Financial Statements

Directors' Statement

These Summary Financial Statements contain BBC Worldwide Limited's ('the Group') Consolidated Income Statement, Consolidated Statement of  Comprehensive Income, Consolidated Balance Sheet, Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity as well as some detailed notes to help explain these primary statements. These notes include the key headline data from the Group's 2012 Annual Report and Accounts.

The information contained in the Summary Financial Statements does not constitute the Group's statutory accounts for the year ended 31 March 2012, but is derived from those accounts. The auditor's report on the Group's statutory accounts is unqualified. The Summary Financial Statements do not contain sufficient information to allow a full understanding of the results and state of  affairs of the BBC Worldwide Group as provided by the 2012 Annual Report and Accounts. Copies of the 2012 Annual Report and Accounts may be obtained from www.bbcworldwide.com

The Summary Financial Statements were approved by the Board on 7 June 2012 and signed on its behalf by:

John Smith

Philip Vincent

Chief Executive Officer
Chief Financial Officer

 

 

 

Auditor's Statement

Independent auditor's statement to the Shareholder of BBC Worldwide Limited

We have examined the Summary Financial Statements for the year ended 31 March 2012 which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity set out below.

This statement is made solely to the company's members, as a body, in accordance with section 427 of the Companies Act 2006. Our work has been undertaken so that we might state to the company's members those matters we are required to state to them in such a statement and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to  anyone other than the company and the company's members as a body, for our work, for this statement, or for the opinions we have formed.

Respective responsibilities of Directors and auditors

The Directors are responsible for preparing the Annual Review in accordance with applicable United Kingdom law.

Our responsibility is to report to you our opinion on the consistency of the Summary Financial Statements within the Annual Review with the full annual Financial Statements and the Directors' Report, and its compliance with the relevant requirements of section 427 of the Companies Act 2006 and the regulations made thereunder.

We also read the other information contained in the Annual Review and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the Summary Financial Statements.

Basis of opinion

We conducted our work in accordance with Bulletin 2008/3: The auditor's statement on the Summary Financial Statements in the United Kingdom, issued by the Auditing Practices Board. Our report on the group's full annual Financial Statements describes the basis of our audit opinion on those Financial Statements and the Directors' Report.

Opinion on Summary

Financial Statements

In our opinion the Summary Financial Statements are consistent with the full annual Financial Statements and the Directors' Report of BBC Worldwide Ltd for the year ended 31 March 2012 and comply with the applicable requirements of section 427 of the Companies Act 2006 and the regulations made thereunder.

Paul Korolkiewicz

For and on behalf of KPMG LLP,
Statutory Auditor,
Chartered Accountants
15 Canada Square
London
E14 5GL
7 June 2012

 

Consolidated income statement

for the year ended 31 March 2012


Note Total
2012
£m
Total
2011
£m
Gross revenue including joint ventures 1,085.0 1,029.8
Less: Share of revenue of joint ventures (150.1) (146.1)
Revenue 934.9 883.7
Total operating costs (840.8) (812.5)
Share of results of joint ventures and associates 23.4 27.5
Operating profit 117.5 98.7
Analysed as:
Headline profit 4 154.8 143.5
Impairment of goodwill 4 (16.1) (33.8)
Share of interest and tax of joint ventures and associates 4 (9.6) (10.5)
Pension deficit reduction payment 4 (4.3) -
Other specific items 4 (7.3) (0.5)
117.5 98.7
Gain on disposal of Animal Planet - 96.4
Other gains and losses 5 (4.7) 1.6
Finance income 0.7 0.5
Finance expense (10.0) (9.2)
Profit before tax 103.5 188.0
Profit before tax excluding gain on disposal of Animal Planet 103.5 91.6
Tax charge for the year 7 (30.2) (30.0)
Profit from continuing operations 73.3 158.0
Profit from discontinued operations 8 100.3 9.0)
Profit for the year 173.6 167.0
Attributable to:
Equity shareholders of the parent company 168.4 161.7
Non-controlling interests 5.2 5.3
Profit for the year 173.6 167.0
 

Consolidated statement
of comprehensive income

for the year ended 31 March 2012

2012
£m
2011
£m
Profit for the year 173.6
167.0
Other comprehensive income:
Recycling of cumulative currency translation reserve on disposal (0.7)
-
Recognition and transfer of cash flow hedges 0.4
0.1
Tax on cash flow hedges taken directly to other comprehensive income -
-
Exchange differences on translation of foreign operations 1.8
(5.1)
Other comprehensive income for the year 1.5 (5.0)
Total comprehensive income for the year 175.1 162.0
Attributable to:
Equity shareholders of the parent company 169.9
156.7
Non-controlling interests 5.2
5.3
Total comprehensive income for the year 175.1 162.0
 

Consolidated balance sheet

as at 31 March 2012

Note 2012
£m
2011
£m
Non-current assets
Goodwill 11 58.2 69.7
Distribution rights 12 132.8 124.0
Other intangible assets 50.8 45.5
Property, plant and equipment 26.4 28.4
Interests in joint ventures and associates 13 28.9 34.0
Investments 4.4 2.5
Deferred tax assets 9.4 22.9
Derivative financial assets 1.2 1.0
312.1 328.0
Current assets
Programme rights and other inventories 14 104.8 83.5
Trade and other receivables 296.5 285.8
Derivative financial assets 2.6 3.5
Cash and cash equivalents 31.1 63.1
Assets classified as held for sale 11.9 44.4
446.9 480.3
Total assets 759.0 808.3
Current liabilities
Interest bearing loans and borrowings 15 30.5 20.1
Trade and other payables 372.0 363.4
Current tax liabilities 2.4 8.7
Provisions 2.5 7.2
Derivative financial liabilities 1.8 5.0
Liabilities relating to assets held for sale - 36.5
409.2 440.9
Non-current liabilities
Interest bearing loans and borrowings 15 65.0 95.3
Trade and other payables 3.0 9.9
Provisions 9.7 11.4
Derivative financial liabilities 4.5 4.2
Deferred tax liabilities 5.6 15.3
87.8 136.1
Total liabilities 497.0 577.0
Net assets 262.0 231.3
Equity
Share capital 0.2 0.2
Hedging reserve 1.2 0.8
Translation reserve 34.1 33.0
Retained earnings 219.3 190.8
Equity attributable to owners of the parent company 254.8 224.8
Non-controlling interests 7.2 6.5
Total equity 262.0 231.3
 

Consolidated cash flow statement

for the year ended 31 March 2012

Note 2012
£m
2011
£m
Cash flows from operating activities
Cash generated from operations 177.9 186.0
Tax paid (33.7) (32.8)
144.2 153.2
Cash flows from investing activities
Interest received 0.7 0.7
Dividends received from joint ventures and associates 13 18.7 43.8
Purchases of distribution rights 12 (98.6) (92.9)
Purchases of other intangible assets (18.3) (11.1)
Purchases of property, plant and equipment (6.0) (10.6)
Acquisition of non-controlling interests - (41.7)
Acquisition of asset held for sale (4.6) -
Disposal of operations 9 111.1 107.4
Acquisition of interests in joint ventures and associates 13 (1.8) (1.6)
Acquisition of investments (1.6) -
Amounts advanced to related parties (0.3) -
Repayment by related parties - 2.2
(0.7) (3.8)
Cash flows from financing activities
Interest paid (9.9) (7.0)
Repayment of loans and borrowings (20.0) (23.8)
Capital element of finance lease payments (0.3) -
Equity dividends paid (139.9) (83.4)
Dividends paid to non-controlling interests (4.5) (3.0)
(174.6) (117.2)
Net (decrease)/increase in cash and cash equivalents (31.1) 32.2
Cash and cash equivalents at the beginning of the year 63.1 31.6
Effect of foreign exchange rate changes (0.9) (0.7)
Cash and cash equivalents at end of the year 31.1 63.1
 

Consolidated statement of changes in equity

for the year ended 31 March 2012

Attributable to equity holders of the parent company
Share
capital £m
Translation
reserve
£m
Hedging
reserve
£m
Retained
earnings
£m
Other
reserve
£m
Total
£m
Non-
controlling
interests
£m
Total
Equity
£m
Balance at 1 April 2010
0.2 36.8 0.5 138.9 (36.3) 140.1 15.6 155.7
Profit for the year - - - 161.7 - 161.7 5.3 167.0
Recognition and transfer of cash flow hedges - - - - - - 0.1 0.1
Tax on items taken directly to equity - - - - - - - -
Exchange differences on translation of foreign operations - (5.0) - - - (5.0) (0.1) (5.1)
Total comprehensive income for the year - (5.0) - 161.7 - 156.7 5.3 162.0
Dividends paid - - - (83.4) - (83.4) (3.0) (86.4)
Transfer of foreign exchange movement on put option - 1.2 - - (1.2) - - -
Exercise of put option over non-controlling interests - - 0.3 (26.4) 37.5 11.4 (11.4) -
Balance at 31 March 2011 0.2 33.0 0.8 190.8 - 224.8 6.5 231.3
Profit for the year - - - 168.4 - 168.4 5.2 173.6
Recycling of cumulative currency translation reserve on disposal - (0.7) - - - (0.7) - (0.7)
Recognition and transfer of cash flow hedges - - 0.4 - - 0.4 - 0.4
Tax on items taken directly to equity - - - - - - - -
Exchange differences on translation of foreign operations - 1.8 - - - 1.8 - 1.8
Total comprehensive income of the year - 1.1 0.4 168.4 - 169.9 5.2 175.1
Dividends paid - - - (139.9) - (139.9) (4.5) (144.4)
Balance at 31 March 2012 0.2 34.1 1.2 219.3 - 254.8 7.2 262.0
 

Notes to the Summary Financial Statements

1. Basis of preparation

The Summary Financial Statements are a summary of the information in the 2012 Annual Report and Accounts. They do not contain sufficient information to allow for a full understanding of the results or the financial position of BBC Worldwide. The Consolidated Financial Statements of BBC Worldwide included in the 2012 Annual Report and Accounts have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (the EU), the Companies Act 2006 and Article 4 of the EU International Accounting Standards Regulations.

2. Key accounting policies

(a) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales-related taxes. Sales of merchandise and publishing are stated after deduction of the sales value of actual and estimated returned goods.

The Group's main sources of revenue and its policies for the recognition of such revenue are summarised as follows:

  • Licence fees are earned by the Group's Sales & Distribution and Content & Production segments from programme content and programme formats, respectively. Once a contract has been signed, licence fees are recognised on the later of the start of the licence period or on delivery of the associated programme.

  • Subscription fees from the broadcast of the Group's Channels on pay television platforms, and from subscriptions to print and online publications and services, is recognised as earned, pro rata over the subscription period.

  • Advertising revenue generated by the Group's Channels business and from websites and magazines managed by the Global Brands operating segment are recognised on transmission or publication of the advertisement.

  • Production fees and participation royalties earned by the Group's Content & Production business are recognised as earned. Production fees are recognised on delivery of the programme or on a stage of completion basis, depending on the nature of the contract with the customer. Royalties are recognised on receipt or on an accruals basis where sufficient reliable information is available.

  • Revenue generated from the sale of physical and digital products by the Consumer Products and Global Brands operating segments (and by the Group's discontinued Magazines operations) is recognised at the time of delivery. Revenue from the sale of goods is stated net of deductions for actual and expected returns based on management judgement and historical experience.

 

(b) Distribution rights

Distribution rights represent rights to programmes and associated intellectual property acquired with the primary intention of exploiting the rights commercially as part of the Group's long-term operations.

Distribution rights acquired by the group are either purchased, generated internally or licensed following the payment of an advance on royalties. Where the Group controls the respective assets and the risks and rewards attached to them, rights are initially recognised at acquisition cost or production cost. The carrying amount is stated at cost less accumulated amortisation and provision for impairment.

Amortisation of distribution rights is charged to the income statement to match the average revenue profile of the programme genre over its estimated average marketable life. The expected lives of distribution rights range from one to 10 years. In the case of royalty advances, amortisation is charged as the advances are recouped.

Where the carrying value of any individual set of rights exceeds management's best estimate of future exploitation revenues, a provision for impairment is recorded in the income statement immediately.

For self-produced content, distribution rights exclude co-production costs borne by third parties. These costs are deferred within current assets and expensed upon recognition of the associated production income. Production income is recognised in accordance with the Group's revenue recognition policies.

(c) Critical accounting estimates and key judgements

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting assumptions, and requires management to exercise its judgement and to make estimates in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed below.

i. Basis of consolidation

Judgement is required in determining whether certain entities in which the Group has an economic interest should be considered to be subsidiaries or joint ventures. In such circumstances, the Group has assessed its ability to control or influence those entities. Control has been assessed with reference to the ability of the Group to direct, unilaterally, key policies of the entity. Where such policies are reserved such that an economic partner has the power to veto key strategic financial and operating decisions, the entity is considered to be a joint venture.

ii. Carrying value of goodwill

The determination of whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate that reflects current market assessments of the risks specific to the asset and the time value of money, in order to calculate present value. Further information about assumptions used in determining the carrying value of goodwill can be found in note 11.

iii. Revenue recognition

The timing of revenue recognition requires judgement, as does the amount to be recognised. This may involve estimating the fair value of consideration before it is received. In making these judgements, the Group considers the detailed criteria for the recognition of revenue set out in IAS 18 Revenue and, in particular, whether the Group has transferred the significant risks and rewards of the goods or services to the customer.

iv. Distribution rights and programme rights

The assessment of the appropriate profile over which to recognise the amortisation of distribution rights and programme rights involves a certain degree of judgement. Amortisation is charged to the income statement to match the average revenue profile of the programme genre over its estimated average marketable life.

v. Fair value of financial instruments

Certain financial instruments are carried on the balance sheet at fair value, with changes in fair value reflected in the income statement. Fair values are estimated by reference in part to published price quotations and in part by using valuation techniques.

3. Segment information

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses. The results of all operating segments are reviewed regularly by the BBC Worldwide Board (the 'Board') which has been identified as the Group's chief operating decision maker in accordance with IFRS 8 Operating Segments.

The Board considers the business primarily from a product and service line perspective. Management has determined the reportable segments based upon reports reviewed by the Board. All segments reported meet the quantitative thresholds required by IFRS 8. The reportable segments are:

  • Channels

Operates international television channels, broadcasting programmes made by both the BBC and other independent providers. Manages the Global BBC iPlayer video-on-demand service.

  • Sales & Distribution

Manages the sale and syndication of the Group's content across television and video-on-demand.

  • Consumer Products

Creates and distributes consumer products, including DVDs, DTO, music and books.

  • Global Brands

Provides central management of the Group's international brands. Manages the Group's magazines, gaming and live events businesses and its branded websites, including BBC.com.

  • Content & Production

Develops and sells programme content and formats and manages the Group's rights acquisitions.

 

Segment information as presented is consistent with the Group's internal reporting to the Board and has been amended since the previous reporting date. As explained in note 9, the Group disposed of its Magazines operations during the year, but retained rights to certain branded titles, which are now published under contract. The results from these ongoing magazines operations are included within the Global Brands operating segment.

The operations which together made up the Digital Entertainment segment at the previous reporting date are now included within the Global Brands segment, with the exception of the Global BBC iPlayer, which is now included in the Channels segment. Comparative information is presented in line with the revised segmental composition adopted in the current year.

The Board assesses the performance of reportable segments based on Headline sales and Headline profit. Inter-segment sales are conducted on an arm's length basis. Specific items, non-trading gains and losses, and net financing costs are not allocated to segments.

Results by segment

2012 Channels
£m
Sales &
Distribution
£m
Consumer
Products
£m
Global
Brands
£m
Content &
Production
£m

Eliminations
£m

Total
£m
Headline sales 344.6 292.7 211.4 146.6 135.5 (45.8) 1,085.0
Share of revenue of joint ventures (128.0) (7.7) (0.2) (11.7) (2.5) - (150.1)
Reported revenue 216.6 285.0 211.2 134.9 133.0 (45.8) 934.9
Headline profit/(loss) 42.3 72.3 49.1 (17.3) 10.5 (2.1) 154.8

 

2011 Channels
£m
Sales &
Distribution
£m
Consumer
Products
£m
Global
Brands
£m
Content &
Production
£m

Eliminations
£m

Total
£m
Headline sales 303.1 260.6 251.1 144.2 102.8 (32.0) 1,029.8
Share of revenue of joint ventures (117.0) (6.0) (2.4) (17.1) (3.6) - (146.1)
Reported revenue 186.1 154.6 248.7 127.1 99.2 (32.0) 883.7
Headline profit/(loss) 38.5 64.0 51.2 (12.9) 7.9 (5.2) 143.5

Information regarding the assets and liabilities of reportable segments is not reported to the Board.

 

4. Headline profit

The operating results of the Group can be impacted by material individual gains and losses, making the understanding and comparability of annual results more complex. The Group therefore provides additional disclosure on the face of the income statement of Headline profit before certain 'specific items', which are disclosed separately, to improve the comparability of year-on-year results. Headline profit grew 7.9% from £143.5m in 2010/11 to £154.8m in 2011/12.

Further information on specific items can be found below:

Impairment of goodwill

The Group has separately identified amounts written off goodwill owing to their scale and one-off nature. Further information about amounts written off goodwill is included in note 11.

Share of interest and tax of joint ventures and associates

The Group views its investments as being a fundamental part of its ongoing operations. IFRS requires that the Group reports its share of the results of joint ventures and associates on an after-tax, after-interest basis. The interest and tax charges borne by joint ventures and associates have been added back as a specific item in order to present an operating profit measure which more appropriately represents the way in which the business is reviewed and assessed internally.

Pension deficit reduction payment

The Group accounts for contributions to the BBC Pension Scheme as if it were a defined contribution scheme. In July 2011, the Group made an additional cash payment of £4.3m to the BBC in connection with the BBC's deficit reduction plan. As this payment is not reflective of the ongoing service cost of active scheme participants, management believes it is appropriate to present this cost as a specific item. The Group anticipates making similar payments in future periods.


Other specific items

2012
£m
2011
£m
Reorganisation costs (5.4) (0.5)
Amounts written off joint ventures and associates (1.0) -
Transaction fees (0.9) -
(7.3) (0.5)

5. Other gains and losses

2012
£m
2011
£m
Change in fair value of derivative financial instruments 1.8 5.6
Change in fair value of put options over non-controlling interests (6.5) (4.0)
(4.7) 1.6

6. Employee costs

The average number of employees during the year was 2,565 (2011: 2,689).

The aggregate remuneration recognised in the income statement in respect of these employees, including casual staff, comprised:

2012
£m
2011
£m
Salaries and wages 161.6 167.8
Social security costs 11.1 10.5
Other pension costs 17.9 16.7
190.6 195.0

In addition to the above, redundancy costs and compensation for loss of office payments totalling £4.4m (2011: £2.3m) were incurred in the year.

6. Employee costs continued

The remuneration of the Directors during the year was as follows:

2012
£m
2011
£m
Emoluments 1,136 1,181
Long-term incentive schemes 357 194
1,493 1,375
 

7. Taxation

Tax charge for the year comprises:

Continuing operations
Discontinued operations
2012
£m
2011
£m
2012
£m
2011
£m
Total
2012
£m
2011
£m
Current Tax:
UK corporation tax 15.3 20.9 1.8 3.9 17.1 24.8
Foreign Tax 14.0 11.1 - - 14.0 11.1
Adjustments in respect of prior years
(2.7) (1.9) - - (2.7) (1.9)

26.6 30.1 1.8 3.9 28.4 34.0
Deferred tax:
Origination and reversal of timing differences 2.8 (0.4) - 0.3 2.8 (0.1)
Reduction in rate of UK corporation tax
0.7 0.2 - - 0.7 0.2
Adjustments in respect of prior years
0.1 0.1 - - 0.1 0.1
3.6 (0.1) - 0.3 3.6 0.2
Tax on profit on ordinary activities
30.2 30.0 1.8 4.2 32.0 34.2

Reconciliation of tax expense

The total tax charge for the year is lower (higher 2009/10) than the standard rate of corporation tax in the UK of 28% (28% 2009/10). The differences are explained as follows:

The total tax charge for the year is higher (2011: lower) than the standard rate of corporation tax in the UK of 26% (2011: 28%). The differences are explained as follows:

2012
£m
2011
£m
Profit before tax on continuing operations 103.5 188.0
Tax at the UK corporation tax rate of 26% (2011: 28%) 26.9 52.6
Effects of:


Disallowed expenditure 7.1 12.8
Tax exempt disposal of assets held for sale
- (27.7)
Tax differential on wholly-owned overseas earnings 4.1 0.6
Tax effect of share of results of joint ventures and associates (6.1) (7.2)
Reduction in rate of UK corporation tax 0.7 0.2
Adjustments in respect of previous years (2.5) (1.3)
Tax charge for the year
30.2 30.0
 

8. Discontinued operations

On 12 August 2011 the Group entered into a sale agreement to dispose of its subsidiaries BBC Magazines Limited, Bristol Magazines Limited, Magazines Services Limited and Genealogy Events Limited; its joint venture Dovetail Services (UK) Holdings Limited; and its associates Frontline Limited and Origin Publishing Holdings Limited (OPL). On 3 October 2011, the Group entered into a further sale agreement to dispose of its joint venture Worldwide Media Private Limited. These investments collectively formed the Group's Magazines operations.

The disposal was effected in pursuit of the group's strategic priorities. The disposal of Worldwide Media Private Limited was completed on 14 October 2011 and the disposal of the remaining investments was completed on 31 October 2011. Consideration for these disposals was received wholly in the form of cash (see note 9).

In connection with its disposal, the Group also exercised a call option over 61% of the equity of OPL, taking its interest to 100% immediately prior to completion of the disposal. As the acquisition of OPL was linked to the Group's disposal of its Magazines operations, the acquisition proceeds have been included in the disposal accounting disclosures in note 9.

Continuing operations which previously formed part of the Magazines operating segment are included within the Global Brands operating segment. Continuing operations include a limited number of magazine titles carrying the Group's key brands where ownership has been retained. The Group has entered into an agreement with the buyer under which these titles will be published under contract on the Group's behalf.

The results of discontinued operations, which have been included in the consolidated income statement, were as follows:

Period
ended
31 Oct 2011
£m
Year ended
31 Mar 2011
£m
Revenue 71.6 123.4
Total operating costs (64.5) (110.0)
Share of results of joint ventures and associates - 0.1
Operating profit 7.1 13.5
Finance income - 0.2
Finance expense - (0.5)
Profit before tax 7.1 13.2
Tax charge for the period (1.8) (4.2)
Profit for the period 5.3 9.0
Profit on disposal of discontinued operations 95.0 -
Net profit attributable to discontinued operations 100.3 9.0

During the year, the Group's discontinued Magazines operations contributed £4.1m (2011: £20.9m) to the Group's net operating cash flows, contributed £110.2m to (2011: paid £3.5m in respect of) investing activities and paid £nil (2011: £0.2m) in respect of financing activities.

 

9. Disposals

In October 2011, the Group completed its disposal of a number of subsidiaries and investments which, collectively, made up its Magazines operations. The Group had classified these investments as assets held for sale as at 31 March 2011 and has not therefore equity accounted for joint ventures and associates included within the disposal group during the year to 31 March 2012. As a result of the cessation of equity accounting, the Group's share of the results of these joint ventures and associates is included in the gain on disposal.

The net assets of the Magazines operations at the date of disposal and at 31 March 2011 were:

Oct
2011
£m
March
2011
£m
Distribution rights 1.6 0.9
Other intangible assets 0.5 1.5
Investments in joint ventures and associates 6.1 6.1
Property, plant and equipment 2.0 1.2
Programme rights and other inventories 1.8 1.4
Trade and other receivables 23.0 28.2
Trade and other payables (30.3) (36.5)
Current tax liabilities (0.6) -
Deferred tax liability (0.2) -
Attributable goodwill 5.1 5.1
9.0 7.9
Transaction costs 2.1
Exercise of option over joint venture (see note 8) 4.6
Separation costs 1.1
Cumulative currency translation gain (0.7)
Gain on disposal 95.0
Total consideration 111.1
Satisfied by:
Cash and cash equivalents 111.1
Net cash inflow arising on disposal 111.1

The net sale proceeds of £111.1m consisted of gross proceeds of £121.0m less working capital adjustments of £9.9m.

In the year ended 31 March 2011, the following disposals took place:

The Group disposed of its interest in BBC Audiobooks Limited on 13 July 2010 to Audio London Limited for cash consideration of £14.0m resulting in a gain on disposal of £2.0m. Consideration was received in the form of cash of £11.6m, deferred consideration of £0.3m and 15% of the ordinary share capital of Audio London Limited. Cash disposed of amounted to £2.1m giving rise to a net cash inflow of £9.5m.

The Group disposed of its 50% interests in Animal Planet Europe and People & Arts on 12 November 2010 to its joint venture partner, Discovery Communications. Cash consideration of £97.9m was received, giving rise to a gain on disposal of £96.4m.

 

10. Dividends

Oct
2011
£m
March
2011
£m
Amounts recognised as distributions to equity holders in the period:
Interim dividends for the year ended 31 March 2011 of £140.16 per share (2011: £166.00 per share) 35.1 41.5
Interim dividends for the year ended 31 March 2012 of £419.26 per share (2011: £167.60 per share) 104.8 41.9
139.9 83.4
Amounts not yet recognised as distributions:
Interim dividend declared but not yet paid for the year ended 31 March 2012
of £21.20 per share (2011: £138.00 per share)
5.3 34.5
Interim dividend proposed but not yet declared for the year ended 31 March 2012 of £3.60 per share (2011: £nil) 0.9 -
6.2 34.5
 

11. Goodwill

Goodwill, allocated by cash generating unit (CGU), is analysed as follows:

2012
£m
2011
£m
Lonely Planet 22.6 34.5
Consumer distribution 25.4 25.3
Australian Channels 10.2 9.9
58.2 69.7
Lonely Planet

The goodwill in this CGU arose as a result of the acquisition of Lonely Planet on 1 October 2007. Following the impairment review performed during the year to 31 March 2012, the carrying value of this CGU has been written down to its recoverable amount, resulting in a charge to the income statement of £16.1m.

Despite solid underlying performance, the Australian dollar has continued to strengthen, proving challenging for the Lonely Planet business, which incurs the majority of its costs in its home of Australia, but earns the majority of its revenue streams in sterling, euros and US dollars. Had foreign exchange rates at the date of the Group's impairment tests remained unchanged since the prior year, no impairment would have been recorded in respect of the Lonely Planet business.

During the year, the Group began to implement changes to the Lonely Planet business which management believes will help to secure its long-term viability and reduce the impact of further currency appreciation. This includes reducing the Australian cost base, relocation of its Digital business from Australia to the UK and exploitation of the Lonely Planet brand through online travel booking services.

Key assumptions for the value in use calculations are those regarding growth rates, foreign exchange rates and discount rates.

The future cash flows used by management in determining the value in use are based on the most recent financial plan approved by management and cover a period of 10 years from the balance sheet date. This period reflects the transition of the business away from its more mature print activities towards mobile and online content, including travel booking services, where growth assumptions are linked to web traffic and conversion rates. Beyond this period, forecast cash flows have been extrapolated based on an estimated growth rate of 3% (2011: 3%). This growth rate does not exceed the average long-term growth rate for the markets in which the Lonely Planet business operates.

Forecast foreign exchange rates have been based on spot rates at the date of impairment testing. Any appreciation or devaluation of the Australian dollar during the forecast period would result in a corresponding reduction or increase in the value-in-use, respectively.

Transactional details of the CGUs and key value in use assumptions are detailed below:

Discount factor Growth rate
CGU Transaction resulting in Goodwill 2012 2011 2012 2011
Lonely Planet Acquisition of Lonely Planet on 1 October 2007 13.0% 13.4% 3.0% 3.0%
DVD distribution Acquisition of 2 entertain on 6 August 2009 11.4% 12.4% 2.0% 2.0%
Australian Channels Acquisition of UK.TV on July 2008 12.6% 13.8% 1.0% 1.0%
 

12. Distribution rights

2012
£m
2011
£m
Cost
At 1 April 279.0 246.8
Additions 98.6 92.9
Disposals 2.2 -
Foreign exchange translation gains and losses (3.5) (3.4)
Fully amortised rights written off (41.0) (57.3)
330.9 279.0
Amortisation
At 1 April 154.1 140.6
Charge for the year 87.2 74.0
Disposals (0.6) -
Foreign exchange translation gains and losses (3.6) (3.2)
Fully amortised rights written off (41.0) (57.3)
196.1 154.1
Net book value 134.8 124.9
Classified as held for sale (2.0) (0.9)
Distribution rights per balance sheet 132.8 124.0

Where content in the course of production is funded by a commissioning broadcaster or co-production partner, this is now separately presented as programmes in the course of production within current assets. Management believes the revised presentation more faithfully represents the substance of these transactions. Comparative information has been restated accordingly, reducing the previously reported additions figure by £8.1m.

13. Interests in joint ventures and associates

The movement in joint ventures and associates during the year was as follows:

Joint
ventures
2012
£m
Associates
2012
£m
Total
2012
£m
Joint
ventures
2011
£m
Associates
2011
£m
Total
2011
£m
At 1 April 15.8 15.0 30.8 30.9 18.8 49.7
Additions - 1.8 1.8 1.6 2.1 3.7
Disposals (5.0) (1.1) (6.1) - (7.2) (7.2)
Share of results 22.1 1.0 23.1 25.7 1.9 27.6
Adjustment to provision for unrealised profits (0.1) 0.4 0.3 (0.4) 0.1 (0.3)
Dividends received* (18.0) (0.7) (18.7) (37.5) (0.5) (38.0)
Amounts repaid by related parties - - - (2.2) - (2.2)
Foreign exchange translation gains and losses (0.1) 0.9 0.8 (0.3) (0.1) (0.4)
Amounts written off (0.7) (0.3) (1.0) (2.0) (0.1) (2.1)
At 31 March 14.0 17.0 31.0 15.8 15.0 30.8

* Dividends received in the year ended 31 March 2011 exclude £5.8m of dividends received from joint ventures classified as held for sale.

Investments in joint ventures and associates continue to form a significant part of the Group's operations with a £23.4m share of profit (2011: £27.5m) and dividends received of £18.7m (2011: £38.0m excluding dividends from associate held for sale).

Joint
ventures
2012
£m
Associates
2011
£m
Total
2012
£m
Joint
ventures
2011
£m
Associates
2011
£m
Total
2011
£m
Investments in joint ventures and associates 11.9 17.0 28.9 19.3 14.7 34.0
Non-current assets held for sale 9.9 - 9.9 5.8 0.3 6.1
Provisions (7.8) - (7.8) (9.3) - (9.3)
At 31 March 14.0 17.0 31.0 15.8 15.0 30.8

The principal contributor to the Group's share of the results of joint ventures and associates is the UKTV joint venture, which produces, markets and supplies on a wholesale basis free-to-air and subscription channels in the UK. During the year Virgin Media sold its equity shareholding in UKTV to Scripps Networks Interactive.

 

14. Programme rights and other inventories

2012
£m
2011
£m
Programme rights for broadcast 58.0 37.2
Programmes in the course of production 5.3 8.1
Raw materials and consumables 4.8 5.6
Work in progress 7.3 9.3
Finished goods and goods for resale 29.4 23.3
104.8 83.5

Within finished goods and goods for resale is inventory of £3.1m (2011: £4.1m), relating to Lonely Planet, which is expected to be sold more than 12 months after the balance sheet date in accordance with the entity's normal operating cycle.

Programmes in the course of production were previously included within Distribution rights, as described in note 12. Comparative information has been restated where appropriate.

 

15. Interest bearing loans and borrowings

As at 31 March 2012 and 31 March 2011, the Group had the following loan facilities:

Facility at 31 March Interest rate Total
facility
2012
£m
Drawn
down
2012
£m
Total facility
2011
£m
Drawn
down
2011
£m
Expiry or
review
date
Unsecured multicurrency facility with BBC Commercial Holdings Limited* Interbank rate plus a margin of 1.00% 210.0 64.9 168.0 64.5 July 2013
Loan with European Investment Bank LIBOR plus a margin of 0.09%. 30.0 30.0 50.0 50.0 May 2012
Finance Leases Liabilities 0.6 0.9
95.5 115.4

* Includes £50.0m (2011: £50.0m) borrowing facility available provided corresponding cash balance is maintained across the Group.

16. Events after the balance sheet date

On 2 April 2012, a dividend of £5.3m in respect of 2011/12 was paid.

There were no other events subsequent to the balance sheet date, details of which are required to be included in the financial statements.

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