R4E.L Regulatory News (R4E)

31.05.11

FIRST ARTIST CORPORATION PLC

("First Artist" or "the Company" or "the Group")

Final Results for the year ended 30 November 2010

First Artist Corporation plc (AIM: FAN), a transatlantic media and entertainment company, is pleased to announce final results for the year ended 30 November 2010.

Chairman of First Artist, David Stoller, commented:

"The Group faced significant challenges during this reporting period, but the changes made during the year and after the balance sheet date, including the completion of the refinancing of the AIB facility, the sale of non-core business assets and the strategic investment by Pivot Entertainment, represent significant steps towards restoring the financial and management strength of the Group and our stated goal of reshaping the Group into a highly-focused media and entertainment company."

The restructuring and divestment activity during the year and after the balance sheet date includes;

·; Sale of Optimal Wealth Management in February 2010 to Conforto Financial Management Limited for £1.5m;

·; Disposal of the business and assets of First Artist Management Limited to James Grant Media Ltd for a consideration of £0.175m in February 2010;

·; Completion of the sale of First Artist Scandinavia A/S in July 2010 to local management for consideration of £0.6m, plus an earnout component valued at up to £37,500 linked to business achieved over the 2 years following completion;

·; Sale of The Finishing Touch (Corporate Events) Ltd in February 2011, to ExEvents Limited, a subsidiary of Rivington Street Holdings plc for cash consideration of £100,001. In addition, ExEvents has agreed to pay 50% of net profits generated by existing TFT customers over each of the next three years;

·; Integration of the theatre sponsorship activities of First Rights Limited into Dewynters Ltd, resulting in cessation of First Rights Ltd trading as a separate operation in October 2010;

·; Sale of First Artist Sport to Jon and Phil Smith for an initial consideration of £1 in May 2011. Additional consideration is payable to the Company equal to the sum of 5 percent of revenue generated in the years ended 30 November 2011 and 2012 in excess of £3 million; and

·; The rationalisation and restructuring of the Group will be complete with the winding up of the remaining operations of the Sport Division, being Promosport SrL, the Italian based football management agency.

Activity directed at restoring the financial and management strength of the Group following the end of the reporting period include:

·; Strategic investment by Pivot Entertainment of $4m (£2.5m) in the Group via a subscription for 9,900,000 new ordinary shares at a subscription price of 11 pence per share representing £1.1m and an unsecured loan for the remainder, being £1.4m;

·; Appointments of David Stoller as Executive Chairman and Jeremy Barbera as Chief Executive following the investment by Pivot Entertainment. Shirley Stapleton was also appointed to the Board as Finance Director;

·; Placing of 10m new ordinary shares at a price of 20 pence per share raising £2m (before expenses), in February 2011, followed in March by a further placing of 8.7m new ordinary shares at a price of 23 pence per share, which raised a further £2m (before expenses)

·; Conversion of Pivot Entertainment unsecured loan of £1.4m into 7.4m ordinary shares at a conversion price of 20 pence per share;

·; Conclusion of new £14.8 million revolving credit facility with Allied Irish Bank; achieving a reduction in the bank debt from the year end value of £18.0m; and

·; Appointment of Marcus Yeoman as non-executive Director, and the resignations of Jon and Phil Smith from the Board following the disposal of First Artist Sport Ltd in May 2011.

Enquiries:

First Artist Corporation Plc

Jeremy Barbera/David Stoller/ Shirley Stapleton Tel: +44 20 79930000

Seymour Pierce Limited

Stewart Dickson /Tom Sheldon Tel: +44 20 71078000

Bishopsgate Communications Limited

Deepali Schneider/Natalie Quinn/Duncan McCormick Tel: +44 20 75623350

firstartist@bishopsgatecommunications.com

CHAIRMAN'S STATEMENT

I am pleased to report the results of the First Artist Corporation ("the Group") for the year ended 30 November 2010. The period for which we report has seen the Group face significant challenges and undergo many changes as a consequence of the restructuring and divestments undertaken to refocus the Group on the core business of the Media Division, being the Dewynters Group (Dewynters Limited, Dewynters Advertising Inc., and Newman Displays), and Spot and Company of Manhattan, Inc., ("Spotco").

In December 2010, the Group received an approach from Pivot Entertainment LLC, ("Pivot"), a New York based entertainment marketing company whose principals have significant experience working in the performing and visual arts industry. This approach resulted in Pivot investing £2.5m ($4.0m) in the Group via a subscription for 9,900,000 new ordinary shares at a subscription price of 11 pence per share representing £1.1m, and an unsecured loan for the remainder, being £1.4m.

During the reporting period the Group breached its banking covenants governing the terms of the facilities provided by its bankers, Allied Irish Bank (GB), ("AIB"). Throughout the period, and subsequent to the balance sheet date AIB has continued to support the Group, leaving the existing facility in place, with a waiver of financial covenants until March 2011, when it was replaced with a £15.0m revolving credit facility, following the investment in the Group by Pivot and subsequent equity placements.

The Group announced in June 2009 that it was reviewing its options with regard to its non-core businesses, in keeping with its stated objectives of debt reduction and the redefinition of the Group with media as its principal focus.

In accordance with this strategy and the resultant restructuring programme, the Group completed the sale of Optimal Wealth Management ("OWM"), the sale of the business and assets of First Artist Management ("FAM"), both sold in February 2010, and the sale of First Artist Scandinavia A/S ("FAScan") in July 2010. First Rights Limited ("FRL") suffered a disappointing year and failed to achieve any significant business in the period. For this reason the Group took the decision to wind up the operations of FRL and it has now ceased trading.

Non-core businesses at the year end were the remaining parts of the Sports Division and the Group's loss making corporate events and party organising company, The Finishing Touch (Corporate Events) Limited ("TFT"). 

In February 2011, TFT was sold to ExEvents Limited, a subsidiary of Rivington Street Holdings plc, ("RSH") for cash consideration of £100,001. In addition, ExEvents has agreed to pay 50% of net profits generated by existing TFT customers over each of the next three years. This disposal has resulted in an impairment of the goodwill value of TFT of £2.9m. The intention remains to complete the rationalisation and restructuring of the Group with the winding up and/or disposal of the remaining operations of the Sport Division, being First Artist Sport Limited ("FAS"), and Promosport SrL ("Promo"), the UK and Italian based football management agencies. This was partially concluded in May 2011, with FAS being sold to Jon and Phil Smith for a nominal cash consideration of £1, plus additional consideration pertaining to future revenue generated in excess of £3 million over the next two years.

Adjusted EBITDA (EBITDA pre exceptional administrative expenses) for the year from continuing operations was £0.555m compared to £3.507m for the 15 months ended 30 November 2009.

Performance across the Media Division as a whole was down compared with the previous period. Media contributed an adjusted EBITDA of £2.727m (15 months ended November 2009: £5.749m).

The Dewynters Group faced a challenging year with a decline in revenue and operating profit compared to the previous 15 month period. However, Dewynters continues to benefit from advertising and marketing a number of successful and long running West End shows including Phantom of the Opera, Lion King, Mamma Mia!, Les Miserables, We Will Rock You, Priscilla Queen of the Desert, Chicago, Grease, Avenue Q, as well as the Royal Opera House and The English National Opera Company. Dewynters also provided support to new productions during the reporting period, which includes Flashdance and several smaller productions and touring shows. In addition, Dewynters launched the new musical production Love Never Dies in Spring 2010 and announced a further three musical productions being Wizard of Oz, Betty Blue Eyes and Ghost The Musical which are expected to open in Spring/Summer 2011. The strength of Dewynters' long standing relationships with existing clients remains a keystone for future development of the Group. 

On a like for like basis, Newmans Displays Ltd achieved a small growth in revenue in the year when compared to the period ended November 2009, although EBITDA showed a marginal decline. The film premieres that have had the most success this year included Sherlock Holmes, Sex and the City II and Harry Potter and the Deathly Hallows as well as Gulliver's Travels and various film projects at Cannes. The company lost some business from the cancellation of two film premieres due to the Icelandic volcanic eruption during the Spring 2010.

Dewynters Advertising Inc's level of trading was down as merchandise and brochure retail sales have suffered during the economic downturn in the USA and the closure in October 2010 of the long running touring production of Phantom of the Opera. New merchandising contracts were won which included the Broadway musical La Cage Aux Folles and sporting events such as the US Tennis Association Open and the New York City Marathon.

SpotCo delivered a strong result for the year from its award winning client base. Shows supported by SpotCo won 19 out of 26 Tony Awards including the 4 top awards; Best Musical for Memphis, Best Musical Revival for La Cage Aux Folles, Best Play for Red and Best Revival of a Play for Fences. During the reporting period, SpotCo was awarded the media buying for both the Radio City Christmas Spectacular and Wintuk by Madison Square Garden adding to the creative services already provided to them. SpotCo's Interactive department continued to grow, creating websites for the films, The King's Speech and The Company Men, as well as increasing the interactive media business for its Broadway clients.

Despite having negotiated the successful presenting sponsorship with Chambord and sponsoring Breakfast at Tiffany's in the 2009 year, First Rights Ltd failed to develop the model sufficiently to justify maintaining it as a stand-alone operation. The business has therefore ceased trading on 31 October 2010 and its activities have been integrated within those of Dewynters Ltd. 

It has been announced previously that the Sport Division, comprising FAS, FAScan, and Promo would be restructured. To this end, Promo has ceased trading and remains in run-off whilst outstanding debtors and accrued income are recouped. FAScan was sold to the local Scandinavian management team with effect 1 July 2010, leaving FAS as the remaining trading arm of the Sport Division in 2010. 

As previously reported, FAS experienced a disappointing trading window in January 2010. This was followed by limited activity in the summer trading window. The highlights of the summer window included the transfer of Jermaine Beckford to Everton, the transfers of Stipe Pletikosa and Niko Kranjcar to Tottenham Hotspur, Victor Obinna and Lars Jacobsen to West Ham United and Andy O'Brien to Bolton. As described above, FAS was subsequently sold in May 2011 to Jon and Phil Smith.

Despite showing some signs of recovery after the difficult trading experienced in the previous reporting period, TFT failed to achieve an improvement in its performance during this reporting period, and the decision was made to identify a structural solution for the business. In February 2011, we announced the sale of TFT to ExEvents Ltd, a subsidiary of RSH Plc. The sale of TFT is another step towards our stated goal of reshaping the Group as a highly focused profitable media and entertainment business.

David Stoller

Chairman

31 May 2011

OPERATING AND FINANCIAL REVIEW

Outline of Continuing Operations

The Media segment comprises the Dewynters Group SpotCo and First Rights Limited. During the reporting period, the operations of the Media division experienced a downturn in trading, generating EBITDA of £2.73 million, (15 months ended 30 November 2009: £5.75 million) compared to £3.51 million, (being the 2009 result restated on a 12 month basis for comparison purposes).

EBITDA for the Dewynters Group for the year was £1.59 million (15 months ended 30 November 2009: £3.30 million). Dewynters Limited produced EBITDA for the year of £1.04 million (15 months ended 30 November 2009: £2.20 million). Dewynters Advertising Inc. for the year traded with an EBITDA of £0.10 million (15 months ended 30 November 2009: £0.44 million). Newmans Displays Limited operated with an EBITDA of £0.45 million (15 months ended 30 November 2009: £0.66 million). 

SpotCo generated an EBITDA of £1.27 million (15 months ended 30 November 2009: £2.55 million).

First Rights produced an EBITDA for the year of £(0.13) million (15 months ended 30 November 2009: £(0.10) million). Following a review of the performance and the outlook for First Rights Limited, the company concluded the prospects did not warrant maintaining a separate operation for theatre sponsorship and the activities of First Rights were integrated into Dewynters Limited. As a result, First Rights Limited ceased trading on 30 October 2010.

The Events division, comprising TFT continued to experience difficult trading conditions despite being awarded several contracts for educational events, a large public sector contract and further foreign based conferences. EBITDA for TFT was £(0.26) million for the year (15 months ended 30 November 2009: £(0.06) million). The Group recognised an impairment charge in respect of its goodwill in TFT of £2.90 million, which arose due to the sale of the business post year end.

Exceptional Costs (excluding depreciation, amortisation and impairment)

Exceptional costs for the continuing business were £0.26m for the year, compared to last period of £0.49 million, which are the costs associated with the restructuring of the Corporation.

Amortisation and Impairment

Amortisation and impairment costs for the year are £3.89 million for the year, £0.85 million for the Dewynters and SpotCo intangible asset (customer relationships and brands) amortisation in the year, and £3.04 million for the impairment of goodwill, being an impairment of £2.90 million against TFT and £0.14 million against Yell Communications.

Finance Costs

Finance Costs for the year amount to £2.00 million (15 months ended 30 November 2009: £2.50 million). The largest contributors to this figure were £0.82 million in interest on bank loans, £0.48 million of unwinding of discounting on deferred consideration and £0.37 million of foreign exchange losses on deferred consideration (15 months ended 30 November 2009: £1.42 million, £0.88 million and £0.13 million gain respectively). This is offset by finance income of £0.50 million due to the early settlement of loan notes to the vendors of Dewynters Group (see Deferred Consideration below).

Earnings Per Share

Basic loss per share for continuing operations for the year is 17.66p (15 months ended 30 November 2009: 8.43p). The basic loss per share for discontinued operations for the year is 8.42p (15 months ended 30 November 2009: 24.52p).

Key Performance Indicators

A number of percentage-based KPIs are used for internal reporting purposes, relating to gross profit, operating profit and personnel costs. KPIs are also calculated on staff numbers to give gross profit and operating profit per head.

The EBITDA of Dewynters Group as a percentage of gross salaries for 2010 decreased to 27% (2009: 49%) although this is driven by the fall in turnover, not a result of increased costs. The similar KPI for SpotCo shows an adverse fall to 25% for 2010 (2009: 51%) and again, the trading results show this to be case of the downturn in turnover.

Outline of Discontinued Operations

Discontinued operations include OWM, FAM, and the Sport Division, being FAS, FAScan and Promo. During the year, the Group completed the disposals of OWM, FAM and FAScan, with Promosport and FAS remaining part of the Group at the yearend pending conclusion of the previously announced restructuring of the Sport Division.

OWM was sold to Conforto Financial Management Limited ("Conforto") on 2 February 2010. The terms of this disposal included cash consideration, payable in instalments, of £1.5 million. In November 2010, Conforto was put into Administration, at which time the final instalment of deferred consideration of £100,000 remained outstanding. The Directors believe it is unlikely that the company will recover any of this amount, and the balance was written off in the reporting period.

On 12 February 2010, the Group completed the sale of the business and assets of FAM to James Grant Media Limited for a net cash consideration of £175,000 including £37,000 in deferred consideration.

Sport Division

As part of the company's strategy to refocus Group activities on the core Media division, the Sport division is undergoing a restructuring programme. As part of this programme FAScan was sold on 1 July 2010 to management of that entity for an initial cash settlement of £1 and deferred consideration amounts payable over two years of £600,000 plus and additional earnout component of up to £37,500 linked to the level of business achieved over the two year period following completion. As at year end, a payment of £300,000 had been received by the company in respect of this sale, split between £175,000 cash, and £125,000 of liabilities offset as per the sale and purchase agreement.

Promosport is being held in run-off whilst all outstanding debtors and accrued income are recouped. During the year EBITDA amounted to £(0.78) million (15 months ended 30 November 2009: £0.91 million) which includes £0.65 million in respect of accrued income and irrecoverable debtors being written off (15 months ended 30 November 2009: £0.75 million) and ongoing running costs whilst Promosport is being wound up.

FAS continued to trade within the Group and generated an EBITDA of £(0.56) million during the year, (15 months ended 30 November 2009: £0.08 million). As the business is not a natural fit with the media-focused strategy now being pursued, the company was sold to Jon and Phil Smith on 19 May 2011 for an initial cash consideration of £1 and additional consideration of a percentage on excess revenue earned over £3 million in the following two trading years. For more information please see Note 27 to the accounts.

Shareholders' Funds

Shareholders Funds have declined from £3.08m as at 30 November 2009 to a deficit of £(4.38)m at the year end. This decline is largely attributable to the loss in the year of £7.81 million, offset by a £0.32 million credit movement in the foreign exchange reserve. 

Cash Flow

Cash flow generated from operating activities was £0.47 million compared to £7.01 million in 2009. The Company received £1.31 million on the disposal of subsidiaries mentioned above and paid out £3.37 million in relation to financing activities. This comprises £1.00 million paid in borrowings, £1.50 million paid in loan notes and £0.88 million paid in bank interest through out the year. This has contributed to the cash position of the Group falling by £2.00 million from the last reporting period.

A working capital facility of £1.7m was made available as part of the continuing banking facility agreement, with an interest rate of 4.00% above Allied Irish Bank's base rate being applied.

Due to the trading circumstances of the Group, all banking covenants have been breached at the year end, which results in all bank borrowings to be reclassified as payable immediately.

The bank net debt is as follows:

The level of gearing has increased to 142% (2009: 81%). This is calculated using Borrowings / Net Assets (or Shareholders' Funds). The level of net debt has increased from £13.40 million to £14.67 million. There was significant fund raising after the balance sheet date to aid the Group in operations going forward. A total of 28.6 million shares were issued between December and March 2011, further details are provided in Note 27. These funds were used to reduce a portion of the debt within the Group by £2.98 million in February and March 2011.

A new four year revolving facility bank agreement was agreed with AIB on 26 April 2011 that replaces the existing facilities. The full amount is payable 4 years from the first drawdown date. Interest is payable for the loan facility at a rate of LIBOR +3% for the first two years of the agreement, LIBOR +4% for the third year and LIBOR +5% for the fourth and final year.

Deferred Consideration

30 November 2010 30 November 2009

£'000 £'000

Deferred consideration relates to actual amounts owed and provisions for future payments due to the vendor of SpotCo as detailed in the terms of the acquisition agreement dated 8 August 2008. An agreement was reached with the vendor to defer settlement of amounts which were due on 31 October 2010 totalling $4.15 million (£2.66 million) until January 2011.

SpotCo achieved the second year performance targets thereby crystallising the liability in relation to earn-out consideration of $2.5 million payable to the vendor on 31 October 2011.

The final loan notes in respect of deferred consideration relating to the acquisition of Dewynters were payable on 30 June 2010 in the amount of £1.50 million and £0.47 million on 31 January 2011. In consideration of early settlement of this liability, a discount was agreed with the vendors to accept £1.50 million in full settlement of both loan notes on 18 June 2010. 

Risks Associated with the Group

The Group is not currently subject to any material, legal or economic restrictions on the ability of its subsidiaries to transfer funds to the Company in the form of dividends, loans or advances.

The Group is subject to a number of macroeconomic factors, as is the rest of the economy, such as foreign exchange rate fluctuations, which are outside of the Company's sphere of influence. The Group does not partake in hedging any borrowings at present in either Pound Sterling, Euros or US Dollars and so foreign exchange rates are considered as a principal risk within the structure of the Group.

The Group are also at risk from interest rate fluctuations although this has been addressed by the Directors in negotiating more favourable terms for the banking facilities being provided by Allied Irish Bank.

The Group recognises that there is a risk for the core continuing operations pertaining to the relationships it has with key producers of West End/Broadway shows and in some cases, the establishments themselves. If these relationships, for any reason, cease to yield any further business, while the loss of them will not be sufficient to be detrimental to the going concern of the subsidiary businesses, they would have an adverse effect on the trading results and therefore the Group results. The theatre advertising market continues to be susceptible to the pressures that a slump in the economic climate would cause, similar to the large majority of industries.

The Group recognises that it has key relationships with operational management within subsidiaries in the Group. In order to counteract this risk, the Directors are partaking in exercises to compile a plan of succession to these positions and to spread the operational duties around the Group, including cross-fertilisation of roles between the two core businesses of Dewynters and SpotCo so that the onus is not entirely on said individuals.

The Group's bank borrowings are subject to a number of financial covenants based upon the EBITDA interest cover, the ratio between total borrowings and adjusted EBITDA and the ratio between cash flow and total borrowings. As at 30 November 2010, the Company were in breach of those covenants,. This has been countered as noted in the post balance sheet events review via the subsequent investments from outside parties and the re-negotiation of the terms of the bank borrowings of £14.8 million with Allied Irish Bank.

Jeremy Barbera

Chief Executive Officer

31 May 2011

We have audited the group and parent company financial statements ("the financial statements") on pages 20 to 80. The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report 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 audit work, for this report, or for the opinions we have formed.

As more fully explained in the Directors' Responsibilities Statement set out on page 18, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/UKNP/.

Opinion on financial statements

In our opinion

·; the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 30 November 2010 and of the group's loss for the year then ended;

·; the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

·; the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

·; the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Emphasis of matter

In forming our opinion on the Financial Statements, which is not qualified, we have considered the adequacy of the going concern disclosure set out on page 27 in the financial statements which details that the company was in breach of its banking covenants at 30 November 2010. The Group also had net liabilities totalling £4,375k as at that date and made a loss in the year then ended of £7,812k. Following the year end, the Group has gone through a significant period of restructuring, including re-negotiations of its borrowing facilities, share placements and the disposals of two loss making subsidiaries. Whilst the Directors believe that the going concern basis is appropriate, the additional financing required to meet deferred consideration payments within the next 12 months, the use of optimistic estimates in the cash flow forecasts and the continuing difficult trading conditions indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

·; adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

·; the parent company financial statements are not in agreement with the accounting records and returns; or

·; certain disclosures of directors' remuneration specified by law are not made; or

·; we have not received all the information and explanations we require for our audit.

DAVID CLARK (Senior Statutory Auditor)

For and on behalf of BAKER TILLY UK AUDIT LLP, Statutory Auditor

Chartered Accountants

25 Farringdon Street

London ,EC4A 4AB

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 30 NOVEMBER 2010

The financial statements on pages 20 to 69 were approved by the board of Directors and authorised for issue on 24 May 2011 and are signed on its behalf by:

David Stoller

Director

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 NOVEMBER 2010

1 BUSINESS AND GEOGRAPHICAL SEGMENTS

Business segments

For management purposes, the Group is currently organised into two operating segments - Media and Events. These divisions are the basis on which the Group reports its primary segment information. During the prior period the Entertainment/Sport division was discontinued (see note 17) and was presented as held-for-sale. Subsequent to the year end the Events division (comprising The Finishing Touch (Corporate Events) Limited) was sold leaving the Media division as the principal operating segment.

Principal continuing activities are as follows:

Media - marketing, design, advertising, promotions, digital media services, publishing and merchandising and sponsorship.

Events - full event planning and management services, venue finding.

Geographical segments

The Group's principal operations are located in the UK and the USA.

The following table provides an analysis of the Group's sales by geographic market:

Included within USA segment net assets is goodwill totalling £6,904k (2009: £6,552k) and intangibles totalling £2,520k (2009: £3,052k) in respect of Spot and Company of Manhattan Inc. Deferred consideration and borrowings for this acquisition are deemed to be liabilities of the United Kingdom segment.

2 EXPENSES BY NATURE AND AUDITOR'S REMUNERATION

Year ended 30 November 2010

15 months ended 30 November 2009

5 EXPENSES BY NATURE AND AUDITOR'S REMUNERATION (continued)

During the year the Group obtained the following services from the Company's auditors and its associates:

6 EMPLOYEES AND DIRECTORS (continued)

DIRECTORS' REMUNERATION

The remuneration of Directors is set out below.

The number of directors for whom benefits were accruing under defined contribution pension schemes was 3 (2009: 3). The number of directors who exercised share options in the period was nil (2009: Nil).

KEY MANAGEMENT PERSONNEL

The key management within the Group are the directors as noted above and in the directors' report (2009: included Company Secretary).

The emoluments of key management personnel are as follows:

A deferred tax asset of approximately £139k (2009: nil) has not been recognised due to uncertainty over future profitability.

Taxation is calculated at the rates prevailing in the respective jurisdictions. The standard tax rates in each jurisdiction are 40% in the United States, 28% in the United Kingdom, 28% in Denmark and 35% in Italy.

4 LOSS PER SHARE

 The calculations of loss per share are based on the following losses and number of shares: