controlled by its Administrators and has therefore been excluded from consolidation as at the accounting year end. 

In accordance with insolvency legislation the Administration automatically came to an end on 3 November 2008. Therefore the Company will now exit the Administration by way of a Creditors' Voluntary Liquidation.

7. TRADE AND OTHER RECEIVABLES

Group

Company

31 Dec 2008

31 May 2008

31 Dec 2008

31 May 2008

£

£

£

£

Other receivables

21,832

5,955

21,832

5,955

21,832

5,955

21,832

5,955

8. AVAILABLE-FOR-SALE FINANCIAL ASSETS

GROUP AND COMPANY

£

Balance at 1 June 2008

66,392

Additions during the year

230,000

Disposal of available-for-sale financial assets

(66,392)

Net change in fair value of available-for-sale financial assets

(10,408)

Balance at 31 December 2008

219,592

COMPANY AND COMPANY

£

Balance at 1 June 2007

580,992

Additions during the year

-

Disposal of available-for-sale financial assets

-

Net change in fair value of available-for-sale financial assets

(514,600)

Balance at 31 May 2008

66,392

9. CASH AND CASH EQUIVALENTS

Group

Company

31 Dec 2008

31 May 2008

31 Dec 2008

31 May 2008

£

£

£

£

Bank balances

29,865

32,241

29,865

32,241

Cash and cash equivalents in the statement of cash flows

29,865

32,241

29,865

32,241

10. TRADE AND OTHER PAYABLES

Group

Company

31 Dec 2008

31 May 2008

31 Dec 2008

31 May 2008

£

£

£

£

Trade payables

135,215

39,618

135,215

39,618

Accruals

10,000

74,500

10,000

74,500

Other payables

771

20,985

771

20,985

145,986

135,103

145,986

135,103

11. BORROWINGS

Group

Company

31 Dec 2008

31 May 2008

31 Dec 2008

31 May 2008

£

£

£

£

Convertible loan stock

-

443,528

-

443,528

-

443,523

-

443,528

The Group's policy on financial instruments is detailed in the Directors' Report.

Short-term debtors and creditors have been excluded from all of the following disclosures.

Interest rate profile

The interest rate profile of the Group's liabilities, which are all denominated in sterling and due in less than one year, was as follows:

Weighted average

interest rate

31 Dec 2008

31 May 2008

£

£

Convertible loan stock

7.2%

-

375,000

Maturity of financial liabilities

The maturity profile of the Group's financial liabilities, other than short term trade creditors and accruals, at 31 December 2008 is:

Convertible loan stock

Group

Company

31 Dec 2008

31 May 2008

31 May 2008

31 May 2008

£

£

£

£

Within one year, or on demand

-

443,528

-

443,528

On 8 August 2005 Nicholas Lebetkin, Laurence Selman and Allied Trust Company Ltd (a company acting as trustee of the Asvattha Trust, a trust of which BE Adams, a Director of the Company, is a beneficiary), the Directors of RAM made a loan to RAM of £375,000 in the form of a convertible unsecured loan stock instrument. On 17 November 2008 the Directors entered into the agreement to exchange their loan stock for the Parallel Media Group stock held by RIG.

The outstanding loan carries interest at the rate of 1.75 per cent per annum above the base rate of Barclays Bank Plc.

The convertible loan stock is secured by a floating charge over the current and future assets of the company.

12. SHARE CAPITAL

31 Dec 2008

31 May 2008

£

£

Authorised

228,372,727 Ordinary Shares of 1p each

2,283,727

83,727

112,275,000 Deferred Shares of 9.99p each

11,216,273

11,216,273

13,500,000

11,300,000

Allotted, called up and fully paid

13,315,400 Ordinary Shares of 1p each

133,154

56,779

99,934,398 Deferred Shares of 9.99p each

9,983,447

9,983,447

10,116,601

10,040,226

The Deferred Shares have rights which provide holders with negligible value and holders have no right to receive notice of or to attend or vote at any general meeting of the Company. The Deferred Shares have not been admitted to trading on AIM.

On 29 September 2008 at an Extraordinary General Meeting of the Company the following ordinary and special resolutions were approved by shareholders:

Ordinary Resolutions

1. That every 2,000 of the issued ordinary shares of 1p each in the capital of the Company be consolidated into 1 ordinary share of £20 in the capital of the Company;

2. That each of the issued ordinary shares of £20 each in the capital of the Company resulting from the consolidation referred to in Resolution 1 be sub-divided into 2,000 ordinary shares of 1p each in the capital of the Company;

3. That the authorised share capital of the Company be increased from £11,300,000 to £11,500,000 by the creation of a further 20,000,000 ordinary shares of 1p each ranking pari passu with the existing ordinary shares of 1p each resulting from the consolidation and sub-division referred to in Resolutions 1 and 2.

4. That the Directors be and they are hereby generally and unconditionally authorised, pursuant to section 80 of the Companies Act 1985 (as amended) (the "Act"), to allot relevant securities (as defined in section 80(2) of the Act) up to an aggregate nominal amount of £226,948.50, such authority to expire on 28 September 2013 unless previously revoked, varied or extended by the Company in general meeting, save that the Company may at any time prior to the expiry of such authority make an offer or enter into an agreement which would or might require relevant securities to be allotted after the expiry of such authority and the Directors may allot relevant securities in pursuance of such an offer or agreement as if such authority had not expired.

Special Resolution

5. That in substitution for any existing power under section 95 of the Act, but without prejudice to the exercise of any such power prior to the date hereof, the Directors be and they are hereby empowered pursuant to section 95(1) of the Act, to allot equity securities (as defined in section 94(2) of the Act) for cash, pursuant to the authority under section 80 of the Act conferred on the Directors in terms of Resolution 4, as if section 89(1) of the Act did not apply to any such allotment, up to an aggregate nominal amount of £226,948.50, such power to expire on 28 September 2013 unless previously revoked, varied or extended by the Company in general meeting, save that the Company may at any time prior to the expiry of such power make an offer or enter into an agreement which would or might require equity securities to be allotted after the expiry of such power and the Directors may allot equity securities in pursuance of such an offer or agreement as if such power had not expired.

13. DIRECTORS' EMOLUMENTS

The Directors were paid £0 (May 2008 - £0) in emoluments in the year.

14. EMPLOYEES

Number of employees

There were no employees during the year.

Employment costs

There were no wages and salaries paid during the year.

15. PROFIT / LOSS PER SHARE

Profit / (Loss) per Ordinary Share is calculated by dividing the loss attributable to shareholders by the weighted average number of shares in issue during the year.

7 Months to

12 Months to

31 Dec 2008

31 May 2008

£

£

Profit / (Loss) attributable to shareholders

293,846

(714,652)

Weighted average number of shares

13,315,400

5,677,900

Profit / (Loss) per Ordinary Share - basic and diluted

2.2p

(12.6)p

Diluted loss per share is calculated on the same basis as basic loss per share because the effect of the potential ordinary shares (convertible loans) reduces the net loss per share and is therefore anti-dilutive.

16. CONTROL

No ultimate party controls the Company.