Final Results

Final Results

Eco Animal Health Group Plc

ECO Animal Health Group plc (‘’ECO”)

(AIM: EAH)

Results for the year ended 31 March 2015

ECO ANIMAL HEALTH REPORTS STRONG PERFORMANCE

HIGHLIGHTS

Financials

  • 22% increase in sales to £39.0 million ( +28% at constant exchange rates )
  • 23% increase in gross profit to £17.4 million with gross profit margin held at 45%
  • 22% increase in adjusted EBITDA to £8.6 million ( +35% at constant exchange rates)
  • 13% increase in total dividend for the year to 4.75p with second interim dividend of 3.0p
  • Cash generation from operations up 16% to £7.2 million
  • Pre-tax profit up 38% to £5.1 million
  • Net cash of £17.7m

Operations

  • Demand for Aivlosin® continues to grow strongly with sales up over 30% ( +36% at constant exchange rates )
  • New marketing authorisations gained in UAE
  • Strong performances in North America, China and Europe
  • Further advances in Southeast Asian territories following recent acquisition
  • Major investment in stockholding and production capacity on schedule

Peter Lawrence, Executive Chairman of ECO Animal Health Group plc, commented:

‘’ The new financial year has started well with sales maintaining momentum. I look forward with confidence to ECO delivering another impressive performance when the interim results are announced ‘’

Contacts:          
ECO Animal Health Group plc
Peter Lawrence 020 8336 6190
Marc Loomes 020 8447 6906
 
Spiro Financial
Anthony Spiro 020 8336 6196
 
Peel Hunt LLP (Nominated Adviser)
Dan Webster, Richard Brown, George Sellar 020 7418 8900

ECO Animal Health Group plc is a leader in the development, registration and marketing of pharmaceutical products for animals. Our products for these global growth markets promote well-being. Our financial goals are achieved through the careful and responsible application of science to generate value for our shareholders.

CHAIRMAN’S STATEMENT

FOR THE YEAR ENDED 31 MARCH 2015

I am delighted to report that ECO Animal Health Group plc has maintained the momentum of its strong first half and delivered an excellent set of results for the year ended 31 March 2015. The recent marketing authorisation granted by the United States Food & Drug Administration (FDA) for the use of our patented drug, Aivlosin®, for pigs is very significant. This approval has reinforced ECO’s position as a supplier that conforms to all the current guidelines governing the judicious use of antimicrobials in the farming industry. Our standing as an important supplier of effective, therapeutic medications to meat producers around the world has strengthened as our penetration of these markets has increased.

Financial Performance

Sales for the year increased by 22% to £39.0m (2014: £31.9m). This increase would have risen to 28% at constant exchange rates (CER) i.e. as if the 2014 sales were recalculated using the same daily average exchange rates that applied in 2015. Earnings before interest, tax, depreciation, amortisation, minority interests, share based payments and foreign exchange differences (EBITDA) grew by 22% to £8.6m (2014: £7.1m). The increase in EBITDA at CER would have been 35%. The pound continued to show strength through the year and that had an impact on the translation of ECO’s results into sterling. An exception was the US dollar which moved in a narrow band against sterling. The dollar/ sterling exchange rate, calculated as the average of each day’s close during the year, was £1 = $1.6133 for the twelve months ended 31 March 2015, weaker than the comparable figure for the previous year which was £1 = $1.5891.

Our balance sheet remains strong and Group cash was £17.7m net of overdrafts (2014: £18.2m) even after our planned strategic stock level increase of almost £3m above the level of the previous year. Cash generated from operations also increased, reaching £7.2m at the year end, an increase of 16%. Pre-tax profit rose 38% to £5.1m (2014: £3.70m) and earnings per share increased by 57% to 6.82 pence per share (2014: 4.35 pence).

The Board is pleased to declare a second interim dividend of 3.0 pence per share to be paid on 2 October 2015 to shareholders on the register on 11 September 2015. This makes a total for the year of 4.75 pence per share (2014: 4.2 pence), an increase of over 13% reflecting the Board’s continued confidence in the growth prospects for the Company.

Operations

The Company is now realising the commercial benefit from the considerable investment it has made over many years in the intellectual property inherent in Aivlosin®, its patented molecule. Aivlosin® is used for the treatment of economically important diseases of pigs and poultry. Aivlosin® is prescribed under strict veterinary control at low but efficacious dose rates for short duration treatment of specified diseases and meets all the guidelines for the judicious use of antimicrobials. Marketing authorisations have now been obtained in nearly all the major markets for pigs and poultry. Our continued investment in highly qualified and experienced staff is reflected in our strong sales performance. We will continue to build stock levels to service the anticipated growth in sales as our global business expands. It is pleasing to report that our production capacity has also been increased substantially during the year. ECO has made important investments in both its business and regulatory software capabilities, which will further enhance productivity.

Worldwide sales of Aivlosin® increased by over 30 % compared with the same period last year (over 36% at CER). Aivlosin®, ECO’s patented molecule, was granted its first marketing authorisation in the USA in 2012 and the subsequent revenue development of this flagship product has been most gratifying. Sales of Aivlosin® in North America, a region that accounts for more than one third of Aivlosin®‘s potential world market, trebled in the year under review. We are well positioned to build on our excellent start in this important market.

In China, our subsidiary, Zhejiang ECO Biok Animal Health Products, which was established over a decade ago, had another successful year with sales rising 8 % in sterling, or 10 % in local currency. The late timing this year of the Chinese Spring Festival vacation delayed the benefit of our annual spring sales campaign until after the Company’s year end. In July 2014 we acquired the business of our long-standing Southeast Asian distributor, based in Kuala Lumpur with representation throughout the region. This operation has performed extremely well with sales up 84% in sterling or 87% in US dollars compared with the same period in the previous year. ECO has completed a strategic review of the opportunities offered by the important Southeast Asian pig and poultry markets. The findings were very encouraging and as a result we are confident that, with renewed focus and greater technical, sales and marketing support, the region will have a very positive commercial impact on future results.

There was a significant upturn in business in Mexico and key tenders were also won in Brazil. In Latin America, the uncertain economic and political situations in Argentina and Venezuela had a significant effect on local currencies. In Japan, the ongoing weakness of the yen continued to affect our results although Aivlosin® sales volumes did increase. Sales in Europe, including the UK, were up almost 19%, continuing the momentum established last year, although the economic climate in this region remains as challenging as ever.

The Company recently announced approvals for both Aivlosin® and Ecomectin® products in the United Arab Emirates. These marketing authorisations should lead to the granting of further licences in the Gulf Cooperation Council, where the UAE is a key member and, in particular, in the Kingdom of Saudi Arabia which is a very important poultry market.

We have continued to invest in our product development pipeline, with the aim of obtaining additional marketing authorisations in the USA, Europe and the key pig and poultry production markets globally.

Board changes

In December 2014 we announced the appointment of Anthony Rawlinson as a Non-Executive Director with effect from 1 January 2015. Mr Rawlinson is a chartered accountant with over 25 years corporate finance experience advising smaller quoted companies; he is a co-founder and partner in Cairn Financial Advisers LLP, AIM Market corporate advisers.

People

While our business performance is driven by animal health, people remain our principal asset. On behalf of all shareholders, I would like to thank everyone associated with the Company for their unceasing commitment and enthusiasm during another year of considerable progress for ECO.

Outlook

The new financial year has started well with revenue maintaining momentum. I look forward with confidence to ECO delivering another impressive performance when the interim results for the first six months of trading are announced.

Peter A Lawrence

2nd July 2015

STRATEGIC REPORT

FOR THE YEAR ENDED 31 MARCH 2015

Group sales in the year to 31 March 2015 rose by 22% to £39m; this increase is 27% at constant exchange rates (CER) i.e. if the 2014 sales are recalculated using the same average exchange rates as applied in 2015. Sales of Aivlosin®, our flagship, patented, therapeutic (disease treating) product, advanced by over 30% in sterling above the level of the previous year. This encouraging performance continues to reflect our strategic decision to focus primarily on our core high margin products and less on lower margin generics. The resulting more profitable product mix was becoming established last year and, despite the strength of sterling, the margins were slightly improved this year.

EBITDA (Earnings before interest, tax, depreciation, amortisation, share based payments, foreign exchange movements and minorities) is our main key performance indicator because we are required to amortise our drug registration costs even though we believe they are increasing in value.

EBITDA advanced by 22% to almost £8.6m, a new record for the Company and, on a like for like basis at CER, the growth would have been approximately 35%. Pre-tax profit increased by almost 38%.

Group cash at the year end was £17.7m net of overdrafts.

Key Performance Indicators

The key performance indicators (‘KPIs’) for the Group are those that communicate the financial performance and strength of the group as a whole to shareholders.

A summary of the KPI’s is as follows:

      2015       2014       2013    
Financial
Revenue £m 39.0 31.9 29.0
Gross Profit £m 17.5 14.1 13.1
Gross Margin % 44.7 44.5 45.2
EBITDA £m 8.61 7.05 6.67
Cash balances, net of borrowing £m 17.7 18.2 7.7
Non Financial
Health and Safety - major accidents reported to the board in the year Nil Nil Nil

Currency

Under IFRS rules, financial assets at the period end are translated from foreign currencies using the period end exchange rates. It has been our practice not to convert the majority of the currency balances into sterling, but to use them to pay overseas suppliers in local currency and invest in the business. Therefore the currency losses experienced on bank balances during the last year may well reverse in the current year.

Risks and Uncertainties

All businesses face a number of strategic and operational risks and uncertainties and the Board considers that the following could influence the Group’s performance:

Currency Movements

The Group exports its products to almost 60 counties and is exposed to movements in currency. It has not been the Company’s practice to convert currencies which are used for purchasing raw materials and services in those currencies and this acts as an extensive hedge against currency fluctuations.

Commercial Risks

There is increasing pressure on veterinarians to prescribe antibiotics appropriately and in accordance with the product label. Aivlosin® meets all current guidelines for the judicious and prudent use of antimicrobials for food producing animals and is never used in human health. The Group spends considerable effort and resource liaising with regulatory authorities and leading consultants to ensure that it remains compliant with all prescribing guidelines.

Supply Risks

The Group is dependent on a small number of suppliers for some of its raw materials and maintains business interruption insurance in respect of each of these. In the longer term the Group continues to build strategic manufacturing partnerships internationally and to increase safety stock levels in order to protect its complex global supply chain.

Dependence on key customers

The Group is dependent on a number of customers and distributors in each of the territories into which it sells. The loss of one or more of its key customers could result in lower than expected sales and have a significant impact on the scale of its operations. The Group seeks to minimise reliance on key territories and individual customers and distributors.

Disease

Although outbreaks of diseases for which our products are indicated are generally beneficial to our sales, some disease outbreaks temporarily impact on production, disrupt the free movement of animals and affect trade. In the face of continued global demand for animal protein, however, any reduction in supply leads to increased prices and therefore benefits those who have taken effective measures to prevent or control the disease. In the medium term, most disease outbreaks are generally well controlled by appropriate intervention strategies.

Timing of approval of marketing authorisations

Aivlosin® has been licenced for use in pigs and/or in poultry by the European, USA, Canadian, Japanese, Chinese and many other regulatory bodies globally but the exact timing of new approvals of marketing authorisations is difficult to predict. Regulatory authorities may submit additional questions or require supplementary trial work to be performed prior to granting of a license and this can lead to some delay. Therefore, considerable resource is devoted to our licensing work in order to address any issues that may arise in as timely a manner as is possible.

Strategy

ECO Animal Health Group plc is a leader in the development, registration and marketing of pharmaceutical products for animals. The Company has developed into a significant UK based business with subsidiaries, joint ventures and distributors in 60 countries. ECO has been granted over 600 drug registrations around the world for its pharmaceutical products, which are principally, but not exclusively, for the treatment of various conditions in pigs and poultry. The Company uses advanced science in order to offer a wide and effective range of specialist treatments, underpinned by strong customer service.

The Company will continue to pursue organic growth by developing its markets and expanding its customer base. It will also continue to research and develop additional applications for its established and proven ranges of active pharmaceutical ingredients. ECO will also consider acquisition opportunities as they arise, provided they meet its market, financial and strategic objectives.

Post Balance Sheet Events

The Group issued 55,000 shares in April 2015 as a result of the exercise of options by current and former employees.

The Group purchased 6,487 of its own shares at an average price of £2.41 in April 2015 and a further 2,381 shares at an average price of £3.02 in June 2015.

Trading update and outlook

The current year has started well with major markets maintaining their rate of growth with particularly good demand from customers in the US and Canada. The strength of sterling may remain an issue, but it will not divert the Company from its objective of developing a global business. Aivlosin® sales are growing rapidly, boosted particularly by North American demand where business is still in its early stages but showing very significant and exciting potential.

Peter Lawrence

Executive Chairman

2nd July 2015

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 MARCH 2015

    2015       2014            
Notes £000's £000's
 
Revenue 2,3,4 38,997 31,865
Cost of sales (21,546)       (17,726)
 
Gross profit 17,451 14,139
 
Other income 293 324
Administrative expenses (12,407) (10,495)
 
Profit from operating activities 5 5,337 3,968
 
Finance income 6 68 58
Finance costs 6 (327)       (343)
Net finance (expense)/income (259)       (285)
 
Profit before income tax 5,078 3,683
Income tax (charge) 8 (457)       (602)
Profit for the year 4,621       3,081
 
 
Profit attributable to:
Owners of the parent company 4,094 2,431
Non-controlling interest 24 527       650
Profit for the year 4,621       3,081
 
         
Earnings per share (pence) 7 6.82       4.35
         
Diluted earnings per share (pence) 7 6.79       4.30

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2015

    2015       2014    
Notes £000's £000's
 
Profit for the year 4,621 3,081
 

Other comprehensive income (net of related tax
effects):

Foreign currency translation differences 350 (651)
Defined benefit plan actuarial (losses)/gains 21 (55) 25
Revaluation of investment property 35 -
Deferred tax on revaluations -       10
Other comprehensive income for the year 330       (616)
 
Total comprehensive income for the year 4,951 2,465
 
Attributable to:
Owners of the parent company 4,090 1,955
Non-controlling interest 24 861       510
4,951       2,465

All items listed in other comprehensive income have gone through reserves and are shown in the consolidated statement of changes in equity.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2015

CONSOLIDATED       Attributable to the owners of the Parent                                  
Share       Share       Treasury       Revaluation Other Retained Total Non-controlling Total
Capital premium Reserve Reserve Reserves Earnings Interest Equity
Account
£000's £000's £000's £000's £000's £000's £000's £000's £000's
 
Balance as at 31 March 2013 2,767 37,881 (5,217) 523 5,050 16,829 57,833 2,458 60,291
 
Profit for the year - - - - - 2,431 2,431 650 3,081

Other comprehensive
income:
Foreign currency differences - - - - - (511) (511) (141) (652)

Actuarial gains on pension
scheme assets

 - - - - - 25 25 - 25
Deferred taxation -       -       -       10       -               10       -       10

Total comprehensive income
for the year

 -       -       -       10       -       1,945       1,955       509       2,464
Transactions with owners recorded directly in equity
 
Contributions by and distributions to owners
 
 
Issue of shares in the year 357 12,298 - - - - 12,655 - 12,655
Share-based payments - - - - 307 - 307 - 307

Transfer from special reserve
to share premium

 - 3,250 - - (3,250) - - - -

Transfers on expiry of
options

 - - - - (291) 291 - - -
Dividends relation to 2013 -       -       -       -       -       (2,110)       (2,110)       (799)       (2,909)
Transactions with owners 357       15,548       -       -       (3,234)       (1,819)       10,852       (799)       10,053
Balance as at 31 March 2014 3,124 53,429 (5,217) 533 1,816 16,955 70,640 2,168 72,808
Profit for the year - - - - - 4,094 4,094 527 4,621

Other comprehensive
income:
Foreign currency differences - - - - - 16 16 334 350

Actuarial (losses) on pension
scheme assets

 - - - - - (55) (55) - (55)

Revaluation of investment
property

 - - - 44 - - 44 - 44
Deferred taxation -       -       -       (9)       -       -       (9)       -       (9)

Total comprehensive income
for the year

 -       -       -       35       -       4,055       4,090       861       4,951
Transactions with owners recorded directly in equity
 
Contributions by and distributions to owners
 
 
Issue of shares in the year 33 769 - - - - 802 - 802

Purchase of shares into
treasury

 - - - - - (17) (17) - (17)
Share-based payments - - - - 252 - 252 - 252

Transfers on expiry of
options

 - - - - (293) 293 - - -
Dividends relation to 2014 -       -       -       -       -       (2,515)       (2,515)       -       (2,515)
Transactions with owners 33       769       -       -       (41)       (2,239)       (1,478)       -       (1,478)
Balance as at 31 March 2015 3,157       54,198       (5,217)       568       1,775       18,771       73,252       3,029       76,281

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2015

COMPANY       Attributable to the owners of the Parent                      
Share       Share       Treasury       Revaluation Other Retained Total
Capital premium Reserve Reserve Reserves Earnings
Account
£000's £000's £000's £000's £000's £000's £000's
 
Balance as at 31 March 2013 2,767 37,881 (5,217) 254 5,050 12,236 52,971
 
Loss for the year - - - - - (43) (43)
Other comprehensive income:
 

Actuarial gains on pension scheme
assets

 - - - - - 25 25
Deferred taxation -       -       -       10       -       -       10

Total comprehensive income for the
year

 -       -       -       10       -       (18)       (8)
Transactions with owners recorded directly in equity
 
Contributions by and distributions to owners
 
 
Issue of shares in the year 357 12,298 - - - - 12,655
Share-based payments - - - - 307 - 307

Transfer from special reserve to share
premium

 - 3,250 - - (3,250) - -
Transfers on expiry of options - - - - (291) 291 -
Dividends relation to 2013 -       -       -       -       -       (2,110)       (2,110)
Transactions with owners 357       15,548       -       -       (3,234)       (1,819)       10,852
Balance as at 31 March 2014 3,124 53,429 (5,217) 264 1,816 10,399 63,815
Profit for the year - - - - - 4,760 4,760
Other comprehensive income:

Actuarial (losses) on pension scheme
assets

 - - - - - (55) (55)
Revaluation of investment property - - - 44 - - 44
Deferred taxation -       -       -       (9)       -       -       (9)

Total comprehensive income for the
year

 -       -       -       35       -       4,705       4,740
Transactions with owners recorded directly in equity
 
 
Contributions by and distributions to owners
Issue of shares in the year 33 769 - - - - 802
 
Share-based payments - - - - 252 - 252
Purchase of shares into treasury - - - - - (17) (17)
Transfers on expiry of options - - - - (293) 293 -
Dividends relation to 2014 -       -       -       -       -       (2,515)       (2,515)
Transactions with owners 33       769       -       -       (41)       (2,239)       (1,478)
Balance as at 31 March 2015 3,157       54,198       (5,217)       299       1,775       12,865       67,077

STATEMENTS OF FINANCIAL POSITION (CO. NUMBER: 01818170)

AS AT 31 MARCH 2015

            Group       Company    
2015       2014 2015       2014
Notes £000's £000's £000's £000's
Non-current assets
Intangible assets 11 45,660 43,172 - -
Property, plant and equipment 12 1,619 1,002 640 654
Investment property 13 189 149 189 149
Investments 14 9       9       20,082       20,082
47,477 44,332 20,911 20,885
Current assets
Inventories 15 9,833 6,972 - -
Trade and other receivables 16 11,522 9,868 36,505 33,908
Income tax recoverable 39 27 - -
Other taxes and social security 110 304 8 102
Cash and cash equivalents 18 20,091       18,240       13,219       9,230
 
Total current assets 41,595 35,411 49,732 43,240
 
Liabilities
Trade and other payables 19 (9,542) (6,343) (931) (151)
Short -term borrowings 20 (2,356) - (2,356) -
Income tax (223) (206) - -
Other taxes and social security (343) (178) (69) (63)
Dividends (35)       (31)       (35)       (30)
Current liabilities (12,499)       (6,758)       (3,391)       (244)
Net current assets 29,096       28,653       46,341       42,996
Total assets less current liabilities 76,573 72,985 67,252 63,881
Non current liabilities
 
Provisions
Deferred tax 17 (192) (177) (75) (66)
Dilapidations on property leases (100)       -       (100)       -
TOTAL ASSETS LESS TOTAL LIABILTIES 76,281       72,808       67,077       63,815
 
EQUITY
Issued share capital 23 3,157 3,124 3,157 3,124
Share premium account 54,198 53,429 54,198 53,429
Treasury reserve (5,217) (5,217) (5,217) (5,217)
Revaluation reserve 568 533 299 265
Other reserves 26 1,775 1,816 1,775 1,816
Retained earnings 18,771       16,955       12,865       10,398
73,252 70,640 67,077 63,815
Non-controlling interests 24 3,029       2,168       -       -
TOTAL EQUITY 76,281       72,808       67,077       63,815

Approved by the Board and authorised for issue on 2nd July 2015

Peter Lawrence Director

STATEMENT OF CASHFLOWS

FOR THE YEAR ENDED 31 MARCH 2015

            Group       Group       Company       Company    
2015 2014 2015 2014
Notes £000's £000's £000's £000's
Cashflows from operating activities
Profit/(loss) before income tax 5,078 3,683 4,761 (36)
Adjustment for:
Net finance costs/(income) 6 259 285 503 (446)
Depreciation 12 & 13 186 173 20 21
Losses on disposal of non-current assets 41 - - -
Amortisation of intangible assets 11 2,538 2,336 - -
Impairment of intangible assets 256 - - -
Pension payments 21 (59) (54) (59) (54)
Pension operating costs 21 4 4 4 4
Share based payments 22 252       307       252       307
 

Operating cash flows before movements in working
capital

8,555 6,734 5,481 (204)
 
Change in inventories (2,861) (546) - -
Change in receivables (1,460) 1,321 (2,503) (3,429)
Change in payables 3,463       (653)       886       (115)
 
Cash generated from operations 7,697 6,856 3,864 (3,748)
Finance costs (31) (34) (533) (32)
Income tax (446)       (619)       -       (6)
Net cash from operating activities 7,220 6,203 3,331 (3,786)
 
Cash flows from investing activities
Acquisition of property, plant and equipment 12 (778) (32) (3) (1)
Disposal of property, plant and equipment 9 15 - -
Purchase of intangibles 11 (5,280) (4,340) - -
Purchase of own shares (17) - (17) -
Finance income 6 68       58       30       478
Net cash (used in)/from investing activities (5,998)       (4,299)       10       477
 
Cash flows from financing activities
Proceeds from issue of share capital 802 12,629 802 12,629
Dividends paid (2,510)       (2,885)       (2,510)       (2,086)
Net cash (used in)/from financing activities (1,708)       9,744       (1,708)       10,543

Net (decrease)/increase in cash and cash
equivalents

(486) 11,649 1,633 7,234
Foreign exchange movements (19) (939) - -
Balance at 1 April 2014 18,240       7,530       9,230       1,996
 
Balance at 31 March 2015 18 17,735       18,240       10,863       9,230

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2015

1. General information

Eco Animal Health Group plc (“the Company”) and its subsidiaries (together “the Group”) manufacture and supply animal health products globally.

The Company is traded on the AIM market of the London Stock Exchange and is incorporated and domiciled in the UK. The address of its registered office is 78 Coombe Road, New Malden, Surrey, KT3 4QS.

2. Basis of preparation

The group has presented its annual report and accounts in accordance with International Financial reporting Standards (IFRS), as adopted by the European Union, IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS.

The preparation of financial statements, in conformity with IFRS as adopted by the European Union, requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The principal accounting policies of the group are set out below and have been applied consistently in dealing with items which are considered material in relation to the Group’s financial statements.

3. Segment information

Management has determined the operating segments based on the reports reviewed by the Board that are used to make strategic decisions. The Board considers the business from a geographical perspective. Geographically, management now considers the performance in the UK and Europe, the Far East, Latin America, North America and the Middle East and Africa. This is a change from prior years, so the comparatives have been restated, although the original comparatives are still presented.

Management considers Earnings before Interest, Tax, Depreciation and Amortisation (“EBITDA”), adjusted for share-based payments.

      U.K.       Europe       Far East      

Latin
America

     

North
America

     

Middle
East and
Africa

      Total    
£000's £000's £000's £000's £000's £000's £000's
 
Year ended 31 March 2015
Total segmental revenue 885 6,609 21,823 9,752 15,361 1,779 56,209
Inter-segment revenue -       -       (4,784)       (3,480)       (8,948)       -       (17,212)
 
Revenue from external customers 885       6,609       17,039       6,272       6,413       1,779       38,997
 
Sale of goods 885 6,609 17,039 6,272 6,413 1,579 38,797
Royalties -       -       -       -       -       200       200
885       6,609       17,039       6,272       6,413       1,779       38,997
 
Adjusted EBITDA (1,504) 1,602 5,015 742 2,215 540 8,610
Total assets 22,775       11,581       27,193       13,547       9,166       4,810       89,072
 
 

Year ended 31 March 2014
(Restated)
Total segmental revenue 784 5,534 18,923 8,487 5,033 1,536 40,297
Inter-segment revenue -       -       (3,655)       (1,876)       (2,899)       -       (8,430)
 
Revenue from external customers 784 5,534 15,268 6,608 2,134 1,536 31,867
                                                 
 
Sale of goods 784 5,534 15,268 6,608 2,134 1,327 31,655
Royalties -       -       -       -       -       209       209
784       5,534       15,268       6,608       2,134       1,536       31,864
 
Adjusted EBITDA (1,209) 1,378 4,467 1,248 428 472 6,784
Total assets 21,359       12,837       23,606       14,152       2,901       4,585       79,440
      U.K.       Europe      

China,
Japan
and the
India sub
continent

     

Latin
America

     

North
America

     

Rest of
the
World

      Total    
£000's £000's £000's £000's £000's £000's £000's
Original
Year ended 31 March 2014
Total segmental revenue 784 5,534 17,348 8,487 5,033 3,111 40,297
Inter-segment revenue -       -       (3,655)       (1,876)       (2,899)       -       (8,430)
 
Revenue from external customers 784       5,534       13,693       6,611       2,134       3,111       31,867
 
Sale of goods 784 5,534 13,693 6,608 2,134 2,902 31,655
Royalties -       -       -       -       -       209       209
784       5,534       13,693       6,608       2,134       3,111       31,864
 
Adjusted EBITDA (1,209) 1,378 4,033 1,248 428 906 6,784
Total assets 21,359       12,837       19,968       14,152       2,901       8,223       79,440

Goodwill and other intangible assets are initially allocated to the geographical segments on the basis of the proportion of sales achieved by each segment.

A reconciliation of adjusted EBITDA to profit before tax is provided as follows:

      2015       2014    
£000's £000's
 
Adjusted EBITDA for reportable segments 8,610 6,784
Depreciation (186) (173)
Losses on disposal of fixed assets (41) -
Amortisation (2,538) (2,336)
Impairment of intangible assets (256) -
Share-based payment charges (252) (307)
Finance (expense) (259)       (285)
Profit before tax on continuing activities 5,078       3,683

4. Other income

      2015       2014    
£000's £000's
 
Management charges 145 141
Rental income 143 127
Sundry income 5       56
293       324

5. Result from operating activities

    2015       2014    
£000's £000's
 
Result from operating activities is stated after charging/(crediting)
Cost of inventories recognised as an expense 21,474 17,635
Employee benefits expenses 4,797 3,819
Amortisation of intangible assets 2,538 2,336
Impairment of intangible assets 256 -
Depreciation (notes 12 &13) 186 173
Losses on disposal of assets 41 -
(Profit)/loss on foreign exchange transactions (41) 264
Research and development 1 11
Operating lease rentals 504 410
 

Fees payable to the Company's auditor for the audit of the parent
 Company and Group annual accounts

19 18
For the audit of the Company's subsidiaries 33 31

Fees payable for audit of the Company's subsidiaries pursuant to
legislation

 6       4
 
2015 2014
£000's £000's

Earnings due to shareholders before interest, tax, depreciation, amortisation, share-based
payments and foreign exchange differences

Profit from operating activities 5,337 3,968
Depreciation 186 173
Loss on disposal of fixed assets 41 -
Amortisation 2,538 2,336
Impairment of intangible assets 256 -
Share-based payments 252       307
 
8,610 6,784
Foreign exchange differences (41)       264
8,569       7,048

6. Finance (expense)

      2015       2014    
£000's £000's
 
Finance costs
Interest paid (31) (34)
Foreign exchange differences on bank loans and overdrafts (296) (309)
 
Finance income
On short term bank deposits 68       58
 
Net finance (expense) (259)       (285)

7. Earnings per share

The calculation of basic earnings per share is based on the post tax profit for the year divided by the weighted average number of shares in issue during the year.

      2015       2014    
Earnings      

Weighted
average
number
of shares

     

Per share
amount

Earnings      

Weighted
average
number
of shares

     

Per share
amount

£000's 000 (pence) £000's 000 (pence)

Earnings attributable to
ordinary shareholders on
continuing operations after
tax

 4,094 60,007 6.82 2,431 55,871 4.35

Dilutive effect of share
options

 - 282 (0.03) - 691 (0.05)
                                   

Fully diluted earnings per
share

 4,094       60,289       6.79 2,431       56,562       4.30

Diluted earnings per share takes into account the dilutive effect of share options. For the purposes of calculating earnings per share, shares held by the Employee Benefit Trust as part of the Joint Share Ownership Plan are excluded from the calculation of the weighted average number of shares. The weighted average number of shares held by the Trust during the year was 2,603,290 (2014: 2,603,290).

8. Taxation

      2015       2014    
£000's £000's
Current tax year
Foreign corporation tax on profits for the year 451 646
 
 
Deferred tax
Due to change in effective rate - (23)
Origination and reversal of temporary differences 6       (21)
 
Income tax charge 457 602
         
Factors affecting the tax charge for the year
Profit on ordinary activities before taxation 5,078 3,683
         
 
2015 2014

Profit on ordinary activities before taxation multiplied by the applicable
rate of UK corporation tax of 21% (2014: 23%)

 1,066 847
Effects of:
Non deductible expenses 210 95
Non chargable credits (190) (151)
Witholding tax on inter-company dividends - 83
Enhanced allowance on research and development expenditure (829) (658)
Different tax rate for foreign subsidiaries 72 84
Reduced effective deferred tax rate - (23)
Unused tax losses carried forward 128       325
Income tax charge 457       602
 
2015 2014
% %
Applicable tax rate per UK legislation 21.00 23.00
Effects of:
Non deductible expenses 4.14 2.59
Non chargable credits (3.75) (4.11)
Witholding tax on inter-company dividends - 2.26
Enhanced allowance on research and development expenditure (16.32) (17.86)
Different tax rate for foreign subsidiaries 1.43 2.27
Reduced effective deferred tax rate - (0.63)
Unused tax losses caried forward 2.51       8.83
Effective tax rate 9.01       16.35

The UK corporation tax rate reduced from 23% to 21% with effect from 1 April 2014 and to 20% from 1 April 2015. Deferred tax balances at the year end have been measured at 20%.

9. Profit for the financial year

      2015       2014    
£000's £000's
 
Parent Company's profit/(loss) for the financial year 4,760       (43)

10. Dividends

      2015       2014    
£000's £000's
 

Dividend for the period ended 31 March 2013 of 4.0p per ordinary
share

 - 2,213

Dividend for the period ended 31 March 2014 of 4.2p per ordinary
share

 2,624 -
Dividend waived by Employee Benefit Trust (109) (103)
         
2,515       2,110

The Board is declaring a total dividend of 4.75 pence per share in respect of the year ended 31 March 2015.

11. Intangible fixed assets

Group       Goodwill      

Distribution
rights

     

Drug
registrations,
patents and
license costs

      Total    
£000's £000's £000's £000's
Cost
At 1 April 2013 17,930 1,266 43,912 63,108
Additions - internally generated - - 4,069 4,069
Additions- acquired separately -       -       271       271
At 1 April 2014 17,930 1,266 48,252 67,448
Additions - internally generated - - 4,786 4,786
Additions- acquired separately -       176       318       494
At 31 March 2015 17,930       1,442       53,356       72,728
 
Amortisation
At 1 April 2013 - 481 21,459 21,940
Charge for the year         63       2,273       2,336
At 1 April 2014 - 544 23,732 24,276
Charge for the year - 71 2,467 2,538
Impairment in the year - - 256 256
Foreign exchange movements -       -       (2)       (2)
At 31 March 2015 -       615       26,453       27,068
 
Net Book Value
At 31 March 2015 17,930       827       26,903       45,660
 
At 31 March 2014 17,930       722       24,520       43,172
 
At 31 March 2013 17,930       785       22,454       41,169

The amortisation and impairment charges are included within administrative expenses on the income statement.

Distribution rights are amortised over their estimated useful life of 20 years and reviewed for impairment when any indication of potential impairment exists. The remaining amortisation period at the date of the financial statements ranged from 8 to 19 years.

The carrying value of goodwill is attributable to the following cash generating units:

Entity   Date of acquisition  

£000’s

Eco Animal Health Limited (acquired 50%) 1 October 2004 17,359
Zhejiang Eco Biok Animal Health Products Limited 1 April 2007 94
ECOpharma Inc. (acquired 80%) 24 December 2009 477
 
17,930
====================

Goodwill acquired in a business combination is allocated at acquisition to the cash generating units (CGU’s) that are expected to benefit from the business combination.

The recoverable amounts of the CGU’s are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding discount rates, growth rates and the estimated remaining useful life of the asset which is maintained at 30 years through ongoing investment in the cash generating unit.

The Group prepares cash flow forecasts derived from the most recent financial budgets and projections that are approved by management for the year ahead and then extrapolates them assuming a 3% annual growth rate which is well below the current performance of the existing business. The directors believe that the long term growth rate assumed does not exceed the average long term growth rate for the relevant markets.

Management estimates discount rates using the pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGU’s. In the current year management estimated the applicable rate to be 11%. Management considers that there is adequate headroom when comparing the net present value of the cash flows to the carrying value of goodwill to conclude that no impairment is necessary this year. On current assumptions the excess of recoverable amount over carrying value is over £55 million.

Management believes that the most significant assumption in the calculation of value in use is the estimated growth rate. However, even if the growth rate were to be zero, the recoverable amount would still be over £33 million more than the carrying value and no impairment would be necessary. This assumes an earnings multiple of 10 on the current budgeted results in estimating fair value which has been derived from historical data.

The value of Drug registrations and licenses can be broken down as follows:

      £000’s    
Aivlosin 24,061
Ecomectin 1,550
Others 1,292
26,903

Aivlosin is a highly effective antibiotic that treats a range of specific enteric (gut) and respiratory diseases in pigs and poultry, ensuring a rapid return to health. In addition to the welfare benefits, healthy animals gain weight faster, digest food more efficiently and get to market earlier which all bring economic benefit to the farmer. Substantial ongoing product development covering more formulations, species and diseases is expected to substantially further increase its revenue generating potential. The remaining amortisation period is from 8 to 20 years.

Ecomectin is an endectocide that controls worms, ticks, lice and mange in grazing stock and pigs. The remaining amortisation period is 0 to 10 years.

Drug registrations and licences are amortised over their estimated useful lives of 10 to 20 years, which is the directors’ estimate of the time it would take to develop a new product allowing for the Group’s patent protection and the exclusivity period which comes with certain registrations. Given the economic climate the directors have conducted an impairment review in the current year by preparing cash flow projections for the year ahead and extrapolating the results for the remaining life of the registrations assuming zero growth and an 11% discount rate to establish value in use. On the current assumptions the excess of the recoverable amount over carrying value is over £5 million.

The calculations have also shown that on current budget figures a 5 year life is more than enough to justify the current carrying value of these registrations. Moreover, fair value calculated as 10 times the current cash generated by the registrations gives an even higher result, so management has again concluded that no impairment is necessary on this basis.

However, a review of individual projects has identified that an impairment of £256,000 is necessary in respect of Carprofen development costs. This was a project regarding a potential new product to relieve pain in dogs which management have decided is not a current priority.

12. Property, plant and equipment

Group      

Land and
Buildings
(freehold)

     

Plant and
machinery

     

Fixtures,
fittings
and
equipment

     

Motor
Vehicles

      Total    
£000's £000's £000's £000's £000's
Cost or valuation
At 1 April 2013 650 1,266 649 102 2,667
Additions - 20 12 - 32
Foreign exchange movements - (81) - - (81)
Disposals -       -       (188)       (27)       (215)
At 1 April 2014 650 1,205 473 75 2,403
Additions - 593 158 27 778
Foreign exchange movements - 153 - (5) 148
Disposals -       (524)       -       (11)       (535)
At 31 March 2015 650       1,427       631       86       2,794
 
Depreciation
At 1 April 2013 - 882 557 52 1,491
Charge for the year 9 113 32 16 170
Foreign exchange movements - (61) 1 1 (59)
Disposals -       -       (188)       (12)       (200)
At 1 April 2014 9 934 402 57 1,402
Charge for the year 9 117 39 18 183
Foreign exchange movements - 76 1 (2) 75
Disposals -       (474)       -       (11)       (485)
At 31 March 2015 18       653       442       62       1,175
 
 
Net Book Value
At 31 March 2015 632       774       189       24       1,619
 
At 31 March 2014 641       271       71       19       1,002
 
At 1 April 2013 650       384       92       50       1,176

The freehold property at 78 Coombe Road, New Malden was valued on 10 May 2013 by Mr R Sworn of Kelion Sworn Chartered Surveyors and Valuers, London, W1. The fair value in use of the freehold property was determined at £650,000 by means of applying a 7.75% discount rate to the annual rental value of the property as determined by local market conditions. The property will continue to be valued on a regular basis.

The value of non depreciable land included within Land and Buildings is £180,000.

The freehold property of 78 Coombe Road, New Malden is subject to a legal charge held by the Company’s bankers dated 20 March 1987.

The value of the freehold property would have been recorded at £295,000 (2014: £306,000) on a historical cost basis giving rise to the current revaluation surplus of £265,000 net of deferred tax provision. This balance is not distributable to shareholders.

Depreciation has been included in the administrative expenses line on the income statement, except for £72,000 (2014: £90,000) of depreciation of production equipment in the Chinese subsidiary ECO Biok, which is included within cost of sales.

Company      

Land and
Buildings
(freehold)

     

Fixtures,
fittings and
equipment

     

Motor
Vehicles

      Total    
Cost or valuation £000's £000's £000's £000's
 
At 1 April 2013 650 145 26 821
Additions -       1       -       1
At 1 April 2014 650 146 26 822
Additions -       3       -       3
At 31 March 2015 650       149       26       825
 
Depreciation
At 1 April 2013 - 141 9 150
Charge for the year 9       2       7       18
At 1 April 2014 9 143 16 168
Charge for the year 9       2       6       17
At 31 March 2015 18       145       22       185
 
 
Net Book Value
At 31 March 2015 632       4       4       640
 
At 31 March 2014 641       3       10       654
 
At 1 April 2013 650       4       17       671

13. Investment property

Group and Company                

Land and
Buildings
(freehold)

Total
£000's £000's
Cost
At March 2013 and 2014 157 157
Revaluation in the year 32       32
At March 2015 189       189
 
Depreciation
At March 2013 5 5
Charge for the year 3       3
At March 2014 8 8
Charge for the year 3 3
Elimination on revaluation (11)       (11)
At March 2015 -       -
 
Net Book Value
At 31 March 2015 189       189
 
At 31 March 2014 149       149
 
At 1 April 2013 152       152

Depreciation has been included in the administrative expenses line on the income statement.

The property in Western Road, Mitcham was valued at £189,000 as at 31 March 2015 by Mr R. Sworn of Kelion Sworn Chartered Surveyors, London W1.

The value of the investment property would have been recorded at £145,000 on a historical cost basis giving rise to the current revaluation surplus of £34,000 net of deferred tax provision. This balance is not distributable to shareholders.

14. Fixed asset investment

Group                

Unlisted
investments

Total
£000's £000's
Cost, fair value and net book value
At March 2013 ,2014 and 2015 9       9
 
Company

Unlisted
investments

Total
Cost or fair value £000's £000's
At March 2013, 2014 and 2015 21,273       21,273
 
Impairment
At March 2013, 2014 and 2015 1,191       1,191
 
Net Book Value
At March 2013, 2014 and 2015 20,082       20,082

The Company holds more than 20% of the share capital of the following companies:

Company      

Country of
registration or
incorporation

      Class      

Shares
held %

   
 
Subsidiary undertakings held by Company
Zhejiang ECO Biok Animal Health Products Limited P. R. China Ordinary 3
Shanghai ECO Biok Veterinary Drug Sale Company Ltd. (via Zhejiang ECO Biok Animal Products Ltd.) P. R. China Ordinary 3
Petlove Limited Great Britain Ordinary 91
Eco Animal Health Limited Great Britain Ordinary 100
 
Subsidiary undertakings held by Group
ECO Animal Health Southern Africa (Pty) Limited South Africa Ordinary 100
Zhejiang ECO Biok Animal Health Products Limited P. R. China Ordinary 48

Shanghai ECO Biok Veterinary Drug Sale Company Ltd.
(via Zhejiang ECO Biok Animal Products Ltd.)

P. R. China Ordinary 48
ECO Animal Health do Brasil Comercio de Produtos Veterinarios Ltda. Brazil Ordinary 100
ECO Animal Health Japan Inc Japan Ordinary 100
ECO Animal Health USA Corp. U.S.A. Ordinary 100
Interpet LLC U.S.A. Ordinary 100
ECO Animal Health de Mexico, S. de R. L. de C. V. Mexico Ordinary 100
ECO Argentina S.A. Argentina Ordinary 100

The principal activity of these undertakings for the last relevant financial year was as follows:

      Principal activity    
ECO Animal Health Limited Distribution of animal drugs
ECO Animal Health Southern Africa (Pty) Limited Non-trading
Petlove Limited Non-trading
Zhejiang ECO Biok Animal Health Products Limited Manufacture of animal drugs
Shanghai ECO Biok Veterinary Drug Sale Company Ltd. Distribution of animal drugs
ECO Animal Health do Brasil Comercio de Produtos Veterinarios Ltda Distribution of animal drugs
ECO Animal Health Japan Inc. Distribution of animal drugs
ECO Animal Health USA Corp. Distribution of animal drugs
Interpet LLC Non-trading
ECO Animal Health de Mexico, S. de R. L. de C. V. Distribution of animal drugs
ECO Argentina S.A. Non-trading

The aggregate amount of capital and reserves and the results of these undertakings for the last relevant financial year were:

      Equity       Profit/loss       Equity       Profit/loss    

for the
year

for the
year

2015 2015 2014 2014
£000's £000's £000's £000's
 
ECO Animal Health Limited 6,687 4,141 7,546 1,697
ECO Animal Health Southern Africa (Pty) Limited 338 15 323 (1)
Zhejiang ECO Biok Animal Health Products Ltd 6,178 1,076 4,420 1,326

ECO Animal Health do Brasil Comercio de Produtos
Veterinarios Ltda

1,122 231 1,196 119
ECO Animal Health Japan Inc. 723 45 704 77
ECO Animal Health de Mexico, S. de R. L. de C. V. (201) (70) (135) (95)
ECO Animal Health USA Corp. (107)       (62)       (39)       (39)

The equity and results of Shanghai ECO Biok Veterinary Drug Sale Company Ltd are included within those disclosed for Zhejiang ECO Biok Animal Health Products Limited.

All of the subsidiaries listed above were included in the consolidation for the year.

Zhejiang ECO Biok Animal Health Products Limited and ECO Animal Health do Brasil Comercio de Produtos Veterinarios Ltda both have 31 December year ends. The Group receives management accounts for the three months to 31 March for these subsidiaries for use in preparing the consolidated financial statements.

ECO Argentina S.A. which holds neither assets nor liabilities and which has not traded since its formation has been excluded from consolidation. Interpet LLC has also been excluded from consolidation as it holds no assets or liabilities and has ceased trading.

The following trading subsidiaries have no requirement for audit under local legislation;

ECO Animal Health do Brasil Comercio de Produtos Veterinarios Ltda.

ECO Animal Health Japan Inc.

ECO Animal Health USA Corp.

ECO Animal Health de Mexico, S. de R. L. de C. V.

The Group also holds (by means of its ownership of ECO Animal Health USA Corp.), a 50% joint venture interest in Pharmgate Animal Health LLC, which is resident in U.S.A. Pharmgate Animal Health LLC distributes the group’s products in the U.S.A.

The Group also holds a 50% joint venture interest in Pharmgate Animal Health Canada Inc, which distributes its products into Canada.

Both Pharmgate Animal Health LLC and Pharmgate Animal Health Canada Inc. have accounting years which end on 31 December.

The group’s holdings in each of the joint venture companies’ share capital is given in the table below:

     

Holding

     

Shares

     

Holding

   

Pharmgate Animal Health Canada Inc

(shares)

in Issue

%

Common shares 100 200 50
Class A shares 100 100 100
Class B shares - 100 -
 

Holding

Shares

Holding

Pharmgate Animal Health USA LLC

(shares)

in Issue

%

Common shares 100 200 50
Class A shares 100 100 100
Class B shares - 100 -

In each case class A shares carry the rights to dividends payable out of profits attributable to the group. These are made up of profits made by products supplied by the ECO group plus 50% of any profit relating to new products developed jointly by the partners to the joint venture.

The following amounts included in the group’s financial statements are related to its interest in these joint ventures.

                 

Pharmgate Animal

Health

   

Pharmgate LLC

Canada Inc

2015 2014

2015

      2014
£000's £000's £000's £000's
Current assets 1,325 214 335 143
Current liabilities (1,308) (199) (335) (143)
Sales 3,660 1,400 2,627 771
Margins 1,639 748 1,508 404
Expenses (662) (527) (270) (151)

15. Inventories

      Group       Company    
2015       2014 2015       2014
£000's £000's £000's £000's
 
Raw materials and consumables 5,868 3,111 - -
Finished goods and goods for resale 3,965       3,861       -       -
9,833       6,972       -       -

The cost of inventories recognised as an expense and included in cost of sales in the period amounted to £21,474,000 (2014: £17,635,000).

16. Trade and other receivables

      Group       Company    
2015       2014 2015       2014
£000's £000's £000's £000's
 
Trade receivables 9,870 8,574 - -
Amounts owed by group undertakings - - 36,185 33,579
Amounts owed by joint ventures 303 234 - -
Other receivables 688 573 240 258
Prepayments and accrued income 661       487       80       71
11,522       9,868       36,505       33,908

As at 31 March 2015, trade receivables of £2,085,000 (2014: £2,336,000) due to the Group and £nil (2014: £nil) due to the Company were past due but not impaired. These relate to long standing distributors with whom we have agreed settlement terms and with whom there is no history of default. The ageing analysis of these trade receivables is as follows:

      Group       Company    
2015       2014 2015       2014
£000's £000's £000's £000's
 
Up to 3 months past due 1,546 1,585 - -
3 to 6 months past due 504 352 - -
Over 6 months past due 35       399       -       -
2,085       2,336       -       -

As at 31 March 2015, trade receivables of £276,000 (2014: £105,000) were impaired and provided for. The impaired receivables mainly relate to historic debt for which recovery is still being sought. The Group mitigates its exposure to credit risk by extensive use of commercial credit reference agencies, close management of its customers’ trading against terms offered and use of retention of title clauses wherever possible. The ageing analysis of the impaired balances is as follows:

      Group       Company    
2015       2014 2015       2014
£000's £000's £000's £000's
 
Up to 3 months past due 17 16 - -
3 to 6 months past due 17 5 - -
Over 6 months past due 242       84       -       -
276       105       -       -

Movement on the Group provision for impairment of trade receivables is as follows:

               
Group 2015 2014
£000's £000's
 
 
Balance at 1 April 105 60
Provided in the year 173 50
Written off in the year (2)       (5)
Balance at 31 March 276       105

The carrying amounts of trade and other receivables are denominated in the following currencies:

      Group       Company    
2015       2014 2015       2014
£000's £000's £000's £000's
 
 
Pounds Sterling 780 771 36,505 33,908
Euros 2,194 2,711 - -
U S Dollars 4,672 3,489 -
Chinese RMB 1,208 682 - -
Brazilian Real 1,117 698 - -
Japanese Yen 478 511 - -
Other currencies 1,073       1,006       -       -
 
11,522       9,868       36,505       33,908

The carrying amounts of trade and other receivables are not significantly different to their fair values.

17. Deferred tax

Group

Deferred tax assets and liabilities are attributable to the following:

      Liabilities       Net    
2015       2014 2015       2014
£000's £000's £000's £000's
 
Drug registration expenditure (2,285) (2,023) (2,285) (2,023)
Freehold property (66) (66) (66) (66)
Investment property (9) - (9) -
Plant and equipment (28) (4) (28) (4)
Tax losses carried forward 2,196       1,916       2,196       1,916
Amount (payable) after more than one year (192)       (177)       (192)       (177)

The movement on the deferred tax account can be summarised as follows:

     

Drug
registration
expenditure

     

Freehold
property

     

Investment
property

      Total    
 
£000's £000's £000's £000's
 
At 31 March 2014 (111) (66) - (177)
(Charge) for the year through income statement (6) - - (6)
(Charge) for the year through revaluation reserve -       -       (9)       (9)
At 31 March 2015 (117)       (66)       (9)       (192)

The tax losses carried forward are not expected to expire under current legislation.

Any future dividend received from the Chinese subsidiary Zhejiang ECO Biok Animal Health Products Limited will be subject to a 10 % withholding tax (reduced to 5% in respect of dividends paid out of profits made in 2014 or after). The deferred tax liability in respect of this has not been recognised.

Company       2015       2015       2015       2014       2014    

Freehold
property

Investment
property

Total

Freehold
property

Total
£000's £000's £000's £000's £000's
 
At 1 April 2014 (66) - (66) (76) (76)

Movement in the year through
revaluation reserve

 -       (9)       (9)       10      

10

At 31 March 2015 (66)       (9)       (75)       (66)       (66)

No charge or credit (2014: no charge or credit) was recognised in the Company’s income statement for the year. A charge of £9,000 (2014: credit of £10,000) was recognised in the Company’s Revaluation Reserve.

18. Cash and cash equivalents

Cash and cash equivalents comprise cash and short term deposits held by the Group. The carrying amount of these assets are not significantly different to their fair value.

      Note       Group       Company    
2015       2014 2015       2014
£000's £000's £000's £000's
 
Cash and cash equivalents 20,091 18,240 13,219 9,230
Overdrafts 20 (2,356)       -       (2,356)       -
 
Net funds per cash flow 17,735 18,240 10,863 9,230
                         

19. Trade and other payables

      Group       Company    
2015       2014 2015       2014
£000's £000's £000's £000's
 
Trade payables 6,751 4,973 90 53
Amounts due to joint venture 99 - - -
Other payables 1,950 305 761 56
Accruals and deferred income 742       1,065       80       42
9,542       6,343       931       151

20. Borrowings

Included within payables on the statement of financial position are the following amounts at fair value secured by a debenture on the assets of the group:

      Group       Company    
2015       2014 2015       2014
£000's £000's £000's £000's
 
Short term borrowings 2,356       -       2,356       -

Currency analysis of short term borrowings

      Group       Company    
2015       2014 2015       2014
£000's £000's £000's £000's
 
U S Dollars 2,356       -       2,356       -

The Group has the facility to overdraw in specific currencies but no net facility. The interest rate for all currency overdrafts is 2.75 per cent over the relevant currency base rate and the borrowings are secured by two debentures held over all assets of the Company dated 28 January 1995 and 28 November 2006.

21. Pension and other post-retirement benefit commitments

Defined Contribution pension Scheme

The Group operates defined contribution pension schemes for the benefit of certain directors and senior employees. The assets of the schemes are held separately from the Group and independently administered by insurance companies. The pension cost charge represents contributions payable to the funds in the year and amounted to £330,000 (2014: £388,000).

Defined Benefit Pension Scheme

The Group operates a defined benefit scheme in the UK for ex-employees only. The scheme is funded by the Company. Contributions by the Company are calculated by a separate actuarial valuation based on the funding policies detailed in the scheme agreement. It aims to provide its members with a pension on retirement equal to 1/60th of their final salary per year of service to the point they left employment with the Group (inflation adjusted), up to a maximum of two thirds of salary.

The scheme is legally separate from the Group and is administered by a Board of Trustees. The Board is made up of representatives of the Group and also of former employees. By law, the Board is required to act in the best interests of current and potential pensioners and has the responsibility of setting investment contribution and other relevant policies.

A full actuarial valuation was carried out at 6 April 2012 and updated 31 March 2015 by a qualified independent actuary. The major assumptions used by the actuary were:

      31 March       1 April    
2015 2014
Discount rate 3.20% 4.30%
Rate of increase in pension payment 2.20% 2.45%
Inflation assumption with a maximum of 5% p.a. 2.90% 3.15%

Mortality rates

Pre retirement mortality is based on the mortality table known as AMCOO for males and AFCOO for females and 70% of the mortality indicated by this table has been taken, as in the previous year.

Post retirement mortality is based on the mortality table known as PCMAOO for males and PCFAOO for females with reference to members years of birth. Allowance has been made for the improvement in mortality experienced recently and expected in the future by using 100% of the “Medium Cohort” improvement table, subject to a minimum improvement rate of 1% for males and 0.7% for females as in the previous year.

Under these mortality assumptions, the expected future lifetime for a member retiring at age 65 at the year end would be 22.8 years for males (2014: 22.7 years) and 24.7 years for females (2014: 24.6 years). For members retiring in 20 years time, the expectation of life would be 24.7 years for males (2014: 24.6 years) and 26.0 years for females (2014: 26.0 years).

The weighted average term of the liabilities is 17.0 years (2014: 17.0 years).

The scheme is exposed to a number of risks, including:

1. Interest rate risk: Movements in the discount rate used could affect the present value of the defined benefit pension obligations.

2. Longevity risk: Changes in the estimated mortality rates of former employees could affect the present value of the defined benefit pension obligations.

3. Investment risk: Variations in the actual return from the scheme’s investments could affect the scheme’s ability to meet its future pension obligations.

Results       2015             2014          
£000's £000's £000's £000's
 
Assets at start of year 2,680 2,760
Defined benefit obligation at start of year (2,478) (2,631)
Net asset at 1 April 202 129
 
Current service cost, including risk benefits (4) (4)
Operating cost (4) (4)
 
Expected return on assets 115 113
Interest cost (107) (108)
8 5
 
Gain on asset return 78 2
Experience gain 2 4
(Loss)/gain on changes in assumptions (135) 19

Statement of other comprehensive
income

(55) 25
 
Employer contributions gross 59 54
Expenses paid by trustees (7) (7)
52 47
Net asset at 31 March 2015 203 202
 
Actual assets at end of year 2,985 2,680

Actual defined benefit obligation at end of
year

 (2,782) (2,478)

The pension fund assets are all held within a policy managed by an insurance company.

Reconciliation of changes in the asset value during the year

      2015             2014          
£000's £000's £000's £000's
 
Fair value of assets at 1 April 2,680 2,760
Expected return on assets 115 113
Gain on asset return 78 2
Employer contributions (gross) 59 54
Death in service insurance premiums paid (4) (4)
Expenses paid by trustees (7) (7)

Increase/(decrease) in secured pensioners'
value due to scheme experience

64 (238)
 
Fair value of assets at 31 March 2015 2,985 2,680
 
Reconciliation of changes in the liability value during the year
 
Defined benefit obligation at 1 April 2,478 2,631
Interest cost 107 108
Experience (gain) on liabilities (2) (4)
Loss/(gain) on changes in assumptions 135 (19)

Increase/(decrease) in secured pensioners'
value due to scheme experience

64 (238)
 

Defined benefit obligation at 31 March
2015

2,782 2,478

The expected contribution to be paid by the employer during the next accounting year is £59,000. This includes a provision of £4,000 for death in service risk premium, (2014: £4,000).

Year ended 31 March       2015       2014       2013       2012       2011    
£000's £000's £000's £000's £000's
 
Fair value of plan assets 2,985 2,680 2,760 2,959 2,596

Present value of defined benefit
obligation

 2,782 2,478 2,631 2,957 2,684
Surplus/(deficit) in plan 203 202 129 2 88

Experience gains on plan
liabilities

 2 4 (31) (5) 1

Defined benefit obligation – sensitivity analysis

The following amounts are the effect (on the defined benefit obligation) of reasonably possible changes to one key actuarial assumption, holding all other assumptions constant, as required by IAS 19.

Actuarial assumption      

Reasonably
Possible Change

     

(Decrease)/Increase in
Defined Benefit Obligation

   
£000's       £000's

Discount rate

(+/- 1%) (125) 162
Increase in inflation (+/- 1%) 6 (7)
Members' life expectancy (+/- 1year) 28 (29)

22. Share-based payments

The measurement requirements of IFRS2 have been implemented in respect of share options that were granted after 7 November 2002. The expense recognised for share based payments made during the year is shown in the following table:

      2015       2014    
£000's £000's
 
Total expense arising from equity settled share-based transactions 252       307

The share based payment plans are described below:

Movements in issued share options and jointly owned shares during the year

The following table illustrates the number and weighted average exercise prices (WAEP) of and movements in, share options and jointly owned shares during the period:

      Options            

Jointly owned
shares

      Options            

Jointly owned
shares

   
2015 2015 2015       2015 2014 2014 2014       2014
000's WAEP 000's WAEP 000's WAEP 000's WAEP
£ £ £ £
 
Outstanding at 1 April 3,441 1.94 2,603 2.00 3,449 1.50 2,603 2.00
Granted during the period 874 1.89 - - 979 2.07 - -

Expired/cancelled during the
period

 (9) 1.89 - - (185) 1.54 - -
Exercised during the period (664) 1.20 - - (802) 1.42 - -
 
Outstanding at 31 March 3,642 1.82 2,603 2.00 3,441 1.94 2,603 2.00
Exercisable at 31 March 1,406       1.48       2,603       2.00       1,665       1.28       315       2.00

The average share price during the year was 183.1p (2014: 217.9p).

The maximum aggregate number of shares over which options may currently be granted cannot exceed 10 per cent of the nominal share capital of the Company on the grant date. The options outstanding at 31 March 2015 had a weighted average share price of £1.82 and a weighted average contractual life of 4.9 years (2014: 4.6 years).

Eco Animal Health Group plc Executive Share Option Scheme

In accordance with the Executive Share Option Scheme, approved and unapproved share options are granted to full time directors and employees who devote at least 25 hours per week to the performance of duties or employment with the Company.

Details of options granted to directors can be found in the Directors Report and notes 29 (Directors Emoluments) and 31 (Related Party Transactions).

The exercise price of the options is equal to the market price of the shares at the date of grant. The options vest three years from the date of grant and if the option holder ceases to be a director or employee of the Company due to injury, disability, redundancy or retirement on reaching pensionable age or any other age at which they are bound to retire at in accordance with the terms of their contract of employment, the option may be exercised within a period of six months after the option holders so ceasing, although the Board may, at its discretion, extend this period by up to 36 months after the date of cessation.

If the option holder ceases employment for any other reason, the option may not be exercised unless the Board permits. The approved and unapproved options will be forfeited where they remain unexercised at the end of their respective contractual lives of ten and seven years.

An analysis of the expiry dates of the outstanding options is given below:

Date of grant       Unapproved       Approved      

Exercise
price
(pence)

      Expiry date    
 
20 February 2006 11,880 252.50 20 February 2016
10 August 2006 12,600 238.00 10 August 2016
03 March 2008 139,455 108.50 03 March 2018
18 September 2008 30,000 85.00 18 September 2018
18 September 2008 80,000 85.00 18 September 2015
30 April 2009 29,600 147.00 30 April 2019
30 April 2009 172,400 147.00 30 April 2016
06 August 2009 22,000 135.00 06 August 2019
06 August 2009 68,000 135.00 06 August 2016
24 December 2009 19,350 155.00 24 December 2019
24 December 2009 10,650 155.00 24 December 2016
20 May 2010 76,100 140.00 20 May 2020
20 May 2010 338,900 140.00 20 May 2017
11 October 2013 127,100 186.50 11 October 2021
11 October 2013 268,400 186.50 11 October 2018
09 July 2013 375,000 222.50 09 July 2018
30 July 2013 10,000 254.00 30 July 2018
24 April 2013 26,060 215.00 24 April 2020
20 August 2013 13,200 226.00 20 August 2023
20 August 2013 306,800 226.00 20 August 2020
09 October 2013 87,940 196.00 09 October 2023
09 October 2013 478,060 196.00 09 October 2020
22 January 2014 14,450 207.50 22 January 2024
22 January 2014 50,550 207.50 22 January 2021
07 August 2014 79,800 161.50 07 August 2024
07 August 2014 178,700 161.50 07 August 2021
13 February 2015 136,300 200.50 13 February 2025
13 February 2015 479,200 200.50 13 February 2022
         
2,816,660       825,835

ECO Animal Health Group plc Joint Share Ownership Plan

In accordance with the Group’s Joint Share Ownership Plan (JSOP), jointly owned shares may be awarded to directors and employees of the Company.

The shares are awarded at the market price on the day of the award and are held jointly by the employee concerned and the ECO Animal Health Group plc Employee Benefit Trust. After a three year vesting period, the shares may be sold at the option of the employee. The proceeds of sale are split between the trust and the employee so that the Trust receives the original market value of the shares sold plus a 5.9% per annum carry charge, with the employee receiving any excess over this amount.

Because these are actual issued shares in the Company rather than options there is no expiry date associated with jointly owned shares. However, they will normally be forfeit if the employee ceases to be an employee of the Company for any reason other than death, injury, redundancy, retirement on or after normal retirement age or disposal by the Group of the employing business entity.

The market price of the shares at 31 March 2015 was 205.0p with a range in the year of 155.5p to 223.5p.

Inputs to the Valuation Model (for options and jointly owned shares)

The fair value of share options granted prior to 31 March 2007 were estimated at the time of grant using trinomial pricing model, taking into account all the terms and conditions upon which the options were granted. For options issued after 1 April 2007, the directors took the decision that a Black-Scholes model would be more appropriate.

The following table lists the inputs to the Black-Scholes model which applies to both options and jointly owned shares.

      2015       2014       2013       2012       2011    
 
Vesting period (years) 3 3 3 3 3
Option expiry (years) 7-10 yrs 7-10 yrs 7-10 yrs 7-10 yrs 7-10 yrs

Dividends expected on the
shares

 2.0-2.3% 1.4-1.9% 1.40% 1.00% 4.50%
Risk free rate (average) 1.00% 0.5-1.2% 0.50% 2.00% 2.00%
Volatility of share price 15% 20% 25% 27% 45%
Weighted average fair value 19.2 29.1 38.7 41.0 37.8

The risk free rate has been based on the yield from UK Government treasury coupons. The volatility of the share price was estimated based on standard deviation calculations on the historic share price.

No shares were issued under the Joint Share Ownership Plan during the year or the previous year.

The fair value of the part interest in the jointly owned shares was calculated using a Black-Scholes model with the same assumptions as those used for the options issued during the same year.

The weighted average fair value of the Jointly owned shares issued during the year ended 31 March 2012 was 26.1p.

23. Share capital

      2015       2014    
£000's £000's
Authorised
68,100,000 Ordinary shares of 5p each 3,405 3,405
10,790 Deferred ordinary shares of 10p each 1 1
32,334 Convertible preference shares of £1 each 32       32
3,438       3,438
 
Allotted, called up and fully paid
63,142,421 (2014: 62,474,231) Ordinary shares of 5p each 3,157 3,124
         

During the year the Company bought 8,078 of its own shares into treasury at an average price of £2.08.

During the year 668,190 shares were issued at a premium of £769,000 mostly as a result of the exercise of options by employees.

24. Minority interests

      2015       2015       2014       2014    
£000's £000's £000's £000's
 
Balance at 1 April 2,168 2,458
Share of subsidiary's profit for the year 527 650

Share of foreign exchange gain/(loss) on net
investment

 334 (141)
861 509
Share of dividend paid by subsidiary - (799)
 
Balance at 31 March 3,029 2,168
   

25. Treasury share reserve

     

2015

     

2014

   

£000's

£000's

 
Balance at 1 April 2014 and 31 March 2015 5,217       5,217

Treasury share reserve consists of £5,217,000 (2014: £5,217,000), being the cost of 2,603,290 shares in the Company held by the Group’s JSOP.

26. Other reserves

Group and Company      

Capital
redemption
reserve

      Special reserve      

Reserve
for
share-
based
payments

      Total    
£000's £000's £000's £000's
 
At 31 March 2013 106 3,250 1,694 5,050
Share-based payments - - 307 307
Transfer to retained earnings on expiry of options - - (291) (291)
Transfer to share premium on issue of equity in the year -       (3,250)       -       (3,250)
At 1 April 2014 106 - 1,710 1,816
Share-based payments - - 252 252
Transfer to retained earnings on expiry of options -       -       (293)       (293)
At 31 March 2015 106       -       1,669       1,775

The only material reserve remaining at the year end is the reserve for share based payments which records the total amount which has been charged to the Group’s results in respect of unexpired share based payment arrangements.

Included in the Group’s retained earnings are the following exchange movements which have been taken directly to reserves on consolidation of the subsidiaries and joint ventures listed below:

      At 1 April       Movement       At 31 March    
2014 in the year 2015
£000's £000's £000's
In respect of:
Zhejiang ECO Biok Animal Health Products Limited 398 348 746

ECO Animal Health do Brasil Comercio de Produtos
Veterinarios Ltda

(122) (305) (427)
ECO Animal Health Japan Inc. (135) (26) (161)
Eco Animal Health USA Corp. - (7) (7)
ECO Animal Health de Mexico, S. de R. L. de C. V. (37) 4 (33)
ECO Animal Health Southern Africa (pty) Ltd. - - -
Pharmgate LLC (1) 2 1
Pharmgate Canada LLC - - -

Foreign currency differences attributable to owner credited directly to
reserves.

 16

27. Financial commitments

At 31 March 2015 the Group had minimum commitments under non-cancellable operating leases as follows:

      Land and Buildings       Other    
2015       2014 2015       2014
£000's £000's £000's £000's
Expiry date:
Within one year 403 377 70 55
Between two and five years 582 628 95 94
In over five years 1,364       1,249       -       -
2,349       2,254       165       149
 

Minimum expected sublease rental
receipts:
Within one year 140 120 - -
Between two and five years 194       285       -       -
334       405       -       -

28. Capital commitments

The group had no authorised capital commitments as at 31 March 2015 (2014: Nil).

29. Directors’ emoluments

      2015       2014    
£000's £000's
 
Emoluments for qualifying services 662 545
Company pension contributions to money purchase schemes 94 147
Share-based payments 151 189
Benefits in kind 23       21
930       902

During the year the directors exercised 112,910 (2014: 698,370) share options realising a gain of £83,000 (2014: £296,000).

The number of directors for whom retirement benefits are accruing under money purchase pension schemes amounted to 3 (2014: 3). No directors accrued benefits under defined benefit schemes for this or the previous year.

The highest paid director received £379,000 (2014: £377,000) including share-based payments and £40,000 (2014: £50,000) of pension contributions.

30. Employees

Number of employees

The average number of employees (including directors) during the year was:

      2015       2014    
Number Number
 
Directors 7 7
Production and development 58 52
Administration 40 39
Sales 73       67
 
178 165
         
 
Employment costs (including amounts capitalised)
2015 2014
£000's £000's
 
Wages and salaries 6,095 4,818
Share-based payments 252 307
Social security costs 419 370
Other pension costs 334       392
 
7,100 5,887
         

31. Related party transactions

During the year P Lawrence and his family received dividends in the form of cash and shares to the value of £478,000 (2014: £451,000). At the year end ECO Animal Health Group plc owed P A Lawrence and members of his family a total of £619,000 (2014: £1,000). The maximum amount briefly outstanding from P Lawrence and connected parties during the year was £312,000. No interest was paid or received in respect of these balances which are payable on demand.

The other directors and their families received dividends to the value of £1,000 (2014: £3,000).

During the year, the Group provided management services to Anpario plc, a company in which P A Lawrence is a Director and holds share options. Fees of £33,000 (2014: £33,000) were charged.

During the year, the Group provided the services of two employees to C-Corp Limited, a company in which P A Lawrence is a Director and shareholder. Fees of £43,000 (2014: £43,000) were charged.

During the year ECO Animal Health Limited made sales on an arm’s length basis to the following other companies. The sales and year end balances are given in the table below. Since all of these companies are wholly owned by the Group, these transactions and balances have all been eliminated on consolidation.

Subsidiary companies       Sales      

Year end
(payables)/
receivables
(net)

      Sales      

Year end
receivables (net)

   
2015 2015 2014 2014
£000's £000's £000's £000's
 
Zhejiang ECO Biok Animal Health Products Limited 3,814 292 2,563 -

ECO Animal Health do Brasil Comercio de
Produtos Veterinarios Ltda.

3,334 162 1,590 (1)
ECO Animal Health Japan Inc. 970 196 1,091 177
ECO Animal Health de Mexico, S. de R. L. de C. V. 146 839 289 827
ECO Animal Health USA Corp. 3,324 890 977 551

Interest and management charges from Parent to the other Group companies

During the year the Company made management charges on an arm’s length basis to ECO Animal Health Limited amounting to £195,000 (2014: £208,000) and charged interest of £490,000 (2014: £455,000) to the Company. Both of these charges were made through the inter-company account and were eliminated on consolidation.

ECO Animal Health Limited also made management charges on an arm’s length basis to ECO Animal Health Japan Inc. amounting to £30,000 (2014: £66,000). The whole transaction was eliminated on consolidation.

ECO Animal Health Limited also paid £341,000 (2014: £302,000) of service charges to ECO Animal Health USA Corp. during the year. This transaction was eliminated on consolidation.

During the year ECO Animal Health Limited paid interest of £15,000 (2014: nil) to ECO Animal Health Southern Africa (Pty) Limited. This transaction was eliminated on consolidation.

During the year Zhejiang ECO Biok Animal Health Products Limited paid no dividend to ECO Animal Health Group plc (2014: £63,000) and no dividend to ECO Animal Health Limited (2014: £768,000).

During the year ECO Animal Health Limited declared a dividend of £5,000,000 payable to ECO Animal Health Group plc (2014: nil). This has been eliminated on consolidation.

Inter Company Guarantee

ECO Animal Health Group plc and ECO Animal Health Limited have each given a guarantee dated 28 January 1995 to the Company’s bankers in respect of the £1,000,000 facility which has been extended to them jointly.

Joint Ventures

During the year ECO Animal Health Limited made sales on an arm’s length basis of £1,962,000 (2014: £520,000) to Pharmgate Animal Health Canada LLC. The balance outstanding at the year end was £286,000 (2014: £197,000).

Key management compensation

The group regards the board of directors as its key management.

      2015       2014    
£000's £000's
 
Salaries and short term benefits 686 566
Retirement benefits 94 147
Share-based payments 150       189
 
930 902
         

The number of directors for which retirement benefits are accruing is 3 (2014: 3).

32. Financial instruments

The Group uses financial instruments comprising borrowings, cash and liquid resources and various items, such as trade receivables, trade payables etc. that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Group’s operations. The directors are responsible for the overall risk management.

The main risks arising from the Group’s use of financial instruments are interest rate risk, capital and liquidity risk, credit risk and foreign currency risks and they are summarised below. The policies have remained unchanged throughout the year.

Interest rate risk

The Group finances its operations through a mixture of retained earnings and bank borrowings. At the year end the Group was exposed to interest rates on currency overdraft facilities of £2,356,000 (2014: no exposure).

Capital and liquidity risk

The Group manages its capital to ensure continuity as a going concern whilst maximising returns through the optimisation of debt and equity. As part of this, the Board considers the cost and risk associated with each class of capital. The capital structure of the Group consists of debt which includes the borrowings disclosed in note 20, cash and cash equivalents in note 18 and equity attributable to equity holders of the parent comprising issued capital, reserves and retained earnings as disclosed in the Group’s statement of changes in equity.

Liquidity risk is managed by maintaining adequate reserves and banking facilities with continuous monitoring of the latest developments by management.

At 31 March 2015 the Group was contractually obliged to make repayments as detailed below:

      2015       2014    
WITHIN ONE YEAR OR ON DEMAND £000's £000's
 
Bank overdrafts 2,356 -
Trade payables 6,751 4,973
         
 
9,107 4,973
         

Credit risk

Credit risk is that of financial loss as a result of default by a counterparty on its contractual obligations. The Group’s exposure to credit risk arises principally in relation to trade receivables from customers and on short term bank deposits. Customers’ creditworthiness is wherever possible checked against independent rating databases and filing authorities or otherwise assessed on the basis of trade knowledge and experience. Exposure and customer credit limits are continually monitored both on specific debts and overall.

The credit risk in relation to short term bank deposits and derivatives is limited because the counterparties are banks with good credit ratings.

The Group operates in certain geographical areas (for example Venezuela) which are from time to time subject to restrictions in the free movement of funds. The Board seeks to minimise the group’s exposure to these markets but the nature of our business makes it impossible to eliminate this exposure completely.

Currency risk

The Group operates in overseas markets particularly through its subsidiaries in China, Brazil, the USA and Japan and its Joint Venture in Canada and is subject to currency exposure on transactions undertaken during the year. The Group does some hedging of receivables when the Board feels it is appropriate to do so and foreign exchange differences on retranslation of foreign monetary items are taken to the income statement

The table below shows the extent to which the Group companies have monetary assets and liabilities in currencies other than in Sterling:

Foreign currency of Group
operations

                                       
2015      

US
Dollar

Euros Rand

Chinese
RMB

Japanese
Yen

Brazilian
Real

Other
 

Sterling equivalent
(000's)

 (2,644) 2,974 364 3,334 422 1,227 1,750
 
2014
 

Sterling equivalent
(000's)

 2,951 4,206 537 3,274 2,091 1,191 1,002

At 31 March 2015 the Group was mainly exposed to the Dollar, Euro, the Chinese RMB, the Japanese Yen and the Brazilian Real. The following table details the effect of a 10 per cent movement in the exchange rate of these currencies against sterling when applied to outstanding monetary items denominated in foreign currency as at 31 March 2015. A positive number indicates the decrease in profit which would arise from a 10 per cent weakening of the foreign currency concerned.

      2015       2014    
£000's £000's
 
U S Dollar (240) 268
Euro 270 382
Chinese RMB 303 298
Japanese Yen 38 190
Brazilian Real 111 108

Analysis of financial instruments by category

Group

     

Loans and
receivables

      Total    
2015 £000's £000's
 
Investments 9 9
Trade and other receivables (excluding prepayments) 10,861 10,861
Cash and cash equivalents 20,091 20,091
 
2014

Loans and
receivables

Total
£000's £000's
 
Investments 9 9
Trade and other receivables (excluding prepayments) 9,381 9,381
Cash and cash equivalents 18,240 18,240

Company

     

Loans and
receivables

      Total    
2015 £000's £000's
 
Trade and other receivables (excluding prepayments) 36,425 36,425
Cash and cash equivalents 13,219 13,219
 
2014

Loans and
receivables

Total
£000's £000's
 
Trade and other receivables (excluding prepayments) 33,837 33,837
Cash and cash equivalents 9,230 9,230

All financial liabilities in the Group’s and Company’s statements of financial position are classified as held at amortised cost for both the current and previous year.

33. Post Balance Sheet events

ECO Animal Health Group plc issued 30,000 shares on the 14th April 2015 and a further 25,000 shares on 15th April 2015, both as a result of the exercise of options by current and former employees.

ECO Animal Health Group plc purchased 6,487 of its own shares at an average price of £2.41 on 23 April 2015 and a further 2,381 shares at an average price of £3.02 in June 2015.

Companies

ECO Animal Health Group (EAH)
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