Atlantic Screen Scores

ATLANTIC SCREEN SCORES

Business Plan under the Enterprise Investment Scheme Disclaimer

The Company has taken all reasonable care to ensure that the facts stated in this Business Plan are true and accurate in all material respects and that there are no other material facts the omission of which would make any statement in this Business Plan misleading. All statements regarding the Company’s business, financial position and prospects should be viewed in the light of the risk factors set out in the section entitled ‘Risk Factors’ in this document.

None of the officers, employees, agents, advisers or representatives of the Company makes any representations or gives any warranties or indemnities or undertakings, express or implied, with respect to the truthfulness, accuracy or completeness of the contents of this Business Plan.

None of the information in this Business Plan, including the illustrative financial projections, constitutes a profit forecast or a prediction. Such information is included for illustrative purposes only. These projections seek to give an indication of one possible outcome if all the assumptions are attained.

Use of Photographic Images

This Business Plan contains publicity images of completed films whose music compositions or score have been created, facilitated or administered by Management in their capacity as directors of third party companies. The images do not purport to represent music compositions or scores of film productions with which the Company has been, or is to be involved, or has created or will create in the future. They represent solely an indication of the types of films in respect of which the Company is intending to create music compositions or scores.

Permission has been granted to the Company by the copyright owner of the images concerned to allow the use of such images in this Business Plan. Business Plan Overview

Atlantic Screen Scores Limited has been established for the purposes of creating and exploiting intellectual property in the form of original music composed for major internationally released films and television productions. Atlantic Screen Scores will work with producers to create original music for film and television by contracting with established international composers to create these music compositions.

The majority of music created will be the incidental and background music (known as ‘the score’) for films and television. Atlantic Screen Scores Limited will own the intellectual property in the composed music from origination and will retain ownership of the copyright created.

Atlantic Screen Scores Limited will exploit the ownership of the copyrights, earning income in the form of copyright royalties collected worldwide from television companies and theatres by the local performing right societies. In order to maximise the income arising, Atlantic Screen Scores Limited will engage Copyright Administration Services Limited to administer the efficient collection of royalties on its behalf. Copyright Administration Services Limited is one of the UK’s leading music publishing administration companies and administers many catalogues owned by third party rights holders.

The Business Plan anticipates a maximum Subscription of £2m.

Strictly Private and Confidential 1 2 Strictly Private and Confidential CONTENTS

1 Glossary of Defined Terms 4

2 Executive Summary 6

3 The Investment 7

4 Operating The Company 8

5 Business Plan Summary 9

6 Management Of Company 11

7 Established Industry Expertise 12

8 Commercial Assumptions 14

9 Risk Factors 15

10 Indicative Investors’ Outcome 17

11 Corporate Structure 18

12 Related Party Contracts 20

13 Shareholders’ Possible Exit Strategies 21

Appendix A: The Music Publishing Industry 22

Appendix B: Business Plan Fundamentals 27

Appendix C: Management Profiles In Detail 32

Appendix D: Commercial Assumptions 34

Strictly Private and Confidential 3 1 Glossary of Defined Terms

Advance Assurance An assurance from HMRC, in advance of applications for Shares, that, on the basis of the information provided, HMRC will regard the Shares issued as satisfying the requirements of EIS Articles of Association The agreement providing for the management of the Company and the conduct of its business under the Companies Act, recording the rights, duties and responsibilities of its members Atlantic Screen Scores Atlantic Screen Scores Limited Business Plan A description of the intended activities and financial projections of the Company as set out in this document Catalogue The various Compositions owned by the Company Commercial Assumptions The assumptions set out in Section 8 and Appendix D Companies Act Companies Act 2006 Company Atlantic Screen Scores Completion Bond A guarantee that the film will be completed without further recourse to the film’s investors or financiers for additional funding Composition An original work comprising music or music and lyrics fixed in tangible form in respect of which a copyright subsists EIS The Enterprise Investment Scheme as described in Part 5 of ITA EIS Deferral Relief Capital gains deferred on reinvestment pursuant to Section 150C and Schedule 5B of TCGA EIS Relief Income tax relief and/or exemption from tax in respect of chargeable gains which is available with EIS EIS Shareholder A holder of a Share in respect of which EIS is to be claimed Film Any record, however made, of a sequence of visual images that is capable of being used as a means of showing that sequence as a moving image HMRC Her Majesty’s Revenue & Customs IFA An Independent Financial Adviser regulated by the Financial Services Authority or successor agency IRR The internal rate of return, being the annualised discounted rate at which the net present value of the relevant cash flows sum to zero, calculated as set out in the Commercial Assumptions ITA Income Tax Act 2007 (as amended) Management The directors of the Company from time to time Management Bonus A performance bonus due and payable to Management at a specified future date based on a determined share of profits Memorandum of Association The agreement under the Companies Act of the founder shareholders to form and become a member of the Company and to take at least one Share Net Publisher Share (‘NPS’) The Company’s share of publishing royalty income received on an annual basis Performing Right Society (‘PRS’) The UK organisation responsible for the collection of performance royalties

4 Strictly Private and Confidential Risk Factors The risk factors set out in Section 9 Score The incidental and background music in a completed film or television programme Share One ordinary share of £1 in the capital of the Company and subject to the rights, benefits and restrictions set out in the Articles of Association Shareholder A holder of a Share Subscription The aggregate sums raised under this Business Plan TCGA The Taxation of Chargeable Gains Act 1992 (as amended)

Strictly Private and Confidential 5 2 Executive Summary

ӶӶ The Opportunity

An investment in Atlantic Screen Scores aims to generate an attractive return from the business of creating, publishing and exploiting original music from important internationally released films and television series.

It is intended that the investor will benefit from an equity investment in a company that will aggregate ownership of newly created film and television scores and thereby grow an exploitable Catalogue which will increase in value over time. The Company generates royalty income from cinemas and broadcasters, and fee income from the re-use of the music, for instance in commercials and trailers. It is intended that the Company will become a valuable asset in the hands of its Shareholders whereby it may continue as a successful business or be offered for sale subject to Shareholder approval either to another music publishing company or by way of a public offer.

Under this Business Plan, Atlantic Screen Scores will be the owner of the intellectual property created and on its behalf Copyright Administration Services Limited will administer those copyrights for a fee.

With the Hollywood studios cutting back on the number of films they produce, choosing to concentrate on their franchiseable sequels, and with global box office continuing to rise year on year, there is the opportunity for strong independent films to perform well. Atlantic Screen Scores relies upon investing in independent films as opposed to studio films, as the studios retain all the music copyright for the films they produce.

According to the MPAA annual theatrical markets statistical report, global box office continues to grow, with box office up 4.0% in 2013 to $35.9 billion. Atlantic Screen Scores will earn royalties from the fees paid by all licensed broadcasters of film and music and in many countries from the box office receipts paid to the performing right societies in each territory where this income source is recognised.

6 Strictly Private and Confidential 3 The Investment

ӶӶ Atlantic Screen Scores Limited

Registered in England and Wales No: 08811587

Private Placing of up to 2,000,000 Ordinary Shares at £1 per share payable in full on application

Share Capital following the investment (assuming full subscription)

Authorised Issued and fully paid Number £ Number £ Ordinary Shares of 2,000,001 2,000,001 2,000,001 2,000,001 £1 each

ØØ 1 Ordinary Share has been issued at par value and is held by Simon Fawcett.

ØØ 2,000,000 Shares of par value £1 each will be offered for Subscription.

Strictly Private and Confidential 7 4 Operating the Company

It is intended that the Company’s business will be conducted on a commercial basis based on the judgement and experience of Management. It is Management’s intention to operate the Company to enable it to be a qualifying company under EIS.

The Company has applied for Advance Assurance for its proposals under EIS from HMRC.

Management expect to run the Company in such a manner that it will satisfy the EIS qualifying conditions throughout the relevant period of three years from either the date the Shares are issued or, if later, from the date of commencement of trade. However, neither Management nor the Company make any warranty that relief, once given, will not be withdrawn.

Subscribing for Shares under the terms of this Offer may enable investors to take advantage of claimable UK tax reliefs such as income tax relief, a capital gains tax exemption, a capital gains tax deferral, loss relief and inheritance tax relief, depending on the individual investor’s circumstances.

The proposals outlined in this Business Plan utilise the particular industry expertise and commercial experience of Management. The Business Plan is designed to create a commercial business activity with a view to the realisation of profit. Whilst Management makes no warranty that this will be achieved, it is Management’s intention that the Company’s Shares will in due course represent valuable assets in the hands of Shareholders as a reflection of the success of the company’s activities. Management are not proposing that a subscription for Shares in the Company be made by investors primarily for the purpose of obtaining a tax mitigation opportunity. Intending investors should base their decision to invest solely on the future activities of the Company as described in this document.

8 Strictly Private and Confidential 5 Business Plan Summary

Atlantic Screen Scores has been established for the purposes of creating intellectual property in the form of original commissioned music for film and television. Atlantic Screen Scores will work with producers to develop new music for film and television productions by contracting with established composers to create these music Compositions. It will concentrate on developing scores for mainly US, British, European and Australian productions.

The majority of music created will be score music for films and television. Atlantic Screen Scores will own the intellectual property and music publishing rights in the composed songs and music from origination and will retain ownership of the copyright created. It will collect the broadcast and box office royalties created by way of broadcast and theatrical performances and also exploit the ownership of these music Compositions by way of releasing soundtracks and licensing the music for use on adverts and other synchronisation opportunities that arise.

In order to maximise the income arising, Atlantic Screen Scores will engage Copyright Administration Services Limited (‘CAS’) to administer the efficient collection of royalties on its behalf. CAS is one of the UK’s leading music publishing administration companies and administers many song and music catalogues owned by third party rights holders. A description of the expertise that CAS will bring to the Company is set out in Section 7.

ӶӶ Strategy

Atlantic Screen Scores will build a valuable library of film and television music scores. As part of the process of building the Company, the Company will create new songs and music for worldwide appreciation, develop new and established writers and thereby create a valuable business. It is intended that Shareholders in Atlantic Screen Scores will experience the satisfaction of making not only an investment in music on sound business principles but also a valuable contribution to artistic development. Additionally, an investment in Atlantic Screen Scores will not only enable independent film producers to complete the financing of their film budgets, but will also reserve valuable music rights in the ownership of the Company for subsequent profitable exploitation.

Atlantic Screen Scores will be managed by Simon Fawcett and Tim Hollier. Simon is an experienced entertainment financier and has a strong understanding of the value of music in film, which will be the core business of Atlantic Screen Scores. Tim is a veteran music publisher having been in the music publishing business for more than 40 years. A brief overview of their careers can be found in section 6, whilst a description of the expertise they bring to the Company is set out in Section 7. Their full curricula vitae are detailed in Appendix C.

Management will actively develop the Company’s trade by judicious exploitation of its assets building a company with a visible asset base. It is intended that at a suitable point in the future Management will consult with Shareholders to agree the future direction of the Company if suitable opportunities arise to enable Shareholders to realise the value of their shareholdings. The resulting proposals may include a continuation of the Company’s business, a realisation of assets, or a trade sale to a third party, such as an established music publishing major. Whilst at this stage it is not possible to be definitive as to the future direction of the Company some years ahead, some possible strategies for realising value are set out in section 13 of this Business Plan.

In an effort to offer an investment on a valid risk/reward ratio, it is proposed that Atlantic Screen Scores be owned 100% by EIS Shareholders. As directors of the Company, Management will be responsible for exploiting the intellectual property assets that the Company will create. Management will actively administer the Catalogue of the Company’s music publishing interests. It is Management’s intention that Shareholders should be able to realise the value of their investment at a future date. Whilst making no warranty that this will be achieved, Management will run the business with an aim of enabling Shareholders to recoup at least the full value of their investment in the Company. To reflect the contribution that Management will bring to the Company in terms of their relevant experience and industry expertise, and to permit Management to share in the targeted future success of the Company, it is proposed that Management receive a basic salary, and by way of an annual or final bonus, a 25% share of any surplus arising after Shareholders recoup the full value of their equity, as more particularly described in Section 12 (Related Party Contracts).

Strictly Private and Confidential 9 ӶӶ Operation of Company’s Trade

Atlantic Screen Scores will enter into agreements with film or television production companies to create the music for particular films or television programmes. Atlantic Screen Scores will then enter into commissioning agreements with a composer or composers under which music scores will be produced. Atlantic Screen Scores will own the intellectual property in the Composition of the music as and when it is created. Once the music score has been created, Atlantic Screen Scores will license the intellectual property in the music to the relevant film or television production, and will enter into a separate administration agreement with CAS for the administration of the publishing rights it comes to own.

Atlantic Screen Scores will invest in the cost of composing the music, which it will recoup in first position from all the royalties generated by the music. After full recoupment Atlantic Screen Scores will continue to earn royalties on an average 75% of the income generated during the life of the copyright, which will broadly extend until 70 years after the composer’s death.

Publishing income in respect of films is earned primarily from a negotiated percentage of gross box office in all major territories except for the USA, and, in respect of films and television programmes, each time a broadcast is made on television. Atlantic Screen Scores will also secure the soundtrack rights on films in which it invests, which will be exploited through its relationship with Bob Frank Distribution, a division of Bob Frank Entertainment Inc and Sony Music Group.

Music publishing income is considered one of the most stable and constant of all media income sources. CAS will collect these income streams worldwide through its network of agreements in place with the world’s collection societies, in a timely and efficient manner that delivers royalties to its clients more quickly - some six months earlier than the major music publishers. CAS has agreements in place with nearly all the major collection societies around the world, such as PRS in the UK, ASCAP, BMI and SESAC in the USA, APRA in Australia and GEMA in Germany, allowing efficient collection of global revenues on behalf of its clients.

The Business Plan seeks to achieve an IRR of 18% (excluding EIS Relief) for Shareholders in Atlantic Screen Scores. This assumes a Catalogue valuation in 2019 of £2.56m based on a multiple of ten times Net Publisher Share (‘NPS’). Net Publisher Share is the recognised basis for calculating a Catalogue value, being the share of royalties received on an annual basis.

ӶӶ Key Business Factors

To ensure returns are maximised for Shareholders, Management have identified four key business factors which can influence how Shareholder returns can be maximised: i. exploiting the publishing rights by maximising income streams from active Catalogue management and score placement in other films, TV productions or advertisements; ii. collecting royalties efficiently through well-managed royalty administration through the network of agreements in place with the major music societies around the world; iii. controlling cost levels; iv. auditing copyright royalties to identify any additional revenues due.

These key business factors are explored in further detail in Appendix B.

10 Strictly Private and Confidential 6 Management Of Company

The management team are well-regarded and extensively connected throughout the industry. The team is to be led by Simon Fawcett and Tim Hollier, under the Chairmanship of Steve Orchard. Full curricula vitae can be found in Appendix C.

ӶӶ Steve Orchard

Steve Orchard will be Chairman of Atlantic Screen Scores.

Steve has been a leading figure in the UK radio industry for over 25 years. He is currently chief executive officer of a UK commercial radio group holding eight station licences. His career in commercial radio has ranged from presenter and programme director to various senior directorship positions in GWR Group plc and GCap Media plc. Steve is renowned in the industry for the successful relaunch of Classic fm and for the creation of digital music station Planet Rock. His non-executive directorships have included Independent Radio News and UK Top 40 Limited. He has been a longstanding Sony Awards judge and was a member of the Brits judging panel. Steve is a trustee of the Prison Radio Association and a Fellow of the Radio Academy. He is also chairman of Atlantic Screen Music Limited.

ӶӶ Simon Fawcett

Simon Fawcett will be Chief Executive Officer of Atlantic Screen Scores.

Simon is an experienced entertainment financier. He is the chief executive officer of Atlantic Screen Music Limited which provides a full music service to film and TV producers by licensing tracks, sourcing composers, arranging the recording of scores and administering music publishing via its subsidiary Copyright Administration Services Limited.

Simon was previously finance director of Pathé Entertainment, the international production and distribution company and latterly chief executive of Aramid Capital Partners, managing its $250m entertainment hedge fund. Having been involved in the production of well over 50 films, Simon has a strong understanding of the value of music in film, which will be the core business of Atlantic Screen Scores.

ӶӶ Tim Hollier

Tim Hollier will be Creative Director of Atlantic Screen Scores.

A founding director of the British Academy of Composers and Songwriters, Tim is a veteran music publisher having been in the music publishing business for more than 40 years. He is the chief executive officer of Copyright Administration Services Limited, a specialist film and television music royalty collection business which is 50% owned by Atlantic Screen Music Limited. Tim’s expertise as a film music publisher is widely acknowledged. He has launched or owned many music publishing companies in his career, including Filmtrax (which became the largest fully independent British music publishing company), Leosong Copyright Services Limited, Screen Music Services and Music Copyright Solutions plc leading up to his present businesses Atlantic Screen Music Limited and Copyright Administration Services Limited where he is a director of each company.

Tim has produced as well as financed some of the most successful British film scores of all time includingRoom With A View, Mona Lisa and Withnail and I. He has administered or owned a unique roster of clients and catalogues over the years, including ABBA, Columbia Pictures Music Group, Belwin Mills, Novello & Co, Barry Mason Music, Merchant Ivory Productions, Ealing Film Studios, The Recorded Picture Company, Endemol, Pathe Films, Lorimar, Grundy and many individual film producers such as Gurinder Chadah Bend( It Like Beckham) and Deepak Nayaar (Kintop Films).

Strictly Private and Confidential 11 7 Established Industry Expertise

ӶӶ Experience of Management

Atlantic Screen Scores will be managed by Simon Fawcett and Tim Hollier. Their experience and management of film and television music and rights is arguably unequalled in the industry, emphasised by the success of their present business, Atlantic Screen Music Limited, and by earlier launches of two other companies investing in the production of film scores, Atlantic Screen Composers Limited and Atlantic Screen International Limited.

ӶӶ Atlantic Screen Music Limited

Set up in 1995 as Palan Music, Atlantic Screen Music Limited is an innovative and bespoke music publishing company active in music copyright consultancy, and finance and administration of music publishing for television broadcasters, production companies and film companies.

Its activities include:

ØØ music supervision: advising producers on their music content

ØØ licence clearances: negotiating and clearing licences for masters and publishing rights

ØØ score production: sourcing composers and arranging for orchestras and recording studios

ØØ music publishing administration: administering producers’ publishing rights

ØØ music budgeting: assessing music budgets and estimating music income streams

ØØ music copyright audits: auditing a producer’s historic music royalties.

Collectively Atlantic Screen Music personnel have managed and/or owned the music catalogues of some of the largest international media groups, including Grundy Television, All American Television, Columbia Pictures Music Group, Merchant Ivory, HandMade Films, Endemol, Chorion, Millimage, National Geographic, Lorimar, Pathé Films, Recorded Picture Company, Kintop Films, Bend It Films and Ealing Films. In addition ASM personnel have also owned or managed successful song catalogues including ABBA (for North America), the Peter Green catalogue (Fleetwood Mac), Bob Marley (Cayman Music) and Barry Mason Music.

ӶӶ Copyright Administration Services Limited

Founded in 2008 to deliver the collection of timely and efficient royalties, Copyright Administration Services Limited (‘CAS’) has rapidly developed in four years into a leading independent music publishing administration company. It is imaginative, highly experienced and forward thinking, and has clients across the media spectrum in film, television, advertising, games and music. CAS is owned 50% by Atlantic Screen Music Limited and 50% by Aurora Entertainment Limited.

CAS film clients include The Recorded Picture Company, Ealing Film Studios, Metrodome Plc, Kintop Pictures, Voltage Films, Foresight Films, Bend It Films and the second largest producer of Bollywood films, Tips Industries.

CAS music publishing clients include Metropolis Music, Guerrilla Music, Fierce Panda, Barry Mason Music, Bronzerat Records, Cha Cha Man, Anger Music, and The Royal Edinburgh Military Tattoo.

12 Strictly Private and Confidential CAS carries out value-based royalty tracking on a much larger scale than most administrators to maximise returns for all client rights owners. CAS provides comprehensive information to clients, allowing a better understanding of their income and a high level of comfort that royalties due are properly collected. All information is stored in one database in London. This reduces replication and duplication errors and enables comprehensive cross-referencing to facilitate extremely powerful royalty tracking. CAS services include:

ØØ quarterly and ‘at-source’ accounting: royalties flow to clients in a more timely and efficient manner enabling CAS to receive all royalties direct to London and to account and pay quarterly;

ØØ individually tailored financial advice: pre-production planning to control music costs, generate revenue streams and music funds;

ØØ historic music revenue reporting: tracking intentional and unintentional misreporting through their network of international partners, uncovering missing royalty streams and ensuring international registrations are kept alive;

ØØ structuring of memberships: registering with relevant international collection societies to give better transparency, forecasting and flow of international revenues.

ӶӶ Music Score Production Companies

Simon Fawcett and Tim Hollier have already been involved in two other music score companies set up using private investor money under EIS and Venture Capital Trusts. Funds for these companies were raised through Octopus Investments. Atlantic Screen Music have provided the services of Simon Fawcett and Tim Hollier to manage the two companies.

In 2010 the first of these two companies, Atlantic Screen Composers Limited, was formed to carry on the trade of producing score music for mainly British and some US productions. In 2011 a second company, Atlantic Screen International Limited, was set up to exploit business opportunities overseas, particularly in the US, which Atlantic Screen Composers Limited had not fully exploited. Consequently Atlantic Screen International Limited began to produce film score music for mainly US productions and also European productions, including some French and Spanish films.

Together, these two companies have already invested in more than 40 film scores, including Dredd, Great Expectations, The Host, Broken City and Two Guns, have been released generating publishing income that CAS administers.

Simon Fawcett and Tim Hollier have reviewed the state of the global music score production market and identified that there is substantial growth potential. With the help of new equity it will be possible to exploit this growth potential in new music. Simon and Tim have decided to create this new music score company, Atlantic Screen Scores, and give investors the opportunity to help build a new business by offering a suitable risk/reward ratio based on 100% share ownership.

Atlantic Screen Scores will concentrate on developing scores for mainly US, British, European and Australian productions.

Strictly Private and Confidential 13 8 Commercial Assumptions

Certain Commercial Assumptions are made for the purposes of this Business Plan. These assumptions relate to the activities to be carried on by the Company and to its projected income and expenditure.

More particularly, these assumptions relate to the adoption by Management of the Business Plan detailed in Section 5 above and Appendix B below, to the financial projections referred to inIndicative Investors’ Outcome in Section 10 below, and to the financial projections referred to in the Projected Inflows Schedule, the Indicative Costs Schedule and the Indicative Profit and Loss Schedule in Appendix B below.

A more detailed summary of the Commercial Assumptions made can be found in Appendix D.

14 Strictly Private and Confidential 9 Risk Factors

ӶӶ General

The opportunity described in this Business Plan may not be suitable for all recipients. Investment in new business carries high risk as well as the possibility of high rewards. It is highly speculative and potential investors should be aware that no established market exists for the trading of shares in private companies.

Shares in the Company will not be listed or dealt in on any stock exchange. An investment in Shares in the Company may thus be difficult to realise. All money invested in Shares is at risk. The value of the Company’s Shares may go down as well as up, or indeed may have no value at all. Investors may therefore realise less than their original investment.

The Company may raise additional capital in the future, subject to Shareholder approval. Any equity offering to new investors may result in dilution of the holdings of investors in this Offer.

The Company has no historic trading record. The Company will be operating in a competitive environment where risks can be high.

Past performance of Management is no guarantee of future performance. There can be no assurance that Management will be able to secure sufficient suitable film projects to achieve the levels of income and profit set out in the Business Plan and the financial projections.

ӶӶ Income

The financial performance of the Company may be dependent upon the popularity of any film in respect of which it enters into an agreement with a film or television production company. Audience reaction, initial reviews and public taste cannot be predicted with certainty. The film may not perform commercially as indicated by any income projections provided by distributors and international sales companies. Accordingly any investment is speculative. However a film that does not perform commercially in cinemas will still sell to broadcasters, generating music royalty income each time the film is transmitted.

ӶӶ Currency Exchange Rates

Most contracts for the sale of distribution rights in films internationally are expressed in either US Dollars or Euros. Similarly the Company’s own contracts that it enters into with third parties for the exploitation of Compositions, and the Company’s funds themselves, will be a mixture of Pounds Sterling, US Dollars and Euros.

The value of future income and returns to investors may therefore change if there are significant movements in currency exchange rates over the future years in respect of the income that has been projected. However no exchange rates have been used in the Company’s projections as these are UK sterling based.

ӶӶ Dividends

Recipients should be aware that dividends in respect of their respective shareholdings may not be paid.

ӶӶ Breach of Commercial Contracts and Agreements

The assumptions that form the basis of the Business Plan and financial projections and illustrations as described in this Business Plan rely upon the fulfilment of contractual obligations and agreements by third parties.

Strictly Private and Confidential 15 There can be no guarantee that the third party contracts and agreements will be fulfilled as executed and contractual breaches may occur. This could affect the Company’s financial performance.

There is a possibility that any Composition may be subject to a claim of an infringement of intellectual property rights. Appropriate insurance will be taken out and maintained in force during the period immediately following completion and delivery of the film for protection. Before proceeding with the film, Management will perform due diligence to ensure as far as possible that chain of title to the film in respect of which the Company has agreed to provide the relevant Compositions under licence rests with the relevant film production company.

ӶӶ Enterprise Investment Scheme and Taxation Changes

The Company has applied for EIS Advance Assurance from HMRC.

The Management will seek to ensure that the Company’s EIS qualification status is maintained throughout the relevant three year qualifying period. However no guarantee can be provided that EIS qualifying status throughout is assured.

Neither the Company, Management nor the Company’s advisers give any warranties or undertakings that EIS relief or EIS Deferral Relief will be available or that if given, such relief will not be withdrawn.

If the Company ceases to carry on the business outlined in this Business Plan during the three year period from the last allotment of Shares, or the three year period from the date of commencement of trading if later, this could prejudice the qualifying status of the Company under EIS. This situation will be carefully monitored with a view to preserving the Company’s qualifying status, but this cannot be guaranteed.

Investors wishing to obtain EIS Relief must retain their Shares for three years from the date of issue or for three years from the date of commencement of the Company’s trade if this is later. If the Shares are not held for such a three-year period, the tax reliefs obtained initially will be lost, and must be repaid with interest. EIS Deferral Relief is withdrawn on a disposal of Shares. Accordingly, for investors wishing to obtain EIS Relief or EIS Deferral Relief, investment in the Company is not suitable as a short-term investment. In addition, there are various additional conditions attached to EIS Relief and EIS Deferral Relief which individual investors must satisfy for specified periods and it is therefore of the utmost importance that potential investors take advice from their own professional advisers on the likelihood of their qualifying for EIS Relief or EIS Deferral Relief.

There may be changes in future government fiscal policy in relation to the Company or its qualifying status under EIS legislation. Any such changes may have a material effect on the Company’s business. Should the law regarding EIS change, then any reliefs previously obtained and the tax advantages set out in this document may be lost.

ӶӶ Change of Legislation

The current assumptions regarding the impact of EIS and UK tax legislation generally on the Company’s Business Plan and financial illustrations are based on current legislation.

Any change of tax legislation in the future may affect the outcomes illustrated for the return to investors.

ӶӶ Management

The Company’s performance is dependent upon the principal members of its management staff, in particular Simon Fawcett and Tim Hollier.

16 Strictly Private and Confidential 10 Indicative Investors’ Outcome

The following projections indicate investors’ possible returns on an investment made in the Company under the terms of this Business Plan. Neither Management nor the Company makes any warranty as to their likelihood or accuracy.

These projections assume a Catalogue valuation in 2019 of £2.56m based on a multiple of ten times Net Publisher Share (‘NPS’). These projections also assume a disposal of the Catalogue at that time by the Company followed by a realisation of value in the Shares. Management will keep under review any possibility of enhancing Shareholder returns by means of effecting a direct disposal of Shares by Shareholders rather than the sale of the Catalogue by the Company.

The ‘Medium’ projections below are based on the financial projections referred to in theProjected Inflows Schedule, the Indicative Costs Schedule and the Indicative Profit and Loss Schedule at pages 30 and 31 of Appendix B of this Business Plan. The ‘Low’ and ‘High’ projections below are extrapolated on the basis of performances respectively below, and in excess of, the financial projections at pages 30 and 31 of Appendix B of this Business Plan.

IRR Projections Low Medium High (annualised over 4 years)

IRR excluding EIS Relief 11% 18% 24%

IRR including EIS Relief 20% 27% 34%

Strictly Private and Confidential 17 11 Corporate Structure

The Company was incorporated under the Companies Act in England and Wales on 11 December 2013 (registered number 08811587) as a private company limited by shares with the name Atlantic Screen Scores Limited.

Share Capital

The authorised share capital of the Company is £2,000,001, divided into 2,000,001 Shares of £1 each.

The following Share has been issued and allotted at par fully paid up:

Name of Shareholder Number of Shares allotted

Simon Fawcett 1 Ordinary Share

Subsidiaries

The Company currently has no subsidiary.

Litigation

The Company is not engaged in any litigation or arbitration proceedings and no litigation or arbitration is known to be pending or threatened against the Company.

Company Accounting Period

The Company will draw up its first accounting period to 31 December 2015 and to 31 December in each subsequent year.

18 Strictly Private and Confidential Directorships

The directorships ofS teve Orchard, other than in the Company, currently held at the date of this document are as follows:

Atlantic Screen Music Ltd (EIRE) Banbury Broadcasting Co Ltd Centre Broadcasting Co Ltd

Company Number (Eire) 241729 Company Number 06778731 Company Number 03294814

Oak FM (Hinckley & Nuneaton) Oak FM Ltd Quidem Ltd Ltd Company Number 03380201 Company Number 06928312 Company Number 03112712

Quidem Midlands Ltd Rugby Broadcasting Co Ltd Sideindex Ltd

Company Number 06928928 Company Number 03243997 Company Number 04004601

The New 102 Ltd Touch Broadcasting Ltd Touch Warwick Ltd

Company Number 03062393 Company Number 02425724 Company Number 05296793

The directorships ofS imon Fawcett, other than in the Company, currently held at the date of this document are as follows:

Atlantic Screen Composers Ltd Atlantic Screen International Ltd Atlantic Screen Music Ltd (EIRE)

Company Number 07248363 Company Number 07599368 Company Number (Eire) 241729 Atlantic Screen Songwriters Ltd Metropolis Movie Music Ltd Osmosis Ltd

Company Number 07896716 Company Number 07739633 Company Number 05226297 Osmosis Films Ltd The Quiet Ones Ltd West Hill Park Ltd

Company Number 08111081 Company Number 08062699 Company Number 07144289 VA Music Ltd

Company Number 08051176

The directorships ofT im Hollier, other than in the Company, currently held at the date of this document are as follows:

Atlantic Screen Composers Ltd Atlantic Screen International Ltd Atlantic Screen Music Ltd (EIRE)

Company Number 07248363 Company Number 07599368 Company Number (Eire) 241729

Aurora Entertainment Ltd Copyright Administration Services Ltd Filmtrax Ltd

Company Number 07310039 Company Number 06463279 Company Number 08377930

Strictly Private and Confidential 19 12 Related Party Contracts

The Company has entered into an administration contract with Copyright Administration Services Limited (‘CAS’) under which CAS will collect the royalties arising in respect of the film score copyrights which the Company will own and exploit. CAS is a company controlled by Atlantic Screen Music Limited. The agreement provides for CAS to charge a 10% fee on all royalties collected on behalf of the Company and a 25% fee in respect of synchronisation income generated on behalf of the Company, synchronisation income being income generated from reselling the score music for use in, for instance, other productions, commercials and trailers. The contract will terminate after 5 years. In Management’s opinion the Company’s contract with CAS is at market rates.

Directors’ Agreements

The Company will pay directors’ fees at an aggregated rate of £80,000 per annum such sum being divisible between them according to their respective service contracts. A profit share arrangement (the Management Bonus) will apply to the Directors whereby the Directors share in: i. an annual bonus of 25% of the net profit of the Company before taxation and dividends but after interest, depreciation, amortisation, extraordinary items and the adjustment of certain other amounts to the extent that the cumulative positive net profits exceeds the amount invested by investors; and ii. a bonus on a sale of the company or a final distribution of the company’s assets on a winding up of 25% of any returns (whether dividends or other distributions, returns of capital or proceeds on a sale of at least 75% of the company’s share capital) to investors in excess of the total amount invested in the Company (‘the Surplus Profits’), less any annual bonuses paid.

In the event that the cumulative annual bonuses exceed the Surplus Profits, the Directors will be liable to repay such excess.

The calculation of the Management Bonus will be approved by the Company’s auditors.

20 Strictly Private and Confidential 13 Shareholders’ Possible Exit Strategies

The Company’s projections assume a Catalogue valuation in 2019 of £2.56m based on a multiple of ten times Net Publisher Share.

Once the Company’s relevant three year qualifying period has elapsed, the following strategies will be considered to enable Shareholders to realise the value in their shareholdings:

ØØ a continuation of the Company’s business with the commencement of payment of dividends;

ØØ a disposal of the assets and settling of liabilities of the Company followed by a liquidation of the Company and distribution of cash to Shareholders;

ØØ a sale of the business to another music publishing company, either by a trade sale or by a sale of Shares in the Company.

Major music publishers continue to be highly acquisitive in the market place offering a potential opportunity for Shareholders to secure sale proceeds at interesting multiples of between 8 and 12 of Net Publishers Share, depending on the size and nature of the publishing catalogue. Management’s proven ability to build smaller catalogues into a larger asset is likely to increase the overall value of the Company.

Management have received independent confirmation from a large major music publisher that using conservative assumptions a multiple between 7.5 and 11 times earnings could be achievable supporting Management’s valuation. However neither Management nor the Company makes any warranty in this regard.

Management will keep the position under review at all times.

Strictly Private and Confidential 21 Appendix A: The Music Publishing Industry

ӶӶ The Industry in Outline

The global music publishing industry is estimated to have generated in excess of $11 billion in 2013, 62% of these royalties are collected in Europe and 19% in the USA/Canada. According to the UK music royalty collection society The Performing Right Society (‘PRS’), the UK contributed £665m to this activity. Despite the challenges to the music business generally caused by digitisation and piracy, music publishing remains a growing activity and a profitable one.

The global music business can be divided into two main areas: recorded music and music publishing. The recorded music industry focuses on creating, recording, producing and marketing music recordings in all their forms, whilst the publishing business involves the exploitation of the intellectual property subsisting in these recordings.

Music publishing is therefore a business with music compositions as its focus, copyright at its heart and royalties as its lifeblood. The music publishing business exploits the ownership of original works which are created once a music composition is fixed in a tangible form. Such compositions can comprise music, or music and lyrics; once fixed in tangible form, a copyright is created which enables works to be profitably copied and reproduced. It took its earliest form as printed or ‘sheet’ music, but then developed later into recorded forms such as vinyl recordings, cassette tapes, compact discs (CDs) and digital versatile discs (DVDs). Its most modern recorded form is the downloadable computer file, such as MPEG-1 or MPEG-2 Audio Layer III, more commonly known as MP3 recordings, which can be stored on personal music players, smartphones or computers.

However, the music publishing business is not restricted to the exploitation of intellectual property in such music recordings. It also extends much more widely to public performances (whether live in concert, on the radio or on television), to films, television programmes, and commercials. Whatever tangible form these compositions take, all depend on the underlying intangible intellectual property which music publishing companies can exploit for profit for a specific duration.

The music publishing industry has grown as a result of co-operation between those who create compositions and those who help them earn income from their created work - in essence, a joint venture between composers and the companies who represent them. The role of the music publisher, as the owner of a musical copyright in whole or in part, or as administrator for the copyright owner, is to both drive the usage of the copyrights it owns or administers through various media and to collect royalty payments based on its efforts to exploit works. It does this by entering into business relationships with composers or copyright holders, promoting and marketing their work and placing compositions in various exploitable sectors. It may conclude contracts with third parties on the composer’s behalf, actively administering and monitoring the exploitation of those compositions and collecting the revenues arising. Based on these contracts, it remits a percentage of these royalties to the composers and retains the remaining portion of revenue, known as Net Publisher’s Share (‘NPS’). Alternatively it may collect revenues on behalf of copyright holders for an agreed fee. In effect, music publishers amalgamate their compositions into ‘catalogues’ and generate revenue from royalty payments arising from the use of those catalogues. Over time these catalogues can become highly valuable.

Overall, music publishing revenue has been resilient to the downward pressure on album sales that has resulted largely from piracy and the availability of digital single downloads. Whilst sales of physical recordings are decreasing, music consumption is increasing as demonstrated by the financial reporting of all the major worldwide Performing and Mechanical Rights organisations.

A variety of revenue streams allows publishers to target several end users other than retail consumers in order to generate revenues and thus mitigate the risk of decreasing album sales. On the basis of recent experience, publishing revenues are projected to continue to grow whilst sales of recorded music are expected to continue to decline - for example there was an increase of 3.2% in 2011 in the revenues collected by PRS.

22 Strictly Private and Confidential ӶӶ Income Producing Sectors

Music publishing companies exploit their catalogues by generating income from the following sources: performance revenue, mechanical revenue, print (sheet music) and synchronisation into film and TV.

Performance revenue

This represents the revenue generated from the public performance of recorded music played on radio, television and other forms of live performance, including sporting events and theatrical productions. Recent new forms of media such as interactive television and non-interactive internet streaming have offered increased revenue streams from performance. It is the most significant income; performance revenue is also a stable source of revenue for publishers and has experienced significant growth in recent years, particularly as publishers seek other sources of revenue outside the sale of physical recorded music. Performance revenue is desirable because it is largely unaffected by piracy or illegal downloads, the cause of decreasing mechanical revenue. The UK royalty collection society PRS reported a total of £665m for overall music royalty collections for 2013, an increase of 3.7%. Within this figure broadcast and public performance royalties increased by 4.8% that year.

Mechanical revenue

This comprises royalties from the sale of physical recorded music such as CDs, DVDs, music videos, computer games and musical toys. Mechanical revenue also includes royalties from digital download services such as iTunes, Spotify, Pandora, Rhapsody, Deezer and LastFM. Mechanical revenue follows recorded music industry trends; much of the decline in physical recorded music sales has been offset by growth in digital downloads.

Print revenue

These fees are generated from the sale of sheet or printed music. It is a relatively stable royalty stream, but as the recent experience of magazine and book publishing has shown, has the potential for further development by replacing the printed form with downloads to computer tablets such as the iPad.

Synchronisation fees

These royalties are contractual in nature and vary depending upon the nature of the media. The royalties are paid to ‘synchronise’ a musical composition with a scene in a film, television programme, computer game, and advertisement or even as an aid to a company’s branding. The importance of music in these media has grown significantly in recent years resulting in music publishers receiving increasing fees. For example, a non-exclusive licence in respect of Peter Green’s composition of Fleetwood Mac’s Albatross was granted to Marks and Spencer in 2005 for their summer food campaign for a fee of £150,000, which was then repeated in 2008. Until then Albatross had enjoyed average net annual income of £50,000.

Synchronisation income is expected to become a growing source of revenue, particularly in new media such as phone applications.

ӶӶ Copyright Registration And Royalty Collection

Copyright in a musical work expires at the end of the period of 70 years from the end of the calendar year in which the author dies. Royalties are received from a global network of collection societies in each major country. Prior to registration of the copyright and to exploitation of the rights, the composer may assign the copyright in the composition to the publisher, or may enter into a co-publishing agreement for the sharing of ownership, or may retain ownership outright under an administration agreement. Under an assignment or sharing basis, both will then negotiate the share of the rights or income which each will own. Until the late 1970s historical contracts were generally concluded on a 50:50 basis for the life of the copyright. Save for film and television commissions, deals are

Strictly Private and Confidential 23 now rarely for life of copyright and more usually for three/seven years with a recoupable advance based on a 75:25 share of earnings.

Under an administration deal, the publisher retains an agreed fee. The contract is then registered by the publisher with the collection societies around the world. The mechanical copyright collection agencies worldwide collect the royalties from record sales and pay them to the local publisher or administrator designated by the original publisher.

The performing rights societies of each country - in the UK, the royalty collection society PRS - collect the royalties from television and radio stations and again pay these to the local designated administrator. The local administrator pays the collected royalties to the publisher less agreed fees and deductions.

ӶӶ The Major Music Publishing Companies

The so-called ‘major’ music publishers, Sony/ATV/EMI, Universal, Warner Chappell and BMG RM, account for approximately 75% of the global publishing business with the balance being accounted for by the so-called ‘independents’, smaller companies whose share capital is not held by the majors. The majors’ appetite for acquisitions of music publishing catalogues demonstrates the enduring financial appeal of well-managed businesses with profitable underlying copyrights.

Sony/ATV Music Publishing

Owned 50:50 by Sony Music Entertainment and the Michael Jackson Family Trust, the Sony/ATV music catalogue includes over 750,000 copyrights. Following the initial merger in 1995 of Sony Music Entertainment’s music publishing interests with ATV Music Publishing, it has grown by various acquisitions over the years, notably of the Acuff-Rose, Leiber & Stoller and Famous Music catalogues. Its roster now includes diverse artists such as The Beatles, Brooks and Dunn, Leonard Cohen, Bob Dylan, the Everly Brothers, Jimi Hendrix, Lady Gaga and Taylor Swift. Its recent acquisition of EMI Music Publishing (see below) has required it to make certain divestments of its catalogue.

EMI Music Publishing

Owned until recently by Citigroup, EMI Music Publishing has now been acquired by a Sony/ATV-led consortium using sovereign funds and private equity. Regulatory approval required the disposal of a proportion of EMI’s catalogue. The disposal places a value on the business of $2.2bn. The company’s artists include ABBA, David Bowie, Garth Brooks, Kelly Clarkson, Holland-Dozier-Holland, Norah Jones and Amy Winehouse. It is currently the second largest music publishing company globally but the effective merger of its 1.3m copyrights with Sony/ATV will generate a combined Sony/ATV managed catalogue of over 2m copyrights. According to Music & Copyright 2012 Sony/ATV/EMI’s market share is estimated to be 30%.

Universal Music Publishing Group

A division of Universal Music Group, UMPG owns more than 1m copyrights. Its artists include Adele, Coldplay, Elton John and Bernie Taupin, Van Morrison, Bruce Springsteen, Diane Warren and Hans Zimmer. It also owns the Rondor catalogue, and manages and administers the music catalogues of many major film and television companies. In 2007, UMPG acquired the BMG Music publishing catalogue for £1.63bn in a transaction valued at a reputed 9.6 times Net Producer Share. According to Music & Copyright 2012 UMPG’s market share is estimated to be 20%.

24 Strictly Private and Confidential Warner Music Group

As the owner of the longstanding Warner/Chappell music catalogue, WMG holds rights in over 1m copyrights generated by over 65,000 composers. Its artists include Eric Clapton, George and Ira Gershwin, Barry Gibb, Madonna, Katy Perry, Cole Porter, Radiohead and Led Zeppelin. According to Music & Copyright 2012 Warner Chappell’s market share is estimated to be 15%.

BMG Rights Management/BMG Chrysalis

Created in 2008 by Bertelsmann AG, having retained some copyright interests after the sale of its former music publishing company BMG Music Publishing, BMG RM is a joint venture with private equity firm KKR, the latter holding 51% ownership. The BMG RM roster now contains various artists such as Black Eyed Peas, Buena Vista Social Club, Kings of Leon, Alison Krauss and ZZ Top. It has grown by catalogue acquisitions – examples include Crosstown Songs, Cherry Lane, Stage Three, Evergreen, Chrysalis and Bug Music with acquisition prices for each catalogue ranging between $50m and $300m. It now owns in excess of 1m copyrights. According to Music & Copyright 2012 BMG’s market share is estimated to be 10%.

ӶӶ The Independent Sector

The independent music publishing business remains a strong and vital growth area in the industry. Long established companies such as Imagem/Boosey & Hawkes, Music Sales and Peer Southern have resisted attempts over the years by the majors to aggregate their catalogues by acquisition. Certain artists prefer the closer business relationship that an independent can often provide, and many well known artists prefer to be represented by a smaller publisher.

Many of the UK independent companies do not report their net publishers share, hence their current valuations cannot be independently determined. However, important examples of the sector include:

ØØ Imagen/Boosey & Hawkes (Rogers and Hammerstein estate acquired for $200m, Boosey & Hawkes for £90m)

ØØ Music Sales Group (composers include Craig Armstrong, Richard Rodney Bennett)

ØØ Carlin Music (composers include Dolly Parton, Stephen Sondheim)

ØØ Bucks Music Group (composers include David Arnold, Rachel Portman)

ØØ Faber Music (composers include Carl Davis, Stephen Warbeck)

Strictly Private and Confidential 25 26 Strictly Private and Confidential Appendix B: Business Plan Fundamentals

This Appendix B gives further detail of the Company’s proposed activities. The Commercial Assumptions on which it is based can be found in Appendix D.

ӶӶ Strategy

Atlantic Screen Scores is a unique opportunity to partner in investing in the creation of a new company whose focus is the acquisition of stable and profitable music publishing rights. The Company will be led by individuals who are highly regarded in the industry with strong connections with film producers and composers.

As indicated in section 10, Management are targeting an IRR for Shareholders of 18%. This figure does not take account of the benefit of EIS relief, which if taken into account increases the IRR to 27%.

ӶӶ Music Scores Investment

Management propose to invest in the music scores of 30 to 40 films over three years. Each film will have a minimum production budget of £3m but most films are likely to have significantly larger budgets. The average investment that the Company will make per film will be of the order of £115,000 but this will vary depending on Management’s analysis of the likely income that they believe could arise from the investment. The Company’s investment in respect of each film will generally not exceed a specific percentage proportion of the film’s overall budget.

Management will review a film project’s script, its sales projections, the film production budget, the amount of expected score music content, and the reputation and track record of the film production company itself, before deciding whether to invest in creating a score. The Company will recoup its advances from 100% of global music publishing income, and soundtrack revenues. It is projecting its average income in the first four years of each film’s release to be approximately £200,000 per film. After full recoupment of its investment in each film and its full administration and transactional costs, it will normally split its gross income on a 75:25 basis with the relevant film producer of each film.

ӶӶ Film Music Copyright Income

The Film Producer will assign the full music publishing rights to the Company for the life of copyright in consideration for the investment the Company will make. As described in Appendix A, the Company will receive income from various sources such as theatrical box office returns, performing rights, television broadcasts, mechanical sales, digital downloads of the score and DVD and CD sales of the score, and from the reselling of the score music for commercials, trailers, and other productions. In this way, even if a film is not successful at the box office, it will generate other sources of income over the life of its copyright and thereby will not become wholly dependent on a film’s initial performance in the first phase of exploitation.

Projected levels of income for the next four years are indicated in the Projected Inflows Schedule below.

ӶӶ Valuation of Film Music Catalogues

The aim of Management is to achieve capital growth in Atlantic Screen Scores, creating a valuable film and television music library which could allow for a possible exit by way of a trade sale or share offer in four to five years’ time. The value of music catalogues is calculated as a multiple of average annual income over a defined period of time, described in the music publishing industry as a ‘multiple of NPS’, or ‘multiple of Net Producer Share’. Current multiple rates on a conservative basis are in the region of 8 to 12 times NPS.

Strictly Private and Confidential 27 On average the major music publishers (eg Sony/ATV/EMI, Warner Music, UPMG and BMG RM) seek to acquire catalogues generating annual income in excess of £1m, attracting on average multiples of 10 to 12 times NPS or more. Whilst smaller catalogues generally attract multiples of only 8 to 10 times NPS, Management will seek as one alternative to maximise the value of the catalogue for a possible disposal to one of the major music publishers within four to five years.

ӶӶ Key Business Factors

Section 5 of the Memorandum emphasised four key business factors which can influence how Shareholder returns can be maximised. These are explored here in further detail.

Exploiting the publishing rights

Management have arguably unrivalled contacts in the film and television industry which will over time enable Atlantic Screen Scores to build a valuable portfolio of copyrights. Management will seek to exploit these assets to maximise the Company’s income. A film or television broadcast can boost royalties significantly, and Management will seek to exploit income from all sources.

As an indication of the possibilities, synchronisation payments from the reselling of score music can vary between £500 and £500,000 per deal, whilst just a minute of music on UK terrestrial television can be worth up to £70. These fees are payable if the music is featured for instance as background music of a television programme, as a theme tune to a show, or as a composition featured in an advertisement or other television broadcast. For example, Albatross, composed by Peter Green in 1968 and a successful recording for Fleetwood Mac, has been featured in over 50 adverts since 1968, generating over £500,000 in publishing royalties over and above the broadcast royalties and record sales income that the composition generated.

Efficient collection of royalties

Copyright Administration Services (‘CAS’) was established by Management in 2008 and will be engaged to collect the worldwide income streams on behalf of Atlantic Screen Scores.

Through its existing trade, CAS possesses an international network of agreements with the world’s collection societies, enabling timely and efficient collection of the income streams at a manageable and highly competitive fee. CAS collects the royalties due and deducts its fee, remitting the net balance to the Company.

Most major publishers account to their clients on a bi-annual basis; however, because of their highly efficient and computerised royalty collection system (‘Counterpoint Management System’), CAS can offer quarterly accounting of royalties.

Controlling cost levels

Atlantic Screen Scores will be able to actively control costs. The expertise and experience of Management will ensure that not only will investments in film scores be made on a value for money basis, but also that overheads and administration costs can be carefully controlled to ensure efficient stewardship of the Company’s intellectual property.

Royalty auditing

Where appropriate Management will arrange for periodic audits of the Catalogue to track any apparent discrepancies in royalty payments.

28 Strictly Private and Confidential ӶӶ Basis of Projections

The Projected Inflows Schedule, the Indicative Costs Schedule and the Indicative Profit and Loss Schedule below form the basis of the ‘Medium’ projections in Section 10 above (Indicative Investors’ Outcome).

ӶӶ Costs and Remuneration

Start Up Costs and Fundraising Commissions

The Business Plan provides for a commission of up to 5% payable from the Subscription in favour of third party fundraisers and IFAs. This will form part of set up costs which will also include the legal costs of setting up the Company and the advisory costs of preparing this Business Plan. The Company estimates these costs will total £220,000. They are included in theIndicative Costs Schedule below.

General Company Costs

The costs for the general administration and management of the Company over a period of three years are indicated in the Indicative Costs Schedule below.

Management Remuneration

The Company will pay directors’ fees payable at an aggregated rate of £80,000 per annum, such sum being divisible between them according to their respective service contracts, and is included in the Indicative Costs Schedule below.

Performance Based Management Bonus

The Directors will share in the following Management Bonus:

i. an annual bonus of 25% of the net profit of the Company before taxation and dividends but after interest, depreciation, amortisation, extraordinary items and the adjustment of certain other amounts to the extent that the cumulative positive net profits exceeds the amount invested by investors, and

ii. a bonus on a sale of the company or a final distribution of the company’s assets on a winding up of 25% of any returns (whether dividends or other distributions, returns of capital or proceeds on a sale of at least 75% of the company’s share capital) to investors in excess of the total amount invested in the Company (‘the Surplus Profits’), less any annual bonuses paid.

In the event that the cumulative annual bonuses exceed the Surplus Profits, the Directors will be liable to repay such excess.

The calculation of the Management Bonus will be approved by the Company’s auditors.

Strictly Private and Confidential 29 ӶӶ Projected Inflows Schedule

2015 2016 2017 2018 2019 Total

Inflows £’000 £’000 £’000 £’000 £’000 £’000

Equity Investment 2,000 2,000

Music Score Income 356 1,469 888 800 3,513

Sale of Catalogue 2,560 2,560

2,000 356 1,469 888 3,360 8,073

ӶӶ Indicative Costs Schedule

2015 2016 2017 2018 2019 Total

£’000 £’000 £’000 £’000 £’000 £’000

Transaction Costs 36 12 48

Composer Fees 1,425 175 1,600

Film Producer Royalties 285 285

Overheads 140 140 140 75 75 570

CAS Music Publishing Admin Fee 36 147 89 80 352

Set Up Costs 130 130

Corporation Tax 317 97 414

Management Profit Share 1,144 1,144

Investor Recoupment 1,850 1,680 3,530

1,731 363 287 2,331 3,361 8,073

30 Strictly Private and Confidential ӶӶ Indicative Profit And Loss Schedule

2015 2016 2017 2018 2019

£’000 £’000 £’000 £’000 £’000

Revenues

Publishing Royalties 356 1,469 888 800

Cost of Sales

Admin Fees 36 147 89 80

Producer Royalties 285

Net Publisher Share 321 1,322 799 435

Expenditure

Transaction Costs 36 12

Overheads 140 140 140 75 75

Set Up Costs 130

Management Profit Share 1,144

Total Expenditure 306 152 140 75 1,219

Amortisation of Catalogue 71 80 80 80 80

Profit on sale of Catalogue (1,351)

Net Profit (377) 89 1,102 644 487

Corporation Tax 317 97

Profits after Tax (377) 89 1,102 326 390

All figures have been rounded

Strictly Private and Confidential 31 Appendix C: Management Profiles In Detail

ӶӶ Steve Orchard

Steve Orchard is the chief executive officer of Quidem Limited, a commercial radio group formed in 2009 which holds eight UK radio licences. He is also chairman of Atlantic Screen Music Limited.

After studying at The National Broadcasting School, Steve began his radio broadcasting career by launching a new radio station, GWR Bristol, becoming its breakfast presenter in 1985. He was promoted to programme controller and then became managing director of GWR Radio in 1988. He subsequently became group programme director and main plc board director following GWR’s flotation in 1988. He was involved in GWR’s rapid expansion across the UK, Europe and into Australasia throughout the 1990s.

He restructured and relaunched the national broadcaster Classic fm in 1997 where he created the award winning format still in place today, achieving record high audiences. He also created and launched the UK’s first national digital commercial radio station Planet Rock, which won the Sony National Digital Station of the Year award with the UK’s highest digital audio broadcasting audience figures. His reputation in the business of radio also extends to the talent side of the industry, where he has coached some of the industry’s top broadcasters including Chris Moyles, Scott Mills, Johnny Vaughan and Richard Bacon. Industry-wide appointments followed, such as non- executive director of Independent Radio News and UK Top 40 Ltd. Steve also became a member of the Sony Radio Awards committee and a Brit Awards judge.

In 2003 Steve became operations director of GWR Group plc, restructuring its local radio division to deliver annual operating profits of £35m. In 2005 GWR merged with Capital Group plc to create the UK’s largest commercial radio operator, GCap Media plc. Within a year Steve became its group operations director and a main board director, with audiences of 15 million, annual turnover of £200m and a staff of 2000. He left GCap Media shortly before it was sold to Global Radio in 2008. Before forming Quidem in 2009, Steve managed a number of musical artists, and became non-executive chairman of Web Sheriff, a company which protects musicians, film producers and other copyright holders from online piracy. He also became a trustee of the Prison Radio Association, a newly formed national charity.

Steve graduated from the University of Oxford in 1982 with a BA in Modern History and an MSc in Applied Social Studies. He is a Fellow of the Radio Academy.

ӶӶ Simon Fawcett

Simon Fawcett is the chief executive officer of Atlantic Screen Music Limited which provides a full music service to film and television producers by licensing tracks, administering music publishing via its associated company Copyright Administration Services Limited, sourcing composers and arranging the recording of scores. Simon was previously finance director of Pathé Entertainment Group, the international production and distribution company from 1998 to 2006, and until 2010 was the chief executive officer of Aramid Capital Partners, a company that managed a $250m entertainment sector Fund.

Simon qualified as a chartered accountant with KPMG in 1988. He later joined Landmark Communications Inc as finance director of The Travel Channel in both their UK and French operations, and was involved in the launch and expansion of these channels throughout Europe, Africa and the Middle East.

Simon then became finance director of Pathé Entertainment, and was actively involved in the growth of Pathé from a small independent UK distributor into an international production and distribution studio operation, with successes including The Queen, Mrs Henderson Presents, Girl with a Pearl Earring and Bride and Prejudice, together with the UK distribution of the award winning filmsCrash and House of Flying Daggers.

32 Strictly Private and Confidential Simon then became chief executive officer of Aramid Capital Partners, managing a $250m hedge fund specialising in entertainment loan finance. Following its launch in 2006, the Fund has financed over 30 films, including How to Lose Friends and Alienate People, Cheri, and Bush. It also successfully funded the expansion of the leading East European Distributor, A Company, and the successful US stage theatre company, Broadway Across America, both requiring development capital, and provided mezzanine finance to structured production slate financing deals for Paramount Pictures, Sony Pictures and Summit Entertainment.

ӶӶ Tim Hollier

Tim Hollier is currently Creative Director of Atlantic Screen Music Limited. He is also currently the Chief Executive Officer of Copyright Administration Services Limited, a specialist film and television music royalty collection business and the music publishing administration affiliate of Atlantic Screen Music.

Tim has over 40 years’ experience in music publishing. He is acknowledged worldwide as one of the most innovative of music publishers. He has produced as well as funded some of the most successful British film scores of all time including Room With A View and Withnail and I.

Tim began his career in 1968 when he was signed to United Artists Records and released ‘Message To A Harlequin’ and three further solo albums. In 1973 he established the record label and music publishing company, Songwriters Workshop. The label was to offer a ‘caring environment for creative composition and recording’. Many artists joined the label including Peter Sarstedt.

In 1983 Tim founded Filmtrax which became the largest fully independent British music publishing company. Filmtrax was later sold to EMI for in excess of $100m. It grew to own such catalogues as the ABBA catalogue of songs, Columbia Pictures Music Group, Novello & Co, Merchant Ivory and Belwin Mills. Its clients also included Lorimar, Bob Marley, Fleetwood Mac and numerous film companies. It also financed many major British films including Room with a View and Mona Lisa.

Tim established Filmtrax in its market leading position by creating the first music publishing company in the world to openly invest in the creation of film scores, and also the first to account for royalties through to its clients on a quarterly and ‘at source’ basis.

In 1992, Tim went on to become chairman and owner of Leosong Copyright Services Limited, still recognised as one of the most innovative music publishers of its day, which became the most respected and longest established music copyright administration company. The company is now part of Music Copyright Solutions plc (Connexion plc).

In 1999, Tim founded Screen Music Services, a music publishing company designed to represent film music composers and to finance film and television music. In 2001, he established Music Copyright Solutions plc, the first music publishing company to offer shares on the OFEX market and is now a leading independent media music publishing company. When Tim left the business in 2004 he had built up an annual turnover of over £7 million and the company was trading profitably.

In 2004, Tim acquired a small Irish music publishing company, Palan Music Ireland, as part of his strategy to own as many direct memberships of performing right organisations as possible, changing the company’s name to Atlantic Screen Music in 2009. In 2008 Tim set up Copyright Administration Services Limited (‘CAS’) which is now 50% owned by Atlantic Screen Music. CAS rapidly developed into a leading independent worldwide administration company. CAS clients include Ealing Film Studios, The Recorded Picture Company, Metrodome plc, Kintop Pictures, Anger Music, Bronzerat and Guerrilla Music. CAS manages the music publishing interests of a number of film clients including Voltage Pictures (The Hurt Locker), Foresight Films, Fragile Films, Ealing Studios (St Trinian’s), Recorded Picture Company (The Last Emperor), Gurinder Chadha (Bend It Like Beckham) and Deepak Nayar, as well as well- known songwriters such as Barry Mason (who wrote Delilah).

May 2010 saw Simon Fawcett and Tim launch Atlantic Screen Composers Limited, a company funded by Octopus Investments to create music for film and television productions. Atlantic Screen International Limited was launched in April 2011, a company also funded by Octopus Investments.

Tim was a founding Director of the British Academy of Composers and Songwriters.

Strictly Private and Confidential 33 Appendix D: Commercial Assumptions

The following Commercial Assumptions are made for the purposes of this Business Plan.

The Subscription will be primarily used to invest in the creation of music scores for mainly US, British, European and Australian film productions. Management will use its expertise to determine the amount of investment which may be made in accordance with an evaluation of potential income.

The projections assume investment in at least 30 films over a three-year period. Income is assumed to begin to arise from 2016 in respect of the first investments to be made in 2015.

The Company’s investment in respect of the music score in each film assumes that each film will be completed satisfactorily to enable the Company to exploit the relevant score. To ensure that the interests of the Company and its Shareholders are protected, the Company will be attached to a form of insurance commonly used in the film industry, namely a Completion Bond, in respect of each film to ensure that the film will be completed in accordance with a predetermined time and budget. If any film is not subject to a Completion Bond, no investment will be made until the film is delivered.

An estimate has been made for the amount of transaction costs likely to be incurred in respect of each investment. The actual amount incurred will depend on the complexity of the transaction.

Cost inflation is assumed to be 2%.

The expenditure on the creation of music copyrights is amortised over 20 years.

Annual overheads of the Company, including the salaries of Management, will be capped at £140,000 per year.

The Company will pay an administration fee of 10% to Copyright Administration Services Limited on all collected royalties.

A maximum 25% share of royalties after full recoupment of all investment, transactional costs, and administration costs, is provided for as the film producer’s share on each film for which the Company creates the music score.

A Corporation tax rate of 20% has been provided for.

34 Strictly Private and Confidential Strictly Private and Confidential 35

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