Restatement under IFRS

DCC PLC 30 September 2005 DCC plc 30 September 2005 SUMMARY OF RESTATEMENT OF FINANCIAL INFORMATION UNDER IFRS DCC plc, the value added sales, marketing and business support services group, today announces the impact of the transition to International Financial Reporting Standards ('IFRS') on its 2005 interim and final results previously prepared in accordance with accounting practice generally accepted in the Republic of Ireland ('Irish GAAP'). The Group's financial statements for the six months ending 30 September 2005 will be prepared under IFRS expected to be in place at 31 March 2006. The financial statements for the year ending 31 March 2006 will be prepared under IFRS. The impact on the selected audited key financial data for the year ended 31 March 2005 is summarised as follows: Irish GAAP IFRS Change Comments on principal changes under IFRS â‚¬'m â‚¬'m % Turnover - Group 2,627.9 2,627.9 - - Associates 103.6 - -100.0% Share of associates' turnover no longer included - Total 2,731.5 2,627.9 -3.8% Operating profit (1) - Parent and subsidiaries 109.7 110.0 +0.3% - Associates 21.8 - -100.0% Share of associates' operating profit no longer included in operating profit - Total 131.5 110.0 -16.4% Net interest payable (5.5) (5.6) Share of associates' profit after tax - 18.2 Share of associates' profit after tax now included in profit before tax Profit before amortisation, net exceptional items and tax 126.0 122.6 -2.6% Amortisation (10.1) (1.2) Amortisation of intangibles - see footnote (2) Profit before net exceptional items 115.9 121.4 +4.8% Net exceptional items (16.0) (20.8) Net exceptional items under IFRS increase due to inclusion of translation differences on foreign currency intercompany loans previously charged to reserves Profit before tax 99.9 100.6 +0.7% Taxation (15.1) (11.8) Share of associates' taxation is now charged in arriving at profit before tax Profit after tax 84.8 88.8 +4.7% Basic earnings per share (cent) 104.69c 109.68c +4.8% Adjusted earnings per share (cent) (1) 137.25c 137.22c -0.0% Total equity 498.1 492.2 -1.2% Recognition in full of defined benefit pension schemes' liabilities Non provision for dividends declared after balance sheet date Non amortisation of goodwill and amortisation of other intangible assets Net debt 8.2 8.2 - No change (1) Excluding amortisation and net exceptional items (2) Goodwill previously amortised over 20 years under Irish GAAP is now capitalised on the balance sheet and is subject to an annual impairment review. Under IFRS, intangibles, other than goodwill, are amortised over their expected economic life. Summary IFRS has a negligible impact on DCC's adjusted earnings per share and balance sheet. Also, the Group's cashflow is unchanged from that previously reported under Irish GAAP. For reference, please contact: Jim Flavin, Chief Executive/Deputy Chairman Fergal O'Dwyer, Chief Financial Officer Conor Murphy, Investor Relations Manager Tel: +353 1 2799 400 Email: investorrelations@dcc.ie Web: www.dcc.ie A copy of this announcement is available in PDF format on DCC's website. DCC plc Restatement of Financial Information under International Financial Reporting Standards 30 September 2005 DCC plc - Restatement of Financial Information Under IFRS CONTENTS PAGES 1. Introduction 2 2. Summary of IFRS Impact 3-4 3. Basis of Preparation 5-6 4. Principal Exemptions Availed of on Transition to IFRS 7-8 5. Principal Changes on Transition to IFRS 8-12 Appendix 1 - Independent Auditors' Report 13-14 Appendix 2 - Group Income Statement for the year ended 31 March 2005 restated under IFRS 15 - Group Statement of Changes in Shareholders' Equity 15 - Reconciliation from Irish GAAP to IFRS (Income Statement) 16 - Group Balance Sheet as at 31 March 2005 17 - Reconciliation from Irish GAAP to IFRS (Balance Sheet) 18 Appendix 3 - Unaudited Group Income Statement for the six months ended 30 September 2004 restated under IFRS 19 - Group Statement of Changes in Shareholders' Equity 19 - Reconciliation from Irish GAAP to IFRS (Income Statement) 20 - Group Balance Sheet as at 30 September 2004 21 - Reconciliation from Irish GAAP to IFRS (Balance Sheet) 22 Appendix 4 - Adjustments required to Irish GAAP Group Balance Sheet as at 1 April 2004, the transition date, for compliance with IFRS 23-24 Appendix 5 - Unaudited restatement under IFRS of segmental information for the year ended 31 March 2005 25 Appendix 6 - Provisional Accounting policies under IFRS 26-37 1. INTRODUCTION Up to and including 31 March 2005, DCC plc ('the Group') prepared its financial statements in accordance with generally accepted accounting practices in Ireland ('Irish GAAP'). For periods commencing on or after 1 January 2005, it is mandatory for all European entities whose securities are listed on a regulated exchange in the European Union to prepare their financial statements in accordance with International Financial Reporting Standards ('IFRS'). Consequently, the Group's first IFRS financial statements will be for the year ending 31 March 2006. The interim results for the six months ending 30 September 2005 will be prepared on the basis of the IFRS accounting policies expected to apply at 31 March 2006. It is a requirement that the first IFRS statements include full comparative information for the year ended 31 March 2005. The date of transition to IFRS for all standards is 1 April 2004, this being the start of the earliest period for which the Group presents full comparative information under IFRS in its first IFRS Financial Statements other than the impact of IAS 32 and IAS 39 where the date of transition is 1 April 2005. This announcement addresses the transition to IFRS under the following sections: 2. Summary of IFRS impact 3. Basis of preparation of financial statements under IFRS 4. Principal exemptions availed of on transition to IFRS 5. Principal changes on transition to IFRS The impact of the transition to IFRS on reported performance, financial position and other key financial information previously reported under Irish GAAP is set out in the attached appendices as follows: Appendix 1: Independent Auditors' Report to the Directors of DCC plc on the Preliminary IFRS Consolidated Financial statements for the year ended 31 March 2005. Appendix 2: Group Income Statement and Group Statement of Changes in Shareholders' Equity for the year ended 31 March 2005 and Group Balance Sheet as at that date together with reconciliations of profit and equity from Irish GAAP to IFRS. Appendix 3: Unaudited Group Income Statement and Group Statement of Changes in Shareholders' Equity for the six months ended 30 September 2004 and Group Balance Sheet as at that date together with reconciliations of profit and equity from Irish GAAP to IFRS. Appendix 4: Adjustments required to the Irish GAAP Group Balance Sheet as at 1 April 2004, the transition date, for compliance with IFRS. Appendix 5: Unaudited restatement under IFRS of selected segmental information published in the 2004/2005 Annual Report. Appendix 6: Provisional accounting policies under IFRS. The restatements of the Group's Income Statement, Statement of Changes in Shareholders' Equity and Balance Sheet for the full year ended 31 March 2005 and the Transition Balance Sheet dated 1 April 2004 have been audited by the Group's auditors, PricewaterhouseCoopers, Chartered Accountants. The financial information in respect of the six months ended 30 September 2004 is unaudited. 2. SUMMARY OF IFRS IMPACT The standards giving rise to the principal changes to the consolidated results of the Group arising from the change to IFRS are: IFRS 2 Expensing of share-based payments at fair value IFRS 3/IAS 38 Amortisation of intangible assets, other than goodwill, arising on business combinations; non-amortisation of goodwill IAS 12 Deferred tax computed on the basis of temporary differences IAS 19 Recognition of defined benefit pension schemes' liabilities IAS 21 Effects of change in foreign currency rates. The impact of the change to IFRS on the Group's financial statements is summarised as follows: Year ended Six months ended 31 March 2005 30 September 2004 (Audited) (Unaudited) Irish GAAP IFRS Irish GAAP IFRS â‚¬'m â‚¬'m â‚¬'m â‚¬'m Group Income Statement Turnover 2,627.9 2,627.9 1,103.0 1,103.0 Operating profit before amortisation and net exceptional items 131.5 110.0 46.0 36.8 Profit before amortisation, net exceptional items and tax 126.0 122.6 43.8 42.4 Profit before tax (PBT) 99.9 100.6 37.9 38.3 Profit after tax 84.8 88.8 32.4 34.3 Tax rate (as a % of PBT) 15.1% 11.7% 14.5% 10.5% Basic EPS (cent) 104.69c 109.68c 39.99c 42.31c Adjusted EPS (cent) 137.25c 137.22c 47.44c 47.43c Group Balance Sheet Total assets 1,403.3 1,410.5 1,251.2 1,250.4 Total liabilities (905.2) (918.3) (787.7) (804.3) Total equity 498.1 492.2 463.5 446.1 Net debt (8.2) (8.2) (24.9) (24.9) IFRS has a negligible impact on DCC's adjusted earnings per share and Balance Sheet. Also, the Group's cash flow is unchanged from that previously reported under Irish GAAP. Reconciliation A reconciliation from Irish GAAP to IFRS of certain figures in the previous table is as follows: Year ended 31 March 2005 Income Statement Balance Sheet ------------------------------------ --------------------- Operating Profit before Profit Adjusted Total profit before amortisation, before EPS* Equity amortisation net exceptional tax and net items and tax exceptional items â‚¬'m â‚¬'m â‚¬'m cent â‚¬'m As reported under Irish GAAP 131.5 126.0 99.9 137.25 498.1 Associated undertakings (21.9) (3.2) (3.2) Employee benefits (pensions) 1.6 1.2 1.2 1.32 (30.2) Share options (1.0) (1.0) (1.0) (1.05) 0.2 Non-amortisation of goodwill 10.1 10.1 Amortisation of intangible assets (1.3) (1.3) Foreign exchange losses on intercompany loans previously charged to reserves (4.8) Non-provision for dividend 19.1 Other (0.2) (0.4) (0.3) (0.30) (3.8) --------------------------------------------------------- (21.5) (3.4) 0.7 (0.03) (5.9) --------------------------------------------------------- As reported under IFRS 110.0 122.6 100.6 137.22 492.2 ========================================================= * Before amortisation and net exceptional items. Six months ended 30 September 2004 Income Statement Balance Sheet ------------------------------------ --------------------- Operating Profit before Profit Adjusted Total profit before amortisation, before EPS* Equity amortisation net exceptional tax and net items and tax exceptional items â‚¬'m â‚¬'m â‚¬'m cent â‚¬'m As reported under Irish GAAP 46.0 43.8 37.9 47.44 463.5 Associated undertakings (9.5) (1.5) (1.5) Employee benefits (pensions) 0.8 0.5 0.5 0.59 (29.0) Share options (0.4) (0.4) (0.4) (0.44) Non-amortisation of goodwill 4.5 4.5 Amortisation of intangible assets (0.1) (0.1) Foreign exchange losses on intercompany loans previously charged to reserves (2.6) Non-provision for dividend 10.8 Other (0.1) (0.16) (3.6) ------------------------------------------------------------- (9.2) (1.4) 0.4 (0.01) (17.4) ------------------------------------------------------------- As reported under IFRS 36.8 42.4 38.3 47.43 446.1 ============================================================= * Before amortisation and net exceptional items. 3. BASIS OF PREPARATION OF FINANCIAL STATEMENTS UNDER IFRS For the year ending 31 March 2006, DCC plc will be required to prepare consolidated financial statements under IFRS as adopted by the European Union ('EU'). The financial information presented in this announcement has been prepared in accordance with the measurement criteria required by International Financial Reporting Standards and Interpretations issued by the International Accounting Standards Board ('IASB') and with International Accounting Standards ('IAS') and Standard Interpretations Committee Interpretations approved by the predecessor International Accounting Standards Committee that have been subsequently authorised by the IASB and remain in effect. The Group's transition date to IFRS is 1 April 2004 and the comparative financial information for the year ended 31 March 2005 has been restated on a consistent basis with those accounting policies expected to be applied by the Group in preparing its first full financial statements in accordance with IFRS at 31 March 2006, except where otherwise required or permitted by IFRS 1 'First time adoption of International Accounting Standards'. The transition to IFRS is accounted for in accordance with IFRS 1. This standard sets out how to adopt IFRS for the first time and mandates that most IFRS are to be fully applied retrospectively. There are certain limited exemptions from this requirement. The significant decisions taken in respect of availing, or otherwise, of the exemptions available are outlined in the section 'Principal Exemptions Availed of on Transition to IFRS'. The majority of the IASs/IFRSs have been approved by the EU. However, a number of IASs/IFRSs remain to be approved at the date of publication of this document. In particular the EU has not yet considered the adoption of an amendment to IAS 19 'Employee Benefits' which would allow recognition of actuarial gains and losses in the Statement of Changes in Shareholders' Equity in the same manner as FRS 17 permitted under Irish GAAP. The preliminary IFRS comparatives for the year ended 31 March 2005 and the six months ended 30 September 2004 have been prepared on the basis of the recognition and measurement requirements of IFRSs in issue that either are adopted by the EU and effective (or available for early adoption) at 31 March 2006 or are expected to be adopted and effective (or available for early adoption) at 31 March 2006, the first annual reporting date at which the Group is required to use accounting standards adopted by the EU. Based on these recognition and measurement requirements management has made assumptions about the accounting policies expected to be applied, which are as set out below, when the first annual financial statements are prepared in accordance with accounting standards adopted by the EU for the year ending 31 March 2006. In particular, management has assumed that the following IFRSs issued by the International Accounting Standards Board and IFRIC Interpretations issued by the International Financial Reporting Interpretations Committee will be adopted by the EU such that they will be available for use in the annual IFRS financial statements for the year ending 31 March 2006: â€¢ Amendment to IAS 19: Actuarial Gains and Losses, Group Plans and Disclosures â€¢ Amendment to IAS 39: Financial Instruments: Recognition and Measurement - Fair Value Option In addition, the accounting standards adopted by the EU that will be effective (or available for early adoption) in the annual financial statements for the year ending 31 March 2006 are still subject to change and to additional interpretations and therefore cannot be determined with certainty. Accordingly, the accounting policies for 2005/2006 will only be finally determined when the annual financial statements are prepared for the year ending 31 March 2006. Details of the exemptions availed of on transition to IFRS are set out in Section 4 including the exemption from restatement of the 2004/2005 numbers relating to IAS 32 and IAS 39. No adjustments have been made for any changes in estimates made at the time of approval of the consolidated financial statements for the year ended 31 March 2005 under Irish GAAP on which the preliminary IFRS information is based. 4. PRINCIPAL EXEMPTIONS AVAILED OF ON TRANSITION TO IFRS IFRS 1 'First-time Adoption of International Financial Reporting Standards' sets out the procedures that the Group must follow when adopting IFRS for the first time as the basis for preparing its Consolidated Financial Statements. The Group is required to establish its IFRS accounting policies for the year ending 31 March 2006 and, in general, apply these retrospectively to determine the IFRS opening balance sheet at its date of transition, 1 April 2004. This standard permits a number of optional exemptions from the general principle of retrospective restatement and the Group has elected, in common with other listed companies, to avail of a number of these exemptions as follows: (i) Business Combinations Business combinations undertaken prior to the transition date of 1 April 2004 have not been subject to restatement; goodwill as at the transition date is carried forward at its carrying amount and, together with goodwill arising on business combinations subsequent to the transition date, is subject to annual impairment testing in accordance with IAS 36 'Impairment of Assets'. As required by IFRS 1, an impairment review of goodwill was carried out at the transition date. This review indicated that no impairment provision was required. (ii) Property, Plant & Equipment The Group has retained its existing carrying value of occupied properties, plant and equipment at 1 April 2004 as deemed cost, rather than either reverting to historical cost or carrying out a valuation at the date of transition as permitted by IFRS 1. (iii) Employee Benefits The Group has elected to recognise all cumulative actuarial gains and losses applicable to defined benefit pension schemes in the transition balance sheet and to adjust them against retained income. (iv) Currency Translation Adjustments IFRS require that on disposal of a foreign operation, the cumulative amount of currency translation differences previously recognised directly in reserves for that operation be transferred to the income statement as part of the profit or loss on disposal. The Group has elected to deem the cumulative currency translation differences applicable to foreign operations to be zero as at the transition date. The cumulative currency translation differences arising after the transition date (i.e. during the year ended 31 March 2005) have been re-classified from retained income to a separate component of equity (termed the 'foreign currency translation reserve' in the attached documentation) with no net impact on capital and reserves attributable to the Group's equity holders. (v) IAS 32 / IAS 39 Given the delay encountered in receiving EU approval, the effective date of the revised versions of IAS 32 'Financial Instruments: Disclosure and Presentation' and IAS 39 'Financial Instruments: Recognition and Measurement' is 1 April 2005 and therefore the Group is adopting these standards with effect from that date. The Group has availed of the exemption under the transition rules of IFRS 1 not to restate the comparative information under IAS 32 and IAS 39. Comparative information on financial instruments for the year ended 31 March 2005 in the financial statements at 31 March 2006 will be presented on the existing Irish GAAP basis. Other Options availed of on Transition In compliance with the transitional arrangements set out in IFRS 2 'Share-based Payment', this standard will be applied in respect of share options granted after 7 November 2002 and which have not vested before 1 January 2005. On the introduction of FRS 17 'Retirement Benefits' in 2001, DCC together with the majority of publicly-listed entities, elected to continue to account for its pension obligations under SSAP 24 'Accounting for Pension Costs' and to disclose the impact of FRS 17 in the notes to the financial statements. FRS 17 requires immediate recognition of actuarial gains and losses on defined benefit pension schemes in the Statement of Total Recognised Gains and Losses. The Group has elected to avail of early application of the amendment to IAS 19 which enables the recognition of actuarial gains and losses through retained income via the Statement of Changes in Shareholders' Equity. 5. PRINCIPAL CHANGES ON TRANSITION TO IFRS The standards which result in the most significant changes for DCC arising from the transition to IFRS from Irish GAAP are summarised in the following paragraphs. The impact of these changes on the financial results for the year ended 31 March 2005 and the interim accounts for the six months ended 30 September 2004 are shown in Appendices 2 and 3. The accounting policies which will apply under IFRS are set out in Appendix 6. (i) IFRS 2 'Share-based Payment' IFRS 2 Share-based Payment requires the recognition of an expense in the income statement representing the fair value at the date of grant of share-based payments (mainly share options in the case of DCC). This expense is recognised over the vesting period of the options. In accordance with the transitional arrangements contained in the standard, only share options granted after 7 November 2002 and which have not vested before 1 January 2005 are included in the calculations. The fair value of the share based payments have been calculated using a binomial model for the DCC plc 1998 Employee Share Option Scheme and Black Scholes for the DCC Sharesave Scheme. The following are the main inputs used in determining the fair value of share options: â€¢ The exercise price which is the market price at the grant date except in the case of Save As You Earn (SAYE) share options which were issued at a 20% discount to the market price at the date of grant; â€¢ Future share price volatility is based on historical volatility over a period consistent with the expected term of the option; â€¢ The risk free interest rate used is the rate applicable to zero-coupon euro-denominated Government bonds with a remaining term equal to the expected term of the option; â€¢ Expected dividend payments An expense of â‚¬1.0 million has been recognised in the Group Income Statement in respect of the year ended 31 March 2005 (â‚¬0.4 million for the six month period to 30 September 2004). (ii) IFRS 3 'Business Combinations' / IAS 38 'Intangible Assets' The Group has availed of the exemption under IFRS 1 enabling non-restatement of business combinations prior to the date of transition to IFRS. Under IFRS 3, goodwill is no longer amortised but rather is subject to annual impairment testing. At 1 April 2004, the date of transition, the Group had a net goodwill asset of â‚¬129.6 million which is carried forward and, together with goodwill arising on subsequent business combinations, is subject to annual impairment testing. Accordingly, the goodwill amortisation charge of â‚¬10.1 million for the year ended 31 March 2005 (â‚¬4.6 million for the six months ended 30 September 2004) is not charged under IFRS. Under IAS 38 'Intangible Assets', there is a requirement to separately identify intangible assets acquired, other than goodwill. Intangible assets (mainly comprising customer relationships) are capitalised and subsequently amortised over their economic lives. The acquisition balance sheets for business combinations completed in the year ended 31 March 2005 have been restated to recognise intangible assets which has resulted in a reduction in the goodwill figure in the acquisition balance sheets. The amortisation charge recognised in respect of intangible assets amounted to â‚¬1.3 million for the year ended 31 March 2005 (â‚¬0.1 million for the six months ended 30 September 2004). Net intangible assets at 31 March 2005 amounted to â‚¬11.3 million (â‚¬4.2 million at 30 September 2004). (iii) IAS 19 'Employee Benefits' IAS 19 'Employee Benefits' requires the assets and liabilities of defined benefit pension schemes to be recognised on the face of the balance sheet. In accordance with the exemption available under IFRS 1, the Group has elected to recognise all cumulative actuarial gains and losses attributable to its defined benefit pension schemes as at the transition date. In addition, in line with the amendment to IAS 19, actuarial gains and losses arising after the date of transition are dealt with in the Statement of Changes in Shareholders' Equity. The amounts reflected in the Group's transition balance sheet as at 1 April 2004 and the Group's balance sheet as at 31 March 2005 are in accordance with the FRS 17 disclosures previously provided in the Annual Reports at 31 March 2004 and 31 March 2005 save for the recording of assets at bid value under IAS 19 as opposed to mid-market value. Application of IAS 19 has resulted in a pre-tax reduction in net assets of â‚¬27.7 million as at 1 April 2004 and a pre-tax reduction of â‚¬34.3 million as at 31 March 2005 (a pre-tax reduction of â‚¬33.2 million as at 30 September 2004). The decrease in the pre-tax charge to the income statement arising from the adoption of IAS 19 for the year ended 31 March 2005 is â‚¬1.2 million (decrease of â‚¬0.5 million for the six months ended 30 September 2004). (iv) Current and Deferred Tax Under Irish GAAP, deferred tax is recognised in respect of all timing differences that have originated but not reversed by the balance sheet date and which could give rise to an obligation to pay more or less taxation in the future. Deferred tax under IAS 12, 'Income Taxes', is recognised in respect of all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying value for financial reporting purposes. IAS 12 also requires that deferred tax assets and liabilities must be disclosed separately on the balance sheet. IAS 12 results in an overall increase in the net deferred tax liability of the Group. The adjustments made to deferred tax assets and liabilities as at the transition date of 1 April 2004, and reflected in the transition balance sheet, principally relate to the following issues: â€¢ Under Irish GAAP, deferred tax was not provided on fair value asset adjustments in business combinations if these adjustments did not give rise to timing differences between the tax base and the book value of the assets acquired. The requirement under IAS 12 to provide deferred tax on the differences arising from the assets acquired gave rise to a deferred tax liability of â‚¬1.3 million as at the transition date. This liability increased to â‚¬1.8 million as at 31 March 2005. â€¢ IAS 12 requires that a deferred tax provision be made for all rolled-over capital gains rather than those expected to crystallise. The IFRS transition balance sheet includes a deferred tax liability of â‚¬0.2 million in respect of rolled-over capital gains, which did not arise under Irish GAAP. â€¢ The deferred tax impact of defined benefit pension scheme surpluses and deficits accounted for in accordance with IAS 19, 'Employee Benefits', has resulted in the creation of a deferred tax asset of â‚¬2.1 million in the transition balance sheet. The deferred tax liability reduces by â‚¬1.3 million as a result of a reversal of the SSAP 24 pension prepayment in the Irish GAAP balance sheet. A net deferred tax asset of â‚¬1.9 million, as set out above, has been provided in the transition balance sheet. IAS 12 requires deferred tax to be provided in respect of undistributed profits of overseas subsidiaries unless the parent is able to control the timing of remittances and it is probable that such remittances will not be made in the foreseeable future. As the Group is able to control the timing of remittances from overseas subsidiaries and no such remittances are anticipated in the foreseeable future, no provision has been made for any tax on undistributed profits of overseas subsidiaries. Similarly, no deferred tax assets or liabilities have been recognised in respect of temporary differences associated with investments in subsidiaries. In addition to the provisions of IAS 12 described above, IAS 1, 'Presentation of Financial Statements' requires separate disclosure of deferred tax assets and liabilities on the face of the balance sheet. The Group's restated Balance Sheets therefore contain re-classifications of deferred tax assets previously netted within the Group's overall deferred tax liability; these amounts were â‚¬6.7 million, â‚¬6.8 million and â‚¬7.0 million as at the transition date, 30 September 2004 and 31 March 2005 respectively. (v) Dividend Payments IAS 10, 'Events after the Balance Sheet Date', requires that dividends declared after the balance sheet date should not be recognised as a liability at the balance sheet date as the liability does not represent a present obligation as defined by IAS 37, 'Provisions, Contingent Liabilities and Contingent Assets'. Instead, dividends will be recognised in the period in which they are declared and approved. This has the effect of increasing the opening net assets at 1 April 2004 by â‚¬16.8 million. The results for 2004/2005, as restated under IFRS, include the 2003/2004 final dividend of â‚¬16.8 million and the 2004/2005 interim dividend of â‚¬10.8 million. The 2004/2005 final dividend of â‚¬19.1 million will be reflected in the results for the first half of 2005/2006. (vi) Exceptional Items Under IFRS, all exceptional items of an operating nature, apart from the results of discontinued operations, are disclosed in the appropriate operating line item before operating profit, with separate disclosure for items which are material by virtue of their size or nature. This results in a reclassification of exceptional items reported by the Group for the year ended 31 March 2005. (vii) Associated Undertakings Under Irish GAAP, the appropriate share of the results of associated undertakings (split between sales, operating profit, interest, tax and minority interest) was included in the consolidated profit and loss account by way of the equity method of accounting. Associated undertakings were stated in the consolidated balance sheet at cost plus the attributable portion of their retained reserves from the date of acquisition less goodwill amortised. Under IAS 28, a single figure (being profit after tax) for results of associated undertakings is disclosed after operating profit. Given the importance of the contributions of associated undertakings to the Group, sufficient information will be provided to allow operating profit to be calculated on a basis that is consistent with previous statements (see Appendix 5). (viii) Foreign Currencies Under Irish GAAP currency translation differences on foreign currency net investments have been written off to revenue reserves. Under IAS 21 'The Effect of Changes in Foreign Exchange Rates', translation differences are recorded in a separate currency translation reserve. On disposal of a foreign operation, the cumulative translation differences relating to that operation are transferred to the income statement as part of the profit or loss on disposal. The Group has availed of the IFRS 1 exemption allowing it to deem all cumulative translation differences that have arisen up to the transition date to be equal to zero. These translation differences will therefore remain written off against revenue reserves and will no longer be separately disclosed in the notes to the accounts. IAS 21 provides specific guidance on how the functional currency (i.e. the currency that an entity should use to record its transactions) of a company should be determined and the functional currencies of a small number of group companies have altered as a result of the application of this guidance. Certain intercompany loans had been treated under Irish GAAP as part of net investment in foreign operations and foreign exchange gains or losses arising on these loans had been recognised directly in reserves. On transition from Irish GAAP, certain of these loans between fellow subsidiaries do not qualify under IFRS as part of net investment in foreign operations and therefore gains or losses on these loans must be recognised in the Income Statement. The financial impact of the above is a charge to the Income Statement of â‚¬4.8 million for the year ended 31 March 2005 (a charge of â‚¬2.6 million for the six months ended 30 September 2004) in respect of foreign exchange losses previously charged to reserves. Accordingly, there is no net impact in the Group's Balance Sheet at either 30 September 2004 or 31 March 2005 and the amounts are included in net exceptional items. The majority of the intercompany balances which gave rise to these accounting charges (previously taken to reserves) were eliminated during the year ended 31 March 2005 and the half year ended 30 September 2005 so as to eliminate accounting volatility from 30 September 2005 onwards. (ix) Other There are a number of other restatements which are not individually material including accruals for holiday pay which have been reflected in this financial information. Appendix 1 SPECIAL PURPOSE AUDIT REPORT OF PRICEWATERHOUSECOOPERS TO DCC plc (THE 'COMPANY') ON ITS INTERNATIONAL FINANCIAL REPORTING STANDARDS ('IFRS') FINANCIAL INFORMATION We have audited the accompanying consolidated IFRS balance sheets of DCC plc and its subsidiaries (the 'Group') as at 1 April 2004 and 31 March 2005, the related consolidated IFRS income statement for the year ended 31 March 2005 and the associated IFRS 1 reconciliations and consolidated IFRS statement of changes in equity for the year ended 31 March 2005 set out on pages 15 to 24 prepared in accordance with the basis of preparation and the provisional IFRS accounting policies set out on pages 26 to 37 (hereinafter referred to as the 'IFRS financial information'). In addition to the above noted opening and year end balance sheets, full year income statement and associated IFRS reconciliations, included with the financial information set out on pages 19 to 22 are the half-year balance sheet, half-year income statement and associated IFRS reconciliations. We have not audited the half-year balance sheet, half-year income statement, associated IFRS reconciliations and selected segmental information and these are not covered by this opinion and do not form part of the above defined IFRS financial information. The IFRS financial information has been prepared by the Group as part of its transition to IFRS and to establish the financial position, and results of operations of the Group to provide the comparative financial information expected to be included in the first complete set of consolidated IFRS financial statements of the Group for the year ending 31 March 2006. Respective responsibilities of Directors and PricewaterhouseCoopers The Directors of the Company are responsible for the preparation of the consolidated IFRS financial information which has been prepared as part of the Group's transition to IFRS. Our responsibilities, as independent auditors, are established in Ireland by the Auditing Practices Board, our profession's ethical guidance and the terms of our engagement. Under the terms of engagement we are required to report to you our opinion as to whether the IFRS financial information has been prepared, in all material respects, in accordance with the basis of preparation and provisional IFRS accounting policies set out on pages 26 to 37. This report, including the opinion, has been prepared for, and only for, the Company for the purposes of assisting with the Group's transition to IFRS and for no other purpose. To the fullest extent permitted by law, we do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. We read the other information contained in this document and consider its implications for our report if we become aware of any apparent misstatements or material inconsistencies with the above defined IFRS financial information. Basis of audit opinion We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the IFRS financial information. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the IFRS financial information, and of whether the accounting policies are appropriate to the Group's circumstances and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the IFRS financial information is free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of the IFRS financial information. Emphasis of matter Without qualifying our opinion, we draw your attention to the fact that the IFRS financial information may require adjustment before its inclusion as comparative information in the Group's first set of IFRS financial statements for the year ending 31 March 2006. This is because Standards currently in issue and adopted by the EU are subject to interpretations issued from time to time by the International Financial Reporting Interpretations Committee (IFRIC) and further Standards may be issued by the International Accounting Standards Board (IASB) that will be adopted for financial years beginning on or after 1 April 2005. Additionally, without qualifying our opinion, IFRS is currently being applied in the Republic of Ireland and in a large number of other countries simultaneously for the first time. Furthermore, due to a number of new and revised Standards included within the body of Standards that comprise IFRS, there is not yet a significant body of established practice on which to draw in forming opinions regarding interpretation and application. Accordingly, practice is continuing to evolve. At this preliminary stage, therefore, the full financial effect of reporting under IFRS as it will be applied and reported on in the Group's first IFRS financial statements for the year ending 31 March 2006 may be subject to change. Furthermore, without qualifying our opinion, we draw attention to the fact that under IFRS, only a complete set of financial statements, comprising a balance sheet, income statement, statement of changes in equity and cash flow statement, together with comparative financial information and explanatory notes can provide a fair presentation of the Group's financial position, results of operations and cash flows in accordance with IFRS. Opinion In our opinion, the accompanying IFRS financial information comprising the consolidated IFRS balance sheets as at 1 April 2004 and 31 March 2005, the related consolidated IFRS income statement for the year ended 31 March 2005, set out on pages 23, 17 and 15 and the associated IFRS 1 reconciliations and consolidated IFRS statement of changes in equity for the year ended 31 March 2005 set out on pages 15, 16, 18 and 24, have been prepared, in all material respects, in accordance with the basis of preparation and the provisional accounting policies set out on pages 26 to 37, which describe how IFRS have been applied under IFRS 1 including the assumptions made by the directors about the standards and interpretations expected to be effective and the policies expected to be adopted when the directors prepare the first complete set of IFRS Accounts for the Group for the year ending 31 March 2006. PricewaterhouseCoopers Chartered Accountants Dublin 29 September 2005 Appendix 2 DCC plc GROUP INCOME STATEMENT for the year ended 31 March 2005 Restated under IFRS Audited Pre net Net exceptionals exceptionals Total 2004/2005 2004/2005 2004/2005 â‚¬'000 â‚¬'000 â‚¬'000 Revenue 2,627,927 - 2,627,927 Cost of sales (2,248,576) - (2,248,576) Gross profit 379,351 - 379,351 Operating costs (270,589) (15,967) (286,556) Operating profit 108,762 (15,967) 92,795 Finance costs (net) (5,630) (4,809) (10,439) Share of associates profit after tax 18,245 - 18,245 Profit before tax 121,377 (20,776) 100,601 Income tax expense (11,819) Profit after tax for the financial year 88,782 Profit attributable to: Equity holders of the Company 87,760 Minority interests 1,022 Profit after tax for the financial year 88,782 Earnings per Ordinary Share - basic (cent) 109.68c GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY for the year ended 31 March 2005 Share Other Retained Attributable to Minority Total Capital Reserves Earnings Equity Holders Interests Equity â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 At 1 April 2004 22,035 126,387 310,313 458,735 4,081 462,816 Actuarial loss (7,742) (7,742) (7,742) Currency translation adjustments and other (5,565) 796 (4,769) (4,769) Recognised directly in equity (5,565) (6,946) (12,511) (12,511) Profit for the period 87,760 87,760 573 88,333 Total recognised income (5,565) 80,814 75,249 573 75,822 Issue of share capital 7 68 6,783 6,858 6,858 Share based payment 1,003 1,003 1,003 Share buyback (26,762) (26,762) (26,762) Dividends (27,212) (27,212) (176) (27,388) Business combinations (130) (130) Other equity movements 7 1,071 (47,191) (46,113) (306) (46,419) At 31 March 2005 22,042 121,893 343,936 487,871 4,348 492,219 DCC plc GROUP INCOME STATEMENT FOR THE YEAR TO 31 MARCH 2005 - RECONCILIATION FROM IRISH GAAP TO IFRS IFRS 2 Previous Share IAS 19 IFRS 3 Restated Irish Based Employee Business Under GAAP Payment Benefits Combinations Associates IAS 21 Reclassifications Other IFRS â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 Revenue 2,627,927 2,627,927 Cost of sales (2,248,576) (2,248,576) Gross profit 379,351 379,351 Operating costs (269,670) (1,003) 1,622 (277) (269,328) Exceptional items - Irish GAAP (3,815) 3,815 - Exceptional items - IFRS - (3,815) (12,152) (15,967) Goodwill amortisation (10,089) 10,089 - Amortisation of intangible assets - (1,261) (1,261) Share of associates operating profit 21,855 (21,855) - Operating profit 117,632 (1,003) 1,622 8,828 (21,855) - (12,429) 92,795 Non operating net exceptional items - Irish GAAP (12,152) 12,152 - Net finance costs (5,576) (423) 369 (5,630) Foreign exchange losses on intercompany financing loans * - (4,809) (4,809) Share of associates profit after tax - 18,245 18,245 Profit on ordinary activities before taxation 99,904 (1,003) 1,199 8,828 (3,241) (4,809) - (277) 100,601 Taxation (15,115) 166 (144) 3,241 33 (11,819) Profit for the financial year 84,789 (837) 1,055 8,828 - (4,809) - (244) 88,782 Attributable to: Equity holders of the Company 83,767 (837) 1,055 8,828 (4,809) - (244) 87,760 Minority interest 1,022 1,022 ----------------------------------------------------------------------------------------------------------- 84,789 (837) 1,055 8,828 - (4,809) - (244) 88,782 Basic earnings per share (cent) 104.69c (1.05c) 1.32c 11.03c - (6.01c) - (0.30c) 109.68c Adjusted earnings per share (cent)** 137.25c (1.05c) 1.32c - - - - (0.30c) 137.22c * Treated as an exceptional item ** Before net exceptional items and amortisation. DCC plc GROUP BALANCE SHEET AS AT 31 MARCH 2005 Restated under IFRS Audited 31 March 2005 â‚¬'000 ASSETS Non-current assets Property, plant and equipment 247,647 Intangible assets 206,295 Investment in associates 64,535 Deferred income tax assets 6,957 Total non-current assets 525,434 Current assets Inventories 123,734 Trade and other receivables 408,904 Cash and cash equivalents 352,399 Total current assets 885,037 Total assets 1,410,471 EQUITY Capital and reserves attributable to the Company's equity holders Equity share capital 22,042 Share premium account 124,506 Other reserves 1,400 Other reserves - shares to be issued 1,552 Foreign currency translation reserve (5,565) Retained earnings 343,936 Minority interests 4,348 Total equity 492,219 LIABILITIES Non-current liabilities Interest-bearing loans and borrowings 315,464 Deferred income tax liabilities 9,844 Retirement benefit obligations 25,380 Deferred acquisition consideration 10,839 Capital grants 958 Total non-current liabilities 362,485 Current liabilities Interest-bearing loans and borrowings 45,127 Trade and other payables 466,434 Current income tax liabilities 37,122 Deferred acquisition consideration 7,084 Total current liabilities 555,767 Total liabilities 918,252 Total equity and liabilities 1,410,471 DCC plc GROUP BALANCE SHEET AS AT 31 MARCH 2005 - Reconciliation from Irish GAAP to IFRS IFRS 2 Previous Share IAS 19 IFRS 3 Restated Irish Based Employee Business Deferred Reclassifications Under GAAP Payment Benefits Combinations Tax Dividend and other IFRS â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 ASSETS Non-current assets Property, plant and equipment 247,647 247,647 Intangible assets - goodwill 193,762 (2,848) 3,503 545 194,962 Intangible assets - other - 11,333 11,333 Financial assets 64,192 343 64,535 Deferred tax assets 3,720 191 3,046 6,957 509,321 191 3,046 8,828 3,503 545 525,434 Current Assets Inventories 123,734 123,734 Trade and other receivables 417,814 (8,910) 408,904 Cash and cash equivalents 352,399 352,399 893,947 (8,910) 885,037 --------------------------------------------------------------------------------------------------------- Total 1,403,268 191 (5,864) 8,828 3,503 545 1,410,471 assets EQUITY Capital and reserves attributable to equity holders Share capital 22,042 22,042 Share premium account 124,506 124,506 Other reserves 1,400 1,400 Other reserves - shares to be issued - 1,552 1,552 Foreign currency translation reserve - (5,565) (5,565) Retained earnings 345,748 (1,361) (30,175) 8,828 19,070 1,826 343,936 Minority interests 4,348 4,348 Total 498,044 191 (30,175) 8,828 19,070 (3,739) 492,219 equity LIABILITIES Non-current liabilities Interest bearing loans and borrowings 315,464 315,464 Retirement benefit obligations - 25,380 25,380 Deferred income tax liabilities 5,350 (1,069) 3,503 2,060 9,844 Deferred acquisition consideration 10,839 10,839 Capital grants 958 958 332,611 24,311 3,503 2,060 362,485 Current liabilities Interest bearing loans and borrowings 45,127 45,127 Trade and other payables 464,210 2,224 466,434 Current income tax liabilities 37,122 37,122 Deferred acquisition consideration 7,084 7,084 Proposed dividend 19,070 (19,070) 572,613 (19,070) 2,224 555,767 Total liabilities 905,224 24,311 3,503 (19,070) 4,284 918,252 ------------------------------------------------------------------------------------------------------- Total equity and liabilities 1,403,268 191 (5,864) 8,828 3,503 - 545 1,410,471 Net debt (8,192) (8,192) Appendix 3 DCC plc GROUP INCOME STATEMENT for the six months ended 30 September 2004 Restated under IFRS Unaudited Pre net exceptionals Net exceptionals Total 6 months ended 6 months ended 6 months ended 30 Sep. 2004 30 Sep. 2004 30 Sep. 2004 â‚¬'000 â‚¬000 â‚¬000 Revenue 1,103,047 1,103,047 Cost of sales (926,022) (926,022) Gross profit 177,025 177,025 Operating costs (140,373) (1,376) (141,749) Operating profit 36,652 (1,376) 35,276 Finance costs (net) (2,203) (2,572) (4,775) Share of associates profit after tax 7,787 7,787 Profit before tax 42,236 (3,948) 38,288 Income tax expense (4,024) Profit after tax for the period 34,264 Profit attributable to: Equity holders of the Company 33,822 Minority interests 442 Profit after tax for the period 34,264 Earnings per Ordinary Share - basic (cent) 42.31c GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY for the six months ended 30 September 2004 Share Other Retained Attributable to Minority Capital Reserves Earnings Equity Holders Interests Total Equity â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 At 1 April 2004 22,035 126,387 310,313 458,735 4,081 462,816 Actuarial loss (4,938) (4,938) (4,938) Currency translation adjustments and other (7,492) 750 (6,742) (6,742) Recognised directly in equity (7,492) (4,188) (11,680) (11,680) Profit for the period 33,822 33,822 209 34,031 Total recognised income (7,492) 29,634 22,142 209 22,351 Issue of share capital 3,842 3,842 3,842 Share based payment 352 352 352 Share buyback (26,762) (26,762) (26,762) Dividends (16,401) (16,401) (122) (16,523) Other equity movements 352 (39,321) (38,969) (122) (39,091) At 30 Sep. 2004 22,035 119,247 300,626 441,908 4,168 446,076 DCC plc GROUP INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2004 - RECONCILIATION FROM IRISH GAAP TO IFRS IFRS 2 Previous Share IAS 19 IFRS 3 Restated Irish Based Employee Business Under GAAP Payment Benefits Combinations IAS 21 Associates Other IFRS â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 Revenue 1,103,047 1,103,047 Cost of sales (926,022) (926,022) Gross profit 177,025 177,025 Operating costs (140,499) (352) 770 (147) (140,228) Net exceptional items - (1,376) (1,376) Goodwill amortisation (4,583) 4,583 - Amortisation of intangible assets - (145) (145) Share of associates operating profit 9,486 (9,486) - Operating profit 41,429 (352) 770 4,438 (9,486) (1,523) 35,276 Non operating exceptional items - Irish GAAP (1,376) 1,376 - Net finance costs (2,167) (229) 193 (2,203) Foreign exchange losses on intercompany financing loans * (2,572) (2,572) Share of associates profit after tax - 7,787 7,787 Profit on ordinary activities before taxation 37,886 (352) 541 4,438 (2,572) (1,506) (147) 38,288 Taxation (5,481) (68) 1,506 19 (4,024) Profit for the financial year 32,405 (352) 473 4,438 (2,572) - (128) 34,264 Attributable to: Equity holders of the Company 31,963 (352) 473 4,438 (2,572) - (128) 33,822 Minority interest 442 442 --------------------------------------------------------------------------------------------------- 32,405 (352) 473 4,438 (2,572) - (128) 34,264 Basic earnings per share (cent) 39.99c (0.44c) 0.59c 5.55c (3.22c) - (0.16c) 42.31c Adjusted earnings per share (cent)** 47.44c (0.44c) 0.59c - - - (0.16c) 47.43c * Treated as an exceptional item ** Before net exceptional items and amortisation. DCC plc GROUP BALANCE SHEET AS AT 30 SEPTEMBER 2004 Restated under IFRS Unaudited 30 Sept 2004 â‚¬'000 ASSETS Non-current assets Property, plant and equipment 222,952 Intangible assets 170,334 Investment in associates 53,879 Deferred income tax assets 6,763 Total non-current assets 453,928 Current assets Inventories 126,552 Trade and other receivables 344,870 Cash and cash equivalents 325,037 Total current assets 796,459 ---------- Total assets 1,250,387 EQUITY Capital and reserves attributable to the Company's equity holders Equity share capital 22,035 Share premium account 124,438 Other reserves 1,400 Other reserves - shares to be issued 901 Foreign currency translation reserve (7,492) Retained earnings 300,626 Minority interests 4,168 Total equity 446,076 LIABILITIES Non-current liabilities Interest-bearing loans and borrowings 321,690 Deferred income tax liabilities 3,803 Retirement benefit obligations 23,434 Deferred acquisition consideration 9,549 Capital grants 1,039 Total non-current liabilities 359,515 Current liabilities Interest-bearing loans and borrowings 28,222 Trade and other payables 373,934 Current income tax liabilities 36,611 Deferred acquisition consideration 6,029 Total current liabilities 444,796 Total liabilities 804,311 --------- Total equity and liabilities 1,250,387 DCC plc GROUP BALANCE SHEET AS AT 30 SEPTEMBER 2004 - Reconciliation from Irish GAAP to IFRS IFRS 2 Previous Share IAS 19 IFRS 3 Restated Irish Based Employee Business Deferred Reclassifications Under GAAP Payment Benefits Combinations Tax Dividends and other IFRS â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 ASSETS Non-current assets Property, plant and equipment 222,952 222,952 Intangible assets - goodwill 164,506 14 1,038 545 166,103 Intangible assets - other - 4,231 4,231 Financial assets 53,686 193 53,879 Deferred tax assets 3,834 2,929 6,763 444,978 2,929 4,438 1,038 545 453,928 Current Assets Inventories 126,552 126,552 Trade and other receivables 354,594 (9,724) 344,870 Cash and cash equivalents 325,037 325,037 806,183 (9,724) 796,459 ------------------------------------------------------------------------------------------------------ Total assets 1,251,161 (6,795) 4,438 1,038 545 1,250,387 EQUITY Capital and reserves attributable to equity holders Share capital 22,035 22,035 Share premium account 124,438 124,438 Other reserves 1,400 1,400 Other reserves - shares to be issued - 901 901 Foreign currency translation reserve - (7,492) (7,492) Retained earnings 311,417 (901) (29,013) 4,438 10,802 3,883 300,626 Minority interests 4,168 4,168 Total equity 463,458 - (29,013) 4,438 10,802 (3,609) 446,076 LIABILITIES Non-current liabilities Interest bearing loans and borrowings 321,690 321,690 Retirement benefit obligations - 23,434 23,434 Deferred income tax liabilities 1,921 (1,216) 1,038 2,060 3,803 Deferred acquisition consideration 9,549 9,549 Capital grants 1,039 1,039 334,199 22,218 1,038 2,060 359,515 Current liabilities Interest bearing loans and borrowings 28,222 28,222 Trade and other payables 371,840 2,094 373,934 Current income tax liabilities 36,611 36,611 Deferred acquisition consideration 6,029 6,029 Proposed dividend 10,802 (10,802) - 453,504 (10,802) 2,094 444,796 Total liabilities 787,703 22,218 1,038 (10,802) 4,154 804,311 ----------------------------------------------------------------------------------------------------- Total equity and liabilities 1,251,161 - (6,795) 4,438 1,038 - 545 1,250,387 Net debt (24,875) (24,875) Appendix 4 DCC plc GROUP BALANCE SHEET AS AT 1 APRIL 2004 ('TRANSITION DATE') Restated under IFRS Audited 2004 â‚¬'000 ASSETS Non-current assets Property, plant and equipment 212,252 Intangible assets 129,566 Financial assets 53,780 Deferred income tax assets 6,673 Total non-current assets 402,271 Current assets Inventories 110,577 Trade and other receivables 315,320 Cash and cash equivalents 320,616 Total current assets 746,513 Total assets 1,148,784 EQUITY Capital and reserves attributable to the Company's equity holders Equity share capital 22,035 Share premium account 124,438 Other reserves 1,400 Other reserves - shares to be issued 549 Foreign currency translation reserve - Retained earnings 310,313 Minority interests 4,081 Total equity 462,816 LIABILITIES Non-current liabilities Interest-bearing loans and borrowings 114,167 Deferred income tax liabilities 2,271 Retirement benefit obligations 17,164 Deferred acquisition consideration 6,799 Capital grants 1,112 Total non-current liabilities 141,513 Current liabilities Interest-bearing loans and borrowings 143,732 Trade and other payables 359,968 Current income tax liabilities 36,077 Deferred acquisition consideration 4,678 Total current liabilities 544,455 Total liabilities 685,968 Total equity and liabilities 1,148,784 DCC plc GROUP BALANCE SHEET AS AT 1 APRIL 2004 - Reconciliation from Irish GAAP to IFRS Previous IFRS 2 IAS 19 Irish Share Based Employee Restated Under GAAP Payment Benefits Dividends Other IFRS â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 ASSETS Non-current assets Property, plant and equipment 212,252 212,252 Intangible assets - goodwill 129,566 129,566 Intangible assets - other - - Financial assets - associates 53,780 53,780 Deferred tax assets 4,527 2,146 6,673 400,125 2,146 402,271 Current Assets Inventories 110,577 110,577 Trade and other receivables 325,858 (10,538) 315,320 Cash and cash equivalents 320,616 320,616 757,051 (10,538) 746,513 ------------------------------------------------------------------------- Total assets 1,157,176 (8,392) 1,148,784 EQUITY Capital and reserves attributable to equity holders Share capital 22,035 22,035 Share premium account 124,438 124,438 Other reserves 1,400 1,400 Other reserves - shares to be issued - 549 549 Foreign currency translation reserve - - Retained earnings 321,739 (549) (24,239) 16,824 (3,462) 310,313 Minority interest 4,081 4,081 Total equity 473,693 - (24,239) 16,824 (3,462) 462,816 LIABILITIES Non-current liabilities Interest bearing loans and borrowings 114,167 114,167 Retirement benefit obligations - 17,164 17,164 Deferred income tax liabilities 2,073 (1,317) 1,515 2,271 Capital grants 1,112 1,112 Deferred acquisition consideration 6,799 6,799 124,151 15,847 1,515 141,513 Current liabilities Interest bearing loans and borrowings 143,732 143,732 Trade and other payables 358,021 1,947 359,968 Current income tax liabilities 36,077 36,077 Proposed dividend 16,824 (16,824) - Deferred acquisition consideration 4,678 4,678 559,332 (16,824) 1,947 544,455 Total liabilities 683,483 15,847 (16,824) 3,462 685,968 ------------------------------------------------------------------------- Total equity and liabilities 1,157,176 (8,392) - - 1,148,784 Net cash 62,717 62,717 Appendix 5 DCC plc Unaudited Restatement under IFRS of Selected Segmental Information - Year ended 31 March 2005 Revenue Profit before Tax --------- ----------------------------------------------- Pre net Net Profit before exceptionals exceptionals tax â‚¬'000 â‚¬'000 â‚¬'000 â‚¬'000 Energy 1,240,551 51,806 (154) 51,652 IT 878,153 27,460 (1,107) 26,353 Healthcare 162,279 15,441 (1,460) 13,981 Food & Beverage 215,834 11,037 (427) 10,610 Environmental 25,780 5,447 612 6,059 Other 105,330 (1,168) (8,631) (9,799) Other Group exceptionals (4,800) (4,800) --------------------------------------------------------------- 2,627,927 110,023 (15,967) 94,056 Amortisation of intangible assets (1,261) (1,261) Profit after tax of associated undertakings 18,245 18,245 Interest (5,630) (5,630) Foreign exchange losses on intercompany loans (4,809) (4,809) -------------------------------------------------------------- 2,627,927 121,377 (20,776) 100,601 Associated undertakings are an important contributor to the Group's profits. Including the Group's share of turnover (â‚¬103.597 million) and operating profit before interest and tax (â‚¬21.855 million), the analysis of turnover and operating profit before net exceptional items and amortisation of intangible assets is as follows: Turnover Operating Profit â‚¬'000 â‚¬'000 Energy 1,240,551 51,697 IT Distribution 878,153 27,460 Healthcare 170,686 16,207 Food & Beverage 242,332 13,256 Environmental 25,823 5,447 Other 173,979 17,811 ------------ ------------ 2,731,524 131,878 ============ ============ Reported under Irish GAAP 2,731,524 131,536 ============ ============ Appendix 6 Provisional Accounting Policies under IFRS Statement of Compliance The restated financial information has been prepared in accordance with International Financial Reporting Standards (IFRS), including Interpretations issued by the International Accounting Standards Board ('IASB') and its committees and endorsed by the European Union expected to apply at 31 March 2006 with the exception that IAS 32 and IAS 39 have not been applied as permitted under the transition rules of IFRS 1. Previous Irish GAAP financial information has been prepared in accordance with the accounting policies set out in the DCC plc Annual Report 2005. Basis of Preparation The restated financial information has been prepared under the historical cost convention except for the measurement at fair value of share options and derivative instruments. The currency used in these financial statements is the euro, denoted by the symbol â‚¬. Basis of Consolidation The restated consolidated financial statements include the Company and all subsidiary and associated undertakings. All inter-company balances and transactions, including unrealised profits arising from inter-group transactions, are eliminated on consolidation. Subsidiaries The results of subsidiary undertakings acquired or disposed of during the year are included in the consolidated income statement from the date of their acquisition or up to the date of their disposal. A subsidiary is one where the Group has the power, directly or indirectly, to govern the financial and operating policies of the entity, so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered in assessing whether the Group controls the entity. Associated Undertakings Associated undertakings are companies other than subsidiaries in which the Group holds, on a long-term basis, a participating interest in the voting equity share capital and exercises significant influence. Associated undertakings are included in the Company balance sheet at cost less provision for any impairment in value. Income from associated undertakings included in the Company profit and loss account comprises dividends received and receivable. The appropriate share of results of associated undertakings is included in the consolidated profit and loss account by way of the equity method of accounting. Associated undertakings are stated in the consolidated balance sheet at cost plus the attributable portion of their retained reserves from the date of acquisition less any impairment in value. Goodwill attributable to investments in associated undertakings is treated in accordance with the accounting policy for goodwill. Turnover and Revenue Recognition Revenue comprises the invoiced value, including excise duty and excluding value added tax, of goods supplied and services rendered. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group, that it can be reliably measured and that the significant risks and rewards of ownership of the goods have passed to the buyer. Segment Reporting A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those other segments. Foreign Currency Translation Functional and Presentation Currency Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in euro which is the presentation currency of the Group. Transactions and Balances Transactions in foreign currencies are recorded at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. Currency translation differences on monetary assets and liabilities are taken to the consolidated income statement except where hedge accounting is applied. Group Companies Results and cash flows of subsidiary and associated undertakings which do not have the euro as their functional currency are translated into euro at average exchange rates for the year, and the related balance sheets are translated at the rates of exchange ruling at the balance sheet date. Adjustments arising on translation of the results of such subsidiary and associated undertakings at average rates, and on the restatement of the opening net assets at closing rates, are dealt with in a separate translation reserve within equity, net of differences on related currency instruments designated as hedges of such investments. On disposal of a foreign operation, such cumulative currency translation differences are recognised in the income statement as part of the overall gain or loss on disposal. Cumulative currency translation differences arising prior to the transition date have been set to zero for the purposes of ascertaining the gain or loss on disposal of a foreign operation subsequent to 1 April 2004. Goodwill and fair value adjustments arising on acquisition of a foreign operation are regarded as assets and liabilities of the foreign operation, are expressed in the functional currency of the foreign operation and are recorded at the exchange rate at the date of the transaction and subsequently retranslated at the applicable closing rates. Pensions and Other Post-Employment Obligations The Group operates defined contribution and defined benefit pension schemes. The costs arising in respect of the Group's defined contribution schemes are charged to the income statement in the period in which they are incurred. The Group has no legal or constructive obligation to pay further contributions after payment of fixed contributions. The Group operates a number of defined benefit pension schemes which require contributions to be made to separately administered funds. The liabilities and costs associated with the Group's defined benefit pension schemes are assessed on the basis of the projected unit credit method by professionally qualified actuaries and are arrived at using actuarial assumptions based on market expectations at the balance sheet date. The Group's net obligation in respect of defined benefit pension schemes is calculated separately for each plan by estimating the amount of future benefits that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value, and the fair value of any plan asset is deducted. The discount rate employed in determining the present value of the schemes' liabilities is determined by reference to market yields at the balance sheet date on high quality corporate bonds of a currency and term consistent with the currency and term of the associated post-employment benefit obligations. The net surplus or deficit arising in the Group's defined benefit pension schemes are shown within either non-current assets or liabilities on the face of the Group Balance Sheet. The deferred tax impact of pension scheme surpluses and deficits is disclosed separately within deferred tax liabilities or assets as appropriate. The Group has elected to avail of the Amendment to IAS 19 'Employee Benefits', to recognise post transition date actuarial gains and losses immediately in the Statement of Changes in Shareholders' Equity. When the benefits of a defined benefit plan are improved, the portion of the increased benefit relating to past service by employees is recognised as an expense in the income statement on a straight line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in the income statement. In accordance with the exemption granted under IFRS 1, IAS 19 has not been applied retrospectively in preparing the Group's transition balance sheet to IFRS. All cumulative actuarial gains and losses as at the transition date (1 April 2004) have therefore been recognised in retained income at that date. Share Based Payment Transactions Employees (including directors) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render service in exchange for shares or rights over shares. The fair value of share entitlements granted is recognised as an employee expense in the income statement with a corresponding increase in equity. The fair value is determined using a binomial model for the DCC plc 1998 Employee Share Option Scheme and Black Scholes for the DCC Sharesave Scheme. Non-market based vesting conditions are not taken into account when estimating the fair value of entitlements as at the grant date. The expense in the income statement represents the product of the total number of options anticipated to vest and the fair value of those options. This amount is allocated on a straight line basis over the vesting period to the Income Statement with a corresponding credit to Other Reserves - Shares to be Issued. The cumulative charge to the income statement is only reversed where entitlements do not vest because non-market performance conditions have not been met or where an employee in receipt of share entitlements relinquishes service before the end of the vesting period. The proceeds received by the company on the vesting of share entitlements are credited to share capital (nominal value) and share premium when the share entitlements are exercised. When the share-based payments give rise to the re-issue of shares from treasury shares, the proceeds of issue are credited to shareholders equity. In line with the transitional arrangements set out in IFRS 2, 'Share Based Payment', the recognition and measurement principles of this standard have been applied only in respect of share entitlements granted after 7 November 2002 and which have not vested by 1 January 2005. The Group does not operate any cash-settled share-based payment schemes or share-based payment transactions with cash alternatives as defined in IFRS 2. Inventories Inventories are valued at the lower of cost and net realisable value. Cost is determined on a first in first out basis and in the case of raw materials, bought-in goods and expense inventories comprises purchase price plus transport and handling costs less trade discounts and subsidies. Cost, in the case of products manufactured by the Group, consists of direct material and labour costs together with the relevant production overheads based on normal levels of activity. Net realisable value represents the estimated selling price less costs to completion and appropriate selling and distribution costs. Provision is made, where necessary, for slow moving, obsolete and defective inventories. Goodwill Goodwill arising in respect of acquisitions completed prior to 1 April 2004 (being the transition date to IFRS) is included at its deemed cost, which equates to its net book value recorded under previous GAAP. In line with the provisions applicable to a first-time adopter under IFRS the accounting treatment of business combinations undertaken prior to the transition date has not been reconsidered in preparing the opening IFRS balance sheet at 1 April 2004, and goodwill amortisation has ceased with effect from the transition date. Goodwill written off to reserves under Irish GAAP prior to 1 April 1998 has not been reinstated and is not included in determining any subsequent profit or loss on disposal. Goodwill on acquisitions is initially measured at cost being the excess of the cost of the business combination over the acquirer's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill relating to acquisitions from 1 April 2004 and goodwill carried in the balance sheet at 1 April 2004 is not amortised. Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. The carrying amount of goodwill in respect of associated undertakings, net of any impairments, is included in financial assets under the equity method in the Group balance sheet. Goodwill was tested for impairment as at 1 April 2004, the date of transition to IFRS, and no impairment resulted from this exercise. Goodwill acquired in a business combination is allocated, from the acquisition date, to the cash-generating units that are anticipated to benefit from the combination's synergies. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is subject to impairment testing on an annual basis and at any time during the year if an indicator of impairment is considered to exist; the goodwill impairment tests are undertaken at a consistent time in each annual period. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised. Impairment losses arising in respect of goodwill are not reversed following recognition. Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured on the basis of the relative values of the operation disposed of and the proportion of the cash-generating unit retained. Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is provided on a straight line basis at the rates stated below, which are estimated to reduce each item of property, plant and equipment to their residual value levels by the end of their useful lives: Annual Rate Freehold and long term leasehold buildings 2% Plant and machinery 5 - 33 1/3% Cylinders 6 2/3% Motor vehicles 10 - 33 1/3% Fixtures, fittings & office equipment 10 - 33 1/3% Land is not depreciated. The residual values and useful lives of property, plant and equipment are reviewed, and adjusted if appropriate, at each balance sheet date. In accordance with IAS 36 'Impairment of Assets', the carrying amounts of items of property, plant and equipment are reviewed at each balance sheet date to determine whether there is any indication of impairment. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. Following the recognition of an impairment loss, the depreciation charge applicable to the asset or cash-generating unit is adjusted prospectively in order to systematically allocate the revised carrying amount, net of any residual value, over the remaining useful life. Subsequent costs are included in an asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the replaced item can be measured reliably. All other repair and maintenance costs are charged to the income statement during the financial period in which they are incurred. Business Combinations The purchase method of accounting is employed in accounting for the acquisition of subsidiaries by the Group. The Group has elected to avail of the exemption under IFRS 1, 'First-time Adoption of International Financial Reporting Standards', whereby business combinations prior to the transition date of 1 April 2004 are not restated. IFRS 3, 'Business Combinations', has been applied with effect from the transition date of 1 April 2004 and goodwill amortisation ceased from that date. The cost of a business combination is measured as the aggregate of the fair value at the date of exchange of assets given, liabilities incurred or assumed and equity instruments issued in exchange for control together with any directly attributable expenses. Deferred expenditure arising on business combinations is determined through discounting the amounts payable to their present value at the date of exchange. The discount component is reflected as an interest charge in the income statement over the life of the obligation. When the initial accounting for a business combination is determined provisionally, any adjustments to the provisional values allocated to assets and liabilities are made within twelve months of the acquisition date and reflected as a restatement of the acquisition balance sheet. Intangible Assets (other than Goodwill) Intangible assets acquired separately are capitalised at cost. Intangible assets acquired in the course of a business combination are capitalised at fair value being their deemed cost as at the date of acquisition. Following initial recognition, intangible assets which have a finite life are carried at cost less any applicable accumulated amortisation and any accumulated impairment losses. Where amortisation is charged on assets with finite lives this expense is taken to the income statement. The amortisation of intangible assets is calculated to write-off the book value of intangible assets over their useful lives on a straight-line basis on the assumption of zero residual value. In general, definite-lived intangible assets are amortised over periods ranging from three to five years, depending on the nature of the intangible asset. Leases Tangible fixed assets, acquired under a lease which transfers substantially all of the risks and rewards of ownership to the Group, are capitalised as fixed assets and are depreciated over their useful lives with any impairment being recognised in accumulated depreciation. Amounts payable under such leases (finance leases), net of finance charges, are shown as short, medium or long term lease obligations, as appropriate. Finance charges on finance leases are charged to the income statement over the term of the lease on an actuarial basis. Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. The annual rentals under operating leases are charged to the income statement as incurred. Deferred Consideration Where acquisitions involve further payments which are deferred or contingent on levels of performance achieved in the years following the acquisition, a discounted deferred acquisition creditor is accrued. Notional interest is charged to the income statement over the relevant period by reference to the period of deferral, current interest rates and the amount of the likely payments. Grants Grants are recognised at their fair value when there is a reasonable assurance that the grant will be received and all attaching conditions have been complied with. Capital grants received and receivable by the Group are credited to capital grants and are amortised to the income statement on a straight line basis over the expected useful lives of the assets to which they relate. Revenue grants are recognised as income over the periods necessary to match the grant on a systematic basis to the costs that it is intended to compensate. Trade and other Receivables and Payables Trade and other receivables and payables are stated at cost, which approximates to fair value given the short-dated nature of these assets and liabilities. Cash and Cash Equivalents Cash and cash equivalents comprise cash at bank and in hand and short term deposits with an original maturity of three months or less. Deposits with a maturity of greater than three months from the date of acquisition are recognised either in held-for-trading financial assets or as loans and receivables. Derivative Financial Instruments The Group uses derivative financial instruments (principally interest rate and currency swaps and forward foreign exchange and commodity contracts) to hedge its exposure to interest rate and foreign exchange risks and to changes in the prices of certain commodity products arising from operational, financing and investment activities. Derivative financial instruments are recognised initially at fair value, being the present value of estimated future cash flows, and gains or losses on subsequent re-measurement of fair value are recognised immediately in the income statement. However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the item being hedged. Hedging For the purposes of hedge accounting, hedges are classified either as fair value hedges (which entail hedging the exposure to movements in the fair value of a recognised asset or liability or a firm commitment) or cash flow hedges (which hedge exposure to fluctuations in future cash flows derived from a particular risk associated with a recognised asset or liability or a highly probable forecast transaction). In the case of fair value hedges which satisfy the conditions for hedge accounting, any gain or loss arising from the re-measurement of the fair value of the hedging instrument is reported in the income statement. In addition, any gain or loss on the hedged item which is attributable to the hedged risk is adjusted against the carrying amount of the hedged item and reflected in the income statement. Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability or a highly probable forecasted transaction, the effective part of any gain or loss on the derivative financial instrument is recognised as a separate component of equity with the ineffective portion being reported in the income statement. When a forecast transaction results in the recognition of an asset or a liability, the cumulative gain or loss is removed from equity and included in the initial measurement of the asset or liability. Otherwise, the associated gains or losses that had previously been recognised in equity are transferred to the income statement in the same reporting period as the hedged transaction. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised as a separate component of equity is kept in equity until the forecast transaction occurs. If a hedged transaction is no longer anticipated to occur, the net cumulative gain or loss recognised in equity is transferred to the income statement in the period. Where foreign currency instruments provide a hedge against a net investment in a foreign operation, foreign exchange differences are taken directly to a foreign currency translation reserve (being a separate component of equity). Cumulative gains and losses remain in equity until disposal of the net investment in the foreign operation at which point the related differences are transferred to the income statement as part of the overall gain or loss on sale. Interest-Bearing Loans and Borrowings All loans and borrowings are initially recorded at cost being the fair value of the consideration received net of transaction costs associated with the borrowing. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost employing the effective interest yield method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement. Gains and losses are recognised in the income statement when the liabilities are derecognised or impaired, as well as through the amortisation process. Provisions A provision is recognised in the balance sheet when the Group has a present obligation (either legal or constructive) as a result of a past event, and it is probable that a transfer of economic benefits will be required to settle the obligation. A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan and announced its main provisions. Provisions arising on business combinations are only recognised to the extent that they would have qualified for recognition in the financial statements of the acquiree prior to the acquisition. Share Capital Treasury Shares Where the Company purchases the Company's equity share capital, the consideration paid is deducted from total shareholders' equity and classified as treasury shares until they are cancelled. Where such shares are subsequently sold or reissued, any consideration received is included in shareholders' equity. Dividends Dividends on Ordinary Shares are recognised as a liability in the Group's financial statements in the period in which they are declared by the Company. Dividends declared after the balance sheet date are disclosed in the subsequent events note. Income Tax Current Tax Current tax represents the expected tax payable or recoverable on the taxable profit for the year using tax rates enacted or substantively enacted at the balance sheet date and taking into account any adjustments stemming from prior years. Deferred Tax Deferred tax is provided using the liability method, on all temporary differences at the balance sheet date which is defined as the difference between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets and liabilities are not subject to discounting and are measured at the tax rates that are anticipated to apply in the year in which the asset is realised or the liability is settled. Deferred tax liabilities are recognised for all taxable temporary differences with the exception of the following: i) where the deferred tax liability arises from the initial recognition of goodwill or the initial recognition of an asset or a liability in a transaction that is not a business combination and affects neither the accounting profit nor the taxable profit or loss at the time of the transaction; and ii) where, in respect of taxable temporary differences associated with investments in subsidiary undertakings, the timing of the reversal of the temporary difference is subject to control and it is probable that reversal will not occur in the foreseeable future. Deferred tax assets are recognised in respect of all deductible temporary differences, carry-forward of unused tax credits and unused tax losses to the extent that it is probable that taxable profits will be available against which to offset these items except: i) where the deferred tax asset arises from the initial recognition of an asset or a liability in a transaction that is not a business combination and affects neither the accounting profit nor the taxable profit or loss at the time of the transaction; and ii) where, in respect of deductible temporary differences associated with investment in subsidiaries and associated undertakings, a deferred tax asset is recognised only if it is probable that the deductible temporary difference will reverse in the foreseeable future and that sufficient taxable profits will be available against which the temporary difference can be utilised. The carrying amounts of deferred tax assets are reviewed at each balance sheet date and are reduced to the extent that it is no longer probable that sufficient taxable profit would be available to allow all or part of the deferred tax asset to be utilised. This information is provided by RNS The company news service from the London Stock Exchange

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Alliance Pharma jumps as takeover news announced and Clarkson advances on modest profit upgrade but Sainsbury continues slide as costs rise and non-food sales slow.

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