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SIT-UP LIMITED Annual Report For the year ended 31 December 2007

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SIT-UP LIMITED Annual Report For the year ended 31 December 2007

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									Registered No. 3877786




                                             SIT-UP LIMITED

                                                Annual Report
                         For the year ended 31 December 2007
SIT-UP LIMITED
Annual report for the year ended 31 December 2007



                                                                    Pages


Directors’ report
                                                                     1-3
Statement of directors’ responsibilities
                                                                      4

Report of the independent auditor to the member of sit-up Limited    5

Profit and loss account                                               6

Balance sheet                                                         7

Cash flow statement                                                   8

Notes to financial statements                                       9-18
SIT-UP LIMITED
Directors’ report for the year ended 31 December 2007

The directors present their report and the audited financial statements of the company for the year
ended 31 December 2007.

Ownership
Following the merger of the NTL and Telewest Groups on 3 March 2006 sit-up is now a wholly
owned subsidiary undertaking of Virgin Media Inc. which changed its name from NTL Incorporated
on 6 February 2007.

Principal activity
The principal activity of the company during the year was and will continue to be, television and
online home shopping.

Review of business and future developments
The results for the year are set out in the profit and loss account on page 6.

The directors consider that the company has traded satisfactorily in a competitive UK retail market.
Turnover increased by 5.3% to £237.1 million (2006 - £225.2 million) and the profit before tax and
exceptional items, as a consequence improved to £4.6 million (2006 - £2.6 million). The directors
expect further tightening of the general UK retail climate in 2008 but believe that sit-up’s strength as
a value retailer will protect the business in the event of a slow down in the economy.

The company’s two major brands are price-drop tv and bid tv which are two live interactive
television and internet channels which drop prices until everything is sold. The channels are
available in 21.7 million homes in the UK on Sky Digital, Virgin Media and Freeview, as well as on
the internet at www.price-drop.tv and www.bid.tv.

The third channel, speed auction tv, which broadcasts rising price auctions was launched in July
2005. This channel is available on Sky Digital, Virgin Media and on the internet at
www.speedauction.tv . The format of this channel has changed in 2008 to falling price.

There was a decrease in the average number of staff employed from 732 to 680 as sit-up
outsourced some of its contact centre operations. As a result employment costs as a percentage of
turnover have reduced to 8.3% (2006 – 8.7%).

The net assets of the company increased by £6.1 million, to £47.0 million (2006 - £1.8 million) as at
31 December 2007. The increase was wholly due to the retained profit for the year.

The satisfactory trading performance enabled the company to maintain a positive cash balance
throughout the year and the cash balance as at 31 December 2007 was £28.1 million (2006 - £24.1
million).

During the year ended 31 December 2005 the company classified 500,000 preference shares
issued for £6.1 million as debt in accordance with FRS25. These shares were redeemed on 18
September 2007 at £1.4 million. The resulting gain of £4.7 million has been treated as an
exceptional item in the profit and loss account and a corresponding transfer of £6.1 million has been
made from the profit and loss reserve to share premium.


Financial risk management
The company’s operations expose it to a variety of financial risks that include the effects of changes
in credit risk, liquidity risk and interest rate risk.

Credit risk
The nature of the company’s business is such that significantly all transactions require settlement at
point of shipment of goods to the customer. It is not practical to instigate credit checks on all
potential customers and reliance is placed on major credit/debit card company prompt settlements,
however the exposure is limited due to the high level of relatively low value transactions and high
number of customers.




                                                   1
SIT-UP LIMITED
Directors' report for the year ended 31 December 2007 (continued)
Liquidity risk
The Virgin Media group manages its financial risk via secure, long-dated and cost-effective funding
for the group’s operations in order to minimise the adverse effects of fluctuations in the financial
markets on the value of its financial assets and liabilities, profitability and cash flows.

The Virgin Media group’s external debt is used to satisfy the funding requirements of group
undertakings via inter-company loans on terms which generally match those of the external debt. In
addition, working capital is managed centrally within the Virgin Media group creating further inter-
company trading balances, on terms which are generally interest free.

Interest rate risk
The company is subject to financial risks where interest rates are not fixed. The Virgin Media
group’s policy is to manage its interest cost using a mix of fixed and variable rate financial
instruments denominated in sterling and foreign currencies and to hedge all or part of the exposure
to interest rate or foreign currency risk. However the group’s policy is not to hedge against interest
rate or foreign currency risk in respect of inter-company debt.

The company primarily has interest bearing assets, which comprise cash balances and a loan to
parent undertaking. The interest rates are not fixed and so are subject to fluctuation. The company
does not use derivative financial instruments to manage interest rate costs.

The directors will revisit the appropriateness of these policies should the company’s operations
change in size or nature.


Results and dividends
The profit for the financial year of £6,126,000 (2006 - £1,820,000) was transferred to reserves. The
directors have not recommended a dividend.


Directors
On 8 June 2006, it was announced that the Founder Directors, Ashley Faull and John Egan and the
Managing Director, Christopher Manson, had decided to reduce their involvement with sit-up and
would leave the business in June 2007. They remained as Board Directors until the date of their
departure. Ian Percival became Chief Executive Officer on 8 June 2006 and took over the day-to-
day running of the business.




                                                 2
SIT-UP LIMITED
Directors' report for the year ended 31 December 2007 (continued)
The directors of the company who held office during the year and thereafter were as follows:

J P Egan                      Resigned 7 June 2007
A C Faull                     Resigned 7 June 2007
C J Manson                    Resigned 10 June 2007
I C Percival
N R Smith                     Resigned 28 February 2007
M R Wall
S R Holmes                    Appointed 28 February 2007

Director interests
The directors’ beneficial interests in the shares of the company at 1 January 2007 and 31 December
2007 were as follows:

                                 4% cumulative preference shares of 1p each
                                   1 January 2007        31 December 2007
J P Egan                                  200,000                          -
A C Faull                                 200,000                          -
C J Manson                                100,000                          -

On 18 September 2007, the preference shareholders exercised their put option to redeem their
preference shares with sit-up Limited.

Employees
Consultation with employees or their representatives has continued at all levels, with the aim of
ensuring that their views are taken into account when decisions are made that are likely to affect
their interests and that all employees are aware of the financial and economic performance of the
company. Communication with all employees continues through periodic briefings and the in-house
intranet. The annual report is available on the company internet site.

Applications for employment by disabled persons are always fully considered, bearing in mind the
respective aptitudes and abilities of the applicant concerned. In the event of members of staff
becoming disabled every effort is made to ensure that their employment with the company
continues and the appropriate training is arranged. It is the policy of the company that the training,
career development and promotion of a disabled person should, as far as possible, be identical to
that of a person who does not suffer from a disability.

Creditor payment policy
The company’s policy concerning the payment of trade creditors is to settle the terms of payment
with suppliers when agreeing the terms of each transaction. Creditors are paid in accordance with
the company’s contractual and other legal obligations. Trade creditors, at the year-end, represented
45 days (2006 - 46 days) of purchases.

Statement as to disclosure of information to auditors

At the date of approving this report:
     • so far as the directors are aware, there is no relevant audit information of which the
         company's auditors are unaware; and
     • the directors confirm that they have taken all necessary steps that they ought to have taken
         as directors to make themselves aware of any relevant audit information and to establish
         that the company's auditors are aware of that information.
Auditor
Ernst & Young LLP will be re-appointed as the company’s auditor in accordance with the elective
resolution passed by the company under Section 386 of the Companies Act 1985.

By order of the Board


I C Percival
Chief Executive Officer
11 June 2008
                                                 3
SIT-UP LIMITED
Statement of Directors’ Responsibilities for the year ended 31
December 2007

The directors are responsible for preparing the Annual Report and the financial statements in
accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that
law the directors have elected to prepare the financial statements in accordance with the United
Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and
applicable law). The financial statements are required by law to give a true and fair view of the state of
affairs of the company and of the profit and loss of the company for that period. In preparing these
financial statements, the directors are required to:

    •   select suitable accounting policies and then apply them consistently;

    •   make judgements and estimates that are reasonable and prudent;

    •   state whether applicable UK Accounting Standards have been followed, subject to any material
        departures disclosed and explained in the financial statements;

    •   prepare the financial statements on the going concern basis unless it is inappropriate to
        presume that the company will continue in business and

The directors are responsible for keeping proper accounting records that disclose with reasonable
accuracy at any time the financial position of the company and enable them to ensure that the financial
statements comply with the Companies Act 1985. They are also responsible for safeguarding the
assets of the company and hence for taking reasonable steps for the prevention and the detection of
fraud and other irregularities.

These financial statements are available on the company website. The maintenance and integrity of the
website is the responsibility of the directors, and it should be noted that UK legislation governing
preparation and dissemination of financial statements may differ from that in other jurisdictions.




                                                    4
SIT-UP LIMITED
Report of the independent auditor to the member of sit-up Limited
We have audited the company’s financial statements for the year ended 31 December 2007 which
comprise the profit and loss account, the balance sheet, the cash flow statement, and the related
notes 1 to 24. These financial statements have been prepared under the accounting policies set
out therein.

This report is made solely to the company's member 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
member those matters we are required to state to it in an auditors' 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 member, 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 United Kingdom law and 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 the directors’ report and consider the implications for our report if we become aware of any
apparent misstatements within it.

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 judgments made by the directors in the preparation of the financial
statements, and of whether the accounting policies are appropriate to the 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.

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 company's affairs as at 31
             December 2007 and of its profit for the year then ended;
             the financial statements 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.


Ernst & Young LLP
Registered Auditor, London
12 June 2008

                                                   5
SIT-UP LIMITED
Profit and loss account for the year ended 31 December 2007


                                                Before
                                            exceptional     Exceptional
                                 Notes           items           items            Total
                                                   2007          2007           2007              2006
                                                   £’000         £’000          £’000             £’000

Turnover                           2             237,142              -       237,142           225,218

Other operating income             3               1,433              -         1,433             1,143

                                                 238,575              -       238,575           226,361

Cost of sales                                (177,690)                -     (177,690)          (170,437)

Gross profit                                      60,885              -        60,885            55,924

Administrative expenses            4          (59,596)         (2,825)        (62,421)          (58,150)

Gain on extinguishment of debt     4                   -         4,703          4,703                  -

Operating profit/(loss)            5               1,289         1,878          3,167            (2,226)

Interest payable and similar
                                   9                (81)              -           (81)              (18)
charges

Interest receivable and other
                                   10              3,367              -         3,367             2,965
similar income

Profit on ordinary activities
                                                   4,575         1,878          6,453               721
before taxation

Taxation                           11                                            (327)            1,099


Profit on ordinary activities
                                   19                                           6,126             1,820
after taxation




The above results relate to the continuing operations of the company.        There was an
exceptional charge in 2006 of £1,878,000.


Statement of Total Recognised Gains and Losses:
There are no recognised gains and losses other than the profit of £6,126,000 attributable to
the shareholder for the year ended 31 December 2007 (2006 - £1,820,000).




                                             6
SIT-UP LIMITED
Balance sheet as at 31 December 2007

                                                            Notes             2007            2006
                                                                              £’000           £’000
Fixed assets
Tangible fixed assets                                         12              6,101          6,221

Current assets
Stock                                                         13            11,786          12,988
Deferred tax asset                                            11             2,003           2,330
Debtors                                                       14            43,469          43,617
Cash at bank and in hand                                                    28,122          24,115
                                                                            85,380          83,050

Creditors: amounts falling due within one year                15           (44,087)        (48,238)

Net current assets                                                          41,293          34,812

Total assets less current liabilities                                       47,394          41,033

Provision for liabilities                                     16              (392)           (157)

Net assets                                                                  47,002          40,876


Capital and reserves
Called up share capital                                       17               126             126
Share premium account                                         18            26,235          20,143
Capital redemption reserve                                    18                 5               -
Profit and loss account                                       18            20,636          20,607
Total shareholders’ funds                                     19            47,002          40,876


The financial statements on pages 6 to 18 were approved by the board of directors on 11 June 2008
and signed on its behalf by:




I C Percival
Chief Executive Officer




                                                 7
SIT-UP LIMITED
Cash flow statement for the year ended 31 December 2007


                                                               Notes    2007      2006
                                                                        £’000     £’000

Net cash inflow from operations                                 20      4,362     5,127

Returns on investment and servicing of finance
Interest received                                                       3,367     3,815
Interest paid                                                             (34)       (1)
Net cash inflow from returns on investments and servicing of
                                                                        3,333     3,814
finance

Capital expenditure and financial investment
Purchase of tangible fixed assets                                      (2,294)   (2,121)

Net cash outflow from capital expenditure and financial
investment                                                             (2,294)   (2,121)

Net cash inflow before financing                                        5,401     6,820

Financing
Founders redemption of preference shares                               (1,394)         -


Net cash outflow from financing                                        (1,394)         -

Increase in cash in the year                                    21      4,007     6,820




                                               8
   SIT-UP LIMITED
   Notes to the financial statements for year ended 31 December 2007

1. Accounting policies

   Basis of accounting
   These financial statements have been prepared under the historical cost convention in accordance
   with the Companies Act 1985 and applicable accounting standards in the United Kingdom.
   Accounting policies for all material transactions have been applied consistently, unless otherwise
   stated, and are set out below.

   Turnover
   Turnover, which excludes Value Added Tax and discounts given, represents the invoiced value of
   goods and services supplied, less actual and expected returns, refunds and credit card charge-
   backs.

   Turnover is recognised in the profit and loss account upon despatch of the goods to the customer.

   Other operating income
   Other operating income is recognised when the service to which the income relates has been
   satisfactorily performed in accordance with the relevant contract.

   Interest revenue
   Revenue is recognised as interest accrues using the effective interest method.

   Pension scheme arrangements
   The company facilitates payments of pension contributions by its employees into a stakeholder
   pension scheme that is separately administered by an independent company. It also makes
   contributions to certain employees’ personal defined contribution pension schemes. These pension
   costs are charged to the profit and loss account as contributions become payable.

   Foreign currencies
   Foreign currency transactions are translated to sterling at the rate of exchange on the day of the
   transaction. Monetary assets or liabilities held in foreign currencies at the balance sheet date are
   translated to sterling at the year-end rate and any exchange differences are taken to the profit and
   loss account.

   Taxation
   The charge for tax is based on the profit and loss account for the year. 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 have occurred at that date that will result in an obligation to pay more,
   or a right to pay less or to receive more, tax, with the following exceptions:

       •   provision is made for deferred tax on gains arising from the revaluation (and similar fair
           value adjustments) of fixed assets, and gains on disposal of fixed assets that have been
           rolled over into replacement assets, only to the extent that, at the balance sheet date, there
           is a binding agreement to dispose of the assets concerned. However, no provision is made
           where, on the basis of all available evidence at the balance sheet date, it is more likely than
           not that the taxable gain will be rolled over into replacement assets and charged to tax only
           where the replacement assets are sold;
       •   deferred tax assets are recognised only to the extent that the directors consider that it is
           more likely than not that there will be suitable taxable profits from which the future reversal
           of the underlying timing differences can be deducted.

   Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the
   periods in which timing differences reverse, based on tax rates and laws enacted or substantively
   enacted at the balance sheet date.

   Tangible fixed assets
   The cost of tangible fixed assets is their purchase cost, together with any incidental costs of acquisition.
   Incremental internal and external staff costs are capitalised where they relate to clearly defined software
   development projects. The carrying values of tangible fixed assets are reviewed for impairment when
   events or changes in circumstances indicate the carrying value may not be recoverable.

                                                       9
   SIT-UP LIMITED
   Notes to the financial statements for year ended 31 December 2007
   (continued)
1. Accounting policies (continued)

   Tangible fixed assets (continued)
   Depreciation is calculated so as to write off the cost of tangible fixed assets, less their estimated
   residual values, on a straight-line basis over the expected useful economic lives of the assets
   concerned. The principal annual terms used for this purpose are:

   Short leasehold properties        over length of the lease
   IT and studio equipment           3 – 5 years
   Fixtures and fittings             3 – 5 years
   Studio set                        1 year

   Stock
   Stock is stated at the lower of cost and net realisable value. In general, cost is determined on a first in
   first out basis. Where necessary, provision is made for obsolete, slow moving and defective stock.

   Provisions for liabilities
   A provision is recognised when the company has a legal or constructive obligation as a result of a
   past event and it is probable that an outflow of economic benefits will be required to settle the
   obligation.

   Operating leases
   Rentals applicable to operating leases, where substantially all of the benefits of ownership remain
   with the lessor, are charged against profits on a straight-line basis over the period of the lease.

   Share-based payments
   The company has no share-based compensation plans. Certain of the company's employees
   participate in the Virgin Media Inc. Stock Incentive Plan, which is described in Virgin Media Inc.'s
   Annual Report and summarised in note 7 below.

   Employees (including directors) of the group receive an element of their remuneration in the form of
   share-based payment transactions, whereby employees render services in exchange for shares or
   rights over shares (equity-settled transactions).

   The cost of equity-settled transactions with employees is measured by reference to the fair value at
   the date at which they are granted and is recognised over the vesting period which ends on the date
   on which the relevant employees become fully entitled to the award. The fair value of share options
   is determined using the Black-Scholes option pricing model. The cumulative expense recognised for
   equity settled transactions at each reporting date reflects the extent to which the vesting period has
   expired and management’s estimate of the number of awards that will ultimately vest. No expense is
   recognised for awards that do not ultimately vest.

   To the extent that the expense for share-based payments is recharged by the ultimate parent
   company which issues the shares, no expense is separately identifiable in reserves as it is included
   within inter-company debt.

   Preference Shares
   The company’s 4% cumulative redeemable preference shares have been classified as debt in
   accordance with FRS 25. On 18 September 2007, these shares were redeemed.

2. Turnover

   The company’s profit and turnover arises principally in the United Kingdom where its assets are located,
   and in one class of business.

3. Other operating income

   Other operating income arises primarily from the commissions from the introductions of customers to
   third parties and also from the sale of customer lists.

                                                         10
   SIT-UP LIMITED
   Notes to the financial statements for year ended 31 December 2007
   (continued)

4. Exceptional items

   Included in administrative expenses are exceptional costs of £2,825,000 (2006 - £1,878,000). These
   costs, relate to an on-going legal claim made by sit-up against a third party for misappropriation of
   trade secrets and breach of contract.

   On 18 September 2007 the Founder Directors redeemed 500,000 preference shares for £1.4 million. The
   resulting gain of £4.7 million has been treated as an exceptional item in the profit and loss account and a
   corresponding transfer for £6.1 million made from the profit and loss reserve to share premium.


5. Operating profit
                                                                                   2007              2006
                                                                                   £’000             £’000
   The operating profit is stated after charging/(crediting):

   Depreciation on tangible fixed assets:
   - Owned assets                                                                  2,577            2,414
   Auditors’ Remuneration
   - Audit services                                                                   65                65
   Operating lease charges
   - Plant and machinery                                                              26               28
   - Land and buildings                                                              798              806




   Auditor's remuneration disclosed above represents costs allocated to the company by the fellow group
   undertakings that pay all auditors’ remuneration on behalf of the Virgin Media group. The company is
   exempt from disclosing additional information regarding non-audit services, as the disclosures required
   under Regulation 4 (1) (b) of Section 390B of Companies Act 1985, are made in the group accounts of
   Virgin Media Finance PLC on a consolidated basis.

6. Directors remuneration

                                                                                  2007               2006
                                                                                  £’000              £’000
   Aggregate emoluments (including benefits in kind)                                320                532
   Company contributions to personal pension schemes                                 28                 52
                                                                                    348                584
   Highest paid director
   Aggregate emoluments (including benefits in kind)                                262               198
   Company contributions to defined contribution scheme                              23                20

   One of the directors was granted, but did not exercise, any share options under schemes operated by the
   ultimate parent company. MR Wall and S R Holmes did not receive any emoluments for their services as
   directors of the company. Although these directors provide services to a number of group companies, as
   well as to sit up Limited, they are not directors of any of those other group undertakings.




                                                          11
   SIT-UP LIMITED
   Notes to the financial statements for year ended 31 December 2007
   (continued)
7. Share-based payments

   The company is an indirect, wholly-owned subsidiary of Virgin Media Inc. Accordingly, the company
   has no share-based compensation plans of its own although certain of the company’s employees
   (including directors) participate in the share-based compensation plan of Virgin Media Inc., as
   summarised below.

   Share option plans
   The Virgin Media Inc. Stock Incentive Plan is intended to encourage Virgin Media Inc. share
   ownership by employees, directors and independent contractors so that they may acquire or increase
   their proprietary interest in the group, and to encourage such employees, directors and independent
   contractors to remain in the group’s employ or service and to put forth maximum efforts for the
   success of the business. To accomplish such purposes, the plan provides that Virgin Media Inc. may
   grant incentive share options, non-qualified share options, restricted shares, restricted share units
   and share awards.

   All options have a 10 year term and vest and become fully exercisable over a period of 3 to 5 years of
   continued employment. The company accounts for the plan under the fair value recognition
   provisions of Financial Reporting Standard 20 “Share-based Payment” (FRS 20).

   The fair value for these options was estimated at the date of grant using the Black-Scholes option-
   pricing model with the following weighted average assumptions:

   Year ended 31 December                                                          2007              2006
   Risk-free Interest Rate                                                        4.62%             4.98%
   Expected Dividend Yield                                                           1%                0%
   Expected Volatility                                                           28.50%            26.97%
   Expected Lives years                                                             4.63              4.35

   The expected life of the options is based on historical data and is not necessarily indicative of
   exercise patterns that may occur. The expected volatility reflects the assumption that the historical
   realised volatility of the ultimate parent company’s share price, matched to the expected life of the
   option, is indicative of future trends, which may not necessarily be the actual outcome.

   A summary of the activity and related information of the Virgin Media Inc. Stock Incentive plan,
   pertaining to the employees of the company, for the years ended 31 December as follows:


                                                                 2007                               2006
                                                             Weighted                           Weighted
                                                    2007                          2006
                                                              Average                            Average
                                                  Options                       Options
                                                             Exercise                           Exercise
                                                                Price                              Price
   As at 1 January 2007                           120,654      $25.24                 -                -
   Granted                                          83,405     $24.36           120,654           $25.24
   Exercised                                       (3,035)     $24.74                 -                -
   Expired                                         (2,914)     $24.74                 -                -
   Forfeited                                      (27,294)     $24.96                 -                -
   As at 31 December 2007                         170,816      $24.87           120,654           $25.24
   Exercisable at 31 December
                                                   21,771       $25.57                 -                    -
   2007


   The options exercisable at the year end had a weighted average remaining contractual term of 8.73
   years (2006 – none) and the options outstanding at the year end had a weighted average remaining
   term of 9.02 years (2006 – 9.64 years).


                                                       12
   SIT-UP LIMITED
   Notes to the financial statements for year ended 31 December 2007
   (continued)
7. Share-based payments (continued)

   The weighted average share price at the date of exercise for the options exercised in 2007 was
   $25.79 (2006 – none).

   The weighted average fair value of options granted during the year was $7.02 (2006 - $7.74). The
   range of exercise prices for options outstanding at the end of the year was $24.36 to $26.42 (2006 -
   $24.74 to $26.42).

   The expense included in the financial statements of the company relating to the payment of the
   share-based compensation of certain of its employees is £315,160 (2006 - £120,274). There are no
   cash settlement alternatives. The amount recharged to the company by fellow group undertakings in
   respect of share-based payments was £315,160 (2006 - £nil).

8. Employees

   The average number of persons (including executive directors) employed by the company during the year
   was:
                                                                               2007             2006
                                                                           Number            Number
   By Activity
   Administration                                                               680              732

   Staff costs (for the above persons)                                         £’000             £’000
   Wages and salaries                                                         17,411            17,729
   Social security costs                                                       1,812             1,816
   Pension costs                                                                  88               103
   Share based payments                                                          315               120
                                                                              19,626            19,768

   At 31 December 2007 pension contributions of £nil (2006 - £1,000) were prepaid.



9. Interest payable and similar charges
                                                                                2007              2006
                                                                                £’000             £’000
   On bank loans, overdrafts and other loans                                       34                 1
   Unwind of discount on provision                                                 47                17
                                                                                   81                18




10. Interest receivable and other similar income
                                                                                2007              2006
                                                                                £’000             £’000
   Bank interest receivable                                                     1,179               777
   Interest on loan to parent undertaking                                       2,188             2,188
                                                                                3,367             2,965




                                                     13
   SIT-UP LIMITED
   Notes to the financial statements for year ended 31 December 2007
   (continued)
11. Tax on profit on ordinary activities
                                                                                  2007               2006
   Current tax                                                                    £’000              £’000
   UK Corporation tax -current                                                        -                  -
   UK Corporation tax -prior period                                                   -                  -
   Total current tax                                                                  -                  -
   Deferred tax
   Origination and reversal of timing differences                                    275             (629)
   Adjustments in respect of change of rate                                          162                 -
   Adjustments in respect of prior periods                                         (110)             (470)
   Total deferred tax
                                                                                    327            (1,099)
   Tax on ordinary activities                                                       327            (1,099)


   The current tax charge for the year is lower than the standard rate of corporation tax in the UK (30%)
   The differences are explained below:
                                                                                    2007               2006
                                                                                    £’000             £’000
   Profit on ordinary activities before tax                                         6,453               721
   Tax on pre tax profit at 30%                                                     1,936               216

   Effects of:
   (Income not taxable)/expenses not deductible for tax purposes                 (1,311)                37
   Accelerated capital allowances & other timing differences                       (295)               627
   Utilisation of tax losses of fellow group undertaking                           (330)             (880)

   Current tax                                                                         -                  -

   Deferred Tax Asset
   The amount of provided and un-provided deferred tax is as follows:
                                                                                  2007               2006
                                                                                  £'000              £'000
   Tax effects of timing differences because of:
   Excess of depreciation over capital allowances                                (1,612)           (1,991)
   Short term timing differences                                                   (391)             (339)
                                                                                 (2,003)           (2,330)


    Analysis of movement in deferred tax asset held within current assets:
                                                                                   2007              2006
                                                                                   £'000             £'000
   As at 1 January                                                               (2,330)           (1,231)
   Profit and loss account                                                           327           (1,099)
   As at 31 December                                                             (2,003)           (2,330)

   The UK Corporation tax rate will decrease from 30% to 28% from 1 April 2008. This rate change will
   affect the amount of future tax payments to be made by the company. The deferred tax balance has
   been adjusted in the current year to reflect this change. Changes to UK Capital allowances regime will
   also impact the capital allowances the company can claim. The full impact of these changes is still being
   assessed.



                                                       14
   SIT-UP LIMITED
   Notes to the financial statements for year ended 31 December 2007
   (continued)

12. Tangible fixed assets

                                    Short
                                leasehold    IT and studio    Fixtures and
                                properties      equipment           fittings    Studio set           Total
                                   £’000           £’000            £’000          £’000            £’000
   Cost
   At 1 January 2007               2,307           7,384            1,133              14         10,838
   Additions                           24          2,255                41           137            2,457
   Disposals                         (61)        (1,613)              (47)           (14)         (1,735)
   At 31 December 2007             2,270           8,026            1,127            137          11,560

   Depreciation
   At 1 January 2007                 834           3,316              459               8           4,617
   Charge for the year               309           1,958              227              83           2,577
   Disposals                         (61)        (1,613)              (47)           (14)         (1,735)
   At 31 December 2007             1,082           3,661              639              77           5,459

   Net book Value
   At 31 December 2007             1,188           4,365               488             60           6,101

   At 31 December 2006             1,473           4,068               674               6          6,221



13. Stock
                                                                                 2007               2006
                                                                                 £’000              £’000
   Finished goods for resale                                                    11,786             12,988


14. Debtors
                                                                                 2007               2006
                                                                                 £’000              £’000
   Trade debtors                                                                 3,879              3,790
   Loan to parent undertaking                                                   34,848             35,319
   Other debtors                                                                   571              1,867
   Prepayments                                                                   2,221                805
   Accrued income                                                                1,950              1,836
                                                                                43,469             43,617

   Included in other debtors there are £135,000 (2006 - £135,000) that fall due after more than one year.




                                                       15
    SIT-UP LIMITED
    Notes to the financial statements for year ended 31 December 2007
    (continued)
15. Creditors: amounts falling due within one year
                                                                                     2007              2006
                                                                                     £’000             £’000

    (2006 - 500,000) 4% cumulative preference shares of 1p each                         -              6,097
    Trade creditors                                                                32,711             32,704
    Other creditors, taxation and social security costs                             3,581              3,463
    Accruals and deferred income                                                    4,637              4,213
    Inter-company accruals                                                          3,158              1,761
                                                                                   44,087             48,238

    Creditors: amounts falling due within one year
    1,000,000 4% cumulative preference shares of 1p each were issued on 23 May 2005 to the three
    Founder directors of the company at a premium of £12,185,000. On 1 June 2006 the preference
    shareholders exercised put options to have 50% of their shares purchased by Screenshop Limited.
    These 500,000 shares registered in the name of Screenshop Limited were immediately re-designated
    as ordinary shares having the rights and being subject to the restrictions and obligations set out in the
    company’s articles of association.

    On 18 September 2007, the preference shareholders exercised put options to have their remaining
    500,000 4% cumulative preference shares, redeemed by the company at a value of £1.4million. The
    redemption has resulted in an exceptional gain of £4.7million (see note 4).

    Loan facility: the company, cross guaranteed, along with fellow subsidiaries Virgin Media group’s
    £3,775 million loan facility on 3 March 2006. An additional facility of £1,500 million was subsequently
    drawn by the Virgin Media group during 2006 to refinance existing unsecured debt obligations. The
    company as a member of the new bank group has pledged its assets under the new loan facility
    along with fellow group subsidiaries but is not a guarantor. As at 31 December 2007, the maximum
    contingent liability represented by outstanding borrowings by these companies amounted to
    approximately £4,905 million (2006 - £5,125 million).


16. Provision for liabilities
                                                                                                       2007
                                                                                                       £’000
    Provision for lease dilapidations
    At 1 January 2007                                                                                    157
    Arising during the year                                                                              188
    Unwind of discount on provision                                                                       47
    At 31 December 2007                                                                                  392

    sit-up has made changes to properties it leases. Provision has been made for the obligation that
    exists to return the properties to their original state at the end of the lease.




                                                         16
   SIT-UP LIMITED
   Notes to the financial statements for year ended 31 December 2007
   (continued)
17. Called up share capital

                                                                               2007             2006
                                                                               £’000            £’000
   Authorised
   17,100,000 (2006 - 17,100,000) ordinary shares of 1p each                    171               171

   500,000 (2006 - 500,000) preference shares of 1p each                           5                  5

                                                                                176               176

                                                                               2007             2006
                                                                               £’000            £’000
   Issued and fully paid
   12,563,114 (2006 - 12,563,114) ordinary shares of 1p each                    126               126

   In 2006 financial statements, 500,000 issued preference shares (now redeemed) were classified as
   debt in accordance with FRS25.


18. Reserve movements
                                                                               Capital      Profit and
                                                              Share
                                                                          redemption              loss
                                                           Premium
                                                                              reserve        account
                                                                £’000           £’000            £’000
   At 1 January 2007                                           20,143                -         20,607
   Retained profit for the financial year                           -                -           6,126
   Redemption of preference shares                              6,092                5         (6,097)
   At 31 December 2007                                         26,235               5          20,636



19. Reconciliation of movements in shareholders’ funds
                                                                              2007              2006
                                                                              £’000             £’000
   Opening shareholders’ funds                                               40,876            32,838
   Profit for the financial year                                              6,126             1,820
   Share-based payment                                                            -               120
   Conversion of preference shares                                                -             6,098
   Closing shareholders’ funds                                               47,002            40,876




                                                     17
   SIT-UP LIMITED
   Notes to the financial statements for year ended 31 December 2007
   (continued)
20. Reconciliation of operating profit to net cash inflow from operating activities

                                                                                 2007             2006
                                                                                 £’000            £’000
   Operating profit/(loss)                                                       3,167          (2,226)
   Gain on redemption of preference shares                                     (4,703)                -
   Share-based payment (non-cash)                                                    -              120
   Depreciation on tangible fixed assets                                         2,577            2,414
   Decrease in stock                                                             1,202              217
   Decrease in debtors                                                             148            1,507
   Increase in creditors and provisions                                          1,971            3,095
   Net cash inflow from operating activities                                    4,362             5,127




21. Reconciliation of movement in net funds
                                                             As at 1                          As at 31
                                                            January           Cash flow      December
                                                               2007                              2007
                                                              £’000               £’000          £’000
   Cash at bank and in hand                                  24,115               4,007         28,122
                                                             24,115               4,007         28,122


22. Financial commitments

   At 31 December the company had annual commitments under non-cancellable operating leases and
   long-term contracts as follows:
                                       Land and buildings                    Other
                                          2007          2006             2007             2006
                                         £’000          £’000           £’000            £’000
   Expiring within one year                476              -             520               28
   Expiring in two to five years           229            705             364              881
   Expiring in over five years             198            198                -               -
                                           903            903             884              909

   The company has no capital commitments at the end of 2007 (2006 - £nil).

23. Related party transactions

   The company has taken advantage of the exemption under FRS 8 not to disclose transactions with group
   undertakings as it is a subsidiary undertaking which is at least 90% controlled by the ultimate parent
   undertaking.

24. Parent undertaking and controlling party

   The company’s immediate parent undertaking is Screenshop Limited.

   The company’s results are included in the group accounts of Virgin Media Finance PLC.
   The company’s ultimate parent company and controlling party as at 31 December 2007 was Virgin
   Media Inc. which is incorporated in Delaware, USA.
   Copies of all sets of group accounts which include the results of the company are available from the
   Secretary, Virgin Media, 160 Great Portland Street, London, W1W 5QA.



                                                     18

								
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