Notes 29, 30 and 31

29. Post Balance Sheet Events

On 15 January 2006 the Group completed the acquisition of Petrol for £1.6 million. Petrol, which is based in Tel Aviv, is a broadcast equipment bag manufacturer and comprises design of broadcast video bags and accessories, together with third party sourcing and assembly operations in China.

The Group has not yet had sufficient time to fully assess the impact of the acquisition in accordance with IFRS. The Group will provide the full IFRS-compliant disclosures relating to this acquisition as part of the 2006 Annual Report and Accounts.

30. Accounting Estimates and Judgements

Management discussed with the Audit Committee the development, selection and disclosure of the Group’s critical accounting policies and estimates and the application of these policies and estimates.

Key sources of estimation uncertainty

Note 14 contains information about the assumptions and their risk factors relating to goodwill impairment. In Note 19 detailed analysis is given of the foreign exchange exposure of the Group and risks in relation to foreign exchange movements.

Provisions for bad debts
The carrying amount of receivables at the year end was £32.1 million. The provision for bad debt as at 1 January 2005 was £1.6 million (2004: £1.1 million). During the year, £0.4 million (2004: £0.3 million) of this provision was utilised to write off bad debts and the provision was increased by £0.3 million (2004: £0.8 million) as part of the normal trade receivable ageing assessments, with the charge going to ‘administrative costs’ in the income statement. The trade receivables impairment provision as at 31 December 2005 was therefore £1.5 million (2004: £1.6 million). Management are confident that this provision is adequate to cover the risk of bad debts.

Provisions for inventory obsolescence
The carrying amount of inventory at the year and was £37.6 million. The provision for inventory obsolescence as at 1 January 2005 was £6.3 million (2004: £4.4 million). During the year, £0.9 million (2004: £0.6 million) of this prior year provision was utilised to scrap obsolete inventory and the provision was increased by £0.7 million (2004: £2.7 million) as part of normal inventory ageing assessments, with the charge going to ‘cost of sales’ in the income statement. As a result of currency movements of £0.2 million (2004: £0.2 million), the provision for inventory obsolescence as at 31 December 2005 was £6.3 million (2004: £6.3 million). Management are confident that this provision is adequate to cover the risk of inventory obsolescence.

Warranty Provisions
Included within provisions is an amount of £1.0 million for warranty provisions. Management are confident that these provisions are adequate to cover the risk of warranty claims against the Group.

Post-employment obligations
A number of accounting estimates and judgements are incorporated within the provisions for post-employment obligations. These are described in more detail in Note 28.

Share-based payments
A number of accounting estimates and judgements are incorporated within the provisions for share based payments. These are described in more detail in Note 28.

Intangible assets
A number of accounting estimates and judgements are incorporated within the valuations of intangible assets. These are described in more detail in Note 14.

31. Related Party Transactions



Identity of related parties

The Group has a related party relationship with its subsidiaries (these are listed in Note 15) and with its key management personnel.

Transactions with key management personnel

Lino Manfrotto, a director of Feltre Stampi, a subsidiary of Gruppo Manfrotto Srl, is president and shareholder of Mancor Spa, a company from which Gruppo Manfrotto rents properties used in its business under operating leases that expire at the end of 2006. Rents paid to Mancor in 2005 totalled c212,958, £145,702 (2004: c210,027, £142,985). At 31 December 2005, there were no outstanding amounts payable to Mancor (2004: Nil).

Abramo Manfrotto is a non-executive director of Gruppo Manfrotto Srl. He is also sole administrator of Antide Srl, a company specialising in world-wide web sites and e-mail services. Group companies paid Antide a total of c45,081, £30,844 during the year (2004: c60,950, £41,468) for products and services. At 31 December 2005, there was c8,653, £5,920 outstanding and payable to Antide Srl.

Abramo Manfrotto is also Managing Director of ALU Spa (disposed of by the Group in December 2003). Sales of Gruppo Manfrotto products and services to ALU in 2005 totalled c1,144,460, £783,019 (2004: c3,902,994, £2,655,459). At 31 December 2005, there was c863,782, £590,984 outstanding, payable by ALU Spa (2004: c151,111, £102,811). Sales of ALU products and services to Gruppo Manfrotto companies in 2005 totalled c72,198, £49,397 (2004: c82,202, £55,927). At 31 December 2005, there was c2,430, £1,663 outstanding and payable to ALU Spa (2004: c10,291, £7,002).

Key management personnel are classed as the Directors (including the Non-executive Directors) and the members of the Executive Board. The Chief Executive, Gareth Rhys Williams, and the Finance Director, Alastair Hewgill, are Directors of the Company and are also members of the Executive Board. However, for the purposes of this section, their interests and remuneration have been excluded from the information relating to the Executive Board to avoid double counting.

Directors of the Company and their immediate relatives control 0.165% of the shares of the Company. Members of the Executive Board own or control 0.058% of the shares of the Company.

In addition to their salaries, the aggregate of which is set out below, the Group also contributes to a number of pension arrangements, each one specific to the country in which the individual member of the Executive Board is based. Members of the Executive Board are eligible to participate in the Group’s executive bonus scheme and its share incentive arrangements. The cost to the Company arising from share incentive exercises in 2005 was £nil (2004: £16,450).

The remuneration of the Directors is set out here. The aggregate salaries of the members of the Executive Board (excluding the Directors) in 2005 was £706,091 (2004: £557,406). Short-term employee benefits paid in 2005 were £2,446 (2004: £2,573).

Information correct at 03/05/2006