RNS Number:5104E
Goldshield Group PLC
01 December 2002
FOR IMMEDIATE RELEASE: 07.00, Monday 2 December 2002
GOLDSHIELD GROUP PLC
Interim Results for the six months ended 30 September 2002
Goldshield Group plc ("Goldshield"), the profitable, marketing-led, emerging
British pharmaceutical company, has pleasure in reporting its interim results
for the six months ended 30 September 2002.
HIGHLIGHTS
* Growth continues despite unusual and adverse trading conditions
o Turnover up by 9% to #54.5m (30 Sept. 2001: #50.0m)
o Headline earnings before amortisation, exceptional costs relating
to SFO and tax, increased by 5% to #11.9m (30 Sep. 2001: #11.3m)
* Diluted earnings per share pre amortisation and exceptional costs up 6%
* to 22.2p (30 Sept. 2001: 20.9p)
* UK sales up 7% and non-US overseas sales up 46%
* US sales up by 32% compared to six months to 31 March 2002 to USD$21.8m
* Efficiencies increasing from Central Group Management Services Unit -
* now up and running in India
* A range of supply chain problems impacted profit by around #1.0m
* Interim dividend 1.45 pence per share (30 Sept. 2001: 1.45 pence per
share)
* No further update from SFO investigation
Commenting on the results, Ajit Patel, Executive Chairman of Goldshield Group,
said:
"The first half of this year has been eventful, yet we continue to make good
progress and despite experiencing unforeseen difficulties in the first six
months, the Group has achieved growth in turnover and earnings before
amortisation, exceptionals and tax.
"Current trading continues on a similar trend as during the first half. Various
difficulties faced during this period are gradually being overcome and your
Board remains confident and upbeat about the Group's underlying performance in
sales and profits.
"Operational efficiencies being achieved through the back office operation in
India, our creation of opportunities for aggressive growth in US healthcare
products, the launch of the UK television home shopping channel and the Antigen
injectables business in Europe will keep us on track to deliver good mid to long
term earnings per share growth."
For further information, please contact:
Goldshield Group plc
Ajit Patel, Executive Chairman Tel on Monday 02.12.02: +44 (0) 20 7466 5000
Rakesh Patel, Finance Director Thereafter: +44 (0) 20 8649 8500
Buchanan Communications Tel: +44 (0) 20 7466 5000
Louise Bolton
Chairman's Statement
Overview
The first half of this year has been eventful. We have suffered severe
difficulties relating to the supply of the Antigen range of injectable products,
raw material shortages, supply problems relating to recent acquisition of Diamox
and, of course, management distractions caused by the SFO investigation. We
estimate a loss in profit of at least #1.0 million resulting from these various
factors in the first half of this year. Despite such unforeseen difficulties we
have continued to make good progress in many areas.
Group turnover has increased by 9% to #54.5 million (30 Sept. 2001: #50.0
million) and underlying earnings before amortisation, exceptional costs and tax
have increased by 5.3% to #11.9 million (30 Sept. 2001: #11.3 million).
Headline earnings per share before amortisation and SFO related exceptional
costs were 22.2 pence (30 Sept. 2001: 20.9 pence). A dividend of 1.45 pence (30
Sept. 2001: 1.45 pence) is due to be paid on 20 January 2003 to those
shareholders on the Register on 13 December 2002.
Sales in the United Kingdom have grown by 7.0% to #31.9 million (30 Sept. 2001:
#28.6 million). This increase is mainly due to organic growth from within our
pharmaceutical businesses, enhanced by various acquisitions made last year.
However, following our successful acquisition of the Antigen range of injectable
products in December last year, the Group has faced supply difficulties that
have not only impacted sales but also profits. We have spent the last few
months supporting the Miza Group, by paying higher cost of goods, in order to
continue with supply until new manufacturers can be established. This, plus
increased interest costs as a result of our prudent build up of inventory to
safeguard future supply, has further impacted profits.
On the UK healthcare side, our mail order business has suffered a decline in
sales of 13% compared to the second half of the last financial year. This is in
large part due to consistent and unfounded negative media coverage regarding use
of vitamins as well as increased competition within the UK. It is our belief
that the recently announced launch of the 24-hour Goldshield Vitality home
shopping channel early in 2003 will put the UK healthcare business back on
track.
An EU ban, on the use of Glucosamine raw material sourced from China, has also
impacted on our sales and profits. The Glucosamine products combined, make up
Goldshield's largest product category; consequently first half margins have been
impacted. However, supplies are being restored and raw material costs have
normalised and we expect this profit impact to stop adversely affecting us as of
this month. The Post Office has imposed a near doubling of the postal rates and
this will obviously impact profits in our mail order business. Looking ahead,
we expect to gradually pass these increased costs to consumers to put our
margins back on track
In the combined Rest of World and Mainland Europe businesses, an increase of
sales by 46.0% to #7.8 million (30 Sept. 2001: #5.4 million) was achieved. Most
of these sales were of pharmaceutical products, although sales of our healthcare
products in France, sold via mail order, are particularly encouraging and we
expect good growth in this market in the coming months.
Sales in North America have increased to US $21.8 million compared to sales of
US $16.5 million in the last 6 months of year ended March 2002. This is an
increase of 32%. Several new initiatives are contributing towards the sales
increase. I am particularly encouraged by our progress against weak consumer
confidence in the North American market though, as being suffered by all
retailers in all sectors, and am in no doubt about this market making a
significant impact on our Group sales over the next two to three years.
The year so far has proved challenging, not forgetting the reported Serious
Fraud Office ("SFO") investigation which has had a significant impact on
management time. To date we have had no further contact from the SFO and
realistically we do not expect any further updates until the second quarter of
next year.
Whilst these results are not in line with our expectations, I remain confident
for the future. Our underlying performance remains strong and I expect the
sales and profit growth to regain momentum over the coming months.
Operating Review
General
Due to the growth being experienced by the Group we have spent the last 12
months developing a world-wide central Management Services Unit. This includes
call centres and order processing activities, warehouse and distribution,
finance and accounting, purchasing, Information Technology (IT), Management
Information Systems (MIS), human resources, regulatory and compliance, and
facilities management. The first half of this year has been concentrated on
consolidating these regionally and a back office structure has been established
in Mumbai, India where we will consolidate a major part of the above activities
in order to reduce operating costs.
As our world-wide direct to consumer business grows, we will also need to
increase the call centre capacity worldwide and cater for several languages. We
anticipate the number of call centre operators to increase to as many as 1,000
people over the next 5 years. Two years ago, when the Group moved some of its
call centre management to India, we outsourced it to Global Telesystems a
leading telecommunications player in India. As our worldwide need is
increasing, in March 2003, we will initiate our own centre in India, which will
house an additional 200 people. This is in addition to a 200 seat sales centre,
which we established at Portland, USA earlier this year.
The Group accounting and finance management team started to move to India in
September this year. Together with the central MIS team being established, the
Indian back office will provide complete financial management and reporting for
all marketing units worldwide. We anticipate this transition will be completed
by the end of the second quarter of 2003.
Healthcare Products
Within the North American Direct / Agent sales business there has been
consolidation of certain aspects of the three business units (Golden Pride,
Changes International and Achievers Unlimited). Management and infrastructure
changes have been put into place to allow for a more cohesive unit which,
although early days, appears to be working well.
Consumer confidence in the US continues to have an effect on overall sales. The
US economic forecast for the next six months is positive, with a recovery, if
slow, projected. Large network of loyal independent distributors, along with
continued new product and programme releases, will continue to broaden our
exposure and further increase our revenue stream.
The business is currently working with other Goldshield business units on
various programmes to generate business to new markets. Tapping into leads
generated by numerous forms of marketing by Goldshield creates market potential
for special offerings by the Division. The release of new products across all
business units will continue, the first being the introduction of the Gold
Benefits Health Plan and Essential 3, a product designed for mothers.
Additional new core products being considered include nutritional bars currently
being marketed by PR Nutrition.
The US Mail Order business saw significant improvements to response rates,
revenues and profitability during the first six months of Fiscal Year 2003.
This is encouraging given the events of 9-11 and the Anthrax scare, which
depressed response rates and revenues during the second half of Fiscal 2002. The
US Mail Order Group, which comprises of Advanced Nutritional Products,
Goldshield Healthcare Direct and PR Nutrition, mailed approximately two million
direct response pieces during the first six months ended September 2002 and
achieved encouraging results. In addition, various tests were carried out for
future potential marketing campaigns with reasonable success using television,
radio and print media.
In the first six months of this year Goldshield Healthcare Direct was able to
introduce a 96 page catalogue which includes over 250 product choices, many of
which were added to create an expanded US product line. This catalogue is
inserted in all Goldshield product orders as well as in orders for new direct
response radio and TV Infomercial buyers. During the first six months of Fiscal
Year 2003 we also expanded the "Auto-Ship Program" where customers sign up to
receive regular shipments of a product or products. This programme provides a
steady stream of revenue and profits for the Goldshield Direct operating unit.
In the UK, over the last six months, our focus has been on the development of
new product introductions and the establishment of new channels of distribution,
whilst maximising return from existing mailing channels. New channels of
distribution have been developed with a more direct focus of resources being
applied to web trading, e-marketing and tele-marketing activities.
Inclusion of web addresses and exclusive incentive offers into "Off The Page"
advertising has seen an increase in the number of customers recruited to the
database and a growth in monthly web sales of 43% during the period between 31st
March 2002 and 31st October 2002.
An e-mail communications strategy has been implemented across all UK businesses,
with a product proposition being mailed to the e-mail database on a bi-weekly
basis. This has proved successful to date, with higher than industry forecast
click through and order rates.
In September, Goldshield Healthcare introduced a major new marketing initiative
to develop loyalty amongst existing customers and incentivise recruitment - The
Goldshield Buyers Club. This initiative will reduce database attrition by
giving members, for a joining fee, up to 20% off the normal mailing price - as
well as being eligible for further incentives.
We are also pleased to announce that we will launch the Goldshield Vitality Home
Shopping channel broadcast via digital satellite early next year. This will
provide further opportunity to increase our market share within this product
category.
Pharmaceutical Products
The Retail and Hospital sales within Western Europe has demonstrated growth in
certain key areas and has further consolidated recent acquisitions, which
provide growth opportunities for the future. For the time being, we remain
focused on the Western European market and Rest of World for pharmaceutical
products. As Management gains more depth and experience in North America we
will look to introduce some of these products to that market as well.
Our generics business has grown at a lower rate, due to significant pricing
pressures from competitors in some areas of the market. Whilst the overall sales
have not grown much in value, the volumes have increased considerably. Further
new product introductions into our Generic range within coming months will
further consolidate our growth and I remain confident about growing our turnover
in this Division.
Despite the ongoing problems with the supply of products associated with Miza
Group, we have achieved some significant penetration into the UK NHS Contract
Hospital business with the recent award of three new tenders in Yorkshire, North
London and Eastern Counties. These will provide us with further sales
opportunities in coming months. Future opportunities to gain further awards
within the NHS will further consolidate this growth.
With the Branded Primary Care sector, we have seen the recent launch of two new
products, Trintek, a nitroglycerine patch for the treatment of angina and Komil,
a branded generic for the treatment of hypertension.
There has been a small decline in the International sales, mainly attributable
to import restrictions due to regulatory transfers in Israel and Romania; a
deteriorating market situation in Pakistan and supply/tender issues in South
Africa. These restrictions however are offset partially by new Antigen business
and an increase in sales of Goldshield brands.
The first half of the year has seen a lot of activity in re-establishing Antigen
Overseas business and distributor network from zero base in many cases. The
Antigen business has given us new partners and business in Turkey, the West
Indies and Malaysia, which we are building on with Goldshield brands both
existing and products pending UK registration. Despite the recent issues with
regard to Miza, the Antigen acquisition remains a good one and key to our
strategy of expanding our product base in the International Division.
Product Development
Four new products have been launched during the 6 months to 30 Sept. 2002 and a
further 15 are scheduled to be approved by March 2003.
Further to the annual report for year end March 2002, of the new product
development projects discussed and since initiated within the injectable and
oncology markets, one marketing authorisation application (MAA) has been
approved, three MAAs are under assessment by the UK Medicines Control Agency and
a further three injectables MAA are to be submitted before March 2003 - we
remain confident of their approvals during the next few months.
Goldshield has had its first Mutual Recognition Procedure (MRP) assessment
approval of a marketing authorisation in two European countries, simultaneously
using the UK as the Reference Member State (RMS). Eight further MRP assessments
by the UK are expected to be filed before the end of this financial year with a
view to new registrations being approved across several other European countries
in the first quarter of the next financial year.
Product licence information has been generated across another 15 products, which
are under technical assessment with a view to making marketing authorisation
product licence applications in 2003, initially in the UK.
Current Trading and Future Prospects
Current trading continues on a similar trend as during the first half. Various
difficulties faced during this period are gradually being overcome and your
Board remains confident and upbeat about the Group's underlying performance in
sales and profits. Operating margins will continue to be under pressure for
most of the second half on a similar scale to that suffered in the first half.
These will be largely due to Antigen stock build up, increased postal rates
which affect mail orders and one off setting up costs relating to the Goldshield
Vitality television shopping channel, the Indian call centre and back office.
Having said that, operational efficiencies being achieved through the back
office operation in India, our creation of opportunities for aggressive growth
in US healthcare products, the launch of the UK television home shopping channel
and the Antigen injectables business in Europe will keep us on track to deliver
strong mid to long term earnings per share growth.
Ajit Patel
Executive Chairman
2 December 2002
Note: Pre-amortisation figures, discussed above, are calculated as follows.
2003 2002 2002
Year to March 1st half 1st half Total
# million # million # million
Turnover 54.5 50.0 100.4
Operating profit before amortisation and SFO costs 12.3 11.4 24.2
Net Interest (0.4) (0.1) (0.4)
Pre tax profit 11.9 11.3 23.8
Taxation (3.6) (3.5) (7.1)
Profit after tax 8.3 7.8 16.7
EPS diluted (pence) 22.2 20.9 44.6
Number of shares (million) 37.4 37.5 37.5
Summarised Consolidated Profit and Loss Account
for the six months ended 30 September 2002
Six months Six months Year
ended ended ended
30 September 30 September 31 March
Notes 2002 2001 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Turnover 1 54,458 50,002 100,433
Operating profit 1 7,521 7,445 16,228
The operating profit is stated after charging the following items:-
Research and development expenditure 499 445 900
Amortisation of intangible assets 4,599 3,906 8,006
Serious Fraud Office investigation -
professional costs 195 - -
Net Interest (378) (101) (372)
Profit on ordinary activities
before taxation 7,143 7,344 15,856
Tax on profit on ordinary activities 2 (2,574) (2,619) (5,357)
Profit on ordinary activities
after taxation 4,569 4,725 10,499
Minority interest 33 (37) (9)
Profit for the financial period 4,602 4,688 10,490
Equity dividends 3 (535) (533) (1,613)
Profit Retained for the period 4,067 4,155 8,877
Earnings per share
Basic (pence) 4 12.5 12.9 28.6
Diluted (pence) 4 12.3 12.5 28.1
Dividend per share (pence) 3 1.45 1.45 4.35
Consolidated Balance Sheet
as at 30 September 2002
As at As at As at
30 September 30 September 31 March
Notes 2002 2001 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Fixed assets
Goodwill 5 30,390 27,088 33,051
Other intangible assets 5 36,672 30,914 38,589
Intangible assets 5 67,062 58,002 71,640
Tangible assets 1,669 1,929 1,327
68,731 59,931 72,967
Current assets
Stocks 17,335 9,796 12,281
Debtors: due after more then one year
- deferred tax 823 - 783
Debtors: due within one year 13,836 10,443 14,007
Cash at bank and in hand 3,644 2,742 9,320
35,638 22,981 36,391
Creditors:
amounts falling due within one year (31,056) (25,649) (35,610)
Net current assets/(liabilities) 4,582 (2,668) 781
Total assets less current liabilities 73,313 57,263 73,748
Creditors: amounts falling due
after more than one year (14,701) (8,091) (19,237)
Provisions for liabilities and charges (3,298) (2,582) (3,187)
55,314 46,590 51,324
Capital and reserves
Share capital 1,845 1,837 1,842
Share premium account 21,101 20,931 21,049
Profit and loss account 32,251 23,644 28,283
Shareholders' funds 55,197 46,412 51,174
Minority interest 117 178 150
Total capital employed 55,314 46,590 51,324
Consolidated Cash Flow Statement for the
six months ended 30 September 2002
Six months ended Six months ended Year ended
30 September 30 September 31 March
Notes 2002 2001 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Net cash inflow from operating
activities 6 3,438 7,786 18,093
Returns on investments and
servicing of finance
Interest received 54 101 164
Interest paid (432) (202) (536)
Net cash outflow from returns on
investments and servicing of financing (378) (101) (372)
Taxation
Corporation tax paid (net) (1,189) (1,665) (5,942)
Capital expenditure and financial investment
Purchase of intangible fixed assets (610) (6,355) (9,513)
Purchase of tangible fixed assets (647) (102) (26)
Proceeds on disposal of intangible
fixed assets - - 229
Proceeds on disposal of tangible fixed
assets - - 804
Net cash outflow from capital expenditure
and financial investment (1,257) (6,457) (8,506)
Acquisitions and disposals
Purchase of businesses (3,327) (5,630) (11,437)
Equity dividends paid (1,070) (851) (1,394)
Net cash outflow before financing (3,783) (6,918) (9,558)
Financing
New bank loan - 3,450 13,737
Bank loan payments (1,948) (596) (1,788)
Issue of shares 55 99 222
(Decrease)Increase in cash 8 (5,676) (3,965) 2,613
Statement of Total Recognised Gains and Losses and Reconciliation of Movements
in Shareholders' Funds
for the six months ended 30 September 2002
Statement of Total Recognised Gains and Losses
Six months ended Six months ended Year ended
30 September 30 September 31 March
Notes 2002 2001 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Profit for the financial period 4,602 4,688 10,490
Currency differences on foreign
currency net investments 7 (99) (254) (337)
Total recognised gains and losses for the
period and total gains and losses recognised
since last financial statements 4,503 4,434 10,153
Reconciliation of movements in equity shareholders' funds
Six months ended Six months ended Year ended
30 September 30 September 31 March
Notes 2002 2001 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Profit for the financial period 4,602 4,688 10,490
Equity dividends (535) (533) (1,613)
Issue of shares 55 99 222
Currency difference on foreign
currency net investments 7 (99) (254) (337)
Net increase in shareholders' funds 4,023 4,000 8,762
Shareholders' funds at 1 April 2002 51,174 42,412 42,412
Shareholders' funds at 30 September 2002 55,197 46,412 51,174
Notes to the Interim Financial Statements
1. Segmental reporting
Turnover, profit on ordinary activities before taxation are attributable to the
principal activity of the Group.
Six months ended Six months ended Year ended
30 September 30 September 31 March
2002 2001 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Turnover by destination:
United Kingdom 32,087 29,821 58,710
Western Europe excluding the
United Kingdom 5,455 2,772 9,766
North America 14,531 14,812 26,288
Rest of the World 2,385 2,597 5,669
54,458 50,002 100,433
Turnover by origin:
United Kingdom 34,463 35,190 70,859
North America 14,531 14,812 26,288
Ireland 5,464 - 3,286
54,458 50,002 100,433
Operating profit/(loss):
United Kingdom 6,937 7,955 16,735
North America (750) (510) (602)
Ireland 1,334 - 95
7,521 7,445 16,228
2. Tax on profit on ordinary activities
The tax charge for the six months has been calculated at an effective rate of
36%.
3. Equity dividends
The Directors have declared an interim dividend of 1.45 pence per share (2001/02
interim dividend: 1.45 pence, 2001/02 final dividend: 2.90 pence). The dividend
will be paid on 20 January 2003 to those shareholders on the Register on 13
December 2002.
4. Earnings per share
Basic earnings per share Diluted Earnings per share
Earnings
attributable Dilutive effect
to ordinary of securities - Adjusted
shareholders share options earnings
6 months to 30 September 2002
Earnings (#000) 4,602 4,602
Weighted average number
of shares ('000) 36,873 577 37,450
Per Share amount (pence) 12.5 12.3
6 months to 30 September 2001
Earnings (#000) 4,688 4,688
Weighted average number of shares ('000) 36,471 1,004 37,475
Per Share amount (pence) 12.9 12.5
12 months to 31 March 2002
Earnings (#000) 10,490 10,490
Weighted average number of shares ('000) 36,621 761 37,382
Per Share amount (pence) 28.6 28.1
5. Intangible fixed assets
Brand names know-how Goodwill Total
licenses and trade marks
#'000 #'000 #'000
Cost
At 1 April 2002 49,324 42,370 91,694
Additions 544 684 1,228
Disposals - - -
Differences on exchange (6) (1,465) (1,471)
At 30 September 2002 49,862 41,589 91,451
Amortisation
At 1 April 2002 10,735 9,319 20,054
Provided for the period 2,455 2,144 4,599
Disposals - - -
Differences on exchange - (264) (264)
At 30 September 2002 13,190 11,199 24,389
Net book amount
At 30 September 2002 36,672 30,390 67,062
Net book amount
At 31 March 2002 38,589 33,051 71,640
6. Net cash inflow from operating activities
Six months ended Six months ended Year ended
30 September 30 September 31 March
2002 2001 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Operating profit 7,521 7,445 16,228
Depreciation 305 394 455
Amortisation 4,599 3,906 8,006
Currency differences on foreign
currency net investments - 99 -
(Profit)/loss on disposal of fixed assets
- Intangible - - 107
- Tangible - - (199)
(Increase) in stocks (5,265) (491) (2,238)
(Increase) in debtors (445) (3,234) (4,143)
(Decrease) in creditors (3,277) (333) (123)
Net cash inflow from operating activities 3,438 7,786 18,093
7. Currency differences on foreign currency net investments
The #99,000 currency difference on foreign currency net investments relates to
the unrealised loss made on translating the assets and liabilities of the US and
Irish subsidiaries at the period-end date (Sep 2001: #254,000 loss).
8. Reconciliation of net cash flow to movement in net debt
Six months ended Six months ended Year ended
30 September 30 September 31 March
2002 2001 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
(Decrease)/increase in cash for the period (5,676) (3,965) 2,613
Increase/(decrease) in financing 1,948 (2,854) (11,949)
Changes in net funds arising from cashflows (3,728) (6,819) (9,336)
Net (debt)/funds at 31 March 2002 (5,964) 3,372 3,372
Net debt at 30 September 2002 (9,692) (3,447) (5,964)
9. Contingent liabilities
As set out in the 2002 group accounts, on 28 November 2001, the Group acquired
the sales, marketing and distribution rights for the Antigen Brand from Antigen
Holdings Limited. The companies and assets were acquired at an estimated cost
of #9.4m. The estimated consideration was to be settled in two parts, firstly
by a payment of #5.2m and secondly by an obligation to discharge the obligations
of the subsidiaries up to an estimated #4.2m under the wider scheme of
arrangement covering all Antigen companies (including those not acquired by the
group). The total known creditors covered by the wider scheme of arrangement
were estimated at #18.8m.
On 29 October 2002 Miza Ireland Limited and each of its Irish subsidiaries,
which were parties to the wider scheme of arrangement, were placed in
examinership. It is not possible to determine the impact, if any of this post
balance sheet event on Goldshield's liabilities under the scheme of arrangement
and no adjustments have been made in this respect in the interim statement.
10. Preparation of interim statements
The interim financial statements have been prepared in accordance with
applicable United Kingdom accounting standards and under the historical cost
convention. The principal accounting policies of the Group are set out in the
Group's 2002 annual report and financial statements. The policies have remained
unchanged from the previous annual report.
The interim statements are unaudited but have been reviewed by the auditors and
their report is set out on page 16. The comparative figures for the financial
year ended 31 March 2002 are based on the Company's statutory accounts for that
year and have been reported on by the Company's auditors and delivered to the
Registrar of Companies. The report of the auditors was unqualified and did not
contain a statement under section 237(2) or (3) of the Companies Act 1985.
The interim statements do not constitute statutory accounts within the meaning
of section 240 of the Companies Act 1985.
11. Approval of interim statement
The interim statement was approved by the Board of Directors on 29 November
2002. Copies of this statement will be available to members of the public, free
of charge, from the Company at NLA Tower, 12-16 Addiscombe Road, Croydon,
Surrey, CR0 0XT.
Independent review report to Goldshield Group plc
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 September 2002 which comprise the Summarised
Consolidated Profit and Loss Account, Consolidated Balance Sheet, Consolidated
Cash Flow Statement, Statement of Total Recognised Gains and Losses,
Reconciliation in Movements in Shareholders Funds and the related notes 1 to 11.
We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Directors' responsibilities
The interim report including the financial information contained therein is the
responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists primarily of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
The maintenance and integrity of the Goldshield website is the responsibility of
the directors: the work carried out by the auditors does not involve
consideration of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the financial
statements since they were initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination of
the financial statement may differ from legislation in other jurisdictions.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2002.
GRANT THORNTON
CHARTERED ACCOUNTANTS
LONDON
29 November 2002
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FSUFUFSESEDE
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