Annual Report for the year ended 31 December 2008

36. Post BalanCe sHeet eVents
on 6 March 2009, The evolution Group plc, the parent company of escl, entered into an investment agreement with First eastern Financial holdings limited
(“First eastern”). under the terms of the investment Agreement First eastern and The evolution Group plc will between them invest an aggregate £900,000 by
way of a subscription for new ordinary shares in escl.
on 1st April 2009, the company announced the completion of the investment which included subscription for shares whereby First eastern now holds 51% of
the ordinary share capital of escl, with the company holding approximately 48.5%. The balance will be held by those existing minority shareholders who elect
to retain their interests, although an opportunity is being provided for those minority shareholders to realise their investment on completion of the investment
Agreement, should they so wish. Although First eastern will have a majority shareholding, The evolution Group plc will continue to be represented on the
Board of escl. The new shares represent 90% of the enlarged issued share capital.
in addition to the funds now being invested, each of First eastern and The evolution Group plc will enter into a financial commitment to escl pursuant
to which they may each be called upon (at the discretion of the escl Board) to provide an aggregate of up to £500,000 by way of additional funding in
each of the three years following completion of this transaction on the basis of 51% from First eastern and 49% from The evolution Group plc.
The financial effect this transaction will have on the future profits and losses of the Group cannot be accurately estimated.
it is expected that once the transaction is completed the Group’s remaining investment in escl will be classified as an investment in associate.
37. Related PaRtY tRansaCtions
The following transactions were carried out with related parties:
i) Intra-Group trading
The company has per iAs 24 not disclosed transactions or balances between Group entities that have been fully eliminated on consolidation.
The company has invested £225,000 in the WDB capital uK equity Fund limited, a fund managed by WDB capital limited, a company which is a wholly
owned subsidiary of the Group. in the prior year the company invested £10,000,000. The fair value of this holding at the year end is £11,651,145.
ii) key management compensation
The compensation paid to key management is detailed below. Key management has been determined as the executive management teams of the Group
operating subsidiaries who are also the Directors of those subsidiaries, and Group Directors.
2008 2007
£'000 £'000
REMuNERATION IN RESPECT OF DIRECTORS:
salaries and short-term employee benefits 5,503 4,221
social security costs 704 540
Gains made on exercise of share options 1,321 2,374
share option expense 3,394 3,247
10,922 10,382
An analysis of all Directors’ remuneration may be found in the Directors’ remuneration report on pages 31 to 38.
iii) Debenture
During 2002, a Director of the company, Alex snow, purchased a debenture at Twickenham rugby club for a term of 10 years. The debenture was paid for by
the Group to the value of £26,000. The balance outstanding at 31 December 2008 was £10,065. (2007: £12,881). An agreement is in place that requires
the remaining portion of the debenture to be repaid by the Director should he leave prior to the end of the ten year term. The debenture is used to facilitate
the entertainment of clients.
iv) Dealings with Directors
other than the dealings referred to the above there are no other dealings the Group had with companies in which any of the key management, or persons
connected to them, is a Director.
notes to tHe FinanCial statements CONTINuED
FOR THE YEAR ENDED 31 DECEMBER 2008
72 The evoluTion Group plc AnnuAl reporT & AccounTs 2008