Motive Television Plc Regulatory News (MTV)

18 June 2013

Motive Television PLC

("Motive", "the Company" or "the Group")

Preliminary results for the year ended 31 December 2012

Motive Television PLC (AIM: MTV.LN), the digital television technology, software and solutions provider, announces its preliminary results for the twelve months ended 31 December 2012.

Financial highlights

·; 2012 Group loss halved to £(1,200,598) from £(2,447,728) in 2011 including a net financial gain of £843,230 primarily from reduced liability to CCAN

·; 2012 Operating loss (EBIT) reduced to £(2,171,913) from £(2,438,737) in 2011

·; 2012 Digital Business loss reduced to £(1,240,821) from £(1,569,014) in 2011 despite reduced revenues of £560,186 in 2012 vs. £876,479 in 2011, as digital costs were cut to £1,801,007 in 2012 vs. £2,445,493 in 2011

·; 2012 Content Business profit of £7,963 from a loss of £(4,526) in 2011 despite reduced revenues of £530,430 in 2012 vs. £1,148,407 in 2011

·; Shareholder Equity increased 12% to £3,943,225 (2011: £3,520,333)

·; 2012 Net Cash outflow from operating activities halved to £(1,330,247) (2011: (£2,593,411))

Operational highlights

·; Tablet TV invented, JV formed with Granite in USA, prototype designed, built and demonstrated

·; Digiturk project Phase 1 completed and soft launched

·; Five-year contract signed with CME starting in Czech Republic with subsequent rollout in their other territories

·; Exercised right to acquire CCAN stake in Motive Television S.L. for €70,116

·; MOU signed with Siyaya Free to Air Ltd. in South Africa

Post-Period Highlights

·; Mocast Proof of Concept announced and unveiled to industry at Mobile World Congress

·; U.S. Patent won for Motive's "Place-shifting apparatus and system"

·; Digiturk, with 2.5 million subscribers, begins commercial launch and Motive begins receiving licence royalties

·; Motive begins development of Tablet TV for the UK

·; £1.8 million of new funding secured

Commenting on the results, Michael Pilsworth, Executive Chairman, said:

"Our rapidly-growing Digital business has established itself as an innovator in the industry and following the progress with CME, the commercial launch of Digiturk services, and widespread industry interest in Tablet TV and Mocast, Motive's technology is gaining traction. The contract with CME validates our business model, which is focused on partnering with our clients to deliver recurring revenues that will grow over time. The Company has evolved from its original single product, single client business to become a software solutions expert that provides its B2B customers with the ability to manage the delivery of content across their existing networks. The Group is now well-placed to roll out its technology to new markets, particularly in the USA (through its Mocast and Tablet TV products) and in emerging markets, where its Television Anytime Anywhere technology is expected to gain increasing traction, as its use does not depend on the use of the internet."

Enquiries:

Motive Television is the developer and integrator of innovative patented software solutions for the television industry that enable our clients to offer on-demand content over any network to any device. We have the knowhow and ability to customize our software to work with existing networks, saving our clients substantial expenditures. Our customers are broadcasters, satellite platforms, cable operators, and telecoms.

Motive's patented and proprietary solutions include:

Television Anytime Anywhere: Video-on-demand and place shifting for the broadcasting and pay television industry

Tablet TV: Viewing and being able to record digital terrestrial TV directly to tablets and smartphones

Mocast: Enabling managed downloads of IP delivered content in 4G LTE wireless systems

CHAIRMAN'S STATEMENT

I am pleased to announce Motive's results for the year ended 31 December 2012.

Our rapidly-growing Digital business has established itself as an innovator in the industry and following the progress with CME, the commercial launch of Digiturk services, and widespread industry interest in Tablet TV and Mocast, Motive's technology is gaining traction. The contract with CME validates our business model, which is focused on partnering with our clients to deliver recurring revenues that will grow over time. The Company has evolved from its original single product, single client business to become a software solutions expert that provides its B2B customers with the ability to manage the delivery of content across their existing networks.

We are pleased that Digiturk has now commercially launched and that our project with CME is on track to be completed before the end of the current year.

The year-on-year reduction in turnover was mainly due to the cancellation of a €1.1 million live sports contract in the Content business. This was replaced by new, higher-margin, productions, leading in fact to an increase in profit for the Content business for the period.

Digital revenue also reduced in 2012 due to delays in completing contracts in a deeply recessionary environment. In response, the Company greatly reduced costs; digital sales reduced by £316,296 but costs were cut by £644,486 resulting in a £328,193 (20%) reduction in operating loss for the Digital business.

Financial analysis

● 2012 Group loss halved to £(1,200,598) from £(2,447,728) in 2011 including a net financial gain of £843,230 primarily from reduced liability to CCAN.

● 2012 Operating loss (EBIT) reduced to £(2,171,913) from £(2,438,737) in 2011

● 2012 Digital Business loss reduced to £(1,240,821) from £(1,569,014) in 2011 despite reduced revenues of £560,186 in 2012 vs. £876,479 in 2011 as costs were cut to £1,801,007 in 2012 vs. £2,445,493 in 2011,

● 2012 Content Business profit of £7,963 from a loss of £(4,526) in 2011 despite reduced revenues of £530,430 in 2012 vs. £1,148,407 in 2011;

● Shareholder Equity increased 12% at 31 December 2012 to £3,943,225 (2011 £3,520,333).

● 2012 Net Cash outflow from operating activities halved to £(1,330,247) (2011 (£2,593,411)).

● After the period £1,763,756 cash has been raised from equity placings.

Digital Business

During 2012 despite a particularly depressed economic environment for the television industry, Motive was able to make progress in developing new products and in getting its existing solutions recognised and considered by major companies. A major multi-year contract was signed with CME, and the development of Tablet TV and Mocast positioned the Company for rapid growth when corporate investment in new technology picks up. Additionally, the Company entered the African market through its new client Siyaya and the United States market through its Tablet TV joint venture with Granite Broadcasting Corporation.

Considerable progress has been made during the year across a number of territories.

Italy

The 2009 implementation of Motive's patented Television Anytime technology at its first major client Mediaset, Italy's largest commercial television broadcaster, continues to generate revenue. This pay television service has been operating successfully since the last quarter of 2009 and delivers Subscription Video-on-Demand (SVOD) movies in standard, high definition, and 3D to over 360,000 homes (based on the number of Motive licences issued). Whilst further technical development of the platform has slowed due to the recession in Italy, Motive continues to support and maintain the platform for Mediaset and our annual contract was renewed.

Should the Italian economy revive, Motive will seek to work with Mediaset to update its technology and offer new features such as Mocast and Tablet TV.

Turkey

The Company's second major client, Turkish direct-to-home satellite broadcaster Digiturk, (served by Motive through a relationship with French set-top box ("STB") and middleware provider, Sagemcom), has launched its new services to consumers. The Company undertook a two-year project to develop new solutions for direct-to-home ("DTH") "push" Video-on-Demand for Digiturk that has now been delivered and tested for commercial use. A second phase of the project with enhanced features is now in the process of being completed during 2013.

The Company receives income from continuing engineering development and integration work, plus additional earnings from support and maintenance and changes to the platform. As previously announced, the initial engineering development and integration contract was for $1.1m. In addition, Motive will receive upside licence royalties to share in the success of the Digiturk platform on a per STB basis. The ultimate amount of these royalties is difficult to estimate by the Company, however with a Digiturk subscriber base of 2.5 million homes this could be a substantial source of continuing income. Digiturk has advised Motive to anticipate payment for a minimum of 100,000 set-top box licences for 2013.

The relationship created by this project with major European consumer electronics manufacturer Sagemcom should pay dividends in the future as Sagemcom devices with Motive's technology will be made available in many global markets.

Central and Eastern Europe

In June 2012, Motive signed a major long-term contract with Central European Enterprises Ltd (CME, [Nasdaq: CETV]) to provide its Television Anytime Anywhere technology platform to support the launch of a new television service that extends its Voyo content platform to digital terrestrial television homes (Voyo Digital Terrestrial Television ("DTT") services). The first market will be through an implementation for Nova Television in the Czech Republic. Nova TV is the flagship television station of CME, operated by CET 21 spol. s r.o. (CET 21),

Under the five-year agreement, Motive has overall responsibility for systems integration, delivery and management of the project, which incorporates a team of major television systems and hardware providers. The centrepiece of the new services will be Motive's patented Television Anytime Anywhere technology, plus continuing engineering and operational services. The project is now in implementation and testing and is expected to be completed by late 2013. To date Motive has successfully delivered the head-end part of the solution, which is in the process of being installed and tested.

Motive continues to earn non-recurring engineering fees based on achieving certain performance milestones and continuing subscriber-based monthly licence and maintenance fees following commercial launch, expected in the first quarter of 2014. In this manner, Motive will share in the success of the new CME pay-television platform.

Although the initial agreement addresses the implementation of Motive's technology for the Voyo DTT services in the Czech Republic, a further rollout to CME's other markets is anticipated. CME is one of Europe's leading media and entertainment companies with operations in six countries with a combined population of approximately 50 million people.

Central and Eastern Europe remains an attractive market for Motive due to the limited degree of cable and satellite television penetration and relative cost-attractiveness of Motive's solutions.

North America

The Company's wholly owned US subsidiary, Motive Television Holdings Inc. and station group broadcaster Granite Broadcasting Corporation established a joint-venture, Tablet TV LLC in April 2012 to implement Motive's tablet-based technology in the United States and Canada. Tablet TV involves the development, implementation, and use of existing broadcast spectrum to provide live television, Personal Video Recorder ("PVR") functionality and Video-on-Demand directly to portable devices such as iPads, Android tablets and smartphones. Tablet TV is based upon Motive's patented and proprietary technology that has been in commercial use in Europe since 2009, and extends its reach to portable devices in the United States. 

Tablet TV enables the user to watch digital broadcast TV channels anywhere, without needing a hotspot or fast Internet signal. Like Freeview to the home, there are no subscriptions needed and no interruptions due to buffering or network congestion. Video viewing on tablets is rapidly increasing, with recent figures from the BBC showing that tablets have moved ahead of smartphones in the use of its catch-up iPlayer service, with 41 million requests in March 2013. According to recent predictions from CCS Insight, one billion tablets will be in use worldwide by 2017, and according to Gartner Research sales of tablets are expected to grow by 70% to about 200 million this year. Searching for content on tablets over the Internet is currently a fragmented experience, using a variety of Internet based (or 'Over the Top' ("OTT") services, such as iPlayer, ITV player etc. There is an increasing opportunity to provide easy-to-use live TV on tablets using the existing broadcast distribution network. 

Once available, this will enable Granite and other U.S. broadcasters to use their existing American Television Standards Committee ("ATSC") spectrum assets to make their current broadcast signal directly available to devices beyond the television. This will provide consumers with free access to broadcasting content everywhere and on the device of their choice. This simultaneously allows broadcasters to broaden their audience, deepen their relationship with viewers and potentially create new revenue opportunities through additional service offerings. 

In November 2012 Motive successfully demonstrated the ability to deliver over-the-air HD television channels on an iPad without the need for cable, satellite, or Internet at Granite's NYC headquarters. By December 2012, the design and specifications of Tablet TV had been completed by Motive, leading to a patent application filed in the United States.

Africa

Motive announced on 18 July 2012 that it had entered into a Memorandum of Understanding with Siyaya Free to Air (Pty) Ltd of Johannesburg, South Africa (Siyaya) for the use of Motive's Television Anytime Anywhere technology in a new pay television service for the South African market. Siyaya has submitted an application to South Africa's licensing authority to be allocated a pay television frequency. Should this application process be successful, Motive and Siyaya will enter into a formal service agreement. The services to be provided by Motive would include engineering work for the integration, development, and implementation of the Motive technology proposed to Siyaya and Motive serving as systems integrator and provider of the entire solution. 

In the first quarter of 2013, Motive announced a contract with Siyaya for assisting in the planning of the new services and support in the licence process and has been providing consulting services since then. Whilst the licensing process has been delayed, Siyaya is planning to implement a trial service in 2013 with Motive's support and technology.

Latin America

In Latin America, Motive announced its agreement with Media Networks Latin America S.A.C. ("Media Networks"), a wholly-owned subsidiary of Telefonica Internacional, to set up a demonstration pilot at its operational headquarters in Lima, Peru, This pilot will demonstrate Motive's direct-to-home ("DTH") platform to Media Networks' clients in Latin America. Media Networks presently provides turnkey satellite distribution and technical operations services to seven self-owned and third party DTH and Cable pay television operators across five countries in South and Central America.

The implementation of this pilot was on hold due to the delays in the availability of satellite set-top boxes from Sagemcom, however, with the Digiturk project now launched this is expected to re-start in 2013.

Post Period-end Developments

Major developments since the year ended 31 December 2012 include:

● Motive is working with terrestrial broadcast group CME to implement its Television Anytime Anywhere platform in CME's flagship market, the Czech Republic, utilizing the new DVB-T2 transmission standard rather than the existing DVB-T standard. Once implemented, the CME service from Prague is expected to be one of Europe's most advanced platforms. CME has requested a number of extensions and additions to the platform that are expected to create additional revenues for Motive in 2013 and 2014

● The next step for Tablet TV will be the completion of a prototype in a full-featured pilot that will be demonstrated at Granite's television station in San Francisco in the coming weeks. The San Francisco prototype will demonstrate the full user experience and allow viewers to watch all available ATSC broadcasts, record or schedule recording, and receive video-on-demand content for viewing at any time. It is expected that Tablet TV in the USA will be commercially launched in early 2014

● Motive unveiled its Proof of Concept (POC) for its Mocast software solution, which enables 4G LTE (Long Term Evolution) Mobile Operators to efficiently manage guaranteed scheduled downloading of video content to their OTT video subscribers, to a number of 4G/LTE mobile operators. The POC was shown to attendees at the Mobile World Congress in Barcelona in February 2013

● Motive was informed by the US patent examiner that its patent application entitled "Place-shifting apparatus and system" has been approved and will be granted. This patent application was originally filed in 2006 by NXVision Ltd and was acquired by Motive Television in 2010 along with other assets of NXVision Ltd. The patent describes an embedded place-shifting system which allows transfer of content from a set-top box or similar device to portable devices such as smartphones / tablets. The patent further discloses the system as allowing the content owner visibility and control of the place-shifting system, permitting new business models and potential new revenues. The NXVision technology was integrated with the BesTV technology during 2011 and is a valuable part of Motive's Television's Anytime Anywhere and Video2Go solution for broadcasters

● Motive announced its first contract with Siyaya, a new start-up broadcaster based in Johannesburg, South Africa. This first contract provides for Motive to advise Siyaya in the technical and product planning of their new service on the basis of monthly consulting fees, and to assist Siyaya in developing its strategy to win a broadcast licence in South Africa. The licence process has been delayed in the past but our understanding is that a decision is now expected in mid 2013.

● In June 2013 Motive announced that it plans to develop its Tablet Television technology to enable Freeview users in Britain to watch and record television programmes directly onto tablets - without the need to connect to the Internet. This represents a first strategic entry for the Company into the UK market. With Motive's app and an antenna-tuner containing Motive's technology, tablet users will be able to watch all the programming currently available on the Freeview platform. Motive plans to license its technology to third party consumer electronics companies that will make the antenna-tuners widely available.

Motive expects that its Freeview-compatible Tablet TV will:

- receive all the Freeview channels available in the broadcast area;

- offer a full 7-day 24 hour EPG with the Freeview look and feel;

- have the ability to record directly onto the tablet for viewing later for private use;

- enable features such as series recording;

- optionally have social media integration (with an internet connection).

- Motive has applied for membership of the UK Digital Television Group (DTG) which publishes and maintains the "D-book" technical specifications for Freeview in the UK. These specifications are also in use in other countries such as South Africa and Australia.

● The Company is in conversations with broadcasters, content companies, satellite and cable companies and consumer electronics suppliers in North America regarding all of its technology solutions and is confident that this will lead to new business in 2014 and beyond.

Research and Development

During 2012 the Company invested in research and development, some of the fruits of which were Tablet TV and its Mocast solution, unveiled to mobile network operators at the Mobile World Congress in Barcelona in February 2013. Mocast enables networks to reduce peak demand congestion and most efficiently manage delivery of on-demand video content, thereby cutting investment in capacity, capturing lost revenue, and increasing ARPU, as well as providing a better experience for the viewer. It helps operators retain revenue in periods of service saturation and provide load balancing on their network caused by peak streaming video usage. Mocast is a software-based solution running on standard network server hardware and operating systems. The mobile industry has been seeking solutions to balance peak video streaming demand for the past two years; a need made more urgent by the investment in 4G LTE capacity. Motive's Mocast is an innovative solution to this problem.

Content Business: Motive Television Limited (Dublin) ("MTL")

Market conditions in the Irish television business have been challenging, with both reductions in commissioning spend at Irish broadcasters and also severe cutbacks in marketing spend by brands, which have affected advertiser-funded programming. These cutbacks led to the loss of the €1.1 million per annum live sports contract with Irish broadcaster TV3 and of "Area 22", a rugby chat show produced by MTL for Guinness. As a consequence, overhead was cut back through a reduction in property costs.

In addition, investment in the development of new projects to be funded by the Broadcasting Authority of Ireland ("BAI") led to the award of three grants to MTL totaling €245,000 (£205,000) towards the cost of production of three sports documentaries for Setanta Sports. "The Gambler" followed the fortunes of Irish poker player John O'Shea at the Las Vegas World Series in 2012; "Batmen" explored the history of cricket in Ireland; and "We Got Game" followed the history of basketball in Ireland in the 1980s. All three programmes were delivered on time and on budget.

MTL was also commissioned to produce a 3-part, £200,000, documentary series for Irish commercial television broadcaster TV3, called "The Estate". This series was also supported by the BAI. It was executive produced by Anne McLoughlin and produced by Jamie D'Alton. "The Estate" was an observational series filmed over a year, following the highs and lows of daily life for six families who live in Ballybeg, a council estate on the edge of Waterford City in Ireland. The series was broadcast in Ireland in April 2013, and attracted excellent ratings and was favorably reviewed.

MTL also produced a one-off documentary for RTÉ called "No Time to Die" on the subject of paediatric palliative care in Ireland. This was very well received by the audience and press alike.

During the period MTL also produced more episodes of "Area 22", a live rugby chat show funded by Guinness for Sky and TV3, as well as producing a number of rugby viral ads for Volkswagen.

MTL was awarded an IFTA (Irish Film and Television Award) at the 2012 IFTAs ceremony in Dublin. The award was for Best Sports Documentary for "Eamonn Coghlan: Man on a Mission". The one-off programme followed World Athlete of the Year David Rudisha and his coach Brother Colm O'Connell. The programme was filmed entirely in Iten, Kenya, as Rudisha prepared for the World Championships in South Korea, which he won. The scope of the programme widened to explore why Kenya has dominated the distance running world for so long and the lasting legacy Brother Colm has left on Kenyan running. Produced by Jamie D'Alton and Anne McLoughlin, the programme was presented by Irish athletics legend Eamonn Coghlan and directed by award-winning documentary maker Maurice Sweeney. It has since been sold to both the BBC and to RTÉ. This was MTL's third IFTA, having previously won IFTAs for sports documentaries "Marooned" and "The Sound of Sunday".

The outlook for this business continues to be challenging, as the BAI has recently announced that it is to transfer funding from single documentaries and factual programmes, (in which MTL specializes), towards animation and drama projects.

CCAN Litigation Update

On 24 July 2012 Motive Television PLC filed a petition with the First Instance Court of Barcelona to seek enforcement of its Call Option in respect of the 32.3% shareholding in Motive Television, S.L. currently held by CCAN 2005 Inversiones Societarias, S.C.R., S.A. De Regimen Simplificado ("CCAN").

In accordance with article 5.7 of the Shareholders Agreement dated 4 October 2010, either party to the Shareholders Agreement is entitled to purchase, at nominal value, the shares owned by the other shareholder if it incurs or is otherwise the subject of any event resulting in an indirect change of control of its share capital. In a letter from CCAN dated 14 June 2012 Motive Television S.L. was served with such a change of control notice and exercised its Call Option over CCAN's shares in Motive Television SL at nominal value (€70,116) in accordance with the Shareholders Agreement.

The petition described above is intended to accomplish the material enforcement of the Call Option, as exercised by Motive, in the form of a sale and purchase agreement of the shares owned by CCAN at nominal value. If the petition is granted, once the judgment is firm and final, the court would order the defendant to cause the transfer of the shares as agreed or the judge could otherwise execute the transfer deed directly with the same legal and economic consequences.

Following a Preliminary Hearing in Barcelona on 5 February 2013, the judge set a trial date of 26th June 2013, with a judgment expected to be announced during Autumn 2013. Legal advice received by Motive is that it has a very strong case.

Summary

The Group is now well-placed to roll out its technology to new markets, particularly in the USA (through its Mocast and Tablet TV products) and in emerging markets, where its Television Anytime Anywhere technology is expected to gain increasing traction, as its use does not depend on the use of the internet.

We are confident that, as the economic environment improves and our technology proves successful with our new and existing clients, we will see an increase in interest in our products and services.

I would like to thank our employees, customers, shareholders and partners for their continued support, and once again, particular thanks must go to your CEO, Leonard M Fertig, whose vision, commitment and drive have once again helped the Group move closer to achieving its goals.

Michael PilsworthExecutive Chairman

17 June 2013

MOTIVE TELEVISION PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2012

MOTIVE TELEVISION PLC

STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2012

Group

1 GENERAL INFORMATION

Motive Television plc and its subsidiaries provide services to the television industry.

This preliminary announcement is authorised for issue by the Board on 17 June 2013. The financial information has been prepared in accordance with International Financial Reporting Standards adopted by the European Union and applying the same accounting policies and bases of calculation and estimation as applied in previous annual financial statements.

Going concern assumption

The directors acknowledge that the revenue forecast on which their assessment of going concern is made includes levels of turnover that have not historically been achieved. The growth rate in these forecasts is based on management's expectations of a new and developing market. This results in a material uncertainty in relation to the ability of the group to meet future obligations as they fall due. In order to provide ongoing working capital, and ensure sufficient funds are available for the Group to undertake the required level of development (including covering the increased level of overhead and expenditure that this would necessitate), the Group may require a further injection of funds within the next 12 months. Since the end of the year the Group has secured £1,763,756 by way of equity placements and the Directors are confident that further such injections can be secured if required and have therefore continued to prepare the financial statements on a going concern basis.

2 CASH GENERATED FROM OPERATIONS

3 LOSS PER SHARE

The loss per share is based on a loss for the year attributable to equity holders of the Parent Company of £1,200,598 (2011: £2,447,728) and the weighted average number of ordinary shares in issue for the year of 3,783,727,173 (2011: 1,651,231,057).

The exercise of the outstanding options and warrants would reduce the loss per share and hence have an anti-dilutive effect.

There are 1,543,287,237 (2011: 497,662,237) shares that could potentially be issued under the terms of options and warrants as described in notes 17 and 24 to the financial statements included in the report and accounts that will potentially reduce future earnings per share.

4 STATUS OF THIS ANNOUNCEMENT

The financial information is unaudited and does not constitute statutory accounts, but has been extracted therefrom. The financial statements for the year ended 31 December 2012, on which the auditors gave an unqualified opinion, have not been filed with the Registrar of Companies. The auditors have reported their opinion on the financial statements for the year ended 31 December 2012 on 17 June 2013. The auditors gave an unqualified opinion. Their report did not contain a statement under Section 498(2) (accounting records or returns inadequate or accounts or directors' remuneration report not agreeing with records and returns), or Section 498(3) (failure to obtain necessary information and explanations). The auditors report included the following two paragraphs by way of emphasis of matter -

"Emphasis of matter - going concern

In forming our opinion on the financial statements we have considered the adequacy of the disclosures made in note 3 to the financial statements concerning the Group's liquidity. The ability of the Group to meet its working capital requirements for the next 12 months and accelerate its development plans is dependent upon further funding being secured. If such funding is not received the Group may not have sufficient funds to enable it to cover its forecast expenditure for the next 12 months, and would have to reduce its costs in order to continue trading. These conditions, as described in note 3 to the financial statements, indicate the existence of material uncertainties that may cast doubt over the Group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

Emphasis of matter - goodwill

In forming our opinion on the financial statements we have considered the adequacy of the disclosures made in note 4 and note 13 to the financial statements concerning the carrying value of goodwill at the balance sheet date. The major component of this goodwill balance relates to the digital segment of the Group, which is still in a development phase in a rapidly developing market, and for which the directors believe there is significant growth potential. The directors have prepared cash flow forecasts for the segment that necessarily include certain significant assumptions regarding the future revenue growth. These assumptions are considered by the directors to be a conservative reflection of their best estimate of the potential of the segment. However, whilst the assumptions are based on the revenue model in existing contracts, the level of future new contract wins is difficult to predict. The significance of these assumptions, and uncertainty regarding the future revenues to be generated, represent material uncertainties which impact the fair value of goodwill. The financial statements do not include any adjustments that would result if these assumptions proved to be incorrect and an impairment provision was required against the carrying value of goodwill."

5 DIVIDEND

The Directors will not be recommending the payment of a dividend.

6 COPIES OF THE REPORT AND ACCOUNTS

Copies of the Annual Report and Accounts will be available from the Company's registered office, Windsor House, Barnett Way, Barnwood, Gloucester GL4 3RT and the Company's website http://www.motivetelevision.co.uk.