TIDMGSD
RNS Number : 4676U
Goldshield Group plc
25 June 2009
GOLDSHIELD DRIVES GROWTH STRATEGY AS IT ANNOUNCES SOLID TRADING RESULTS
Goldshield Group plc ("Goldshield"), the Pharmaceutical and Consumer Health
Group, today announces its full year results for the year ended 31 March 2009:
* Group revenue up 15.9% to GBP98.4 million (2008: GBP84.9 million)
* Profit before tax up 71.8% to GBP21.3 million (2008: GBP12.4 million)
* EBTA* up 38.3% to GBP24.2 million (2008: GBP17.5 million)
* EPS up 134.9% to 39.7 pence (2008: 16.9 pence)
* Net Cash GBP27.5 million (2008: GBP19.2 million)
* Proposed dividend of 5.8 pence expected to be paid on 19 August 2009 (2008: 5.5
pence)
* EBTA defined as earnings before tax, amortisation, impairment losses and
exceptional items.
Commenting on the results, Rakesh Patel, Chief Executive Officer, said,
"I am delighted to be able to report another strong performance. Although we
have not been immune from the effects of the recession, I am very encouraged by
these results. Pre-tax profits have increased 71.8%, revenue is up 15.9% and our
cash reserves have grown to GBP27.5 million. As a sign of our confidence, we
have increased the full year dividend by 8.8%. I fully intend to use our
resources to invest in new product introductions via development, in-licensing
and acquisitions together with the scaling and building of our brands.
Sustainable long-term growth is an area at the forefront of our objectives. We
are entering an exciting period for Goldshield and I am confident that we can
continue to drive value for our shareholders."
-ends-
Date: 25 June 2009
For further information contact:
+----------------------------------------+----------------------------------------+
| Goldshield Group plc | City Profile |
+----------------------------------------+----------------------------------------+
| Rakesh Patel, Chief Executive Officer | Jonathan Gillen |
+----------------------------------------+----------------------------------------+
| Ram Swamy, Chief Financial Officer | William Attwell |
+----------------------------------------+----------------------------------------+
| 020-8649-8500 | 020-7448-3244 |
+----------------------------------------+----------------------------------------+
| www.goldshieldplc.com | goldshield@city-profile.com |
+----------------------------------------+----------------------------------------+
Chairman's Overview
On 3 December 2008, the Court of Appeal finally put an end to the Serious Fraud
Office's endeavour to prosecute the Company. Despite the outcome being positive
the persistence and length of the litigation, over six years, have caused damage
to the reputation of the Group. It is a credit to the management that through
this turbulent time the business has delivered strong growth, profits and cash
flows. The Board is committed to continue to build its market position by
providing quality service and products, and focusing on strengthening mutually
beneficial business partnerships with the Company's stakeholders.
Our refocus on the Pharmaceuticals and Consumer Health product businesses has
delivered encouraging results. During the year, senior managers have devoted a
significant amount of time to restructure the business and upgrade its systems
and processes for future growth. The systems upgrade with a majority of SAP
systems and processes implementation is due for completion by the end of this
calendar year.
The pharmaceutical side of our business continues to provide good margins and we
are actively pursuing the introduction of new products to ensure that this
continues. Our Consumer Health business remains "work in progress" and is
undergoing strategic changes. There are encouraging positive signs from the sale
of our branded weight management products.
We also have developed strategies to increase our market share in the
territories we cover outside the UK and bring new quality products to the
consumer in a more cost effective and efficient way. I hope to report positive
progress during the course of the current financial year. We are in a very sound
financial position with substantial cash balance of GBP27.5 million and no debt.
We intend to spend our cash reserves on new product introductions, creating
brands in the future and paying dividends.
The Group has strengthened its corporate governance by having a strong
non-executive Director presence on the Board and a newly appointed CFO, Ram
Swamy. We are fully committed to continue to improve our corporate governance
platform; for example, this year we launched our risk management assessment
program across the Group.
I am pleased to inform you that Kirti V. Patel has agreed to rejoin the Board as
Group Executive Director in August 2009. Kirti has been closely associated with
the Company from its inception, most recently as strategic advisor. I am
confident Kirti's undoubted knowledge and standing within the pharmaceutical
industry will add much value to our future success.
After a successful last financial year, we have had an encouraging start to the
current financial year but we expect to face a more challenging economic
environment in the short-term future. I am confident that Goldshield is a Group
which can grow further, with the support of its dedicated employees.
Dr. Keith Hellawell QPM
Chairman
24 June 2009
Chief Executive Officer's Operating Review
I am pleased to report another encouraging performance across the Group for the
year ended 31 March 2009. Our efforts to concentrate on the core Pharmaceuticals
and Consumer Health businesses have proved successful and have delivered Group
revenues of GBP98.4 million, an increase of 15.9% over 2008 (GBP84.9million) or
12.2% at constant exchange rates. Our profit before tax and exceptionals was
GBP20.0 million (2008: GBP13.2 million), excluding a credit of GBP2.1 million in
relation to litigation costs (2008: charge of GBP0.3 million) and a GBP0.7
million non-cash impairment charge (2008: GBP0.7 million). Earnings per share
were 39.7 pence (2008: 16.9 pence). During the year, the Group generated cash of
GBP12.9 million from operating activities (2008: GBP4.8 million), and we
finished the year with GBP27.5 million of cash (2008: GBP19.2 million). I am
delighted to report that we have proposed to increase the final dividend to 5.8
pence, which brings the total dividend to 8.7 pence (2008: 8.0 pence), an
increase of 8.8%.
Our pharmaceuticals product portfolio has performed well with sales of GBP73.8
million (2008: GBP63.8 million) and operating profit of GBP23.8 million (2008:
GBP14.0 million) benefiting from a combination of favourable product mix and
operational efficiencies. Despite this encouraging performance, the
Pharmaceuticals business is facing increasing regulatory costs and pricing
pressure on its branded pharmaceuticals products sold to the NHS due to the
Pharmaceutical Price Regulation Scheme . This has a 3.9% price reduction
effective as of February 2009 and further 1.9% price reduction as of January
2010.
Sales from the Consumer Health business are up to GBP23.5 million (2008: GBP19.2
million) reflecting, in particular, a strong performance by our two leading
weight management products: Lipobind and Appesat. However, the Consumer Health
business incurred an operating loss of GBP4.7 million (2008: loss of GBP1.6
million) due to a challenging market environment and increased investment in
brand building. The product lines have been rationalised, a number of non-core
product areas have been closed and the division has been restructured, resulting
in non-recurring costs last year in the region of GBP1 million. While we believe
that this division has good long term prospects, especially in weight management
and joints & mobility, further work is required to build a sustainable business
and we expect the division to continue to be loss-making in the current
financial year.
Our decision to restructure our US business by strengthening the direct sales
has shown encouraging performance. It is our intention to operate in our core
markets - Europe and North America - and invest in new products and our
marketing capabilities.
During the year we have made major efforts to improve efficiency with a
rationalisation of our product base and a review and reorganisation of processes
to strengthen our operational platform. In line with this, we are implementing
SAP business management systems. I expect the majority of systems and processes
integration to be complete by the end of the calendar year.
We have made significant progress in strengthening our senior management in the
areas of quality, regulatory, technical and medical affairs which will greatly
assist us in supporting and growing our product-focused business. As already
mentioned in the Chairman's report I am pleased to welcome Kirti Patel back to
the Group Board. He will be a valuable addition to the Group.
A detailed business review is provided on pages 11 to 13 in the Report of the
Directors.
This is an exciting period for the Group. We remain committed to the development
of lifestyle consumer health brands and the introduction of new pharmaceutical
products. Our strong balance sheet allows us to be confident of weathering the
economic downturn and our cash flow and cash reserves facilitate our commitment
to grow the business. We intend to use our resources to invest in new product
introductions via development, in-licensing and acquisitions together with
building brands. Long term sustainable growth is an area that is at the
forefront of our objectives and I am confident we can maximise value for our
shareholders.
The past year has been one of a major change for the Group and I would like to
extend my gratitude to the entire staff at Goldshield for their hard work and
commitment.
Rakesh Patel
Chief Executive Officer
24 June 2009
Report of the Chief Financial Officer
Revenue
The revenue for the year grew by 15.9% to GBP98.4 million (2008: GBP84.9
million).
Revenues in the UK and Western Europe have increased to GBP89.8 million (2008:
GBP77.6 million) primarily due to increase in sales by all the units of
Pharmaceutical division and through the Retail distribution channel of Consumer
Health division.
Revenues in North America grew by 29.4% to GBP6.6 million (2008: GBP5.1 million)
due to an upswing in the Canadian business, growth of active customers and
favourable currency translations.
Gross profit
The Group's gross profit for the year was GBP68.2 million (2008: GBP57.5
million). The gross margin achieved was 69.3% (2008: 67.7 %).
Earnings and operating results
The Group Earnings before Tax, Amortisation, Impairment and Exceptional costs
(EBTA) were GBP24.2 million (2008: GBP17.5 million) a growth of 38.3%. The
reconciliation to the Group's operating profit is given below:
+-----------------------------------+-------------+-------------+
| | 2009 | 2008 |
+-----------------------------------+-------------+-------------+
| | GBP'million | GBP'million |
+-----------------------------------+-------------+-------------+
| Operating profit | 20.2 | 11.2 |
+-----------------------------------+-------------+-------------+
| Amortisation | 4.3 | 4.3 |
+-----------------------------------+-------------+-------------+
| Impairment losses | 0.7 | 0.5 |
+-----------------------------------+-------------+-------------+
| Exceptional legal and | (2.1) | 0.3 |
| professional costs | | |
+-----------------------------------+-------------+-------------+
| Finance income | 1.1 | 1.2 |
+-----------------------------------+-------------+-------------+
| EBTA | 24.2 | 17.5 |
+-----------------------------------+-------------+-------------+
The Group operating profit was GBP20.2 million (2008: GBP11.2 million)
representing a margin of 20.5% (2008: 13.2 %). The operating profit is stated
after:
- Exceptional legal and professional costs in connection with the Serious Fraud
Office and Department of Health litigation, credit of GBP2.1 million (2008:
charge of GBP0.3 million).
- Impairment in relation to the goodwill of the Regina Health Limited business
and property, plant and equipment of the Well Being Centre at Ahmedabad and
Consumer Health Direct business in India amounting to GBP0.7 million (2008:
GBP0.5 million).
Research and development expenditure
Research and development expenditure incurred and written off directly to the
income statement was GBP0.7 million (2008: GBP0.3 million). As at 31 March 2009
the Group does not have any capitalised development expenditure (2008: GBPnil).
Taxation
The taxation charge of GBP7.4 million (2008: GBP6.1 million) represents an
effective tax rate 34.9% (2008: 49.6 %). The tax charge is higher than the
standard rate principally as a result of tax disallowance on amortisation,
impairment, other expenses and the tax losses of some of our overseas business
which are not available to be offset against profits elsewhere in the Group.
The deferred tax credit included in the tax charge was GBP0.4 million (2008:
Deferred tax charge of GBP0.2 million). The deferred tax credit is due to the
temporary difference on account of amortisation of intangible assets.
Earnings and dividends
Basic earnings per share is 39.7 pence (2008: 16.9 pence) and the
diluted earnings per share is 39.7 pence (2008: 16.9 pence).
The Directors propose a dividend of 5.8 pence per share (2008: 5.5 pence).
The dividend paid during the year was 8.4 pence (2008: 7.6 pence). The proposed
dividend will be subject to approval at the Annual General Meeting, to be held
on 5 August 2009, and is expected to be paid on 19 August 2009 to Ordinary
Shareholders on the register at the close of business on 24 July 2009.
Cash flow and liquidity
During the year the Group generated GBP12.9 million from operating activities
(2008: GBP4.8 million). The primary use of the operating cash was to meet
increased working capital needs of the business and payment of corporation tax
and dividends to shareholders. The Group has not bought back any shares during
the year (In 2008 it used GBP 4.67 million to buy back 1,650,000 shares which
have subsequently been held as Treasury Shares). In addition, the Group has
expended GBP1.4 million on property, plant and equipment (2008: GBP1.2 million)
and an amount of GBP1.0 million towards purchase and implementation of
Enterprise Resource Planning (ERP) software costs. The Group also funded the
Employee Benefit Trust (EBT) for the purchase of shares to be used for the
Group's Long-Term Incentive Plan (LTIP) amounting to GBP0.8 million (2008:
GBP1.9 million).
The Group ended the year with a cash balance of GBP27.5 million (2008: GBP19.2
million). The Group deployed its cash surpluses in money market instruments,
earning interest income for the year. The average rate of interest earned on
short term deposits during the year was 5.7% (2008: 6.8%).
Ram Swamy
Chief Financial Officer
24 June 2009
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Consolidated Income Statement |
| for the year ended 31 March 2009 |
| |
+-------------------------------------------------------------------------------------------------------------------------------------+
| | | Before | Exceptional | Impairment | Total | Before | Exceptional | Impairment | Total |
| | | impairment | items | | | impairment | items | | |
| | | and | | | | and | | | |
| | | exceptional | | | | exceptional | | | |
| | | items | | | | items | | | |
+---------------------+-------+ + + +----------+ + + +----------+
| | | | | | 2009 | | | | 2008 |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| |Notes | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Revenue | 2 | 98,397 | - | - | 98,397 | 84,934 | - | - | 84,934 |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Cost of sales | | (30,162) | - | - | (30,162) | (27,425) | - | - | (27,425) |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Gross profit | | 68,235 | - | - | 68,235 | 57,509 | - | - | 57,509 |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Distribution costs | | (5,519) | - | - | (5,519) | (4,340) | - | - | (4,340) |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Impairment losses | 7/8 | - | - | (749) | (749) | - | - | (483) | (483) |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Exceptional legal and | - | 2,100 | - | 2,100 | - | (328) | - | (328) |
| professional costs | | | | | | | | |
+-----------------------------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Other administrative | (43,830) | - | - | (43,830) | (41,194) | - | - | (41,194) |
| expenses | | | | | | | | |
+-----------------------------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Administrative | | (43,830) | 2,100 | (749) | (42,479) | (41,194) | (328) | (483) | (42,005) |
| expenses | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Operating profit | 3 | 18,886 | 2,100 | (749) | 20,237 | 11,975 | (328) | (483) | 11,164 |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Finance costs | 5 | (4) | - | - | (4) | (10) | - | - | (10) |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Finance income | 5 | 1,096 | - | - | 1,096 | 1,241 | - | - | 1,241 |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Profit before tax | | 19,978 | 2,100 | (749) | 21,329 | 13,206 | (328) | (483) | 12,395 |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Income tax expense | 6 | (6,859) | (588) | - | (7,447) | (6,240) | 98 | - | (6,142) |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Profit after tax | | 13,119 | 1,512 | (749) | 13,882 | 6,966 | (230) | (483) | 6,253 |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Earnings per share | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Basic (pence) | 14 | | | | 39.7 | | | | 16.9 |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Diluted (pence) | 14 | | | | 39.7 | | | | 16.9 |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Dividends paid | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Dividends paid during the | | | | 8.4 | | | | 7.6 |
| year (pence) | | | | | | | | |
+-----------------------------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| Dividends paid | 15 | | | | 2,948 | | | | 2,817 |
| during the year | | | | | | | | | |
| (GBP'000) | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
| | | | | | | | | | |
+---------------------+-------+-------------+-------------+------------+----------+-------------+-------------+------------+----------+
+-------------------------------------------------+-------+--+-------------+-------------+
| Consolidated Balance Sheet | |
| as at 31 March 2009 | |
+--------------------------------------------------------------------------+-------------+
| |Notes | | 2009 | 2008 |
| | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| | | | GBP'000 | GBP'000 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Assets | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| Non-current | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| Intangible assets | 7 | | 14,906 | 17,416 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Property, plant and equipment | 8 | | 4,803 | 4,106 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Held to maturity investments | 21 | | - | 377 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Deferred tax assets | 13 | | 602 | 638 |
+-------------------------------------------------+-------+--+-------------+-------------+
| | | | 20,311 | 22,537 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Current | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| Inventories | 9 | | 14,229 | 11,686 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Trade and other receivables | 10 | | 14,558 | 12,753 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Cash and cash equivalents | 11 | | 27,462 | 19,197 |
+-------------------------------------------------+-------+--+-------------+-------------+
| | | | 56,249 | 43,636 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Total assets | | | 76,560 | 66,173 |
+-------------------------------------------------+-------+--+-------------+-------------+
| | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| Equity | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| Equity attributable to shareholders of | | | | |
| Goldshield Group plc | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| Share capital | 12 | | 1,919 | 1,919 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Share premium | | | 22,274 | 22,274 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Treasury shares | | | (4,667) | (4,667) |
+-------------------------------------------------+-------+--+-------------+-------------+
| Share held by employee benefit trust | | | (2,762) | (1,939) |
+-------------------------------------------------+-------+--+-------------+-------------+
| Translation reserve | | | 2,868 | 691 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Retained earnings | | | 32,335 | 21,092 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Total equity | | | 51,967 | 39,370 |
+-------------------------------------------------+-------+--+-------------+-------------+
| | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| Liabilities | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| Non-current | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| Deferred tax liabilities | 13 | | 1,116 | 805 |
+-------------------------------------------------+-------+--+-------------+-------------+
| | | | 1,116 | 805 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Current | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| Provisions | 17 | | - | 3,335 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Trade and other payables | 18 | | 19,428 | 16,974 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Other liabilities | 19 | | 1,411 | 1,122 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Current tax liabilities | | | 2,638 | 4,567 |
+-------------------------------------------------+-------+--+-------------+-------------+
| | | | 23,477 | 25,998 |
+-------------------------------------------------+-------+--+-------------+-------------+
| Total liabilities | | | 24,593 | 26,803 |
+-------------------------------------------------+-------+--+-------------+-------------+
| | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| Total equity and liabilities | | | 76,560 | 66,173 |
+-------------------------------------------------+-------+--+-------------+-------------+
| | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| The financial statements were approved by the Board of Directors on 24 June 2009 and |
| signed on their behalf by: |
+----------------------------------------------------------------------------------------+
| | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| Rakesh V Patel, Chief Executive Officer | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
| Ram Swamy, Chief Financial Officer | | | | |
+-------------------------------------------------+-------+--+-------------+-------------+
+--------------------------------------------------+------+------------+------------+
| Consolidated Cash Flow Statement | |
| for the year ended 31 March 2009 | |
+----------------------------------------------------------------------+------------+
| |Note | 2009 | 2008 |
+--------------------------------------------------+------+------------+------------+
| | | GBP'000 | GBP'000 |
+--------------------------------------------------+------+------------+------------+
| Cash flows from operating activities | | | |
+--------------------------------------------------+------+------------+------------+
| Result for the period before tax | | 21,329 | 12,395 |
+--------------------------------------------------+------+------------+------------+
| Depreciation | | 614 | 617 |
+--------------------------------------------------+------+------------+------------+
| Amortisation | | 4,299 | 4,300 |
+--------------------------------------------------+------+------------+------------+
| Impairment losses | | | |
+--------------------------------------------------+------+------------+------------+
| - intangible assets | | 505 | 237 |
+--------------------------------------------------+------+------------+------------+
| - property, plant and equipment | | 244 | 246 |
+--------------------------------------------------+------+------------+------------+
| Equity settled share options/rewards | | 309 | (102) |
+--------------------------------------------------+------+------------+------------+
| Profit/(loss) on disposal of assets | | | |
+--------------------------------------------------+------+------------+------------+
| - intangible assets | | - | (43) |
+--------------------------------------------------+------+------------+------------+
| - property, plant and equipment | | 15 | (4) |
+--------------------------------------------------+------+------------+------------+
| Finance costs | | 4 | 10 |
+--------------------------------------------------+------+------------+------------+
| Finance income | | (1,096) | (1,241) |
+--------------------------------------------------+------+------------+------------+
| | | 26,223 | 16,415 |
+--------------------------------------------------+------+------------+------------+
| Increase in inventories | | (2,543) | (3,206) |
+--------------------------------------------------+------+------------+------------+
| Increase in trade and other receivables | | (1,805) | (769) |
+--------------------------------------------------+------+------------+------------+
| Increase/(decrease) in provisions, trade | | 713 | (1,923) |
| payables and other liabilities | | | |
+--------------------------------------------------+------+------------+------------+
| Taxes paid | | (9,734) | (5,767) |
+--------------------------------------------------+------+------------+------------+
| Net cash from operating activities | | 12,854 | 4,750 |
+--------------------------------------------------+------+------------+------------+
| | | | |
+--------------------------------------------------+------+------------+------------+
| Cash flows from investing activities | | | |
+--------------------------------------------------+------+------------+------------+
| Additions | | | |
+--------------------------------------------------+------+------------+------------+
| - intangible assets | | (950) | (39) |
+--------------------------------------------------+------+------------+------------+
| - property, plant and equipment | | (1,381) | (1,206) |
+--------------------------------------------------+------+------------+------------+
| Proceeds from disposals of assets | | | |
+--------------------------------------------------+------+------------+------------+
| - intangible assets | | - | 150 |
+--------------------------------------------------+------+------------+------------+
| - property, plant and equipment | | 44 | 5 |
+--------------------------------------------------+------+------------+------------+
| Proceeds on maturity/(purchase) of held to | | 377 | (377) |
| maturity investments | | | |
+--------------------------------------------------+------+------------+------------+
| Interest received | | 1,096 | 1,241 |
+--------------------------------------------------+------+------------+------------+
| Net cash from investing activities | | (814) | (226) |
+--------------------------------------------------+------+------------+------------+
| | | | |
+--------------------------------------------------+------+------------+------------+
| Cash flows from financing activities | | | |
+--------------------------------------------------+------+------------+------------+
| Proceeds from share issue | | - | 785 |
+--------------------------------------------------+------+------------+------------+
| Purchase of shares held by employee benefit | | (823) | (1,939) |
| trust | | | |
+--------------------------------------------------+------+------------+------------+
| Purchase of treasury shares | | - | (4,667) |
+--------------------------------------------------+------+------------+------------+
| Interest paid | | (4) | (10) |
+--------------------------------------------------+------+------------+------------+
| Dividends paid | | (2,948) | (2,817) |
+--------------------------------------------------+------+------------+------------+
| Net cash from financing activities | | (3,775) | (8,648) |
+--------------------------------------------------+------+------------+------------+
| Net increase/(decrease) in cash and cash | | 8,265 | (4,124) |
| equivalents | | | |
+--------------------------------------------------+------+------------+------------+
| Cash and cash equivalents at beginning of the | | 19,197 | 23,321 |
| year | | | |
+--------------------------------------------------+------+------------+------------+
| Cash and cash equivalents at end of the year | 11 | 27,462 | 19,197 |
+--------------------------------------------------+------+------------+------------+
+--------------------------------------------------+----------------+------------+
| Consolidated Statement of Recognised Income and Expense for the year ended 31 |
| March 2009 |
+--------------------------------------------------------------------------------+
| | 2009 | 2008 |
+--------------------------------------------------+----------------+------------+
| | GBP'000 | GBP'000 |
+--------------------------------------------------+----------------+------------+
| | | |
+--------------------------------------------------+----------------+------------+
| Currency translation differences | 3,024 | 1,651 |
+--------------------------------------------------+----------------+------------+
| Deferred tax on translation reserve | (847) | (476) |
+--------------------------------------------------+----------------+------------+
| Net income recognised directly in equity | 2,177 | 1,175 |
+--------------------------------------------------+----------------+------------+
| | | |
+--------------------------------------------------+----------------+------------+
| Profit for the period | 13,882 | 6,253 |
+--------------------------------------------------+----------------+------------+
| | | |
+--------------------------------------------------+----------------+------------+
| Total recognised income for the period | 16,059 | 7,428 |
+--------------------------------------------------+----------------+------------+
Notes to the Financial Statements
1. PRINCIPAL ACCOUNTING POLICIES
Corporate information
The consolidated financial statements of Goldshield Group plc for the year ended
31 March 2009 were authorised for issue by the Board of Directors on 24 June
2009 and the balance sheets were signed on the Board's behalf by Rakesh V Patel
and Ram Swamy. Goldshield Group plc is a public limited company incorporated in
England and Wales whose shares are publicly traded on the London Stock Exchange.
The principal activities of the Group are described in the Report of the
Directors that accompanies these financial statements.
Basis of preparation
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European
Union (EU) and as issued by the International Accounting Standards Board (IASB).
A summary of the accounting policies applied in the preparation of these
consolidated financial statements is given below. These policies have been
consistently applied to all the periods presented, unless otherwise stated.
Adoption of new and revised Standards and Interpretations
In the current year, the Group has adopted all of the new and revised Standards
and Interpretations issued by the IASB and the International Financial Reporting
Committee (the IFRIC) of the IASB that are relevant to its operations and
effective for the annual reporting periods beginning on 1 April 2008. The
adoption of these new and revised Standards and interpretations do not have a
material financial impact on the financial statements of the Group.
Adoption of IFRS Interpretations, new and amendments to IFRS
- Applicable for the Group's accounting periods beginning on or after 1 April
2009
At the date of approval of these financials statements, the following standards,
interpretations and amendments thereto were issued that are mandatory for the
Group's accounting periods beginning on or after 1 April 2009. Management
assessed the relevance of these amendments and interpretations and concluded
that they are either not relevant or material to the Group or resulted in
additional disclosures.
International Financial Reporting Interpretations Committee (IFRIC)
interpretations
- IFRIC 12 Service Concession Arrangements
- IFRIC 13 Customer Loyalty Programmes (IASB effective date 1 July 2008)
- IFRIC 14, IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction
- IFRIC 15 Agreements for the Construction of Real Estate (effective 1 January
2009)
- IFRIC 16 Hedges of a Net Investment in a Foreign Operation (effective 1
October 2008)
- IFRIC 17 Distributions of Non-cash Assets to Owners (effective 1 July 2009)
- IFRIC 18 Transfers of Assets from Customers (effective prospectively for
transfers on or after 1 July 2009)
Amendments to existing standards
- Amendment to IFRS 2 Share-based Payment-Vesting Conditions and Cancellations
(effective 1 January 2009)
- Amendments to IFRS 1 First-time Adoption of International Financial Reporting
Standards and IAS 27 Consolidated and Separate Financial Statements-Costs of
Investment in a Subsidiary, Jointly Controlled Entity or Associate (effective 1
January 2009)
- Amendment to IAS 39 Financial Instruments: Recognition and
Measurement-Eligible Hedged Items (effective 1 July 2009)
- Amendment to IFRS 7 Financial Instruments: Disclosures-Improving Disclosures
About Financial Instruments (effective 1 January 2009)
- Amendments to IAS 39 and IFRIC 9 Embedded Derivatives (effective for annual
periods ending on or after 30 June 2009)
- Improvements to IFRSs (effective 1 January 2009 other than certain amendments
effective 1 July 2009)
International Financial Reporting Standards (IFRS)
- IAS 23 Borrowing Costs (revised 2007) (effective 1 January 2009)
- IAS 27 Consolidated and Separate Financial Statements (Revised 2008)
(effective 1 July 2009)
- IFRS 3 Business Combinations (Revised 2008) (effective 1 July 2009)
Basis of consolidation
The Group financial statements consolidate those of the Company and of its
subsidiary undertakings drawn up to 31 March 2009. A subsidiary is an entity
which the Company controls, which is achieved when the Company has the power to
control the financials and operating policies of an entity. Profits or losses on
intra-group transactions are eliminated in full. The results of the subsidiary
undertakings acquired during the year have been included from the date of
acquisition. On acquisition of a subsidiary, all of the subsidiary's assets and
liabilities which exist at the date of acquisition are recorded at the fair
values reflecting their condition at that date. Goodwill arising on
consolidation, representing the excess of the fair value of the consideration
given over the fair values of the identifiable net assets acquired, is
capitalised net of any provision for impairment. An Employee Benefit Trust
that is controlled by its sponsoring entity, which is the Company in case of the
Group, is consolidated into the financial statements.
Revenue
Revenue from the sale of goods is recognised in the Consolidated Income
Statement when the significant risks and rewards of ownership have been
transferred to the buyer. Revenue is measured at the fair value of the
consideration received/receivable by the Group for goods supplied and
services provided, excluding value added tax and trade discounts. Revenue from
services rendered is recognized in the Consolidated Income Statement by
reference to the stage of completion of transactions at the balance sheet date.
The stage of completion for the Global Solutions - call centre business
is determined by the man days spent on the project for rendering the service at
the end of each billing cycle. Subscription revenue is accrued over the period
of the subscription. Advertising revenue for the Wellbeing media business is
recognised when the related advertisement appears in the magazine.
Intangible assets
Goodwill
All business combinations are accounted for under the purchase method and
goodwill has been recognised on acquisitions of subsidiaries. In respect of
business combinations that have occurred since 1 April 2004, goodwill represents
the difference between the cost of the acquisition and the fair value of the net
identifiable assets acquired. Goodwill is stated at cost less any accumulated
impairment losses. Goodwill arising on acquisitions before 1 April 2004 has been
retained at the previous UK GAAP amounts at 31 March 2004. Goodwill is allocated
to cash generating units and is not amortised but tested for impairment annually
or more frequently if events or changes in circumstances indicate that it might
be impaired.
Other intangible assets
Externally purchased product licences, trademarks, brand-names, know-how and
similar intangible items are capitalised at historical cost, net of any
provision for impairment and amortised on a straight line basis over their
estimated useful economic lives which range between seven and ten years.
The amortisation cost has been included within administrative expenses in the
Consolidated Income Statement.
Software
Acquired software licences are capitalised on the basis of the costs incurred to
acquire and bring into use the specific software. These costs are amortised over
their estimated useful lives between three to five years. The amortisation cost
has been included within administrative expenses in the Consolidated Income
Statement.
Property, plant and equipment
Property, plant and equipment is stated at cost less the accumulated
depreciation. Depreciation is charged on a straight line basis over the
estimated useful lives on the cost of the assets less their residual value. Land
is not depreciated.
The estimated useful lives are as follows:
Freehold buildings and leasehold improvements -25 years or over the period of
lease
Office equipment -5 years
Plant and equipment -6 to 7 years
Motor vehicles -5 years
Residual values are re-assessed annually.
Directly attributable costs for construction of assets are shown under Capital
work in progress and will be transferred to the relevant category on completion
of construction of the asset. Capital work in progress is carried at cost, less
any recognised impairment loss. Depreciation commences when assets are ready for
their intended use.
Impairment of non-financial assets
Assets that have an indefinite useful life excluding land, for example goodwill,
are not subject to amortisation and are tested annually for impairment. Assets
that are subject to amortisation are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the
asset's carrying amount exceeds its recoverable amount. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (cash generating units). An impairment
loss is recognised at the amount by which the asset's or cash generating
unit's carrying amount exceeds its recoverable amount. The recoverable amount is
based on the higher of the fair value less costs to sell and value in use.
If at the balance sheet date there is any indication that an impairment loss
recognised in prior periods for an asset other than goodwill no longer exists,
the recoverable amount is reassessed and the asset is reflected at the
recoverable amount.
Research and development expenditure
Expenditure on development activities is capitalised if the product or process
is technically and commercially feasible, the costs are separately identifiable
and the Group has sufficient resources to complete development. Capitalised
development costs are stated at cost less accumulated amortisation and
impairment losses. Capitalised development costs are amortised from the point at
which the asset is ready to use on a straight-line basis over its useful life,
not exceeding five years. All other research and development expenditure is
written off to the Consolidated Income Statement in the period in which it is
incurred.
Inventories
Inventories are stated at the lower of cost and net realisable value. The cost
is determined using the weighted average price method. The cost of finished
goods comprises of product cost, its packaging and applicable duties and taxes.
Net realisable value is the estimated selling price in the ordinary course of
business, less applicable variable selling expenses.
Accounting for income taxes
Current income tax assets and/or liabilities comprise those obligations to, or
claims from, fiscal authorities relating to the current or prior reporting
period, that are unpaid at the balance sheet date. They are calculated according
to the tax rates and tax laws applicable to the fiscal periods to which they
relate, based on the taxable profit for the year.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability method. This
involves comparison of the carrying amount of assets and liabilities in the
consolidated financial statements with their respective tax bases. However,
deferred tax is not provided on the initial recognition of goodwill, nor on the
initial recognition of an asset or liability unless the related transaction is a
business combination or affects tax or accounting profit. Deferred tax
liabilities are always provided for in full. Deferred tax assets and liabilities
are calculated, without discounting, at tax rates that are expected to apply to
the period when asset is realised or the liability is settled, based on tax
rates (tax laws) that have been enacted or substantially enacted by the balance
sheet date. All changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the Consolidated Income Statement, except where
they relate to items that are charged or credited directly to equity (such as
translation reserve and pre 7 November 2002 grants of share options) in which
case the related deferred tax is also charged or credited directly to equity.
Tax losses available to be carried forward as well as other income tax credits
to the Group are assessed for recognition as deferred tax assets. Deferred tax
assets are only recognised to the extent that it is probable that future taxable
profits will be available against which the asset can be recognised and
are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
Deferred income tax is provided on temporary differences arising on investments
in subsidiaries except where the timing of the reversal of the temporary
differences is controlled by the Group and it is probable that the temporary
difference will not reverse in the foreseeable future.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an
original maturity of three months or less. Bank overdrafts that are repayable on
demand and form an integral part of the Group's cash management are included as
a component of cash.
Employee benefit trust
The assets and liabilities of the Employee Benefit Trust (EBT) have been
included in the consolidated financial statements. Any assets held by the EBT
cease to be recognised on the Consolidated Balance Sheet when the assets vest
unconditionally in identified beneficiaries.
The costs of purchasing own shares held by the EBT are shown as a deduction
against equity. The proceeds from the sale of own shares held increase equity.
Neither the purchase nor sale of own shares leads to a gain or loss being
recognised in the Consolidated Income Statement.
Employee benefits
The Group operates a defined contribution pension scheme whereby contributions
are made to individual employee pension plans of certain employees. These costs
are charged against profits in respect of the accounting period in which they
are paid.
Indian gratuity costs, which represent a form of long term service benefits are
accrued based on actuarial valuation at the balance sheet date, carried out by
an independent actuary.
Leased assets
All leased assets are identified as operating leases if they do not transfer
substantially all the risks and rewards to the lessee.
Payments made under operating leases are charged to the Consolidated Income
Statement on a straight line basis over the period of the lease.
Foreign currencies
The reporting currency for these financial statements is GB sterling (GBP) which
is the parent Company's functional currency.
Transactions in foreign currencies are translated at the exchange rate ruling at
the date of the transaction into the parent company's presentational currency.
Monetary assets and liabilities in foreign currencies are translated at the
rates of exchange ruling at the balance sheet date. Foreign exchange differences
arising on translation are recognised in profit or loss. Non monetary assets and
liabilities that are measured in terms of historical cost in a foreign entity
are translated using the exchange rate at the date of the transaction.
All assets and liabilities in the financial statements of foreign subsidiaries
are translated at the closing rate at the balance sheet date. The results of
foreign operations have been converted into Group's reporting currency at the
actual rates over the reporting period and the exchange differences arising have
been taken to translation reserve, a component of equity. The exchange
differences arising from re-translation of the net investments in subsidiaries
are directly taken to translation reserve.
Share options
For all employee share options an expense is recognised in the Consolidated
Income Statement with a corresponding credit to equity. The equity share based
payment is measured at the fair value at the grant date using the binomial
lattice method. If vesting periods or other vesting conditions apply, the
expense is allocated over the vesting period, based on the best available
estimate of the number of share options expected to vest.
Long-term share incentive plan
As soon as practicable after the start of each performance period, each eligible
participant will be notified about the number of shares awarded to him/her in
respect of that period. The participant will also be informed about the form of
the award, the performance targets to be achieved in relation to the performance
period and any other conditions to which the award may be subject. The
fair value of the share awards granted is recognised as an employee expense with
a corresponding increase in equity. The fair value is measured at each award
date and spread over the period during which the participants become
unconditionally entitled to the awards. The fair value of the share awards is
measured using a binomial model, taking into account the terms and conditions
upon which the shares will be released to the participants.
Provisions - Legal and other disputes
Provision is made where a reliable estimate can be made of the likely outcome of
legal or other disputes against the Group. In addition, provision is made for
legal and other expenses arising from claims received or other disputes. No
provision is made for other possible claims or where an obligation exists but it
is not possible to make a reliable estimate. Costs associated with claims
made by the Group against third parties are charged to the Consolidated Income
Statement as they are incurred. The provisions are not discounted as the impact
is not material.
Exceptional legal and professional costs
Exceptional legal and professional costs are expenditure incurred and provided
for defending the legal claims against the Group by the Department of Health and
the Serious Fraud Office.
Dividends
Dividends proposed or declared after the balance sheet dates are not recognised
as a liability. However the amounts of such dividends are disclosed in the
financial statements.
Segmental reporting
A segment is a distinguishable component of the Group that is engaged either in
providing products or services (business segment) or in providing products or
services within a particular economic environment (geographic segment) which is
subject to risks and rewards that are different from those of other segments.
Financial instruments
Financial assets and financial liabilities are recognised on the consolidated
Balance Sheet when the Group becomes a party to the contractual terms of the
instrument.
Held to maturity investments
Held to maturity investments are non-derivative financial assets with fixed or
determinable payments and a fixed date of maturity where it is the intention of
the Directors to hold them until maturity. Held to maturity investments are
measured subsequent to initial recognition at amortised cost using the effective
interest method. If there is objective evidence that the investment has been
impaired, the financial asset is measured at the present value of estimated cash
flows. Any changes to the carrying amount of the investment are recognised in
the Consolidated Income Statement.
Loans and receivables
Trade receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less provision
for impairment. A provision for impairment of trade receivables is established
when there is objective evidence that the Group will not be able to collect all
amounts due according to the original terms of the receivables. Significant
financial difficulties of the debtor, probability that the debtor will enter
bankruptcy or financial reorganisation, and default or delinquency in payments
(more than 60 days overdue) are considered indicators that the trade receivable
is impaired. The amount of the provision is the difference between the asset's
carrying amount and the present value of estimated future cash flows, discounted
at the original effective interest rate. The carrying amount of the asset is
reduced through the use of an allowance account, and the amount of the loss is
recognised in the Consolidated Income Statement within 'Other administrative
expenses'. When a trade receivable is uncollectible, it is written off against
the allowance account for trade receivables. Subsequent recoveries of amounts
previously written off are credited against 'Other administrative expenses' in
the Consolidated Income Statement.
Bank borrowings
Interest bearing bank loans and overdrafts are recorded at fair values on
initial recognition. Finance charges including premiums payable on settlement or
redemption and direct issue costs, are accounted for on an accruals basis to the
Consolidated Income Statement using the effective interest method and are added
to the carrying value of the instrument to the extent that they are not
settled in the period in which they arise.
Trade payables
Trade payables are not interest bearing and are initially stated at their fair
values and thereafter at amortised cost.
Equity instruments
Equity instruments issued by the Group are recorded at the proceeds received,
net of direct issue costs.
Equity comprises of the following:
- Share capital - represents the nominal value of equity shares
- Share premium - represents the excess over nominal value of fair value of
consideration
- Treasury shares - represents purchase of the Company's equity share capital,
the consideration paid, including any transaction costs and is deducted from
total shareholders' equity
- Shares held by Employee Benefit Trust - represents amounts paid for shares of
the Company held by the Employee Benefit Trust of the Long-Term Incentive Plan
- Retained earnings - represents the accumulated retained profits
- Translation reserve - represents gains or losses on foreign currency
differences arising on consolidation of the net investment in subsidiaries.
2. SEGMENTAL REPORTING
Segment information is presented in the consolidated financial statements in
respect of the Group's business segments, which are the primary basis of segment
reporting. The business segment reporting format reflects the Group's management
and internal reporting structure.
Primary - Business segments
The Group is organised into five major business units - Retail Brands, Retail
Generics, Hospitals, Consumer Health Europe (CH E) and, Consumer Health North
America (CH NA). Other business units - Country Distributors, Global Services,
Wellbeing Centre, Wellbeing Villages, Resorts and Management Services -
constitute Other Segments. These units form the basis for the Group's reporting
of primary segment information.
Secondary - Geographical segments
The geographical segments are considered for disclosure as secondary segments.
Geographical revenues are segregated based on the location from which the
revenues are generated. Assets are identified with the segment on the basis of
their place of use.
Segment results
Segment results include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis.
All inter-segment transfers are priced and carried out at arm's length.
Segment assets and liabilities
Segment assets include all operating assets used by a segment and consist
principally of operating cash, trade and other receivables and property, plant
and equipment, net of allowances and provisions which are reported as direct
offsets in the Balance Sheet. Segment liabilities include all
operating liabilities and consist principally of trade and other payables and
other liabilities.
Segment assets and liabilities do not include deferred income taxes.
Unallocated segment income and expenses
Unallocated segment income comprises interest income and miscellaneous receipts
not directly attributable to any particular segment. Unallocated segment
expenditure represents interest on loans and provision for income taxes, which
cannot be directly attributed to any segment.
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Primary segment disclosure - Business segments | | | | |
+---------------------------------------------------------+---------+---------+----------+---------+
| | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| 31 March 2009 | Retail | Retail | Hospitals | CH E | CH NA | Other | Total |
| | Brands | Generics | | | | Segments | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Revenue | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| External sales | 43,014 | 11,497 | 13,259 | 16,318 | 6,622 | 7,687 | 98,397 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Total revenue | 43,014 | 11,497 | 13,259 | 16,318 | 6,622 | 7,687 | 98,397 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Result | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Segment result | 15,773 | 3,753 | 3,745 | (3,266) | (607) | 839 | 20,237 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Operating profit | | | | | | | 20,237 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Finance costs | | | | | | | (4) |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Finance income | | | | | | | 1,096 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Income tax expense | | | | | | | (7,447) |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Profit for the year | | | | | | | 13,882 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Other Information | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Segment assets | 19,056 | 3,793 | 17,545 | 4,438 | 2,383 | 28,743 | 75,958 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Unallocated corporate | | | | | | | 602 |
| assets | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Consolidated total | | | | | | | 76,560 |
| assets | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Segment liabilities | 9,766 | 2,083 | 665 | 2,964 | 710 | 4,651 | 20,839 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Unallocated corporate | | | | | | | 3,754 |
| liabilities | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Consolidated total | | | | | | | 24,593 |
| liabilities | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Capital expenditure | - | - | 149 | | 27 | 2,155 | 2,331 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Depreciation and | 3,877 | - | 53 | 11 | 21 | 951 | 4,913 |
| amortisation | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Impairment losses | - | - | - | - | - | 749 | 749 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Non-cash expenses | - | - | - | - | - | 309 | 309 |
| other than | | | | | | | |
| depreciation | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| 31 March 2008 | Retail | Retail | Hospitals | CH E | CH NA | Other | Total |
| | Brands | Generics | | | | Segments | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Revenue | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| External sales | 36,585 | 9,251 | 12,614 | 13,751 | 5,103 | 7,630 | 84,934 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Total revenue | 36,585 | 9,251 | 12,614 | 13,751 | 5,103 | 7,630 | 84,934 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Result | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Segment result | 9,604 | 1,956 | 1,587 | (833) | (454) | (696) | 11,164 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Operating profit | | | | | | | 11,164 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Finance costs | | | | | | | (10) |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Finance income | | | | | | | 1241 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Income tax expense | | | | | | | (6,142) |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Profit for the year | | | | | | | 6,253 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Other Information | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Segment assets | 19,604 | 3,166 | 15,469 | 2,971 | 1,271 | 23,054 | 65,535 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Unallocated corporate | | | | | | | 638 |
| assets | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Consolidated total | | | | | | | 66,173 |
| assets | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Segment liabilities | 7,596 | 1,768 | 1,810 | 1,985 | 461 | 7,811 | 21,431 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Unallocated corporate | | | | | | | 5,372 |
| liabilities | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Consolidated total | | | | | | | 26,803 |
| liabilities | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Capital expenditure | 84 | - | 52 | - | 23 | 1,086 | 1,245 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Depreciation and | 3,892 | - | 36 | 2 | 23 | 964 | 4,917 |
| amortisation | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Impairment losses | - | - | - | - | - | 483 | 483 |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
| Non-cash expenses | - | - | - | - | - | (102) | (102) |
| other than | | | | | | | |
| depreciation | | | | | | | |
+------------------------+---------+----------+-----------+---------+---------+----------+---------+
+----------------------------------------------------+------------------+-------------+
| Secondary segment disclosure -Geographical | 2009 | 2008 |
| segments | | |
+----------------------------------------------------+------------------+-------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------+------------------+-------------+
| Revenue | | |
+----------------------------------------------------+------------------+-------------+
| United Kingdom | 74,470 | 63,714 |
+----------------------------------------------------+------------------+-------------+
| Ireland | 15,365 | 13,880 |
+----------------------------------------------------+------------------+-------------+
| North America | 6,622 | 5,103 |
+----------------------------------------------------+------------------+-------------+
| India | 1,940 | 2,237 |
+----------------------------------------------------+------------------+-------------+
| Total | 98,397 | 84,934 |
+----------------------------------------------------+------------------+-------------+
| | | |
+----------------------------------------------------+------------------+-------------+
| Assets | | |
+----------------------------------------------------+------------------+-------------+
| United Kingdom | 38,816 | 34,837 |
+----------------------------------------------------+------------------+-------------+
| Ireland | 24,691 | 21,426 |
+----------------------------------------------------+------------------+-------------+
| North America | 2,383 | 1,271 |
+----------------------------------------------------+------------------+-------------+
| India | 10,670 | 8,639 |
+----------------------------------------------------+------------------+-------------+
| Total | 76,560 | 66,173 |
+----------------------------------------------------+------------------+-------------+
| | | |
+----------------------------------------------------+------------------+-------------+
| Capital expenditure | | |
+----------------------------------------------------+------------------+-------------+
| United Kingdom | 75 | 87 |
+----------------------------------------------------+------------------+-------------+
| Ireland | 149 | 135 |
+----------------------------------------------------+------------------+-------------+
| North America | 27 | 23 |
+----------------------------------------------------+------------------+-------------+
| India | 2,080 | 1,000 |
+----------------------------------------------------+------------------+-------------+
| Total | 2,331 | 1,245 |
+----------------------------------------------------+------------------+-------------+
+------------------------------------------------+----------------------+-------------+
| 3. OPERATING PROFIT | | |
+------------------------------------------------+----------------------+-------------+
| The operating profit is stated after | | |
| charging/(crediting) : | | |
+------------------------------------------------+----------------------+-------------+
| | 2009 | 2008 |
+------------------------------------------------+----------------------+-------------+
| | GBP'000 | GBP'000 |
+------------------------------------------------+----------------------+-------------+
| Auditors' remuneration: | | |
+------------------------------------------------+----------------------+-------------+
| - Audit services (see below) | 83 | 80 |
+------------------------------------------------+----------------------+-------------+
| - Other services (see below) | 233 | 272 |
+------------------------------------------------+----------------------+-------------+
| Depreciation and amortisation: | | |
+------------------------------------------------+----------------------+-------------+
| - Intangible assets | 4,299 | 4,300 |
+------------------------------------------------+----------------------+-------------+
| - Property, plant and equipment | 614 | 617 |
+------------------------------------------------+----------------------+-------------+
| Hire of plant and machinery | 53 | 50 |
+------------------------------------------------+----------------------+-------------+
| Impairment losses | 749 | 483 |
+------------------------------------------------+----------------------+-------------+
| Exceptional legal and professional | (2100) | 328 |
| (credit)/costs | | |
+------------------------------------------------+----------------------+-------------+
| Other operating lease rentals | 1,148 | 1,146 |
+------------------------------------------------+----------------------+-------------+
| Foreign exchange losses/(gain) | 118 | (267) |
+------------------------------------------------+----------------------+-------------+
| Research and development: | | |
+------------------------------------------------+----------------------+-------------+
| - current year expenditure | 672 | 275 |
+------------------------------------------------+----------------------+-------------+
Operating expenses are included in administrative expenses.
Auditors' remuneration for audit and non-audit services in jurisdictions in
which the Group has a presence are analysed below:
+------------------------------------------------+----------------------+-------------+
| Group audit | 2009 | 2008 |
+------------------------------------------------+----------------------+-------------+
| | GBP'000 | GBP'000 |
+------------------------------------------------+----------------------+-------------+
| Audit fees to Company's auditor for audit of | 83 | 80 |
| the Group's annual accounts | | |
+------------------------------------------------+----------------------+-------------+
| | 83 | 80 |
+------------------------------------------------+----------------------+-------------+
| | | |
+------------------------------------------------+----------------------+-------------+
| Other services | | |
+------------------------------------------------+----------------------+-------------+
| Audit fees to Company's auditor and associates | 126 | 110 |
| for Company's subsidiaries pursuant to | | |
| legislation | | |
+------------------------------------------------+----------------------+-------------+
| Non audit | | |
+------------------------------------------------+----------------------+-------------+
| Advisory | 50 | 73 |
+------------------------------------------------+----------------------+-------------+
| Corporation Tax | 46 | 68 |
+------------------------------------------------+----------------------+-------------+
| VAT | 11 | 21 |
+------------------------------------------------+----------------------+-------------+
| | 233 | 272 |
+------------------------------------------------+----------------------+-------------+
+------------------------------------------------+----------------------+-------------+
| 4. DIRECTORS AND EMPLOYEES | | |
+------------------------------------------------+----------------------+-------------+
| Employees | | |
+------------------------------------------------+----------------------+-------------+
| Staff costs during the year were as follows: | 2009 | 2008 |
+------------------------------------------------+----------------------+-------------+
| | GBP'000 | GBP'000 |
+------------------------------------------------+----------------------+-------------+
| Wages and salaries | 9,619 | 9,414 |
+------------------------------------------------+----------------------+-------------+
| Social security costs | 617 | 593 |
+------------------------------------------------+----------------------+-------------+
| Share options | 5 | (219) |
+------------------------------------------------+----------------------+-------------+
| Long-term incentive plan | 304 | 117 |
+------------------------------------------------+----------------------+-------------+
| Other pension costs | 278 | 236 |
+------------------------------------------------+----------------------+-------------+
| | 10,823 | 10,141 |
+------------------------------------------------+----------------------+-------------+
| | | |
+------------------------------------------------+----------------------+-------------+
| The average number of employees is analysed | 2009 | 2008 |
| below: | | |
+------------------------------------------------+----------------------+-------------+
| | Number | Number |
+------------------------------------------------+----------------------+-------------+
| Administration | 273 | 290 |
+------------------------------------------------+----------------------+-------------+
| Marketing and selling | 544 | 534 |
+------------------------------------------------+----------------------+-------------+
| Management | 70 | 81 |
+------------------------------------------------+----------------------+-------------+
| Warehouse | 23 | 25 |
+------------------------------------------------+----------------------+-------------+
| | 910 | 930 |
+------------------------------------------------+----------------------+-------------+
The Group contributes to employee money purchase pension schemes at a percentage
of pay (depending on grade). The share option charge/(credit) includes an amount
of GBPnil (2008: GBP51,000) pertaining to key management personnel. The
long-term incentive plan cost includes GBP182,000 (2008: GBP64,000) pertaining
to key management personnel.
Key managements' remuneration
The key management personnel have been identified as the Board of Directors.
+------------------------------------------------------+-----------------+-------------+
| The emoluments of the Directors were as follows: | 2009 | 2008 |
+------------------------------------------------------+-----------------+-------------+
| | GBP'000 | GBP'000 |
+------------------------------------------------------+-----------------+-------------+
| Emoluments | 1,275 | 1,349 |
+------------------------------------------------------+-----------------+-------------+
| Payments to third parties for consultancy services | - | 44 |
+------------------------------------------------------+-----------------+-------------+
| Pension contributions to money purchase pension | 54 | 87 |
| schemes | | |
+------------------------------------------------------+-----------------+-------------+
| Pay in lieu of notice | - | 313 |
+------------------------------------------------------+-----------------+-------------+
| Compensation for loss of office | - | 576 |
+------------------------------------------------------+-----------------+-------------+
| | 1,329 | 2,369 |
+------------------------------------------------------+-----------------+-------------+
During the year two Directors (2008: four Directors) participated in money
purchase pension schemes. There was no exercise of share options by the
Directors during the year (2008: GBP243,000 gain on excise of share options).
Further details of the remuneration, share options and long-term incentive plan
share awards of the Directors are given in the Directors' Remuneration Report on
pages 24 to 30.
5. FINANCE COSTS AND FINANCE INCOME
Finance costs and finance income includes all interest related income and
expenses. The following amounts have been included in the income statement line
for the reporting periods presented:
+------------------------------------------------------+----------------+-------------+
| | 2009 | 2008 |
+------------------------------------------------------+----------------+-------------+
| | GBP'000 | GBP'000 |
+------------------------------------------------------+----------------+-------------+
| Interest expense resulting from | | |
+------------------------------------------------------+----------------+-------------+
| -corporation tax | (2) | - |
+------------------------------------------------------+----------------+-------------+
| -others | (2) | (10) |
+------------------------------------------------------+----------------+-------------+
| Finance costs | (4) | (10) |
+------------------------------------------------------+----------------+-------------+
| | | |
+------------------------------------------------------+----------------+-------------+
| Interest income resulting from | | |
+------------------------------------------------------+----------------+-------------+
| -special interest bearing account | 131 | 568 |
+------------------------------------------------------+----------------+-------------+
| -short term bank deposits | 958 | 665 |
+------------------------------------------------------+----------------+-------------+
| -corporation tax | 7 | 8 |
+------------------------------------------------------+----------------+-------------+
| Finance income | 1,096 | 1,241 |
+------------------------------------------------------+----------------+-------------+
| | | |
+------------------------------------------------------+----------------+-------------+
| | | |
+------------------------------------------------------+----------------+-------------+
| 6. INCOME TAX EXPENSE | | |
+------------------------------------------------------+----------------+-------------+
| | 2009 | 2008 |
+------------------------------------------------------+----------------+-------------+
| | GBP'000 | GBP'000 |
+------------------------------------------------------+----------------+-------------+
| Result for the year before tax | 21,329 | 12,395 |
+------------------------------------------------------+----------------+-------------+
| Tax rate | 28% | 30% |
+------------------------------------------------------+----------------+-------------+
| Expected tax expense | (5,972) | (3,719) |
+------------------------------------------------------+----------------+-------------+
| | | |
+------------------------------------------------------+----------------+-------------+
| Adjustment for non-deductible expenses | | |
+------------------------------------------------------+----------------+-------------+
| - overseas losses not utilised | (135) | (637) |
+------------------------------------------------------+----------------+-------------+
| - overseas profits not taxed | 504 | 677 |
+------------------------------------------------------+----------------+-------------+
| - amortisation non-deductible | (406) | (341) |
+------------------------------------------------------+----------------+-------------+
| - other non-deductible expenses | (1,510) | (2,338) |
+------------------------------------------------------+----------------+-------------+
| Adjustment to tax charges in respect of prior | 72 | 216 |
| periods | | |
+------------------------------------------------------+----------------+-------------+
| Actual tax expense, net | (7,447) | (6,142) |
+------------------------------------------------------+----------------+-------------+
| | | |
+------------------------------------------------------+----------------+-------------+
| Comprising | | |
+------------------------------------------------------+----------------+-------------+
| Current tax expense | (7,902) | (6,181) |
+------------------------------------------------------+----------------+-------------+
| Adjustment to tax charges in respect of prior | 72 | 216 |
| periods | | |
+------------------------------------------------------+----------------+-------------+
| | (7,830) | (5,965) |
+------------------------------------------------------+----------------+-------------+
| Deferred tax income /(expense)resulting from the | 383 | (177) |
+------------------------------------------------------+----------------+-------------+
| - origination and reversal of temporary difference | 383 | (141) |
+------------------------------------------------------+----------------+-------------+
| Tax rate adjustment for future period | - | (36) |
+------------------------------------------------------+----------------+-------------+
| | (7,447) | (6,142) |
+------------------------------------------------------+----------------+-------------+
The Group earns its profit in the UK and overseas. The tax rate used for the tax
on profit on ordinary activities reduced to 28% from 30% from 1 April 2008,
being the standard rate for UK corporation tax.
+---------------------------------------+----------+----------+----------+----------+----------+
| 7. INTANGIBLE ASSETS | | | | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| | Brand | Goodwill | Software | Capital | Total |
| | names | | | work in | |
| | know-how | | | progress | |
| | licences | | | | |
| | and | | | | |
| | trade | | | | |
| | marks | | | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Cost | | | | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| At 1 April 2007 | 64,575 | 25,437 | - | - | 90,012 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Exchange differences | 81 | 1,484 | - | - | 1,565 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Additions | - | - | 39 | - | 39 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Disposals | (225) | - | - | - | (225) |
+---------------------------------------+----------+----------+----------+----------+----------+
| At 31 March 2008 | 64,431 | 26,921 | 39 | - | 91,391 |
+---------------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| At 1 April 2008 | 64,431 | 26,921 | 39 | - | 91,391 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Exchange differences | 160 | 6,995 | 3 | - | 7,158 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Additions | - | - | 66 | 884 | 950 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Disposals | - | (600) | - | - | (600) |
+---------------------------------------+----------+----------+----------+----------+----------+
| At 31 March 2009 | 64,591 | 33,316 | 108 | 884 | 98,899 |
+---------------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| Amortisation and Impairment losses | | | | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| At 1 April 2007 | 51,246 | 17,734 | - | - | 68,980 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Exchange differences | 81 | 420 | - | - | 501 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Amortisation | 4,297 | - | 3 | - | 4,300 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Impairment losses | - | 237 | - | - | 237 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Disposals | (43) | - | - | - | (43) |
+---------------------------------------+----------+----------+----------+----------+----------+
| At 31 March 2008 | 55,581 | 18,391 | 3 | - | 73,975 |
+---------------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| At 1 April 2008 | 55,581 | 18,391 | 3 | - | 73,975 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Exchange differences | 160 | 5,651 | 3 | - | 5,814 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Amortisation | 4,282 | - | 17 | - | 4,299 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Impairment losses | - | 486 | 19 | - | 505 |
+---------------------------------------+----------+----------+----------+----------+----------+
| Disposals | - | (600) | - | - | (600) |
+---------------------------------------+----------+----------+----------+----------+----------+
| At 31 March 2009 | 60,023 | 23,928 | 42 | - | 83,993 |
+---------------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| Carrying amounts | | | | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| At 1 April 2007 | 13,329 | 7,703 | - | - | 21,032 |
+---------------------------------------+----------+----------+----------+----------+----------+
| At 31 March 2008 | 8,850 | 8,530 | 36 | - | 17,416 |
+---------------------------------------+----------+----------+----------+----------+----------+
| At 31 March 2009 | 4,568 | 9,388 | 66 | 884 | 14,906 |
+---------------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| Subsequent to the annual impairment test for 2009, the carrying amount of goodwill is |
| allocated to the following cash generating units : |
+----------------------------------------------------------------------------------------------+
| | | | | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| | | 2009 | 2008 | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| | | GBP'000 | GBP'000 | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| Hospitals | | 9,388 | 8,044 | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| Regina Health Limited | | - | 486 | | |
+---------------------------------------+----------+----------+----------+----------+----------+
| | | 9,388 | 8,530 | | |
+---------------------------------------+----------+----------+----------+----------+----------+
The recoverable amounts for the cash generating units given above are determined
based on internal discounted cash flow evaluation. The cash flow evaluation is
based on actual operating results and five year forecasts at the growth rates
stated in the key assumptions.
The key assumptions are:
+------------------------------------------------+----------+---------+
| Growth rates | 2009 | 2008 |
+------------------------------------------------+----------+---------+
| Hospitals | Zero | Zero |
+------------------------------------------------+----------+---------+
| Regina Health Limited | - | Zero |
+------------------------------------------------+----------+---------+
| | | |
+------------------------------------------------+----------+---------+
| Discount rates | 2009 | 2008 |
+------------------------------------------------+----------+---------+
| Hospitals | 8% | 8% |
+------------------------------------------------+----------+---------+
| Regina Health Limited | - | 8% |
+------------------------------------------------+----------+---------+
Management assumes the Hospitals business units continue to earn the current
level of profit margins and achieve the same level of sales in the future
forecasts.
The growth rate for the Hospitals business is assumed to be zero based on past
experience.
The discount rate applied for the impairment review workings is based on the
Weighted Average Cost of Capital for the Group.
The Regina Health Limited business has shown a 42% decline in revenue over
previous year due to the economic downturn and reduced sales from one of its
major customers which has led to the recognition of the impairment charge.
The related goodwill impairment loss of GBP486,000 (2008: GBP237,000) is
included under "Impairment losses" in the Consolidated Income Statement.
The Directors believe that any reasonably possible change in the key assumptions
on which the recoverable amount are based would not cause the carrying amount to
exceed its recoverable amount.
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| 8. PROPERTY, PLANT AND EQUIPMENT | | | | | |
+------------------------------------------------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| | Land & | Capital | Office | Plant & | Motor | Total |
| | buildings | work in | equipment | equipment | vehicles | |
| | | progress | | | | |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Cost | | | | | | |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| At 1 April 2007 | 2,384 | 130 | 3,270 | 670 | 27 | 6,481 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Exchange differences | 169 | 9 | 135 | 60 | 2 | 375 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Additions | 236 | 197 | 574 | 199 | - | 1,206 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Disposals | - | - | (67) | - | - | (67) |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| At 31 March 2008 | 2,789 | 336 | 3,912 | 929 | 29 | 7,995 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| At 1 April 2008 | 2,789 | 336 | 3,912 | 929 | 29 | 7,995 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Exchange differences | 203 | 25 | 492 | 105 | 2 | 827 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Additions | 97 | 11 | 1,124 | 149 | - | 1,381 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Transfers | 56 | (56) | - | - | - | - |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Disposals | (158) | - | (2,240) | (305) | - | (2,703) |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| At 31 March 2009 | 2,987 | 316 | 3,288 | 878 | 31 | 7,500 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Depreciation and impairment losses | | | | | | |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| At 1 April 2007 | 142 | - | 2,288 | 500 | 12 | 2,942 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Exchange differences | 13 | - | 87 | 47 | 1 | 148 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Depreciation | 101 | - | 444 | 68 | 4 | 617 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Impairment losses | 82 | - | 163 | 1 | - | 246 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Disposals | - | - | (64) | - | - | (64) |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| At 31 March 2008 | 338 | - | 2,918 | 616 | 17 | 3,889 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| At 1 April 2008 | 338 | - | 2,918 | 616 | 17 | 3,889 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Exchange differences | 39 | - | 449 | 92 | 2 | 582 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Depreciation | 81 | - | 435 | 94 | 4 | 614 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Impairment losses | 116 | - | 123 | 5 | - | 244 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Disposals | (158) | - | (2,176) | (298) | - | (2,632) |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| At 31 March 2009 | 416 | - | 1,749 | 509 | 23 | 2,697 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| Carrying amounts | | | | | | |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| At 1 April 2007 | 2,242 | 130 | 982 | 170 | 15 | 3,539 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| At 31 March 2008 | 2,451 | 336 | 994 | 313 | 12 | 4,106 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
| At 31 March 2009 | 2,571 | 316 | 1,539 | 369 | 8 | 4,803 |
+------------------------------------+-----------+----------+-----------+-----------+----------+----------+
Land and building includes GBP1,960,000 (2008: GBP1,774,000) of land which is
not being depreciated.
+---------------------------------------+------------+------------+
| 9. INVENTORIES | | |
+---------------------------------------+------------+------------+
| | 2009 | 2008 |
+---------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+---------------------------------------+------------+------------+
| Finished goods and goods for resale | 17,204 | 14,807 |
+---------------------------------------+------------+------------+
| Write down on inventories | (2,975) | (3,121) |
+---------------------------------------+------------+------------+
| | 14,229 | 11,686 |
+---------------------------------------+------------+------------+
In 2009, a total of GBP30,162,000 of inventories was included in the
Consolidated Income Statement as an expense (2008: GBP27,425,000).
An amount of GBP1,504,000 for write down of inventories (2008: GBP1,586,000) has
been included within administrative expenses in the Consolidated Income
Statement.
No reversal of previous write-downs was recognised as a reduction of expense in
2009 or 2008. None of the inventories are pledged as securities for liabilities.
+---------------------------------------+------------+------------+
| 10. TRADE AND OTHER RECEIVABLES | | |
+---------------------------------------+------------+------------+
| | 2009 | 2008 |
+---------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+---------------------------------------+------------+------------+
| Trade receivables | 14,258 | 12,152 |
+---------------------------------------+------------+------------+
| Provision for impairment of trade | (625) | (452) |
| receivables | | |
+---------------------------------------+------------+------------+
| Trade receivables, net | 13,633 | 11,700 |
+---------------------------------------+------------+------------+
| Prepayments and accrued income | 925 | 1,053 |
+---------------------------------------+------------+------------+
| Total | 14,558 | 12,753 |
+---------------------------------------+------------+------------+
Trade receivables that are less than 60 days past due are not considered
impaired. As of 31 March 2009, trade receivables of GBP815,000 (2008:
GBP225,000) were past due but not impaired. These relate to a number of
independent customers for whom there is no recent history of default.
The ageing analysis of these trade receivables is as follows:
+---------------------------------------+------------+------------+
| | 2009 | 2008 |
+---------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+---------------------------------------+------------+------------+
| Up to two months | 815 | 225 |
+---------------------------------------+------------+------------+
| | | |
+---------------------------------------+------------+------------+
| | 815 | 225 |
+---------------------------------------+------------+------------+
As of 31 March 2009, trade receivables of GBP625,000 (2008: GBP452,000) were
impaired and provided for. The individually impaired receivables mainly relate
to wholesalers/distributors, which are in unexpectedly difficult economic
situations. The ageing of these receivables is as follows:
+---------------------------------------+------------+------------+
| | 2009 | 2008 |
+---------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+---------------------------------------+------------+------------+
| Two to six months | 258 | 104 |
+---------------------------------------+------------+------------+
| Over six months | 367 | 348 |
+---------------------------------------+------------+------------+
| | | |
+---------------------------------------+------------+------------+
| | 625 | 452 |
+---------------------------------------+------------+------------+
The carrying amounts of the Group's trade receivables are denominated in the
following currencies:
+---------------------------------------+------------+------------+
| | 2009 | 2008 |
+---------------------------------------+------------+------------+
| Currency | GBP'000 | GBP'000 |
+---------------------------------------+------------+------------+
| Sterling | 9,816 | 8,082 |
+---------------------------------------+------------+------------+
| Euro | 2,861 | 2,197 |
+---------------------------------------+------------+------------+
| Dollar | 651 | 459 |
+---------------------------------------+------------+------------+
| Other currencies | 305 | 962 |
+---------------------------------------+------------+------------+
| | 13,633 | 11,700 |
+---------------------------------------+------------+------------+
Movements on the Group provision for impairment of trade receivables are as
follows:
+---------------------------------------+------------+------------+
| | 2009 | 2008 |
+---------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+---------------------------------------+------------+------------+
| At 1 April | 452 | 836 |
+---------------------------------------+------------+------------+
| Provision for receivables impairment | 458 | 187 |
+---------------------------------------+------------+------------+
| Receivables written off during the | (10) | (471) |
| year as uncollectible | | |
+---------------------------------------+------------+------------+
| Unused amounts reversed | (275) | (100) |
+---------------------------------------+------------+------------+
| At 31 March | 625 | 452 |
+---------------------------------------+------------+------------+
The creation and release of provisions for impaired receivables have been
included in 'Other administrative expenses' in the Consolidated Income
Statement. Amounts charged to the allowance account are generally written off,
when there is no expectation of recovering additional cash.
The other classes within trade and other receivables do not contain impaired
assets.
Trade receivables are usually due within 50 days and do not bear any effective
interest rate. All trade receivables except the factored portion of the Retail
Generics segment are subject to credit risk exposure. However the Group does not
identify specific concentration of credit risk with regards to trade
receivables, as the amount recognized consist of a large number of receivables
from various customers.
The fair value of these short term financial assets is not individually
determined as the carrying amount is a reasonable approximation of fair value.
+---------------------------------------+------------+------------+
| 11. CASH AND CASH EQUIVALENTS | | |
+---------------------------------------+------------+------------+
| | 2009 | 2008 |
+---------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+---------------------------------------+------------+------------+
| Cash at bank and in hand | 9,257 | 6,073 |
+---------------------------------------+------------+------------+
| Short-term bank deposits | 18,205 | 13,124 |
+---------------------------------------+------------+------------+
| Total | 27,462 | 19,197 |
+---------------------------------------+------------+------------+
The effective interest rate on short-term bank deposits was 5.7% (2008: 6.8%);
these deposits have an average
maturity of 68 days (2008: 38 days).
+---------------------------------------+------------+------------+
| 12. SHARE CAPITAL AND SHARE OPTIONS | | |
+---------------------------------------+------------+------------+
| | 2009 | 2008 |
+---------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+---------------------------------------+------------+------------+
| Authorised | | |
+---------------------------------------+------------+------------+
| 100,000,000 ordinary shares of 5 | 5,000 | 5,000 |
| pence each | | |
+---------------------------------------+------------+------------+
| | | |
+---------------------------------------+------------+------------+
| Allotted, called up and fully paid | | |
+---------------------------------------+------------+------------+
| 38,367,046 ordinary shares of 5 pence | 1,919 | 1,919 |
| each | | |
+---------------------------------------+------------+------------+
| | | |
+---------------------------------------+------------+------------+
| | 2009 | 2008 |
+---------------------------------------+------------+------------+
| | Number | Number |
+---------------------------------------+------------+------------+
| Share issued and fully paid: | | |
+---------------------------------------+------------+------------+
| -beginning of the year | 38,367,046 | 37,176,033 |
+---------------------------------------+------------+------------+
| -issued during the year | - | 1,191,013 |
+---------------------------------------+------------+------------+
| Share issued and fully paid | 38,367,046 | 38,367,046 |
+---------------------------------------+------------+------------+
During the year no shares were issued under the unapproved employee share option
scheme, the employee share save scheme and the long-term incentive plan.
Share options
Details of Directors' share options are set out in the Directors' Remuneration
Report on page 29. The market price at 31 March 2009 was 311 pence and the range
during the year ended 31 March 2009 was 160.25 pence to 325 pence.
The following share options which have been granted by the Company were
outstanding at the year end:
+--------------------------------+------------+-------------+------------+------------+------------+
| | Date of | Earliest | Latest | 2009 | 2008 |
| | grant | date of | date of | Number | Number |
| | | exercise | exercise | | |
+--------------------------------+------------+-------------+------------+------------+------------+
| | | | | | |
+--------------------------------+------------+-------------+------------+------------+------------+
| The 'unapproved scheme' | | | | | |
+--------------------------------+------------+-------------+------------+------------+------------+
| 5p Ordinary shares at 480.5 | 11 Aug 99 | 11 Aug 02 | 10 Aug 09 | 18,387 | 18,387 |
| pence | | | | | |
+--------------------------------+------------+-------------+------------+------------+------------+
| 5p Ordinary shares at 260.7 | 26 Jul 04 | 26 Jul 09 | 25 Jul 14 | 72,491 | 83,722 |
| pence | | | | | |
+--------------------------------+------------+-------------+------------+------------+------------+
| 5p Ordinary shares at 270 | 21 Jul 05 | 21 Jul 10 | 20 Jul 15 | 32,875 | 49,058 |
| pence | | | | | |
+--------------------------------+------------+-------------+------------+------------+------------+
| The employee 'sharesave | | | | | |
| scheme' | | | | | |
+--------------------------------+------------+-------------+------------+------------+------------+
| 5p Ordinary shares at | 2 Jul 02 | 1 Aug 09 | 31 Jan 10 | 6,531 | 6,531 |
| 275.2pence | | | | | |
+--------------------------------+------------+-------------+------------+------------+------------+
| 5p Ordinary shares at 266 | 10 Jan 03 | 1 Feb 08 | 31 Jul 10 | - | 2,469 |
| pence | | | | | |
+--------------------------------+------------+-------------+------------+------------+------------+
| 5p Ordinary shares at 126 | 15 Aug 03 | 1 Sep 08 | 28 Feb 09 | - | 2,527 |
| pence | | | | | |
+--------------------------------+------------+-------------+------------+------------+------------+
The Directors' interests (including beneficial and family interests) in the
above share options are set out in the Directors' Remuneration Report on page
29.
+---------------------------------+------------+------------+------------+-------------+
| | 2009 | 2009 | 2008 | 2008 |
+---------------------------------+------------+------------+------------+-------------+
| | Weighted | Number of | Weighted | Number of |
| | average | options | average | options |
| | exercise | | exercise | |
| | price | | price | |
+---------------------------------+------------+------------+------------+-------------+
| | Pence | | Pence | |
+---------------------------------+------------+------------+------------+-------------+
| | | | | |
+---------------------------------+------------+------------+------------+-------------+
| Outstanding at the beginning of | 286.92 | 162,694 | 309.73 | 2,056,478 |
| the period | | | | |
+---------------------------------+------------+------------+------------+-------------+
| Lapsed/forfeited/surrendered | 255.24 | (32,410) | 347.81 | (1,482,771) |
| during the period | | | | |
+---------------------------------+------------+------------+------------+-------------+
| Exercised during the period | - | - | 181.39 | (411,013) |
+---------------------------------+------------+------------+------------+-------------+
| Outstanding at the end of the | 294.79 | 130,284 | 286.92 | 162,694 |
| period | | | | |
+---------------------------------+------------+------------+------------+-------------+
| Exercisable at the end of the | 480.50 | 18,387 | 455.11 | 20,856 |
| period | | | | |
+---------------------------------+------------+------------+------------+-------------+
As at 31 March 2009, the Group maintained three sharebased payment schemes:
Goldshield Group plc unapproved scheme
The unapproved share option scheme is administered by the Group. Options are
granted to employees during their tenure of service and these can be exercised
until expiry of 10 years from the date of grant, provided the employee continues
to remain in service at the earliest exercise date. The options are exercisable
based on the achievement of performance criteria with regards to growth in
earnings per share and turnover. The Remuneration Committee has the discretion
to consider any exception in meeting the performance criteria when the options
are exercised.
Goldshield Group plc sharesave scheme
The scheme allows all eligible employees to benefit from the growth of the
Company through savings deducted directly from pay, tax-free bonuses and a right
to purchase Goldshield Group plc shares in the future but at a fixed price,
which does not exceed the middle market value of a share over the three dealing
days immediately preceding the issue of this invitation. The approved sharesave
scheme has option exercise terms of 3,5 or 7 years. The sharesave scheme can be
exercised for 6 months only after the 3,5 or 7 year maturity dates.
The options outstanding at 31 March 2009 have an exercise price in the range of
260.7 pence to 480.5 pence and a weighted average contractual life of 4.64
years.
There were no share options granted during the year.
Goldshield Group plc Long-Term Incentive Plan
Participation in the plan is restricted to employees (including executive
Directors) of the Group who are required to devote substantially the whole of
their working time to their duties to the Group. Ordinarily, the Remuneration
Committee selects participants at or before the start of each performance period
but the Remuneration Committee may, in exceptional circumstances, decide to
select participants at any time.
As soon as practicable after the start of each performance period, each
participant will be notified about:
- the number of shares awarded to him/her in respect of that period
- the form of the award
- the performance targets to be achieved in relation to the performance period
- the basis upon which the shares may be released after the end of the
performance period and
- any other conditions to which the Award may be subject.
+-----------------+----------+----------+-----------+----------+-----------+----------+-----------+-----------+
| | At start | Awarded | Lapsed | Released | At end | Mid | Date of | Date of |
| | of year | in the | | | of year | market | award | vesting |
| | | year | | | | price at | | |
| | | | | | | date of | | |
| | | | | | | award | | |
| | | | | | | (pence) | | |
+-----------------+----------+----------+-----------+----------+-----------+----------+-----------+-----------+
| Performance | 575,982 | - | (61,499) | - | 514,483 | 231 | 12 Sep 07 | 12 Sep 10 |
| shares | | | | | | | | |
+-----------------+----------+----------+-----------+----------+-----------+----------+-----------+-----------+
| Performance | - | 811994 | (68,387) | - | 743,607 | 253.5 | 17 Sep 08 | 12 Sep 11 |
| shares | | | | | | | | |
+-----------------+----------+----------+-----------+----------+-----------+----------+-----------+-----------+
| | 575,982 | 811,994 | (129,886) | - | 1,258,090 | | | |
+-----------------+----------+----------+-----------+----------+-----------+----------+-----------+-----------+
+------------------------------------+-----------+-----------+
| | 2009 | 2008 |
+------------------------------------+-----------+-----------+
| | Number | Number |
| | of | of |
| | awards | awards |
+------------------------------------+-----------+-----------+
| Outstanding at the beginning of | 575,982 | - |
| the period | | |
+------------------------------------+-----------+-----------+
| Granted during the period | 811,994 | 708,862 |
+------------------------------------+-----------+-----------+
| Lapsed during the period | (129,886) | (132,880) |
+------------------------------------+-----------+-----------+
| Outstanding at the end of the | 1,258,090 | 575,982 |
| period | | |
+------------------------------------+-----------+-----------+
+------------------------------+-----------+-------------+-----------+-------------+
| 13. DEFERRED TAX ASSETS AND LIABILITIES |
+----------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------+
| Defered tax assets and liabilities are attributable to the following: |
+----------------------------------------------------------------------------------+
| | 2009 | 2009 | 2008 | 2008 |
+------------------------------+-----------+-------------+-----------+-------------+
| | Deferred | Deferred | Deferred | Deferred |
| | tax | tax | tax | tax |
| | assets | liabilities | assets | liabilities |
+------------------------------+-----------+-------------+-----------+-------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------------+-----------+-------------+-----------+-------------+
| Intangible assets | - | 1 | - | 537 |
+------------------------------+-----------+-------------+-----------+-------------+
| Property, plant and | 66 | - | 66 | - |
| equipment | | | | |
+------------------------------+-----------+-------------+-----------+-------------+
| Share options | 148 | - | 61 | - |
+------------------------------+-----------+-------------+-----------+-------------+
| Translation reserve | - | 1,115 | - | 268 |
+------------------------------+-----------+-------------+-----------+-------------+
| Other liabilities | 23 | - | 104 | - |
+------------------------------+-----------+-------------+-----------+-------------+
| Unused tax losses | 365 | - | 407 | - |
+------------------------------+-----------+-------------+-----------+-------------+
| Total | 602 | 1,116 | 638 | 805 |
+------------------------------+-----------+-------------+-----------+-------------+
| | | | | |
+------------------------------+-----------+-------------+-----------+-------------+
| Equity | | | | |
+------------------------------+-----------+-------------+-----------+-------------+
| Translation reserve | - | 847 | - | 476 |
+------------------------------+-----------+-------------+-----------+-------------+
| Share options | - | - | - | - |
+------------------------------+-----------+-------------+-----------+-------------+
| Total | - | 847 | - | 476 |
+------------------------------+-----------+-------------+-----------+-------------+
| | | | | |
+------------------------------+-----------+-------------+-----------+-------------+
| Unrecognised deferred taxes | 2009 | 2008 | | |
+------------------------------+-----------+-------------+-----------+-------------+
| | GBP'000 | GBP'000 | | |
+------------------------------+-----------+-------------+-----------+-------------+
| US | 10,248 | 6,840 | | |
+------------------------------+-----------+-------------+-----------+-------------+
| India | 3,801 | 2,314 | | |
+------------------------------+-----------+-------------+-----------+-------------+
| | 14,049 | 9,154 | | |
+------------------------------+-----------+-------------+-----------+-------------+
The tax losses for the US subsidiaries expire in 2028 and losses for Indian
subsidiaries expire in 2016. Deferred tax assets against the tax losses have not
been recognised to the extent that the realisation of the related tax benefit
through the future taxable profits is not probable.
Please also refer to note 6 for information on the Group's tax expense.
14. EARNINGS PER SHARE
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during the year, excluding those held by employee benefit trust
and those held as treasury shares.
The calculation of diluted earnings per share is based on the basic earnings per
share, adjusted to allow for the issue of shares and the post tax effect of
dividends, on the assumed conversion of all dilutive options.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
+-----------------------------+-----------+----------+--------+----------+----------+----------+
| | 2009 | 2008 |
+-----------------------------+-------------------------------+--------------------------------+
| | Earnings | | Per | Earnings | | Per |
| | GBP'000 | Weighted | share | GBP'000 | Weighted | share |
| | | average | amount | | average | amount |
| | | number | pence | | number | pence |
| | | of | | | of | |
| | | shares | | | shares | |
| | | '000 | | | '000 | |
+-----------------------------+-----------+----------+--------+----------+----------+----------+
| Profit attributable to | 13,882 | 34,989 | - | 6,253 | 36,915 | - |
| shareholders | | | | | | |
+-----------------------------+-----------+----------+--------+----------+----------+----------+
| Basic earnings per share | | | 39.7 | | | 16.9 |
+-----------------------------+-----------+----------+--------+----------+----------+----------+
| Diluted earnings per share | | 34,989 | 39.7 | | 36,916 | 16.9 |
+-----------------------------+-----------+----------+--------+----------+----------+----------+
+----------------------------------------------------+---------------+---------------------+
| Weighted average number of ordinary shares | 2009 | 2008 |
+----------------------------------------------------+---------------+---------------------+
| | shares | shares |
+----------------------------------------------------+---------------+---------------------+
| | 000's | 000's |
+----------------------------------------------------+---------------+---------------------+
| Issued ordinary share at 1 April | 35,203 | 37,176 |
+----------------------------------------------------+---------------+---------------------+
| Weighted average number of shares issued during | - | 593 |
| the year | | |
+----------------------------------------------------+---------------+---------------------+
| Weighted average number of treasury shares | (214) | (725) |
+----------------------------------------------------+---------------+---------------------+
| Weighted average number of shares held by employee | - | (129) |
| benefit trust | | |
+----------------------------------------------------+---------------+---------------------+
| Weighted average number of ordinary share at 31 | 34,989 | 36,915 |
| March | | |
+----------------------------------------------------+---------------+---------------------+
+----------------------------------------------------+---------------+---------------------+
| Weighted average number of ordinary shares | | |
| (diluted) | | |
+----------------------------------------------------+---------------+---------------------+
| Weighted average number of ordinary shares at 31 | 34,989 | 36,915 |
| March | | |
+----------------------------------------------------+---------------+---------------------+
| Effect of share options on issue | - | 1 |
+----------------------------------------------------+---------------+---------------------+
| Weighted average number of ordinary shares | 34,989 | 36,916 |
| (diluted) at 31 March | | |
+----------------------------------------------------+---------------+---------------------+
+------------------------------------------------------------+---------+---------------------+
| 15. EQUITY DIVIDENDS | | |
+------------------------------------------------------------+---------+---------------------+
| | 2009 | 2008 |
+------------------------------------------------------------+---------+---------------------+
| | GBP'000 | GBP'000 |
+------------------------------------------------------------+---------+---------------------+
| Ordinary shares - dividend for 2007 of 5.1 pence per share | - | 1,896 |
| paid on 20 August 2007 | | |
+------------------------------------------------------------+---------+---------------------+
| Ordinary shares - dividend for 2008 of 2.5 pence per share | - | 921 |
| paid on 10 January 2008 | | |
+------------------------------------------------------------+---------+---------------------+
| Ordinary shares - dividend for 2008 of 5.5 pence per share | 1,936 | - |
| paid on 20 August 2008 | | |
+------------------------------------------------------------+---------+---------------------+
| Ordinary shares - dividend for 2009 of 2.9 pence per share | 1,012 | - |
| paid on 8 January 2009 | | |
+------------------------------------------------------------+---------+---------------------+
| | 2,948 | 2,817 |
+------------------------------------------------------------+---------+---------------------+
| | | |
+------------------------------------------------------------+---------+---------------------+
| | 2009 | 2008 |
+------------------------------------------------------------+---------+---------------------+
| | Pence | Pence |
+------------------------------------------------------------+---------+---------------------+
| Proposed dividend per share | 5.8 | 5.5 |
+------------------------------------------------------------+---------+---------------------+
| | | |
+------------------------------------------------------------+---------+---------------------+
| | 2009 | 2008 |
+------------------------------------------------------------+---------+---------------------+
| | GBP'000 | GBP'000 |
+------------------------------------------------------------+---------+---------------------+
| Proposed dividend | 2,023 | 1,936 |
+------------------------------------------------------------+---------+---------------------+
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| 16. STATEMENT OF CHANGES IN EQUITY |
+-------------------------------------------------------------------------------------------------+
| | Equity attributable to equity holders of |
+--------------------------------+----------------------------------------------------------------+
| | Goldshield Group plc |
+--------------------------------+----------------------------------------------------------------+
| | Share | Share | Own | Translation | Retained | Total |
| | capital | premium | shares | reserve | earnings | equity |
| | GBP | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | '000 | | | | | |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Balance 1 April 2007 | 1,859 | 21,549 | - | (484) | 17,758 | 40,682 |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Currency translation | - | - | - | 1,651 | - | 1,651 |
| differences | | | | | | |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Deferred tax on translation | - | - | - | (476) | - | (476) |
| reserve | | | | | | |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Net income recognised directly | - | - | - | 1,175 | - | 1,175 |
| in equity | | | | | | |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Profit for the year | - | - | - | - | 6,253 | 6,253 |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Total recognised income for | - | - | - | 1,175 | 6,253 | 7,428 |
| the year | | | | | | |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Shares issued | 60 | 725 | - | - | - | 785 |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Purchase of shares held by | - | - | (1,939) | - | - | (1,939) |
| employee benefit trust | | | | | | |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Purchase of treasury shares | - | - | (4,667) | - | - | (4,667) |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Employee share based | - | - | - | - | (102) | (102) |
| compensation | | | | | | |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Dividends paid | - | - | - | - | (2,817) | (2,817) |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Balance at 31 March 2008 | 1,919 | 22,274 | (6,606) | 691 | 21,092 | 39,370 |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| | | | | | | |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Balance 1 April 2008 | 1,919 | 22,274 | (6,606) | 691 | 21,092 | 39,370 |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Currency translation | - | - | - | 3,024 | - | 3,024 |
| differences | | | | | | |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Deferred tax on translation | - | - | - | (847) | - | (847) |
| reserve | | | | | | |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Net income recognised directly | - | - | - | 2,177 | - | 2,177 |
| in equity | | | | | | |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Profit for the year | - | - | - | - | 13,882 | 13,882 |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Total recognised income for | - | - | - | 2,177 | 13,882 | 16,059 |
| the year | | | | | | |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Purchase of shares held by | - | - | (823) | - | - | (823) |
| employee benefit trust | | | | | | |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Employee share based | - | - | - | - | 309 | 309 |
| compensation | | | | | | |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Dividends paid | - | - | - | - | (2,948) | (2,948) |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
| Balance at 31 March 2009 | 1,919 | 22,274 | (7,429) | 2,868 | 32,335 | 51,967 |
+--------------------------------+---------+---------+---------+-------------+----------+---------+
+----------------------------------------+---------+
| 17. PROVISIONS | GBP'000 |
+----------------------------------------+---------+
| | |
+----------------------------------------+---------+
| Carrying amount 1 April 2008 | 3,335 |
+----------------------------------------+---------+
| Used during the year | (1,235) |
+----------------------------------------+---------+
| Unused amount released | (2,100) |
+----------------------------------------+---------+
| Carrying amount 31 March 2009 | - |
+----------------------------------------+---------+
The carrying value of provisions at 1 April 2008 represented estimated legal
fees of the costs for defending Serious Fraud Office litigation against the
Group. However with the judgement of the litigation being in favour of the
Group, the balance unused amount was released during the year.
+--------------------------------------+------------+----------+
| 18. TRADE AND OTHER PAYABLES | | |
+--------------------------------------+------------+----------+
| | 2009 | 2008 |
+--------------------------------------+------------+----------+
| | GBP'000 | GBP'000 |
+--------------------------------------+------------+----------+
| Trade payables | 6,429 | 5,516 |
+--------------------------------------+------------+----------+
| Accruals | 12,999 | 11,458 |
+--------------------------------------+------------+----------+
| | 19,428 | 16,974 |
+--------------------------------------+------------+----------+
| | | |
+--------------------------------------+------------+----------+
| 19. OTHER LIABILITIES | | |
+--------------------------------------+------------+----------+
| | 2009 | 2008 |
+--------------------------------------+------------+----------+
| | GBP'000 | GBP'000 |
+--------------------------------------+------------+----------+
| Other creditors | 531 | 490 |
+--------------------------------------+------------+----------+
| Social security and other taxes | 880 | 632 |
+--------------------------------------+------------+----------+
| | 1,411 | 1,122 |
+--------------------------------------+------------+----------+
20. OPERATING LEASES
The Group's minimum operating lease payments are as follows:
+--------------------------------------+-----------+----------+-----------+----------+
| | 2009 | | 2008 | |
+--------------------------------------+-----------+----------+-----------+----------+
| | Land & | 2009 | Land & | 2008 |
| | buildings | Other | buildings | Other |
+--------------------------------------+-----------+----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+-----------+----------+-----------+----------+
| Within one year | 953 | 14 | 712 | 14 |
+--------------------------------------+-----------+----------+-----------+----------+
| Between one to five years | 1,277 | 14 | 1,116 | 28 |
+--------------------------------------+-----------+----------+-----------+----------+
| More than five years | 1,167 | - | 1,346 | - |
+--------------------------------------+-----------+----------+-----------+----------+
| | 3,397 | 28 | 3,174 | 42 |
+--------------------------------------+-----------+----------+-----------+----------+
Lease payments recognised as an expense during the period amount to GBP1,148,000
(2008: GBP1,146,000). No sublease income is expected as all assets held under
lease agreements are used exclusively by the Group.
No operating lease agreements contain any contingent rent clauses.
The office building in India has a renewal option and escalation clause for
lease rentals. Apart from the India office building at Mumbai, none of the
operating lease agreements contain renewal options or escalation clauses.
The Group did not have any financial leases at 31 March 2009 (2008: GBPnil).
21. HELD-TO-MATURITY FINANCIAL ASSETS
Held-to-maturity financial assets comprise of a secured non-convertible
debenture. The redemption date was 14 months from the date of investment. The
interest period was the period starting from the allotment date to the
redemption and maturity date. The debenture was redeemed in 2009.
The cost and fair values of this financial assets was as follows:
+--------------------------------------+------------+----------+
| | 2009 | 2008 |
+--------------------------------------+------------+----------+
| | GBP'000 | GBP'000 |
+--------------------------------------+------------+----------+
| Carrying amounts at amortised cost: | | |
+--------------------------------------+------------+----------+
| Secured non-convertible debenture | - | 377 |
+--------------------------------------+------------+----------+
| | - | 377 |
+--------------------------------------+------------+----------+
| | | |
+--------------------------------------+------------+----------+
| Estimated fair values: | | |
+--------------------------------------+------------+----------+
| Secured non-convertible debenture | - | 377 |
+--------------------------------------+------------+----------+
| | - | 377 |
+--------------------------------------+------------+----------+
22. FINANCIAL INSTRUMENTS
The Group uses financial instruments, comprising cash, short term borrowings,
trade receivables and trade payables, which arise directly from its operations.
The main purpose of these financial instruments is to raise finance for the
Group's operations.
Capital management
The Groups capital management objectives are to ensure that the entities in the
Group will be able to continue as a going concern whilst maximising the return
to shareholders. The Group currently has no debt.
Short term payables and receivables
The Group's trade and other receivables are actively monitored to avoid
significant concentrations of credit risk.
Interest rate risk
The Group finances its operations through a mixture of retained profits and bank
facilities. Bank borrowings are made using variable interest rates.
Liquidity risk
The Group seeks to manage financial risk, to ensure sufficient liquidity is
available to meet foreseeable needs and to invest cash assets safely and
profitably.
Short-term flexibility is achieved through overdraft facilities and short/medium
term borrowings.
Borrowing facilities
The Group has undrawn facilities available of GBP500,000 expiring within one
year (2008: GBP500,000).
Currency risk
The Group is exposed to translation and transaction foreign exchange risk. In
relation to translation risk the proportion of assets held in the foreign
currency are matched to an appropriate level of borrowings in the same currency.
Transaction exposures are hedged when known, mainly using the forward exchange
hedge market.
The Group seeks to hedge its exposures using a variety of financial instruments,
with the objective of minimizing the impact of fluctuations in exchange rates on
future transactions and cash flows.
The Group has overseas subsidiaries operating in Ireland where reserves and
expenses are denominated in Euros.
GBP22.8 million (2008: GBP20.8 million) of the sales of the Group's business is
to customers in continental Europe/foreign markets excluding North American
operations. The majority of these sales are invoiced in the currencies of the
customers involved. The Group policy is to minimise all currency exposures on
any balance not expected to mature within 30 days of its arising through the use
of forward currency contracts, however there were none in place at the year end.
All other sales of UK business are denominated in sterling.
The tables below show the extent to which Group companies have monetary assets
and liabilities in currencies other than their local currency.
+----------------------------+-----------+-----------+-----------+------------+-----------+
| Functional currency of | Net foreign currency monetary assets/(liabilities) |
| operation | |
+----------------------------+------------------------------------------------------------+
| | US | Euro | Indian | Other | Total |
| | Dollars | | Rupees | currencies | |
+----------------------------+-----------+-----------+-----------+------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+-----------+-----------+-----------+------------+-----------+
| 2009 | | | | | |
+----------------------------+-----------+-----------+-----------+------------+-----------+
| Sterling | 162 | 1,835 | (31) | 752 | 2,718 |
+----------------------------+-----------+-----------+-----------+------------+-----------+
| US Dollar | 1,434 | - | - | - | 1,434 |
+----------------------------+-----------+-----------+-----------+------------+-----------+
| Euro | 493 | 96 | - | (28) | 561 |
+----------------------------+-----------+-----------+-----------+------------+-----------+
| Indian Rupees | - | - | 3,313 | - | 3,313 |
+----------------------------+-----------+-----------+-----------+------------+-----------+
| | 2,089 | 1,931 | 3,282 | 724 | 8,026 |
+----------------------------+-----------+-----------+-----------+------------+-----------+
| 2008 | | | | | |
+----------------------------+-----------+-----------+-----------+------------+-----------+
| Sterling | 172 | 2,417 | (168) | 1,263 | 3,684 |
+----------------------------+-----------+-----------+-----------+------------+-----------+
| US Dollar | 658 | - | - | - | 658 |
+----------------------------+-----------+-----------+-----------+------------+-----------+
| Euro | 544 | - | 1 | - | 545 |
+----------------------------+-----------+-----------+-----------+------------+-----------+
| Indian Rupees | - | - | 3,133 | - | 3,133 |
+----------------------------+-----------+-----------+-----------+------------+-----------+
| | 1,374 | 2,417 | 2,966 | 1,263 | 8,020 |
+----------------------------+-----------+-----------+-----------+------------+-----------+
Fair values
The fair values of the Group's financial instruments are considered equal to the
book value. As these financial instruments are not publicly traded, the fair
values presented are determined by calculating present values of the cash flows
anticipated until maturity of these financial assets.
+---------------------------------+-------------+-------------+------------+
| 2009 | | | |
+---------------------------------+-------------+-------------+------------+
| Assets as per balance sheet | Held to | Loans and | Total |
| | maturity | receivables | |
| | investments | | |
+---------------------------------+-------------+-------------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------+-------------+-------------+------------+
| Trade and other receivables | - | 14,558 | 14,558 |
+---------------------------------+-------------+-------------+------------+
| Cash and cash equivalents | - | 27,462 | 27,462 |
+---------------------------------+-------------+-------------+------------+
| | - | 42,020 | 42,020 |
+---------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------+-------------+-------------+------------+
| 2008 | | | |
+---------------------------------+-------------+-------------+------------+
| Assets as per balance sheet | Held to | Loans and | Total |
| | maturity | receivables | |
| | investments | | |
+---------------------------------+-------------+-------------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------+-------------+-------------+------------+
| Held to maturity investments | 377 | - | 377 |
+---------------------------------+-------------+-------------+------------+
| Trade and other receivables | - | 12,753 | 12,753 |
+---------------------------------+-------------+-------------+------------+
| Cash and cash equivalents | - | 19,197 | 19,197 |
+---------------------------------+-------------+-------------+------------+
| | 377 | 31,950 | 32,327 |
+---------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------+-------------+-------------+------------+
| 2009 | | | |
+---------------------------------+-------------+-------------+------------+
| Liabilities as per balance | | Liabilities | Total |
| sheet | | at fair | |
| | | value | |
| | | through the | |
| | | profit and | |
| | | loss | |
+---------------------------------+-------------+-------------+------------+
| | | GBP'000 | GBP'000 |
+---------------------------------+-------------+-------------+------------+
| Trade and other payables | | 19,428 | 19,428 |
+---------------------------------+-------------+-------------+------------+
| Other liabilities | | 1,411 | 1,411 |
+---------------------------------+-------------+-------------+------------+
| | | 20,839 | 20,839 |
+---------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------+-------------+-------------+------------+
| 2008 | | | |
+---------------------------------+-------------+-------------+------------+
| Liabilities as per balance | | Liabilities | Total |
| sheet | | at fair | |
| | | value | |
| | | through the | |
| | | profit and | |
| | | loss | |
+---------------------------------+-------------+-------------+------------+
| | | GBP'000 | GBP'000 |
+---------------------------------+-------------+-------------+------------+
| Trade and other payables | | 16,974 | 16,974 |
+---------------------------------+-------------+-------------+------------+
| Other liabilities | | 1,122 | 1,122 |
+---------------------------------+-------------+-------------+------------+
| | | 18,096 | 18,096 |
+---------------------------------+-------------+-------------+------------+
23. CAPITAL COMMITMENTS
During the year ended 31 March 2009, the Group entered into contracts to
purchase property, plant and equipment and implement Enterprise Resource
Planning software for GBP644,000 (2008: GBP234,000). These commitments are
expected to be settled in the following financial year.
24. SUBSIDIARY UNDERTAKINGS
At 31 March 2009 the Company held more than 20% of the allotted share capital of
the following significant undertakings:
+----------------------+---------------+--------------+--------------+---------------------------+
| Name | Country of | Class of | Proportion | Nature of business |
| | registration | share | held | |
| | or | capital held | | |
| | incorporation | | | |
+----------------------+---------------+--------------+--------------+---------------------------+
| Goldshield | England and | GBP1 | 100% | Marketing and |
| Pharmaceuticals | Wales | ordinary | | distribution of |
| Limited | | shares | | pharmaceutical products |
+----------------------+---------------+--------------+--------------+---------------------------+
| Goldshield Limited | England and | GBP1 | 100% | Marketing and |
| | Wales | ordinary | | distribution of vitamins |
| | | shares | | and health supplements |
+----------------------+---------------+--------------+--------------+---------------------------+
| Goldshield | England and | GBP1 | 100% | Management services |
| Management Services | Wales | ordinary | | |
| Limited | | shares | | |
+----------------------+---------------+--------------+--------------+---------------------------+
| Vitamins Direct | England and | GBP1 | 100% | Marketing and |
| Limited | Wales | ordinary | | distribution of vitamins |
| | | shares | | and health supplements |
+----------------------+---------------+--------------+--------------+---------------------------+
| Regina Health | England and | GBP1 | 100% | Marketing and |
| Limited | Wales | ordinary | | distribution of vitamins |
| | | shares | | and health supplements |
+----------------------+---------------+--------------+--------------+---------------------------+
| B&S House of Health | England and | GBP1 | 100% | Marketing and |
| Limited | Wales | ordinary | | distribution of vitamins |
| | | shares | | and health supplements |
+----------------------+---------------+--------------+--------------+---------------------------+
| Natural Essentials | England and | GBP1 | 100% | Marketing and |
| Limited | Wales | ordinary | | distribution of vitamins |
| | | shares | | and health supplements |
+----------------------+---------------+--------------+--------------+---------------------------+
| Forley Generics | England and | GBP1 | 100% | Marketing of |
| Limited | Wales | ordinary | | pharmaceutical products |
| | | shares | | |
+----------------------+---------------+--------------+--------------+---------------------------+
| Goldshield USA, Inc | USA | Ordinary | 100% | Intermediate holding |
| | | shares | | company |
+----------------------+---------------+--------------+--------------+---------------------------+
| Golden Pride, Inc | USA | Ordinary | 100% | Marketing and |
| | | shares | | distribution of vitamins |
| | | | | and health supplements |
+----------------------+---------------+--------------+--------------+---------------------------+
| WT Rawleigh, Co | Canada | Ordinary | 100% | Marketing and |
| | | shares | | distribution of vitamins |
| | | | | and health supplements |
+----------------------+---------------+--------------+--------------+---------------------------+
| Goldshield Services | India | Ordinary | 100% | Management services |
| Pvt. Limited | | shares | | |
+----------------------+---------------+--------------+--------------+---------------------------+
| Antigen | Ireland | Ordinary | 100% | Intermediate holding |
| Pharmaceuticals | | shares | | company |
| Limited | | | | |
+----------------------+---------------+--------------+--------------+---------------------------+
| Antigen | Ireland | Ordinary | 100% | Marketing and |
| International | | shares | | distribution of |
| Limited | | | | pharmaceutical products |
+----------------------+---------------+--------------+--------------+---------------------------+
| Antigen Overseas | Ireland | Ordinary | 100% | Marketing and |
| Limited | | shares | | distribution of |
| | | | | pharmaceutical products |
+----------------------+---------------+--------------+--------------+---------------------------+
| Anpharm Limited | Ireland | Ordinary | 100% | Marketing and |
| | | shares | | distribution of |
| | | | | pharmaceutical products |
+----------------------+---------------+--------------+--------------+---------------------------+
| Goldshield | India | Ordinary | 100% | Marketing and |
| Healthcare Pvt. | | shares | | distribution of vitamins |
| Limited | | | | and health supplements |
| | | | | and telemarketing |
| | | | | services |
+----------------------+---------------+--------------+--------------+---------------------------+
| Goldshield Real | India | Ordinary | 100% | Development of |
| Estate Pvt. Limited | | shares | | Wellbeing Villages and |
| | | | | Resorts |
+----------------------+---------------+--------------+--------------+---------------------------+
| Complete Wellbeing | India | Ordinary | 100% | Publishing magazines for |
| Publishing Pvt. | | shares | | consumers and selling |
| Limited | | | | copies, subscriptions and |
| | | | | advertising space |
+----------------------+---------------+--------------+--------------+---------------------------+
| Goldshield | USA | Ordinary | 100% | Marketing and |
| Direct,Inc. | | shares | | distribution of vitamins |
| | | | | and health supplements |
+----------------------+---------------+--------------+--------------+---------------------------+
| Goldshield | USA | Ordinary | 100% | Management services |
| Management Services, | | shares | | |
| Inc. | | | | |
+----------------------+---------------+--------------+--------------+---------------------------+
25. CONTINGENT LIABILITIES
Indemnities and guarantees
The Group has given indemnities in respect of advance payments, deferred
purchase consideration and import duty guarantees issued on its behalf in the
normal course of business. The indemnities given at 31 March 2009 amounted to
GBP688,000 (2008: GBP707,000).
26. ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgments are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
The Group makes estimates and judgements concerning the future. The estimates
and judgements that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year
are discussed below.
Impairment of goodwill and other intangibles
The Group test annually the carrying values of goodwill and other intangibles
for impairment in accordance with the accounting policy statement in Note 1. The
achievement of the growth and profitability by the individual cash generating
units is critical in substantiating the carrying value of goodwill and
intangibles. Refer to note 7 of Consolidated Financial Statements on page 48.
Share options
The share options calculation takes into account future dividends of 6 pence and
a volatility rate of 45%, based on expected share price. It is assumed that the
3 and 5 year share save options are held for 3 and 5 years respectively, ie. the
duration of the savings contracts, because the bonus is paid then and the
employee has cash tied up. For the employee stock options it is assumed that 3
year options will be held for 5 years and that 5 year options will be held for 6
years. Both could be held for longer before expiry, but on average employees are
likely to seek liquidity or leave the Company before the full term. The
risk-free interest rate was determined at 5%. The underlying expected volatility
was based upon a calculation of historic volatility during the period 2002-2004.
Long-Term Incentive Plan
The costs for Long-term incentive plan share rewards were calculated using the
Binomial model with the following assumptions:
+-------------------------------------+-----------+-----------+-----------+-----------+
| Date of award |12 Sep 07 |12 Sep 07 |17 Sep 08 |17 Sep 08 |
+-------------------------------------+-----------+-----------+-----------+-----------+
| Performance criteria | TSR | EPS | TSR | EPS |
+-------------------------------------+-----------+-----------+-----------+-----------+
| Number of shares issued under the | 354,431 | 354,431 | 405,997 | 405,997 |
| scheme | | | | |
+-------------------------------------+-----------+-----------+-----------+-----------+
| Share price (GBP) (mid market) | GBP2.31 | GBP2.31 | GBP2.535 | GBP2.535 |
+-------------------------------------+-----------+-----------+-----------+-----------+
| Option exercise price (GBP) | GBP0.00 | GBP0.00 | GBP0.00 | GBP0.00 |
+-------------------------------------+-----------+-----------+-----------+-----------+
| Expected life of awards in years | 3 | 3 | 3 | 3 |
+-------------------------------------+-----------+-----------+-----------+-----------+
| Volatility | 30% | 30% | 36% | 36% |
+-------------------------------------+-----------+-----------+-----------+-----------+
| Dividend Yield | 2.5% | 2.5% | 3.2% | 3.2% |
+-------------------------------------+-----------+-----------+-----------+-----------+
| Risk free interest rate | 5% | 5% | 3.5% | 3.5% |
+-------------------------------------+-----------+-----------+-----------+-----------+
| Binomial model GBP fair value | GBP1.39 | GBP2.31 | GBP1.01 | GBP2.535 |
+-------------------------------------+-----------+-----------+-----------+-----------+
Income taxes
The Group is subject to taxes in various jurisdictions. Significant judgment is
required in determining the Group provision for income taxes. There are many
transactions and calculations for which the ultimate tax determination is
uncertain during the ordinary course of business. The Group recognises
liabilities for anticipated tax audit issues based on estimates as to whether
additional taxes will be due. Where the final tax outcome of these matters is
different from the amounts that were initially recorded, such differences will
impact the income tax and deferred tax provision in the year in which such
determination is made.
27.PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985.
The Consolidated Balance Sheet at 31 March 2009 and the Consolidated Profit and
Loss account, Consolidated Cash Flow Statement and associated notes for the year
then ended have been extracted from the Group's 2009 statutory financial
statements upon which the auditors opinion is unqualified and does not include
any statement under Section 237 of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR USAWRKNRNUAR
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