Restatement of Financial Info

RNS Number : 6458V

Leeds Group PLC

30 May 2008

 



Issued on behalf of Leeds Group plc                                                                              Immediate Release

Date: 30 May 2008

Leeds Group plc

Restatement of Financial Information under

International Financial Reporting Standards

Leeds Group plc ('the group') is preparing for the adoption of International Financial Reporting Standards ('IFRS') for the year ending 30 September 2008. As part of this transition, the group today presents its results and accounting policies prepared under IFRS for the year ended 30 September 2007 and the six months ended 31 March 2007, together with explanations and reconciliations of the changes. This announcement is intended to assist readers of the group's financial statements to understand the impact of IFRS in advance of the publication on 2 June 2008 of the group's interim report for the six months ended 31 March 2008.

The changes to the group's previously reported financial information at 31 March 2007 and 30 September 2007 resulting from the adoption of IFRS arise in the following areas: -

• Cessation of the previous policy under which goodwill was amortised.

• Recognition of fair value gains or losses arising on forward exchange contracts.

• Disclosure as a separate component of equity the gains and losses arising after 1 October 2006, the date of transition, on the retranslation of the net assets of overseas subsidiaries.

The adoption of IFRS represents an accounting change only and the underlying performance of the group and its cash flows are unaffected. The impact of the adoption of IFRS on previously reported financial information is as follows: -

	6 months to 31 Mar 2007 £000	Year to 30 Sep 2007 £000
Amortisation written back	47	96
Recognition of derivative financial liabilities	(4)	(26)
Total increase in reported profit before tax	43	70
Previously reported profit before tax (GAAP)	350	760
IFRS profit before tax	393	830

Full reconciliations between UK GAAP and IFRS balance sheet at 1 October 2006 and income statements and balance sheets at 31 March 2007 and 30 September 2007 are set out in the body of this announcement.

The group's interim results for the six months ended 31 March 2008 will be announced on 2 June 2008.

Enquiries:
Leeds Group plc	Citigate Dewe Rogerson	Seymour Pierce Limited
Malcolm Wilson, Company Secretary	Fiona Tooley	Sarah Jacobs
Tel: [phone] or 07801 224618	Tel: [phone]	Tel: [phone]
Ewen Wigley, Chairman
Tel: [phone]

1. Introduction

On 18 December 2007 Leeds Group plc ('the group') reported its financial results for the year ended 30 September 2007, prepared for the last time under UK Generally Accepted Accounting Practice ('UK GAAP'). In future the group will prepare its consolidated financial statements in accordance with EU adopted IFRS as required for all AIM listed companies. The group's first reported IFRS results will be for the six months to 31 March 2008 and the group's first annual report under IFRS will be for the year to 30 September 2008. The group's date of transition to IFRS is 1 October 2006, being the start of the previous period that will be presented as comparative information. 

The impact on the reporting of the group's results is not significant and the underlying performance of the business and its cash flows remain unaffected.  

This announcement describes for investors the key impacts of the transition from UK GAAP to IFRS on the Group's results for the six months to 31 March 2007 and for the year to 30 September 2007. The restated figures are expected to form the comparative figures for both the interim financial statements for the six months ended 31 March 2008 and those for the year ending 30 September 2008.

2. Basis of Preparation

The unaudited financial statements in this announcement have been prepared in accordance with the accounting policies set out in section 5 below. These accounting policies are based on current IFRS, International Financial Reporting Interpretation Committee ('IFRIC') interpretations and current International Accounting Standards Board ('IASB') exposure drafts that are expected to be issued as final standards and adopted by the EU such that they are effective for the year ending 30 September 2008. These standards are subject to ongoing review and endorsement by the EU and further IFRIC interpretations and may therefore be subject to change. The group's first IFRS financial statements may consequently be prepared on the basis of accounting policies or presentations that are different to those set out in this document.

In implementing the transition to IFRS, the Group has followed the requirements of IFRS 1, the general principle being to establish accounting policies under IFRS and then to apply them retrospectively at the date of transition to determine the opening balance sheet. Significant accounting policy changes, together with the relevant transitional provisions, are set out in Section 4 below.

In accordance with IFRS 1 'First Time Adoption of International Financial Reporting Standards' there are a number of first time adoption exemptions available, some of which are mandatory and some optional. The group has applied the following optional exemptions:

• Business combinations - the Group has adopted the exemption under IFRS 1 relating to business combinations that occurred before 1 October 2006, the date of transition. The goodwill arising from combinations before that date therefore remains at the amount shown under UK GAAP at 30 September 2006, subject to subsequent translation differences and any subsequent impairment; and

• Cumulative translation differences - Under IAS 21, the effects of changes in foreign exchange rates and cumulative translation differences are tracked within reserves and are recycled from equity to the income statement on disposal of a foreign operation. In order to eliminate the need to retrospectively apply this requirement, the group took the exemption to set cumulative translation differences to zero at the date of transition.

The UK GAAP financial information contained in this document does not constitute full financial statements within the meaning of Section 240 of the Companies Act 1985. Full financial statements for the year ended 30 September 2007, which were prepared under UK GAAP, have been delivered to the Registrar of Companies. The auditors' report on those financial statements was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and did not contain a statement under section 237(2)-(3) of the Companies Act 1985.

3.  Overview of the Impact of IFRS Adoption

The adoption of IFRS represents an accounting change only and does not affect the cash flows of the group or its operations. The analysis below sets out the adjustments made at arriving at the income statements and balance sheets in accordance with IFRS, the impact of which can be seen in the reconciliations in Sections 6 to 10.

Based on the accounting policies detailed in Section 5, the effect of the transition on key reported results is as follows:

	6 months to 31 March 2007		Year to 30 September 2007
	UK GAAP	IFRS	UK GAAP	IFRS
	£000	£000	£000	£000
Profit before tax	350	393	760	830
Profit for the period	203	246	515	585
Basic and diluted EPS (pence)	0.6p	0.7p	1.5p	1.7p
Net assets	10,979	11,022	10,822	10,892

The changes resulting from the adoption of IFRS to the group's financial information previously reported under UK GAAP arise in the following areas : -

• Cessation of the previous policy under which goodwill was amortised.

• Recognition of fair value losses arising on forward exchange contracts.

• Disclosure as a separate component of equity the gains and losses arising after 1 October 2006, the date of transition, on the retranslation of the net assets of overseas subsidiaries.

Each of these is discussed in further detail in the following section, and full reconciliations of the UK GAAP to IFRS figures are shown in Sections 6 to 10.

4. Explanation of Adjustments

• Goodwill.  Goodwill represents the excess of the cost of a business combination over the interest in the fair value of identifiable assets, liabilities and contingent liabilities acquired. Cost comprises the fair values of assets given, liabilities assumed and equity instruments issued, plus any direct costs of acquisition. At 1 October 2006 ('the transition date'), the goodwill carrying value under UK Generally Accepted Accounting Practice ('UK GAAP') was tested for impairment and based on the conditions existing at that time no impairment was identified. Thus the carrying amount of goodwill in the group's opening IFRS balance sheet was equal to that under GAAP. From the date of transition the group discontinued the amortisation of goodwill and implemented annual impairment tests for goodwill

• Derivative financial assets and liabilities. The group makes use of forward exchange contracts to reduce the exposure to exchange rate fluctuations on amounts receivable or payable in currencies other than the functional currency of the operating unit involved. From the date of transition the group adopted a policy of carrying these forward exchange contracts in the balance sheet at fair value as either derivative financial assets ('in-the-money' contracts) or derivative financial liabilities ('out-of-the-money' contracts) with changes in fair value recognised in the consolidated income statement in the finance income or expense line.

• Treasury shares.  Under UK GAAP the cost of treasury shares was written off directly to reserves. Adopting IFRS, amounts written off to reserves at the date of transition have been reinstated, and shown as a separate component of equity, namely the 'treasury share reserve'.

• Translation differences.  On consolidation, the results of overseas operations, and all assets and liabilities of overseas operations, including goodwill arising on the acquisition of those operations, are translated at the rate ruling at the balance sheet date. Under GAAP, exchange differences arising on translating the opening net assets at opening rate were dealt with through reserves. Under IFRS such differences are recognised as a separate component of equity, namely the 'foreign exchange reserve'.  

5.    Accounting Policies

The IFRS restatement information has been prepared in accordance with the requirements of IFRS as adopted by the European Union. A summary of the significant accounting policies that have been adopted and consistently applied in the preparation of the IFRS restatement information is shown below

Basis of preparation

The unaudited financial statements in this announcement have been prepared in accordance with the accounting policies set out in this section 5. These accounting policies are based on current IFRS, International Financial Reporting Interpretation Committee ('IFRIC') interpretations and current International Accounting Standards Board ('IASB') exposure drafts that are expected to be issued as final standards and adopted by the EU such that they are effective for the year ending 30 September 2008.

Revenue

Revenue shown in the income statement is receivable by the group in the ordinary course of its business for the provision of goods and services to customers and excludes value added tax.

Basis of consolidation

Where the company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements present the results of the company and its subsidiaries ('the group') as if they formed a single entity. Inter-company transactions and balances between group companies are therefore eliminated in full.

Business combinations

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated balance sheet, the acquired entity's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated income statement from the date on which control is obtained.

Goodwill

Goodwill represents the excess of the cost of a business combination over the interest in the fair value of identifiable assets, liabilities and contingent liabilities acquired. Cost comprises the fair values of assets given, liabilities assumed and equity instruments issued, plus any direct costs of acquisition.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated income statement. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the consolidated income statement on the acquisition date.

At 1 October 2006, the date of transition to IFRS, the carrying amount of goodwill under UK GAAP was tested for impairment and based on the conditions existing at the transition date no impairment was identified. Thus, the carrying amount of goodwill in the group's IFRS opening balance sheet was equal to the carrying amount of goodwill under UK GAAP. From 1 October 2006 the group discontinued the amortisation of goodwill and implemented annual impairment tests for goodwill. 

Impairment of non-financial assets (excluding inventories, investment properties and 

deferred tax assets)

Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year-end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset's cash-generating unit (i.e. the lowest group of assets in which the asset belongs for which there are separately identifiable cash flows). Goodwill is allocated on initial recognition to each of the group's cash-generating units that are expected to benefit from the synergies of the combination that gave rise to the goodwill.

Impairment charges are included in the administrative expenses line item in the consolidated income statement, except to the extent they reverse gains previously recognised in the consolidated statement of recognised income and expense. An impairment loss recognised for goodwill is not reversed.

Foreign currency

Transactions entered into by group entities in a currency other than the currency of the primary economic environment in which they operate (their 'functional currency') are recorded at the rates ruling on the first day of the month in which the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the balance sheet date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in the consolidated income statement.

On consolidation, the results of overseas operations, and all assets and liabilities of overseas operations, including goodwill arising on the acquisition of those operations, are translated at the rate ruling at the balance sheet date. Exchange differences arising on translating the opening net assets at opening rate are recognised as a separate component of equity (the 'foreign exchange reserve'). 

Exchange differences recognised in the income statement of group entities' separate financial statements on the translation of long-term monetary items forming part of the group's net investment in the overseas operation concerned are reclassified to the foreign exchange reserve on consolidation.

On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that operation up to the date of disposal are transferred to the consolidated income statement as part of the profit or loss on disposal.

The group has used an exemption available under IFRS 1, 'First time adoption of International Financial Reporting Standards', under which cumulative translation differences for all foreign operations were deemed to be zero at 1 October 2006, the date of transition to IFRS. Any gain or loss on the subsequent disposal of those foreign operations would exclude translation differences that arose before 1 October 2006 and would include only subsequent translation differences.

Segment reporting

A business segment is a distinguishable component of an enterprise that is engaged in providing an individual product or service or a group of related products or services and that is subject to risks and returns that are different from those of other business segments. A geographical segment is a distinguishable component of an enterprise that is engaged in providing products or services within a particular economic environment and that is subject to risks and returns that are different from those of components operating in other economic environments.

Financial assets

The group classifies its financial assets into one of the three categories discussed below, depending on the purpose for which the asset was acquired. The group has not classified any of its financial assets as held to maturity.

Other than financial assets in a qualifying hedging relationship, the group's accounting policy for each category is as follows:

(i) Fair value through profit or loss:  This category comprises only in-the-money derivatives (see financial liabilities section for out-of-the-money derivatives). They are carried in the balance sheet at fair value with changes in fair value recognised in the consolidated income statement in the finance income or expense line. Other than these derivative financial instruments, the group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.  

(ii) Loans and receivables:  The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the balance sheet. These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (e.g. trade receivables), but also incorporate other types of contractual monetary asset. They are initially recognised at fair value, and subsequently carried at fair value less provision for impairment. 

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counter-party or default or significant delay in payment) that the group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in the income statement. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision. 

From time to time, the Group elects to renegotiate the terms of trade receivables due from customers with which it has previously had a good trading history. Such renegotiations will lead to changes in the timing of payments rather than changes to the amounts owed and, in consequence, the new expected cash flows are discounted at the original effective interest rate.

Cash and cash equivalents includes cash in hand, deposits held at call with banks, and bank overdrafts. Bank overdrafts are shown within loans and borrowings in current liabilities on the balance sheet.

(iii) Available-for-sale:  Non-derivative financial assets not included in the above categories are classified as available-for-sale and comprise principally the group's strategic investments in entities not qualifying as subsidiaries, associates or jointly controlled entities. They are carried at fair value with changes in fair value recognised directly in a separate component of equity (available-for-sale reserve). Where there is a significant or prolonged decline in the fair value of an available-for-sale financial asset (which constitutes objective evidence of impairment), the full amount of the impairment, including any amount previously charged to equity, is recognised in the income statement. On sale, the amount held in the available-for-sale reserve associated with that asset is removed from equity and recognised in the income statement.  

The group does not engage in hedge accounting.

Financial liabilities

The group classifies its financial liabilities into one of the two categories below, depending on the purpose for which the liability was acquired. Other than financial liabilities in a qualifying hedging relationship, the group's accounting policy for each category is as follows:

(i) Fair value through profit or loss:  This category comprises only out-of-the-money derivatives (see financial assets for in-the-money derivatives). They are carried in the balance sheet at fair value with changes in fair value recognised in the consolidated income statement. Other than these derivative financial instruments, the Group does not have any liabilities held for trading nor has it designated any financial liabilities as being at fair value through profit or loss.

(ii) Other financial liabilities:  Other financial liabilities include the following items, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method:

• Bank borrowings 

• Trade payables.

Dividends

Interim dividends are recognised when paid and final dividends are recognised when approved by the shareholders at the AGM.  

Retirement benefits

The group operates no defined benefit pension schemes. The group operates a defined contribution pension scheme for its UK employees, and contributions are charged to the consolidated income statement in the year to which they relate. The group does not operate pension schemes in either Germany or Holland where pension arrangements are provided by the state. 

Leased assets

Where substantially all of the risks and rewards incidental to ownership are not transferred to the group (an 'operating lease'), the total rentals payable under the lease are charged to the consolidated income statement on a straight-line basis over the lease term. The aggregate benefit of lease incentives is recognised as a reduction of the rental expense over the lease term on a straight-line basis.

The land and buildings elements of property leases are considered separately for the purposes of lease classification.

Deferred taxation

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs from its tax base, except for differences arising on:

• the initial recognition of goodwill;

• the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and

• investments in subsidiaries and jointly controlled entities where the group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered). 

Deferred tax assets and liabilities are offset when the group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:

• the same taxable group company; or

• different group entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.

Share capital

The group's ordinary shares are classified as equity instruments.

Treasury shares

Consideration paid/(received) for the purchase/(sale) of treasury shares is recognised directly in equity. The cost of treasury shares held is presented as a separate component of equity (the 'treasury share reserve'). Any excess of the consideration received on the sale of treasury shares over the weighted average cost of the shares sold is credited to the share premium account. 

Property, plant and equipment

All items of property, plant and equipment are carried at depreciated cost. Freehold land and buildings were acquired in 2008 and these will be professionally revalued every five years. Although revaluations will not be recognised in the accounts, details of the revalued amount will be disclosed in a note to the accounts. 

Freehold land is not depreciated. Depreciation is provided on all other items of property, plant and equipment to write off the carrying value of items evenly over their expected useful economic lives as follows:

Freehold buildings	50 years
Leasehold improvements	8 years
Plant and machinery	5 - 15 years
Motor vehicles	6 years

Inventories

Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Weighted average cost is used to determine the cost of ordinarily interchangeable items.

Government grants

Government grants received on capital expenditure are generally deducted in arriving at the carrying amount of the asset purchased. Grants for revenue expenditure are netted against the cost incurred by the group. Where retention of a government grant is dependent on the group satisfying certain criteria, it is initially recognised as deferred income. When the criteria for retention have been satisfied, the deferred income balance is released to the consolidated income statement or netted against the asset purchased. 

Provisions

Provisions are recognised for liabilities of uncertain timing or amount that have arisen as a result of past transactions and are discounted at a pre-tax rate reflecting current market assessments of the time value of money and the risks specific to the liability.

Where the buyer has the right to return the goods the group estimates the return rate based on past experience with similar sales and recognises revenue on this transaction with a corresponding provision against revenue for estimated returns.

6.    Reconciliation of Net Assets at 1 October 2006.

	UK GAAP	Goodwill	Forward Contracts	Translation Differences	Treasury Shares	Effect of Transition	Restated under IFRS
	£000	£000	£000		£000	£000	£000
Assets
Non-current assets
Property, plant and equipment	245	-	-	-	-	-	245
Intangible assets	757	-	-	-	-	-	757
Available for sale investments	-	-	-	-	-	-	-
Total non-current assets	1,002	-	-	-	-	-	1,002
Current assets
Inventories	4,552	-	-	-	-	-	4,552
Trade and other receivables	3,990	-	-	-	-	-	3,990
Cash and cash equivalents	4,706	-	-	-	-	-	4,706
Total current assets	13,248	-	-	-	-	-	13,248
Total assets	14,250	-	-	-	-	-	14,250
Liabilities
Non-current liabilities
Loans and borrowings	-	-	-	-	-	-	-
Total non-current liabilities	-	-	-	-	-	-	-
Current liabilities
Trade and other payables	(1,037)	-	-	-	-	-	(1,037)
Loans and borrowings	(1,923)	-	-	-	-	-	(1,923)
Corporation tax liability	(255)	-	-	-	-	-	(255)
Derivative financial liabilities	-	-	-	-	-	-	-
Provisions	(160)	-	-	-	-	-	(160)
Total current liabilities	(3,375)	-	-	-	-	-	(3,375)
Total liabilities	(3,375)	-	-	-	-	-	(3,375)
TOTAL NET ASSETS	10,875	-	-	-	-	-	10,875

Equity
Share capital	4,392	-	-	-	-	-	4,392
Capital redemption reserve	-	-	-	-	-	-	-
Treasury share reserve	-	-	-	-	(350)	(350)	(350)
Foreign exchange reserve	-	-	-	-	-	-	-
Retained earnings	6,483	-	-	-	350	350	6,833
TOTAL EQUITY	10,875	-	-	-	-	-	10,875

7.    Reconciliation of Net Assets at 31 March 2007.

	UK GAAP	Goodwill	Forward Contracts	Translation Differences	Treasury Shares	Effect of Transition	Restated under IFRS
	£000	£000	£000		£000	£000	£000
Assets
Non-current assets
Property, plant and equipment	259	-	-	-	-	-	259
Intangible assets	712	47	-	-	-	47	759
Available for sale investments	-	-	-	-	-	-	-
Total non-current assets	971	47	-	-	-	47	1,018
Current assets
Inventories	3,620	-	-	-	-	-	3,620
Trade and other receivables	3,562	-	-	-	-	-	3,562
Cash and cash equivalents	4,701	-	-	-	-	-	4,701
Total current assets	11,883	-	-	-	-	-	11,883
Total assets	12,854	47	-	-	-	47	12,901
Liabilities
Non-current liabilities
Loans and borrowings	-	-	-	-	-	-	-
Total non-current liabilities	-	-	-	-	-	-	-
Current liabilities
Trade and other payables	(851)	-	-	-	-	-	(851)
Loans and borrowings	(794)	-	-	-	-	-	(794)
Corporation tax liability	(91)	-	-	-	-	-	(91)
Derivative financial liabilities	-	-	(4)	-	-	(4)	(4)
Provisions	(139)	-	-	-	-	-	(139)
Total current liabilities	(1,875)	-	(4)	-	-	(4)	(1,879)
Total liabilities	(1,875)	-	(4)	-	-	(4)	(1,879)
TOTAL NET ASSETS	10,979	47	(4)	-	-	43	11,022

Equity
Share capital	4,392	-	-	-	-	-	4,392
Capital redemption reserve	-	-	-	-	-	-	-
Treasury share reserve	-	-	-	-	(462)	(462)	(462)
Foreign exchange reserve	-	-	-	13	-	13	13
Retained earnings	6,587	47	(4)	(13)	462	492	7,079
TOTAL EQUITY	10,979	47	(4)	-	-	43	11,022

8.    Reconciliation of Profit for the Six Months ended 31 March 2007.

	UK GAAP	Goodwill	Forward Contracts	Effect of Transition	Restated under IFRS
	£000	£000	£000	£000	£000
Revenue	8,350	-	-	-	8,350
Cost of sales	(6,304)	-	(4)	(4)	(6,308)
Gross profit	2,046	-	(4)	(4)	2,042
Distribution expenses	(546)	-	-	-	(546)
Administrative expenses	(1,223)	47	-	47	(1,176)
Profit from operations	277	47	(4)	43	320
Finance expense	(44)	-	-	-	(44)
Finance income	117	-	-	-	117
Profit before tax	350	47	(4)	43	393
Tax expense	(147)	-	-	-	(147)
Profit for the period	203	47	(4)	43	246
Earnings per share
Basic & diluted (pence)	0.6p	0.1p	-	0.1p	0.7p

9.    Reconciliation of Net Assets at 30 September 2007.

	UK GAAP	Goodwill	Forward Contracts	Translation Differences	Treasury Shares	Effect of Transition	Restated under IFRS
	£000	£000	£000		£000	£000	£000
Assets
Non-current assets
Property, plant and equipment	308	-	-	-	-	-	308
Intangible assets	683	96	-	-	-	96	779
Available for sale investments	-	-	-	-	-	-	-
Total non-current assets	991	96	-	-	-	96	1,087
Current assets
Inventories	5,172	-	-	-	-	-	5,172
Trade and other receivables	4,344	-	-	-	-	-	4,344
Cash and cash equivalents	4,764	-	-	-	-	-	4,764
Total current assets	14,280	-	-	-	-	-	14,280
Total assets	15,271	96	-	-	-	96	15,367
Liabilities
Non-current liabilities
Loans and borrowings	(1,569)	-	-	-	-	-	(1,569)
Total non-current liabilities	(1,569)	-	-	-	-	-	(1,569)
Current liabilities
Trade and other payables	(1,195)	-	-	-	-	-	(1,195)
Loans and borrowings	(1,535)	-	-	-	-	-	(1,535)
Corporation tax liability	(25)	-	-	-	-	-	(25)
Derivative financial liabilities	-	-	(26)	-	-	(26)	(26)
Provisions	(125)	-	-	-	-	-	(125)
Total current liabilities	(2,880)	-	(26)	-	-	(26)	(2,906)
Total liabilities	(4,449)	-	(26)	-	-	(26)	(4,475)
TOTAL NET ASSETS	10,822	96	(26)	-	-	70	10,892

Equity
Share capital	4,188	-	-	-	-	-	4,188
Capital redemption reserve	204	-	-	-	-	-	204
Treasury share reserve	-	-	-	-	(766)	(766)	(766)
Foreign exchange reserve	-	-	-	167	-	167	167
Retained earnings	6,430	96	(26)	(167)	766	669	7,099
TOTAL EQUITY	10,822	96	(26)	-	-	70	10,892

10.    Reconciliation of Profit for the Year ended 30 September 2007.

	UK GAAP	Goodwill	Forward Contracts	Effect of Transition	Restated under IFRS
	£000	£000	£000	£000	£000
Revenue	17,523	-	-	-	17,523
Cost of sales	(13,392)	-	(26)	(26)	(13,418)
Gross profit	4,131	-	(26)	(26)	4,105
Distribution expenses	(1,096)		-	-	(1,096)
Administrative expenses	(2,392)	96	-	96	(2,296)
Profit from operations	643	96	(26)	70	713
Finance expense	(121)	-	-	-	(121)
Finance income	238	-	-	-	238
Profit before tax	760	96	(26)	70	830
Tax expense	(245)	-	-	-	(245)
Profit for the period	515	96	(26)	70	585
Earnings per share
Basic & diluted (pence)	1.5p	0.2p	-	0.2p	1.7p

 

END

 

 

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