shed media plc 
 
 
 
 
report and accounts 2007  1 financial highlights
2 chairman’s statement
3 chief executive’s statement
6 financial review
9 board of directors
12 directors’ report
18 corporate governance report
20 directors’ remuneration report
24 statement of directors‘ responsibilities
25 independent auditor’s report 
27 group profit and loss account
28 balance sheets
30 group cash flow statement
32 accounting policies
35 notes to the financial statements
58 shareholder information
59 company information
60 notice of annual general meeting
shed media annua l report  accounts 2007
contents financial highlights
16 months ended year ended
31 december 2007 31 august 2006
turnover £631m £435m
gross profit £234m £13m
adjusted operating profit £111m £8m
pre goodwill amortisation operating margin 18 18
adjusted profit before tax £10m £77m
adjusted diluted earnings per ordinary share 1056p 953p
proposed final dividend of 11p increase of 10 2006 1p
 adjusted profit before tax and adjusted operating profit are stated before goodwill amortisation
 adjusted diluted earnings per ordinary share is before goodwill amortisation and frs 20 charge
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shed media annua l report  accounts 2007 shed media the ‘group’ has succeeded in transforming the scale and scope of the business in the 16
month period to 31 december 2007 the acquisition of three companies during the period outright
distribution twenty twenty and wall to wall has significantly broadened the group by genre
broadcaster base and geographic spread these acquisitions have changed the risk profile of the group
reducing dependence on any one particular brand and shed media now serves 13 broadcast customers in
both the uk and the us
outright distribution enables the group to exploit its programme rights more effectively selling into over
125 territories worldwide and to retain the margin otherwise paid out to external distributors outright is
also growing its quality third party business attracted by efficient exploitation into many territories and an
outstanding catalogue of programme brands
shed medias core strategy of building a portfolio of long run returning series with the capability of
generating revenue from intellectual property rights characterised the acquisitions completed in the
period at the same time as executing this strategy the group has maintained its position as one of the
most efficient producers in the uk sustaining high operating margins of 18 twice the industry average 
i am delighted to have welcomed to the board chris bonney md of outright peter caselyhayford md
of twenty twenty and alex graham ceo of wall to wall their experience combined with their
enthusiasm for the continued growth of shed media has made the task of integrating the businesses very
straightforward and effective
ann mcmanus and maureen chadwick founders of shed productions stood down from the board their
knowledge and creativity has been and continues to be the backbone of shed drama as they continue in
their roles as leading show runners and writers of our long run drama series i thank them for their
invaluable contribution
in changing economic conditions broadcast customers need efficient producers and shed medias forward
order book of 64 of target revenue commissioned and our proven expertise at delivering quality
programming provides the basis for our confidence in the year
the expansion of the business and the demands of our customers in competitive markets has placed
continuing high demands on the talents and resources of our staff and i would like to thank them for their
hard work and commitment
katherine innes ker
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shed media a nnual report  accounts 2007
chairman’s statement overview for the 16 months
i am pleased to announce shed media’s final results covering the 16 months to 31 december 2007
over the 16 months adjusted operating profit increased to £111m operating margin before goodwill
amortisation remains high at 18 nearly double the industry average of 93 
revenue from the group’s core activities content production and ip exploitation has grown strongly
during the period the group delivered 209 hours of programming – 38 hours of drama and 171 of factual
programmes included new itv1 drama rock rivals waterloo road series three and supernanny usa
season three
shed media’s inhouse distribution arm outright distribution has performed strongly successfully
distributing shed media content and growing its third party business  revenue from the group’s ip
exploitation accounted for 30 of gross profit  we expect this area of business to grow as the library
expands with shed group and third party business
one of the main highlights of the period was the acquisition of twenty twenty and wall to wall two
highly respected and trusted production companies renowned for their compelling quality programming
the acquisitions further diversify the group’s programme portfolio and broaden our broadcaster
customer base  both companies produce highly profitable programming across a wide range of genres and
are an excellent fit alongside shed productions and ricochet  brands include who do you think you are
new tricks brat camp and the choir the us presents further opportunities in which to launch wall to
wall and twenty twenty formats and content 
drama
during the 16 months shed productions secured new drama commissions and recommissions a third
series of waterloo road was recommissioned and delivered for bbc1 during the period with a substantial
increase in the order from 12 hours to 20 hours  rock rivals an 8 hour primetime drama was delivered
for itv1 and catwalk dogs a 90 minute drama for itv1 was delivered   
post period a fourth series of waterloo road has been reordered for bbc1 for a run of 20 hours and a
new primetime drama hope springs has been ordered for bbc1 8 x 60 mins
shed currently has more major drama series in funded and nonfunded development than ever before for
broadcasters in the uk and the us  
factual
ricochet performed extremely well during the 16 months securing 17 new series 5 in the us and 12 in the
uk whilst delivering a total of 171 hours of programming
the us business experienced strong growth  in the period supernanny usa 3 was delivered to the abc
network and the order for supernanny usa 4 was increased from an initial 13 episodes to 25 episodes  in
addition ricochet delivered a new primetime factual entertainment series fat march to abc  other new
commissions included an 8part series for bravo the real housewives of new york city and a 7 x 60 mins
order for an extreme survival series the alaska experiment for discovery us
postperiod abc has ordered a 5th season of supernanny usa 13 x 60 mins and a pilot episode of super
manny  bravo has ordered a second season run of 10 episodes of the real housewives of new york city
following its ratings success and discovery us has picked up a new 3 x 60 mins major documentary series
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shed media annua l report  accounts 2007
chief executive’s statement in the uk highlights include two new series for the bbc blood sweat and tshirts 4 x 60 mins and open
house 20 x 30 mins as well as two new brands for five breaking into tesco 6 x 60 mins and
unbreakable 8 x 60 mins  in the period ricochet also won its first commissions for itv and uktv
ricochet also delivered new series of supernanny uk the mummy diaries and born to be different for
channel 4 and living in the sun and extreme dreams for the bbc
postperiod channel 4 has ordered a new primetime factual entertainment series danger women 4 x
60mins five has ordered a new features series cowboy builders 6 x 60mins as well as recommissioning
breaking into tesco 6 x 60mins and the bbc has ordered a new landmark documentary series 3 x
60mins
intellectual property ip exploitation
ip exploitation was strong and contribution to the bottom line accounted for 30 of gross profit  during
the period outright distribution sold over 2100 hours of television in 125 different territories  the
programme library continues to grow and with effective exploitation by outright distribution this
provides a reliable and growing income stream going forward  outright continues to capture more profit
from group product whilst continuing to grow third party business
a major highlight was securing record presales for shed’s new itv1 drama rock rivals prior to production
and securing a europe wide dvd deal
outlook
four months into our current financial year we have 227 hours commissioned representing over 80 of
hours and 64 of revenue target these commissions include most of the major revenue generating
brands drama accounts for 38 hours including a new peak time drama hope springs for bbc1 8 x
60mins and recommission of waterloo road 20 x 60mins both for shed productions  a fifth series of
new tricks 8 x 60mins for wall to wall and a new 90min drama whatever it takes for twenty twenty
abc has ordered a fifth series of ricochet’s supernanny usa 13 x 60mins and bbc1 has recommissioned
a fifth series of wall to wall’s who do you think you are 10 x 60mins
in addition to the commissions for 2008 wall to wall has been recommissioned to produce a sixth series
of new tricks 8 x 60mins and sixth series of who do you think you are 8 x 60 mins both for bbc1
and due for delivery in 2009
the us continues to be an attractive area for growth with our la production office presently
commissioned to make four series this year for broadcasters including abc nbc bravo and discovery us
an additional four shows are in paid development with mtv spike and soapnet supernanny usa is as
strong as ever and the group is looking forward to the benefit of syndication revenues from 2009
delivering on our stated strategy to leverage both wall to wall and twenty twenty into the us market
wall to wall has received its first commission from nbc to develop and cast six episodes for a us version
of its successful brand who do you think you are  twenty twenty has been commissioned by mtv to
produce a pilot inspired by its successful brat camp format
the acquisition of outright distribution in september 2006 has enabled the group to capture more profit
from its ip rights  the acquisition also made it possible for outright distribution to significantly transform
its business  its library has more than doubled with the addition of over 500 hours of major new brands
from the shed media group  outright’s strong and extensive library attracts all major international buyers
as well as quality third party uk production companies
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shed media a nnual report  accounts 2007
chief executive’s statement continued with shed media now greatly diversified in terms of brand count and broadcast customers the group’s
risk profile has been transformed the group is making good progress in a difficult market in the uk and
we are confident of achieving growth for the current financial year
eileen gallagher
 pact census 2007
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shed media annua l report  accounts 2007
chief executive’s statement continued revenue and profits
the 16 month period ending 31st december 2007 saw revenue increase to £631m 2006 12 months –
£435m
geographically 66 of group revenue in 2007 was from the uk 2006 71 26 from the us 2006
19 and 8 from the rest of the world 2006 10
during the period the group was commissioned directly by 13 broadcasters in both the uk and us and
sold production rights to over 125 territories worldwide 
statutory reported operating profits are £86m with a reported profit on ordinary activities of £75m
operating profits before goodwill amortisation are £111m with a profit before tax and goodwill of £10m
operating margin before goodwill deduction for the period was 18 2006 18 with gross margin at 37
2006 30 the increase in the gross margin is due to stronger ancillary sales and corresponding lower
amortisation rates
acquisitions
in september 2006 the group completed the acquisition of outright distribution for £2m which was
satisfied by £1m in cash and £1m in shares an additional consideration of £05m in cash and £05m in
shares is conditional upon profit performance for the period ending june 2008
in september 2007 we completed the acquisition of twenty twenty for £18m which was satisfied by
£134m in cash and loan notes and £46m in shares an additional consideration of £10m in cash and loan
notes is conditional upon profit performance for the period ending december 2008
in november 2007 we completed the acquisition of wall to wall for £204m which was satisfied by £127m
in cash and loan notes and £77m in shares an additional consideration of £4m in shares and a super
earnout of £1m in cash is conditional upon profit performance for the period ending june 2009
capital structure and treasury policy
during the period shed media plc “the company” increased issued ordinary shares to 78970292 ordinary
shares of 01p each the increase in issued ordinary shares financed both the final earnout for ricochet
limited and the acquisitions of outright twenty twenty and wall to wall  
during the period we arranged a debt facility of £44m with barclays and the bank of ireland to help fund
the acquisitions and to provide a working capital facility consisting of
a £32m five year facility to fund the acquisitions of outright twenty twenty wall to wall and to
refinance the existing debt facility used to purchase ricochet
a £4m in guaranteed loan notes to fund the acquisitions of outright twenty twenty and wall to wall
which are redeemable in one year
the company also has a £8m working capital facility which had not been drawn down by the period end
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shed media a nnual report  accounts 2007
financial review earnings per share
basic earnings per share in the period was 649p 2006 744p based on earnings of £43m divided by the
weighted average number of shares in issue during the period of 66092144 2006 57634688 diluted
earnings per share in the period was 642p 2006 737p based on the weighted average number of shares
in issue of 66827444 2006 58151598
after adjusting for frs 20 charges and goodwill amortisation adjusted basic earnings per share was 1067p
2006 96p and adjusted diluted earnings per share was 1056p 2006 953p
cash flow 
net cash inflow from operating activities was £65m 2006 £104m with the main movements being a
£3m increase in debtors due to timing of productions and a decrease in creditors of £52m 
the overall net cash decreased by £72k 2006 £1m increase which was the net of the overall growth in
the business offset by the acquisitions made during the year
balance sheet
fixed assets the £53m increase in film assets during the period represents the capitalisation of new
productions during the period and the addition of  the twenty twenty and wall to wall film libraries in
the current period the group depreciated on average 82 of assets arising from new drama productions
and 90 on new factual entertainment productions the remainder will be amortised over the life of the
production defined by expected future sales the £13m increase in fixtures fittings and equipment
includes a combination of additions from acquisitions leasehold improvements and new edit suites
debtors the increase in debtors in the period is due to the inclusion of outright twenty twenty and wall
to wall debtors of the £182m 2006 £92m £7m were trade debtors and £92m represented accrued
income 
creditors due within one year the increase in creditors in the period to £277m 2006 £212m has been
partly due to the inclusion of outright twenty twenty and wall to wall creditors but also partly due to
short term bank loans for production of rock rivals £36m and new tricks £18m 
creditors due after one year during the period creditors due after one year increased to £264m 2006
£nil as a 5 year loan facility was arranged to purchase outright wall to wall and twenty twenty  
goodwill during the period an additional £434m of goodwill representing the excess of the purchase
price over the fair value of net assets acquired with outright wall to wall and twenty twenty  was
recognised and is being written off over 20 years
international financial reporting standards
the group will be reporting under international financial reporting standards ‘ifrs’ from the year
commencing 1 january 2008 management are currently reviewing how this change will affect future
results 
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shed media annua l report  accounts 2007
financial review continued taxation
the tax charge for the period is £32m at an effective rate of 32 2006 30 on the operating profit
before goodwill amortisation the effective rate has increased due to a proportion of the operating profit
being taxed in the usa 
jonathon kemp
financial and commercial director
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shed media a nnual report  accounts 2007
financial review continued chief executive officer shed media plc eileen gallagher
prior to cofounding shed productions eileen was managing director of lwt london weekend
television and deputy managing director of granada broadcasting she also cocreated bad girls and the
fugitives
eileen’s business experience and strong creative influence have been instrumental in shed media’s success
as chair of the independent producers’ trade association pact for 2002 and 2003 she was at the
forefront of the successful campaign to introduce amendments into the communications bill to
strengthen the position of the independent production sector in its dealings with broadcasters in
20022003 eileen picked up two industry awards for outstanding achievements for her work with shed
and the independent production sector as a whole
financial and commercial director shed media plc jonathon kemp
jonathon kemp joined shed in 2002 from capitol films a film production and financing company where
he was head of finance jonathon has had experience in a number of uk production and broadcasting
companies including fox kids where he was involved in the flotation of the channel before that jonathon
worked at nickelodeon uk
jonathon’s primary responsibility is the financial management of the group and the commercial activities
he is an acma qualified accountant
chief operating officer shed media plc and managing director ricochet nicholas southgate
nick started his television career in wildlife filmmaking working for the bbc’s acclaimed natural history
unit after five years at the bbc including time spent on tomorrow’s world and in bbc childrens nick set
up his own independent production company tiga films where he produced and directed documentaries
for the bbc and channel 4
nick joined ricochet in 1999 as a producerdirector and in 2000 he formed ricochet digital with nick
powell where he executive produced projects including ‘who rules the roost’ ‘fightbox’ and ‘tetris
from russia with love’
following the merger between ricochet digital and ricochet south nick became creative director of the
new company ricochet ltd and subsequently managing director where he continued to oversee a number
of key projects both in the uk and for ricochet la 
in 2005 shed acquired ricochet and in 2007 nick was appointed as the chief operating officer of the
enlarged group
managing director shed productions brian park
brian park was previously head of entertainment at granada where he stewarded stars in their eyes
you’ve been framed and russ abbot his subsequent move to drama resulted in him producing true love
and prime suspect he took over an ailing coronation street restoring it as the uk’s biggest rating show
brian produced the first two series of bad girls and has been executive producer on the subsequent series
of bad girls all series of footballers’ wives and waterloo road and the first series of bombshell and rock
rivals
chief creative director ricochet nicholas powell
nick began working in tv in 1987 at brook productions as a researcher on a major series on the
international debt crisis he worked at diverse productions in 1988 working on 9 to 5 and at box
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shed media annua l report  accounts 2007
board of directors productions on the harrods sale in 1989 he transferred to channel 4 where he produced comment
before becoming series producer on out of africa and then series editor on right to reply
in 1995 nick formed ricochet assuming the role of managing director during the last 10 years he has
executive produced over 500 hours of primetime network television in the uk with many of the series
having been shown and broadcast throughout the world he has overseen many projects including no
going back its me or the dog risking it all and supernanny in 2003 nick established a los angeles office
and executive produces the american version of supernanny for abc as well as managing the growth of
ricochet nick oversees development and overall company strategy
in 2005 shed acquired ricochet and nick was appointed to the board of shed media
managing director outright distribution chris bonney appointed 28 september 2006
chris bonney is the managing director of outright distribution shed media’s wholly owned distribution
company specialising in the areas of factual entertainment formats and drama 
chris began his career in 1986 at ecm a specialist in advertiserfunded programming and format
distribution he left in 1989 to join the tv programming department at saatchi saatchi followed by a
spell as manager of sponsorship at tyne tees television chris rejoined ecm at the end of 1991 where he
rose to become chief operating officer in 2001 together with a team of experienced television
distribution executives from ecm chris established screentime partners as an mbo in august 2003 which
changed its name to outright distribution limited in january 2007 following the acquisition by shed media
in 2006
managing director twenty twenty peter caselyhayford appointed 19 september 2007
peter caselyhayford is the managing director of twenty twenty and has been in the television industry
since 1976 he began his career at the bbc in the television accounts department where he gained
experience of management and finance in the tv industry later he moved to news and current affairs
managing programmes such as question time and newsnight before becoming production unit manager
of panorama for 5 years  
peter joined twenty twenty in 1990 as the manager of production looking after all areas of management
within the company in 1996 peter became a director shareholder of twenty twenty and was subsequently
promoted to managing director in 2003 since that time he has been responsible for the running of the
business and profitability of the company following shed media’s acquisition of twenty twenty in
september 2007 peter was appointed to the board of shed media
chief executive wall to wall alex graham appointed 29 november 2007
born in glasgow wall to wall ceo alex graham has built the company into one of the uk’s leading
independent producers with a reputation for quality and innovation wall to wall has won almost every
award on both sides of the atlantic including several baftas emmys royal television society and
peabody awardswall to wall was recently voted one of the top seven independent producers in the world
by real screen magazine   in november 2007 wall to wall became part of the shed media group of
companies     
alex helped create several of wall to wall’s hit shows including the 1900 house and who do you think
you are he is executive producer of several of the company’s leading shows including who do you
think you are and new tricks
alex sits on the board of shed media  he is a member of pact council where he served as chair during
2006 and 2007  he also sits on the board of the sheffield international documentary festival he is a
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shed media a nnual report  accounts 2007
board of directors continued fellow of the royal television society the royal society of arts and a visiting fellow of the university of
bournemouth’s media school
nonexecutive chairman katherine innes ker†
katherine innes ker is a nonexecutive director of taylor wimpey plc the ordnance survey plc and
oakley capital having gained a d phil in molecular biophysics at oxford university she joined ubs phillips
and drew in 1987 as a uk media analyst she subsequently worked at dresdner kleinwort benson and sbc
warburg as a director and pan european media analyst
katherine is a trustee of the tavistock trust for aphasia and has been a nonexecutive director of
itvdigital plc formerly ondigital plc the television corporation plc fibernet plc wickam capital plc
williams lea plc and bryant group plc
nonexecutive director david kogan†
david kogan is the chief executive and co founder of reel enterprises limited a company specialising in
rights negotiations channel development and sport in the uk and global media markets reel enterprises
advise the bbc and other leading uk broadcasters as well as leading sports leagues such as the fa premier
league on all its media rights deals in the uk and overseas
in 1979 david worked as a marketing executive at express newspapers and then in 1982 he joined the bbc
where he worked as a senior producer on news and current affairs programmes such as today newsnight
and breakfast time he was the bbc radio editor in new york in 19845 in 1988 he joined reuters
television as managing editor he subsequently became managing director in the united kingdom and was
then for three years the global managing director he also acted as the launch managing editor of gmtv
in 1993 in 1996 david joined the granada media group as executive director of granada channels which
he left to create reel enterprises in 1998
creative director ann mcmanus resigned 6 february 2008
ann mcmanus is the story expert and show runner at shed she is responsible for the script to screen
creative overview for all shed dramas and has extensive experience writing serial drama for major
television networks with a large number of storylines and scripts having appeared on screen in the uk and
abroad working as story and script executive with brian park at granada she worked on the successful
turnaround of an ailing ‘coronation street’
creative director maureen chadwick resigned 6 february 2008
maureen chadwick is the script expert at shed and shares the show runner role with ann mcmanus her
television credits include ‘eastenders’ ‘eldorado’ ‘angels’ ‘springhill’ and ‘coronation street’ plus two of
her own screenplays ‘two golden balls’ and ‘watch with mother’ made for bbc1’s screen one series
she has also written original work for theatre and musical theatre and was a finalist for the vivian ellis
award for new musicals maureen is the lead writer for shed working closely with ann mcmanus to create
stories and characters together they write key episodes and where necessary edit or rewrite others to
ensure a consistent style and quality throughout each series
 member of the audit committee
† member of the remuneration committee
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shed media annua l report  accounts 2007
board of directors continued the directors have pleasure in presenting their report on the group together with the audited financial
statements for the period ended 31 december 2007
principal activity
shed media the “group” is an independent television production and distribution company the group
specialises in contemporary original drama and factual programming and content and in distributing
subsequent rights from these programmes
change of accounting reference date
during the period the group announced a change in accounting reference date the nature and timing of
the group’s business means it is more appropriate to have a final reporting date after the peak production
season and the board is aware that for comparative purposes it is useful for the group to align the
accounting reference date with those of other public companies in the sector
results and dividends
the results for the group show a pretax profit of £75 million 2006 12 months £66 million for the
period and sales of £631 million 2006 12 months £435 million the group has net debt of £305 million
2006 12 months net funds of £56 million net cash flow from operating activities for 2007 was £65
million 2006 £103 million the directors have recommended a final dividend for 2007 of 11p per share
which subject to confirmation at the agm will be paid 18 july 2008 to shareholders on the register at 20
june 2008
the final dividend proposed at 31 august 2006 of 1p per share was paid on 12 january 2007
the six month interim dividend of 025p per share proposed on 28 february 2007 was paid on 5 july 2007
business review
business environment
the independent television market has benefited from changes in the law the communications act in
2003 and the corresponding changes in terms of trade have enabled producers to own and control the
rights to the content they create this new legislation has most benefited those companies that create
valuable rights that sell well in international and uk secondary markets
the emergence of new media is also an important development in the television market new technology
such as mobile phone streaming and internet downloading give independent producers more
opportunities to exploit their content the companies which own attractive recognisable brands that
platform owners need benefit most from these market developments
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shed media a nnual report  accounts 2007
directors’ report the independent production sector has traditionally been fragmented with hundreds of companies
producing a limited number of programmes and owning few if any of the rights to those programmes
the favourable changes to market conditions have enabled the emergence of a few dominant players
strong enough to buy out smaller competitors this has led to the creation of the “super indie” which
benefits from diversification into different production genres thus mitigating the risks associated with
creative businesses
within this competitive environment the group has differentiated itself from its competitors as follows
• business model – focussed on multiple profit streams rather than turnover
• brands – creating powerful brands that sell internationally and across new platforms
• operating margins – consistently delivering strong operating margins
• visibility of revenue – strong brands and a good reputation with broadcasters who recommission
existing brands and are open to new programme developments
• growth – organically through an expanding inhouse talent pool and strategically through
acquisition of brand – owning brandcreating companies
strategy
the group’s overriding objective is to achieve attractive and sustainable rates of growth and returns
through a combination of organic growth and acquisitions 
• strong organic growth through
• • maintaining and securing key production talent
• • building on success and reputation with broadcasters
• • successful exploitation of programming rights
• • building new broadcaster relationships in the uk and internationally and in particular the us
• selective acquisition of companies meeting strict criteria
• • production companies in valuable new genres
• • brand owning and brand creating capabilities
• • talent tied in by ownership
• • right price
• • new media
key performance indicators “kpis”
the board monitors progress on the overall group strategy and the individual strategic elements by
reference to six kpis
1 growth in sales  
year on year sales growth expressed as a percentage the increase is in line with the group’s growth
strategy sales have improved due to our successful acquisition and integration of outright distribution
limited twenty twenty productions limited and wall to wall holdings limited in the period which has
led to the group strengthening its product through expansion of its genres and making direct distribution
sales thereby not incurring commission on the sale of new products 
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shed media annua l report  accounts 2007
directors’ report continued 2 gross margin  
gross margin is the ratio of gross profit before exceptional items and goodwill amortisation to sales
expressed as a percentage gross margin has improved on last year within the group 37 2006 30 
3 operating profit margin 
operating profit margin is the ratio of operating profit before exceptional items and goodwill amortisation
to sales expressed as a percentage gross margin is important to maintain to ensure productions are
profitable but it is essential the group keeps overheads under control and maintains a strong operating
profit margin the group produced a strong operating profit margin in the period 18 2006 18the
operating profit margin is very strong compared to the industry as a whole and as a kpi will continue to be
monitored by the group
4 ebitda 
the group monitors its ability to pay loans on a monthly basis by reviewing interest to ebitda and loan
amount to ebitda the group ensures it is clearly able to meet the terms set out in its loan agreements
5 programming hours
the group monitors commissioned programming hours per annum as a kpi  the group produced 209
programme hours 2006 12 months 132 programme hours
6 international sales
in order to grow as a business it is important for the group to continue to exploit its programmes in the
international market this performance target is reviewed quarterly and the group anticipates annual
growth which enables continual growth of the business this area of the business has continued to grow in
the period
principal risks
risks are formally reviewed by the board and appropriate processes put in place to monitor and mitigate
them if more than one event occurs it is possible that the overall effect of such events would compound
the possible adverse effects on the group
the directors consider the following to be the principal risks faced by the group
1 competition
the group operates in a highly competitive market with many companies small and large competing for
broadcasters’ commissions for the group to grow it needs to secure recommissions of existing brands
and have new programme brands ready to be commissioned when more mature ones fade to mitigate
the risk of a slowdown in the overall rate of growth our creative teams are constantly developing new
programme brands to ensure a healthy pipeline of new productions
a reputation for consistently delivering high quality programmes is a prime asset in the market and this
reputation is dependent on maintaining a pool of high quality creative staff
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shed media a nnual report  accounts 2007
directors’ report continued 2 key creative staff
the group’s performance depends largely on the retention of key creative staff the loss of key individuals
or failure to recruit sufficient talent with the right experience and skills can adversely impact the group’s
results during the period the group has added to its pool of creative staff and encouraged commitment
to the group through share incentive plans the group has also successfully trained up younger staff
members to take on creative roles and has been successful in retaining them over the long term when
acquiring companies the group ensures that the talent is tied in through share ownership and
performancebased earn out schemes
3 control of productions costs
once the executive producers have negotiated programme prices with the broadcasters an internal
budget is agreed and it is up to the production departments to ensure programmes are made within or
below that budget there is a risk that productions go over budget at some point during the production
process to control this risk the group employ skilled production accountants who report into senior
group management on at least a weekly basis any drift over budget can be dealt with quickly to ensure
the overall production budget is adhered to there is also adequate insurance in place for each production
to cover any unforeseen problems that may affect the cost of production such as key cast illnesses or
major equipment failure
4 financial risk management
the board regularly reviews the financial requirements of the group and the risks associated therewith
the group does not use complicated financial instruments and where financial instruments are used it is
for reduced interest or exchange rate risk the group does not trade in financial instruments group
operations are primarily financed from equity funds raised retained earnings and bank borrowings
including overdraft facilities in addition to the primary financial instruments the group also has other
financial instruments such as debtors prepayments trade creditors and accruals that arise directly from
the group’s operations further information is provided in note 18 to the financial statements
directors
the directors of the group are named on pages 9 to 11 together with brief biographical notes all
directors have been in office for the duration of the period unless stated on pages 9 to 11
directors’ interests in shares and options
details of directors’ interests in shares and share options can be found in the director’s remuneration
report on pages 20 to 23
retirement and reelections of directors
katherine innes ker and david kogan retire by rotation from office at the annual general meeting chris
bonney peter caselyhayford and alexander graham being newly elected to the board will also retire
from office at the annual general meeting being eligible these directors will offer themselves for re
election in accordance with the company’s articles of association
15
shed media annua l report  accounts 2007
directors’ report continued substantial shareholdings
directors of the group had been notified of the following interests of 3 or more in the group’s issued
share capital at 10 march 2008
name holding at 10 march 2008 
nicholas powell 10973266 139
eileen gallagher 6325000 80
alex graham 6363459 81
cyrte investments 6483402 82
ann mcmanus 6125000 80
maureen chadwick 6125000 80
brian park 6175000 78
fc asset management 3407303 43
nicholas southgate 3349251 42
newton investment management 3000000 38
peter casely hayford 2454564 31
share capital
details of the share capital are shown in note 19 to the financial statements
registrar
the registrar is capita irg plc the registry 34 beckenham road beckenham kent br3 4tu
employees
the group is committed to a policy of equal opportunity in matters relating to employment training and
career development of employees and is opposed to any form of less favourable treatment afforded on
the grounds of disability sex age race or religion
the group encourages the involvement of its employees in its management through regular meetings of
senior management teams which have responsibility for the dissemination of information of particular
concern to employees and for receiving their views on important matters of policy
the group operates a share option scheme to encourage employees details of this scheme are more fully
described in note 19
political and charitable donations
the group made no political or charitable contributions in the period 2006 £nil
creditor payment policy and practice
it is the group’s policy that payments to suppliers are made in accordance with those terms and conditions
agreed between the group and its suppliers provided that all trading terms and conditions have been
complied with
trade creditor days for the group for the period ended 31 december 2007 were 30 days 2006 30 days
based on the ratio of group trade creditors at the end of the period to the amounts invoiced during the
period to trade creditors
16
shed media a nnual report  accounts 2007
directors’ report continued corporate governance
detailed statements of the group’s corporate governance and the group’s system of internal control are
set out on pages 18 to 19
the audit committee
the committee comprises the following both of whom are independent nonexecutive directors
katherine innes ker chair david kogan
the remuneration committee
the committee comprises the following all of whom are independent nonexecutive directors david
kogan chair katherine innes ker
statement as to disclosure of information to auditors 
the directors who were in office on the date of approval of these financial statements have confirmed as
far as they are aware that there is no relevant audit information of which the auditors are unaware each
of the directors have confirmed that they have taken all the steps that they ought to have taken as
directors in order to make themselves aware of any relevant audit information and to establish that it has
been communicated to the auditor
auditors
a resolution to reappoint baker tilly audit uk llp chartered accountants as auditors will be put to the
members at the annual general meeting baker tilly uk audit llp have confirmed their willingness to
continue in office as auditors of the group and a resolution to reappoint them will be proposed at the
annual general meeting
annual general meeting
the annual general meeting of the group will be held at 12pm on the 12 june 2008 at the tower room
the old sessions house 22 clerkenwell green london ec1r 0na formal notice of the meeting is set out
on page 60
jonathon kemp
financial and commercial director
17
shed media annua l report  accounts 2007
directors’ report continued the directors support high standards of corporate governance and confirm that they intend to comply
with the requirements of the new “combined code” on corporate governance “the code” published in
2006 so far as practicable given the size nature and current stage of the development of the group the
key group objective is to enhance and protect shareholder value
the board of directors
the board consisted of twelve directors during the period whose names and details appear on pages 9 to
11 the two nonexecutive directors are considered to be independent of management and free of any
relationship that could materially interfere with the exercise of their independent judgement 
a formal schedule of matters is considered by the board which meets at least 10 times per year and keeps
under constant review the need to hold additional meetings the board is responsible for
• overall group strategy
• acquisitions
• monitoring the operating and financial results against plans and budgets
• ensuring that the necessary financial and human resources are in place for the group to meet its
objectives
• ensuring that the group’s obligations to its shareholders and others are understood and met
the following committees which have written terms of reference deal with specific aspects of the
group’s affairs
audit committee
the audit committee consists of the two nonexecutive directors and meets at least twice a year it is
responsible for ensuring that the financial activities of the group are properly monitored controlled and
reported on it meets the external auditors without executive directors being present and reviews reports
from the auditors
the audit committee recommends the appointment of the external auditors reviews the audit fee and
audit plan and preapproves all nonaudit work in respect of external auditors prior to commitment by the
group
remuneration committee
the remuneration committee consists of two nonexecutive directors it reviews the performance of the
executive directors and sets the scale and structure of their remuneration and that of senior management
and the basis of their service agreements with due regard to the interests of shareholders in determining
the remuneration of the executive directors and senior management the committee seeks to ensure that
the group will be able to attract and retain executives of the highest calibre it makes recommendations to
the full board concerning the allocation of incentive schemes to employees no director participates in
discussions or decisions concerning his own remuneration
further details of the group’s policies on remuneration including details of director’s share options are
given in the report of the remuneration committee report on pages 20 to 23
nomination committee
the directors consider that given the size of the board nominations should be a matter for the board as a
whole and accordingly there is no separate nomination committee this will be reviewed regularly
18
shed media a nnual report  accounts 2007
corporate governance report internal controls
the directors acknowledge their responsibility for the group’s systems of internal controls and for
reviewing their effectiveness these internal controls are designed to safeguard the assets of the group
and to ensure the reliability of financial information for both internal and external publication the
effectiveness of the system of internal controls has been reviewed by the directors and they are satisfied
the controls are effective with regard to the size of the group and the stage of its development any
system of internal control can only be designed to manage rather than eliminate the risk of failure to
achieve business objectives and can provide reasonable and not absolute assurance against material
misstatement or loss
given the size of the group there is currently not an internal audit function this will be reviewed as the
group grows
relationship with shareholders
the directors attach great importance to maintaining good relationships with shareholders
communications with shareholders are given high priority the directors meet and discuss the
performance of the group with shareholders during the year queries raised by shareholders are promptly
answered by whoever on the board is best placed to do so investors are encouraged to participate in the
annual general meeting at which the chairman will present a review of the results and comment on
current business activity the board will be available at the annual general meeting to answer shareholder
questions
going concern
after making enquiries the directors have reasonable expectation that the company and the group have
adequate resources to continue in operational existence for the foreseeable future and that it is therefore
appropriate to adopt the going concern basis in preparing the financial statements in forming this view the
directors have reviewed the annual profit plan for the year ending 31 december 2008 and strategic plan
projections for subsequent years the directors have satisfied themselves that the group is in a sound
financial position and sufficient borrowing facilities will be available to meet the group’s foreseeable cash
requirements
on behalf of the board
katherine innes ker
19
shed media annua l report  accounts 2007
corporate governance report continued the following report outlines the group’s policy on the remuneration of executive directors and gives
details of the remuneration packages of executive directors and of the fees paid to nonexecutive
directors for the period ended 31 december 2007 a resolution to approve the report will be proposed at
the annual general meeting of the group the directors have applied the principles of good governance
related to director’s remuneration as described below
remuneration committee
the remuneration committee comprises two independent nonexecutive directors david kogan chair
and katherine innes ker
remuneration policy
the remuneration policy of the committee and of the board is to provide remuneration packages for the
executive directors and other senior executives in the group which are appropriate to the size and nature
of the group’s business and which will attract and retain high calibre executives it is the group’s policy
that a substantial proportion of the executive directors’ remuneration should be performance related in
order to encourage and reward superior business performance and shareholder return and that
remuneration should be linked to both individual and group performance
accordingly executive directors may earn up to an additional 50 of their basic salaries as a performance
bonus and have benefited from participation in the group’s share option scheme as set out below
it is the policy of the committee and the board to maintain the above approach to remuneration packages
for executive directors and other senior executives of the group for the current financial year and future
financial years subject to review in the light of any changes in relevant legislation regulations or market
practice the committee will continue to review base salaries and performance targets to ensure that they
align with the remuneration policy of the committee and the board and with the group’s strategic
objectives the individual salary bonus and benefit levels of the executive directors’ are and will continue
to be reviewed annually by the committee this year the committee has also undertaken a review of the
longer term remuneration with particular emphasis on selecting longer term incentives
it is the group’s policy to employ executive directors under contracts with an indefinite term subject to
the termination by notice by either party of 12 months any compensation payable by the group would be
subject to normal legal principles of mitigation of loss no compensation would be payable if the service
contracts were to be terminated by notice from the executive director or for lawful termination by the
group there are no provisions for payment of predetermined compensation under the service contracts
in relation to future appointments of executive directors the committee’s and board’s policy will remain
one of restricting notice periods to 12 months
details of individual directors’ remuneration and share options are set out on pages 22 and 23 of this
report the main components of the remuneration for executive directors are
basic salary
the group’s policy is that basic salaries for executive directors’ should take into account the individual’s
role and responsibilities performance and experience for an executive director who is experienced and
fully effective in his role basic salary is targeted at the retail market median for comparable roles
annual bonus
executive directors are eligible to receive an annual performance bonus up to a maximum of 50 of their
annual basic salaries at the time the bonus scheme is announced the amount of bonus is based on the
20
shed media a nnual report  accounts 2007
directors’ remuneration report achievement of profit targets specified and agreed at the beginning of the year the performance targets
for bonus entitlements are intended by the remuneration committee to create keen incentives to
perform at the highest levels 
share option schemes
on 14th march 2005 the group adopted an emi scheme under which the group employees including
executive directors are eligible for the grant of options to acquire ordinary shares in the group further
details are in note 19
performance share plan
a key element of the group’s retention and reward strategy is to encourage employee share ownership
and facilitate the retention of key staff and talent the group operates a performance share plan psp to
provide additional share awards to certain employees to reward and motivate existing staff and attract key
new hires the psp will allow participants to acquire shares subject to and to the extent that performance
conditions are satisfied awards in the period are detailed in note 19
other benefits
executive directors are entitled to be provided with private healthcare insurance alexander graham
received a pension in the period
nonexecutive directors
the fees of the nonexecutive directors are determined by the executive members of the board and are
based on market surveys
the group’s practice is to appoint nonexecutive directors under letters of engagement rather than under
service contracts these letters of engagement set out fixed terms of appointment of three years which
may be extended with the agreement of the board
executive directors’ service contracts
details of the executive directors’ service contracts are as follows 
date of service
agreement
eileen gallagher 18 february 2005
brian park 18 february 2005
ann mcmanus 18 february 2005
maureen chadwick 18 february 2005
jonathon kemp 18 february 2005
nicholas powell 24 november 2005
nicholas southgate 24 november 2005
chris bonney 28 september 2006
peter caselyhayford 19 september 2007
alexander graham 29 november 2007
the group may terminate any of the above service contracts by giving not less than 12 months notice any
compensation payable by the group for early termination would be subject to the normal legal principles
of mitigation of loss no compensation would be payable if a service contract were to be terminated by
notice from any of the above directors or for lawful early termination by the group
21
shed media annua l report  accounts 2007
directors’ remuneration report continued in concluding the service contracts for the directors the group took into account the provisions of the
combined code regarding notice periods for service contracts in relation to future appointments of
executive directors the committee’s and board’s policy will remain one of restricting notice periods of
termination service contracts to twelve months
nonexecutive directors letters of appointment
the group’s practice for the appointment of nonexecutive directors is consistent with the provisions of
the combined code nonexecutive directors are appointed under letters of engagement rather than
under service contracts
details of the nonexecutive directors’ letters of engagement are as follows
date of unexpired term
letter of at the date
engagement of this report
katherine innes ker 18 march 2008 10 months
david kogan 18 march 2008 10 months
each letter of appointment is terminable by either party by giving not less than three months notice or by
the group on payment of fees in lieu of notice no compensation would be payable to a nonexecutive
director if hisher engagement were terminated as a result of himher retiring by rotation at an annual
general meeting not being elected or reelected at an annual general meeting or otherwise ceasing to
hold office under the provisions of the articles of association of the group
directors’ emoluments
total
remuneration total
16 months remuneration
ended year ended
salaries 31 december 31 august
fees bonuses benefits 2007 2006
£££££
executive directors
eileen gallagher 213250 50000 415 263665 200397
brian park 213250 50000 777 264027 200589
ann mcmanus 213250 50000 699 263949 200397
maureen chadwick 213250 50000 1013 264263 200589
jonathon kemp 207208 50000 375 257583 175284
nicholas powell 213250 50000 1192 264442 163325
nicholas southgate 239563 50000 1192 290755 163213
peter caselyhayford 33750 – 132 33882 –
chris bonney 159879 – 2088 161967 –
alexander graham 11158 – 178 11336 –
nonexecutive directors
katherine innes ker 80600 – – 80600 61467
david kogan 47267 – – 47267 36467
total 1845675 350000 8061 2203736 1401728
22
shed media a nnual report  accounts 2007
directors’ remuneration report continued directors’ pensions entitlements
the group has made pension contributions to nicholas powell during the course of the period £nil 2006
£12217 and alexander graham £257 2006 £nil
directors’ interests in shares and share options
ordinary shares of 01p
shareholdings as at shareholdings as at
31 december 2007 31 august 2006
eileen gallagher 6125000 6125000
brian park 6125000 6125000
ann mcmanus 6125000 6125000
maureen chadwick 6125000 6125000
jonathon kemp – –
nicholas powell 10973266 7437708
nicholas southgate 3279251 2479236
katherine innes ker 82828 82828
david kogan 24166 11364
alex graham 6363459 –
peter casely hayford 2454564 –
christopher bonney 162162 –
the only director to hold share options at 31 december 2007 was jonathon kemp the details are disclosed
in the table below
date of grant no of shares vesting date expiry date exercise price
18 march 2005 57000 14032005 14032015 1p
18 march 2005 62500 14032007 14032015 88p
18 march 2005 62500 14032008 14032015 88p
during the period jonathon kemp and nicholas southgate held shares under the performance share plan
psp the details are held below
director date of grant no of shares date to be received
jonathon kemp 1 september 2005 114679 31082008
jonathon kemp 1 september 2006 90580 31082009
jonathon kemp 1 september 2007 147541 31082010
nicholas southgate 1 september 2007 180328 31082010
approval
this report was approved by the board of directors on 16 may 2008 and signed on its behalf by
david kogan
chair – remuneration committee
23
shed media annua l report  accounts 2007
directors’ remuneration report continued the directors are responsible for preparing the annual report and the financial statements in accordance
with applicable law and united kingdom generally accepted accounting practice company law requires
the directors to prepare financial statements for each financial period which provide a true and fair view of
the state of affairs of the company and the group and the profit and loss of the group in that period in
preparing those statements the directors are required to
• select appropriate accounting policies and apply them consistently
• make judgements and estimates which are prudent and reasonable and
• state whether applicable accounting standards have been followed subject to any material
departure disclosed and explained in the financial statements and to disclose and prepare the
accounts on a going concern basis unless it is inappropriate to presume that the group will continue
in business
the directors confirm that the financial statements on pages 27 to 57 comply with all the above
requirements 
the directors are also responsible for maintaining adequate accounting records which disclose with
reasonable accuracy at any time the financial position of the company and the group and which allow
them to ensure that the financial statements comply with the requirements of the companies act 1985
they also have a general responsibility in law for taking such suitable measures as are available to them to
safeguard the assets of the group and to prevent and detect fraud and other irregularities they are also
responsible for ensuring that the annual report includes information required by the aim rules of the
financial services authority
the maintenance and integrity of the group’s website is the responsibility of the directors the work
carried out by the auditors does not involve consideration of these matters and accordingly the auditors
accept no responsibility for any changes that may have occurred to the financial statements since they
were initially presented on the website 
legislation in the united kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions
24
shed media a nnual report  accounts 2007
statement of directors’ responsibilities we have audited the financial statements on pages 27 to 57
this report is made solely to the company’s members as a body in accordance with section 235 of the
companies act 1985 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
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report and the financial statements in accordance
with applicable law and united kingdom accounting standards united kingdom generally accepted
accounting practice are set out in the statement of directors’ responsibilities
our responsibility is to audit the financial statements in accordance with relevant legal and regulatory
requirements and international standards on auditing uk and ireland
we report to you our opinion as to whether the financial statements give a true and fair view and are
properly prepared in accordance with the companies act 1985 we also report to you whether in our
opinion the information given in the directors’ report is consistent with the financial statements 
in addition we report to you if in our opinion the company has not kept proper accounting records if we
have not received all the information and explanations we require for our audit or if information specified
by law regarding directors’ remuneration and other transactions is not disclosed
we read other information contained in the annual report and consider whether it is consistent with the
audited financial statements this other information comprises only the chairman’s statement chief
executive’s statement the financial review the directors’ report the corporate governance report and
the directors’ remuneration report we consider the implications for our report if we become aware of
any apparent misstatements or material inconsistencies with the financial statements our responsibilities
do not extend to any other information
basis of audit opinion
we conducted our audit in accordance with international standards on auditing uk and ireland issued by
the auditing practices board an audit includes examination on a test basis of evidence relevant to the
amounts and disclosures in the financial statements it also includes an assessment of the significant
estimates and judgements made by the directors in the preparation of the financial statements and of
whether the accounting policies are appropriate to the group’s and company’s circumstances consistently
applied and adequately disclosed
we planned and performed our audit so as to obtain all the information and explanations which we
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the
financial statements are free from material misstatement whether caused by fraud or other irregularity or
error in forming our opinion we also evaluated the overall adequacy of the presentation of information in
the financial statements
25
shed media annua l report  accounts 2007
independent auditor’s report 
to the members of shed media plc opinion
in our opinion 
• the financial statements give a true and fair view in accordance with united kingdom generally
accepted accounting practice of the state of the group’s and parent company’s affairs as at 31
december 2007 and of the group’s profit for the period then ended and have been properly
prepared in accordance with the companies act 1985 and
• the information given in the directors’ report is consistent with the financial statements
baker tilly uk audit llp 
registered auditor
chartered accountants
2 bloomsbury street
london 
wc1b 3st
16 may 2008
26
shed media a nnual report  accounts 2007
independent auditor’s report
to the members of shed media plc continued consolidated profit and loss account
for the period ended 31 december 2007
continuing acquisitions total
16 months 16 months 16 months year
ended ended ended ended
31 december 31 december 31 december 31 august
2007 2007 2007 2006
notes £’000 £’000 £’000 £’000
turnover 1 56248 6860 63108 43487
cost of sales 35481 4181 39662 30520
gross profit 20767 2679 23446 12967
other operating expenses net 10439 1881 12320 4975
goodwill amortisation 1994 526 2520 1088
administrative expenses 12433 2407 14840 6063
operating profit 8334 272 8606 6904
interest receivable and
similar income 2 228 133
interest payable and
similar charges 3 1313 437
profit on ordinary activities
before taxation 4 7521 6600
taxation 6 3231 2310
retained profit for the
periodyear 4290 4290
––––––– –––––––
––––––– –––––––
basic earnings per
ordinary share 9 649p 744p
––––––– –––––––
––––––– –––––––
diluted earnings per
ordinary share 9 642p 737p
––––––– –––––––
––––––– –––––––
no statement of recognised gains and losses has been prepared as all such gains and loses have been dealt
with in the profit and loss account
27
shed media annua l report  accounts 2007 consolidated balance sheet
31 december 2007
31 december 31 august
2007 2006
notes £’000 £’000
fixed assets
goodwill 10 68804 27940
tangible assets 11 12383 5789
––––––––––––––––––––––––––––––––
81187 33729
current assets
stock and work in progress 13 – 203
debtors 14 18186 9222
cash at bank and in hand 6559 6631
––––––––––––––––––––––––––––––––
total current assets 24745 16056
creditors amounts falling due
within one year 15 27711 21160
––––––––––––––––––––––––––––––––
net current liabilities 2966 5104
––––––––––––––––––––––––––––––––
total assets less current liabilities 78221 28625
creditors amounts falling due
after more than one year 16 26400 –
provisions for liabilities 17 6982 5323
––––––––––––––––––––––––––––––––
net assets 44839 23302
–––––––– ––––––––
–––––––– ––––––––
capital and reserves
called up share capital 19 79 60
share premium 21 28241 9990
share option reserves 20 453 213
own shares held in trust 20 450 –
profit and loss account 22 16516 13039
––––––––––––––––––––––––––––––––
equity shareholders’ funds 44839 23302
–––––––– ––––––––
–––––––– ––––––––
the accounts were approved by the board of directors and authorised for issue on 16 may 2008 and
signed on its behalf by
eileen gallagher jonathon kemp
chief executive financial and commercial director
28
shed media annual report  accounts 2007 company balance sheet
31 december 2007
31 december 31 august
2007 2006
notes £’000 £’000
fixed assets
tangible assets 11 995 701
investments 12 78730 30604
––––––––––––––––––––––––––––––––
79725 31305
current assets
debtors 14 5568 4796
cash at bank and in hand 697 –
––––––––––––––––––––––––––––––––
total current assets 6265 4796
creditors amounts falling due
within one year 15 16091 13544
––––––––––––––––––––––––––––––––
net current liabilities 9826 8748
––––––––––––––––––––––––––––––––
total assets less current liabilities 69899 22557
––––––––––––––––––––––––––––––––
creditors amounts falling due
after one year 16 26400 –
––––––––––––––––––––––––––––––––
provisions for liabilities 17 6891 5000
––––––––––––––––––––––––––––––––
net assets 36608 17557
–––––––– ––––––––
–––––––– ––––––––
capital and reserves
called up share capital 19 79 60
share premium 21 28241 9990
share option reserve 20 453 213
own shares held in trust 20 450 –
profit and loss account 22 8285 7294
––––––––––––––––––––––––––––––––
equity shareholders’ funds 36608 17557
–––––––– ––––––––
–––––––– ––––––––
the accounts were approved by the board of directors and authorised for issue on 16 may 2008 and
signed on its behalf by
eileen gallagher jonathon kemp
chief executive financial and commercial director
29
shed media annua l report  accounts 2007 consolidated cash flow statement
for the period ended 31 december 2007
16 months year
ended ended
31 december 31 august
2007 2006
notes £’000 £’000
net cash inflow from
operating activities i 6500 10369
returns on investment and
servicing of finance
interest received 228 133
interest paid 1313 437
––––––––––––––––––––––––––––––––
net cash outflow from returns
on investment and servicing
of finance 1085 304
taxation 2141 4390
capital expenditure
payments to acquire film assets 3461 3124
payments to acquire tangible
fixed assets 4317 28
sales from proceeds of fixed assets 6 –
––––––––––––––––––––––––––––––––
net cash outflow from capital
expenditure and financial
investments 7772 3152
acquisition
purchase of subsidiary undertaking 30523 7500
expenses to acquire subsidiary
undertaking 930 603
cash held by subsidiary undertaking
on acquisition 2369 6248
––––––––––––––––––––––––––––––––
net cash outflow for acquisition 29084 1855
equity dividends paid 813 649
net cash outflow  inflow before
use of liquid resources and financing 34395 19
financing
new borrowings 34773 1000
purchase of own shares 450 –
net cash inflow from financing 34323 1000
––––––––––––––––––––––––––––––––
decreaseincrease in cash in the periodyear 72 1019
30
shed media annual report  accounts 2007 31
shed media annua l report  accounts 2007
notes to the consolidated cash flow statement
for the period ended 31 december 2007
i reconciliation of operating profit to net cash inflow
from operating activities
2007 2006
£’000 £’000
operating profit 8606 6904
depreciation charge 3056 1979
goodwill amortisation 2520 1088
loss on disposal 18 
share option charge 240 163
decrease in stocks 203 1314
increase in debtors 2971 1795
decreaseincrease in creditors 5172 716
–––––––– ––––––––
net cash inflow from operating activities 6500 10369
–––––––– ––––––––
–––––––– ––––––––
ii analysis of movement in the group’s net funds in the period
at at
1 september cash flow acquisitions 31 december
2006 2007
£’000 £’000 £’000 £’000
cash at bank and in hand 6631 2441 2369 6559
bank loans 1000 34773 1306 37079
–––––––– –––––––– –––––––– ––––––––
5631 37214 1063 30520
–––––––– –––––––– –––––––– ––––––––
–––––––– –––––––– –––––––– ––––––––
iii reconciliation of net cash flow to movement in net funds
2007 2006
£’000 £’000
decreaseincrease in cash in the period 72 1019
cash inflow from increase in debt and lease financing 36079 1000
–––––––– ––––––––
change in net funds resulting from cash flows 36151 19
net funds at 1 september 2006 5631 5612
net debt at 31 december 2007 30520 5631
iv non cash movements
on 25 september 2006 the group increased issued share capital as part of the acquisition of outright
distribution limited see note 28 on 19 september 2007 the group issued share capital and £2m in loan
notes as part of the acquisition of twenty twenty productions limited see note 28 on 29 november
2007 the group issued share capital and £21m in loan notes for the acquisition of wall to wall holdings
limited see note 28 accounting policies
the principal accounting policies which have been consistently applied in the group’s financial information
throughout the period under review are as follows
basis of accounting
the financial information has been prepared under the historical cost convention and in accordance with
applicable accounting standards in the united kingdom 
basis of consolidation
the consolidated financial information incorporates the financial information relating to shed media plc
and its subsidiary undertakings made up to 31 december 2007
development expenditure
development expenditure has been written off as incurred unless the directors are satisfied as to the
technical commercial and financial viability of individual projects in this situation the development
expenditure is deferred
tangible fixed assets
tangible fixed assets are stated at historical cost
for programme assets depreciation is provided in accordance with the income forecast method whereby
depreciation is taken to the profit and loss account on a pro rata basis calculated as the income received in
the accounting period in relation to the expected revenue over the life of the programme
depreciation is provided on all tangible fixed assets at rates calculated to write each asset down to its
estimated residual value evenly over its expected useful life as follows–
fixtures fittings  equipment 25 straight line
computer equipment 50 straight line
programme assets held under finance leases
programme assets held under finance leases are treated as if they had been purchased outright at the
present value of the rentals payable less finance charges over the primary period of the agreements any
surplus generated from the excess of interest due from the sale proceeds held on deposit as compared
with the interest payable under the lease agreement is recognised as profit in the period of initial contract
after accounting for related costs
operating leases
rental payments under operating leases are charged to the profit and loss account on a straight line basis
over the period of the lease
going concern
the directors regularly review that the company and the group have adequate resources to continue in
operational existence for the foreseeable future and that it is therefore appropriate to adopt the going
concern basis in preparing the financial statements see corporate governance statement for additional
information
investments
fixed asset investments are stated at cost less any provision for diminution in value
32
shed media annual report  accounts 2007 accounting policies continued
stock and work in progress
work in progress is stated at the lower of cost and net realisable value cost includes all direct costs
incurred in bringing the television productions to their present stage of completion
net realisable value is based on the estimated selling price less further costs expected to be incurred to
completion and disposal
foreign currencies
assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange
ruling at the balance sheet date transactions in foreign currencies are translated into sterling at the rate of
exchange ruling at the date of the transaction exchange differences are taken to the profit and loss
account for the year
deferred taxation
deferred tax is recognised in respect of all timing differences that have originated but not reversed at the
balance sheet date where transactions or events that result in an obligation to pay more tax in the future
or a right to pay less tax in the future have occurred at the balance sheet date timing differences are
differences between the group’s taxable profits and its results as stated in the financial statements that
arise from the inclusion of gains and losses in tax assessments in periods different from those in which they
are recognised in the financial statements
deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing
differences are expected to reverse based on tax rates and laws that have been enacted or substantially
enacted by the balance sheet date deferred tax is measured on a nondiscounted basis
turnover
turnover represents amounts receivable for work carried out in producing television programmes and is
recognised on the basis of the value of costs related to production activity turnover also includes sums
receivable from the exploitation of programmes in which the group owns rights gross profit on
production activity is recognised based upon the stage of completion of the production and in accordance
with the underlying contract
for distribution income the amount recognised in the profit and loss account represents the value of the
licence fees including withholding tax but excluding value added tax
distribution income is recognised when
– an agreement is contracted
– the arrangement is fixed and determinable
– and for finished programme sales when the programme is delivered
goodwill
the goodwill arising on acquisitions has been capitalised and amortised on a straight line basis over 20
years from the date of acquisition the amortisation period is considered by the directors to be a
reasonable estimate of useful economic life goodwill is based on the difference between the fair value of
the consideration including all costs relating to the acquisition and the net assets of the acquired entity
after fair value adjustments
33
shed media annua l report  accounts 2007 accounting policies continued
deferred consideration 
where the deferred consideration is dependent upon future trading performance an estimate of the
present value of the likely consideration payable is made this contingent deferred consideration is re
assessed annually and a corresponding adjustment is made to goodwill arising on acquisition the
difference between the present value and the total amount payable at a future date gives rise to a finance
charge which is charged to the profit and loss account and credited to the liability over the period in which
the consideration is deferred 
deferred financing costs
bank arrangement fees and associated legal costs are amortised over the term of the debt facility
sharebased payment
the group has adopted financial reporting standard 20 frs20 sharebased payments in the current
year frs20 requires the recognition of a charge for sharebased payment transactions which include for
example share options granted to employees that require a certain length of service before vesting
equity settled sharebased payments are measured at fair value at the date of grant the fair value
determined at the grant date of equitysettled sharebased payments is expensed on a straightline basis
over the vesting period based on the group’s estimate of shares that will eventually vest the fair value is
measured by use of the blackscholes option pricing model the expected life used in the model has been
adjusted based on managements best estimate for the effect of nontransferability exercise restrictions
and behavioural considerations
there was not a material difference between the prior year charge under uitf 17 and the current year
charge and consequently no prior year adjustments have been made
34
shed media annual report  accounts 2007 notes to the financial statements
for the period ended 31 december 2007
1 turnover and profit on ordinary activities before taxation
the group’s turnover gross profit before taxation and net assets are derived from its principal activity
being the provision of television and film production services and the exploitation of the rights to those
productions
sales were made in the following geographical markets
16 months year
ended ended
31 december 31 august
2007 2006
£’000 £’000
united kingdom 36706 30734
usa 16209 8063
rest of world 10193 4690
63108 43487
profit before tax was made in the following geographical markets
16 months year
ended ended
31 december 31 august
2007 2006
£’000 £’000
united kingdom 3009 2986
usa 2232 440
rest of world 2280 3174
7521 6600
net assets can split into the following geographical markets
31 december 31 august
2007 2006
£’000 £’000
united kingdom 44385 23246
usa 454 56
44839 23302
2 interest receivable and similar income
16 months year
ended ended
31 december 31 august
2007 2006
£’000 £’000
bank interest receivable 228 133
35
shed media annua l report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
3 interest payable and similar charges
16 months year
ended ended
31 december 31 august
2007 2006
£’000 £’000
loan arrangement fees 85 –
loan interest 1228 437
1313 437
4 profit on ordinary activities before taxation
16 months year
ended ended
31 december 31 august
2007 2006
£’000 £’000
profit on ordinary activities before taxation is arrived at after
chargingcrediting
operating lease rentals
– property rents 719 237
depreciation of tangible fixed assets
– owned assets 2925 1979
– production assets under finance leases 131 –
national insurance rebate 165 –
auditors’ remuneration
– statutory audit of parent and consolidated accounts 69 64
– statutory audit of subsidiary companies 115 33
– other services see below 112 52
exchange rate losses 67 226
goodwill amortisation 2520 1088
additional fees were paid to baker tilly corporate finance llp in respect of group acquisitions totalling
£239000 2006 £75000
non audit services
16 months year
ended ended
31 december 31 august
2007 2006
£’000 £’000
taxation services 92 20
other services 20 32
112 52
36
shed media annual report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
5 employee costs
the aggregated remuneration of all employees including directors comprised
16 months year
ended ended
31 december 31 august
2007 2006
£’000 £’000
wages and salaries 17194 9123
social security costs 2032 484
share based payments 240 213
19466 9820
average number of persons employed by the group during the period
number number
management and administration 142 118
technical 274 133
sales 5–
421 251
there was an average of 178 selfemployed production people during the year 2006 140 selfemployed
production people were paid a total of £4888547 2006 £4797446 
directors’ emoluments
total total
remuneration remuneration
16 months year
ended ended
salaries 31 december 31 august
fees bonuses benefits 2007 2006
£££££
directors total
eileen gallagher 213250 50000 415 263665 200397
brian park 213250 50000 777 264027 200589
ann mcmanus 213250 50000 699 263949 200397
maureen chadwick 213250 50000 1013 264263 200589
jonathon kemp 207208 50000 375 257583 175284
nicholas powell 213250 50000 1192 264442 163325
nicholas southgate 239563 50000 1192 290755 163213
peter caselyhayford 33750 – 132 33882 –
chris bonney 159879 – 2088 161967 –
alexander graham 11158 – 178 11336 –
nonexecutive directors
katherine innes ker 80600 – – 80600 61467
david kogan 47267 – – 47267 36467
total 1845675 350000 8061 2203736 1401728
37
shed media annua l report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
directors’ pensions entitlements
the group has made pension contributions to nicholas powell during the course of the period £nil 2006
£12217 and alexander graham £257 2006 £nil
6 taxation
16 months year
ended ended
31 december 31 august
2007 2006
notes £’000 £’000
current taxation
uk corporation tax charge for the period 3002 2250
adjustment in respect of prior periods 707 6
total current tax 2295 2244
deferred tax 17 936 66
total tax 3231 2310
the current tax charge is reconciled with the standard rate of uk corporation tax as follows
16 months year
ended ended
31 december 31 august
2007 2006
£’000 £’000
profit on ordinary activities before taxation 7521 6600
uk corporation tax at standard rate of 30 2256 1980
factors affecting the charge for the period
expenses not deductible for tax purposes 30 –
capital allowances in excess of depreciation 65 116
tax losses utilised 334 –
goodwill on consolidation not deductible 777 –
timing differences re film assets 56 –
other disallowable expense – 358
adjustments to tax charge in respect of previous periods 707 6
share based payments 62 –
higher rate of tax on overseas income 76 –
other tax adjustments 14 28
current tax charge for period 2295 2244
7 profit of the holding company
the parent company’s profit after tax for the period to 31 december 2007 amounted to £1804000 2006
£2225000 the directors have taken advantage of the exemption available under section 230 of the
companies act 1985 and not presented a profit and loss account for the company alone
38
shed media annual report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
8 dividends group
16 months year
ended ended
31 december 31 august
2007 2006
£’000 £’000
final proposed dividend at 31 august 2006 and
31 august 2005 – 1p per ordinary share 2006 1p 650 500
interim dividend – 025p per ordinary share 2006 025p 163 149
equity dividends paid in the year 813 649
the final dividend proposed at 31 august 2006 totalling £650000 was paid to shareholders registered at the
close of business on 12 january 2007 on 9 february 2007
the interim dividend proposed on 28 february 2007 totalling £163000 was paid on 5 july 2007 to
shareholders registered at the close of business on 8 june 2007
the final dividend of 11p per ordinary share proposed at 31 december 2007 is payable to shareholders on 18
july 2008 registered at the close of business on 20 june 2008
9 earnings per ordinary share
basic earnings per share are calculated by dividing the earnings attributable to ordinary shareholders by the
weighted average number of ordinary shares in issue during the period the weighted average number of
shares has been adjusted for the issue of shares during the year
for diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to
assume conversion for all dilutive potential ordinary shares these represent share options granted to
employees where the exercise price is less than the average market price of the group’s ordinary shares
determined in accordance with the provisions of frs 22
16 months year
ended ended
31 december 31 august
2007 2006
no of shares no of shares
weighted average number of shares in issue 66092144 57634688
weighted average number of dilutive shares – share options 735300 516910
total number of shares for calculating diluted earnings
per share 66827444 58151598
the alternative measure of earnings per share is provided because it reflects the group’s underlying trading
performance by excluding the effect of goodwill amortisation and share scheme amortisation
39
shed media annua l report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
16 months year
ended ended
31 december 31 august
2007 2006
£’000 £’000
basic and diluted earnings 4290 4290
goodwill amortisation 2520 1088
share option charge 240 163
underlying earnings before goodwill and share option charge 7050 5541
earnings per share is calculated as follows
16 months year
ended ended
31 december 31 august
2007 2006
pp
basic earnings per ordinary share 649 744
diluted earnings per ordinary share 642 737
basic earnings per ordinary share before goodwill and
share option charges 1067 961
diluted earnings per ordinary share before goodwill and
share option charges 1056 953
10 goodwill – group
notes £’000
cost
cost at 1 september 2006 29028
additions 28 43384
at 31 december 2007 72412
amortisation
amortisation at 1 september 2006 1088
amortisation charge in period 2520
at 31 december 2007 3608
at 31 december 2007 68804
at 31 august 2006 27940
40
shed media annual report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
11 tangible fixed assets – group
fixtures
programme fittings and
assets equipment total
£’000 £’000 £’000
cost
at 1 september 2006 12064 974 13038
arising on acquisitions 1462 601 2063
additions 6159 1452 7611
disposals – 128 128
at 31 december 2007 19685 2899 22584
depreciation
at 1 september 2006 6954 295 7249
depreciation for the period 2315 741 3056
on disposals – 104 104
at 31 december 2007 9269 932 10201
net book value at 31 december 2007 10416 1967 12383
net book value at 31 august 2006 5110 679 5789
the above programme asset titles include 232 drama hours and 457 factual hours of programming
programmes with a net book value of £313535 2006 £651739 are held under finance leases the related
depreciation charge for the period in respect of these assets is £338204 2006 £302868
11 tangible fixed assets – company
fixtures
programme fittings and
assets equipment total
£’000 £’000 £’000
cost
at 1 september 2006 788 99 887
transfer from subsidiaries 50 – 50
additions – 489 489
at 31 december 2007 838 588 1426
depreciation
at 1 september 2006 123 63 186
depreciation for the period 126 119 245
at 31 december 2007 249 182 431
net book value at 31 december 2007 589 406 995
net book value at 31 august 2006 665 36 701
41
shed media annua l report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
12 fixed asset investments – company
notes £’000
shares in group undertakings
cost
at 1 september 2006 30604
additions 28 48126
at 31 december 2007 78730
principal subsidiaries
the investments in subsidiary undertakings as at 31 december 2007 are as follows
name principal activity  ownership
ordinary shares
shed productions limited television production 100
shed productions jailbirds limited television production 100
shed productions et limited television production 100
shed productions wr limited television production 100
shed productions dh limited television production 100
shed productions bad girls limited television production 100
shed productions fw limited television production 100
shed productions fw2 limited television production 100
shed productions fw4 limited television production 100
ricochet limited television production 100
ricochet productions limited
▲ ▲
television production 100
ricochet digital limited
▲ ▲
television production 100
supernanny usa inc 
▲ ▲
television production 100
ricochet television inc 
▲ ▲
television production 100
off the grid limited
▲ ▲
television production 100
mamo inc
▲ ▲
television production 100
tbtw inc
▲ ▲
television production 100
supernanny web limited
▲ ▲
television production 100
alaska experiment inc
▲ ▲
television production 100
twenty twenty productions ltd television production 100
twenty twenty brighton ltd
▲ ▲
television production 100
outright distributions ltd distribution 100
wall to wall holdings ltd television production 100
wall to wall television ltd
▲ ▲
television production 100
wall to wall media ltd
▲ ▲
television production 100
spring place services ltd
▲ ▲
television production 100
wall to wall new tricks limited
▲ ▲
television production 100
wall to wall inc
▲ ▲
television production 100
george iv inc
▲ ▲
television production 100
wall to wall egypt ltd
▲ ▲
television production 100
wall to wall drama ltd
▲ ▲
television production 100
42
shed media annual report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
12 fixed asset investments – company continued
joint ventures associates
the investments in joint venturesassociates as at 31 december 2007 are as follows
name principal activity  ownership
ordinary shares
all banged up limited non trading 50
bad girls london ltd non trading 50
fightbox limited
▲ ▲
television production 50
brand events history
▲ ▲
television production 225
 registered in england and wales
▲ ▲
indirectly owned 
 registered in united states of america
the joint venturesassociates are not material to the group for disclosure purposes
13 stocks and work in progress – group
31 december 31 august
2007 2006
£’000 £’000
work in progress – 203
– 203
14 debtors
group company
31 december 31 august 31 december 31 august
notes 2007 2006 2007 2006
£’000 £’000 £’000 £’000
trade debtors 6974 5632 132 261
amounts owed to group 
undertakings – – 3820 2621
other debtors 1976 767 946 572
prepayments and accrued income 9236 2747 670 1137
deferred tax asset 17 – 76 – 70
18186 9222 5568 4796
43
shed media annua l report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
15 creditors amounts falling due within one year
group company
31 december 31 august 31 december 31 august
2007 2006 2007 2006
£’000 £’000 £’000 £’000
loans note 18 10679 1000 5190 1000
loan notes 4010 7500 4010 7500
bank overdrafts – – – 45
payments received on account 310 5700 – –
trade creditors 2499 432 98 49
amounts due to group undertakings – – 5672 3879
corporation tax 370 401 27 –
other taxation and social security 858 1280 79 280
other creditors 136 690 315 1
accruals and deferred income 8849 4157 754 790
27711 21160 16091 13544
16 creditors amounts falling due after one year
group company
31 december 31 august 31 december 31 august
2007 2006 2007 2006
£’000 £’000 £’000 £’000
loans note 18 26400 – 26400 –
26400 – 26400 –
17 provisions for liabilities
group
deferred deferred
consideration taxation total
£’000 £’000 £’000
opening position at 1 september 2006 5000 323 5323
utilised in the year 5000 – 5000
acquisitions 6885 1086 5723
transfer to profit and loss account – 860 936
balance at 31 december 2007 6885 97 6982
44
shed media annual report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
17 provisions for liabilities continued
company
deferred deferred
consideration taxation total
£’000 £’000 £’000
opening position at 1 september 2006 5000 – 5000
utilised in the year 5000 – 5000
acquisitions 6885 – 6885
transfer to profit and loss account – 6 6
balance at 31 december 2007 6885 6 6891
provision for deferred tax has been made as follows
group company
31 december 31 august 31 december 31 august
notes 2007 2006 2007 2006
£’000 £’000 £’000 £’000
accelerated capital allowances 41 340 – 3
other timing differences 11 93 – 67
tax losses carried forward 924 – – –
film asset 969 – – –
97 247 – 70
net provision at start of period 247 – 70 –
acquisitions 1086 181 – –
net deferred tax charge in profit
and loss account for the period 6 936 66 76 70
net provision at end of period 97 247 6 70
disclosed within debtors 14 – 76 – 70
gross provision as above 97 323 6 –
deferred consideration – group and company
31 december 31 august
2007 2006
£’000 £’000
within one year 3356 5000
between one and two years 3529 –
6885 474
45
shed media annua l report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
18 financial instruments
the group’s financial instruments principally comprise borrowings cash at bank loan notes and various
items such as trade debtors and creditors that arise directly from operations the main purpose of these
financial instruments is to raise money for the group’s operations
although the majority of transactions the group undertakes are with uk broadcasters uk suppliers and
uk distributors in uk sterling the group does have a satellite office in the united states of america and
enters into contractual arrangements with american broadcasters contractual arrangements are also from
time to time made in us dollars by the uk entities within the group in certain circumstances some
purchasing takes place with overseas suppliers who bill in local currency
where exchange risk is perceived the group considers its exposure and uses financial instruments to
reduce this risk at 31 december 2007 the group did not have any financial instruments in place
short–term debtors and creditors have been excluded from all the following disclosures other than the
currency risk disclosures
a financial assets
31 december 31 august
2007 2006
£’000 £’000
cash at bank in hand – variable rate of interest 6559 6631
interest accrues at the bank’s overnight rate
b financial liabilities
31 december 31 august
2007 2006
£’000 £’000
loans variable rate 31590 1000
production loans variable rate 5489 –
loan notes fixed rate 4010 7500
c currency exposures
the group reviews currency risk and considers hedging when occasionally entering into large foreign
currency contracts to eliminate the cost at the year end there were no foreign exchange hedges 2006
nil
the group had one bank account denominated in a currency other than the group reporting currency at
31 december 2007 the us dollar balance translated to £873240 2006 £nil
46
shed media annual report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
18 financial instruments continued
d borrowing facilities
the group has borrowing facilities available at 31 december 2007 of £32m which was fully drawn down at
the balance sheet date 2006 £45m the loan is at a variable rate of 175 over libor on the 8 january
2008 a hedge was in place to fix the rate at 675 while the production loans have an average interest rate
of 715 the loan notes are at a fixed rate of 525
at 31 august 2006 there was a banking facility of £4m of which £1m was drawn at the balance sheet date
this had a variable rate with an average interest rate of 6 and 3 average months to maturity
average interest average average
rate  of interest rate months to
floating rate  of fixed maturity of
financial rate financial fixed
liabilities liabilities liabilities
sterling 67552535
loans payable within one year
at 31 december at 31 august 
2007 2007
£‘000 £‘000
loans – payable within one year 5190 1000
productions loans 5489 –
total 10679 1000
loans payable after one year
at 31 december at 31 august 
2007 2007
£‘000 £‘000
loans – payable 2–5 years 26400 –
total 26400 –
the long term loan is secured against the net assets of the main operating companies in the group while
the short term production loans are secured against the production income contracted from the
broadcaster
e fair values of financial assets and liabilities
the fair value of the group’s financial assets and liabilities is not considered to be materially different from
their book values 
f liquidity risk
the group reviews its cash position on a monthly basis and ensures it has sufficient access to cash for its
operational needs the repayment of the loan notes £4m 2006 £75m will be financed by cash resources
47
shed media annua l report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
19 share capital – group and company
31 december 31 august
2007 2006
£’000 £’000
authorised
80000000 ordinary shares at 01 pence each 80 80
allotted issued and fully paid
78970292 2006 59916944 ordinary shares at 01 pence each 79 60
on the 25 september 2006 the issued share capital was increased with the issue of 772200 ordinary shares
of 01p each to fund the acquisition of outright limited
on 31 october 2006 the issued share capital was increased from 59916944 to 64252514 through the
issue of 4335570 ordinary shares of 01p each this was to fund the earn – out on the acquisition of
ricochet limited
the issued share capital was further increased on the 19 september 2007 by 5033168 ordinary shares of
01p each to fund the acquisition of twenty twenty productions ltd
on the 29 november 2007 the issued share capital was increased to 78970292 with the issue of 8912410
ordinary shares of 01p each to fund the acquisition of wall to wall holdings ltd
share options
at 31 december 2007 the following options had been granted through the emi share option scheme
at
at granted in the 31 december
31 august 2006 period 2007
options over options over options over date from
ordinary shares ordinary shares ordinary shares which expiry exercise
of 01p each of 01p each of 01p each exercisable date price
57000 – 57000 140305 140315 01p
179959 – 179959 140307 140315 88p
179959 – 179959 140308 140315 88p
47874 – 47874 010505 010515 01p
25000 – 25000 251107 251115 88p
25000 – 25000 251108 251115 88p
28500 – 28500 250508 250515 1255p
28500 – 28500 250509 250516 1255p
185000 – 185000 251107 251116 107p
– 60250 60250 281208 281217 155p
– 60250 60250 281209 281218 155p
756792 120500 877292
48
shed media annual report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
at 31 december 2007 the following shares were granted through the performance share plan psp
date to be 
date of grant no of shares received
1 september 2005 255046 31082008
1 september 2006 201450 31082009
1 september 2007 495082 31082010
the share price at 31 december 2007 was 82p and the highest and the lowest share prices during the
period ended 31 december 2007 were 815p and 138p respectively
20 other reserves
a share option reserve  group and company
31 december 2007
£’000
at 1 september 2006 213
charge in period 240
at 31 december 2007 453
the balance held in share option reserves both within the group and the company relates to payments
due for the above share schemes as per frs20 – share based payments
the charge for the year was calculated using the blackscholes option pricing model using the following
inputs
31 december 2007
expected volatility 239
expected life years 5
risk free rate 54
expected volatility was determined by calculating the historical volatility of the group’s share price from
listing on 29 march 2005 to 28 february 2008 the expected life used on the model is based on
management’s best estimate for the effects of nontransferability exercise restrictions and behavioural
considerations
a risk free rate of 54 per cent has been used for both years which reflects the interest rate that it is
assumed can be obtained by investing in financial instruments with no default risk
no share options were exercised during the year
own shares held in trust
on 17 august 2007 the group purchased £450000 of its own shares this equated to 456496 shares with
a purchase value of 985p
49
shed media annua l report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
21 share premium – group and company
31 december 2007
£’000
at 1 september 2006 9990
premium on allotment during the period 18251
at 31 december 2007 28241
22 profit and loss account – group
31 december 2007
£’000
1 september 2006 13039
profit for period 4290
equity dividends paid note 8 813
31 december 2007 16516
22 profit and loss account – company
31 december 2007
£’000
1 september 2006 7294
profit for period 1804
equity dividends paid note 8 813
31 december 2007 8285
23 reconciliation in movement of shareholders’ funds
group company
31 december 31 august 31 december 31 august
2007 2006 2007 2006
£’000 £’000 £’000 £’000
profit for the periodyear 4290 4290 1804 2225
equity dividends paid 813 649 813 649
3477 3641 991 1576
new share capital subscribed 18270 10000 18270 10000
share option reserves 240 163 240 163
own shares held in trust 450 – 450 –
net increase in shareholders’ funds 21537 13804 19051 11739
opening shareholders’ funds 23302 9498 17557 5818
closing shareholders’ funds 44839 23302 36608 17557
50
shed media annual report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
24 commitments under operating leases
the group was committed to making the following payments during the next year under noncancellable
operating leases as follows
31 december 31 august
2007 2006
£’000 £’000
land and buildings
expiring in the first year 76 33
expiring between two and five years 567 210
expiring after five years 82 231
725 474
25 capital commitments 
at each yearend the group was committed to making the following capital payments during the next year
in respect of operating leases
16 months ended year ended
31 december 31 august
2007 2006
£’000 £’000
land and buildings – 305
26 related party disclosures
the group has taken advantage of the exemption in frs 8 – related party transactions not to disclose
transactions between group companies
at the year end the group owed peter caselyhayford £78749 2006 £nil relating to additional
consideration on the acquisition of twenty twenty this was paid on 21 january 2008 the group also
owed alexander graham £815973 2006 £nil due to additional consideration relating to an acquired tax
asset on the wall to wall acquisition this will be paid as the tax asset is utilised
51
shed media annua l report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
27 substantial transactions
the group has entered into various sale and leaseback transactions on the television programmes “bad
girls” series 23 and 4 and “footballers wives” series 1 and 2 amounts are held on deposit accounts as a
result of these transactions and comprise money to provide for the discharge of future leasing liabilities
the banks with which these sums are deposited have given guarantees to the lessors in respect of lease
liabilities a liability would only crystallise upon the failure of the bank holding the deposit this is
considered remote and therefore these balances have not been included within the group’s balance sheet
the amounts involved are as follows
31 december 31 august
2007 2006
£’000 £’000
amounts held on deposit 20207 13019
less loans outstanding 20207 13019
––
the maturity of the above amount is as follows
less than one year 2210 1199
two to five years 9621 5428
over five years 8376 6392
20207 13019
52
shed media annual report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
28 acquisitions
outright distribution limited
on 25 september 2006 the group acquired the issued share capital of outright distribution limited for
initial consideration of £20 million satisfied by £10 million in cash and £10 million through the issue of
772200 new ordinary shares at 1295 pence per share representing 13 of the enlarged issued share
capital of the group the cash element of the consideration was funded from the group’s existing cash
resources 
in addition subject to certain performance criteria for the period to 30 june 2008 additional
consideration of up to £10 million will be payable in new ordinary shares and cash this has been provided
for within provisions for liabilities the total maximum consideration is therefore £30 million
on 18 january 2007 screentime partners limited was renamed outright distribution limited
this acquisition has been incorporated into the group’s balance sheet at the fair value at the date of
acquisition
assets and liabilities acquired
book value fair value fair
adjustments value
£’000 £’000 £’000
tangible fixed assets 4 – 4
debtors 885 143 742
cash at bank and in hand 195 – 195
creditors 1177 – 1177
net liabilities acquired 93 143 236
goodwill capitalised 3316
total cost of acquisition 3080
comprising
cash 1000
shares allotted 1000
deferred consideration – cash and shares to be allotted 1000
costs 80
total 3080
effect of acquisitions on cash flow
16 months
ended
31 december
2007
£’000
net cash inflow from operating activities 349
taxation 47
net cash outflow from capital expenditure 220
net cash inflow before use of liquid resources and financing 82
increase in cash 82
53
shed media annua l report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
28 acquisitions continued
additional statutory information 
loss after tax for the period between 1 july 2006 to 25 september 2006 was £218482 and for the year
ending 30 june 2006 £75874 
twenty twenty productions limited
on 19 september 2007 the group acquired the issued share capital of twenty twenty productions
limited for initial consideration of £180 million satisfied by £114 million in cash and £46 million through
the issue of 5033165 new ordinary shares at 915 pence per share representing 63 of the enlarged issued
share capital of the group and £189 million in loan notes
in addition subject to certain performance criteria for the period to 31 december 2008 additional
consideration of up to £13 million will be payable in ordinary shares and loan notes this has been provided
for within provisions for liabilities the total maximum consideration is therefore £193 million
this acquisition has been incorporated into the group’s balance sheet at the fair value at the date of
acquisition
assets and liabilities acquired
accounting
book value policy fair
alignment value
£’000 £’000 £’000
tangible fixed assets 50 369 419
debtors 1606 284 1322
cash at bank and in hand 814 – 814
creditors 1323 237 1086
net assets acquired 1147 322 1469
goodwill capitalised 18036
total cost of acquisition 19505
comprising
cash 11444
shares allotted 4605
loan notes 1890
deferred consideration – shares loan notes and cash 1214
costs 352
total 19505
54
shed media annual report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
28 acquisitions continued
effect of acquisitions on cash flow
16 months
ended
31 december
2007
£’000
net cash inflow from operating activities 407
net cash inflow from returns on investment and servicing of finance 16
net cash outflow from capital expenditure 70
net cash inflow before use of liquid resources and financing 353
increase in cash 353
additional statutory information 
period 1 june 2007 year ending
to 30 september 2007 31 may 2007
£’000 £’000
turnover 2608 9259
operating profit 459 1493
profit before tax 491 1527
profit after tax 344 1094
wall to wall holdings limited
on 29 november 2007 the group acquired the issued share capital of wall to wall holdings limited for
initial consideration of £204 million satisfied by £106 million in cash and £77m through the issue of
8912410 new ordinary shares at 86 pence per share representing 111 of the enlarged issued share capital
of the group and £21 million in loan notes
in addition subject to certain performance criteria for the period to 30 june 2009 additional
consideration of up to £4 million payable in ordinary shares which has been provided for with provisions
for liabilities an additional super earnout of £1 million in cash is payable if targets are exceeded additional
consideration of £12 million is payable as an acquired tax asset is utilised the total maximum consideration
is therefore £266 million
55
shed media annua l report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
28 acquisitions continued
wall to wall holdings limited continued
this acquisition has been incorporated into the group’s balance sheet at the fair value at the date of
acquisition
assets and liabilities acquired
accounting
book value policy fair
alignment value
£’000 £’000 £’000
tangible fixed assets 547 1094 1641
debtors 3845 1490 5335
cash at bank and in hand 1360 – 1360
creditors 4827 – 4827
work in progress 1214 1214 –
net assets acquired 2139 1370 3509
goodwill capitalised 22032
total cost of acquisition 25541
comprising
cash 10579
shares allotted 7664
loan notes 2120
consideration relating to tax asset 1142
deferred consideration – ordinary shares and cash 3529
costs 507
total 25541
effect of acquisitions on cash flow
16 months
ended
31 december
2007
£’000
net cash inflow from operating activities 1329
net cash outflow from capital expenditure 9
net cash inflow before use of liquid resources and financing 1338
net cash inflow from financing 569
decrease in cash 769
56
shed media annual report  accounts 2007 notes to the financial statements continued
for the period ended 31 december 2007
additional statutory information
period from 1 july 2007 year ending
to 30 november 2007 30 june 2007
£’000 £’000
turnover 5237 19501
operating profit 1421 982
profit before tax 587 1248
profit after tax 411 851
57
shed media annua l report  accounts 2007 shareholder information
annual general meeting
the annual general meeting “agm” of shed media plc “group” will be held at the tower room the
old sessions house 22 clerkenwell green london ec1r 0na on 12 june 08 at 12 pm each shareholder is
entitled to attend and vote at the agm a notice relating to the 2007 agm is included within the annual
report and accounts on page 60 the form of proxy for use at that agm accompanies this annual report
and accounts separately
dividend payments
the recommended final dividend if approved at the 2007 annual general meeting will be paid on 18 july
2008 to shareholders on the register at 20 june 2008 all dividends will be paid by cheque
shareholder information on the internet
the group maintains an investor relations zone on its website wwwshedproductionscom which contains
links to useful investor information 
58
shed media annual report  accounts 2007 company information
registrars auditors
capita irg plc baker tilly uk audit llp
the registry 2 bloomsbury street
34 beckenham road london
beckenham wc1b 3st
kent
br3 4tu
registered head office brokers
2 holford yard landsbanki
london old change house
wc1x 9hd 128 queen victoria street
london
ec4v 4bj
a copy of this annual report is being sent to all shareholders the report is also placed on the investor relations
section of the group’s website wwwshedproductionscom
59
shed media annua l report  accounts 2007 this document is important and requires your immediate attention
when considering what action to take you are recommended to seek your own financial advice immediately
from your stockbroker bank solicitor accountant or other independent financial adviser who if you are in the
united kingdom is duly authorised under the financial services and markets act 2000 as amended
if you have sold or otherwise transferred all of your shares in shed media plc the “company” please send this
document together with the form of proxy at once to the purchaser or transferee or to the bank stockbroker
or other agent through whom you have sold or transferred your shares for delivery to the purchaser or
transferee
shed media plc
a company incorporated and registered in england and wales
under the companies act 1985 with registered number 3617464
notice of annual general meeting
to be held on
12 june 2008
notice of an annual general meeting of the company to be held at 1200 pm on 12 june 2008 at the tower
room the old sessions house 22 clerkenwell green london ec1r 0na is set out overleaf
a form of proxy for use at the annual general meeting is enclosed and to be valid should be completed in
accordance with the instructions printed thereon and returned so as to reach the company’s registrar capita
registrars proxy department the registry 34 beckenham road beckenham kent br3 4tu together with a letter
or power of attorney or other written authority if any under which it is signed or a notarially certified or office
copy of such power or written authority as soon as possible but in any event not later than 48 hours before the
time and date fixed for holding the annual general meeting or any adjournment thereof completion and posting
of the form of proxy does not prevent a shareholder from attending speaking and voting in person at the annual
general meeting
60 shed media plc
notice of annual general meeting
notice is hereby given that an annual general meeting of shed media plc the “company” will be held
at the tower room the old sessions house 22 clerkenwell green london ec1r 0na at 1200 pm on 12 june
2008 for the purposes of considering and if thought fit passing the following resolutions as to which those
numbered 1 to 9 and 11 and 13 will be proposed as ordinary resolutions and those numbered 10 12 and 14 will be
proposed as special resolutions
the resolutions
1 to receive and adopt the directors’ report and the company’s annual accounts for the 16 month period
ended 31 december 2007 together with the auditors’ report on those accounts
2 to approve and adopt the directors’ remuneration report for the 16 month period ended 31 december
2007
3 to consider the recommendation of the directors of a final dividend for the 16 month period ended 31
december 2007 of 11 pence per ordinary share in the capital of the company to be paid on 18 july 2008 to
shareholders whose names appear on the register at the close of business on 20 june 2008 and if thought
fit to declare a dividend accordingly  
4 to reelect katherine innes ker as a director of the company who retires by rotation but has offered herself
for reelection 
5 to reelect david kogan as a director of the company who retires by rotation but has offered himself for
reelection
6 to elect christopher bonney as a director of the company who having been appointed as a director by the
board since the last annual general meeting offers himself for election to the board
7 to elect peter caselyhayford as a director of the company who having been appointed as a director by the
board since the last annual general meeting offers himself for election to the board
8 to elect alexander graham as a director of the company who having been appointed as a director by the
board since the last annual general meeting offers himself for election to the board
9 to reappoint baker tilly as auditors of the company to hold office from the conclusion of the meeting until
the conclusion of the next annual general meeting of the company at which accounts are laid and to
authorise the directors to fix the remuneration of the auditors
10 that the company be and is hereby generally and unconditionally authorised pursuant to section 166 of the
companies act 1985 the “act” to make one or more market purchases as defined in section 163 of the
act of its own ordinary shares on such terms and in such manner as the directors of the company may from
time to time determine in accordance with the articles of association of the company and chapter vii of
part v of the act provided that this power shall
a expire at the conclusion of the next annual general meeting of the company or 15 months after the
date of its passing whichever shall first occur except that the company may before such expiry
enter into a contract for the purchase of ordinary shares which may be completed by or executed
wholly or partly after the expiration of this authority
b be limited to the purchase of up to 11845543 ordinary shares
c not permit the payment of a price per ordinary share exclusive of any expenses payable by the
company which is not less than 01 pence per share nor more than 105 per cent of the average of
the middle market quotations for the shares on the daily official list aim of london stock
exchange plc for the five business days immediately preceding the date on which the purchase of
ordinary shares is made
61 d before its expiry entitle the company to enter into any contract for the purchase of its own
securities which might be executed and completed wholly or partly after its expiry and to make
purchases of its own shares in pursuance of any such contract
following any purchase of ordinary shares by the company pursuant to the foregoing powers the company
may hold such shares in treasury or dispose of or otherwise deal with them in accordance with the provisions
of the act
11 that the directors be and they are generally and unconditionally authorised for the purposes of section 80
of the act to exercise all the powers of the company to allot relevant securities of the company within the
meaning of section 802 of the act up to an aggregate nominal amount of £26323 provided that this
authority shall unless earlier revoked varied or extended by the company in general meeting expire at the
earlier of the conclusion of the next annual general meeting of the company or 15 months from the date of
passing this resolution save that the company may before the expiry of this period make an offer or
agreement which would or might require securities to be allotted after such expiry and the directors may
allot relevant securities in pursuance of that offer or agreement as if the authority conferred hereby had not
expired  the authority granted by this resolution shall be in addition to and not in substitution for all existing
authorities to allot relevant securities as defined above granted to the directors
12 that subject to and conditional upon the passing of resolution 11 above “section 80 resolution” pursuant
to section 95 of the act and in addition to all existing powers under that section the directors be and are
hereby generally empowered to allot equity securities within the meaning of section 94 other than section
943a of the act for cash pursuant to the authority conferred by the section 80 resolution or otherwise
in the case of treasury shares as defined in section 162a of the act at any time up to the earlier of 1 the
conclusion of the next annual general meeting of the company and 2 the expiry of the period of 15 months
from the date of the passing of this resolution in each case as if section 891 of the act did not apply to any
such allotment provided that this power shall be limited to
a the allotment of equity securities in connection with an offer whether by way of a rights issue open
offer or otherwise to holders of equity securities in proportion as nearly as practicable to the
respective numbers of equity securities held by them subject to such exclusions or other
arrangements as the directors may deem necessary or expedient in relation to fractional entitlements
or any legal or practical problems under the laws of any territory or the requirements of any
regulatory body or stock exchange and
b the allotment of equity securities for cash otherwise than pursuant to paragraph 12a above up to
an aggregate nominal amount of £3949
and save that the company may make an offer or agreement before the expiry of this power which would
or might require equity securities to be allotted for cash after such expiry and the directors may allot equity
securities for cash pursuant to any such offer or agreement as if the power conferred by this resolution had
not expired
in this resolution
a the nominal amount of any securities should be taken to be in the case of a right to subscribe for or
convert any securities into shares of the company the nominal amount of the shares which may be
allotted pursuant to such right and
b words and expression defined in or for the purposes of section 89 to 96 inclusive of the act shall bear
the same meanings herein
this power applies in relation to a sale of shares which is an allotment of equity securities by virtue of section
943a of the act as if in the first paragraph of this resolution the words “that subject to and conditional
upon the passing of resolution 11 above “section 80 resolution”” were omitted
special business
13 to increase the authorised share capital of the company from £80000 to £105000 by the creation of
25000000 ordinary shares of 01p each ranking pari passu in all respects with the existing ordinary shares of
01p each in the capital of the company
62 14 that the articles of association produced to the meeting and for the purpose of identification marked “a”
and initialled by the chairman of the meeting be adopted as the articles of association of the company in
substitution for and to the exclusion of the existing articles of association
by order of the board
jonathon kemp
financial and commercial director 
19 may 2008
registered office
2 holford yard
london 
wc1x 9hd
63 notes
1 a member of the company entitled to attend speak and vote at the above annual general meeting  the “agm” may appoint
one or more proxies to attend speak and vote instead of him a proxy need not also be a member of the company
2 completion and return of a form of proxy does not preclude a member from attending speaking and voting at the agm in
person should he so wish
3 a form of proxy is enclosed and to be valid must be completed signed and returned so as to reach the company’s registrar
capita registrars proxy department the registry 34 beckenham road beckenham kent br3 4tu together with a letter or
power of attorney or other written authority if any under which it is signed or a notarially certified or office copy of such power
or written authority not later than 1200 pm on 10 june 2008 being 48 hours before the time fixed for holding the agm or any
adjournment thereof
4 copies of the directors’ service contracts letters of appointment and a copy of the memorandum and articles of association of
the company together with the proposed articles showing the changes will be available for inspection by members at the
registered office of the company during normal business hours from the date of this notice until the conclusion of the agm
5 to appoint a proxy or to give or amend an instruction to a previously appointed proxy via the crest system the crest message
must be received by the issuer’s agent ra10 by 1200 pm on 10 june 2008  for this purpose the time of receipt will be taken to
be the time as determined by the timestamp applied to the message by the crest application host from which the issuer’s
agent is able to retrieve the message after this time any change of instructions to a proxy appointed through crest should be
communicated to the proxy by other means crest personal members or other crest sponsored members and those crest
members who have appointed voting service providers should contact their crest sponsor or voting service providers for
assistance with appointing proxies via crest  for further information on crest procedures limitations and system timings
please refer to the crest manual we may treat as invalid a proxy appointment sent by crest in the circumstances set out in
regulation 355a of the uncertificated securities regulations 2001 in any case your proxy form must be received by the
company’s registrars no later than 1200 pm on 10 june 2008
6 pursuant to regulation 41 of the uncertified securities regulations 2001 only those members registered in the register of
members of the company as at close of business as at 600 pm on 10 june 2008 are entitled to attend speak or vote at this agm
in respect of the number of shares registered in their name at 600 pm on 10 june 2008 changes to entries in the register after
600 pm on 10 june 2008 shall be disregarded in determining the right to attend speak or vote at the agm
64 appendix
explanatory notes of principal changes to the company’s
articles of association
1 articles which duplicate statutory provisions
provisions in the current articles which replicate provisions contained in the companies act 2006 are in the
main amended to bring them into line with the companies act 2006  certain examples of such provisions
include provisions as to the form of resolutions the variation of class rights and provisions regarding the
period of notice required to convene general meetings the main changes made to reflect this approach are
detailed below
2 form of resolution
the current articles contain a provision that where for any purpose an ordinary resolution is required a
special or extraordinary resolution is also effective and that where an extraordinary resolution is required a
special resolution is also effective  this provision is being amended as the concept of extraordinary
resolutions has not been retained under the companies act 2006
3 convening extraordinary and annual general meetings
the provisions in the current articles dealing with the convening of general meetings and the length of
notice required to convene general meetings are being amended to conform to new provisions in the
companies act 2006 in particular an extraordinary general meeting to consider a special resolution can be
convened on 14 days’ notice whereas previously 21 days’ notice was required
4 votes of members
under the companies act 2006 proxies are entitled to vote on a show of hands whereas under the current
articles proxies are only entitled to vote on a poll  the time limits for the appointment or termination of a
proxy appointment have been altered by the companies act 2006 so that the articles cannot provide that
they should be received more than 48 hours before the meeting or in the case of a poll taken more than 48
hours after the meeting more than 24 hours before the time for the taking of a poll with weekends and
bank holidays being permitted to be excluded for this purpose  multiple proxies may be appointed provided
that each proxy is appointed to exercise the rights attached to a different share held by the shareholder
multiple corporate representatives may also be appointed  the proposed articles reflect all of these new
provisions
5 age of directors on appointment
as a provision limiting the age at which a director can be appointed could now fall foul of the employment
equality age regulations 2006 the provision in the current articles providing for no retirement on account
of age is unnecessary so has been removed from the proposed articles
6 conflicts of interest
the companies act 2006 sets out directors’ general duties which largely codify the existing law but with
some changes  under the companies act 2006 from 1 october 2008 a director must avoid a situation
where he has or can have a direct or indirect interest that conflicts or possibly may conflict with the
company’s interests the requirement is very broad and could apply for example if a director becomes a
director of another company or a trustee of another organisation the companies act 2006 allows directors
of public companies to authorise conflicts and potential conflicts where appropriate where the articles of
association contain a provision to this effect  the companies act 2006 also allows the articles of association
to contain other provisions for dealing with directors’ conflicts of interest to avoid a breach of duty  the
proposed articles give the directors authority to approve such situations and to include other provisions to
allow conflicts of interest to be dealt with in a similar way to the current position with respect to conflicts
arising on or after 1 october 2008
65 there are safeguards which will apply when directors decide whether to authorise a conflict or potential
conflict  first only directors who have no interest in the matter being considered will be able to take the
relevant decision and secondly in taking the decision the directors must act in a way they consider in good
faith will be most likely to promote the company’s success the directors will be able to impose limits or
conditions when giving authorisation if they think this is appropriate
it is also proposed that the new articles should contain provisions relating to confidential information
attendance at board meetings and availability of board papers to protect a director being in breach of duty
if a conflict of interest or potential conflict of interest arises these provisions will only apply where the
position giving rise to the potential conflict has previously been authorised by the directors  it is the board’s
intention to report annually on the company’s procedures for ensuring that the board’s powers to authorise
conflicts are operated effectively
7 notice of board meetings
under the current articles when a director is abroad he can request that notice of directors’ meetings are
sent to him at a specified address and if he does not do so he is not entitled to receive notice while he is
away this provision has been removed as modern communications mean that there may be no particular
obstacle to giving notice to a director who is abroad  it has been replaced with a more general provision that
a director is treated as having waived his entitlement to notice unless he supplies the company with the
information necessary to ensure that he receives notice of a meeting before it takes place
8 directors’ indemnities and loans to fund expenditure
the companies act 2006 has in some areas widened the scope of the powers of a company to indemnify
directors and to fund expenditure incurred in connection with certain actions against directors in particular
a company that is a trustee of an occupational pension scheme can now indemnify a director against liability
incurred in connection with the company’s activities as trustee of the scheme in addition the existing
exemption allowing a company to provide money for the purpose of funding a director’s defence in court
proceedings now expressly covers regulatory proceedings and applies to associated companies
9 generally the opportunity has been taken to bring clearer language into the proposed articles and in some
areas to conform the language of the proposed articles
66


Summary:
 financial highlights
16 months ended year ended
31 december 2007 31 august 2006
turnover £631m £435m
gross profit £234m £13m
adjusted operating profit £111m £8m
pre goodwill amortisation operating margin 18 18
adjusted profit before tax £10m £77m
adjusted diluted earnings per ordinary share 1056p 953p
proposed final dividend of 11p increase of 10 2006 1p
 adjusted profit before tax and adjusted operating profit are stated before goodwill amortisation
 adjusted diluted earnings per ordinary share is before goodwill amortisation and frs 20 charge
01
shed media annua l report  accounts 2007