IFRS - Part 1
21 Junho 2005 - 4:00AM
UK Regulatory
RNS Number:7856N
Rotork PLC
21 June 2005
PART 1
Embargoed until 7.00am, 21 June 2005
Rotork p.l.c.
2004 accounts restated and audited as compliant with International Financial
Reporting Standards
Rotork, the specialist engineer, today notifies its 2004 accounts restated and
audited as compliant with International Financial Reporting Standards ("IFRS").
The adoption of IFRS will first apply to the Group's financial results for the
six months ending 30 June, 2005. Previously Rotork reported under UK generally
accepted accounting principles (UK GAAP).
The new accounting standards change the basis on which many of the figures in
the accounts are calculated, and this statement should be read in conjunction
with the full audited restatement also announced today. The adoption of IFRS
results in changes to the Company's income statement for the 12 months ended 31
December 2004, announced on 3 March, 2005.
These restated accounts for 2004 will also be used as the comparative figures
when the results for 2005 are released.
The major impacts of IFRS accounting standards on income are shown below.
* Cost of share schemes - This relates to all employee share schemes
operated by the Group. Previously only the performance related share scheme
"LTIP" resulted in a charge to income, the share option scheme being
satisfied by the issue of new shares with no income statement charge. The
new standard requires that all share schemes result in a charge against
profits and prescribes a method for calculating the LTIP charge. This
creates an overall reduction in the charge to profit of #12k in 2004.
* Treatment of intangibles - IFRS requires a new approach to the allocation
of purchase price on an acquisition to reduce the amount of the carrying
value of goodwill by allocating purchase price to amortisable intangibles.
As a result, an additional charge of #70k against profit appears in relation
to the 2004 acquisition of Deanquip.
* Goodwill amortisation - The 2004 goodwill amortisation of #1,293k is
reversed as goodwill on earlier acquisitions are fixed at the 1 January 2004
value and subject to annual impairment tests.
* Capitalised development costs - This relates to the requirement to
attribute value to the development of products under a prescribed formula.
An additional charge against profit of #220k appears in the 2004 accounts.
The Balance Sheet has an additional net asset of #772k relating to historic
development costs now capitalised.
* Treatment of exchange gains. This standard requires exchange gains, mainly
on the conversion of foreign currency cash balances, to be shown after the
definition of operating income, rather than within it. 2004 had an exchange
gain relating to foreign cash held, credited within administration costs.
This now comes out of operating income into financial income. The result is
that operating income drops by #440k, but Profit before Tax is unchanged.
* Basic EPS as reported was 23.2p, under the restated accounts it is 24.5p.
* Balance sheet reclassification - IFRS requires a number of assets and
liabilities to be presented differently. The most significant change is the
presentation of all deferred tax assets as non-current assets rather than as
current assets or a reduction in the defined benefit pension liability.
Furthermore, employee related accruals, previously shown in current
liabilities, are now disclosed within employee benefits which is within
non-current liabilities and there is some reanalysis between the lines
within equity.
Attached to this statement are the 2004 income statement reconciliation and
balance sheet reconciliation at 31 December 2004 to the IFRS accounts now
released.
A second statement notified today provides the full restated accounts for 2004.
Additionally, Rotork announces that today a meeting will be held with analysts
at the Lucca plant in Italy, the main factory operated by the Rotork Fluid
System division which is one of the main growth areas for the Group. No new
trading information will be provided by the Company at this event. Trading
remains in line with the Trading Update made at the Annual General Meeting on 22
April 2005.
The Company's announcement of its interim 2005 results will be made on 3 August
2005.
For further information on this please contact:
For further information, please contact:
Rotork p.l.c. Tel: 01225 733200
Bill Whiteley, Chief Executive
Bob Slater, Finance Director
Financial Dynamics Tel: 020 7269 7224
Sally Lewis
IFRS restated 2004 audited accounts
Income statement
UK Share Amortisation Capitalised Disclosure Reverse IFRS
GAAP based of acquired development of exchange goodwill
payments intangibles costs gains write down
Revenue 146,883 146,883
Cost of sales (79,030) (17) (50) (79,097)
Gross profit 67,853 (17) (50) 0 0 0 67,786
Overheads (37,996) 29 (20) (220) (440) 1,293 (37,354)
Profits from
operations 29,857 12 (70) (220) (440) 1,293 30,432
Net financing
income 634 440 1,074
Profit before tax 30,491 12 (70) (220) 0 1,293 31,506
Tax expense (10,591) (4) 21 66 (10,508)
Net profit for the
year 19,900 8 (49) (154) 0 1,293 20,998
IFRS restated 2004 audited accounts
Balance sheet
UK Share Intangibles Capitalised Reverse Reverse Presentation IFRS
GAAP based acquired development goodwill declared adjustment
payments write down dividend
PP&E 13,877 13,877
Intangible assets 18,174 (70) 772 1,293 20,169
Deferred tax assets 173 21 6,794 6,988
Other receivables 489 489
Total non-current
assets 32,540 173 (49) 772 1,293 0 6,794 41,523
Inventories 21,015 21,015
Trade receivables 34,060 34,060
Current tax 2,176 2,176
receivable
Other receivables 3,442 (917) 2,525
Cash and cash
equivalents 25,298 25,298
Total current 85,991 0 0 0 0 0 (917) 85,074
assets
Total assets 118,531 173 (49) 772 1,293 0 5,877 126,597
Issued capital 4,300 4,300
Preference shares 47 47
Share premium 4,993 4,993
Reserves 4,042 (3,617) 425
Retained earnings 44,753 716 (49) 541 1,293 8,342 2,893 58,489
Total equity 58,135 716 (49) 541 1,293 8,342 (724) 68,254
Loans and 268 268
borrowings
Employee benefits 13,885 (543) 10,227 23,569
Deferred tax 275 231 649 1,155
liabilities
Provisions 1,159 (638) 521
Total non-current
liabilities 15,587 (543) 0 231 0 0 10,238 25,513
Bank overdraft 473 473
Loans and 253 253
borrowings
Trade payables 15,609 15,609
Current tax 5,779 5,779
Other payables 21,653 (8,342) (3,637) 9,674
Provisions 1,042 1,042
Total current 44,809 0 0 0 0 (8,342) (3,637) 32,830
liabilities
Total liabilities 60,396 (543) 0 231 0 (8,342) 6,601 58,343
Total equity and
liabilities 118,531 173 (49) 772 1,293 0 5,877 126,597
This information is provided by RNS
The company news service from the London Stock Exchange
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