NOTES TO THE COMPANY FINANCIAL STATEMENTS
1 accounting policies
basis of preparation
The accounts have been prepared under the historical cost convention and in accordance with UK GAAP.
As permitted by Section 408 of the Companies Act 2006, a profit and loss account of the Company is not presented.
The Financial Statements have been prepared on a going concern basis, as disclosed in the Governance Report.
The Company’s profit for the 53 weeks ended 3 May 2009, before dividends declared and paid of £2,828,000, was £5,143,000 (2008: £657,000).
investments in subsidiary undertakings
Investments in subsidiary undertakings are stated at cost less any provision for permanent diminution in value.
provisions
A provision is recognised when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
share‑based compensation
The Company operates various equity‑settled share‑based compensation schemes. The fair value of the employee services received by Group subsidiaries in exchange for the grant of the options is recognised by the Company as an increase in its investments in subsidiary undertakings, with a corresponding increase in equity. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non‑market vesting conditions, which are included in assumptions about the number of options that are expected to become exercisable. The estimate of the number of options that are expected to become exercisable is revised at each Balance Sheet date and the impact of the revision is recognised over the remaining vesting period.
The Company additionally operates cash‑settled share‑based compensation schemes. The expected cash settlement cost is recognised as an increase in the Company’s investments in subsidiary undertakings over the vesting period. The expected cash settlement cost is revised at each Balance Sheet date and the impact of the revision is recognised over the remaining vesting period.
dividends
Dividend income is recognised in the Company’s Financial Statements in the period in which the dividends are declared. Where such dividends are proposed subject to the approval of the paying Company’s shareholders, the dividends are only declared once shareholder approval has been obtained.
Dividends on the Company’s Ordinary Shares are recognised as a liability in the Company’s Financial Statements, and as a deduction from equity, in the period in which the dividends are declared. Where such dividends are proposed subject to the approval of the Company’s shareholders, the dividends are only declared once shareholder approval has been obtained.
share capital
The Company’s Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue of new Ordinary Shares or options over Ordinary Shares for the acquisition of a business are included as part of the cost of the acquisition. Incremental costs directly attributable to other issues of new Ordinary Shares or options over Ordinary Shares are reflected in equity as a deduction from share premium.
Ordinary Shares to be issued are classified as equity, unless the number of shares to be issued is variable, in which case they are classified as a financial liability.
taxation
Current tax is provided at amounts expected to be paid (or recovered) using tax rates and laws that have been enacted (or substantially enacted) by the Balance Sheet date.
cash flow
The Company has taken advantage of the exemption available under paragraph 5(a) of FRS 1 Cash flow statements not to prepare a Statement of Cash Flows.
2 investments in subsidiary undertakings
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Cost |
£’000 |
|---|---|
At 28 April 2008 |
62,296 |
Investments in the year |
8,278 |
Exchange differences on US dollar denominated investments |
1,056 |
At 3 May 2009 |
71,630 |
| Impairment |
|
At 28 April 2008 |
33 |
Provisions and write downs |
9,626 |
At 3 May 2009 |
9,659 |
Net book amount |
|
At 3 May 2009 |
61,971 |
At 27 April 2008 |
62,263 |
During the year, the Company acquired Strategic Leisure Limited and Benaim Enterprise (Holdings) Limited. Details of the consideration for this acquisition and the net assets acquired are set out in note 38 of the Consolidated Financial Statements.
Investments in the year also includes £755,000 in respect of the cost of share option schemes in which employees of subsidiary companies participate and £83,000 increase in the redemption value (excluding exchange difference) of the Company’s holding in Basing View Investments Ltd preference shares. Further disclosures relating to share options are provided in note 23 to the Consolidated Financial Statements.
Provisions and write downs substantially reflects a write‑down in the carrying value of the Company’s investment in Cameron Taylor Group Limited following receipt of a dividend from that company.
The Company’s principal operating subsidiaries at 3 May 2009 were:
Download table
|
Country of incorporation |
Principal activity | Percentage holding – direct |
Percentage holding – indirect % |
|---|---|---|---|---|
Scott Wilson Ltd |
England |
Engineering consultancy |
— |
100 |
Scott Wilson Railways Ltd |
England |
Engineering consultancy |
— |
100 |
Scott Wilson Scotland Ltd |
Scotland |
Engineering consultancy |
— |
100 |
Scott Wilson India (Pvt) Ltd |
India |
Engineering consultancy |
— |
100 |
Scott Wilson Sp. Z.o.o. |
Poland |
Engineering consultancy |
— |
100 |
Scott Wilson Limited |
Hong Kong |
Engineering consultancy |
— |
100 |
3 borrowings
The Company’s borrowings comprise bank overdrafts of £Nil (2008: £7,798,000) and loan notes of £Nil (2008: £433,000) relating to the acquisition of Cameron Taylor Group Limited.
The loan notes bore interest at UK bank base rate and were due for settlement any time between 7 June 2007 and 30 April 2009 at the request of the noteholder. The bank overdraft is part of a Group facility, details of which are set out in note 29 of the Consolidated Financial Statements.
4 shares to be issued
Shares to be issued at 3 May 2009 reflect the value of shares expected to be issued in connection with the acquisitions of the businesses and assets of DCL Consulting Engineers Limited (£257,000 to be settled in Ordinary Shares in May 2009 and May 2010) and of McLay Collier (£216,000 to be settled in Ordinary Shares in July 2009). £346,000 is due for settlement within one year and £127,000 in more than one year.
Shares to be issued at 27 April 2008 reflects the value of shares expected to be issued in connection with the acquisitions of the businesses and assets of DCL Consulting Engineers Limited (£385,000 to be settled in Ordinary Shares in May 2008, May 2009 and May 2010) and of McLay Collier (£530,000 to be settled in Ordinary Shares in July 2008 and July 2009).
5 accruals and deferred income
Included in accruals and deferred income at 3 May 2009 is an accrued liability in respect of cash‑settled share‑based compensation of £Nil (2008: £145,000).
6 share capital
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|
Ordinary Shares to be issued £’000 |
Ordinary Shares issued £’000 |
Share premium £’000 |
|---|---|---|---|
At 30 April 2007 |
481 |
7,472 |
87,910 |
Translation differences |
12 |
— |
— |
Shares issued on business combinations |
(96) |
116 |
3,276 |
Shares issued on exercise of share options |
— |
7 |
78 |
At 27 April 2008 |
397 |
7,595 |
91,264 |
Translation differences |
(11) |
— |
— |
Shares issued on business combinations |
(97) |
20 |
415 |
Shares issued on exercise of share options |
— |
3 |
35 |
At 3 May 2009 |
289 |
7,618 |
91,714 |
During the 53 weeks ended 3 May 2009, the Company issued 200,004 Ordinary Shares in connection with the acquisition of subsidiaries and 31,029 Ordinary Shares pursuant to share option schemes.
Details of share option schemes operated by the Company, including information on options outstanding at 3 May 2009, are set out in note 23 to the Consolidated Financial Statements.
ordinary shares to be issued
Ordinary Shares to be issued relate to the acquisition of the business of Roscoe Postle Associates Inc on 1 June 2006. Deferred consideration to be settled in Ordinary Shares is payable in equal instalments over five years, contingent upon the achievement of financial targets. The first settlement was on 1 June 2007.
7 own shares
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|
Number ‘000 |
£’000 |
|---|---|---|
At 27 April 2008 |
— |
— |
Acquired in the period |
3,180 |
2,121 |
Disposed of on exercise of options |
— |
— |
Other movements |
(5) |
(5) |
At 3 May 2009 |
3,175 |
2,116 |
The own shares reserve represents the cost of shares in Scott Wilson Group plc purchased in the market and held as treasury shares for the purpose of satisfying option grants and share awards made under the Company’s employee share schemes. The number of Ordinary Shares held at 3 May 2009 was 3,175,000.
8 profit and loss account
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|
£’000 |
|---|---|
At 1 May 2007 |
5,355 |
Profit for the period |
657 |
Dividends declared |
(2,638) |
Equity-settled share-based compensation |
607 |
At 27 April 2008 |
3,981 |
Profit for the period |
5,143 |
Dividends declared |
(2,828) |
Equity-settled share-based compensation |
755 |
At 3 May 2009 |
7,051 |
9 contingent liabilities
The Company is party to and jointly and severally liable under a facility agreement with The Royal Bank of Scotland (RBS). Under the agreement, RBS makes available to the Group a composite £70.0m facility, comprising £45.0m of fixtures available for draw‑down for periods of between one and twelve months, £10.0m overdraft and £15.0m guarantee facility. The facility sub‑limits may be revised subject to further agreement with RBS.
At 3 May 2009, £19.0m (2008: £18.0m) was drawn down under the fixtures facility and the overdraft balance was £Nil (2008: £Nil). The amount outstanding under the guarantee facility at 3 May 2009 was £9.2m (2008: £7.9m).