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) DECEMBER 13, 1999
-----------------
NTL (TRIANGLE) LLC
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-24792 13-4086747
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation File Number) Identification No.)
110 East 59th Street, New York, New York 10022
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code (212) 906-8440
--------------
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
The registrant hereby amends its Current Report on Form 8-K dated December
28, 1999 by filing financial statements of the acquired business, Cablelink
Limited, and certain pro forma financial information for the registrant.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Page
----
(a) Financial Statements of Businesses Acquired
Cablelink Limited and Subsidiaries
Consolidated Financial Statements, Year Ended 31 March 1999 ....... 4
Consolidated Financial Statements, Year Ended 2 April 1998 ........ 30
Consolidated Financial Statements, Year Ended 3 April 1997 ........ 51
(b) Pro Forma Financial Information
NTL (Triangle) LLC and Subsidiaries
Unaudited Pro Forma Financial Statements .......................... 72
- 2 -
<PAGE>
SIGNATURES
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 thereunto duly authorized.
NTL (TRIANGLE) LLC
By: NTL Group Limited,
Its Managing Member
By: /s/ Robert Mackenzie
--------------------------------
Name: Robert Mackenzie
Title: Secretary
Dated: January 28, 2000
- 3 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
- 4 -
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of Cablelink Limited and Subsidiaries:-
We have audited the accompanying balance sheets of Cablelink Limited and
Subsidiaries as at 31 March 1999 and 2 April 1998 and the related profit and
loss accounts, cash flow statements and reconciliation of movements in
shareholders' funds for the three years ended 31 March 1999, all expressed in
Irish pounds. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the Republic of Ireland, which are substantially the same as those followed
in the United States. 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 audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cablelink Limited and
Subsidiaries at 31 March 1999 and 2 April 1998 and the results of its operations
and its cash flows for each of the three years ended 31 March 1999, in
conformity with generally accepted accounting principles in Ireland.
Accounting principles generally accepted in Ireland vary in certain significant
respects from accounting principles generally accepted in the United States.
Application of accounting principles generally accepted in the United States
would have affected results of operations for each of the three years in the
period ended 31 March 1999 and movements in shareholders' funds at 31 March
1999, 2 April 1998 and 31 March 1997, to the extent summarised in Note 30 to the
financial statements.
PricewaterhouseCoopers
Chartered Accountants and Registered Auditors
Dublin, Republic of Ireland
13 May 1999, except as to Note 30 which is as of January 27, 2000
- 5 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
ACCOUNTING POLICIES
YEAR ENDED 31 MARCH 1999
The significant accounting policies adopted by the company are as follows:-
A. BASIS OF ACCOUNTING
The financial statements are prepared under the historical cost convention.
B. BASIS OF CONSOLIDATION
The consolidated profit and loss account and balance sheet include the
financial statements of the parent company and its subsidiaries made up to
31 March 1999.
C. TURNOVER
Turnover comprises:
(i) Service revenue from subscribers, net of value added tax which is
accounted for on an earnings basis. Deferred income (which is included
under the balance sheet category "Creditors: Amounts falling due
within one year") represents the proportion of service revenue
received which relates to future periods.
(ii) Revenues in respect of charges for connecting customers to the relay
systems, net of value added tax, is accounted for on a cash receipts
basis. However, in instances where connection revenue from an
applicant exceeds (IR Pound) 30 it is deducted from the capitalised
connection cost rather than included in revenue.
D. TANGIBLE FIXED ASSETS
Additions to the relay systems, including the costs of connecting
subscribers for the first time, are capitalised.
The costs of disconnection and reconnection of subscribers are charged to
the profit and loss account.
Connection and reconnection fees are credited to the profit and loss
account in the period in which they are received where they are less than
(IR Pound) 30. Where they exceed (IR Pound) 30, they are deducted from the
capitalised connection costs.
Depreciation is provided at rates calculated to write off the cost less
estimated residual value of each asset, other than freehold land, on a
straight line basis, over its expected useful life, as follows:
Freehold Property 60 years
Relay Systems 5 to 12 years
Test Equipment 5 years
Furniture & Fittings 5 years
Computers 3/4 years
Motor Vehicles 4/5 years
Improvements to Leasehold Premises 5 years
- 6 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
ACCOUNTING POLICIES
YEAR ENDED 31 MARCH 1999
E. STOCKS
Consumable stores are valued at cost, less a provision for obsolescence
where appropriate. Cost consists of the invoiced price of supplies.
F. TAXATION
Corporation tax payable is provided on taxable profits at the current rate.
Advance corporation tax payable on dividends paid and provided for in the
period is written off except when recoverability against corporation tax
payable is considered to be reasonably assured. Credit is taken for advance
corporation tax written off in previous years when it is recoverable
against a corporation tax liability.
Tax deferred or accelerated is accounted for in respect of all material
timing differences only to the extent that it is probable that a liability
or asset will crystallise in the foreseeable future. Timing differences
arise from the inclusion of items of income and expenditure in tax
computations in periods different from those in which they are included in
the financial statements. Provision is made at the rate which is expected
to be applied when the liability or asset is expected to crystallise. Where
this is not known the latest estimate of the long-term tax rate applicable
has been adopted.
G. BAD DEBTS
All balances due for over 12 months, together with all balances on
disconnected accounts are provided against in full. A provision of 20% is
made against amounts due for more than 6 months and less than 12 months.
H. FOREIGN CURRENCIES
Normal trading activities denominated in foreign currencies are recorded in
Irish pounds at actual exchange rates as of the date of transaction.
Monetary assets and liabilities denominated in foreign currencies are
reported at the rates of exchange prevailing at the balance sheet date. Any
gain or loss arising from a change in exchange rates subsequent to the date
of the transaction is reported as an exchange gain or loss in the profit
and loss account.
I. PENSIONS
Pension costs are accounted for on the basis of charging the expected cost
of providing pensions over the period during which the company benefits
from employees' services. The effects of variations from regular cost are
spread over the expected average remaining service lives of the members of
the scheme.
- 7 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
ACCOUNTING POLICIES
YEAR ENDED 31 MARCH 1999 (CONTINUED)
J. LEASES
Expenditure on leases which are operating leases is charged to the profit
and loss account on a basis representative of the benefit derived from the
asset, normally on a straight line basis, over the lease period.
- 8 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
CONSOLIDATED PROFIT AND LOSS ACCOUNT
YEAR ENDED 31 MARCH 1999
<TABLE>
<CAPTION>
NOTES 31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
<S> <C> <C> <C>
TURNOVER 1 40,498,348 36,647,492
Operating Expenses (net) (35,957,246) (31,810,487)
---------- ----------
OPERATING PROFIT 4,541,102 4,837,005
Investment Income 2 545,143 746,627
Interest Payable and Similar Charges 3 - (129,075)
---------- ----------
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 4 5,086,245 5,454,557
Tax on Profit on Ordinary Activities 6 (1,259,834) (1,646,939)
---------- ----------
PROFIT FOR THE YEAR AFTER TAXATION 7 3,826,411 3,807,618
Dividends 8 (10,500,000) -
---------- ----------
(LOSS)/PROFIT FOR THE YEAR RETAINED (6,673,589) 3,807,618
========== ==========
</TABLE>
In arriving at the results for the financial year, all amounts above relate to
continuing operations.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
The company has no recognised gains and losses other than those included in the
profits above and, therefore, no separate statement of total recognised gains
and losses has been presented.
NOTE OF HISTORICAL COST PROFITS
There is no difference between the profit on ordinary activities before taxation
and the retained profit for the year stated above and their historical cost
equivalents.
STATEMENT OF MOVEMENT IN RETAINED PROFITS
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
RETAINED PROFIT AT 2 APRIL 1998 24,496,970 20,689,352
(LOSS)/PROFIT FOR THE YEAR RETAINED (6,673,589) 3,807,618
---------- ----------
RETAINED PROFIT AT 31 MARCH 1999 17,823,381 24,496,970
========== ==========
ON BEHALF OF THE BOARD
A Kane )
) DIRECTORS
K J Windle )
The notes on pages 6 to 8 and 13 to 28 form part of these Financial Statements
Auditors' Report page 5.
- 9 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 1999
<TABLE>
<CAPTION>
NOTES 31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND) (IR POUND) (IR POUND)
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Tangible Fixed Assets 9 40,906,716 36,871,721
CURRENT ASSETS
Stocks 11 2,651,595 2,881,359
Debtors 12 2,947,606 2,207,929
Cash at Bank and in Hand - 12,044,841
---------- ----------
5,599,201 17,134,129
CREDITORS
Amounts falling due
within one year 13 (18,500,775) (19,575,119)
---------- ----------
NET CURRENT (LIABILITIES) (12,901,574) (2,440,990)
---------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 28,005,142 34,430,731
Provisions for Liabilities
and Charges 16 (2,707,000) (2,459,000)
---------- ----------
NET ASSETS 25,298,142 31,971,731
========== ==========
CAPITAL AND RESERVES
Called up Share Capital 17 86,980 86,980
Share Premium Account 18 7,124,448 7,124,448
Other Reserves 18 263,333 263,333
Profit & Loss Account 17,823,381 24,496,970
---------- ----------
SHAREHOLDERS' FUNDS - EQUITY 22
INTERESTS 25,298,142 31,971,731
========== ==========
</TABLE>
ON BEHALF OF THE BOARD
A Kane )
) DIRECTORS
K J Windle )
The notes on pages 6 to 8 and 13 to 28 form part of these Financial Statements
Auditors' Report page 5.
- 10 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
COMPANY BALANCE SHEET AS AT 31 MARCH 1999
<TABLE>
<CAPTION>
NOTES 31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND) (IR POUND) (IR POUND)
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Tangible Fixed Assets 9 34,108,002 30,521,911
Financial Assets 10 601,100 601,100
---------- ----------
34,709,102 31,123,011
CURRENT ASSETS
Stocks 11 2,152,804 2,390,302
Debtors:
amounts due after one year 12 5,426,425 5,080,174
amounts due within one year 12 2,593,756 1,917,114
Cash at Bank and in Hand - 12,036,403
---------- ----------
10,172,985 21,423,993
CREDITORS
Amounts falling due
within one year 13 (17,498,368) (18,365,104)
---------- ----------
NET CURRENT (LIABILITIES)/ASSETS (7,325,383) 3,058,889
---------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 27,383,719 34,181,900
Provisions for Liabilities
and Charges 16 (2,240,000) (2,000,000)
---------- ----------
NET ASSETS 25,143,719 32,181,900
========== ==========
CAPITAL AND RESERVES
Called up Share Capital 17 86,980 86,980
Share Premium Account 18 7,124,448 7,124,448
Other Reserves 18 263,333 263,333
Profit & Loss Account 17,668,958 24,707,139
---------- ----------
SHAREHOLDERS' FUNDS - EQUITY INTERESTS 25,143,719 32,181,900
========== ==========
</TABLE>
ON BEHALF OF THE BOARD
A Kane )
) DIRECTORS
K J Windle )
The notes on pages 6 to 8 and 13 to 28 form part of these Financial Statements
Auditors' Report page 5.
- 11 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED 31 MARCH 1999
<TABLE>
<CAPTION>
NOTES 31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
<S> <C> <C> <C>
CASH FROM OPERATING ACTIVITIES 19A 9,851,680 13,665,358
RETURNS ON INVESTMENT AND SERVICING OF FINANCE 19B 545,143 617,552
TAXATION (1,325,834) (1,775,939)
EQUITY DIVIDEND PAID 8 (10,500,000) -
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT 19C (10,753,901) (12,000,041)
---------- ----------
Cash (Outflow)/Inflow Before Use of Liquid Resources (12,182,912) 506,930
MANAGEMENT OF LIQUID RESOURCES 19D 11,914,193 390,255
---------- ----------
(DECREASE)/INCREASE IN CASH IN YEAR (268,719) 897,185
========== ==========
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
(Decrease)/Increase in Cash in Year (268,719) 897,185
Cash (Inflow) from (Decrease) in Liquid Resources (11,914,193) (390,255)
---------- ----------
Movement in Net Funds in Year (12,182,912) 506,930
Net Funds at Start of Year (12,044,841) 11,537,911
---------- ----------
NET FUNDS AT END OF YEAR 20 (138,071) 12,044,841
========== ==========
</TABLE>
The notes on pages 6 to 8 and 13 to 28 form part of these Financial Statements
Auditors' Report page 5.
- 12 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
1. TURNOVER
Turnover is represented by revenue from subscribers and is generated in
total in the Republic of Ireland.
2. INVESTMENT INCOME
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
Interest Receivable and Similar Income 545,143 746,627
======= =======
3. INTEREST PAYABLE AND SIMILAR CHARGES
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
On bank loans, overdrafts and other
loans wholly repayable within five years - 129,075
======= =======
4. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
<TABLE>
<CAPTION>
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
<S> <C> <C>
Profit on ordinary activities before
taxation is stated after charging/(crediting):
Directors' emoluments:
Fees 23,100 15,500
Other emoluments (including pension contributions) 120,060 108,011
--------- ---------
143,160 123,511
========= =========
(Profit) on disposal of tangible fixed assets (102,238) (61,907)
========= =========
Depreciation of Tangible Fixed Assets 6,821,144 5,699,558
========= =========
Auditors' Remuneration 15,000 15,000
========= =========
</TABLE>
- 13 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
5. EMPLOYEES
The average number of employees (including executive directors) during the
year, analysed by category, was as follows:
NUMBERS EMPLOYED
31 MARCH 1999 2 APRIL 1998
Marketing & Customer Service 80 61
Operations 135 154
Administration 55 42
--- ---
270 257
=== ===
The aggregate payroll costs of these employees were as follows:
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
Wages and Salaries 5,754,111 4,984,916
Social Welfare Costs 478,630 424,183
Other Pension Costs 238,716 272,294
--------- ---------
6,471,457 5,681,393
========= =========
6. TAX ON PROFIT ON ORDINARY ACTIVITIES
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
Corporation Tax @ 32%/28% 1,011,834 1,333,939
Deferred Tax 248,000 313,000
--------- ---------
1,259,834 1,646,939
========= =========
7. PROFIT FOR FINANCIAL YEAR
(IR Pound) 3,461,819 (1998: (IR Pound) 3,836,012) of this profit has been
dealt with in the profit and loss account of Cablelink Limited, which, as
permitted by Section 3 (2) of the Companies (Amendment) Act 1986, is not
presented in these financial statements.
8. DIVIDENDS
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
PAID:
Interim dividend on ordinary
shares of (IR Pound) 120.72
per share 10,500,000 Nil
========== ===
- 14 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
9. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
FURNITURE IMPROVEMENTS
RELAY AND MOTOR TO LEASEHOLD FREEHOLD
SYSTEMS EQUIPMENT FIXTURES COMPUTER VEHICLES PROPERTY PROPERTY TOTAL
GROUP (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COST
At 2 April 1998 61,361,263 868,755 1,379,409 5,324,366 1,307,818 1,004,297 351,306 71,597,214
Additions 8,112,601 44,691 154,378 2,183,968 372,571 38,953 - 10,907,162
---------- ------- --------- --------- --------- --------- ------- ----------
69,473,864 913,446 1,533,787 7,508,334 1,680,389 1,043,250 351,306 82,504,376
Less: Disposals (91,835) - - (26,328) (326,819) - - (444,982)
---------- ------- --------- --------- --------- --------- ------- ----------
At 31 March 1999 69,382,029 913,446 1,533,787 7,482,006 1,353,570 1,043,250 351,306 82,059,394
---------- ------- --------- --------- --------- --------- ------- ----------
DEPRECIATION
At 2 April 1998 29,660,839 721,915 964,671 2,251,298 722,408 348,355 56,007 34,725,493
Charge for the Year 5,399,593 61,403 167,272 860,834 284,362 40,437 7,243 6,821,144
---------- ------- --------- --------- --------- --------- ------- ----------
35,060,432 783,318 1,131,943 3,112,132 1,006,770 388,792 63,250 41,546,637
Less: Disposals (91,835) - - (1,646) (300,478) - - (393,959)
---------- ------- --------- --------- --------- --------- ------- ----------
At 31 March 1999 34,968,597 783,318 1,131,943 3,110,486 706,292 388,792 63,250 41,152,678
---------- ------- --------- --------- --------- --------- ------- ----------
NET BOOK AMOUNT AT
31 March 1999 34,413,432 130,128 401,844 4,371,520 647,278 654,458 288,056 40,906,716
========== ======= ========= ========= ========= ========= ======= ==========
2 April 1998 31,700,424 146,840 414,738 3,073,068 585,410 655,942 295,299 36,871,721
========== ======= ========= ========= ========= ========= ======= ==========
</TABLE>
The basis by which depreciation is calculated are stated in accounting
policy Note D.
- 15 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
9. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
FURNITURE IMPROVEMENTS
RELAY AND MOTOR TO LEASEHOLD FREEHOLD
SYSTEMS EQUIPMENT FIXTURES COMPUTER VEHICLES PROPERTY PROPERTY TOTAL
COMPANY (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cost
At 2 April 1998 50,765,257 746,357 1,285,761 5,118,162 1,173,978 759,327 351,306 60,200,148
Additions 6,513,123 44,190 154,378 2,180,353 314,860 24,243 - 9,231,147
---------- ------- --------- --------- --------- --------- ------- ----------
57,278,380 790,547 1,440,139 7,298,515 1,488,838 783,570 351,306 69,431,295
Less: Disposals (43,470) - - - (281,823) - - (325,293)
---------- ------- --------- --------- --------- --------- ------- ----------
At 31 March 1999 57,234,910 790,547 1,440,139 7,298,515 1,207,015 783,570 351,306 69,106,002
---------- ------- --------- --------- --------- --------- ------- ----------
Depreciation
At 2 April 1998 25,046,707 627,891 900,946 2,124,641 657,076 264,969 56,007 29,678,237
Charge for the Year 4,284,574 52,051 157,315 838,241 254,520 25,257 7,243 5,619,201
---------- ------- --------- --------- --------- --------- ------- ----------
29,331,281 679,942 1,058,261 2,962,882 911,596 290,226 63,250 35,297,438
Less: Disposals (43,470) - - - (255,968) - - (299,438)
---------- ------- --------- --------- --------- --------- ------- ----------
At 31 March 1999 29,287,811 679,942 1,058,261 2,962,882 655,628 290,226 63,250 34,998,000
---------- ------- --------- --------- --------- --------- ------- ----------
Net Book Amount at
31 March 1999 27,947,099 110,605 381,878 4,335,633 551,387 493,344 288,056 34,108,002
========== ======= ========= ========= ========= ========= ======= ==========
2 April 1998 25,718,550 118,466 384,815 2,993,521 516,902 494,358 295,299 30,521,911
========== ======= ========= ========= ========= ========= ======= ==========
</TABLE>
The basis by which depreciation is calculated are stated in accounting
policy Note D.
- 16 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
10. FINANCIAL ASSETS
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
INTEREST IN SUBSIDIARY COMPANIES:
Cablelink Construction Limited 600,000 600,000
Cablelink Waterford Limited 100 100
Cablelink Galway Limited 1,000 1,000
------- -------
601,100 601,100
======= =======
In the opinion of the directors, the value of the interest in subsidiary
companies is not less than the amounts stated.
11. STOCKS
GROUP AND COMPANY
Stocks represent goods purchased for the construction and maintenance of
the cable systems. The replacement cost of stocks did not exceed the
valuation on a FIFO basis by a material amount.
12. DEBTORS: AMOUNTS FALLING DUE AFTER ONE YEAR
<TABLE>
<CAPTION>
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
<S> <C> <C>
COMPANY
Amounts Due by Group Companies (Note 15) 5,426,425 5,080,174
========= =========
DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
GROUP
Trade Debtors 1,524,763 1,205,789
Prepayments 815,644 609,447
Other Debtors 607,199 392,693
--------- ---------
2,947,606 2,207,929
========= =========
COMPANY
Trade Debtors 1,265,888 1,017,865
Prepayments 768,003 560,758
Other Debtors 559,865 338,491
--------- ---------
2,593,756 1,917,114
========= =========
</TABLE>
- 17 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
<S> <C> <C>
GROUP:
Trade Creditors 2,340,826 1,700,422
Taxation and Social Welfare (Note 14) 1,552,702 2,239,412
Accruals 5,629,165 6,854,000
Deferred Income 8,840,011 8,781,285
Bank Overdraft 138,071 -
---------- ----------
18,500,775 19,575,119
========== ==========
COMPANY:
Trade Creditors 2,176,540 1,568,637
Taxation and Social Welfare (Note 14) 1,332,241 1,974,738
Accruals 5,257,845 6,367,776
Amounts owed to group companies (Note 15) 618,178 618,178
Deferred Income 7,818,856 7,835,775
Bank Overdraft 294,708 -
---------- ----------
17,498,368 18,365,104
========== ==========
</TABLE>
14. TAXATION CREDITORS
The taxation creditors included in taxation and social welfare are made up
as follows:
<TABLE>
<CAPTION>
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
<S> <C> <C>
GROUP:
Corporation Tax 1,022,000 1,336,000
PAYE 98,270 80,376
PRSI 53,899 46,820
VAT 366,713 631,676
Construction Tax 10,019 23,643
Pension Refund Tax 1,489 3,322
Withholding Tax - Professional Fees 312 117,575
--------- ---------
1,552,702 2,239,412
========= =========
COMPANY:
Corporation Tax 890,000 1,230,000
PAYE 90,817 73,785
PRSI 49,134 43,105
VAT 291,006 493,153
Construction Tax 9,795 14,295
Pension Refund Tax 1,489 3,322
Withholding Tax - Professional Fees - 117,078
--------- ---------
1,332,241 1,974,738
========= =========
</TABLE>
- 18 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
15. INTERCOMPANY BALANCES
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
COMPANY:
Receivable:
Cablelink Waterford Limited 3,288,341 2,678,785
Cablelink Galway Limited 2,138,084 2,401,389
--------- ---------
5,426,425 5,080,174
========= =========
Payable:
Cablelink Construction Limited 618,178 618,178
========= =========
16. PROVISIONS FOR LIABILITIES AND CHARGES
31 MARCH 1999 2 APRIL 1998
FULL FULL
POTENTIAL POTENTIAL
LIABILITY LIABILITY
(IR POUND) (IR POUND)
DEFERRED TAXATION:
GROUP:
Tax impact of timing differences:
Capital Allowances/Depreciation 2,707,000 2,459,000
========= =========
COMPANY:
Tax impact of timing differences:
Capital Allowances/Depreciation 2,240,000 2,000,000
========= =========
17. CALLED UP SHARE CAPITAL
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
AUTHORISED:
1,085,000 Ordinary Shares of
(IR Pound) 1 each 1,085,000 1,085,000
========= =========
ALLOTTED, CALLED UP AND FULLY PAID:
86,980 Ordinary Shares of
(IR Pound) 1 each 86,980 86,980
========= =========
- 19 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
18. CAPITAL RESERVES
SHARE CAPITAL
PREMIUM REDEMPTION
ACCOUNT RESERVE FUND TOTAL
(IR POUND) (IR POUND) (IR POUND)
At 31 March 1999 7,124,448 263,333 7,387,781
========= ======= =========
At 2 April 1998 7,124,448 263,333 7,387,781
========= ======= =========
19A. RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
Operating Profit 4,541,102 4,837,005
Depreciation Charges 6,821,144 5,699,558
(Profit) on Sale of Tangible Fixed Assets (102,238) (61,907)
Decrease in Stocks 229,764 373,435
(Increase) in Debtors (739,677) (409,664)
(Decrease)/Increase in Creditors (898,415) 3,226,931
--------- ----------
9,851,680 13,665,358
========= ==========
19B. RETURN ON INVESTMENTS AND SERVICING OF FINANCE
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
Interest Received 545,143 746,627
Interest Paid - (129,075)
--------- ----------
NET CASH OUTFLOW FOR RETURNS ON
INVESTMENTS AND SERVICING OF FINANCE 545,143 617,552
========= ==========
19C. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
Purchases of Fixed Assets (10,907,162) (12,074,580)
Proceeds from Disposals of Fixed Assets 153,261 74,539
----------- -----------
(10,753,901) (12,000,041)
=========== ===========
- 20 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
19D. MANAGEMENT OF LIQUID RESOURCES
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
Decrease in Term Deposits with Banks (11,914,193) (390,255)
----------- --------
(11,914,193) (390,255)
=========== ========
20. ANALYSIS OF THE CHANGES IN NET FUNDS
AT AT
2 APRIL 1998 CASH FLOWS 31 MARCH 1999
(IR POUND) (IR POUND) (IR POUND)
Cash at Bank and in Hand 125,767 (268,719) (142,952)
Term Deposits 11,919,074 (11,914,193) 4,881
---------- ---------- -------
12,044,841 (12,182,912) (138,071)
========== ========== =======
21. COMMITMENTS
FUTURE CAPITAL EXPENDITURE NOT PROVIDED FOR:
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
GROUP
Contracted for 1,901,000 2,417,000
Authorised but not Contracted for 5,010,000 4,619,000
--------- ---------
6,911,000 7,036,000
========= =========
COMPANY
Contracted for 1,827,000 2,389,000
Authorised but not Contracted for 5,010,000 4,619,000
--------- ---------
6,837,000 7,008,000
========= =========
- 21 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
21. COMMITMENTS (CONTINUED)
OPERATING LEASE COMMITMENTS
The group has commitments under operating leases to make payments totalling
(IR Pound) 557,500 for the next year (company - (IR Pound) 511,000) (1998:
group - (IR Pound) 314,500, company - (IR Pound) 270,500) as follows:
LAND AND BUILDINGS
GROUP COMPANY
(IR POUND) (IR POUND)
Expiring:
Within one year - -
Between two and five years - -
More than five years 557,500 511,000
------- -------
557,500 511,000
======= =======
The rentals payable under leases in respect of land and buildings are
subject to renegotiation at various intervals specified in the leases.
22. STATEMENT OF MOVEMENTS IN SHAREHOLDERS' FUNDS
31 MARCH 1999 2 APRIL 1998
(IR POUND) (IR POUND)
Profit for financial year 3,826,411 3,807,618
Dividend paid (10,500,000) -
Opening shareholders' funds 31,971,731 28,164,113
---------- ----------
CLOSING SHAREHOLDERS' FUNDS 25,298,142 31,971,731
========== ==========
23. CONTINGENT LIABILITIES
(i) The company has given irrevocable guarantees in respect of the
liabilities, referred to in Section 5 (c) of the Companies (Amendment)
Act 1986, of Cablelink Galway Limited, Cablelink Waterford Limited,
Cablelink Construction Limited and Dublin Cablesystems Limited. In the
opinion of the directors, no losses are likely to arise in respect of
this contingency.
(ii) In the past, the company has been required to place certain of its
cables underground. No provision has been made in the financial
statements for costs which may be incurred in doing similar work in
the future. The amount of such costs cannot be estimated with any
reasonable accuracy but are not currently expected to be significant.
(iii)From time to time the Group is involved in legal cases which arise
through the normal course of business. In one such case, the Group is
engaged in a dispute with the Irish Revenue Authorities. The Directors
are confident that this dispute will be resolved in the Group's
favour.
- 22 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
24. RELATED PARTY TRANSACTIONS
(i) Interest earned on deposits with ITI during the year amounted to
(IR Pound) 105k.
(ii) During the year, the following related party transactions were
undertaken with Telecom Eireann:-
Purchase of Fixed Assets (IR Pound) 1,295k
Duct Rental (IR Pound) 244k
Accommodation (IR Pound) 180k
Telephone Charges (IR Pound) 179k
Other (IR Pound) 104k
(iii)During the year, the following related party transactions were
undertaken with RTE:
Secondment of Personnel (IR Pound) 101k
(iv) During the year, the following related party transactions were
undertaken with Eircell:
Telephone Charges (IR Pound) 74k
25. ULTIMATE PARENT COMPANY
Bord Telecom Eireann, a company incorporated in the Republic of Ireland, is
the ultimate parent company. The group in which the results of the company
are consolidated is that headed by Bord Telecom Eireann. Copies of the
group financial statements of Bord Telecom Eireann are available at 114 St.
Stephen's Green West, Dublin 2.
26. GROUP COMPANIES
<TABLE>
<CAPTION>
<S> <C> <C>
NAME % OWNED PRINCIPAL ACTIVITY
Cablelink Limited Cable and MDS Television Systems
SUBSIDIARIES:
Cablelink Waterford Limited 100% Cable and MDS Television Systems
Cablelink Galway Limited 100% Cable and MDS Television Systems
Dublin Cablesystems Limited 100% Non-trading
Cablelink Construction Limited 100% Non-trading
</TABLE>
(A) All of the above companies are incorporated and operate in the
Republic of Ireland.
(B) All of the group's interest in subsidiary companies consist of
ordinary share capital.
(C) The registered office of the company and its subsidiaries is 10
Pembroke Place, Ballsbridge, Dublin 4.
- 23 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
27. SECTION 17 GUARANTEE
Each of the Subsidiary companies listed in note 26 and consolidated into
these financial statements have availed of the exemption from filing their
individual financial statements set out in Section 17 of the Companies
(Amendment) Act, 1986.
28. PENSION
The group operates a contributory defined benefit pension scheme covering
all of its permanent employees. The scheme's funds are administered by
trustees and are held separately from those of the group.
The total pension cost for the group was (IR Pound) 99,304 (1998: (IR
Pound) 90,624). The pension cost is assessed in accordance with the advice
of an independent qualified actuary using the aggregate method at triennial
intervals. The latest actuarial valuation of the scheme was at 1 May 1998.
The primary financial assumption underlying the actuarial valuation was
that the scheme's investments will earn a real rate of investment return,
over and above salary inflation and pension increases, of 2.0% per annum.
The actuarial report is not available for public inspection.
At the date of the latest actuarial valuation, the market value of the
assets of the scheme was (IR Pound) 4,820,953 and the actuarial value of
the assets was sufficient to cover 150% of the benefits which had accrued
to members, after allowing for expected future increases in earnings.
Contributions to an external pension scheme on behalf of seconded personnel
were (IR Pound) 101,622 (1998: (IR Pound) 117,889).
29. APPROVAL OF FINANCIAL STATEMENTS
The directors approved the financial statements on 7 May 1999.
30. SUMMARY OF DIFFERENCES BETWEEN IRISH AND UNITED STATES ("US") GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"):
The financial statements of Cablelink Limited and it subsidiaries have been
prepared in accordance with Irish GAAP which differs in certain significant
respects from US GAAP. The significant differences between Irish and US
GAAP and their effect on the financial statements of Cablelink are
described below:
- 24 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
PENSION AMOUNTS
Under Irish GAAP, pension costs are determined in accordance with Statement
of Standard Accounting Practice No. 24, costs being expensed over
employees' working lives. Under US GAAP, pension costs are determined in
accordance with the requirements of Statement of Financial Accounting
Standard 87, "Employers Accounting for Pensions". Differences between the
amounts under Irish GAAP and US GAAP arise from the requirement to use
different actuarial methods and assumptions and the method of amortising
surpluses and deficits.
Assumptions used in determining the actuarial present value of the
projected benefit obligation for the pension plan included weighted average
discount rates of 6%, 6% and 7% in 1999, 1998 and 1997, respectively. The
rate of return on new investments was assumed to be 7%, 7% and 7.5% in
1999, 1998 and 1997, respectively.
This information is provided in addition to that described in note 28 with
respect to the pension plans of Cablelink.
DEFERRED TAX
Under Irish GAAP, deferred tax is accounted for to the extent that it is
considered probable that a liability or asset will materialise in the
foreseeable future.
Under US GAAP, deferred tax is provided on a full liability basis which
permits deferred tax assets to be recognised if their realisation is
considered more likely than not.
Cablelink has provided for deferred tax on a full liability basis and has
determined additional deferred tax adjustments are not material.
REVENUE RECOGNITION
Under Irish GAAP, the Company records revenue for connecting customers to
the relay systems, net of value added tax, on a cash receipts basis. Where
the connection fees exceed (IR Pound) 30, then the entire fee is deducted
from the capitalised cost of the relay systems. Generally, the fees that
are taken directly to revenue relate to reconnection and second connection
fees. Initial hookup connections are treated as a deduction from the
capitalised cost of the systems.
- 25 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
Under US GAAP, revenues are recorded under Statement of Financial
Accounting Standard 51, "Financial Reporting by Cable Television Companies"
which requires hookup revenue to be recognised currently to the extent of
direct selling costs. Direct selling costs include those costs that are
incurred in obtaining new subscribers. Hookup revenue in excess of direct
selling costs is deferred and amortised to revenue over the estimated
average subscription period. Additionally, capitalised costs of relay
systems should be depreciated over their estimated useful lives.
Cablelink has determined that the average subscription period approximates
the estimated useful life of the relays systems and corresponding
adjustments are not material. Additionally, Cablelink has determined that
its direct selling costs approximate (IR Pound) 30 and its policy regarding
connection and reconnection fees are consistent with US GAAP.
COMPREHENSIVE INCOME
US GAAP requires the disclosure of comprehensive income. Comprehensive
income is composed of net income and other comprehensive income. Cablelink
and its subsidiaries do not have any changes in equity from non-owner
sources and as such, comprehensive is comprised solely of "profit for the
year after taxation".
STATEMENT OF CASH FLOW BASIS
Cablelink's Statement of Cash Flow is prepared in accordance with Financial
Reporting Standard 1 (Revised) "FRS 1" whose objective and principles are
similar to those set out in Statement of Financial Accounting Standard 95
"Statement of Cash Flows"("SFAS 95"). The principal differences between the
standards relate to classification. Under FRS 1, the Company presents its
cashflows for (a) operating activities, (b) returns on investments and
servicing of finance, (c) tax paid, (d) capital expenditure and financial
investment and (e) financing. SFAS 95 requires only three categories of
cash flow activity being (a) operating, (b) investing and (c) financing.
Irish GAAP permits bank indebtedness to be included in the determination of
cash and cash equivalents in the consolidated cash flow statement. US GAAP
requires that bank indebtedness be reported as financing cash flows. As a
result, under US GAAP, the bank indebtedness at the beginning and end of
the year as reflected in the consolidated cash flow statement would be
reported as cash flows under the heading "Financing" in the statement.
Under US GAAP, the funds provided by financing activities in 1999 and 1997
would be increased by (IR Pound) 142,952 and (IR Pound) 771,418,
respectively.
- 26 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
Under US GAAP, the payment of a dividend is treated as a financing cash
flow and thus would be recorded as a financing activity.
The following table discloses the sub-totals of operations, investing and
financing activities in accordance with US GAAP.
Consolidated Cash Flow Statement
YEAR ENDED
----------------------------------------------
MARCH 31 APRIL 2, APRIL 3,
1999 1998 1997
Operations 9,070,989 12,506,971 9,920,964
Investing (10,753,901) (12,000,041) (10,645,785)
Financing (10,357,048) (771,148) -
US GAAP requires the disclosure of interest and taxes paid during each
fiscal period. The disclosure for interest paid is included in the
footnotes to the financial statements and taxation information is included
on the face of the Cash Flow Statement.
NEW ACCOUNTING STANDARDS NOT YET ADOPTED
Statement of Financial Accounting Standard 133 "Accounting for Derivative
Instruments and Hedging Activities" was issued in June 1998 and establishes
accounting and reporting standards for derivative instruments and hedging
activities. It is effective for fiscal years beginning after 15 June, 2000.
The Company does not expect the adoption of SFAS No.133 to have a material
impact on its financial statements.
The following is a summary of material adjustments to net income and
shareholders' equity which would have been reported had the financial
statements been prepared in accordance with US GAAP and a reconciliation of
shareholders' equity.
<TABLE>
<CAPTION>
YEAR ENDED
----------------------------------------------
MARCH 31 APRIL 2, APRIL 3,
1999 1998 1997
<S> <C> <C> <C>
Net earnings for the period under Irish GAAP 3,826,411 3,807,618 3,304,613
Pension Expense 167,000 42,000 38,000
--------- --------- ---------
Net earnings for the period in accordance with
United States GAAP 3,993,411 3,849,618 3,342,613
========= ========= =========
</TABLE>
- 27 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 1999
<TABLE>
<CAPTION>
YEAR ENDED
-----------------------------
MARCH 31 APRIL 2,
1999 1998
<S> <C> <C>
Shareholder's funds in accordance with Irish GAAP 25,298,142 31,971,731
Adjustments to conform to US GAAP
Pension 248,000 81,000
---------- ----------
Shareholder's funds in accordance with US GAAP 25,546,142 32,052,731
========== ==========
Auditor's Report page 5
</TABLE>
- 28 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
SCHEDULE 1
(NOT COVERED BY THE REPORT OF THE AUDITORS)
STATEMENT OF COMPLIANCE REQUIRED BY SECTION 12(1)
OF THE PROMPT PAYMENT OF ACCOUNTS ACT, 1997
The Directors have overall responsibility for the company's compliance with the
Prompt Payment of Accounts Act 1997 and have delegated this responsibility to
the company's management. The company's system of internal control includes
accounting and computer controls designed to ensure the identification of
invoices and contracts for payment within the prescribed payment dates as
defined by the Act.
The company's system of internal control is designed to provide reasonable
though not absolute assurance against non compliance with the Act.
The director's are satisfied that they have complied in all material respects
with the provisions of the Prompt Payment of Accounts Act 1997.
- 29 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 2 APRIL 1998
- 30 -
<PAGE>
REPORT OF THE AUDITORS TO THE MEMBERS OF
CABLELINK LIMITED
We have audited the financial statements on pages 32 to 50.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The Company's directors are responsible for the preparation of the financial
statements. It is our responsibility to form an independent opinion, based on
our audit, on those statements and to report our opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards 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 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 financial statements give a true and fair view of the state
of affairs of the group and the company as at 2 April 1998 and of the profit,
total recognised gains and cash flows of the group for the year then ended and
have been properly prepared in accordance with the Companies Acts 1963 to 1990
and the European Communities (Companies: Group Accounts) Regulations, 1992.
We have obtained all the information and explanations we consider necessary for
the purposes of our audit. In our opinion, proper books of account have been
kept by the company. The financial statements are in agreement with the books of
account.
The net assets of the company, as stated in the balance sheet on page 11, are
more than half the amount of its called up share capital and, in our opinion, on
that basis there did not exist at 2 April 1998 a financial situation which,
under Section 40(1) of the Companies (Amendment) Act 1983, would require the
convening of an Extraordinary General Meeting of the company.
Coopers & Lybrand
-----------------------
Chartered Accountants
and Registered Auditors
11 May 1998
Dublin
- 31 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
ACCOUNTING POLICIES
YEAR ENDED 2 APRIL 1998
The significant accounting policies adopted by the company are as follows:-
A. BASIS OF ACCOUNTING
The financial statements are prepared under the historical cost convention.
B. BASIS OF CONSOLIDATION
The consolidated profit and loss account and balance sheet include the
financial statements of the parent company and its subsidiaries made up to
2 April 1998.
C. TURNOVER
Turnover comprises:
(i) Service revenue from subscribers, net of value added tax which is
accounted for on an earnings basis. Deferred income (which is included
under the balance sheet category "Creditors: Amounts falling due
within one year") represents the proportion of service revenue
received which relates to future periods.
(ii) Revenues in respect of charges for connecting customers to the relay
systems, net of value added tax, is accounted for on a cash receipts
basis. However, in instances where connection revenue from an
applicant exceeds (IR Pound) 30 it is deducted from the capitalised
connection cost rather than included in revenue.
D. TANGIBLE FIXED ASSETS
Additions to the relay systems, including the costs of connecting
subscribers for the first time, are capitalised.
The costs of disconnection and reconnection of subscribers are charged to
the profit and loss account.
Connection and reconnection fees are credited to the profit and loss
account in the period in which they are received where they are less than
(IR Pound) 30. Where they exceed (IR Pound) 30, they are deducted from the
capitalised connection costs.
Depreciation is provided at rates calculated to write off the cost less
estimated residual value of each asset, other than freehold land, on a
straight line basis, over its expected useful life, as follows:
Freehold Property 60 years
Relay Systems 5 to 12 years
Test Equipment 5 years
Furniture & Fittings 5 years
Computers 3/4 years
Motor Vehicles 4/5 years
Improvements to Leasehold Premises 5 years
- 32 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
ACCOUNTING POLICIES
YEAR ENDED 2 APRIL 1998
E. STOCKS
Consumable stores are valued at cost, less a provision for obsolescence
where appropriate. Cost consists of the invoiced price of supplies.
F. TAXATION
Corporation tax payable is provided on taxable profits at the current rate.
Advance corporation tax payable on dividends paid and provided for in the
period is written off except when recoverability against corporation tax
payable is considered to be reasonably assured. Credit is taken for advance
corporation tax written off in previous years when it is recoverable
against a corporation tax liability.
Tax deferred or accelerated is accounted for in respect of all material
timing differences only to the extent that it is probable that a liability
or asset will crystallise in the foreseeable future. Timing differences
arise from the inclusion of items of income and expenditure in tax
computations in periods different from those in which they are included in
the financial statements. Provision is made at the rate which is expected
to be applied when the liability or asset is expected to crystallise. Where
this is not known the latest estimate of the long-term tax rate applicable
has been adopted.
G. BAD DEBTS
All balances due for over 12 months, together with all balances on
disconnected accounts are provided against in full. A provision of 20% is
made against amounts due for more than 6 months and less than 12 months.
H. FOREIGN CURRENCIES
Normal trading activities denominated in foreign currencies are recorded in
Irish pounds at actual exchange rates as of the date of transaction.
Monetary assets and liabilities denominated in foreign currencies are
reported at the rates of exchange prevailing at the balance sheet date. Any
gain or loss arising from a change in exchange rates subsequent to the date
of the transaction is reported as an exchange gain or loss in the profit
and loss account.
I. PENSIONS
Pension costs are accounted for on the basis of charging the expected cost
of providing pensions over the period during which the company benefits
from employees' services. The effects of variations from regular cost are
spread over the expected average remaining service lives of the members of
the scheme.
- 33 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
ACCOUNTING POLICIES
YEAR ENDED 2 APRIL 1998
J. LEASES
Expenditure on leases which are operating leases is charged to the profit
and loss account on a basis representative of the benefit derived from the
asset, normally on a straight line basis, over the lease period.
- 34 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
CONSOLIDATED PROFIT AND LOSS ACCOUNT
YEAR ENDED 2 APRIL 1998
<TABLE>
<CAPTION>
NOTES 2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
<S> <C> <C> <C>
TURNOVER 1 36,647,492 32,938,312
Operating Expenses (net) 31,810,487 28,247,684
---------- ----------
OPERATING PROFIT 4,837,005 4,690,628
Investment Income 2 746,627 600,055
Interest Payable and Similar Charges 3 (129,075) (122,624)
---------- ----------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 4 5,454,557 5,168,059
Tax on Profit on Ordinary Activities 6 (1,646,939) (1,863,446)
---------- ----------
PROFIT FOR THE YEAR 7 3,807,618 3,304,613
Dividends 8 - -
---------- ----------
PROFIT FOR THE YEAR RETAINED 3,807,618 3,304,613
========== ==========
</TABLE>
In arriving at the results for the financial year, all amounts above relate to
continuing operations.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
The company has no recognised gains and losses other than those included in the
profits above and, therefore, no separate statement of total recognised gains
and losses has been presented.
NOTE OF HISTORICAL COST PROFITS
There is no difference between the profit on ordinary activities before taxation
and the retained profit for the year stated above and their historical cost
equivalents.
STATEMENT OF MOVEMENT IN RETAINED PROFITS
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
RETAINED PROFIT AT 3 APRIL 1997 20,689,352 17,384,739
PROFIT FOR THE YEAR RETAINED 3,807,618 3,304,613
---------- ----------
RETAINED PROFIT AT 2 APRIL 1998 24,496,970 20,689,352
========== ==========
ON BEHALF OF THE BOARD
A Kane )
) DIRECTORS
K J Windle )
The notes on pages 32 to 34 and 39 to 50 form part of these Financial Statements
Auditors' Report page 31.
- 35 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS AT 2 APRIL 1998
<TABLE>
<CAPTION>
NOTES 2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND) (IR POUND) (IR POUND)
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Tangible Fixed Assets 9 36,871,721 30,509,331
CURRENT ASSETS
Stocks 11 2,881,359 3,254,794
Debtors 12 2,207,929 1,798,265
Cash at Bank and in Hand 12,044,841 11,537,911
---------- ----------
17,134,129 16,590,970
CREDITORS
Amounts falling due
within one year 13 (19,575,119) (16,790,188)
---------- ----------
NET CURRENT (LIABILITIES) (2,440,990) (199,218)
---------- ----------
TOTAL ASSETS LESS CURRENT
Liabilities 34,430,731 30,310,113
Provisions for Liabilities
and Charges 16 (2,459,000) (2,146,000)
---------- ----------
NET ASSETS 31,971,731 28,164,113
========== ==========
CAPITAL AND RESERVES
Called up Share Capital 17 86,980 86,980
Share Premium Account 18 7,124,448 7,124,448
Other Reserves 18 263,333 263,333
Profit & Loss Account 24,496,970 20,689,352
---------- ----------
SHAREHOLDERS' FUNDS - EQUITY 22
INTERESTS 31,971,731 28,164,113
========== ==========
</TABLE>
ON BEHALF OF THE BOARD
A Kane )
) DIRECTORS
K J Windle )
The notes on pages 32 to 34 and 39 to 50 form part of these Financial Statements
Auditors' Report page 31.
- 36 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
COMPANY BALANCE SHEET AS AT 2 APRIL 1998
<TABLE>
<CAPTION>
NOTES 2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND) (IR POUND) (IR POUND)
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Tangible Fixed Assets 9 30,521,911 25,371,224
Financial Assets 10 601,100 601,100
---------- ----------
31,123,011 25,972,324
CURRENT ASSETS
Stocks 11 2,390,302 2,807,130
Debtors:
amounts due after one year 12 5,080,174 4,127,994
amounts due within one year 12 1,917,114 1,514,395
Cash at Bank and in Hand 12,036,403 11,531,282
---------- ----------
21,423,993 19,980,801
CREDITORS
Amounts falling due
within one year 13 (18,365,104) (15,887,237)
---------- ----------
NET CURRENT ASSETS 3,058,889 4,093,564
---------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 34,181,900 30,065,888
Provisions for Liabilities
and Charges 16 (2,000,000) (1,720,000)
---------- ----------
NET ASSETS 32,181,900 28,345,888
========== ==========
CAPITAL AND RESERVES
Called up Share Capital 17 86,980 86,980
Share Premium Account 18 7,124,448 7,124,448
Other Reserves 18 263,333 263,333
Profit & Loss Account 24,707,139 20,871,127
---------- ----------
SHAREHOLDERS' FUNDS - EQUITY
Interests 32,181,900 28,345,888
========== ==========
</TABLE>
ON BEHALF OF THE BOARD
A Kane )
) DIRECTORS
K J Windle )
The notes on pages 32 to 34 and 39 to 50 form part of these Financial Statements
Auditors' Report page 31.
- 37 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED 2 APRIL 1998
<TABLE>
<CAPTION>
NOTES 2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
<S> <C> <C> <C>
CASH FROM OPERATING ACTIVITIES 19A 13,665,358 10,171,179
RETURNS ON INVESTMENT AND SERVICING OF FINANCE 19B 617,552 477,431
TAXATION (1,775,939) (528,630)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT 19C (12,000,041) (11,003,617)
---------- ----------
Cash Inflow/(Outflow) Before
Use of Liquid Resources 506,930 (883,637)
MANAGEMENT OF LIQUID RESOURCES 19D 390,255 158,816
---------- ----------
INCREASE/(DECREASE) IN CASH IN YEAR 897,185 (724,821)
========== ==========
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Increase/(Decrease) in Cash in Year 897,185 (724,821)
Cash (Inflow) from (Decrease) in
Liquid Resources (390,255) (158,816)
---------- ----------
Movement in Net Funds in Year 506,930 (883,637)
Net Funds at Start of Year 11,537,911 12,421,548
---------- ----------
NET FUNDS AT END OF YEAR 20 12,044,841 11,537,911
========== ==========
</TABLE>
The notes on pages 32 to 34 and 39 to 50 form part of these Financial Statements
Auditors' Report page 31.
- 38 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 2 APRIL 1998
1. TURNOVER
Turnover is represented by revenue from subscribers and is generated in
total in the Republic of Ireland.
2. INVESTMENT INCOME
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
Interest Receivable and Similar Income 746,627 600,055
======= =======
3. INTEREST PAYABLE AND SIMILAR CHARGES
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
On bank loans, overdrafts and other
loans wholly repayable within five years 129,075 122,624
======= =======
4. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
<TABLE>
<CAPTION>
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
<S> <C> <C>
Profit on ordinary activities before
taxation is stated after charging/(crediting):
Directors' emoluments:
Fees 15,500 15,500
Other emoluments (including pension contributions) 108,011 105,643
--------- ---------
123,511 121,143
========= =========
(Profit) on disposal of tangible fixed assets (61,907) (145,387)
========= =========
Depreciation of Tangible Fixed Assets 5,699,558 5,096,042
========= =========
Auditors' Remuneration 15,000 15,000
========= =========
</TABLE>
- 39 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 2 APRIL 1998
5. EMPLOYEES
The average number of employees (including executive directors) during the
year, analysed by category, was as follows:
NUMBERS EMPLOYED
2 APRIL 1998 3 APRIL 1997
Marketing & Customer Service 61 60
Operations 154 154
Administration 42 39
--- ---
257 253
=== ===
The aggregate payroll costs of these employees were as follows:
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
Wages and Salaries 4,984,916 4,668,610
Social Welfare Costs 424,183 408,100
Other Pension Costs 272,294 244,916
--------- ---------
5,681,393 5,321,626
========= =========
6. TAX ON PROFIT ON ORDINARY ACTIVITIES
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
Corporation Tax @ 36%/32% 1,333,939 1,775,446
Deferred Tax 313,000 88,000
--------- ---------
1,646,939 1,863,446
========= =========
7. PROFIT FOR FINANCIAL YEAR
(IR Pound) 3,836,012 (1997: (IR Pound) 3,236,552) of this profit has been
dealt with in the profit and loss account of Cablelink Limited, which, as
permitted by Section 3 (2) of the Companies (Amendment) Act 1986, is not
presented in these financial statements.
8. DIVIDENDS
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
PAID:
Dividend on ordinary shares of
(IR Pound) 1 each Nil Nil
=== ===
- 40 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 2 APRIL 1998
9. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
FURNITURE IMPROVEMENTS
RELAY AND MOTOR TO LEASEHOLD FREEHOLD
SYSTEMS EQUIPMENT FIXTURES COMPUTER VEHICLES PROPERTY PROPERTY TOTAL
GROUP (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COST
At 3 April 1997 52,977,127 817,721 1,234,144 2,434,013 1,314,107 945,026 332,031 60,054,169
Additions 8,675,331 52,794 150,218 2,890,353 227,338 59,271 19,275 12,074,580
---------- ------- --------- --------- --------- --------- ------- ----------
61,652,458 870,515 1,384,362 5,324,366 1,541,445 1,004,297 351,306 72,128,749
Less: Disposals (291,195) (1,760) (4,953) - (233,627) - - (531,535)
---------- ------- --------- --------- --------- --------- ------- ----------
At 2 April 1998 61,361,263 868,755 1,379,409 5,324,366 1,307,818 1,004,297 351,306 71,597,214
---------- ------- --------- --------- --------- --------- ------- ----------
DEPRECIATION
At 3 April 1997 25,250,252 656,380 821,580 1,780,918 669,869 316,524 49,315 29,544,838
Charge for the Year 4,701,782 67,295 147,741 470,380 273,837 31,831 6,692 5,699,558
---------- ------- --------- --------- --------- --------- ------- ----------
29,952,034 723,675 969,321 2,251,298 943,706 348,355 56,007 35,244,396
Less: Disposals (291,195) (1,760) (4,650) - (221,298) - - (518,903)
---------- ------- --------- --------- --------- --------- ------- ----------
At 2 April 1998 29,660,839 721,915 964,671 2,251,298 722,408 348,355 56,007 34,725,493
---------- ------- --------- --------- --------- --------- ------- ----------
NET BOOK AMOUNT AT
2 April 1998 31,700,424 146,840 414,738 3,073,068 585,410 655,942 295,299 36,871,721
========== ======= ========= ========= ========= ========= ======= ==========
3 April 1997 27,726,875 161,341 412,564 653,095 644,238 628,502 282,716 30,509,331
========== ======= ========= ========= ========= ========= ======= ==========
</TABLE>
The basis by which depreciation is calculated are stated in accounting
policy Note D.
- 41 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 2 APRIL 1998
9. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
FURNITURE IMPROVEMENTS
RELAY AND MOTOR TO LEASEHOLD FREEHOLD
SYSTEMS EQUIPMENT FIXTURES COMPUTER VEHICLES PROPERTY PROPERTY TOTAL
COMPANY (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COST
At 3 April 1997 44,352,537 712,008 1,159,705 2,290,036 1,186,885 723,301 332,031 50,756,503
Additions 6,615,220 34,349 131,009 2,828,126 192,920 36,026 19,275 9,856,925
---------- ------- --------- --------- --------- --------- ------- ----------
50,967,757 746,357 1,290,714 5,118,162 1,379,805 759,327 351,306 60,613,428
Less: Disposals (202,500) - (4,953) - (205,827) - - (413,280)
---------- ------- --------- --------- --------- --------- ------- ----------
At 2 April 1998 50,765,257 746,357 1,285,761 5,118,162 1,173,978 759,327 351,306 60,200,148
---------- ------- --------- --------- --------- --------- ------- ----------
DEPRECIATION
At 3 April 1997 21,477,403 570,068 766,170 1,674,191 603,517 244,615 49,315 25,385,279
Charge for the Year 3,771,804 57,823 139,426 450,450 248,202 20,354 6,692 4,694,751
---------- ------- --------- --------- --------- --------- ------- ----------
25,249,207 627,891 905,596 2,124,641 851,719 264,969 56,007 30,080,030
Less: Disposals (202,500) - (4,650) - (194,643) - - (401,793)
---------- ------- --------- --------- --------- --------- ------- ----------
At 2 April 1998 25,046,707 627,891 900,946 2,124,641 657,076 264,969 56,007 29,678,237
---------- ------- --------- --------- --------- --------- ------- ----------
NET BOOK AMOUNT AT
2 April 1998 25,718,550 118,466 384,815 2,993,521 516,902 494,358 295,299 30,521,911
========== ======= ========= ========= ========= ========= ======= ==========
3 April 1997 22,875,134 141,940 393,535 615,845 583,368 478,686 282,716 25,371,224
========== ======= ========= ========= ========= ========= ======= ==========
</TABLE>
The basis by which depreciation is calculated are stated in accounting
policy Note D.
- 42 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 2 APRIL 1998
10. FINANCIAL ASSETS
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
INTEREST IN SUBSIDIARY COMPANIES:
Cablelink Construction Limited 600,000 600,000
Cablelink Waterford Limited 100 100
Cablelink Galway Limited 1,000 1,000
------- -------
601,100 601,100
======= =======
In the opinion of the directors, the value of the interest in subsidiary
companies is not less than the amounts stated.
11. STOCKS
GROUP AND COMPANY
Stocks represent goods purchased for the construction and maintenance of
the cable systems. The replacement cost of stocks did not exceed the
valuation on a FIFO basis by a material amount.
12. DEBTORS: AMOUNTS FALLING DUE AFTER ONE YEAR
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
COMPANY
Amounts Due by Group Companies (Note 15) 5,080,174 4,127,994
========= =========
DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
GROUP
Trade Debtors 1,205,789 1,201,745
Prepayments 609,447 269,723
Other Debtors 392,693 326,797
--------- ---------
2,207,929 1,798,265
========= =========
COMPANY
Trade Debtors 1,017,865 999,963
Prepayments 560,758 229,901
Other Debtors 338,491 284,531
--------- ---------
1,917,114 1,514,395
========= =========
- 43 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 2 APRIL 1998
13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
GROUP:
Trade Creditors 1,700,422 726,871
Taxation and Social Welfare (Note 14) 2,239,412 2,680,482
Accruals 6,854,000 5,533,715
Deferred Income 8,781,285 7,849,120
---------- ----------
19,575,119 16,790,188
========== ==========
COMPANY:
Trade Creditors 1,568,637 567,941
Taxation and Social Welfare (Note 14) 1,974,738 2,475,221
Accruals 6,367,776 5,134,984
Amounts owed to group companies (Note 15) 618,178 618,178
Deferred Income 7,835,775 7,090,913
---------- ----------
18,365,104 15,887,237
========== ==========
14. TAXATION CREDITORS
The taxation creditors included in taxation and social welfare are made up
as follows:
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
GROUP:
Corporation Tax 1,336,000 1,778,000
PAYE 80,376 107,515
PRSI 46,820 62,355
VAT 631,676 702,914
Construction Tax 23,643 19,952
Pension Refund Tax 3,322 -
Withholding Tax - Professional Fees 117,575 9,746
---------- ----------
2,239,412 2,680,482
========== ==========
COMPANY:
Corporation Tax 1,230,000 1,680,000
PAYE 73,785 99,707
PRSI 43,105 58,236
VAT 493,153 613,879
Construction Tax 14,295 13,653
Pension Refund Tax 3,322 -
Withholding Tax - Professional Fees 117,078 9,746
---------- ----------
1,974,738 2,475,221
========== ==========
- 44 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 2 APRIL 1998
15. INTERCOMPANY BALANCES
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
COMPANY:
Receivable:
Cablelink Waterford Limited 2,678,785 1,491,942
Cablelink Galway Limited 2,401,389 2,636,052
--------- ---------
5,080,174 4,127,994
========= =========
Payable:
Cablelink Construction Limited 618,178 618,178
========= =========
16. PROVISIONS FOR LIABILITIES AND CHARGES
2 APRIL 1998 3 APRIL 1997
FULL FULL
POTENTIAL POTENTIAL
LIABILITY LIABILITY
(IR POUND) (IR POUND)
DEFERRED TAXATION:
GROUP:
Tax impact of timing differences:
Capital Allowances/Depreciation 2,459,000 2,146,000
========= =========
COMPANY:
Tax impact of timing differences:
Capital Allowances/Depreciation 2,000,000 1,720,000
========= =========
17. CALLED UP SHARE CAPITAL
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
AUTHORISED:
1,085,000 Ordinary Shares of
(IR Pound) 1 each 1,085,000 1,085,000
========= =========
ALLOTTED, CALLED UP AND FULLY PAID:
86,980 Ordinary Shares of
(IR Pound) 1 each 86,980 86,980
========= =========
- 45 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 2 APRIL 1998
18. CAPITAL RESERVES
SHARE CAPITAL
PREMIUM REDEMPTION
ACCOUNT RESERVE FUND TOTAL
(IR POUND) (IR POUND) (IR POUND)
At 2 April 1998 7,124,448 263,333 7,387,781
========= ======= =========
At 3 April 1997 7,124,448 263,333 7,387,781
========= ======= =========
19A. RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
Operating Profit 4,837,005 4,690,628
Depreciation Charges 5,699,558 5,096,042
(Profit) on Sale of Tangible Fixed Assets (61,907) (145,387)
Decrease/(Increase) in Stocks 373,435 (254,878)
(Increase) in Debtors (409,664) (233,064)
Increase in Creditors 3,226,931 1,017,838
---------- ----------
13,665,358 10,171,179
========== ==========
19B. RETURN ON INVESTMENTS AND SERVICING OF FINANCE
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
Interest Received 746,627 600,055
Interest Paid (129,075) (122,624)
------- -------
NET CASH OUTFLOW FOR RETURNS ON
INVESTMENTS AND SERVICING OF FINANCE 617,552 477,431
======= =======
19C. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
Purchases of Fixed Assets (12,074,580) (11,172,235)
Proceeds from Disposals of Fixed Assets 74,539 168,618
---------- ----------
(12,000,041) (11,003,617)
========== ==========
- 46 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 2 APRIL 1998
19D. MANAGEMENT OF LIQUID RESOURCES
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
(Increase)/Decrease in Term
Deposits with Banks (390,255) 158,816
------- -------
(390,255) 158,816
======= =======
20. ANALYSIS OF THE CHANGES IN NET FUNDS
AT AT
3 APRIL 1997 CASH FLOWS 2 APRIL 1998
(IR POUND) (IR POUND) (IR POUND)
Cash at Bank and in Hand (771,418) 897,185 125,767
Term Deposits 12,309,329 (390,255) 11,919,074
---------- ------- ----------
11,537,911 506,930 12,044,841
========== ======= ==========
21. COMMITMENTS
FUTURE CAPITAL EXPENDITURE NOT PROVIDED FOR:
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
GROUP
Contracted for 2,417,000 810,000
Authorised but not Contracted for 4,619,000 2,950,000
--------- ---------
7,036,000 3,760,000
========= =========
COMPANY
Contracted for 2,389,000 796,500
Authorised but not Contracted for 4,619,000 2,950,000
--------- ---------
7,008,000 3,746,500
========= =========
- 47 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 2 APRIL 1998
21. COMMITMENTS (CONTINUED)
OPERATING LEASE COMMITMENTS
The group has commitments under operating leases to make payments totalling
(IR Pound) 314,500 for the next year (company - (IR Pound) 270,500) (1997:
group - (IR Pound) 314,500, company - (IR Pound) 270,500) as follows:
LAND AND BUILDINGS
GROUP COMPANY
(IR POUND) (IR POUND)
Expiring:
Within one year
Between two and five years
More than five years 314,500 270,500
------- -------
314,500 270,500
======= =======
The rentals payable under leases in respect of land and buildings are
subject to renegotiation at various intervals specified in the leases.
22. STATEMENT OF MOVEMENTS IN SHAREHOLDERS' FUNDS
2 APRIL 1998 3 APRIL 1997
(IR POUND) (IR POUND)
Profit for financial year 3,807,618 3,304,613
Opening shareholders' funds 28,164,113 24,859,500
---------- ----------
CLOSING SHAREHOLDERS' FUNDS 31,971,731 28,164,113
========== ==========
23. CONTINGENT LIABILITIES
(i) The company has given irrevocable guarantees in respect of the
liabilities, referred to in Section 5 (c) of the Companies (Amendment)
Act 1986, of Cablelink Galway Limited, Cablelink Waterford Limited,
Cablelink Construction Limited and Dublin Cablesystems Limited. In the
opinion of the directors, no losses are likely to arise in respect of
this contingency.
(ii) In the past, the company has been required to place certain of its
cables underground. No provision has been made in the financial
statements for costs which may be incurred in doing similar work in
the future. The amount of such costs cannot be estimated with any
reasonable accuracy but are not currently expected to be significant.
(iii)From time to time the Group is involved in legal cases which arise
through the normal course of business. In one such case, the Group is
engaged in a dispute with the Irish Revenue Authorities. The Directors
are confident that this dispute will be resolved in the Group's
favour.
- 48 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 2 APRIL 1998
24. RELATED PARTY TRANSACTIONS
(i) Included in cash and bank balances at the year end is (IR Pound)
2,332,176 which is held on deposit with Irish Telecommunications
Investments plc ("ITI"). Interest earned on deposits with ITI during
the year amounted to (IR Pound) 147k.
(ii) During the year, the following related party transactions were
undertaken with Telecom Eireann:-
Purchase of Fixed Assets (IR Pound) 1,377k
Duct Rental (IR Pound) 278k
Accommodation (IR Pound) 143k
Telephone Charges (IR Pound) 150k
Other (IR Pound) 111k
(iii)During the year, the following related party transactions were
undertaken with RTE:
Secondment of Personnel (IR Pound) 88k
(iv) During the year, the following related party transactions were
undertaken with Eircell:
Telephone Charges (IR Pound) 99k
25. ULTIMATE PARENT COMPANY
Bord Telecom Eireann, a company incorporated in the Republic of Ireland, is
the ultimate parent company. The group in which the results of the company
are consolidated is that headed by Bord Telecom Eireann. Copies of the
group financial statements of Bord Telecom Eireann are available at 114 St.
Stephen's Green West, Dublin 2.
26. GROUP COMPANIES
<TABLE>
<CAPTION>
<S> <C> <C>
NAME % OWNED PRINCIPAL ACTIVITY
Cablelink Limited Cable and MDS Television Systems
Subsidiaries:
Cablelink Waterford Limited 100% Cable and MDS Television Systems
Cablelink Galway Limited 100% Cable and MDS Television Systems
Dublin Cablesystems Limited 100% Non-trading
Cablelink Construction Limited 100% Non-trading
</TABLE>
(A) All of the above companies are incorporated and operate in the
Republic of Ireland.
(B) All of the group's interest in subsidiary companies consist of
ordinary share capital.
(C) The registered office of the company and its subsidiaries is 10
Pembroke Place, Ballsbridge, Dublin 4.
- 49 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 2 APRIL 1998
27. SECTION 17 GUARANTEE
Each of the Subsidiary companies listed in note 26 and consolidated into
these financial statements have availed of the exemption from filing their
individual financial statements set out in Section 17 of the Companies
(Amendment) Act, 1986.
28. PENSION
The group operates a contributory defined benefit pension scheme covering
all of its permanent employees. The scheme's funds are administered by
trustees and are held separately from those of the group.
The total pension cost for the group was (IR Pound) 90,624 (1997: (IR
Pound) 79,411). The pension cost is assessed in accordance with the advice
of an independent qualified actuary using the aggregate method at triennial
intervals. The latest actuarial valuation of the scheme was at 1 August
1995. The primary financial assumption underlying the actuarial valuation
was that the scheme's investments will earn a real rate of investment
return, over and above salary inflation and pension increases, of 1.5% per
annum. The actuarial report is not available for public inspection.
At the date of the latest actuarial valuation, the market value of the
assets of the scheme was (IR Pound) 2,227,214 and the actuarial value of
the assets was sufficient to cover 129% of the benefits which had accrued
to members, after allowing for expected future increases in earnings.
Contributions to an external pension scheme on behalf of seconded personnel
were (IR Pound) 117,889 (1997: (IR Pound) 108,154).
29. APPROVAL OF FINANCIAL STATEMENTS
The directors approved the financial statements on 8 May 1998.
Auditors' Report page 31.
- 50 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 3 APRIL 1997
- 51 -
<PAGE>
REPORT OF THE AUDITORS TO THE MEMBERS OF
CABLELINK LIMITED
We have audited the financial statements on pages 53 to 71.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The Company's directors are responsible for the preparation of the financial
statements. It is our responsibility to form an independent opinion, based on
our audit, on those statements and to report our opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards 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 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 financial statements give a true and fair view of the state
of affairs of the group and the company as at 3 April 1997 and of the profit,
total recognised gains and cash flows of the group for the year then ended and
have been properly prepared in accordance with the Companies Acts 1963 to 1990
and the European Communities (Companies: Group Accounts) Regulations 1992.
We have obtained all the information and explanations we consider necessary for
the purposes of our audit. In our opinion, proper books of account have been
kept by the company. The financial statements are in agreement with the books of
account.
The net assets of the company, as stated in the balance sheet on page 11, are
more than half the amount of its called up share capital and, in our opinion, on
that basis there did not exist at 3 April 1997 a financial situation which,
under Section 40(1) of the Companies (Amendment) Act 1983, would require the
convening of an Extraordinary General Meeting of the company.
COOPERS & LYBRAND
-----------------------
CHARTERED ACCOUNTANTS
AND REGISTERED AUDITORS
9 May 1997
Dublin
- 52 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
ACCOUNTING POLICIES
YEAR ENDED 3 APRIL 1997
The significant accounting policies adopted by the company are as follows:-
A. BASIS OF ACCOUNTING
The financial statements are prepared under the historical cost convention.
B. BASIS OF CONSOLIDATION
The consolidated profit and loss account and balance sheet include the
financial statements of the parent company and its subsidiaries made up to
3 April 1997.
C. TURNOVER
Turnover comprises:
(i) Service revenue from subscribers, net of value added tax which is
accounted for on an earnings basis. Deferred income (which is included
under the balance sheet category "Creditors: Amounts falling due
within one year") represents the proportion of service revenue
received which relates to future periods.
(ii) Revenues in respect of charges for connecting customers to the relay
systems, net of value added tax, is accounted for on a cash receipts
basis. However, in instances where connection revenue from an
applicant exceeds (IR Pound) 30 it is deducted from the capitalised
connection cost rather than included in revenue.
D. TANGIBLE FIXED ASSETS
Additions to the relay systems, including the costs of connecting
subscribers for the first time, are capitalised.
The costs of disconnection and reconnection of subscribers are charged to
the profit and loss account.
Connection and reconnection fees are credited to the profit and loss
account in the period in which they are received where they are less than
(IR Pound) 30. Where they exceed (IR Pound) 30, they are deducted from the
capitalised connection costs.
Depreciation is provided at rates calculated to write off the cost less
estimated residual value of each asset, other than freehold land, on a
straight line basis, over its expected useful life, as follows:
Freehold Property 60 years
Relay Systems 5 to 12 years
Test Equipment 5 years
Furniture & Fittings 5 years
Computers 3/4 years
Motor Vehicles 4/5 years
Improvements to Leasehold Premises 5 years
- 53 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
ACCOUNTING POLICIES
YEAR ENDED 3 APRIL 1997
E. STOCKS
Consumable stores are valued at cost, less a provision for obsolescence
where appropriate. Cost consists of the invoiced price of supplies.
F. TAXATION
Corporation tax payable is provided on taxable profits at the current rate.
Advance corporation tax payable on dividends paid and provided for in the
period is written off except when recoverability against corporation tax
payable is considered to be reasonably assured. Credit is taken for advance
corporation tax written off in previous years when it is recoverable
against a corporation tax liability.
Tax deferred or accelerated is accounted for in respect of all material
timing differences only to the extent that it is probable that a liability
or asset will crystallise in the foreseeable future. Timing differences
arise from the inclusion of items of income and expenditure in tax
computations in periods different from those in which they are included in
the financial statements. Provision is made at the rate which is expected
to be applied when the liability or asset is expected to crystallise. Where
this is not known the latest estimate of the long-term tax rate applicable
has been adopted.
G. BAD DEBTS
All balances due for over 12 months, together with all balances on
disconnected accounts are provided against in full. A provision of 20% is
made against amounts due for more than 6 months and less than 12 months.
H. FOREIGN CURRENCIES
Normal trading activities denominated in foreign currencies are recorded in
Irish pounds at actual exchange rates as of the date of transaction.
Monetary assets and liabilities denominated in foreign currencies are
reported at the rates of exchange prevailing at the balance sheet date. Any
gain or loss arising from a change in exchange rates subsequent to the date
of the transaction is reported as an exchange gain or loss in the profit
and loss account.
I. PENSIONS
Pension costs are accounted for on the basis of charging the expected cost
of providing pensions over the period during which the company benefits
from employees' services. The effects of variations from regular cost are
spread over the expected average remaining service lives of the members of
the scheme.
- 54 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
ACCOUNTING POLICIES
YEAR ENDED 2 APRIL 1998
J. LEASES
Expenditure on leases which are operating leases is charged to the profit
and loss account on a basis representative of the benefit derived from the
asset, normally on a straight line basis, over the lease period.
- 55 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
CONSOLIDATED PROFIT AND LOSS ACCOUNT
YEAR ENDED 3 APRIL 1997
<TABLE>
<CAPTION>
NOTES 3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
<S> <C> <C> <C>
TURNOVER 1 32,938,312 28,477,624
Operating Expenses (net) 28,247,684 24,558,192
---------- ----------
OPERATING PROFIT 4,690,628 3,919,432
Investment Income 2 600,055 706,853
Interest Payable and Similar Charges 3 (122,624) (111,798)
---------- ----------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 4 5,168,059 4,514,487
Tax on Profit on Ordinary Activities 6 (1,863,446) (1,743,997)
---------- ----------
PROFIT FOR THE YEAR 7 3,304,613 2,770,490
Dividends 8 - -
---------- ----------
PROFIT FOR THE YEAR RETAINED 3,304,613 2,770,490
========== ==========
</TABLE>
In arriving at the results for the financial year, all amounts above relate to
continuing operations.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
The company has no recognised gains and losses other than those included in the
profits above and, therefore, no separate statement of total recognised gains
and losses has been presented.
NOTE OF HISTORICAL COST PROFITS
There is no difference between the profit on ordinary activities before taxation
and the retained profit for the year stated above and their historical cost
equivalents.
STATEMENT OF MOVEMENT IN RETAINED PROFITS
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
RETAINED PROFIT AT 4 APRIL 1996 17,384,739 14,614,249
PROFIT FOR THE YEAR RETAINED 3,304,613 2,770,490
---------- ----------
RETAINED PROFIT AT 3 APRIL 1997 20,689,352 17,384,739
========== ==========
ON BEHALF OF THE BOARD
A Kane )
) DIRECTORS
K J Windle )
The notes on pages 53 to 55 and 60 to 71 form part of these Financial Statements
Auditors' Report page 52.
- 56 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS AT 3 APRIL 1997
<TABLE>
<CAPTION>
NOTES 3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND) (IR POUND) (IR POUND)
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Tangible Fixed Assets 9 30,509,331 24,456,369
CURRENT ASSETS
Stocks 11 3,254,794 2,999,916
Debtors 12 1,798,265 1,565,201
Cash at Bank and in Hand 11,537,911 12,421,548
---------- ----------
16,590,970 16,986,665
CREDITORS
Amounts falling due
within one year 13 (16,790,188) (14,525,534)
---------- ----------
NET CURRENT (LIABILITIES) / ASSETS (199,218) 2,461,131
---------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 30,310,113 26,917,500
Provisions for Liabilities
and Charges 16 (2,146,000) (2,058,000)
---------- ----------
NET ASSETS 28,164,113 24,859,500
========== ==========
CAPITAL AND RESERVES
Called up Share Capital 17 86,980 86,980
Share Premium Account 18 7,124,448 7,124,448
Other Reserves 18 263,333 263,333
Profit & Loss Account 20,689,352 17,384,739
---------- ----------
SHAREHOLDERS' FUNDS - EQUITY 22
INTERESTS 28,164,113 24,859,500
========== ==========
</TABLE>
ON BEHALF OF THE BOARD
A Kane )
) DIRECTORS
K J Windle )
The notes on pages 53 to 55 and 60 to 71 form part of these Financial Statements
Auditors' Report page 52.
- 57 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
COMPANY BALANCE SHEET AS AT 3 APRIL 1997
<TABLE>
<CAPTION>
NOTES 3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND) (IR POUND) (IR POUND)
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Tangible Fixed Assets 9 25,371,224 20,310,577
Financial Assets 10 601,100 601,100
---------- ----------
25,972,324 20,911,677
CURRENT ASSETS
Stocks 11 2,807,130 2,643,376
Debtors:
amounts due after one year 12 4,127,994 3,357,639
amounts due within one year 12 1,514,395 1,380,502
Cash at Bank and in Hand 11,531,282 12,415,258
---------- ----------
19,980,801 19,796,775
CREDITORS
Amounts falling due within one year 13 (15,887,237) (13,949,216)
---------- ----------
NET CURRENT ASSETS 4,093,564 5,847,559
---------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 30,065,888 26,759,236
Provisions for Liabilities
and Charges 16 (1,720,000) (1,650,000)
---------- ----------
NET ASSETS 28,345,888 25,109,236
========== ==========
CAPITAL AND RESERVES
Called up Share Capital 17 86,980 86,980
Share Premium Account 18 7,124,448 7,124,448
Other Reserves 18 263,333 263,333
Profit & Loss Account 20,871,127 17,634,475
---------- ----------
SHAREHOLDERS' FUNDS - EQUITY INTERESTS 28,345,888 25,109,236
========== ==========
</TABLE>
ON BEHALF OF THE BOARD
A Kane )
) DIRECTORS
K J Windle )
The notes on pages 53 to 55 and 60 to 71 form part of these Financial Statements
Auditors' Report page 52.
- 58 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED 3 APRIL 1997
<TABLE>
<CAPTION>
NOTES 3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
<S> <C> <C> <C>
CASH FROM OPERATING ACTIVITIES 19A 10,171,179 9,975,104
RETURNS ON INVESTMENT AND SERVICING OF FINANCE 19B 477,431 595,055
TAXATION (528,630) (1,681,997)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT 19C (11,003,617) (7,355,833)
---------- ----------
Cash (Outflow) / Inflow Before
Use of Liquid Resources (883,637) 1,532,329
MANAGEMENT OF LIQUID RESOURCES 19D 158,816 (806,604)
---------- ----------
(DECREASE)/INCREASE IN CASH IN YEAR (724,821) 725,725
========== ==========
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
(DECREASE)/INCREASE IN CASH IN YEAR (724,821) 725,725
Cash (Inflow)/Outflow from
(Decrease)/Increase in Liquid Resources (158,816) 806,604
---------- ----------
Movement in Net Funds in Year (883,637) 1,532,329
Net Funds at Start of Year 12,421,548 10,889,219
---------- ----------
NET FUNDS AT END OF YEAR 20 11,537,911 12,421,548
========== ==========
</TABLE>
The notes on pages 53 to 55 and 60 to 71 form part of these Financial Statements
Auditors' Report page 52.
- 59 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 3 APRIL 1997
1. TURNOVER
Turnover is represented by revenue from subscribers and is generated in
total in the Republic of Ireland.
2. INVESTMENT INCOME
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
Interest Receivable and Similar Income 600,055 706,853
======= =======
3. INTEREST PAYABLE AND SIMILAR CHARGES
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
On bank loans, overdrafts and other
loans wholly repayable within five years 122,624 111,798
======= =======
4. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
<TABLE>
<CAPTION>
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
<S> <C> <C>
Profit on ordinary activities before
taxation is stated after charging/(crediting):
Directors' emoluments:
Fees 15,500 16,375
Other emoluments (including pension contributions) 105,643 93,839
--------- ---------
121,143 110,214
========= =========
Depreciation of Tangible Fixed Assets 5,096,042 4,200,474
========= =========
Auditors' Remuneration 15,000 15,000
========= =========
</TABLE>
- 60 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 3 APRIL 1997
5. EMPLOYEES
The average number of employees (including executive directors) during the
year, analysed by category, was as follows:
NUMBERS EMPLOYED
3 APRIL 1997 4 APRIL 1996
Marketing & Customer Service 60 56
Operations 154 140
Administration 39 39
--- ---
253 235
=== ===
The aggregate payroll costs of these employees were as follows:
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
Wages and Salaries 4,668,610 4,454,793
Social Welfare Costs 408,100 376,056
Other Pension Costs 244,916 237,373
--------- ---------
5,321,626 5,068,222
========= =========
6. TAX ON PROFIT ON ORDINARY ACTIVITIES
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
Corporation Tax @ 38% 1,775,446 1,742,997
Deferred Tax 88,000 1,000
--------- ---------
1,863,446 1,743,997
========= =========
7. PROFIT FOR FINANCIAL YEAR
(IR Pound) 3,236,652 (1996: (IR Pound) 2,617,882) of this profit has been
dealt with in the profit and loss account of Cablelink Limited, which, as
permitted by Section 3 (2) of the Companies (Amendment) Act 1986, is not
presented in these financial statements.
8. DIVIDENDS
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
PAID:
Dividend on ordinary shares of
(IR Pound) 1 each Nil Nil
=== ===
- 61 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 3 APRIL 1997
9. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
FURNITURE IMPROVEMENTS
RELAY AND MOTOR TO LEASEHOLD FREEHOLD
SYSTEMS EQUIPMENT FIXTURES COMPUTER VEHICLES PROPERTY PROPERTY TOTAL
GROUP (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COST
At 4 April 1996 42,968,321 785,006 1,090,465 2,021,276 1,182,768 882,650 319,082 49,249,568
Additions 10,182,551 49,504 145,087 412,737 307,031 62,376 12,949 11,172,235
---------- ------- --------- --------- --------- ------- ------- ----------
53,150,872 834,510 1,235,552 2,434,013 1,489,799 945,026 332,031 60,421,803
Less: Disposals (173,745) (16,789) (1,408) - (175,692) - - (367,634)
---------- ------- --------- --------- --------- ------- ------- ----------
At 3 April 1997 52,977,127 817,721 1,234,144 2,434,013 1,314,107 945,026 332,031 60,054,169
---------- ------- --------- --------- --------- ------- ------- ----------
DEPRECIATION
At 4 April 1996 21,261,178 588,255 673,641 1,374,157 565,656 287,314 42,998 24,793,199
Charge for the Year 4,162,819 76,112 148,180 406,761 266,643 29,210 6,317 5,096,042
---------- ------- --------- --------- --------- ------- ------- ----------
25,423,997 664,367 821,821 1,780,918 832,299 316,524 49,315 29,889,241
Less: Disposals (173,745) (7,987) (241) - (162,430) - - (344,403)
---------- ------- --------- --------- --------- ------- ------- ----------
At 3 April 1997 25,250,252 656,380 821,580 1,780,918 669,869 316,524 49,315 29,544,838
---------- ------- --------- --------- --------- ------- ------- ----------
NET BOOK AMOUNT AT
3 April 1997 27,726,875 161,341 412,564 653,095 644,238 628,502 282,716 30,509,331
========== ======= ========= ========= ========= ======= ======= ==========
4 April 1996 21,707,143 196,751 416,824 647,119 617,112 595,336 276,084 24,456,369
========== ======= ========= ========= ========= ======= ======= ==========
</TABLE>
The basis by which depreciation is calculated are stated in accounting
policy Note D.
- 62 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 3 APRIL 1997
9. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
FURNITURE IMPROVEMENTS
RELAY AND MOTOR TO LEASEHOLD FREEHOLD
SYSTEMS EQUIPMENT FIXTURES COMPUTER VEHICLES PROPERTY PROPERTY TOTAL
COMPANY (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND) (IR POUND)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COST
At 4 April 1996 35,883,404 685,385 1,019,850 1,895,806 1,069,628 691,397 319,082 41,564,552
Additions 8,469,133 43,412 141,263 394,230 277,993 31,904 12,949 9,370,884
---------- ------- --------- --------- --------- ------- ------- ----------
44,352,537 728,797 1,161,113 2,290,036 1,347,621 723,301 332,031 50,935,436
Less: Disposals - (16,789) (1,408) - (160,736) - - (178,933)
---------- ------- --------- --------- --------- ------- ------- ----------
At 3 April 1997 44,352,537 712,008 1,159,705 2,290,036 1,186,885 723,301 332,031 50,756,503
---------- ------- --------- --------- --------- ------- ------- ----------
DEPRECIATION
At 4 April 1996 18,049,686 510,463 625,236 1,287,967 512,715 224,910 42,998 21,253,975
Charge for the Year 3,427,717 67,592 141,175 386,224 240,466 19,705 6,317 4,289,196
---------- ------- --------- --------- --------- ------- ------- ----------
21,477,403 578,055 766,411 1,674,191 753,181 244,615 49,315 25,543,171
Less: Disposals - (7,987) (241) - (149,664) - - (157,892)
---------- ------- --------- --------- --------- ------- ------- ----------
At 3 April 1997 21,477,403 570,068 766,170 1,674,191 603,517 244,615 49,315 25,385,279
---------- ------- --------- --------- --------- ------- ------- ----------
NET BOOK AMOUNT AT
3 April 1997 22,875,134 141,940 393,535 615,845 583,368 478,686 282,716 25,371,224
========== ======= ========= ========= ========= ======= ======= ==========
4 April 1996 17,833,718 174,922 394,614 607,839 556,913 466,487 276,084 20,310,577
========== ======= ========= ========= ========= ======= ======= ==========
</TABLE>
The basis by which depreciation is calculated are stated in accounting
policy Note D.
- 63 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 3 APRIL 1997
10. FINANCIAL ASSETS
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
INTEREST IN SUBSIDIARY COMPANIES:
Cablelink Construction Limited 600,000 600,000
Cablelink Waterford Limited 100 100
Cablelink Galway Limited 1,000 1,000
------- -------
601,100 601,100
======= =======
In the opinion of the directors, the value of the interest in subsidiary
companies is not less than the amounts stated.
11. STOCKS
GROUP AND COMPANY
Stocks represent goods purchased for the construction and maintenance of
the cable systems. The replacement cost of stocks did not exceed the
valuation on a FIFO basis by a material amount.
12. DEBTORS: AMOUNTS FALLING DUE AFTER ONE YEAR
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
COMPANY
Amounts Due by Group Companies (Note 15) 4,127,994 3,357,639
========= =========
DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
GROUP
Trade Debtors 1,201,745 966,899
Prepayments 269,723 284,138
Other Debtors 326,797 314,164
--------- ---------
1,798,265 1,565,201
========= =========
COMPANY
Trade Debtors 999,963 838,358
Prepayments 229,901 270,038
Other Debtors 284,531 272,106
--------- ---------
1,514,395 1,380,502
========= =========
- 64 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 3 APRIL 1997
13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
GROUP:
Trade Creditors 726,871 1,106,730
Taxation and Social Welfare (Note 14) 2,680,482 2,593,004
Accruals 5,533,715 3,636,435
Deferred Income 7,849,120 7,189,365
---------- ----------
16,790,188 14,525,534
========== ==========
COMPANY:
Trade Creditors 567,941 1,022,719
Taxation and Social Welfare (Note 14) 2,475,221 2,454,297
Accruals 5,134,984 3,328,956
Amounts owed to group companies (Note 15) 618,178 618,178
Deferred Income 7,090,913 6,525,066
---------- ----------
15,887,237 13,949,216
========== ==========
14. TAXATION CREDITORS
The taxation creditors included in taxation and social welfare are made up
as follows:
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
GROUP:
Corporation Tax 1,778,000 1,751,000
PAYE 107,515 76,980
PRSI 62,355 47,370
VAT 702,914 671,679
Construction Tax 19,952 23,738
Pension Refund Tax - 1,897
Withholding Tax - Professional Fees 9,746 20,340
---------- ----------
2,680,482 2,593,004
========== ==========
COMPANY:
Corporation Tax 1,680,000 1,730,000
PAYE 99,707 69,980
PRSI 58,236 42,959
VAT 613,879 566,414
Construction Tax 13,653 22,734
Pension Refund Tax - 1,897
Withholding Tax - Professional Fees 9,746 20,313
---------- ----------
2,475,221 2,454,297
========== ==========
- 65 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 3 APRIL 1997
15. INTERCOMPANY BALANCES
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
COMPANY:
Receivable:
Cablelink Waterford Limited 1,491,942 832,140
Cablelink Galway Limited 2,636,052 2,525,499
--------- ---------
4,127,994 3,357,639
========= =========
Payable:
Cablelink Construction Limited 618,178 618,178
========= =========
16. PROVISIONS FOR LIABILITIES AND CHARGES
3 APRIL 1997 4 APRIL 1996
FULL FULL
POTENTIAL POTENTIAL
LIABILITY LIABILITY
(IR POUND) (IR POUND)
DEFERRED TAXATION:
GROUP:
Tax impact of timing differences:
Capital Allowances/Depreciation 2,146,000 2,058,000
========= =========
COMPANY:
Tax impact of timing differences:
Capital Allowances/Depreciation 1,720,000 1,650,000
========= =========
17. CALLED UP SHARE CAPITAL
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
AUTHORISED:
1,085,000 Ordinary Shares of
(IR Pound) 1 each 1,085,000 1,085,000
========= =========
ALLOTTED, CALLED UP AND FULLY PAID:
86,980 Ordinary Shares of
(IR Pound) 1 each 86,980 86,980
========= =========
- 66 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 3 APRIL 1997
18. CAPITAL RESERVES
SHARE CAPITAL
PREMIUM REDEMPTION
ACCOUNT RESERVE FUND TOTAL
(IR POUND) (IR POUND) (IR POUND)
At 3 April 1997 7,124,448 263,333 7,387,781
========= ======= =========
At 4 April 1996 7,124,448 263,333 7,387,781
========= ======= =========
19A. RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
Operating Profit 4,690,628 3,919,432
Depreciation Charges 5,096,042 4,200,474
(Profit) / Loss on Sale of Tangible
Fixed Assets (145,387) 2,862
(Increase) in Stocks (254,878) (1,251,679)
(Increase) in Debtors (233,064) (24,879)
Increase in Creditors 1,017,838 3,128,894
---------- ---------
10,171,179 9,975,104
========== =========
19B. RETURN ON INVESTMENTS AND SERVICING OF FINANCE
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
Interest Received 600,055 706,853
Interest Paid (122,624) (111,798)
---------- ---------
NET CASH OUTFLOW FOR RETURNS ON
INVESTMENTS AND SERVICING OF FINANCE 477,431 595,055
========== =========
19C. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
Purchases of Fixed Assets (11,172,235) (7,428,845)
Proceeds from Disposals of Fixed Assets 168,618 73,012
---------- ---------
(11,003,617) (7,355,833)
========== =========
- 67 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 3 APRIL 1997
19D. MANAGEMENT OF LIQUID RESOURCES
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
Decrease / (Increase) in Term
Deposits with Banks 158,816 (806,604)
------- -------
158,816 (806,604)
======= =======
20. ANALYSIS OF THE CHANGES IN NET FUNDS
AT AT
4 APRIL 1996 CASH FLOWS 3 APRIL 1997
(IR POUND) (IR POUND) (IR POUND)
Cash at Bank and in Hand (46,597) (724,821) (771,418)
Term Deposits 12,468,145 (158,816) 12,309,329
---------- ------- ----------
12,421,548 (883,637) 11,537,911
========== ======= ==========
21. COMMITMENTS
FUTURE CAPITAL EXPENDITURE NOT PROVIDED FOR:
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
GROUP
Contracted for 810,000 1,437,300
Authorised but not Contracted for 2,950,000 4,600,000
--------- ---------
3,760,000 6,037,300
========= =========
COMPANY
Contracted for 796,500 1,414,000
Authorised but not Contracted for 2,950,000 4,600,000
--------- ---------
3,746,500 6,014,000
========= =========
- 68 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 3 APRIL 1997
21. COMMITMENTS (CONTINUED)
OPERATING LEASE COMMITMENTS
The group has commitments under operating leases to make payments totalling
(IR Pound) 314,500 for the next year (company - (IR Pound) 270,500) (1996:
group - (IR Pound) 262,900, company - (IR Pound) 220,500) as follows:
LAND AND BUILDINGS
GROUP COMPANY
(IR POUND) (IR POUND)
Expiring:
Within one year - -
Between two and five years - -
More than five years 314,500 270,500
------- -------
314,500 270,500
======= =======
The rentals payable under leases in respect of land and buildings are
subject to renegotiation at various intervals specified in the leases.
22. STATEMENT OF MOVEMENTS IN SHAREHOLDERS' FUNDS
3 APRIL 1997 4 APRIL 1996
(IR POUND) (IR POUND)
Profit for financial year 3,304,613 2,770,490
Opening shareholders' funds 24,859,500 22,089,010
---------- ----------
CLOSING SHAREHOLDERS' FUNDS 28,164,113 24,859,500
========== ==========
23. CONTINGENT LIABILITIES
(i) The company has given irrevocable guarantees in respect of the
liabilities, referred to in Section 5 (c) of the Companies (Amendment)
Act 1986, of Cablelink Galway Limited, Cablelink Waterford Limited,
Cablelink Construction Limited and Dublin Cablesystems Limited. In the
opinion of the directors, no losses are likely to arise in respect of
this contingency.
(ii) In the past, the company has been required to place certain of its
cables underground. No provision has been made in the financial
statements for costs which may be incurred in doing similar work in
the future. The amount of such costs cannot be estimated with any
reasonable accuracy but are not currently expected to be significant.
- 69 -
<PAGE>
CABLELINK LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 3 APRIL 1997
24. RELATED PARTY TRANSACTIONS
(i) Included in cash and bank balances at the year end is (IR Pound)
2,512,478 which is held on deposit with Irish Telecommunications
Investments plc ("ITI"). Interest earned on deposits with ITI during
the year amounted to (IR Pound) 159k.
(ii) During the year, the following related party transactions were
undertaken with Telecom Eireann:-
Purchase of Fixed Assets (IR Pound) 1,377k
Duct Rental (IR Pound) 268k
Accommodation (IR Pound) 142k
Telephone Charges (IR Pound) 145k
Other (IR Pound) 52k
(iii)During the year, the following related party transactions were
undertaken with RTE:
Secondment of Personnel (IR Pound) 88k
(iv) During the year, the following related party transactions were
undertaken with Eircell:
Telephone Charges (IR Pound) 96k
25. ULTIMATE PARENT COMPANY
Bord Telecom Eireann, a company incorporated in the Republic of Ireland, is
the ultimate parent company. The group in which the results of the company
are consolidated is that headed by Bord Telecom Eireann. Copies of the
group financial statements of Bord Telecom Eireann are available at 114 St.
Stephen's Green West, Dublin 2.
26. GROUP COMPANIES
<TABLE>
<CAPTION>
<S> <C> <C>
NAME % OWNED PRINCIPAL ACTIVITY
Cablelink Limited Cable and MDS Television Systems
SUBSIDIARIES:
Cablelink Waterford Limited 100% Cable and MDS Television Systems
Cablelink Galway Limited 100% Cable and MDS Television Systems
Dublin Cablesystems Limited 100% Non-trading
Cablelink Construction Limited 100% Non-trading
</TABLE>
(A) All of the above companies are incorporated and operate in the
Republic of Ireland.
(B) All of the group's interest in subsidiary companies consist of
ordinary share capital.
(C) The registered office of the company and its subsidiaries is 10
Pembroke Place, Ballsbridge, Dublin 4.
- 70 -
<PAGE>
Cablelink Limited and Subsidiaries
Notes to the Financial Statements
Year Ended 3 April 1997
27. SECTION 17 GUARANTEE
Each of the Subsidiary companies listed in note 26 and consolidated into
these financial statements have availed of the exemption from filing their
individual financial statements set out in Section 17 of the Companies
(Amendment) Act, 1986.
28. PENSION
The group operates a contributory defined benefit pension scheme covering
all of its permanent employees. The scheme's funds are administered by
trustees and are held separately from those of the group.
The total pension cost for the group was (IR Pound) 79,411 (1996: (IR
Pound) 95,468). The pension cost is assessed in accordance with the advice
of an independent qualified actuary using the aggregate method at triennial
intervals. The latest actuarial valuation of the scheme was at 1 August
1995. The primary financial assumption underlying the actuarial valuation
was that the scheme's investments will earn a real rate of investment
return, over and above salary inflation and pension increases, of 1.5% per
annum. The actuarial report is not available for public inspection.
At the date of the latest actuarial valuation, the market value of the
assets of the scheme was (IR Pound) 2,227,214 and the actuarial value of
the assets was sufficient to cover 129% of the benefits which had accrued
to members, after allowing for expected future increases in earnings.
Contributions to an external pension scheme on behalf of seconded personnel
were (IR Pound) 108,154 (1996: (IR Pound) 107,011).
29. COMPARATIVE FIGURES
Certain comparative figures have been restated to ensure consistency with
current year presentation.
30. APPROVAL OF FINANCIAL STATEMENTS
The directors approved the financial statements on 7 May 1997.
Auditors' Report page 52.
- 71 -
<PAGE>
NTL (TRIANGLE) LLC AND SUBSIDIARIES
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
On November 23, 1999, NTL (Triangle) LLC (formerly NTL (Bermuda) LLC) (the
"Company") sold its 50% interest in Cable London PLC ("Cable London") for (UK
Pound) 428,018,000 in cash to Telewest Communications plc. The price was
established pursuant to the provisions of an agreement between the parties. On
December 13, 1999, the Company acquired the entire issued and outstanding
participations of Canarias Target S.L. ("Canarias") from its parent, NTL
Communications Corp. ("NTL") for a cash payment equal to the UK pounds sterling
equivalent of 535,180,000 Irish punts. Canarias is the parent entity of
Cablelink Limited ("Cablelink"), Ireland's largest cable television provider,
which was acquired by Canarias on July 9, 1999 for 535,180,000 Irish punts.
The unaudited pro forma financial statements presented are based on the
historical financial statements of the Company and Cablelink. The unaudited pro
forma condensed consolidated statement of operations for the year ended December
31, 1998 gives effect to the sale of Cable London and the acquisition of
Cablelink as if these transactions had been consummated on January 1, 1998. In
addition, the unaudited pro forma condensed consolidated statement of operations
for the year ended December 31, 1998 gives effect to the sale by the Company in
October 1998 of its 27.5% interest in Birmingham Cable Corporation Limited
("Birmingham") as if the sale occurred on January 1, 1998. The unaudited pro
forma condensed consolidated balance sheet as of December 31, 1998 gives effect
to the sale of Cable London and the acquisition of Cablelink as if these
transactions had been consummated on that date.
The unaudited pro forma statement of operations reflects the translation of all
Irish punts denominated amounts at the average rate for the year ended March 31,
1999 of (IR Pound) 1.00 = (UK Pound) 0.86841. The unaudited pro forma condensed
consolidated balance sheet reflects the translation of all Irish punts
denominated amounts at the March 31, 1999 rate of (IR Pound) 1.00 = (UK Pound)
0.8462.
The acquisition of Cablelink by the Company from NTL has been accounted for at
NTL's historical cost in a manner consistent with a transfer of entities under
common control which is similar to that used in a "pooling of interests." NTL
accounted for its acquisition of Cablelink using the purchase method of
accounting. Accordingly, the assets acquired and the liabilities assumed were
recorded at their estimated fair values. The Company is unaware of events other
than those disclosed in the unaudited pro forma adjustments that would require a
material change to the preliminary purchase price allocation. However, a final
determination of necessary purchase accounting adjustments will be made upon the
completion of a study to determine the fair value of certain Cablelink assets
and liabilities, including intangible assets. The actual financial position and
results of operations may differ, perhaps significantly, from the unaudited pro
forma amounts as a result of the final purchase accounting adjustments.
The pro forma adjustments are based upon available information and assumptions
that the Company believes were reasonable at the time made. The unaudited pro
forma condensed consolidated financial statements do not purport to present the
Company's financial position or results of operations had the sale of Cable
London or the acquisition of Cablelink occurred on the dates indicated, nor are
they necessarily indicative of the financial position or results of operations
that may be achieved in the future. The accompanying unaudited condensed
consolidated pro forma financial statements should be read in conjunction with
the historical financial statements of the Company and Cablelink.
- 72 -
<PAGE>
NTL (TRIANGLE) LLC AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
DECEMBER 31, 1998
(IN (UK POUND)000'S)
<TABLE>
<CAPTION>
NTL TRIANGLE CABLELINK
(HISTORICAL) (HISTORICAL)(1) ADJUSTMENTS PRO FORMA
<S> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents (UK Pound) 103,451 (UK Pound) (117) (UK Pound) (24,851)(F) (UK Pound) 78,483
Other current assets 11,007 2,704 13,711
-----------------------------------------------------------------------------------------
Total current assets 111,458 2,588 (24,851) 92,195
Investments in affiliates 28,080 (28,080)(A) -
Property and equipment, net 321,822 36,859 358,681
Goodwill 453,150 (B) 453,150
Deferred charges, net 42,776 42,776
Other assets 5,188 - 5,188
-----------------------------------------------------------------------------------------
(UK Pound) 512,324 (UK Pound) 39,446 (UK Pound) 400,219 (UK Pound) 951,989
=========================================================================================
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Current portion of long-term debt (UK Pound) 1,966 - (UK Pound) 1,966
Other current liabilities 37,472 15,539 53,011
-----------------------------------------------------------------------------------------
Total current liabilities
Long-term debt 259,104 259,104
Deferred tax 2,291 2,291
Shareholder's equity
Acquired company equity 21,617 (21,617)(B) -
Common stock 8 8
Additional capital 359,049 21,898 (B) 380,947
Accumulated deficit (145,275) 399,938 (A) 254,663
-----------------------------------------------------------------------------------------
Total shareholders' equity 213,782 21,617 400,219 635,618
-----------------------------------------------------------------------------------------
(UK Pound) 512,324 (UK Pound) 39,446 (UK Pound) 400,219 (UK Pound) 951,989
=========================================================================================
</TABLE>
(1) As of March 31, 1999
- 73 -
<PAGE>
NTL (TRIANGLE) LLC AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1998
(IN (UK POUND) 000'S)
<TABLE>
<CAPTION>
NTL TRIANGLE CABLELINK
(HISTORICAL) (HISTORICAL)(1) ADJUSTMENTS PRO FORMA
<S> <C> <C> <C> <C>
REVENUES (UK Pound) 78,587 (UK Pound) 35,169 (UK Pound) (938)(C) (UK Pound) 112,818
COSTS AND EXPENSES
Operating 25,598 13,238 38,836
Selling, general, and administrative 34,971 12,008 46,979
Management fees 2,400 - 2,400
Depreciation and amortization 31,185 5,923 45,315 (D) 82,423
----------------------------------------------------------------------------------------
94,154 31,169 45,315 170,638
----------------------------------------------------------------------------------------
OPERATING LOSS (15,567) 4,000 (46,253) (57,820)
OTHER INCOME (EXPENSE)
Interest expense (34,898) - 6,714 (E) (28,184)
Investment income 9,054 473 (1,243)(F) 8,284
Equity in net losses of affiliates (19,696) - 19,696 (G) -
Gain on sale of investments 110,497 - 391,228 (H) 501,725
Exchange losses (gains) and other (6,185) 89 (6,096)
----------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM 43,205 4,562 370,142 417,909
Income taxes - (1,094) - (1,094)
----------------------------------------------------------------------------------------
INCOME BEFORE EXTRAORDINARY ITEM (UK Pound) 43,205 (UK Pound) 3,468 (UK Pound) 370,142 (UK Pound) 416,815
=========================================================================================
</TABLE>
(1) For the year ended March 31, 1999
- 74 -
<PAGE>
NTL (TRIANGLE) LLC AND SUBSIDIARIES
UNAUDITED PRO FORMA ADJUSTMENTS
(IN (UK POUND) 000'S)
Pro Forma Condensed Consolidated Balance Sheet
A. Sale of Cable London
Cash received (UK Pound) 428,018
Investment in Cable London 28,080
------------------
Gain on sale (UK Pound) 399,938
==================
Since the Company is a pass-through entity for U.S. income tax purposes and is
not subject to U.S. income tax, there is no income tax provision included in the
pro forma adjustment.
B. Purchase of Cablelink
Cash paid ((IR Pound) 535,180
at March 31, 1999 exchange rate) (UK Pound) 452,869
Cablelink equity at March 31, 1999 21,617
------------------
431,252
NTL additional investment in the Company 21,898
------------------
NTL historical goodwill (UK Pound) 453,150
==================
Pro Forma Condensed Consolidated Statement of Operations
C. Reversal of consulting revenue received prior to the respective sales
Birmingham (UK Pound) 531
Cable London 407
--------------
(UK Pound) 938
==============
D. Amortization of goodwill from Cablelink acquisition
NTL historical goodwill (UK Pound) 453,150
Assumed amortization period 10
------------------
(UK Pound) 45,315
==================
The intangible assets arising from NTL's acquisition of Cablelink may include
customer lists, license acquisition costs and goodwill. The amount of each
individual intangible is not currently determinable. The amounts of each
intangible will be determined based on appraisals and other analyses. The
amortization period may vary, although it is assumed in Pro Forma Adjustment D,
that 10 years is a representative blended amortization period.
E. Repayment of the Company's credit facility of (UK Pound) 100 million using
a portion of the (UK Pound) 130 million proceeds from the sale of
Birmingham
Historical interest expense on the credit facility (UK Pound) 6,714
================
- 75 -
<PAGE>
F. Interest income reduction to reflect the use of cash to acquire Cablelink
Cash paid to acquire Cablelink (UK Pound) 452,869
Cash received from the sale of Cable London 428,018
------------------
24,851
Estimated interest rate on the Company's short
term investments 5%
------------------
(UK Pound) 1,243
==================
G. Equity in net losses of affiliates prior to the respective sales
Birmingham (UK Pound) 7,841
Cable London 11,855
-----------------
(UK Pound) 19,696
=================
H. Gain on sale of Cable London
Cash received (UK Pound) 428,018
Investment in Cable London at January 1, 1998 36,790
------------------
(UK Pound) 391,228
==================
Since the Company is a pass-through entity for U.S. income tax purposes and is
not subject to U.S. income tax, there is no income tax provision included in the
pro forma adjustment.
- 76 -
