Notes to the Accounts (14-18)

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14 Fixed asset investments

Investments at cost or written down value	2004 £m	Group 2003 £m	2004 £m
Group
Cost
At 1 January 2004 (restated⁽¹⁾)	2.9	2.9	-
Additions	-	-	-
Currency translation adjustments	(0.2)	(0.2)	-
At 31 December 2004	2.7	2.7	-
Provision
At 1 January 2004	(2.9)	(2.9)	-
Currency translation adjustments	0.2	0.2	-
At 31 December 2004	(2.7)	(2.7)	-
Net book value
At 31 December 2004	-	-	-
At 1 January 2004 (restated⁽¹⁾)	-	-	-
Company
At 1 January 2004 (restated⁽¹⁾)	154.7	89.0	65.7
Additions - long term intergroup loans	75.3	-	75.3
Disposals	(4.4)	(4.4)	-
Provision against carrying value of intergroup loan	(19.1)	-	(19.1)
At 31 December 2004	206.5	84.6	121.9

⁽¹⁾ Investments have been restated to show the investment held in respect of grants under share option schemes as a deduction (see Note 1).

The Group’s investment in other shares represents a 10.3% investment in Intersense Inc. Full impairment provision has been made against this investment.

Principal subsidiaries

The Group’s principal subsidiaries at 31 December 2004 are listed below.

	Country of incorporation
Vitec Group US Holdings Inc	USA
Vitec Luxembourg Holdings Sarl	Luxembourg
Broadcast Systems
Anton/Bauer Inc	USA
Centro de Produccion Profesional CPP Limitada	Costa Rica
Radamec Broadcast Systems Limited	UK
Sachtler Corporation of America	USA
Sachtler GmbH & Co. KG	Germany
Vinten Broadcast Limited	England and Wales*
Vinten Inc	USA
Vitec Group Communications Inc (formerly Vitec CC Inc trading as Clear-Com)	USA
Vitec Group Communications Limited (formerly Drake Electronics Limited)	England and Wales*
Photographic
Bogen Imaging Inc	USA
Gitzo SA	France
Gruppo Manfrotto Srl	Italy
Lino Manfrotto & Co SpA	Italy
Broadcast Services
Vitec Broadcast Services Inc	USA

* Indicates companies directly owned by the parent company

A complete list of subsidiary companies will be included in the next annual return.

15 Stocks

	2004 £m	Group 2003 £m
Raw materials and components	10.0	11.1
Work in progress	7.3	8.8
Finished goods	15.3	13.3
	32.6	33.2

16 Debtors

	2004 £m	Group 2003 £m	2004 £m	Company 2003 £m
Amounts falling due within one year
Trade debtors	26.2	28.2	-	-
Amounts recoverable on long term contracts	2.1	1.0	-	-
Amounts owed by subsidiaries	-	-	2.6	0.1
Other debtors	3.8	3.3	0.4	0.6
Tax recoverable	2.3	5.6	0.1	2.0
Prepayments and accrued income	2.2	2.1	0.1	0.1
	36.6	40.2	3.2	2.8
Amounts falling due after one year
Prepayments and accrued income	0.6	1.0	-	-
Other debtors	1.3	1.0	-	-
	1.9	2.0	-	-
Total debtors	38.5	42.2	3.2	2.8

17 Creditors

	2004 £m	Group 2003 £m	2004 £m	Company 2003 £m
Amounts falling due within one year
Bank loans and overdrafts (unsecured)	25.7	-	24.7	-
Payments received on account	0.4	0.5	-	-
Trade creditors	15.7	15.0	-	-
Amounts owed to subsidiaries	-	-	119.1	43.0
Dividends	3.7	6.8	3.7	6.8
Corporation tax	2.6	1.7	-	-
Other tax and social security costs	1.8	1.9	-	-
Other creditors	3.8	5.4	0.1	0.8
Accruals and deferred income	5.7	6.0	1.2	2.0
	59.4	37.3	148.8	52.6
Amounts falling due after more than one year
Bank loans (unsecured)	-	26.0	-	26.0
Accruals and deferred income	0.1	0.1	-
	0.1	26.1	-	26.0

18 Financial instruments

An explanation of the Group’s treasury policy and controls is included in the Financial Review. Short term debtors and creditors have been omitted from all disclosures other than the currency profile.

a) Financial liabilities

i) Analysis of borrowings

	2004 £m	Group 2003 £m	2004 £m	Company 2003 £m
Bank loans and overdrafts	25.7	26.0	24.7	26.0
Senior notes	-	-	-	-
Other loans	-	-	-	-
Swaps	-	-	-	-
Gross financial liabilities	25.7	26.0	24.7	26.0

ii) Maturity profile

	2004 £m	Group 2003 £m	2004 £m	Company 2003 £m
Within one year or less	25.7	-	24.7	-
More than one year but not more than two years	-	26.0	-	26.0
More than two years but not more than five years	-	-	-	-
	25.7	26.0	24.7	26.0

The total amount of bank loans and overdrafts any part of which fall due after five years is £nil (2003: £nil).

The Group had the following undrawn borrowing facilities at the end of the period

	2004 £m	2003 £m
Expiring in one year or less
– committed facilities	30.3	-
– uncommitted facilities	13.5	8.0
More than one year but not more than two years
– committed facilities	-	29.0
More than two years but not more than three years
– committed facilities	-	-
Total	43.8	37.0

On 25 January 2005 the Group signed a five year £100 million Multicurrency Revolving Credit Facility Agreement to replace the two existing Multicurrency Revolving Credit Facility Agreements which had termination dates of 28 October 2005. The first draw down on this Facility was made on 31 January 2005.

iii) Interest rate profile

Currency	Total £m	2003 £m	Fixed rate borrowings £m
Sterling	13.0	13.0	-
US$	4.2	4.2	-
Euro	8.5	8.5	-
At 31 December 2004	25.7	25.7	-
Sterling	26.0	26.0	-
US$	-	-	-
Euro	-	-	-
At 31 December 2003	26.0	26.0	-

The floating rate borrowings comprise bank loans and overdrafts bearing interest at rates based on LIBOR.

b) Financial assets

Currency	Floating rate 2004 £m	Floating rate 2003 £m
Sterling	-	(5.5)
US$	7.1	10.2
Euro	6.4	10.2
Other	0.9	0.7
	14.4	15.6

The floating rate financial assets comprise bank deposits bearing interest at rates based on local money market rates.

Sterling, US$, Euro and Yen balances within the UK can be offset. At December 2003 Euro balances of £3.1 million and US$ balances of £4.0 million could be offset.

Currency	Total £m	Floating rate borrowings £m	Fixed rate borrowings £m
Sterling	13.0	13.0	-
US$	4.2	4.2	-
Euro	8.5	8.5	-
At 31 December 2004	25.7	25.7	-
Sterling	26.0	26.0	-
US$	-	-	-
Euro	-	-	-
At 31 December 2003	26.0	26.0	-

The floating rate borrowings comprise bank loans and overdrafts bearing interest at rates based on LIBOR.

b) Financial assets

Currency	Floating rate 2004 £m	Floating rate 2003 £m
Sterling	-	(5.5)
US$	7.1	10.2
Euro	6.4	10.2
Other	0.9	0.7
	14.4	15.6

The floating rate financial assets comprise bank deposits bearing interest at rates based on local money market rates.

Sterling, US$, Euro and Yen balances within the UK can be offset. At December 2003 Euro balances of £3.1 million and US$ balances of £4.0 million could be offset.

c) Fair value of financial assets and liabilities

	Book value £m	2004 Fair value £m	Book value £m	2003 Fair value £m
Cash at bank and in hand	14.4	14.4	15.6	15.6
Bank overdraft	(1.0)	(1.0)	-	-
Floating rate borrowings	(24.7)	(24.7)	(26.0)	(26.0)
Fixed rate borrowings	-	-	-	-
Swaps	-	-	-	-
	(11.3)	(11.3)	(10.4)	(10.4)

Market rates have been used to determine fair values.

d) Foreign exchange hedging

Cost of sales include net gains of £1.5 million (2003: £2.9 million) arising from the difference between the exchange rates at which foreign currency transactions are converted and the contracted rates on the forward exchange rate contracts set up as hedges against such transactions. When compared with their values at the exchange rates on the forward contracts in effect on 31 December 2004, the cumulative unrecognised aggregate gain on the forward exchange contracts as of 31 December 2004 is £0.3 million (2003: £1.6 million). All of these unrecognised gains relate to the year 2005. Because these contracts are put in place to hedge a portion of the underlying transactions, any net gain or loss that may arise on these contracts over the forthcoming year will be more than compensated by the corresponding transactional gains or losses.

During 2003 and 2004 forward option contracts selling US Dollars and purchasing Euros were taken out to cover anticipated US Dollar currency receipts covering the period January 2005 to December 2005. These forward option contracts totalled £9.3 million (2003: £8.4 million) and the unrecognised gains on all these options at 31 December 2004, based on the exchange rates on that date, were £1.1 million (2003: £0.7 million). The Group’s foreign exchange hedging policy is set out in the Financial Review.

During the year forward option contracts selling US Dollars and purchasing Sterling were taken out to cover anticipated US Dollar currency receipts covering the period January 2005 to August 2005. These totalled £0.9 million and the unrecognised gains on these options at 31 December 2004, based on the exchange rates on that date, were £nil.

e) Currency profile

The main functional (or “operating’’) currencies of the Group are Sterling, US$ and Euro. The following analysis of net monetary assets and liabilities, excluding cash and borrowings, shows the Group’s currency exposures after applying the effects of forward contracts used to manage currency exposure. Such net positions comprise the monetary assets and liabilities of the Group that are not denominated in the functional currency of the operating units involved.

	Sterling £m	US$ £m	Euro £m	Other £m	Total £m
Sterling	-	1.4	2.9	0.4	4.7
Euro	-	0.9	-	-	0.9
US$	-	-	(0.4)	-	(0.4)
At 31 December 2004	-	2.3	2.5	0.4	5.2
Sterling	-	1.4	0.8	(0.2)	2.0
Euro	-	0.8	(0.3)	0.5	1.0
At 31 December 2003	-	2.2	0.5	0.3	3.0

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