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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Goldshield Grp | LSE:GSD | London | Ordinary Share | GB0002893823 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 486.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:9644I
Goldshield Group PLC
03 December 2007
GOLDSHIELD ANNOUNCES INTERIM RESULTS
Goldshield Group plc ("Goldshield"), the pharmaceutical and healthcare company,
today announces its unaudited interim results for the six months to 30 September
2007.
* Revenue of #40.9 million (2006: #36.0 million)
* Profit before tax #6.1 million (2006: loss #3.6 million)
* EBTA #7.9 million (2006: #6.8 million)
* EPS 8.8p (2006: loss 9.8p)
* Net Cash #26.3 million (2006: #17.2 million)
* Interim dividend 2.5p to be paid on 10 January 2008 (2006: 1.7p)
Commenting on the results, Rakesh Patel, Chief Executive, said,
" The Group is in good shape. The decision to focus on the core pharmaceutical
and healthcare businesses has returned us to growth. Products such as Codipar,
Traxam Gel and Lipobind are generating sales and are enjoying a strong
recognition in the market place."
" The Group's balance sheet remains strong and we have established a platform
from which we can grow the scale of the business. The future for Goldshield
Group plc remains promising."
Commenting on the legal update, Dr. Keith Hellawell QPM, Chairman, said,
" The Board is making significant progress with legal matters. We have settled
the Antigen case by mediation and the two remaining civil claims against us are
also progressing well. I would add that we remain in positive dialogue with the
SFO regarding the criminal case."
Date: 3 December 2007
For further information contact:
Goldshield Group plc City Profile
Rakesh Patel, Chief Executive Jonathan Gillen
020-8649-8500 William Attwell
www.goldshieldplc.com 020-7448-3244
Chairman's Overview
I am delighted to report to shareholders that Goldshield has returned to
growth with both sales and profit before tax moving ahead. Further, our balance
sheet remains strong.
As the Chief Executive Officer's Operating Review will detail, our strategy of
focusing upon our core activity has begun to deliver. As shareholders may recall,
I announced earlier this year a number of management changes and some
re-organisation. Also, within my statement, I would like to highlight our
current status.
Earlier this year we announced that we intended to dispose of a number of
non-core activities to the former Chief Executive. Due to contractual issues,
we were unable to complete the disposal. While we are focused upon our core
business, we continue to explore ways in which we can maintain these marginal
enterprises without taking up too much of our senior managers' time.
As promised in my last report, the Board is progressing legal matters as
expeditiously as possible. The claim brought in the Irish Courts in relation to
Antigen was settled through mediation. I would add that the agreement has been
approved from the High Court Commercial in Ireland. In October, while the Court
of Appeal ruled against our "no crime" argument, in the Warfarin case, they did,
however, grant us leave to appeal to the House of Lords where the criminal case
will be heard in January 2008. While the civil claim made by the Department of
Health (DoH) in England and Wales was resolved without admitting liability, the
two other outstanding civil claims against us are also progressing well. Finally,
I would add that we remain in positive dialogue with the SFO regarding the
criminal case.
As I stated in my 2006 report, your Company is focusing upon its core business
of pharmaceutical and healthcare products. Within the operational review which
followed our announcement, we have taken the opportunity to rationalise staff
numbers. However, in order to ensure the stability of our workforce in the
future, we are introducing improved human resource processes to identify and
develop talent. This is especially important in India where the demand for
experienced staff is increasing.
In recent weeks, we announced that Mike Reardon had resigned from the Board to
pursue other interests. Mike has contributed much to the success of the Company
and we wish him well for the future.
I am pleased that Paul Edwards, MBE, has joined the Board as a non-executive
Director. Paul has over 25 years experience in the pharmaceutical and
biotechnology industries for which he received Royal recognition in 1997. I am
sure he will make a valuable contribution to the Company. We also continue our
search for a new Finance Director to complete the Board.
It has been very pleasing to see new products achieving success. For example
"Lipobind", a weight management product, has had promising results. This is one
of a number of products with good potential and we are now in the process of
bringing these products to market.
The interim results are encouraging and give me considerable confidence for the
full year. This is due in no small measure to the endeavour of every member of
this Company who has worked through changing and difficult times; I thank them
wholeheartedly for their support.
Dr. Keith Hellawell QPM
Chairman
30 November 2007
Chief Executive Officer's Operating Review
Overview
I am pleased to present my first report since taking over as CEO in July this
year.
The period under review was marked with a number of changes and challenges. It
was equally a period of important strategic developments, setting up a platform
for the business to grow in the coming years.
The results for the six months to September 2007 are encouraging. The Group
reported revenues of #40.9 million (2006: #36.0 million) and profit before tax
at #6.1 million (2006: loss #3.6 million). Pre exceptional earnings before tax,
amortisation and impairment losses (EBTA) were #7.9 million (2006: #6.8 million).
These achievements would not have been possible were it not for the patience,
dedication and commitment from all employees, customers, business partners and
shareholders. On behalf of the Board, I wish to express my sincerest thanks to
each of them.
In light of the progress made, the Board is pleased to recommend an increased
interim dividend of 2.5 pence per share (2006: 1.7 pence). The dividend will be
paid on 10 January 2008 to those shareholders on the register on 14 December 2007.
Significant restructuring has taken place both at the Board and Senior management
levels.
Mike Reardon resigned from the Board on 14 November 2007 to pursue other
interests. On behalf of the Board, I would like to thank him for his contribution
towards the progress of the Group.
Paul Edwards has joined the Board as a non-executive Director. I am confident
that the Group will benefit from the skills and experience he brings with him.
The search for a new Finance Director is in progress.
The proposal to sell the Indian based Business Solution business together with
certain assets in India to Ajit Patel failed to progress. Consequently, the Group
is retaining this business.
Our core strategy is to develop and grow the pharmaceutical and healthcare
products businesses. In returning our focus back to the product business,
resources will need to be allocated in building our infrastructure, product
development, marketing and development of brands.
Potential acquisitions in both the pharmaceutical and healthcare areas are
currently being evaluated.
Pharmaceuticals division
The Pharmaceutical division achieved total sales of #30.4 million (2006: #25.4
million).
The European retail brand business achieved increased sales of #17.5 million
(2006: #14.4 million). The curtailment of re-importation of export sales back
into the UK by parallel importers has now had the positive effect expected.
Focused marketing on key products like Codipar, Traxam Gel, Nitrofurantoin and
Lomotil has further enhanced sales. The PCT (Primary Care Trust) portfolio
strategy is expected to continue delivering growth in the second half of the
year.
Sales in the Generics business have increased to #4.9 million (2006: #3.6 million)
due to favorable market conditions. With a wider product portfolio anticipated
for the future the prospects are encouraging.
The Hospitals' business sales in Europe remained steady at #5.6 million (2006:
#5.6 million). New product development, new registrations of several generic
pharmaceuticals and a continued focus on European business generation, are all
expected to drive the growth prospects of the business forward. Our range of
differentiated Bupivacaine epidural infusions have received Department of Health
(DOH) and the National Patient Safety Agency (NPSA) approval. We anticipate a
wider European interest in our Bufecaine infusions.
Sales in the Country Distributor business were #2.4 million (2006: #1.8 million),
with the growth attributable to improved supplies of key products like Ecotrin.
We anticipate that new product launches in new and existing territories should
contribute to future growth.
Healthcare division
Current sales for the Healthcare division for the period were broadly static at
#9.4 million (2006: #9.5 million).
The European Healthcare division reported an increase in sales of 3% to #6.6
million (2006: #6.4 million), rectifying the decline in previous years. The
division has focused on increasing retail distribution, internet marketing,
telemarketing, the introduction of new products and increasing the territories
where Goldshield products are sold. The results of these efforts are expected to
be seen in the second half of the year. Lipobind, the weight management product
launched in Q4 06/07, continues to show significant growth and has attracted the
interest of major UK retailers.
The North American business reported a decline in sales at #2.6 million (2006:
#3.0 million), significantly impacted by the weak US dollar. This business is
refocusing on tele-marketing and new products for the second half.
Indian markets for products and services offer significant potential for growth,
which will be explored through the direct to consumer and retail channels.
Trading and future prospects
I am very encouraged with the progress made so far which we expect to carry on
into the second half of the year. I expect to report further progress on various
new initiatives and strategies that are expected to impact results in the near
future.
Statement of Directors' responsibilities
The Directors of Goldshield Group plc confirm that to the best of their
knowledge this condensed set of financial statements has been prepared in
accordance with IAS 34 as adopted by the European Union, and the Chief Executive
Officer's Operating Review includes a true and fair view of the assets,
liabilities, financial position and profits of Goldshield Group plc as
required by the Disclosure and Transparency Rules (DTR) 4.2.4 and a fair view of
the information required by DTR 4.2.7 and DTR 4.2.8.
Rakesh Patel
Chief Executive Officer
30 November 2007
Note: Earnings before tax, amortisation, impairment and exceptional costs are
calculated as follows:-
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Revenue 40,915 35,980 74,274
===========================================
Profit/(loss) before tax 6,068 (3,600) 603
Amortisation 2,154 2,489 4,661
Impairment losses 307 1,920 3,800
Exceptional legal and professional costs (610) 6,040 5,602
-------------------------------------------
Earnings before tax, amortisation,
impairment and exceptional costs 7,919 6,849 14,666
===========================================
Consolidated Income Statement for the six months ended 30 September 2007
Total Total Total
Six months Six months Year
Before ended ended ended
impairment and 30 September 30 September 31 March
Notes exceptional Exceptional 2007 2006 2007
items items Impairment (unaudited) (unaudited) (audited)
#'000 #'000 #'000 #'000 #'000 #'000
Revenue 2 40,915 - - 40,915 35,980 74,274
Cost of sales (13,084) - - (13,084) (12,459) (26,213)
-----------------------------------------------------------------------------
Gross profit 27,831 - - 27,831 23,521 48,061
Distribution costs (1,835) - - (1,835) (1,890) (3,407)
Impairment losses 6,7 - (307) (307) (1,920) (3,800)
Exceptional legal and
professional costs - 610 - 610 (6,040) (5,602)
Other administrative
expenses (20,857) - - (20,857) (17,557) (35,350)
-----------------------------------------------------------------------------
Administrative expenses (20,857) 610 (307) (20,554) (25,517) (44,752)
-----------------------------------------------------------------------------
Operating profit/(loss) 5,139 610 (307) 5,442 (3,886) (98)
Finance costs - - - - (3) (4)
Finance income 626 - - 626 289 705
-----------------------------------------------------------------------------
Profit/(loss) before tax 5,765 610 (307) 6,068 (3,600) 603
Income tax expense 3 (2,621) (183) - (2,804) (21) (2,366)
-----------------------------------------------------------------------------
Profit/(loss) after tax
attributable to
shareholders of parent 3,144 427 (307) 3,264 (3,621) (1,763)
=============================================================================
Earnings/(loss) per share
Basic 5 8.8 (9.8) (4.7)
===============================
Diluted 5 8.8 (9.8) (4.7)
===============================
Dividends
Proposed dividend
per share (pence) 2.5 1.7 5.1
===============================
Proposed dividend (#'000) 959 632 1,896
===============================
Dividends paid
during the period (pence) 5.1 5.1 6.8
===============================
Dividends paid
during the period (#'000) 1,896 1,893 2,525
===============================
The accompanying accounting policies and notes form an integral part of the
interim financial statement.
Consolidated Balance Sheet as at 30 September 2007
As at As at As at
30 September 30 September 31 March
Notes 2007 2006 2007
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Assets
Non-current
Goodwill 6 7,690 9,626 7,703
Other intangible assets 6 10,993 15,502 13,329
Property, plant and equipment 7 3,721 3,240 3,539
Held to maturity investments 368 - -
Deferred tax assets 1,536 1,024 1,840
-----------------------------------------
24,308 29,392 26,411
Current
Inventories 9,013 10,229 8,480
Trade and other receivables 12,311 10,904 11,984
Cash and cash equivalents 26,348 17,214 23,321
-----------------------------------------
47,672 38,347 43,785
-----------------------------------------
Total assets 71,980 67,739 70,196
=========================================
Equity
Equity attributable to shareholders
of Goldshield Group plc
Share capital 8 1,918 1,858 1,859
Share premium 8 22,258 21,524 21,549
Shares held by employee
benefit trust (39) - -
Translation reserve (468) (651) (692)
Retained earnings 19,327 16,795 17,966
-----------------------------------------
Total equity 42,996 39,526 40,682
-----------------------------------------
Liabilities
Non-current
Deferred tax liabilities 1,117 928 1,117
-----------------------------------------
1,117 928 1,117
Current
Provisions 3,320 6,420 5,177
Trade and other payables 16,407 14,769 16,092
Other liabilities 3,374 3,036 2,533
Current tax liabilities 4,766 3,060 4,595
-----------------------------------------
27,867 27,285 28,397
-----------------------------------------
Total liabilities 28,984 28,213 29,514
-----------------------------------------
-----------------------------------------
Total equity and liabilities 71,980 67,739 70,196
=========================================
The accompanying accounting policies and notes form an integral part of the
interim financial statement.
Consolidated Cash Flow Statement for the six months ended 30 September 2007
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Operating activities
Result for the period before tax 6,068 (3,600) 603
Depreciation 336 310 632
Amortisation 2,154 2,489 4,661
Impairment losses
- intangible assets 112 1,920 3,800
- property, plant and equipment 195 - -
Equity settled share options/rewards 60 30 95
Profit on disposal of assets
- intangible assets (43) - -
- property, plant and equipment (4) - -
Finance costs - 3 4
Finance income (626) (289) (705)
------------------------------------------------------------------------------------------
8,252 863 9,090
(Increase)/decrease in inventories (533) 1,301 3,050
(Increase)/decrease in trade and other receivables (327) (224) (1,304)
(Decrease)/increase in provisions, trade
payables and other liabilities (692) 4,227 3,826
Taxes paid (2,353) (1,172) (2,678)
------------------------------------------------------------------------------------------
Net cash from operating activities 4,347 4,995 11,984
Cash flows from investing activities
Additions to property, plant and equipment (566) (2,070) (2,686)
Proceeds on disposal of assets
- intangible assets 150 - -
- property, plant and equipment 5 - -
Purchase of businesses and deferred consideration - - (75)
Purchase of held to maturity investments (368) - -
Interest received 626 289 705
------------------------------------------------------------------------------------------
Net cash from investing activities (153) (1,781) (2,056)
Cash flows from financing activities
Proceeds from share issue 768 41 67
Purchase of shares by employee benefit trust (39) - -
Interest paid - (3) (4)
Dividends paid (1,896) (1,893) (2,525)
------------------------------------------------------------------------------------------
Net cash from financing activities (1,167) (1,855) (2,462)
Net increase in cash and cash equivalents 3,027 1,359 7,466
Cash and cash equivalents at beginning of period 23,321 15,855 15,855
------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period 26,348 17,214 23,321
==========================================================================================
Consolidated Statement of Changes in Equity for the six months ended 30
September 2007
Equity attributable to equity holders of Total
Goldshield Group plc Equity
Share Share Translation Retained
capital premium reserve earnings
#'000 #'000 #'000 #'000 #'000
Balance 1 April 2006 1,856 21,485 (90) 22,221 45,472
Currency translation differences - - (561) - (561)
Deferred tax on translation reserve - - - 168 168
Deferred tax on pre 7 November
2002 grants of share options - - - (110) (110)
-----------------------------------------------------------------
Net gains/(losses) not recognised
in income statement - - (561) 58 (503)
Loss for the period - - - (3,621) (3,621)
-----------------------------------------------------------------
Total recognised expense
for the period - - (561) (3,563) (4,124)
Shares issued 2 39 - - 41
Employee share based
compensation - - - 30 30
Dividends paid - - - (1,893) (1,893)
-----------------------------------------------------------------
Balance at 30 September 2006 1,858 21,524 (651) 16,795 39,526
=================================================================
Balance 1 April 2006 1,856 21,485 (90) 22,221 45,472
Currency translation differences - - (602) - (602)
Deferred tax on translation reserve - - - 181 181
Deferred tax on pre 7 November
2002 grants of share options - - - (243) (243)
-----------------------------------------------------------------
Net losses not recognised
in income statement - - (602) (62) (664)
Loss for the period - - - (1,763) (1,763)
-----------------------------------------------------------------
Total recognised expense
for the period - - (602) (1,825) (2,427)
Shares issued 3 64 - - 67
Employee share based
compensation - - - 95 95
Dividends paid - - - (2,525) (2,525)
-----------------------------------------------------------------
Balance at 31 March 2007 1,859 21,549 (692) 17,966 40,682
=================================================================
Equity attributable to equity holders of Total
Goldshield Group plc Equity
Share Share Shares held Translation Retained
capital premium by EBT reserve earnings
#'000 #'000 #'000 #'000 #'000 #'000
Balance 1 April 2007 1,859 21,549 - (692) 17,966 40,682
Currency translation differences - - - 224 - 224
Deferred tax on translation reserve - - - - (67) (67)
-----------------------------------------------------------------
Net gains/(losses) not recognised
in income statement - - - 224 (67) 157
Profit for the period - - - - 3,264 3,264
-----------------------------------------------------------------
Total recognised income
for the period - - - 224 3,197 3,421
Shares issued 59 709 - - - 768
Shares held by employee
benefit trust - - (39) - - (39)
Employee share based
compensation - - - - 60 60
Dividends paid - - - - (1,896) (1,896)
-----------------------------------------------------------------
Balance at 30 September 2007 1,918 22,258 (39) (468) 19,327 42,996
=================================================================
Notes to the Interim Financial Statement
1. Principal accounting policies
Statement of compliance
The interim financial statement has been prepared in accordance with
International Accounting Standard 34 "Interim Financial Reporting". It does not
include all of the information required for full annual financial statements,
and should be read in conjunction with the consolidated financial statement of
the Group as at and for the year ended 31 March 2007.
New IFRS standards and interpretations not adopted
The IASB and IFRIC have issued additional standards and interpretations which
are effective for periods starting after the date of these financial statements.
The following standards and interpretations with their effective date have yet
to be adopted by the Group.
* IFRS 8 Operating Segments - 1 January 2009
* IFRIC 12 Service Concession Agreements - 1 January 2008
The Group does not anticipate that the adoption of these standards and
interpretations will have a material effect on its financial statements on
initial adoption.
Basis of consolidation
The Group financial statements consolidate those of the Company and of its
subsidiary undertakings drawn up to 30 September 2007. A subsidiary is an entity
which the Company controls, this is achieved by owning more than 50% of the
issued share capital. Profits or losses on intra-group transactions are
eliminated in full. The results of the subsidiary undertakings acquired during
the year have been included from the date of acquisition. On acquisition of a
subsidiary, all of the subsidiary's assets and liabilities which exist at the
date of acquisition are recorded at the fair values reflecting their condition
at that date. Goodwill arising on consolidation, representing the excess of the
fair value of the consideration given over the fair values of the identifiable
net assets acquired, is capitalised net of any provision for impairment.
An Employee Benefit Trust (EBT) that is controlled by its sponsoring entity
which is the Company in case of the Group is consolidated into the financial
statements.
Revenue
Revenue from the sale of goods is recognised in the income statement when the
significant risks and rewards of ownership have been transferred to the buyer.
Revenue is measured at the fair value of the consideration received/receivable
by the Group for goods supplied and services provided, excluding value added tax
and trade discounts. Revenue from services rendered is recognised in the income
statement by reference to the stage of completion of transactions at the balance
sheet date. The stage of completion for the Global Solutions call centre
business is determined by the man days spent on the project for rendering the
service at the end of each billing cycle. Subscription revenue is accrued over
the period of the subscription.
Intangible assets
Goodwill
All business combinations are accounted for under the purchase method and
goodwill has been recognised on acquisitions of subsidiaries. In respect of
business combinations that have occurred since 1 April 2004, goodwill represents
the difference between the cost of the acquisition and the fair value of the net
identifiable assets acquired. Goodwill is stated at cost less any accumulated
impairment losses. Goodwill arising on acquisitions before 1 April 2004 has been
retained at the previous UK GAAP amounts at 31 March 2004. Goodwill is allocated
to cash generating units and is not amortised but tested for impairment annually
or more frequently if events or changes in circumstances indicate that it might
be impaired.
Other intangible assets
Externally purchased product licenses, trademarks, brand-names, know-how and
similar intangible items are capitalised at historical cost, net of any
provision for impairment and amortised on a straight line basis over their
estimated useful economic lives which range between seven and ten years. The
amortisation cost has been included within administrative expenses in the income
statement.
Impairment
The Group's goodwill and other intangible assets are tested for impairment
annually or more frequently, if events or changes in circumstances indicate that
it might be impaired. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash
flows (cash generating units). An impairment loss is recognised for the amount
by which the asset's or cash generating unit's carrying amount exceeds its
recoverable amount. The recoverable amount is based on internal discounted
cash flow evaluation. If at the balance sheet date there is any indication that
an impairment loss recognised in prior periods for an asset other than goodwill
no longer exists, the recoverable amount is reassessed and the asset is reflected
at the recoverable amount.
Research and development expenditure
Expenditure on development activities is capitalised if the product or process
is technically and commercially feasible, the costs are separately identifiable
and the Group has sufficient resources to complete development. Capitalised
development costs are stated at cost less accumulated amortisation and
impairment losses. Capitalised development costs are amortised from the point at
which the asset is ready to use on a straight-line basis over its useful life,
not exceeding five years. All other research and development expenditure is
written off to the income statement as other administrative expenses in the
period in which it is incurred.
Property, plant and equipment
Property, plant and equipment are stated at cost less the accumulated
depreciation on the same. Depreciation is charged on a straight line basis over
the estimated useful lives on the cost of the assets less their residual value.
Land is not depreciated.
The estimated useful lives are as follows:
Freehold buildings and leasehold
improvements - 25 Years or over the period of lease
Office equipment - 5 Years
Plant and equipment - 6 to 7 Years
Motor vehicles - 5 Years
Residual values are re-assessed annually.
Directly attributable costs for construction of assets is shown under Capital
work in progress and will be transferred to the relevant category on completion
of construction of the asset.
An asset's carrying amount is written down immediately to its recoverable amount
if the asset's carrying amount is greater than its estimated recoverable amount.
The write down is included under Impairment in the Income Statement.
Investments in debt and equity securities
When the Group has the positive intent and ability to hold non-convertible
debentures/debt securities to maturity, they are initially recognised at fair
value, less impairment losses.
Securities held-to-maturity are recognised/derecognised on the day they are
transferred to/by the Group.
Inventories
Inventories are stated at the lower of cost and net realisable value. The costs
of inventories are valued using the weighted average price method.
Accounting for income taxes
Current income tax assets and/or liabilities comprise those obligations to, or
claims from, fiscal authorities relating to the current or prior reporting
period, that are unpaid at the balance sheet date. They are calculated according
to the tax rates and tax laws applicable to the fiscal periods to which they
relate, based on the taxable profit for the year.
Deferred tax is recognised on all temporary differences. This involves
comparison of the carrying amount of assets and liabilities in the consolidated
financial statements with their respective tax bases. However, deferred tax is
not provided on the initial recognition of goodwill, nor on the initial
recognition of an asset or liability unless the related transaction is a
business combination or affects tax or accounting profit. Deferred tax
liabilities are always provided for in full. Deferred tax assets and liabilities
are calculated, without discounting, at tax rates that are expected to apply to
the period when the asset is realised or the liability is settled, based on tax
rates (tax laws) that have been enacted or substantially enacted by the balance
sheet date. All changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the income statement, except where they relate to
items that are charged or credited directly to equity (such as translation
reserve and pre 7 November 2002 grants of share options) in which case the
related deferred tax is also charged or credited directly to equity.
Tax losses available to be carried forward as well as other income tax credits
to the Group are assessed for recognition as deferred tax assets. Deferred tax
assets are only recognised to the extent that it is probable that future taxable
profits will be available against which the asset can be recognised and are
reduced to the extent that it is no longer probable that the related tax benefit
will be realised.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an
original maturity of three months or less. Bank overdrafts that are repayable on
demand and form an integral part of the Group's cash management are included as
a component of cash.
Employee benefit trust
The assets and liabilities of the Employee Benefit Trust (EBT) have been
included in the Group accounts. Any assets held by the EBT cease to be
recognised on the Group balance sheet when the assets vest unconditionally in
identified beneficiaries.
The costs of purchasing own shares held by the EBT are shown as a deduction
against equity. The proceeds from the sale of own shares held increase equity.
Neither the purchase nor sale of own shares leads to a gain or loss being
recognised in the Group income statement.
Employee benefits
The Group operates a defined contribution pension scheme whereby contributions
are made to individual employee pension plans of certain employees. These costs
are charged against profits in respect of the accounting period in which they
are paid.
Indian Gratuity costs, which represent a form of long term service benefits are
accrued based on actuarial valuation at the balance sheet date, carried out by
an independent actuary.
Leased assets
All leased assets are identified as operating leases if they do not transfer
substantially all the risks and rewards to the lessee.
Payments made under operating leases are charged to the profit and loss account
on a straight line basis over the period of the lease.
Foreign currencies
The reporting currency for these financial statements is GB sterling (#) which
is the parent Company's functional currency.
Transactions in foreign currencies are translated at the exchange rate ruling at
the date of the transaction. Monetary assets and liabilities in foreign
currencies are translated at the rates of exchange ruling at the balance sheet
date. Foreign exchange differences arising on translation are recognised in
profit or loss. Non monetary assets and liabilities that are measured in terms
of historical cost in a foreign entity are translated using the exchange rate at
the date of the transaction. All assets and liabilities in the financial
statements of foreign subsidiaries are translated at the closing rate at the
balance sheet date. The results of foreign operations have been converted into
the Group's reporting currency at the actual rates over the reporting period and
the exchange differences arising have been taken to translation reserve, a
component of equity. The exchange differences arising from re-translation of the
net investments in subsidiaries are directly taken to translation reserve. All
other exchange differences are dealt with through the income statement.
Share options
For all employee share options granted after 7 November 2002 and vesting on or
after 1 January 2005, an expense is recognised in the income statement with a
corresponding credit to equity. The equity settled share based payment is
measured at the fair value at the grant date using the binomial lattice method.
If vesting periods or other vesting conditions apply, the expense is allocated
over the vesting period, based on the best available estimate of the number of
share options expected to vest.
Long term share incentive plan
As soon as practicable after the start of each performance period, each eligible
participant will be notified about the number of shares awarded to him/her in
respect of that period. The participant will also be informed about the form of
the award, the performance targets to be achieved in relation to the performance
period and any other conditions to which the award may be subject. The fair
value of the share awards granted is recognised as an employee expense with a
corresponding increase in equity. The fair value is measured at each award date
and spread over the period during which the participants become unconditionally
entitled to the awards. The fair value of the share awards is measured using a
binomial model, taking into account the terms and conditions upon which the
shares will be released to the participants.
Provisions - Legal and other disputes
Provision is made where a reliable estimate can be made of the likely outcome of
legal or other disputes against the Group. In addition, provision is made for
legal and other expenses arising from claims received or other disputes. No
provision is made for other possible claims or where an obligation exists but it
is not possible to make a reliable estimate. Costs associated with claims made
by the Group against third parties are charged to the profit and loss account as
they are incurred. The provisions are not discounted as the impact is not
material.
Exceptional legal costs
Exceptional legal costs are expenditure incurred and provided for defending the
legal claims against the Group by Department of Heath and Serious Fraud Office.
Dividends
Dividends proposed or declared after the balance sheet dates are not recognised
as a liability. However the amounts of such dividends are disclosed in the
financial statements.
Segmental 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 (geographic segment) which is
subject to risks and rewards that are different from those of other segments.
Financial instruments
Financial assets and financial liabilities are recognised on the Group's balance
sheet when the Group becomes a party to the contractual terms of the instrument.
- Trade receivables
Trade receivables do not carry any interest and are initially stated at their
fair values and thereafter at amortised cost as reduced to equal the estimated
present value of the future cash flows.
- Bank borrowings
Interest bearing bank loans and overdrafts are recorded at fair values on
initial recognition. Finance charges including premiums payable on settlement or
redemption and direct issue costs, are accounted for on an accruals basis to the
profit and loss account using the effective interest method and are added to the
carrying value of the instrument to the extent that they are not settled in the
period in which they arise.
- Trade payables
Trade payables are not interest bearing and are initially stated at their fair
values and thereafter at amortised cost.
- Equity instruments
Equity instruments issued by the Group are recorded at the proceeds received,
net of direct issue costs.
Equity comprises of the following:
- Share capital - represents the nominal value of equity shares
- Share premium - represents the excess over nominal value of fair value of
consideration
- Shares held by Employee Benefit Trust - represents shares of the Company held
by the Employee Benefit Trust of the Long Term Incentive Plan
- Retained earnings - represents the accumulated retained profits
- Translation reserve - represents gains or losses on foreign currency
transactions
2. Segmental reporting
Segment information is presented in the consolidated financial statements in
respect of the Group's business segments, which are the primary basis of segment
reporting. The business segment-reporting format reflects the Group's management
and internal reporting structure.
Primary - Business segments
The Group is organised into five major business units - Retail Brands, Retail
Generics, Hospitals, Direct to Consumer Western Europe (D2C WE) and, Direct to
Consumer North America (D2C NA). Certain other business units like Country
Distributors, Global Services, Wellbeing Centre, Wellbeing Villages, Resorts and
Management Services constitute the other segments. These units form the basis
for the Group's reporting of primary segment information.
Segment results
Segment results include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis.
All inter-segment transfers are priced and carried out at arm's length.
Unallocated segment income and expenses
Unallocated segment income comprises interest income and miscellaneous receipts
not directly attributable to any particular segment. Unallocated segment
expenditure represents interest on loans and provision for income taxes, which
cannot be directly attributed to any segment.
Primary segment disclosure - Business segments
6 months ended Retail Retail Other
30 September 2007 Brands Generics Hospitals D2C WE D2C NA Segments Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Revenue
External sales 17,530 4,889 5,593 5,516 2,569 4,818 40,915
---------------------------------------------------------------------
Total revenue 17,530 4,889 5,593 5,516 2,569 4,818 40,915
---------------------------------------------------------------------
Result
Segment result 4,106 1,137 557 (380) (305) 327 5,442
---------------------------------------------------------------------
Operating profit 5,442
Finance costs -
Finance income 626
Income tax expense (2,804)
--------
Profit for the period 3,264
========
6 months ended Retail Retail Other
30 September 2006 Brands Generics Hospitals D2C WE D2C NA Segments Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Revenue
External sales 14,356 3,649 5,634 5,975 3,035 3,331 35,980
---------------------------------------------------------------------
Total revenue 14,356 3,649 5,634 5,975 3,035 3,331 35,980
---------------------------------------------------------------------
Result
Segment result 1,096 (38) 1,248 (81) (462) (5,649) (3,886)
---------------------------------------------------------------------
Operating loss (3,886)
Finance costs (3)
Finance income 289
Income tax expense (21)
-------
Loss for the period (3,621)
=======
Year ended Retail Retail Other
31 March 2007 Brands Generics Hospitals D2C WE D2C NA Segments Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Revenue
External sales 31,266 7,420 11,364 11,580 5,852 6,792 74,274
---------------------------------------------------------------------
Total revenue 31,266 7,420 11,364 11,580 5,852 6,792 74,274
---------------------------------------------------------------------
Result
Segment result 4,743 135 2,539 (441) (2,653) (4,421) (98)
---------------------------------------------------------------------
Operating loss (98)
Finance costs (4)
Finance income 705
Income tax expense (2,366)
--------
Loss for the year (1,763)
========
3. Tax on profit on ordinary activities
Tax on profits on ordinary activities is calculated at the standard rate of
corporation tax in the United Kingdom of 30%.
The taxation charge of #2.80 million (2006: #0.02 million) represents an
effective tax rate of 46.21% (2006: Nil %).
4. Equity dividends
The amount of #1.89 million pertaining to the final dividend proposed as at 31
March 2007 has been paid on 20 August 2007.
The Directors have declared an interim dividend of 2.5 pence per share for 2007/
08 (2006/07 interim dividend: 1.70 pence, 2006/07 final dividend: 5.10 pence).
The dividend will be paid on 10 January 2008 to those shareholders on the
register on 14 December 2007.
5. Earnings/(loss) per share
The earnings/(loss) are based on the earnings/(loss) attributable to ordinary
shareholders and the weighted average number of shares is based on ordinary
shares outstanding during the period.
Basic Diluted
Earnings/(loss) Earnings/(loss)
per share per share
6 months to 30 September 2007 earnings (#'000) 3,264 3,264
Weighted average number of shares (000) 37,176 37,176
Per share amount (pence) 8.8 8.8
==============================
6 months to 30 September 2006 loss (#'000) (3,621) (3,621)
Weighted average number of shares (000) 37,131 37,404
Per share amount (pence) (9.8) (9.8)
==============================
Year to 31 March 2007 loss (#'000) (1,763) (1,763)
Weighted average number of shares (000) 37,146 37,146
Per share amount (pence) (4.7) (4.7)
==============================
6. Intangible assets
Brand names know-how Goodwill Total
licences and trade marks
#'000 #'000 #'000
Cost
At 1 April 2007 64,575 25,437 90,012
Exchange differences 12 (339) (327)
Disposals (225) - (225)
------------------------------
At 30 September 2007 64,362 25,098 89,460
------------------------------
At 1 April 2006 64,586 27,349 91,935
Exchange differences (12) (1,216) (1,228)
------------------------------
At 30 September 2006 64,574 26,133 90,707
------------------------------
Amortisation and impairment
At 1 April 2007 51,246 17,734 68,980
Exchange differences 12 (438) (426)
Amortisation 2,154 - 2,154
Impairment losses - 112 112
Disposals (43) - (43)
------------------------------
At 30 September 2007 53,369 17,408 70,777
------------------------------
At 1 April 2006 45,071 17,112 62,183
Exchange differences (12) (1,001) (1,013)
Amortisation 2,489 - 2,489
Impairment losses 1,524 396 1,920
------------------------------
At 30 September 2006 49,072 16,507 65,579
------------------------------
Carrying amounts
------------------------------
At 30 September 2007 10,993 7,690 18,683
------------------------------
At 30 September 2006 15,502 9,626 25,128
------------------------------
At 31 March 2007 13,329 7,703 21,032
==============================
An impairment provision of #Nil has been recognised for the US business as at 30
September 2007 (30 September 2006: #284,000, 31 March 2007: #2,132,000).
The performance of Regina business has also been reviewed and an impairment
provision of #112,000 has been made as at 30 September 2007 (30 September 2006:
#112,000 31 March 2007: #144,000).
The carrying value of the Other Intangibles have been reviewed and an impairment
provision of #Nil has been made as at 30 September 2007 (30 September 2006:
#1,524,000, 31 March 2007: #1,524,000).
7. Property, plant and equipment
During the period ended 30 September 2007 the Group acquired assets with a cost
of #566,000 (30 September 2006: #2,070,000, 31 March 2007: #2,686,000)
Assets with a carrying value of #3,000 were disposed of during the period ended
30 September 2007 (30 September 2006: #Nil, 31 March 2007: #Nil) resulting in a
gain on disposal of #4,000 (30 September 2006: #Nil, 31 March 2007: #Nil).
The carrying value of assets for the Wellbeing Center at Akruti have
been reviewed and an impairment provision of #195,000 has been made as at 30
September 2007 (30 September 2006: #Nil, 31 March 2007: #Nil).
8. Share capital
Ordinary shares Ordinary shares Share
of 5 pence of 5 pence premium
shares '000 #'000 #'000
Authorised
At 30 September 2006, 31 March 2007
and 30 September 2007 100,000 5,000 -
============================================
Allotted, called up and fully paid
At 1 April 2006 37,127 1,856 21,485
Issued under sharesave scheme 33 2 39
--------------------------------------------
At 30 September 2006 37,160 1,858 21,524
--------------------------------------------
At 1 April 2006 37,127 1,856 21,485
Issued under sharesave scheme 49 3 64
--------------------------------------------
At 31 March 2007 37,176 1,859 21,549
--------------------------------------------
At 1 April 2007 37,176 1,859 21,549
Issued to employee benefit trust 780 39 -
Issued under share option scheme 405 20 709
--------------------------------------------
At 30 September 2007 38,361 1,918 22,258
============================================
During the period, 1,185,000 shares were issued under the share option scheme
and the long term incentive plan. The difference between the total consideration
of #768,000 and nominal value of #59,250 has been credited to share premium
account.
9. Contingent liabilities
Indemnities and guarantees
The Group has given indemnities in respect of advance payments, deferred
purchase consideration and import duty guarantees issued on its behalf in the
normal course of business. The indemnities given at 30 September 2007 were
#574,000 (30 September 2006: #712,000, 31 March 2007: #583,000).
Serious Fraud Office (SFO) Investigation update
In April 2006, the SFO brought formal charges against the Company and two of the
Company Directors, Ajit Patel and Kirti Patel. Ajit Patel has since ceased to be
employed by the Company effective 3 July, 2007. The Directors do not believe the
Group has acted in an unlawful manner and the case is being defended. Legal and
professional costs in this matter have been provided for.
Scottish and Northern Irish Department of Health claims update
The information required by IAS 37 with respect to the above claims is not
disclosed on the grounds that it can be expected to prejudice the outcome of the
litigation. The expected legal and professional costs for this action have been
provided for.
10. Post balance sheet events
Irish operations
On 28 September 2007 the Group concluded a full and final settlement in respect
of the above claim through mediation with the liquidator. The mediation has
since been ratified by the High Court on 5 November 2007.
11. Preparation of Interim Financial Statement
The interim financial statement is unaudited but has been reviewed by the
auditors and their report is set out on page 20. The financial information does
not constitute statutory accounts within the meaning of section 240 of the
Companies Act. Statutory accounts for Goldshield Group plc for the year ended 31
March 2007 on which the auditors gave an unqualified report have been delivered
to the Registrar of Companies. The accounting policies and presentation of
figures in the interim financial statement are consistent with those in the last
annual accounts.
12. Approval of Interim Financial Statement
The interim financial statement was approved by the Board of Directors on 30
November 2007. Copies of this statement will be available to members of the
public, free of charge, from the Company at NLA Tower, 12-16 Addiscombe Road,
Croydon, Surrey, CR0 0XT.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FDWFASSWSEEF
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