7th Nov 2005 17:31
BTG PLC07 November 2005 BTG plc Releases Financial Statement Information For The Year to 31 March 2005 Restated Under IFRS London: 7 November 2005 BTG plc (LSE:BGC), the medical innovations company, today provides an unauditedsummary of the restatement of its 2004/5 financial statements prepared underInternational Financial Reporting Standards ("IFRS"). This summary is beingprovided in advance of the announcement, on 10 November, of BTG's interimresults for the six months ended 30 September 2005. BTG also announces mattersarising with respect to the valuation of its defined benefit pension plan. The main changes from preparing the results under IFRS rather than UK GAAP(Generally Accepted Accounting Practice) that affect the Group loss before taxand the net asset position are: (1) Under UK GAAP, BTG applied a true and fair override and accounted for investments in a number of early-stage companies at cost or impaired value in the balance sheet on the basis that they were part of a venture capital portfolio. Under IFRS the results of associate companies (those investments in which BTG owns 20% or more of the voting equity) are accounted for on an equity basis (2) A true and fair override was also applied to one company in which BTG owned more than 50% of the voting equity and was accounted for as an investment available for sale. The results of this subsidiary company are now consolidated under IFRS (3) Under UK GAAP, BTG held its investments where it owned less than 20% of the voting at the lower of cost and net realisable value. Under IFRS, these equity holdings have been revalued to fair value at each balance sheet date with the movement in fair value being recorded in reserves (4) Discontinuation of regular amortisation of goodwill and initiation of annual impairment reviews (5) Accounting for the cost of employee share options and other share-based payments (6) Accounting for employee benefits in accordance with IAS 19 rather than SSAP 24 (7) Deferred tax assets and liabilities have been calculated for all taxable temporary timing differences, as required by IAS 12. In most cases they have been offset, as permitted by the standard. The remaining deferred tax liabilities relate to timing differences on the fair value of available for sale investments. The most significant impact on the Group's balance sheet and its net assetposition is the inclusion of the net liabilities of the Group defined benefitpension plan (the "Plan") in accordance with IAS 19. At 31 March 2005, the netpension related liability under IAS 19 was £10.1m (31 March 2004: £10.9m). TheFRS 17 deficit disclosed as a note to the audited accounts at 31 March 2005 was£4.4m and the IAS 19 figure should have been similar to this. However, thePlan's actuaries have now advised the Trustees of the Plan and the Company thatthey made an error in their 2002 valuation, resulting in liabilities ofapproximately £6m being ignored in calculating the net Plan position at thatpoint and at subsequent year-ends. Thus the net deficit that should have beendisclosed as at 31 March 2005 under FRS 17 was £10.0m. The correct valuation hasbeen used in preparing the restated IFRS numbers. The profit and loss accountimpact of this error by the actuaries was not material to the losses reported ineach of the three financial years ended 31 March 2005 covered by the 2002valuation. BTG plc will continue to produce its company-only accounts under UK GAAP andtherefore none of the IFRS adjustments in this announcement impacts on itsbalance sheet or reserves. There are only minor IFRS adjustments to the Group cash flows, due to theinclusion of assets and liabilities on the consolidation of subsidiary companiesand certain reclassifications, which are not material. The Group's results for the six months ended 30 September 2004 and the full yearended 31 March 2005 on an IFRS and comparative UK GAAP basis are summarisedbelow. Reconciliations for each item are provided in the notes attached anddetailed reconciliations provided in Appendix 1. Adjusted losses reflect tradinglosses before certain items, which under UK GAAP, were disclosed as exceptionalitems. These items are disclosed and explained in the relevant financialstatements. Note Six months ended Six months ended Year ended Year ended 30 September 2004 30 September 2004 31 March 2005 31 March 2005 UK GAAP IFRS UK GAAP IFRS £m £m £m £m Revenue 18.6 18.6 38.3 38.3 _____ _____ _____ _____ Operating loss:Adjusted* 1 (14.1) (14.7) (23.3) (25.8)Reported 1 (14.1) (14.7) (35.9) (36.4) _____ _____ _____ _____ Basic loss per share:Adjusted* 2 (8.9p) (9.3p) (14.8p) (16.5p)Reported 2 (8.9p) (9.3p) (23.5p) (23.8p) _____ _____ _____ _____ £m £m £m £m Net cash** 47.2 47.4 34.4 34.5 _____ _____ _____ _____ Employee benefits liability 3 0.3 10.5 - 10.1 _____ _____ _____ _____ Shareholders' equity 4 69.3 62.2 47.9 38.9 _____ _____ _____ _____ * The 'Adjusted' loss before financing and tax excludes certain items described as exceptional in the UK GAAP accounts for the year ended 31 March 2005 ** Net cash comprises 'Cash and Cash Equivalents' less 'Bank Overdraft' Shareholder and Analyst Enquiries: BTG Financial DynamicsChristine Soden, Chief Financial Officer Ben Atwell+44 (0)20 7575 1591 +44 (0)20 7831 3113Andy Burrows, Director of Investor Relations+44 (0)20 7575 1741 About BTG BTG acquires rights to early stage pharmaceuticals and other medicaltechnologies from a global network of corporations, universities and researchinstitutions. The Group applies resources including finance, intellectualproperty and project management skills to fund and manage outsourced preclinicaland clinical development programmes. BTG then commercialises the technologiesby licensing to pharmaceutical or medical device companies, or by creatingcompanies to exploit them. BTG's pipeline comprises around 50 assets at varyingstages of development, contributing to an increasing range of products marketedby licensees. BTG operates from London, Philadelphia and Tokyo. For furtherinformation visit: www.btgplc.com. Notes to IFRS Restatement Announcement 1. Loss before financing and tax Six months ended Year ended 30 September 2004 31 March 2005 Adjusted Exceptional Reported Adjusted Exceptional Reported items items £m £m £m £m £m £mOperating loss - UK GAAP (14.1) - (14.1) (23.3) (12.6) (35.9)Change in scope of consolidation (0.3) - (0.3) (0.4) - (0.4)Goodwill impairment - - - (0.4) - (0.4)Removal of equity write downs on - - - - 0.8 0.8transition to equity accountingImpact of equity accounting for (0.5) - (0.5) (1.0) 1.2 0.2associatesPension charge changes 0.1 - 0.1 0.1 - 0.1Share based payments charge (0.3) - (0.3) (0.6) - (0.6)Other employee benefits 0.4 - 0.4 (0.2) - (0.2) _____ _____ _____ _____ _____ _____Operating loss under IFRS (14.7) - (14.7) (25.8) (10.6) (36.4) _____ _____ _____ _____ _____ _____ 2. Loss per share Six months ended Year ended 30 September 2004 31 March 2005 Adjusted Exceptional Reported Adjusted Exceptional Reported items items £m £m £m £m £m £mLosses reported under UK GAAP (13.0) - (13.0) (21.6) (12.6) (34.2)Cumulative IFRS adjustments (0.6) - (0.6) (2.5) 2.0 (0.5)attributable to equity shareholders _____ _____ _____ _____ _____ _____Losses reported under IFRS (13.6) - (13.6) (24.1) (10.6) (34.7) _____ _____ _____ _____ _____ _____ Average number of shares 145.4m 145.4m 145.5m 145.5mBasic and diluted loss per share (8.9p) (8.9p) (14.8p) (23.5p)under UK GAAPBasic and diluted loss per share under IFRS (9.3p) (9.3p) (16.5p) (23.8p) _____ _____ _____ _____ 3. Employee Benefits Liability Under IAS 19, the Group has recorded the net deficit on the defined benefitpension plan as a liability in the balance sheet. As disclosed earlier, theactuaries have now corrected their assessment of these liabilities and thesediffer substantially from those disclosed under FRS 17 in the previouslyreported financial statements. The net deficit at each period end was: Six months ended Year ended 30 September 2004 31 March 2005 £m £mValuation of assets 64.7 65.5Valuation of liabilities (75.2) (75.6) _____ _____Net deficit (10.5) (10.1) _____ _____ 4. Shareholders' Equity Six months ended Year ended 30 September 2004 31 March 2005 £m £mReported under UK GAAP 69.3 47.9Adjustment of investments to fair value 6.2 2.4Deferred tax arising on adjustment of investments (1.4) (0.2)to fair valueImpact of transition to IAS 19 (10.2) (10.1)Adoption of accounting for associates (1.6) (0.9)Other (0.1) (0.2) _____ _____Reported under IFRS 62.2 38.9 _____ _____ Appendix 1 Restatement of accounts previously prepared under UK GAAP to InternationalFinancial Reporting Standards Basis of preparation BTG plc ("the Company") will report its annual consolidated financial statementsfor the year ending 31 March 2006 in accordance with International FinancialReporting Standards ("IFRS") as endorsed by the European Union. This reportpresents and explains the un-audited conversion of the consolidated results forthe year ended 31 March 2005 and the six months ended 30 September 2004 andsimilarly the Group's financial position at 31 March 2005, 30 September 2004 and1 April 2004, being the transition date. EU law (IAS Regulation EC 1606/2002) requires that the next annual consolidatedfinancial statements of the company, for the year ending 31 March 2006, beprepared in accordance with IFRSs adopted for use in the EU ("adopted IFRSs"). The financial information in this report has been prepared on the basis of therecognition and measurement requirements of IFRSs in issue that either areendorsed by the EU and effective (or available for early adoption) at 31 March2006 or are expected to be endorsed and effective (or available for earlyadoption) at 31 March 2006, the Group's first annual reporting date at which itis required to use adopted IFRSs. In particular, the directors have assumedthat the presently unadopted amendments to IAS 19 "Employee Benefits" will beapproved for use by the time the first annual IFRS financial statements areprepared for the year ending 31 March 2006. In addition, the adopted IFRSs that will be effective (or available for earlyadoption) in the annual financial statements for the year ending 31 March 2006are still subject to change and to additional interpretations and thereforecannot be determined with certainty. Accordingly, the accounting policies forthat annual period will be determined finally only when the annual financialstatements are prepared for the year ending 31 March 2006. The financial information, in the form of the primary statements contained inthis report, is presented in accordance with International Accounting Standard(IAS) 1, "Presentation of Financial Statements". The comparative figures for the financial year ended 31 March 2005 are not theCompany's statutory accounts for the financial year. Those accounts, which wereprepared under UK GAAP, have been reported on by the Company's auditor anddelivered to the Registrar of Companies. The report of the auditor wasunqualified and did not contain a statement under section 237(2) or (3) of theCompanies Act 1985. Disclosure of significant items IAS 1 provides no definitive guidance as to the format of the income statement,but states key items should be disclosed. It also encourages additional lineitems to be added and the re-ordering of items presented on the face of theincome statement when appropriate for a proper understanding of an entity'sfinancial performance. BTG has reviewed the items disclosed separately on theface of the income statement and the components of financial performanceconsidered by management to be significant or for which separate disclosurewould assist both in a better understanding of financial performance and inmaking projections of future results. This has been done taking intoconsideration BTG's revised operating strategy as well as the materiality,nature and function of components of income and expense. Restatement of accounts previously prepared under UK GAAP to InternationalFinancial Reporting Standards Income statement reconciliation from UK GAAP to IFRS Six months ended 30 September 2004 Note As reported Impact of Reported Under transition to Under UK GAAP IFRS IFRS £m £m £mRevenue 18.61 - 18.61Revenue sharing (8.30) - (8.30) _____ _____ _____ 10.31 - 10.31 _____ _____ _____ Varisolve(R) development (7.98) - (7.98)Other research & development a) (3.03) (0.26) (3.29)Share of results of associates b) - (0.55) (0.55) _____ _____ _____ (11.01) (0.81) (11.82) _____ _____ _____ Operating and administrative costs c) (14.27) 0.17 (14.10)Restructuring costs - - - _____ _____ ____ (14.27) 0.17 (14.10) _____ _____ _____ Profit on disposal of other fixed assets 1.19 - 1.19Amounts written off other fixed assets d) (0.31) - (0.31) _____ _____ _____ 0.88 - 0.88 _____ _____ _____ Operating loss (14.09) (0.64) (14.73) _____ _____ _____ Financial income 1.04 - 1.04Financial expense (0.04) - (0.04) _____ _____ _____Net financing income 1.00 - 1.00 _____ _____ _____ Loss before tax (13.09) (0.64) (13.73)Income tax expense (0.05) - (0.05) _____ _____ _____Loss for period (13.14) (0.64) (13.78) _____ _____ _____Attributable to:Equity holders of the parent (12.98) (0.58) (13.56)Minority interest (0.16) (0.06) (0.22) _____ _____ _____Loss for period (13.14) (0.64) (13.78) _____ _____ _____ Basic and diluted loss per share (8.93p) (0.40p) (9.33p) _____ _____ _____ Year ended 31 March 2005 Note As reported Impact of Reported Under transition to under UK GAAP IFRS IFRS £m £m £mRevenue 38.31 - 38.31Revenue sharing (15.69) - (15.69) _____ _____ _____ 22.62 - 22.62 _____ _____ _____ Varisolve(R) development (9.17) - (9.17)Other research & development a) (6.27) (0.36) (6.63)Share of results of associates b) - (1.01) (1.01) _____ _____ _____ (15.44) (1.37) (16.81) _____ _____ _____ Operating and administrative costs c) (30.51) (1.11) (31.62)Restructuring costs (11.78) - (11.78) _____ _____ _____ (42.29) (1.11) (43.40) _____ _____ _____ Profit on disposal of other fixed assets 2.19 - 2.19Amounts written off other fixed assets d) (3.02) 1.97 (1.05) _____ _____ _____ (0.83) 1.97 1.14 _____ _____ _____ Operating loss (35.94) (0.51) (36.45) _____ _____ _____ Financial income 1.72 - 1.72Financial expense (0.08) - (0.08) _____ _____ _____Net financing income 1.64 - 1.64 _____ _____ _____ Loss before tax (34.30) (0.51) (34.81)Income tax expense (0.17) - (0.17) _____ _____ _____Loss for period (34.47) (0.51) (34.98) _____ _____ _____ Attributable to:Equity holders of the parent (34.23) (0.44) (34.67)Minority interest (0.24) (0.07) (0.31) _____ _____ _____Loss for period (34.47) (0.51) (34.98) _____ _____ _____ Basic and diluted loss per share (23.53p) (0.30p) (23.83p) _____ _____ _____ Restatement of accounts previously prepared under UK GAAP to InternationalFinancial Reporting Standards Balance sheet reconciliation from UK GAAP to IFRS As at 1 April 2004 Note As reported Impact of Reported under transition to Under UK GAAP IFRS IFRS £m £m £m AssetsIntangible assets e) 11.62 1.02 12.64Property, plant & equipment f) 10.10 (0.41) 9.69Investments in associates g) - 3.54 3.54Other investments h) 14.03 4.30 18.33 _____ _____ _____Total non-current assets 35.75 8.45 44.20 _____ _____ _____ Trade and other receivables i) 7.04 0.08 7.12Cash and cash equivalents j) 67.97 0.22 68.19 _____ _____ _____Total current assets 75.01 0.30 75.31 Total assets 110.76 8.75 119.51 _____ _____ _____ EquityIssued capital 14.76 - 14.76Share premium 182.24 - 182.24Capital reserve k) 7.31 (7.31) -Foreign exchange reserve - - -Fair value reserve l) - 7.33 7.33Retained earnings m) (122.32) (4.43) (126.75) _____ _____ _____Total equity attributable to equity holders 81.99 (4.41) 77.58of the parentMinority interest 0.32 0.06 0.38 _____ _____ _____Total equity 82.31 (4.35) 77.96 _____ _____ _____ LiabilitiesEmployee benefits n) 0.42 10.51 10.93Provisions 2.05 (1.53) 0.52Deferred tax liabilities o) - 2.39 2.39 _____ _____ _____Total non-current liabilities 2.47 11.37 13.84 _____ _____ _____ Bank overdraft 1.70 - 1.70Trade and other payables p) 24.28 0.20 24.48Provisions - 1.53 1.53 _____ _____ _____Total current liabilities 25.98 1.73 27.71 _____ _____ _____ Total liabilities 28.45 13.10 41.55 _____ _____ _____ Total equity and liabilities 110.76 8.75 119.51 _____ _____ _____ As at 30 September 2004 Note As reported Impact of Reported Under transition to Under UK GAAP IFRS IFRS £m £m £m AssetsIntangible assets e) 11.97 0.90 12.87Property, plant & equipment f) 11.80 (0.27) 11.53Investments in associates g) - 3.76 3.76Other investments h) 14.77 (0.17) 14.60 _____ _____ _____Total non-current assets 38.54 4.22 42.76 _____ _____ _____ Trade and other receivables i) 6.87 - 6.87Cash and cash equivalents j) 47.18 0.21 47.39 _____ _____ _____Total current assets 54.05 0.21 54.26 _____ _____ _____ Total assets 92.59 4.43 97.02 _____ _____ _____ EquityIssued capital 14.76 - 14.76Share premium 182.22 - 182.22Capital reserve k) 7.31 (7.31) -Foreign exchange reserve - 0.09 0.09Fair value reserve l) - 4.79 4.79Retained earnings m) (134.98) (4.72) (139.70) _____ _____ _____Total equity attributable to equity holders 69.31 (7.15) 62.16of the parentMinority interest 0.16 0.04 0.20 _____ _____ _____Total equity 69.47 (7.11) 62.36 _____ _____ _____ LiabilitiesEmployee benefits n) 0.31 10.21 10.52Provisions 2.88 (0.63) 2.25Deferred tax liabilities o) - 1.44 1.44 _____ _____ _____Total non-current liabilities 3.19 11.02 14.21 _____ _____ _____ Bank overdraft 0.01 - 0.01Trade and other payables p) 19.92 (0.11) 19.81Provisions - 0.63 0.63 _____ _____ _____Total current liabilities 19.93 0.52 20.45 _____ _____ _____ Total liabilities 23.12 11.54 34.66 _____ _____ _____ Total equity and liabilities 92.59 4.43 97.02 _____ _____ _____ As at 31 March 2005 Note As reported Impact of Reported Under transition to Under UK GAAP IFRS IFRS £m £m £m AssetsIntangible assets e) 10.25 0.48 10.73Property, plant & equipment f) 10.91 (0.22) 10.69Investments in associates g) - 3.57 3.57Other investments h) 11.98 (2.35) 9.63 _____ _____ _____Total non-current assets 33.14 1.48 34.62 _____ _____ _____ Trade and other receivables i) 7.47 0.01 7.48Cash and cash equivalents j) 39.10 0.07 39.17 _____ _____ _____Total current assets 46.57 0.08 46.65 _____ _____ _____ Total assets 79.71 1.56 81.27 _____ _____ _____ EquityIssued capital 14.76 - 14.76Share premium 182.22 - 182.22Capital reserve k) 7.31 (7.31) -Foreign exchange reserve - (0.12) (0.12)Fair value reserve l) - 2.11 2.11Retained earnings m) (156.43) (3.65) (160.08) _____ _____ _____Total equity attributable to equity holders 47.86 (8.97) 38.89of the parentMinority interest 0.08 0.02 0.10 _____ _____ _____Total equity 47.94 (8.95) 38.99 _____ _____ _____ LiabilitiesEmployee benefits n) - 10.10 10.10Provisions 7.63 (4.61) 3.02Deferred tax liabilities o) - 0.24 0.24 _____ _____ _____Total non-current liabilities 7.63 5.73 13.36 _____ _____ _____ Bank overdraft 4.67 - 4.67Trade and other payables p) 19.47 0.17 19.64Provisions - 4.61 4.61 _____ _____ _____Total current liabilities 24.14 4.78 28.92 _____ _____ _____ Total liabilities 31.77 10.51 42.28 _____ _____ _____ Total equity and liabilities 79.71 1.56 81.27 _____ _____ _____ Restatement of accounts previously prepared under UK GAAP to InternationalFinancial Reporting Standards Group statement of recognised income and expense reconciliation from UK GAAP toIFRS Six months ended 30 September 2004 As reported Impact of Reported Under transition to Under UK GAAP IFRS IFRS £m £m £mForeign exchange translation differences 0.05 0.04 0.09Unrealised gain on intangible assets 0.24 - 0.24Change in value of pension liabilities - 0.17 0.17Change in value of available for sale - (3.50) (3.50)equity securitiesDeferred tax arising on available for sale - 0.95 0.95equity securities _____ _____ _____Net income recognised directly in equity 0.29 (2.34) (2.05) Loss for period (13.14) (0.64) (13.78) _____ _____ _____ Total recognised income and expense for (12.85) (2.98) (15.83)period _____ _____ _____ Attributable to:Equity holders of the parent (12.69) (2.92) (15.61)Minority interest (0.16) (0.06) (0.22) _____ _____ _____Total recognised income and expense for (12.85) (2.98) (15.83)period _____ _____ _____ Year ended 31 March 2005 As reported Impact of Reported Under Transition Under UK GAAP to IFRS IFRS £m £m £mForeign exchange translation differences (0.31) 0.19 (0.12)Unrealised gain on intangible assets 0.24 - 0.24Change in value of pension liabilities - 0.34 0.34Change in value of available for sale - (7.37) (7.37)equity securitiesDeferred tax arising on available for sale - 2.15 2.15equity securities _____ _____ _____Net income recognised directly in equity (0.07) (4.69) (4.76) Loss for period (34.47) (0.51) (34.98) _____ _____ _____ Total recognised income and expense for (34.54) (5.20) (39.74)period _____ _____ _____ Attributable to:Equity holders of the parent (34.30) (5.13) (39.43)Minority interest (0.24) (0.07) (0.31) _____ _____ _____Total recognised income and expense for (34.54) (5.20) (39.74)period _____ _____ _____ Restatement of accounts previously prepared under UK GAAP to InternationalFinancial Reporting Standards Group reconciliation of equity from UK GAAP to IFRS Issued share Share premium Capital Foreign exchange capital account reserve reserve account £m £m £m £mSix months ended 30 September 2004 Total equity as at 1 April 2004As previously reported under UK GAAP 14.76 182.24 7.31 -Effect of transition to IFRS - - (7.31) - _____ _____ _____ _____Total equity restated under IFRS 14.76 182.24 - - _____ _____ _____ _____ Movements for period as reported under UK GAAPIssue of shares in rights issue (net) - (0.02) - -Movement in shares held by trust - - - -Total recognised loss for period - - - 0.05 _____ _____ _____ _____ - (0.02) - 0.05 _____ _____ _____ _____Movement for period (effect of transition toIFRS)Total effect of IFRS adoption of net recognised - - - 0.04lossesShare based payments - - - -Investment in subsidiary - - - - _____ _____ _____ _____ - - - 0.04 _____ _____ _____ _____ Total equity as at 30 September 2004 14.76 182.22 - 0.09 _____ _____ _____ _____ Year ended 31 March 2005 Total equity as at 1 April 2004As previously reported under UK GAAP 14.76 182.24 7.31 -Effect of transition to IFRS - - (7.31) - _____ _____ _____ _____Total equity restated under IFRS 14.76 182.24 - - _____ _____ _____ _____ Movements for period as reported under UK GAAPIssue of shares in rights issue (net) - (0.02) - -Movement in shares held by trust - - - -Total recognised loss for period - - - (0.31) _____ _____ _____ _____ - (0.02) - (0.31) _____ _____ _____ _____Movement for period (effect of transition toIFRS)Total effect of IFRS adoption of net recognised - - - 0.19lossesShare based payments - - - -Investment in subsidiary - - - - _____ _____ _____ _____ - - - 0.19 _____ _____ _____ _____ 14.76 182.22 - (0.12)Total equity as at 31 March 2005 _____ _____ _____ _____ Fair value Retained Minority Total reserve earnings interest £m £m £m £mSix months ended 30 September 2004 Total equity as at 1 April 2004As previously reported under UK GAAP - (122.32) 0.32 82.31Effect of transition to IFRS 7.33 (4.43) 0.06 (4.35) _____ _____ _____ _____Total equity restated under IFRS 7.33 (126.75) 0.38 77.96 _____ _____ _____ _____ Movements for period as reported under UK GAAPIssue of shares in rights issue (net) - - - (0.02)Movement in shares held by trust - 0.03 - 0.03Total recognised loss for period - (12.74) (0.16) (12.85) _____ _____ _____ _____ - (12.71) (0.16) (12.84) _____ _____ _____ _____Movement for period (effect of transition toIFRS)Total effect of IFRS adoption of net recognised (2.54) (0.42) (0.06) (2.98)lossesShare based payments - 0.18 - 0.18Investment in subsidiary - - 0.04 0.04 _____ _____ _____ _____ (2.54) (0.24) (0.02) (2.76) _____ _____ _____ _____ Total equity as at 30 September 2004 4.79 (139.70) 0.20 62.36 _____ _____ _____ _____ Year ended 31 March 2005 Total equity as at 1 April 2004As previously reported under UK GAAP - (122.32) 0.32 82.31Effect of transition to IFRS 7.33 (4.43) 0.06 (4.35) _____ _____ _____ _____Total equity restated under IFRS 7.33 (126.75) 0.38 77.96 _____ _____ _____ _____ Movements for period as reported under UK GAAPIssue of shares in rights issue (net) - - - (0.02)Movement in shares held by trust - 0.19 - 0.19Total recognised loss for period - (33.99) (0.24) (34.54) _____ _____ _____ _____ - (33.80) (0.24) (34.37) _____ _____ _____ _____Movement for period (effect of transition toIFRS)Total effect of IFRS adoption of net recognised (5.22) (0.10) (0.07) (5.20)lossesShare based payments - 0.57 - 0.57Investment in subsidiary - - 0.03 0.03 _____ _____ _____ _____ (5.22) 0.47 (0.04) (4.60) _____ _____ _____ _____ 2.11 (160.08) 0.10 38.99Total equity as at 31 March 2005 _____ _____ _____ _____ Restatement of accounts previously prepared under UK GAAP to InternationalFinancial Reporting Standards Details of adjustments made on transition from UK GAAP to IFRS Income statement Note Six months ended Year ended 31 30 September 2004 March 2005 £m £m a) Other research and developmentChange in scope of consolidation 1 (0.26) (0.36) _____ _____ b) Share of results of associatesAdoption of equity accounting for associates 2 (0.55) (1.01) _____ _____ c) Operating and administrative expensesImpairment of goodwill 4 - (0.40)Adjustment to pension charge 5 0.13 0.07Transfer differences on exchange to reserves (0.05) (0.21)Share based & deferred compensation scheme 6 (0.25) (0.63)chargeAdjustment to employee benefits 0.34 0.06 _____ _____ 0.17 (1.11) _____ _____ d) Amounts written off other fixed assetsRemoval of equity write downs 2 - 1.97 _____ _____ Balance sheet Note As at As at As at 1 April 2004 30 September 2004 31 March 2005 £m £m £m e) Intangible assetsTransfer software from property, plant & 8 0.43 0.27 0.22equipmentChange in scope of consolidation 1 0.59 0.63 0.26 _____ _____ _____ 1.02 0.90 0.48 _____ _____ _____ f) Property, plant & equipmentTransfer software to intangible assets 8 (0.43) (0.27) (0.22)Change in scope of consolidation 1 0.02 - - _____ _____ _____ (0.41) (0.27) (0.22) _____ _____ _____ g) Investment in associatesAdoption of equity accounting for associates 2 3.54 3.76 3.57 _____ _____ _____ h) Other investmentsChange in scope of consolidation 1 (0.80) (1.00) (0.25)Adoption of equity accounting for associates 2 (4.62) (5.40) (4.45)Adjustment of investments to fair value 3 9.72 6.23 2.35 _____ _____ _____ 4.30 (0.17) (2.35) _____ _____ _____ i) Trade and other receivablesChange in scope of consolidation 1 0.08 - 0.01 _____ _____ _____ j) Cash and cash equivalentsChange in scope of consolidation 1 0.22 0.21 0.07 _____ _____ _____ k) Capital reserveReclassification of negative goodwill 4 (7.31) (7.31) (7.31) _____ _____ _____ Restatement of accounts previously prepared under UK GAAP to InternationalFinancial Reporting Standards Details of adjustments made on transition from UK GAAP to IFRS (continued) Note As at As at As at 1 April 2004 30 September 2004 31 March 2005 £m £m £ml) Fair value reserveAdjustment of investments to fair value 3 9.72 6.23 2.35Deferred tax arising on adjustment of 7 (2.39) (1.44) (0.24)investments to fair value _____ _____ _____ 7.33 4.79 2.11 _____ _____ _____ m) Retained earningsChange in scope of consolidation 1 (0.01) (0.22) 0.05Adoption of accounting for associates 2 (1.08) (1.64) (0.88)Recognition of actuarial gains and losses on 5 (10.51) (10.21) (10.10)defined benefit pension and other postretirement obligationsShare based and deferred compensation scheme 6 (0.14) 0.13 (0.15)chargeTransfer foreign exchange movement to separate - (0.09) 0.12reserveReclassification of negative goodwill 4 7.31 7.31 7.31 _____ _____ _____ (4.43) (4.72) (3.65) _____ _____ _____n) Employee benefitsRecognition of actuarial gains and losses on 5 10.51 10.21 10.10defined benefit pension and other postretirement obligations _____ _____ _____ o) Deferred tax liabilitiesPresentation of deferred tax assets and 7 2.39 1.44 0.24liabilities _____ _____ _____ p) Trade and other payablesChange in scope of consolidation 1 0.06 0.02 0.02Share based and deferred compensation scheme 6 - 0.06 0.07chargeAdjustment to holiday and other accruals 0.14 (0.19) 0.08 _____ _____ _____ 0.20 (0.11) 0.17 _____ _____ _____ Restatement of accounts previously prepared under UK GAAP to InternationalFinancial Reporting Standards Summary and description of significant IFRS adjustments The Group has made a number of changes to the presentation of the accounts, inaccordance with IAS 1, in addition to transition changes to the financialresults. Presentational changes include a different analysis of provisions andthe separation of reserve adjustments for foreign exchange and the fair value ofinvestments. These financial statements have been prepared in accordance with existing Groupaccounting policies with certain amendments required in order to comply with therequirements of IFRS. The existing policies are as published in the annualaccounts of the Group for the year ended 31 March 2005. The principaladjustments made in order to transition the Group's financial statements from UKGAAP to IFRS are explained below. 1) Scope of consolidation of subsidiaries The Group now consolidates all investments where its holding exceeds 50% asrequired by IAS 27. In the past the Company has elected to apply a true andfair override and treat certain such holdings as investments held exclusivelywith a view for subsequent resale. 2) Accounting for associates The Group has elected to equity account all investments where the Group'sholding is between 20% and 50%, recognising the Group's share of profits andlosses and net assets within the Group accounts, in accordance with IAS 28.Under UK GAAP, BTG applied a true and fair override and accounted forinvestments in a number of early-stage companies at cost or impaired value inthe balance sheet on the basis that they were part of a venture capitalportfolio. 3) Other investments The Company has elected to treat investments where the Group owns less than 20%of the investee company's share capital as available for sale. In accordancewith IAS 39, such investments are adjusted to fair value at each balance sheetdate and any movement in value taken through the statement of recognised incomeand expense. Where an impairment of value has occurred, the difference betweencost and fair value will be reflected in the income statement. On disposal, thedifference between sale proceeds and carrying amount will be reflected in theincome statement and the cumulative change in fair value recycled from reservesthrough the income statement. 4) Business combinations and goodwill IFRS 3 prohibits the amortisation of goodwill generated from businesscombinations. The standard requires that goodwill should be carried at costsubject to annual impairment reviews. Under the transitional arrangements, IFRS1 permits the Company to apply IFRS 3 from the date of transition and does notrequire the restatement of all previous business combinations. The Company hastaken advantage of this option. In accordance with IFRS 3, negative goodwill on consolidation is credited toreserves and is no longer reflected in a capital reserve. 5) Employee benefits Under IAS 19, the Company is required to recognise the surplus or deficit andcost of its defined benefit pension scheme within the balance sheet and incomestatement rather than just in the notes to the accounts. The Company haselected to recognise any actuarial gains and losses in full immediately in thestatement of recognised income and expense, as allowed by the amendment to IAS19 "Actuarial Gains and Losses, Group Plans and Disclosures". The amendment, ifendorsed by the EU, will be effective from 1 January 2006 with earlier adoptionencouraged. Assuming the proposals are adopted, the Company's policy will be toapply the revised standard as from the transition date. Under UK GAAP, the charge to the profit and loss account for the defined benefitpension scheme was based on an actuarial calculation and represents a regularcost, allowing for any actuarial surplus or deficit, so as to allocate pensioncosts of employees over their expected future working lifetime. The actuarial valuation of the Group's defined benefit pension scheme at 31March 2005 produced a deficit of £10.10 million (1 April 2004: £10.93 million,30 September 2004: £10.52 million). As a result of the Group's transition toIFRS, the net impact on reserves with respect to employee benefit arrangementswas a reduction of £10.10 million at 31 March 2005 (1 April 2004: £10.51million, 30 September 2004: £10.21 million). 6) Share based payments The share option and restricted share schemes allow Group employees to acquireshares of the company. The fair value of options granted and restricted sharesawarded is recognised as an employee expense with a corresponding increase inequity. The fair value is measured at grant or award date and spread over theperiod during which the employees become unconditionally entitled to them. Thefair value of the options and awards granted is measured using a binomiallattice model, taking into account the terms and conditions upon which theoptions and awards were granted. The amount recognised as an expense isadjusted to reflect the actual number of share options and awards that vest,except where forfeiture is only due to share prices not achieving the thresholdfor vesting. In accordance with IFRS 2, the company has recognised a charge to incomerepresenting the fair value of outstanding employee share options and restrictedshare awards. The fair value has been calculated using the binomial latticemodel and is charged to income over the relevant option vesting periods,adjusted to reflect actual and expected levels of vesting. The charge includesall options and awards granted since 7 November 2002, but not vested at 1January 2005 in accordance with IFRS 2. 7) Income taxes IAS 12 requires the separate disclosure of deferred tax assets and liabilitieson the Group's balance sheet. Deferred tax assets are only recognised to theextent to which they are expected to be utilised in the near future. Deferredtax liabilities are recognised on the fair value of equity adjustments. 8) Computer software Under IAS 38, computer software should be capitalised under intangible assetsunless it is part of the actual operating system. Certain assets have beenreclassified accordingly. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
BTG