13th Jul 2005 07:00
De La Rue PLC13 July 2005 DE LA RUE PLC DE LA RUE PRESENTS RESULTS FOR 2004/2005 UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) De La Rue plc is today publishing its unaudited results under IFRS for the yearended 26 March 2005. A full report, which contains detailed explanations of theIFRS and UK GAAP numbers and discusses the impact of the adoption of IFRS on DeLa Rue, is attached and is also available on the De La Rue web site,www.delarue.com. The report also reconciles the previously reported UK GAAPresults to the restated position in accordance with IFRS for the opening balancesheet at 27 March 2004, the unaudited results for the six months ended 25September 2004 under IFRS as well as the unaudited financial position for theyear ended 26 March 2005. The full year 2005 results prepared on an IFRS basis and those under UK GAAP aresummarised as follows: ----------------------------- -------- ----------Year Ended 26 March 2005 IFRS UK GAAP £m £m ----------------------------- -------- ---------- Headline Profit before tax 65.0 66.5Headline Earnings 46.2 46.3Headline Earnings per share 25.9p 26.0p The adoption of IFRS in the Group accounts represents an accounting change onlyand will not affect the operations or cash flows of the Group. The principalareas of impact are in relation to Pensions accounting (IAS 19), Research andDevelopment costs (IAS 38) and share option accounting (IFRS 2). The Group hasadopted IAS 39 (Financial Instruments: Recognition and Measurement) from 27March 2005 and adjustments to prior periods do not include any effects of thatstandard. Stephen King, Group Finance Director, De La Rue plc commented: "As previously indicated, the transition to IFRS does not have a material impacton Group earnings. De La Rue's transition to the new standards has gone well andwe are pleased to present unaudited financial information for prior periods wellin advance of the first set of results under IFRS. We have addressed thefinancial effects of the standards as well as the impact on systems, people andprocesses." -ends- For further information please contact: De La Rue plcStephen King, Group Finance DirectorMarkFearon, Head of Corporate Affairs 01256 605307 01256 605303Financial DynamicsRichard Mountain 020 7269 7291 13 July 2005 Notes to Editors: 1. De La Rue is the world's largest commercial security printer and papermaker, involved in the production of over 150 national currencies and a wide range of security documents such as passports, fiscal stamps, travellers cheques and authentication labels. The Company is a leading provider of cash handling equipment and software solutions to banks and retailers worldwide, helping them to reduce the cost of handling cash. De La Rue employs over 6,200 people across 31 countries and has an ongoing turnover of approximately £650m. De La Rue is a member of the FTSE 250. Its ordinary shares are listed with the UK Listing Authority and trade on the market for listed securities on the London Stock Exchange under the symbol DLAR. For further information visit De La Rue's website at www.delarue.com. 2. A briefing is being held today for analysts and shareholders, for details contact Diana Brown on 01256 605307. Financial Information on the Transition to International Financial ReportingStandards 13 July 2005 Contents 1. Introduction 2. Basis of Preparation 3. Impact of Transition 4. Employee Benefits (IAS 19) 5. Share-based Payments (IFRS 2) 6. Intangible Assets 6.1 Goodwill (IFRS 3) 6.2 Development Costs (IAS 38) 6.3 Capitalised Software Costs (IAS 38) 7. Dividends (IAS 10) 8. Taxation (IAS 12) 9. Other areas 9.1 Associates 9.2 Earnings per share 9.3 Cash flow statement 9.4 Segmental reporting 9.5 Presentation of reconciliations Appendices A Income statement for the year ended 26 March 2005 B Balance Sheet at 26 March 2005 C Balance Sheet at 27 March 2004 D Income statement for the half year ended 25 September 2004 E Balance Sheet at 25 September 2004 1. INTRODUCTION De La Rue plc will be presenting its consolidated financial statements inaccordance with International Financial Reporting Standards (IFRS) for the yearended 25 March 2006. Previously the Group has prepared financial information inaccordance with United Kingdom generally accepted accounting principles (UKGAAP). The first financial results under IFRS will be the interim results forthe six months ended 24 September 2005. The estimated impact of the transition to IFRS on the results and financialposition of De La Rue is set out below. The transition does not affectunderlying business cash flows, but will principally impact the following areas: • Accounting for share based payments; • Other employee benefits, specifically defined benefit pension scheme accounting; • Development expenditure; • Amortisation of goodwill; and • Accounting for dividends to shareholders. IFRS will also bring a number of disclosure and presentation changes, in particular:- • Associate profits to be disclosed net of tax, impacting PBT; • All exceptional items to be charged in arriving at operating profit; • Reclassification of software assets from tangible to intangible fixed assets and; • Liabilities, most notably provisions, to be split between current and non-current. De La Rue has adopted IAS 32 (Financial Instruments:Disclosures and Presentation) and IAS 39 (Financial Instruments: Recognition and Measurement) from 27 March 2005 and hence there is no impact shown within this report. IAS 39 has implications for internal processes and systemsbut a material impact on earnings is not anticipated, subject to meeting the hedging provisionsset out within the standard as planned. 2. BASIS OF PREPARATION The financial information within this report has been prepared on the basis of the International Financial Reporting Standards and interpretations that are expected to be in effect and endorsed by the EU for the year ended 25 March 2006. Management has performed a thorough review of all relevant standards and considered in detail how their application will impact De La Rue. Revised Group policies and procedureshave been established and applied in producing the information within this report. Many listed companies, both in the United Kingdom and other countries, are currently transitioning to IFRS. Therefore, a degree of uncertainty remains in interpreting a number of areas of IFRS, particularly regarding the new standards issued in December 2003. At this early stage, practice is not sufficiently established to provide clearguidance in interpreting new standards or in determining how IFRS should be applied in all instances. As practice evolves it is possible that different interpretationswill emerge. It is also possible that the IFRS currently in place will change, either due to the process of EU endorsement, or as new or revised standards are issued by the IASB. The financial position disclosed within this document is thereforeprovisional and may require revision for any of the factors noted above prior to issue of the interim financial statements to 24 September 2005 and the first audited financial statements under IFRS for the year ended 25 March 2006. IFRS 1 First-time adoption of International Financial Reporting Standardssets out the requirements for entities transitioning to IFRS. In general,companies are required to apply all relevant IFRS retrospectively from thedate of transition. There are however a number of optional exemptions fromthis requirement in addition to a number of compulsory exemptions. The mostsignificant of the optional exemptions that De La Rue has elected to take are as follows: Business combinations IFRS 1 allows an exemption from applying IFRS 3 Business Combinationsretrospectively to all business combinations. Consequently, acquisitions priorto the date of transition (27 March 2004) will not be restated. From the date oftransition to IFRS goodwill is no longer subject to amortisation but will bereviewed at least annually for impairment. Employee benefits Cumulative actuarial gains and losses will be recognised in full from the dateof transition. The Group intends to adopt early the amendments to IAS 19 issuedby the IASB in December 2004 permitting recognition of annual actuarial gainsand losses in full outside of the income statement in the statement ofrecognised income and expense. Cumulative translation differences The exemption allows cumulative translation differences on net investments inforeign subsidiaries to be set at zero at the date of transition to IFRS. Financial Instruments The option to defer adoption of IAS 32 and 39 has been taken and accordingly theinformation within this report does not include any effects of these standards.IAS 32 and 39 have been adopted with effect from 27 March 2005 with norestatement of comparative information. The opening impact of the adoption ofIAS 32 and 39 at 27 March 2005 will be disclosed in the interim results for thesix months ended 24 September 2005. Property, plant and equipment IFRS 1 permits fair value to be used as deemed cost for any individual item ofproperty, plant or equipment at the date of transition to IFRS. Following areview of our property portfolio a downward adjustment of £3.3m has been made tothe transitional balance sheet at 27 March 2004. This reflects the fair value ofcertain properties as valued by an external independent valuer as at that date. 3. IMPACT OF TRANSITION The effects of the adoption of IFRS for the year ended 26 March 2005, the halfyear to 25 September 2004 and on the transition balance sheet at 27 March 2004are shown in the attached reconciliations. The most significant impacts onheadline profit before tax and Earnings Per Share for the year ended 26 March2005 are summarised below: Year ended Headline PBT Headline earnings Headline EPS (pence)26 March 2005 £'m £'m UK GAAP 66.5 46.3 26.0Pensions and otheremployee benefits 1.8 1.8 1.0Capitalisation ofdevelopment costs(net of amortisation) 1.1 1.1 0.6Share based payments (1.4) (1.4) (0.8)Taxation adjustments - (1.6) (0.9)Reclassification ofAssociates tax (3.0) - -IFRS 65.0 46.2 25.9 1. Headline figures are before exceptional items and goodwill amortisation.2. Earnings is defined as profit after tax and minority interests. The principal adjustments for De La Rue as a result of the adoption of IFRS arediscussed in more detail in the following section. Full details of our IFRSaccounting policies will be disclosed within the first IFRS announcement for thesix months to 24 September 2005. 4. EMPLOYEE BENEFITS (IAS 19) Pensions The Group has previously accounted for the defined benefit pension schemes inline with SSAP 24 Accounting for pension costs. Full FRS 17 disclosures havebeen made in the consolidated financial statements in line with the requirementsof the standard.In accordance with SSAP 24, a regular pension cost is established based onactuarial advice and charged to operating profits. Variations from the regularpension cost are spread forward over the average remaining service lives of theemployees. IAS 19 is broadly similar to FRS 17. The standard requires the net valuation ofthe Group's defined benefit pension scheme to be reflected on the balance sheetand prescribes certain assumptions as to the valuation of liabilities. Thesediffer from those used under SSAP 24 and in general represent a significantlymore prudent valuation assuming investment returns are restricted to prescribedbond yields. The charge to the income statement will comprise an operatingcharge and a finance charge (within interest) the latter representing thedifference between the expected return on assets and the interest on schemeliabilities. The Group has opted to early adopt the amendments to IAS 19 issuedin December 2004 allowing annual actuarial gains and losses to be recognised infull outside of the income statement in a statement of recognised income andexpense. Under IAS 19 a deficit of £64m is recognised at 27 March 2004, rising to £79m asat 26 March 2005. This increase is predominantly attributable to an actuarialrevision of mortality rates in line with common practice. The operating charge for 2004/2005 is decreased by £0.4m with a beneficialimpact of £1.5m to finance costs, giving rise to an overall increase in PBT of£1.9m. The impact on finance costs will be difficult to predict going forward. Other employee benefits Under UK GAAP, in line with common practice, De La Rue does not account forholiday accruals unless legally obliged to make cash settlement. IAS 19explicitly requires appropriate provision to be made for the cost of holidayentitlements not taken at the balance sheet date. An accrual of £1.8m has beenrecorded as at 26 March 2005. The annual impact on the income statement isexpected to be broadly neutral although a degree of seasonality is introduced asthe amount of outstanding holiday will generally be higher at March thanSeptember. 5. SHARE BASED PAYMENTS (IFRS 2) IFRS 2 Share based payments requires a charge to be made to the income statementfor awards made based on the fair value of the option assessed at the date ofgrant. The charge is spread over the vesting period of the options and is basedon the number of options that may reasonably be expected to vest. IFRS 2 hasbeen applied to equity settled option awards granted after 7 November 2002 andnot vested by 1 January 2005 in accordance with the requirements of thestandard. De La Rue currently operates a number of share option schemes. A binomial modelhas been used to assess the fair value of options awarded under the mostsignificant schemes. Under UK GAAP, a charge is required where options awarded have an intrinsicvalue i.e. the exercise price is below the prevailing market price. As optionshave traditionally been awarded with an exercise price equal to the prevailingmarket share price no charges have previously been recorded. The impact of the adoption of IFRS 2 has been a charge to the income statementof £1.4m in 2004/2005. This charge is expected to increase in the coming year toapproximately £2.0m reflecting a full year's charge in respect of some awardsand the impact of new awards that we anticipate will be granted. 6. INTANGIBLE ASSETS 6.1 Goodwill (IFRS 3) Goodwill is no longer subject to annual amortisation under IFRS 3 BusinessCombinations. Instead, goodwill will be subject to an annual impairment reviewor more frequently where any indication of impairment exists. Under UK GAAPgoodwill was capitalised and amortised over an appropriate period, not exceeding20 years. The Group has elected to apply the IFRS 1 optional exemption to not apply IFRS 3retrospectively. Consequently the net book value of goodwill as at 27 March 2004becomes the deemed cost upon transition to IFRS. Negative goodwill shown within intangible assets of £0.8m on the published March2004 balance sheet has been credited directly to reserves in the transitionalIFRS balance sheet as negative goodwill is not permitted under IFRS 3. In line with IFRS 3, the UK GAAP amortisation charge has been reversed in therestated financial information, which has resulted in an increase to profits of£1.4m for 2004/2005. The exceptional charge of £11.5m within the UK GAAP financial statements relatesto an impairment charge and is therefore unchanged by the application of IFRS. 6.2 Development costs (IAS 38) IAS 38 Intangible assets requires that development costs meeting certaincriteria are capitalised and amortised over an appropriate period. Under UK GAAPDe La Rue has historically expensed all research and development expenditure inthe year in which it is incurred. The key criteria for capitalising development expenditure under IAS 38 are thatan asset must be considered able to generate future economic benefits and thatcosts are capable of being reliably measured. Management has performed adetailed review of development expenditure around the Group and costs meetingthe relevant criteria have been capitalised retrospectively. A detailed policyhas been established to ensure costs are appropriately treated going forward. In accordance with IAS 38, at 26 March 2005, development assets with a net bookvalue of £6.6m have been capitalised, which has uplifted net assets accordingly.During 2004/2005 £2.6m of costs were capitalised, offset by an amortisationcharge for the year of £1.5m. The level of benefit to the income statement isexpected to be smaller going forward. 6.3 Capitalised software costs (IAS 16) Under IFRS, capitalised software costs which are not an integral part of theassociated hardware are required to be classified as intangible assets. TheGroup has previously capitalised eligible software costs within tangible fixedassets. The impact of the transition to IFRS is the reclassification of software assetswith a net book value of £2.6m from tangible fixed assets to intangible assetsas at March 2005. The amortisation policy in respect of these assets isunchanged. 7. DIVIDENDS (IAS 10) Proposed dividends are treated as an adjusting post balance sheet event under UKGAAP and recognised as a liability at the period end. IAS 10 Post balance sheetevents does not allow dividends declared after the balance sheet date to berecognised as a liability at the period end as they do not meet the definitionof a 'present obligation' as set out by IAS 37 Provisions, ContingentLiabilities, and Contingent Assets. The final dividends for the years ended 27 March 2004 and 26 March 2005, and forthe half year to September 2004 have been reversed and recognised as paid duringthe following period. The result is an increase in net assets of £17.7m at March2004 and £19.0m at 26 March 2005. Subject to the level of dividends remaining ata relatively consistent level the ongoing impact on annual retained earningswill be broadly neutral. 8. TAXATION (IAS 12) Under UK GAAP, deferred tax is recognised in respect of all timing differencesthat have originated but not reversed by the balance sheet date and which couldgive rise to a future obligation to pay more or less tax. Deferred tax is recognised in respect of all temporary differences at thebalance sheet date between the tax bases of assets and liabilities and theiraccounting carrying value under IAS 12 'Income Taxes' A further difference between IAS 12 and UK GAAP is that under UK GAAP deferredtax was only provided on unremitted earnings to the extent that dividends wereaccrued or if there was a binding agreement for the distribution of earnings atthe reporting date. Under IFRS full provision must be made for tax arising onunremitted earnings from subsidiaries, joint ventures and associated companies,except to the extent that the Group can control the timing of remittances andremittance is not probable in the foreseeable future. The current tax assets and liabilities in the balance sheet are unaffected byIFRS as the tax payable was based on the relevant local GAAP accounts. With theexception of current tax relief on share based payments, which has beenrecognised in equity, the current tax charge in the income statement has beenunaffected by IFRS. The Group's effective tax rate on profit before tax, goodwill amortisation (UKGAAP only) and exceptional items has increased under IFRS from 28.0% to 29.7%before taking account of the reclassification of associate company taxation. Theincrease in effective rate is mainly as a result of changes to current anddeferred tax as a consequence of the adoption of IFRS 2 Share based payments.The effective tax rate after the reclassification of associates' taxation is26.5% 9. OTHER AREAS 9.1 Associates (IAS 1) A change to the way in which the share of associates' profits is presented onthe face of the income statement is required under IFRS. Under UK GAAP, theshare of associates' profits is shown gross of tax, with associates' taxdisclosed as part of the overall tax charge. IFRS requires that the share ofassociates' profits is disclosed net of tax within Group operating profit. Thishas the impact of reducing profit before tax, but has no overall effect onearnings. For the year ended 26 March 2005 this change in presentation reduces profitbefore tax by £3.0m, with no consequent change to profit after tax or earnings 9.2 Earnings per share (IAS 33) The method for calculating earnings per share under IFRS is broadly consistentwith UK GAAP. Group policy will be to continue to disclose an adjusted (basicand diluted) earnings per share figure which will be disclosed in the notes tothe accounts in line with IAS 33 Earnings per share. The calculation of adjusted earnings per share will be based on the earningsmeasure used for the basic calculation adjusted for exceptional items net oftax. 9.3 Cash flow statement (IAS 7) The adoption of IFRS does not impact the underlying business cash flows of theGroup. However, IAS 7 Cash Flow Statements differs quite significantly from theUK equivalent standard in terms of presentation of the cash flow statement. IAS 7 also has a broader definition of cash and cash equivalents than UK GAAP.Cash equivalents encompasses short-term investments with a maturity of less thenthree months which would generally not fall within the UK GAAP definition ofcash. 9.4 Segmental reporting (IAS 14) Under IFRS, identification of the primary and secondary reporting formats forsegmental reporting is dependant on the dominant source and nature of risks andreturns. For De La Rue, products and services sold is the key determinant ofrisks and rewards, consequently business segments will continue to be theprimary reporting format with geographical segments as the secondary reportingformat. The Group has reviewed the requirements under IFRS and concluded that thebusiness segments previously disclosed remain appropriate, these being: SecurityPaper and Print, and Cash Systems. 9.5 Presentation of reconciliations The purpose of the financial information presented in the attachedreconciliations is to explain the impact of the adoption of IFRS on previouslyreported UK GAAP financial information. Whilst the format used is representativeof that required by IFRS it is not intended to be strictly in accordance withIAS 1. The main differences from the UK GAAP format are as follows: • Exceptional items have been charged before arriving at operating profit; • The share of associates' operating profits are disclosed net of tax on a single line; • All assets and liabilities are required to be disclosed as either current or non-current. The 'other' adjustments columns shown within the attached reconciliations represent variousminor adjustments, none of which is material individually. A. Reconciliation of UK GAAP to preliminary IFRS income statement for the year ended 26 March 2005 ---------- ---------- Share-based Employee Development UK GAAP payments benefits Goodwill assets Reclassifications IFRS £m £m £m £m £m £m £m Revenue 643.2 643.2 Operating expenses (590.0) (1.4) 0.3 1.4 1.1 (588.6) Exceptional items (24.6) 8.9 (15.7) ---------- --------- --------- --------- --------- ---------- ---------- Operating profit 28.6 (1.4) 0.3 1.4 1.1 8.9 38.9 Share of associates 9.4 (3.0) 6.4 operating profit Non-operating 8.9 (8.9) - exceptionals ---------- --------- --------- --------- --------- ---------- ---------- Profit on ordinary 46.9 (1.4) 0.3 1.4 1.1 (3.0) 45.3 activities before interest Net interest 2.5 1.5 4.0 ---------- --------- --------- --------- --------- ---------- ---------- Profit on ordinary 49.4 (1.4) 1.8 1.4 1.1 (3.0) 49.3 activities before taxation Taxation (15.9) (0.8) (0.5) (0.2) (0.3) 3.0 (14.7) ---------- --------- --------- --------- --------- ---------- ---------- Profit on ordinary 33.5 (2.2) 1.3 1.2 0.8 - 34.6 activities after taxation Minority interests (1.6) (1.6) ---------- --------- --------- --------- --------- ---------- ---------- Profit attributable to equity 31.9 (2.2) 1.3 1.2 0.8 - 33.0 shareholders ---------- ---------- --------------- ---------- --------- --------- --------- --------- ---------- ---------- Profit before tax, exceptional items and goodwill amortisation 66.5 (1.4) 1.8 - 1.1 (3.0) 65.0 --------------- ---------- --------- --------- --------- --------- ---------- ---------- B. Reconciliation of UK GAAP to preliminary IFRS balance sheet for the year ended 26 March 2005 Development Software Employee Tangible UK GAAP Goodwill assets assets Benefits Taxation Reclassifications Dividends Assets IFRS £m £m £m £m £m £m £m £m £m £mNon-currentassets Goodwill 15.4 2.3 (2.9) 14.8Otherintangibleassets - 6.6 2.6 9.2Property,plant andequipment 154.6 (2.6) (3.3) 148.7 Trade andotherreceivables 1.1 1.1Deferredtaxation 30.8 26.9 (3.6) 0.6 54.7Investments:- Associates 14.0 14.0- Other 0.3 0.3 -------- -------- --------- --------- --------- -------- ---------- -------- --------- --------- 216.2 2.3 6.6 - 26.9 (3.6) (2.9) (2.7) 242.8CurrentassetsInventories 73.8 73.8Trade andother receivables 88.7 88.7Cash and cashequivalents 140.7 140.7 -------- -------- --------- --------- --------- -------- ---------- -------- --------- ----------- 303.2 303.2 -------- -------- --------- --------- --------- -------- -------- -------- --------- ---------Total 519.4 2.3 6.6 26.9 (3.6) (2.9) (2.7) 546.0assetsCurrent liabilitiesBorrowings (17.8) (17.8)Trade andother payables (194.2) (1.8) 0.6 19.0 (176.4)Provisions (49.8) (1.3) 25.1 (26.0) -------- -------- --------- --------- --------- -------- ---------- -------- --------- --------- (261.8) (3.1) 0.6 25.1 19.0 (220.2)Non-current liabilitiesBorrowings (16.4) (16.4)Trade andother payables (12.8) (12.8) Netretirementbenefit liability - (86.7) (25.1) (111.8) -------- -------- --------- --------- --------- -------- ---------- -------- -------- --------- (29.2) (86.7) (25.1) (141.0) -------- -------- --------- --------- --------- -------- ---------- -------- -------- ---------Totalliabilities (291.0) (89.8) 0.6 - 19.0 (361.2) -------- -------- --------- --------- --------- -------- ---------- -------- -------- ---------Net assets 228.4 2.3 6.6 - (62.9) (3.0) (2.9) 19.0 (2.7) 184.8 -------- -------- Shareholders' equityShare capital 46.1 46.1Reserves 178.6 2.3 6.6 (62.9) (3.0) (2.9) 19.0 (2.7) 135.0 -------- -------- --------- --------- -------- -------- -------- -------- --------- ------ 224.7 2.3 6.6 (62.9) (3.0) (2.9) 19.0 (2.7) 181.1MinorityInterests 3.7 3.7 -------- -------- --------- --------- --------- -------- ---------- -------- --------- ----- 228.4 2.3 6.6 - (62.9) (3.0) (2.9) 19.0 (2.7) 184.8 -------- -------- --------- --------- --------- -------- ---------- -------- --------- ----- C. Reconciliation of UK GAAP to preliminary IFRS balance sheet at 27 March 2004 Development Software Employee Tangible UK GAAP Goodwill assets assets Benefits Taxation Reclassifications Dividends Assets IFRS £m £m £m £m £m £m £m £m £m £m Non-current assets Goodwill 28.2 0.8 (2.8) 26.2Otherintangibleassets - 5.5 1.6 7.1Property,plant andequipment 164.4 (1.6) (3.3) 159.5Trade andotherreceivables 0.3 0.3Deferredtaxation 33.1 20.8 (2.4) 0.6 52.1Investments:- Associates 13.2 13.2- Other 0.2 0.2 -------- ------- --------- -------- ------- ------- ---------- -------- ------- ------- 239.4 0.8 5.5 - 20.8 (2.4) (2.8) (2.7) 258.6Current assetsInventories 99.7 99.7Trade andotherreceivables 116.3 116.3Cash and cashequivalents 85.5 85.5 -------- ------- --------- -------- ------- ------- ---------- -------- ------- --------- 301.5 301.5 -------- ------- --------- -------- ------- ------- ---------- -------- ------- ---------Total assets 540.9 0.8 5.5 20.8 (2.4) (2.8) (2.7) 560.1 Current liabilitiesBorrowings (8.3) (8.3)Trade andother payables (214.5) (2.1) 0.6 17.7 (198.3)Provisions (50.8) (1.2) 24.0 (28.0) -------- ------- --------- -------- ------- ------- ---------- -------- -------- --------- (273.6) (3.3) 0.6 24.0 17.7 (234.6) Non-current liabilitiesBorrowings (36.1) (36.1)Trade andother (13.6) (13.6)payablesNetretirementbenefitliability - (66.3) (24.0) (90.3) -------- ------- --------- -------- ------- ------- ---------- -------- -------- -------- (49.7) (66.3) (24.0) (140.0) -------- ------- --------- -------- ------- ------- ---------- -------- ------ ---------Totalliabilities (323.3) (69.6) 0.6 - 17.7 (374.6) -------- ------- --------- -------- ------- ------- ---------- -------- -------- --------Net assets 217.6 0.8 5.5 - (48.8) (1.8) (2.8) 17.7 (2.7) 185.5 -------- --------- Shareholders'equityShare capital 45.8 45.8Reserves 168.3 0.8 5.5 (48.8) (1.8) (2.8) 17.4 (2.7) 135.9 -------- ------- --------- -------- -------- ------- ---------- -------- ------- --------- 214.1 0.8 5.5 (48.8) (1.8) (2.8) 17.4 (2.7) 181.7MinorityInterests 3.5 0.3 3.8 -------- ------- --------- -------- -------- ------- ---------- -------- ------- --------- 217.6 0.8 5.5 - (48.8) (1.8) (2.8) 17.7 (2.7) 185.5 D. Reconciliation of UK GAAP to preliminary IFRS income statement for the six months ended 25 September 2004 Share-based Employee Development UK GAAP payments benefits Goodwill assets Reclassifications Other IFRS £m £m £m £m £m £m £m £m Revenue 318.3 318.3 Operating expenses (298.4) (0.6) 0.5 0.7 0.7 0.2 (296.9) Exceptional items (13.1) (13.1) ---------- --------- ---------- --------- ---------- ---------- --------- ---------- Operating profit 6.8 (0.6) 0.5 0.7 0.7 0.2 8.3 Share of associates 4.2 (1.3) 2.9 operating profit ---------- --------- ---------- --------- ---------- ---------- --------- ---------- Profit on ordinary 11.0 (0.6) 0.5 0.7 0.7 (1.3) 0.2 11.2 activities before interest Net interest 1.0 0.8 1.8 ---------- --------- ---------- --------- ---------- ---------- --------- ---------- Profit on ordinary 12.0 (0.6) 1.3 0.7 0.7 (1.3) 0.2 13.0 activities before taxation Taxation (6.3) 0.1 (0.4) (0.3) (0.2) 1.3 (5.8) ---------- --------- ---------- --------- ---------- ---------- --------- ---------- Profit on ordinary 5.7 (0.5) 0.9 0.4 0.5 - 0.2 7.2 activities after taxation Minority interests (0.8) (0.8) ---------- --------- ---------- --------- ---------- ---------- --------- ---------- Profit attributable to 4.9 (0.5) 0.9 0.4 0.5 0.2 6.4 equity shareholders ---------- ---------- -------------- ---------- --------- ---------- --------- ---------- ---------- --------- ---------- Profit before tax, exceptional items and goodwill amortisation 25.8 (0.6) 1.3 - 0.7 (1.3) 0.2 26.1 -------------- ---------- --------- ---------- --------- ---------- ---------- --------- ---------- E Reconciliation of UK GAAP to prelimary IFRS balance sheet at 25 September 2004 - Development Software Employee Tangible UK GAAP Goodwill assets assets Benefits Taxation Reclassifications Dividends Assets Other IFRS £m £m £m £m £m £m £m £m £m £m £m Non-current assetsGoodwill 16.4 1.6 (2.9) 15.1Otherintangibleassets - 6.2 1.6 7.8Property,plant andequipment 160.2 (1.6) (3.3) 155.3Trade andotherreceivables 0.5 0.5Deferredtaxation 35.2 23.8 (2.9) 0.6 56.7Investments: - Associates 13.5 13.5 - Other 0.2 0.2 -------- -------- -------- ------- -------- -------- ------- ------- ------- ------ -- 226.0 1.6 6.2 - 23.8 (2.9) (2.9) (2.7) 249.1Current assetsInventories 96.5 96.5Trade andotherreceivables 95.5 95.5Cash and cashequivalents 101.9 101.9 -------- -------- ------- ------- -------- -------- -------- ------ ------- ------ ----- 293.9 293.9 -------- -------- --------- ------- -------- -------- --------- ------ ------- ------ -----Total 519.9 1.6 6.2 23.8 (2.9) (2.9) (2.7) 543.0assets Current liabilitiesBorrowings (5.3) (5.3)Trade andother payables (200.8) (1.8) 0.6 8.4 0.3 (193.3)Provisions (50.7) (1.1) 24.5 (27.3) -------- -------- ------- ------- -------- -------- -------- ----- ------ ----- ------- (256.8) (2.9) 0.6 24.5 8.4 0.3 (225.9)Non-current liabilitiesBorrowings (35.0) (35.0)Trade andother payables (11.0) (11.0) Netretirementbenefit liability - (76.5) (24.5) (101.0) -------- ------ ------- ------- -------- -------- -------- ------ ----- ----- ------ (46.0) (76.5) (24.5) (147.0) -------- ------ ------- ------- -------- -------- -------- ------ ----- ----- ------ Totalliabilities (302.8) (79.4) 0.6 - 8.4 0.3 (372.9) -------- ------ ------- ------- -------- -------- -------- ------ ----- ----- ------ Net assets 217.1 1.6 6.2 - (55.6) (2.3) (2.9) 8.4 (2.7) 0.3 170.1 -------- ------ ------- ------- -------- -------- -------- ------ ----- ----- ------ Shareholders'equityShare 45.8 45.8capitalReserves 167.1 1.6 6.2 (55.6) (2.3) (2.9) 8.4 (2.7) 0.3 120.1 -------- ------- --------- ------- -------- -------- ---------- ------- ----- ------- ------ 212.9 1.6 6.2 (55.6) (2.3) (2.9) 8.4 (2.7) 0.3 165.9MinorityInterests 4.2 4.2 -------- ------- --------- ------- -------- -------- ---------- ------- -------- ---- ------- 217.1 1.6 6.2 - (55.6) (2.3) (2.9) 8.4 (2.7) 0.3 170.1 -------- ------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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