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<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 29, 1999
Four Media Company
______________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 0-21943 95-4599440
______________ _________________________ ___________________
(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
2813 West Alameda Avenue
Burbank, California 91505
_________________________
(Address of principal executive offices) (Zip Code)
(818) 840-7000
_________________________
(Registrant's telephone number, including area code)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
___________________________________________________________________
The following documents are included as part of this report:
TVP GROUP PLC
REPORT AND ACCOUNTS
INDEX PAGE
Report of the Auditors............................................ 3
Consolidated Profit and Loss Account.............................. 4
Statement of Total Recognised Gains and Losses.................... 5
Consolidated Balance Sheet........................................ 6
Consolidated Cash Flow Statement.................................. 7
Notes to the Accounts............................................. 8-23
- 2 -
<PAGE>
------------------
REPORT OF INDEPENDENT AUDITORS
We have audited the accompanying consolidated Balance Sheets of TVP Group Plc as
of 31 December 1996, 1997 and 1998 and the related consolidated Profit and Loss
Account and consolidated Statement of Cash Flows for the years ended 31 December
1996, 1997 and 1998. These consolidated financial statements are the
responsibility of the company's directors. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United Kingdom which do not differ in any significant respect from United
States generally accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of TVP Group Plc and
its subsidiaries as of 31 December 1996, 1997 and 1998 and the results of their
operations and their cash flows for each of the three years ended 31 December
1996, 1997 and 1998 in conformity with accounting principles generally accepted
in the United Kingdom which differ in certain significant respects from those
followed in the United States. Application of accounting principles generally
accepted in the United States would have affected the results of operations for
each of the three years ended 31 December 1996, 1997 and 1998 and the
determination of shareholders' equity as of 31 December 1996, 1997 and 1998, to
the extent summarised in Note 27 to the accounts.
Morley & Scott
Chartered Accountants
Registered Auditor
London
United Kingdom
23 April 1999 (June 1999 as to Note 27 to the accounts).
- 3 -
<PAGE>
TVP GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNTS
<TABLE>
<CAPTION>
Year Year Year Quarter Quarter
Ended Ended Ended Ended Ended
Notes 31.12.98 31.12.97 31.12.96 31.3.99 31.3.98
as restated unaudited unaudited
(Pounds) (Pounds) (Pounds) (Pounds) (Pounds)
<S> <C> <C> <C> <C> <C> <C>
TURNOVER 2 5,876,188 5,338,223 5,033,310 1,399,881 1,581,146
Cost of Sales (2,268,318) (2,448,090) (2,487,349) (543,412) (578,822)
---------- ---------- ---------- --------- ---------
GROSS PROFIT 3,607,870 2,890,133 2,545,961 856,469 1,002,324
Distribution Costs (716,832) (577,055) (406,518) (202,653) (166,056)
Administrative Expenses (2,035,834) (2,187,225) (1,975,950) (517,253) (514,661)
Other Operating Income 41,308 - - 4,639 1,950
---------- ---------- ---------- --------- ---------
OPERATING PROFIT 3 896,512 125,853 163,493 141,202 323,557
Other Interest Receivable
and Similar Income 6 12,231 1,124 17 - -
Interest Payable and
Similar Charges 7 (86,363) (124,270) (112,089) (15,056) (21,409)
---------- ---------- ---------- --------- ---------
PROFIT ON ORDINARY
ACTIVITIES BEFORE TAXATION 822,380 2,707 51,421 126,146 302,148
Tax on Profit on Ordinary
Activities 8 (294,009) (72,189) (65,328) (54,709) (114,437)
---------- ---------- ---------- --------- ---------
PROFIT/(LOSS) FOR THE PERIOD 528,371 (69,482) (13,907) 71,437 187,711
RETAINED PROFITS AT
BEGINNING OF PERIOD 1,120,958 1,190,440 1,204,347 1,649,329 1,120,958
---------- ---------- ---------- --------- ---------
RETAINED PROFITS AT END
OF PERIOD (Pounds)1,649,329 (Pounds)1,120,958 (Pounds)1,190,440 (Pounds)1,720,766 (Pounds)1,308,669
========== ========== ========== ========= =========
</TABLE>
All turnover and operating profits derive from continuing activities.
- 4 -
<PAGE>
TVP GROUP PLC
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
<TABLE>
<CAPTION>
Year Year Year Quarter Quarter
Ended Ended Ended Ended Ended
Notes 31.12.98 31.12.97 31.12.96 31.3.99 31.3.98
as restated unaudited unaudited
(Pounds) (Pounds) (Pounds) (Pounds) (Pounds)
<S> <C> <C> <C> <C> <C> <C>
Profit/(Loss) for the
financial period 528,371 (69,482) (13,907) 71,437 187,711
Prior year adjustment 17 (140,956) - - - -
------- ------ ------ ------ -------
Total gains and losses
recognised since last
financial statements (Pounds)387,415 (Pounds)(69,482) (Pounds)(13,907) (Pounds)71,437 (Pounds)187,711
======= ====== ====== ====== =======
</TABLE>
- 5 -
<PAGE>
TVP GROUP PLC
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Notes 31.12.98 31.12.97 31.12.96 31.3.99 31.3.98
as restated unaudited unaudited
(Pounds) (Pounds) (Pounds) (Pounds) (Pounds)
<S> <C> <C> <C> <C> <C> <C>
FIXED ASSETS
Tangible Assets 9 1,399,017 1,647,881 1,909,917 1,410,617 1,626,985
Investments 10 - 1,006 - - 1,006
---------- ---------- ---------- ---------- ---------
1,399,017 1,648,887 1,909,917 1,410,617 1,627,991
---------- ---------- ---------- ---------- ---------
CURRENT ASSETS
Stocks 11 20,464 17,185 26,874 20,464 17,185
Debtors 12 1,436,788 1,343,023 1,218,774 1,203,069 1,686,281
Cash at Bank and in Hand 409,547 82,345 53,465 772,361 30,273
---------- ---------- ---------- ---------- ---------
1,866,799 1,442,553 1,299,113 1,995,894 1,733,739
LESS CURRENT LIABILITIES
Creditors: Amounts falling
due within one year 13 (1,210,113) (1,312,393) (1,346,318) (1,255,615) (1,289,006)
---------- ---------- ---------- ---------- ---------
NET CURRENT ASSETS/
(LIABILITIES) 656,686 130,160 (47,205) 740,279 444,733
---------- ---------- ---------- ---------- ---------
TOTAL ASSETS LESS
CURRENT LIABILITIES 2,055,703 1,779,047 1,862,712 2,150,896 2,072,724
Creditors: Amounts falling
due after more than one year 14 (245,093) (467,133) (622,272) (276,242) (580,518)
Provisions for liabilities
and charges 15 (111,281) (140,956) - (103,888) (133,537)
---------- ---------- ---------- ---------- ---------
NET ASSETS (Pounds)1,699,329 (Pounds)1,170,958 (Pounds)1,240,440 (Pounds)1,770,766 (Pounds)1,358,669
========== ========== ========== ========== =========
CAPITAL AND RESERVES
Called up Share Capital 16 50,000 50,000 50,000 50,000 50,000
Profit and Loss Account 1,649,329 1,120,958 1,190,440 1,720,766 1,308,669
---------- ---------- ---------- ---------- ---------
SHAREHOLDERS' FUNDS 18 (Pounds)1,699,329 (Pounds)1,170,958 (Pounds)1,240,440 (Pounds)1,770,766 (Pounds)1,358,669
(equity interests) ========== ========== ========== ========== =========
</TABLE>
)
)
N.P. PANNAMAN )
) Directors
)
S.P. KAY )
23 April 1999 (June 1999 as to Note 27 to the accounts).
- 6 -
<PAGE>
TVP GROUP PLC
CONSOLIDATED CASH FLOW STATEMENTS
<TABLE>
<CAPTION>
Year Year Year Quarter Quarter
Ended Ended Ended Ended Ended
Notes 31.12.98 31.12.97 31.12.96 31.3.99 31.3.98
as restated unaudited unaudited
(Pounds) (Pounds) (Pounds) (Pounds) (Pounds)
<S> <C> <C> <C> <C> <C> <C>
NET CASH INFLOW FROM
OPERATING ACTIVITIES 19 1,123,106 1,011,242 897,114 541,131 1,177
Net Cash Outflow from Returns
on Investment and Servicing
of Finance 20 (69,475) (123,146) (112,072) (15,056) (21,409)
TAXATION
Corporation Tax Paid (71,994) (70,524) (52,199) - -
Net Cash Outflow from
Capital Expenditure
and Financial Investment 20 (257,098) (299,492) (466,344) (67,838) (57,933)
--------- --------- -------- -------- --------
Net Cash Inflow before
Financing 724,539 518,080 266,499 458,237 (78,165)
Net Cash Outflow from
Financing 20 (397,337) (451,008) (203,236) (95,423) (109,372)
INCREASE/(DECREASE) IN --------- --------- -------- -------- --------
CASH IN THE PERIOD (Pounds)327,202 (Pounds)67,072 (Pounds)63,263 (Pounds)362,814 (Pounds)(187,537)
========= ========= ======== ======== ========
</TABLE>
- 7 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
1. ACCOUNTING POLICIES
a) Accounting Convention
The financial statements are prepared under the historical cost
convention and in accordance with applicable accounting standards and
include the results of the group's operations as indicated in the
directors' report, all of which are continuing.
The company has adopted FRS12 resulting in a prior year adjustment (Note
17).
b) Turnover
Turnover represents net invoiced sales of goods, excluding value added
tax and trade discounts and arises from the group's principal activity.
c) Tangible Fixed Assets and Depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation
is provided at rates calculated to write off the cost less estimated
residual value of each asset over its expected useful life, as follows:-
Leasehold Properties - Straight line over the life of the
lease.
Plant and Equipment - 25% for first 3 years (straight line)
and then 5% per annum (straight line)
thereafter.
Computers, Fixtures
and Fittings - 25% straight line.
Motor Vehicles - 25% straight line.
d) Leasing and Hire Purchase Commitments
Assets obtained under hire purchase contracts are capitalised as tangible
assets and depreciated over their useful lives. Obligations under such
agreements are included in creditors net of the finance charge allocated
to future periods. The finance element of the rental payment is charged
to the Profit and Loss Account on a straight line basis.
Rentals payable under operating leases are charged against income on a
straight line basis over the lease term when the property is occupied for
the company's business. When the property is surplus to the company's
requirements and is sublet at a loss, full provision is made for the
anticipated loss.
e) Basis of Consolidation
The consolidated accounts incorporate the financial statements of TVP
Group Plc and its subsidiary undertakings, the accounts of which are all
made up to 31 December annually.
- 8 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
1. ACCOUNTING POLICIES - Continued
f) Stocks
Stock is valued at the lower of cost to the group and net realisable
value.
g) Pensions
The pension costs charged in the Financial Statements represent the
contributions payable by the company during the year in accordance with
SSAP 24.
h) Deferred Taxation
Deferred taxation is provided using the liability method in respect of
the taxation effect of all timing differences to the extent that the
directors consider that a liability will crystallise in the foreseeable
future.
2. TURNOVER
The turnover and profit before taxation of the group for the year are
attributable to the principal activity wholly undertaken in the UK.
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
3. OPERATING PROFIT 31.12.98 31.12.97 31.12.96
as restated
(Pounds) (Pounds) (Pounds)
<S> <C> <C> <C>
Group operating profit is stated after charging:-
Depreciation of Tangible Assets 699,963 822,981 780,942
Hire of Plant and Machinery 26,471 20,441 59,660
Operating Lease Rentals - Land and Buildings 208,493 237,514 249,901
Auditors' Remuneration 14,750 14,750 14,250
Remuneration of Auditors for non-audit work 12,250 6,048 4,290
Exceptional item (see below) - 140,956 -
======== ======== ========
and after crediting:-
Release of provision against onerous contract (Note 15) 29,675 - -
Rent Receivable 41,308 - -
Profit on Disposal of Tangible Assets 31,874 35,011 8,182
======== ======== ========
</TABLE>
The exceptional items relates to a provision for an onerous contract.
- 9 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
4. INFORMATION RELATING TO EMPLOYEES 31.12.98 31.12.97 31.12.96
(Pounds) (Pounds) (Pounds)
<S> <C> <C> <C>
Staff costs during the year amounted to:-
Wages and Salaries 2,409,082 2,138,682 2,082,698
Social Security Costs 220,919 194,771 191,660
Other Pension Costs 23,893 17,417 11,986
--------- --------- ---------
(Pounds)2,653,894 (Pounds)2,350,870 (Pounds)2,286,344
========= ========= =========
</TABLE>
The average weekly number of persons employed by the group during the year was
105 (1997: 97, 1996: 93), split into the following categories:-
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
31.12.98 31.12.97 31.12.96
Number Number Number
<S> <C> <C> <C>
Directors 2 2 2
Other Staff 103 95 91
------- ------- -------
105 97 93
======= ======= =======
Year Year Year
Ended Ended Ended
5. DIRECTORS' EMOLUMENTS 31.12.98 31.12.97 31.12.96
(Pounds) (Pounds) (Pounds)
Emoluments for qualifying services 165,461 178,551 170,797
Company pension contributions to money
purchase scheme 11,300 10,145 4,000
------- ------- -------
(Pounds)176,761 (Pounds)188,696 (Pounds)174,797
======= ======= =======
</TABLE>
Both directors have retirement benefits accruing under the money purchase scheme
(1997 and 1996: Two).
- 10 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
6. OTHER INTEREST RECEIVABLE AND 31.12.98 31.12.97 31.12.96
SIMILAR INCOME (Pounds) (Pounds) (Pounds)
<C> <S> <C> <C> <C>
Profit on disposal of listed investments 843 - -
Bank Interest Received 10,888 1,124 17
Other interest 500 - -
-------- -------- --------
(Pounds)12,231 (Pounds)1,124 (Pounds)17
======== ======== ========
7. INTEREST PAYABLE
On Bank Loans and Overdrafts 46 1,864 46,155
Hire Purchase Interest 40,942 60,921 65,934
On other loans wholly repayable within 5 years 39,375 61,485 -
Interest on overdue tax 6,000 - -
-------- -------- --------
(Pounds)86,363 (Pounds)124,270 (Pounds)112,089
======== ======== ========
8. TAX ON PROFIT ON ORDINARY ACTIVITIES
UK Corporation Tax @ 31% (1997 - 24%, 1996 - 25%) 272,583 71,994 70,329
Adjustment in respect of Prior Years 21,426 195 (5,001)
-------- -------- --------
(Pounds)294,009 (Pounds)72,189 (Pounds)65,328
======== ======== ========
</TABLE>
- 11 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
<TABLE>
<CAPTION>
9. TANGIBLE FIXED ASSETS
Computer,
Plant & Fixtures & Motor
Equipment Fittings Vehicles Total
(Pounds) (Pounds) (Pounds) (Pounds)
<S> <C> <C> <C> <C>
COST
At 1 January 1997 4,516,711 587,753 200,605 5,305,069
Additions 501,591 69,172 25,953 596,716
Disposals (183,155) (11,520) (73,271) (267,946)
--------- ------- ------- ---------
At 31 December 1997 (Pounds)4,835,147 (Pounds)645,405 (Pounds)153,287 (Pounds)5,633,839
========= ======= ======= =========
DEPRECIATION
At 1 January 1997 2,918,573 381,204 95,375 3,395,152
Charge for Year 704,428 83,792 34,761 822,981
Disposals (169,047) (10,214) (52,914) (232,175)
--------- ------- ------- ---------
At 31 December 1997 (Pounds)3,453,954 (Pounds)454,782 (Pounds)77,222 (Pounds)3,985,958
========= ======= ======= =========
NET BOOK VALUE
At 31 December 1997 (Pounds)1,381,193 (Pounds)190,623 (Pounds)76,065 (Pounds)1,647,881
========= ======= ======= =========
At 1 January 1997 (Pounds)1,598,138 (Pounds)206,549 (Pounds)105,230 (Pounds)1,909,917
========= ======= ======= =========
</TABLE>
Included above are assets held under finance leases or hire purchase
contracts as follows:-
<TABLE>
<CAPTION>
Net Book Depreciation
Value Charge
(Pounds) (Pounds)
<S> <C> <C>
Plant and Equipment 570,198 264,713
Computer, Fixtures and Fittings 4,744 3,163
Motor Vehicles 76,065 34,175
------- --------
(Pounds)651,007 (Pounds)302,051
======= ========
</TABLE>
- 12 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
9. TANGIBLE FIXED ASSETS (Continued)
<TABLE>
<CAPTION>
Computer,
Plant & Fixtures & Motor
Equipment Fittings Vehicles Total
(Pounds) (Pounds) (Pounds) (Pounds)
<S> <C> <C> <C> <C>
COST
At 1 January 1998 4,835,147 645,405 153,287 5,633,839
Additions 312,386 95,550 80,062 487,998
Disposals (39,490) (4,099) (51,866) (95,455)
--------- ------- ------- ---------
At 31 December 1998 (Pounds)5,108,043 (Pounds)736,856 (Pounds)181,483 (Pounds)6,026,382
========= ======= ======= =========
DEPRECIATION
At 1 January 1998 3,453,954 454,782 77,222 3,985,958
Charge for Year 549,997 113,725 36,241 699,963
Disposals (13,835) (2,212) (42,509) (58,556)
--------- ------- ------- ---------
At 31 December 1998 (Pounds)3,990,116 (Pounds)566,295 (Pounds) 70,954 (Pounds)4,627,365
========= ======= ======= =========
NET BOOK VALUE
At 31 December 1998 (Pounds)1,117,927 (Pounds)170,561 (Pounds)110,529 (Pounds)1,399,017
========= ======= ======= =========
At 1 January 1998 (Pounds)1,381,193 (Pounds)190,623 (Pounds) 76,065 (Pounds)1,647,881
========= ======= ======= =========
</TABLE>
Included above are assets held under hire purchase contracts as follows:-
<TABLE>
<CAPTION>
Net Book Depreciation
Value Charge
(Pounds) (Pounds)
<S> <C> <C>
Plant and Equipment 196,970 80,588
Computer, Fixtures and Fittings - 4,744
Motor Vehicles 110,529 28,847
------- -------
(Pounds)307,499 (Pounds)114,179
======= =======
</TABLE>
- 13 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
<TABLE>
<CAPTION>
10. FIXED ASSET INVESTMENTS 31.12.98 31.12.97 31.12.96
(Pounds) (Pounds) (Pounds)
<S> <C> <C> <C> <C>
Investment in Subsidiary Undertakings
(Note 10a) - - -
Other investments (Note 10b) - 1,006 -
----- ----- -----
(Pounds) - (Pounds)1,006 (Pounds) -
===== ===== =====
</TABLE>
a) Investments in Subsidiary Undertakings
The Company holds more than 10% of the equity and no other share or loan
capital of the following companies:-
<TABLE>
<CAPTION>
Proportion of
Nominal Value
Country of Class of of Issued
Name of Company Registration Shares Held Shares Held
%
<S> <C> <C> <C>
TVP Videodubbing Ltd. England & Wales Ordinary 100
Post Box Golden Square Ltd. England & Wales Ordinary 100
Television Presentations Ltd. England & Wales Ordinary 100
TVP Broadcast Ltd. England & Wales Ordinary 100
The Edit Box Ltd. England & Wales Ordinary 100
TVP Doublevision Ltd. England & Wales Ordinary 100
The Original Video Dubbing Ltd. England & Wales Ordinary 100
</TABLE>
All of the above companies have coterminous year ends. The interest in TVP
Doublevision Ltd. is held through TVP Videodubbing Ltd.
The principal activity of TVP Videodubbing Ltd. is the provision of post-
production facilities.
The principal activity of Post Box Golden Square Ltd. is the provision of
video editing facilities .
The other companies did not trade during the year.
- 14 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
10. FIXED ASSET INVESTMENTS (Continued)
<TABLE>
<CAPTION>
Listed
b) Other Investments (Pounds)
<S> <C>
Cost
At 1 January 1998 1,006
Disposals (1,006)
------
At 31 December 1998 (Pounds) -
======
</TABLE>
<TABLE>
<CAPTION>
11. STOCKS 31.12.98 31.12.97 31.12.96
(Pounds) (Pounds) (Pounds)
<S> <C> <C> <C>
Raw Materials and Consumables (Pounds) 20,464 (Pounds) 17,185 (Pounds) 26,874
========= ========= =========
<CAPTION>
12. DEBTORS 31.12.98 31.12.97 31.12.96
(Pounds) (Pounds) (Pounds)
<S> <C> <C> <C>
Trade Debtors 1,281,918 1,214,405 1,095,705
Other Debtors 11,970 - -
Prepayments and Accrued Income 142,900 128,618 123,069
--------- --------- ---------
(Pounds)1,436,788 (Pounds)1,343,023 (Pounds)1,218,774
========= ========= =========
<CAPTION>
13. CREDITORS - Amounts falling due 31.12.98 31.12.97 31.12.96
within one year (Pounds) (Pounds) (Pounds)
<S> <C> <C> <C>
Bank Loans and Overdraft (See Note 14) 239,277 199,277 237,469
Net Obligations under Hire Purchase Contracts 155,741 185,760 279,181
Trade Creditors 146,491 494,107 507,703
Amount owed to Subsidiary Undertaking - - -
Corporation Tax 299,509 71,994 70,329
Other Taxation and Social Security 271,231 237,813 207,236
Other Creditors 1,079 1,186 810
Accruals 96,785 122,256 43,590
--------- --------- ---------
(Pounds)1,210,113 (Pounds)1,312,393 (Pounds)1,346,318
========= ========= =========
</TABLE>
- 15 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
<TABLE>
<CAPTION>
14. CREDITORS - Amounts falling due
after more than one year 31.12.98 31.12.97 31.12.96
(Pounds) (Pounds) (Pounds)
<S> <C> <C> <C>
Bank Loans 119,569 332,804 470,597
Net Obligations under Hire Purchase Contracts 125,524 134,329 151,675
------- ------- -------
(Pounds) 245,093 (Pounds) 467,133 (Pounds) 622,272
======= ======= =======
Bank Loans
Wholly repayable within five years 358,846 532,081 669,874
Included in Current Liabilities (239,277) (199,277) (199,277)
-------- -------- --------
(Pounds) 119,569 (Pounds) 332,804 (Pounds) 470,597
======== ======== ========
</TABLE>
Bank loans and overdrafts are secured by a fixed and floating charge over
the Group's assets.
<TABLE>
<CAPTION>
31.12.98 31.12.97 31.12.96
(Pounds) (Pounds) (Pounds)
<S> <C> <C> <C>
Net Obligations under
Hire Purchase Contracts
Repayable within one year 186,996 222,418 335,676
Repayable between one and five years 136,481 155,344 181,737
-------- -------- --------
323,477 377,762 517,413
Finance charges and interest allocated
to future accounting periods (42,212) (57,673) (86,557)
-------- -------- --------
281,265 320,089 430,856
Included in Current Liabilities (155,741) (185,760) (279,181)
-------- -------- --------
(Pounds) 125,524 (Pounds) 134,329 (Pounds) 151,675
======== ======== ========
</TABLE>
- 16 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
15. PROVISIONS FOR LIABILITIES AND CHARGES
<TABLE>
<CAPTION>
31.12.98 31.12.97 31.12.96
as restated
(Pounds) (Pounds) (Pounds)
<S> <C> <C> <C>
Balance at 1 January 1998 140,956 - -
(Decrease)/Increase in year (29,675) 140,956 -
-------- ------- -------
Balance at 31 December 1998 (Pounds)111,281 (Pounds)140,956 (Pounds) -
======= ======= =======
</TABLE>
The above provision relates to rent due on an onerous contract provided in
full to be released over a five year period (Note 1a).
<TABLE>
<CAPTION>
16. SHARE CAPITAL
31.12.98 31.12.97 31.12.96
as restated
(Pounds) (Pounds) (Pounds)
<S> <C> <C> <C>
Authorised
1,000,000 Ordinary Shares of (Pounds)1 each (Pounds)1,000,000 1,000,000 (Pounds)1,000,000
========= ========= =========
Allotted, Called Up and Fully Paid
50,000 Ordinary Shares of (Pounds)1 each (Pounds)50,000 (Pounds)50,000 (Pounds)50,000
========= ========= =========
</TABLE>
17. STATEMENT OF MOVEMENTS ON PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
Profit and
Loss Account
(Pounds)
<S> <C>
Balance at 1 January 1998 as previously reported 1,261,914
Prior year adjustment (Note 1a) (140,956)
---------
Balance at 1 January 1998 as restated 1,120,958
Retained profit for the year 528,371
---------
Balance at 31 December 1998 (Pounds)1,649,329
=========
</TABLE>
- 17 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
18. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
31.12.98 31.12.97 31.12.96
(Pounds) (Pounds) (Pounds)
<S> <C> <C> <C>
Profit/(Loss) for the Year 528,371 (69,482) (13,907)
Opening Shareholders' Funds
(1997: (Pounds)1,311,914 before deducting
prior year adjustment of (Pounds)140,956). 1,170,958 1,240,440 1,254,347
--------- --------- ---------
Closing Shareholders' Funds (Pounds)1,699,329 (Pounds)1,170,958 (Pounds)1,240,440
========= ========= =========
</TABLE>
19. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
31.12.98 31.12.97 31.12.96
as restated
(Pounds) (Pounds) (Pounds)
<S> <C> <C> <C>
Operating Profit 896,512 125,853 163,493
Depreciation of Tangible Assets 699,963 822,981 780,942
Profit on Disposal of Tangible Assets (31,874) (35,011) (8,182)
(Increase)/Decrease in Stocks (3,279) 9,689 3,587
Increase in Debtors (93,765) (124,249) (196)
(Decrease)/Increase in Creditors due
within one year (314,776) 71,023 (42,530)
(Decrease)/Increase in provision
on onerous contact (29,675) 140,956 -
-------- --------- -------
Net cash inflow from operating (Pounds)1,123,106 (Pounds)1,011,242 (Pounds)897,114
activities ========= ========= =======
</TABLE>
- 18 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
<TABLE>
<CAPTION>
Year Year Year Quarter Quarter
20. ANALYSIS OF CASH FLOWS Ended Ended Ended Ended Ended
FOR HEADINGS NETTED IN 31.12.98 31.12.97 31.12.96 31.3.99 31.3.98
THE CASH FLOW STATEMENT as restated unaudited unaudited
(Pounds) (Pounds) (Pounds) (Pounds) (Pounds)
<S> <C> <C> <C> <C> <C>
Returns on Investments and
Servicing of Finance
Interest Received 10,888 1,124 17 - -
Interest Paid (80,363) (124,270) (112,089) (15,056) (21,409)
-------- -------- -------- -------- --------
(Pounds) (69,475) (Pounds)(123,146) (Pounds)(112,072) (Pounds)(15,056) (Pounds) (21,409)
======== ======== ======== ======== ========
Capital Expenditure and
Financial Investment
Purchase of Tangible Fixed
Assets (302,719) (369,268) (499,910) (73,838) (57,933)
Purchase of Investments - (1,006) - - -
Sale of Tangible Fixed
Assets 43,772 70,782 33,566 6,000 -
Sale of Investments 1,849 - - - -
-------- -------- -------- -------- --------
(Pounds)(257,098) (Pounds)(299,492) (Pounds)(466,344) (Pounds)(67,838) (Pounds) (57,933)
======== ======== ======== ======== ========
Financing
New Long Term Bank Loan - - 400,000 - -
Repayment of Long Term Bank
Loan (173,235) (137,793) (216,642) (54,988) (54,319)
Capital Element of Hire
Purchase Contracts (224,102) (313,215) (386,594) (40,435) (55,053)
-------- -------- -------- -------- --------
(Pounds)(397,337) (Pounds)(451,008) (Pounds)(203,236) (Pounds)(95,423) (Pounds)(109,372)
======== ======== ======== ======== ========
</TABLE>
- 19 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
21. ANALYSIS OF NET DEBT
<TABLE>
<CAPTION>
At 1 January Cashflow Other non- At 31
1997 cash December
changes 1997
(Pounds) (Pounds) (Pounds) (Pounds)
<S> <C> <C> <C> <C>
Net Cash:
Cash at bank and in hand 53,465 28,880 - 82,345
Overdrafts (38,192) 38,192 - -
---------- ------- -------- --------
15,273 67,072 - 82,345
Debt:
Debt due after one year (470,597) - 137,793 (332,804)
Debt due within one year (199,277) 137,793 (137,793) (199,277)
Finance leases (430,856) 313,215 (202,448) (320,089)
---------- ------- -------- --------
Net Debt: (Pounds)(1,085,457) (Pounds)518,080 (Pounds)(202,448) (Pounds)(769,825)
========== ======= ======== ========
<CAPTION>
At 1 Cashflow Other non- At 31
January cash December
1998 changes 1998
(Pounds) (Pounds) (Pounds) (Pounds)
<S> <C> <C> <C> <C>
Net Cash:
Cash at bank and in hand 82,345 327,202 - 409,547
Debt:
Debt due after one year (332,804) - 213,235 (119,569)
Debt due within one year (199,277) 173,235 (213,235) (239,277)
Finance leases (320,089) 224,102 (185,278) (281,265)
---------- ------- -------- --------
Net debt (Pounds) (769,825) (Pounds)724,539 (Pounds)(185,278) (Pounds)(230,564)
========== ======= ======== ========
</TABLE>
- 20 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
<TABLE>
<CAPTION>
22. RECONCILIATION OF NET CASH FLOW Year Year Year
TO MOVEMENT IN NET DEBT Ended Ended Ended
31.12.98 31.12.97 31.12.96
(Pounds) (Pounds) (Pounds)
<S> <C> <C> <C>
Increase in cash in the year 327,202 67,072 63,263
Cash outflow from decrease in debt
and lease financing 397,337 451,008 203,236
-------- ---------- ----------
Change in net debt resulting from cash flows 724,539 518,080 266,499
New finance leases (185,278) (202,448) (233,782)
-------- ---------- ----------
Movement in net debt in the year 539,261 315,632 32,717
Net debt at beginning of year (769,825) (1,085,457) (1,118,174)
-------- ---------- ----------
Net debt at end of year (Pounds)(230,564) (Pounds)(769,825) (Pounds)(1,085,457)
======== ========== ==========
</TABLE>
23. MAJOR NON-CASH TRANSACTIONS
During the year the company entered into finance lease arrangements in
respect of assets with a total capital value at the inception of the leases
of (Pounds)185,278 (1997: (Pounds)202,448, 1996: (Pounds)233,782).
24. FINANCIAL COMMITMENTS
The company had annual commitments under non-cancellable operating leases
as follows:-
<TABLE>
<CAPTION>
Land and Buildings
31.12.98 31.12.97 31.12.96
Expiry Date: (Pounds) (Pounds) (Pounds)
<S> <C> <C> <C>
Between two and five years 140,000 140,000 140,000
In over five years 98,175 98,175 98,175
-------- -------- -------
(Pounds)238,175 (Pounds)238,175 (Pounds)238,175
======== ======== =======
</TABLE>
The leases are subject to rent reviews every five years.
- 21 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
25. CONTINGENT LIABILITIES
The company is party to an unlimited multilateral guarantee with group
companies in respect of bank facilities granted to those companies. The
contingent liability of the company under this guarantee at the Balance
Sheet date amounted to (Pounds)nil (1997: (Pounds)451,263, 1996:
(Pounds)655,563).
The company has also guaranteed other borrowings of group companies. The
contingent liability of the company under this guarantee at the Balance
Sheet date amounted to (Pounds)124,384 (1997: (Pounds)115,513, 1996:
(Pounds)208,169).
26. RELATED PARTY TRANSACTIONS
Mr. N.P. Pannaman and Mr. S.P. Kay have a joint and several guarantee in
respect of the bank borrowings of TVP Videodubbing Limited, limited to
(Pounds)200,000 (1997: (Pounds)200,000, 1996: (Pounds)nil).
27. SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING
PRINCIPLES GENERALLY ACCEPTED IN THE
UNITED KINGDOM AND THE UNITED STATES
The following is a summary of the effect of the above differences on the
reported amounts (in British pounds).
<TABLE>
<CAPTION>
Year Year Year Quarter Quarter
Ended Ended Ended Ended Ended
31.12.98 31.12.97 31.12.96 31.3.99 31.3.98
as restated unaudited unaudited
(Pounds) (Pounds) (Pounds) (Pounds) (Pounds)
<S> <C> <C> <C> <C> <C>
Net Income
Profit/(Loss) for the period 528,371 (69,482) (13,907) 71,437 187,711
Adjustment
Movement in deferred tax
asset provision 82,279 79,476 20,152 91,071 100,915
--------- --------- --------- --------- ---------
Net Income as adjusted to
accord with US GAAP (Pounds)610,650 (Pounds)9,994 (Pounds)6,245 (Pounds)162,508 (Pounds)288,626
========= ========= ========= ========= =========
Shareholders' Equity
Shareholders' equity as
reported 1,699,329 1,170,958 1,240,440 1,770,766 1,358,669
Adjustment
Movement in deferred tax
asset provision 82,279 79,476 20,152 91,071 100,915
--------- --------- --------- --------- ---------
Shareholders' equity as
adjusted to accord with
US GAAP (Pounds)1,781,608 (Pounds)1,250,434 (Pounds)1,260,592 (Pounds)1,861,837 (Pounds)1,459,584
========= ========= ========= ========= =========
</TABLE>
- 22 -
<PAGE>
TVP GROUP PLC
NOTES TO THE ACCOUNTS
27. SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN
THE UNITED KINGDOM AND THE UNITED STATES (Continued)
Statement of Cash Flows
The statements of cash flows prepared in accordance with UK GAAP present
substantially the same information as that required under US GAAP. UK and US
GAAP differ, however, with regard to the classification of items within the
statements and as regards the definition of cash and cash equivalents.
Under UK GAAP, cash flows are presented separately for operating activities,
returns on investments and servicing of finance, taxation, investing
activities and financing activities. US GAAP, however, requires only three
categories of cash flow activity to be reported: operating, investment and
financing. Cash flows from taxation and returns on investments and servicing
of finance shown under UK GAAP would be included as operating activities
under US GAAP.
Under US GAAP, cash and cash equivalents would not include bank overdrafts.
Bank overdrafts shown under cash and cash equivalents under UK GAAP would be
included as cash outflows and inflows from financing activities under US
GAAP.
The categories of cash flow activity under US GAAP can be summarised as
follows (in British pounds).
<TABLE>
<CAPTION>
Year Year Year Quarter Quarter
Ended Ended Ended Ended Ended
31.12.98 31.12.97 31.12.96 31.3.99 31.3.98
as restated unaudited unaudited
(Pounds) (Pounds) (Pounds) (Pounds) (Pounds)
<S> <C> <C> <C> <C> <C>
Cash Inflow/(Outflow) from
Operating Activities 981,637 817,572 732,843 526,075 (20,232)
Cash Outflow on Investing
Activities (257,098) (299,492) (466,344) (67,838) (57,933)
Cash (Outflow)/Inflow from
Financing Activities (397,337) (489,200) (215,959) (95,423) 25,989
-------- -------- -------- ------- -------
Increase/(Decrease) in Cash
and Cash Equivalents 327,202 28,880 50,540 362,814 (52,176)
Cash and Cash Equivalents
at beginning of period 82,345 53,465 2,925 409,547 82,345
-------- -------- -------- ------- -------
Cash and Cash Equivalents
at end of year as adjusted to
accord with US GAAP (Pounds)409,547 (Pounds)82,345 (Pounds)53,465 (Pounds)772,361 (Pounds)30,169
======== ======== ======== ======= =======
</TABLE>
- 23 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: June 9, 1999
FOUR MEDIA COMPANY
By: /s/ William E. Niles
____________________
William E. Niles
Vice President of Business Affairs, General
Counsel and Secretary
- 24 -
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