COVER 20/9/99 3:30 pm Page 1
DCC plc,
DCC House,
Brewery Road,
Stillorgan,
Co. Dublin,
Ireland.
+353 1 283 1011
+353 1 283 1017
Tel:
Fax:
e-mail: dccplc@dcc.ie
web: www.dcc.ie
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Adding Value in
Marketing and Distribution
DCC plc Annual Report 1999
COVER 20/9/99 3:30 pm Page 2
Corporate Profile
DCC is an Irish based value adding marketing and distribution group with a strong growth record and a
focused approach to the management and development of its four divisions:
is a rapidly developing international division which provides distribution and
manufacturing services to the high growth computer sector.
is building on its strong market position in the cash generative liquified
petroleum gas distribution business in Ireland and Britain and is the fastest
growing oil distribution business in Ireland.
is growing its business in the marketing and distribution of its own branded and
third party branded products for higher growth segments of the Irish food trade.
is expanding its hospital supply business in Ireland and Britain, expanding
internationally in the growing mobility and rehab market and building a vibrant
health supplements business in Britain.
DCC was founded in 1976 by Jim Flavin, Chief Executive/Deputy Chairman. The Company’s shares are listed on the Irish Stock
Exchange and the London Stock Exchange. DCC’s market capitalisation at 7 May 1999 was I762 million (US$823 million).
The Group employs approximately 2,700 people.
Contents
Financial Highlights
The Group at a Glance
Financial Summary and Key Ratios 1992 - 1999
Directors
Chairman’s Statement
Chief Executive / Deputy Chairman’s Review
Divisional Reviews
Financial Review
Corporate Information
Corporate Governance
Report of the Directors
Report on Directors’ Remuneration
Statement of Directors’ Responsibilities
Report of the Auditors
Accounting Policies
Financial Statements
Notes to the Financial Statements
Group Directory
Shareholder Information
Index
1
2
4
5
6
8
12
20
25
26
28
30
34
35
37
40
45
73
77
79
DCC plc Annual Report and Accounts 1999
Printed by SerCom Solutions Limited, a DCC Group company.
Designed and produced by Trinity Design.
Financial Highlights
for the year ended 31 March 1999
1999
1998
% change
+18.7%
+27.0%
+28.9%
+25.9%
+20.3%
Turnover
RR1,059.3m
R892.3m
Profit before goodwill amortisation and tax
Operating cash flow
Adjusted earnings per share*
Dividend per share
Dividend cover (times)
RR59.2m
RR65.5m
RR57.19c
RR14.66c
R46.6m
R50.8m
R45.41c
R12.19c
3.9
3.7
Acquisition and development expenditure
RR93.4m
R33.4m
Return on capital employed
- excluding goodwill
- including goodwill
Group net (debt)/cash
Debt ratio
36.3%
21.2%
(RR20.3m)
10.4%
33.6%
20.0%
R7.0m
n/a
* adjusted to exclude the effect of goodwill amortisation
Operating Profit by Division
R(cid:213)m
% change
DCC SerCom
DCC Energy
DCC Foods
DCC Healthcare
Other Interests
18.3
18.2
15.0
9.8
2.4
+18.2%
+37.8%
+16.1%
+36.1%
+5.2%
DCC
Healthcare
Other
Interests
DCC
SerCom
DCC
Foods
63.7
+24.7%
DCC
Energy
DCC plc Annual Report and Accounts 1999
1
The Group at a Glance
DCC SerCom
(services to the
computer industry)
provides distribution
and manufacturing services,
including
international computer industry.
localisation,
to
the
Micro P and Gem in Britain and Sharptext in
Ireland market and distribute a broad range
of computer hardware and software
products
retailers,
computer dealers, value added resellers,
computer superstores, mail order catalogues
and a variety of other outlets.
large multiple
to
of
for
the
procurement
supply chain
SerCom Solutions provides extensive
services
and
manufacturing requirements of computer
software and hardware companies including
components,
the
warehousing, sub-assembly and delivery of
product directly
customers’
production lines on a "just-in-time" basis. Its
subsidiary
translates and adapts
software, documentation and on-line help for
international computer companies to enable
their products to conform to the language
and cultures of local markets.
ITP
its
to
DCC Energy
is a leading
importer, distributor
and marketer of liquefied
petroleum gas (LPG) and oil
products in the Republic of Ireland
and Northern Ireland and is a leading
independent marketer and distributor
of LPG in Britain.
In Ireland, Flogas has marine LPG terminals in
Drogheda, Cork and Belfast, while in Britain it
operates
in Leicester,
Glasgow, Newcastle, Leeds, Newport and
London.
from terminals
Emo Oil has marine oil import terminals in
Dublin, New Ross and Belfast and supplies all
grades of distillates (heating oils and diesel),
fuel oils and petrol for transport, domestic,
commercial and industrial uses.
DCC Foods
is principally
involved in the
marketing and
distribution in Ireland of
healthfoods, snackfoods, hot and
cold beverages, wine and bakery products,
and in chilled and frozen food distribution.
DCC Foods’ companies service a broad
retail customer base in the grocery,
convenience, off-licence, health store and
pharmacy sectors. DCC Foods is also
developing strongly in the fast growing Irish
catering sector, particularly in ground
coffee and wine.
DCC is a 10.3% shareholder with board
representation in Fyffes plc, the leading
fresh produce distribution group in Europe.
1999
1998
1999
1998
1999
1998
Turnover
I416.5m
R336.9m
+23.6%
Turnover
I193.3m
R160.9m
+20.2%
Turnover
I314.2m
R293.3m
+7.1%
Profit
Margin
ROCE
I18.3m
R15.5m
+18.2%
4.4%
4.6%
42.8%
47.6%
Profit
Margin
ROCE
I18.2m
R13.2m
+37.8%
9.4%
8.2%
32.5%
24.2%
Profit
Margin
ROCE
I15.0m
R12.9m
+16.1%
4.8%
4.4%
32.1%
31.7%
Employees
1,239
1,144
Employees
457
412
Employees
244
249
2
DCC plc Annual Report and Accounts 1999
Profit before goodwill amortisation,
net exceptional gains and tax
I’million
Compound Growth = 20.0%
59.2
46.6
40.1
36.2
32.3
27.6
16.5
18.4
92
93
94
95
96
97
98
99
Compound Growth = 18.1%
Adjusted earnings per share
I(cid:213)cents
57.2
45.4
37.5
28.4
31.9
24.8
17.8
19.9
92
93
94
95
96
97
98
99
Dividend per share
I(cid:213)cents
14.7
12.2
10.2
Compound Growth = 28.5%
7.8
8.8
DCC Healthcare’s
business comprises
the supply of medical,
surgical and laboratory
consumables and equipment
to hospitals, the manufacture and
distribution of mobility and rehabilitation
products and the manufacture, marketing
and distribution of health supplements.
Fannin Healthcare is the largest distributor
laboratory
of medical,
surgical
equipment and consumables to
Irish
hospitals and has a modest, but growing base
in Britain.
and
DMA and DSI are
focused on the
production and distribution of lifestyle
enhancing mobility and rehabilitation
products for senior citizens in Britain,
mainland Europe and America.
Healthilife, EuroCaps and Thompson &
Capper manufacture, market and distribute
health supplements and other tablets and
capsules in Britain and to export markets
worldwide.
1999
1998
Turnover
I114.8m
R81.3m
+41.1%
Profit
Margin
ROCE
I9.8m
R7.2m
+36.1%
6.3
8.5%
8.8%
31.8%
29.5%
2.5
2.9
Employees
724
489
92
93
94
95
96
97
98
99
DCC plc Annual Report and Accounts 1999
3
Financial Summary and Key Ratios 1992-1999
Profit & Loss Account
Year ended 31 March
Turnover
Operating profit*
Net interest receivable/(payable)
Profit on ordinary activities before
goodwill amortisation, net
exceptional gains and tax
Goodwill amortisation
Net exceptional gains
Profit before taxation
Taxation
Minority interests
Profit attributable to
Group shareholders
Earnings per share
- Basic (e cents)
- Basic adjusted (e cents)
Dividend per share (e cents)
Dividend cover (times)
Interest cover (times)
Operating profit / Turnover (%)
* before goodwill amortisation
Consolidated Balance Sheet
At 31 March
Tangible fixed assets
Associated undertakings
Goodwill
Net current assets
Shareholders' funds
Minority interests
Net (cash)/debt
Other long term creditors/provisions
Capital expenditure
Acquisitions
Development expenditure
Operating cash flow
1992
e(cid:213)m
237.7
11.6
4.9
16.5
-
2.4
18.9
(4.5)
(0.6)
13.8
20.46
17.83
2.54
7.0
n/a
4.9%
1992
e(cid:213)m
1.9
70.7
-
72.6
3.8
76.4
120.7
1.4
(46.7)
1.0
76.4
0.5
13.0
13.5
6.6
Net cash (debt) / equity (%)
38.7%
Return on tangible capital employed (%) 16.5%
177
Average no of employees
1993
e(cid:213)m
311.7
13.7
4.7
18.4
-
0.6
19.0
(3.6)
(0.9)
14.5
21.36
19.87
2.92
6.8
n/a
4.4%
1993
e(cid:213)m
33.0
57.6
-
90.6
8.0
98.6
113.7
2.5
(24.9)
7.3
98.6
2.4
42.9
45.3
12.9
21.9%
16.4%
480
1994
e(cid:213)m
426.1
27.1
0.5
27.6
(0.2)
0.8
28.2
(5.6)
(5.8)
16.8
24.84
24.84
6.35
3.9
n/a
6.4%
1994
e(cid:213)m
87.2
44.0
-
131.2
5.1
136.3
104.1
24.0
(1.1)
9.3
136.3
10.3
39.4
49.7
32.4
1.0%
24.5%
1,551
1995
e(cid:213)m
513.9
32.9
(0.6)
32.3
(0.2)
-
32.1
(5.5)
(6.3)
20.3
28.12
28.44
7.82
3.6
57.8
6.4%
1995
e(cid:213)m
86.8
49.3
-
136.1
12.4
148.5
118.4
28.5
(9.4)
11.0
148.5
12.5
12.9
25.4
33.3
8.0%
24.2%
1,720
1996
e(cid:213)m
680.1
37.8
(1.6)
36.2
(0.2)
0.6
36.6
(6.5)
(6.6)
23.5
32.20
31.93
8.76
3.6
23.1
5.6%
1996
e(cid:213)m
86.9
44.4
-
131.3
18.7
150.0
102.6
4.4
10.5
32.5
150.0
13.3
66.1
79.4
34.3
1997
e(cid:213)m
797.0
44.0
(3.9)
40.1
(0.2)
5.1
45.0
(8.4)
(2.7)
33.9
42.33
37.50
10.16
3.7
11.3
5.5%
1997
e(cid:213)m
89.4
41.9
-
131.3
19.1
150.4
122.5
4.8
4.5
18.6
150.4
14.9
23.4
38.3
43.5
(9.7%)
26.4%
2,081
(3.6%)
30.5%
2,170
1998
e(cid:213)m
892.3
51.1
(4.5)
1999
e(cid:213)m
1,059.3
63.7
(4.5)
46.6
(0.2)
-
46.4
(7.5)
(1.4)
37.5
45.08
45.41
12.19
3.7
11.5
5.7%
1998
e(cid:213)m
98.8
46.5
-
145.3
18.2
163.5
154.1
5.3
(7.0)
11.1
163.5
18.6
14.8
33.4
50.8
4.6%
33.6%
2,294
59.2
(1.5)
-
57.7
(8.9)
(0.8)
48.0
55.39
57.19
14.66
3.9
14.3
6.0%
1999
e(cid:213)m
106.7
56.9
46.0
209.6
33.3
242.9
195.2
3.9
20.3
23.5
242.9
18.0
75.4
93.4
65.5
(10.4%)
36.3%
2,664
4
DCC plc Annual Report and Accounts 1999
Directors
Alex Spain
Chairman
Jim Flavin
Chief Executive / Deputy Chairman
Alex Spain, B Comm, FCA (aged 66), is
Non-executive Chairman of DCC. He is
also Deputy Chairman of National Irish
Bank and is a director of a number of
other companies. He was Managing
Partner of KPMG in Ireland from 1977 to
1984. He is a former President of the
Institute of Chartered Accountants in
Ireland and a former Chairman of the
Financial Services Industry Association in
Ireland. Mr Spain joined the Board and
became Chairman in 1976.
Jim Flavin, B Comm, DPA, FCA (aged 56)
founded DCC in 1976 and is Chief
Executive and Deputy Chairman. He has
extensive experience in the areas of
business development and corporate
acquisitions. Prior to founding DCC, he
worked as head of AIB Bank’s venture
capital unit. Mr Flavin is also a director of
Fyffes plc and Telecom Eireann plc.
Tony Barry
Non-executive Director
Tony Barry, Chartered Engineer
(aged 64), Non-executive Director, is
Chairman of CRH plc, having previously
been Chief Executive. He is Deputy
Governor of the Bank of Ireland and a
director of Greencore plc and Ivernia
West plc. Mr Barry is the immediate
past President of the Irish Business and
Employers Confederation. Mr Barry
joined the Board in 1995.
Morgan Crowe
Executive Director
Morgan Crowe, Dip Eng, MBA
(aged 54), Executive Director, joined
DCC in 1976, having previously worked
with the Boeing Company in Seattle
and with IBM in Dublin. He is
Managing Director of DCC Healthcare.
Mr Crowe joined the Board in 1979.
Paddy Gallagher
Non-executive Director
Paddy Gallagher, BL, DPA (aged 59),
Non-executive Director, is Head of
Legal and Pensions Administration at
Guinness Ireland Group. He previously
worked with Aer Lingus, the Irish
national airline, and is a former
Chairman of the Irish Association of
Pension Funds. Mr Gallagher joined the
Board in 1976.
DCC plc Annual Report and Accounts 1999
5
Chairman’s Statement
Development
The year was an active one for acquisitions and
development with total expenditure of E93.4
million. Jim Flavin comments further on this in his
Chief Executive/Deputy Chairman’s Review.
Financial Strength
After cash expenditure on acquisitions and
development of E76.0 million, net debt at 31 March
1999 amounted to E20.3 million, compared to net
cash of E7.0 million at 31 March 1998.
Shareholders’ funds at 31 March 1999 amounted to
E195.2 million (1998: E154.1 million). The Group’s
modest debt ratio of 10.4% and its well structured
capital base give DCC the scope to pursue
substantial development activity.
Alex Spain
Chairman
Results
The Group achieved strong organic profit growth in
the year ended 31 March 1999 which was
supplemented by positive contributions from
acquisition activity during the year. Profit before
goodwill amortisation and taxation increased by
27.0% to E59.2 million. Adjusted earnings per
share increased by 25.9% to E57.19 cents. The
return on tangible capital employed increased to
36.3% from 33.6% and inclusive of acquisition
goodwill the return increased to 21.2% from 20.0%.
Presentation of Accounts
Dividend
A second interim dividend of E9.264 cents per
share was paid on 1 April 1999. This dividend was
When the Euro was launched on 1 January 1999 the
rate of conversion from Irish pounds was fixed at
E1 = IR£0.787564. The Group’s businesses
compete in a global marketplace and are starting to
paid in lieu of a final dividend and represented a
conduct business in Euros. In addition, international
increase over the
20.0%
final dividend of
E7.720 cents per share paid in respect of the
previous year.
The total net dividend for the year ended 31 March
1999 of E14.660 cents per share represented a
20.3% increase over the total net dividend of
E12.189 cents per share paid in respect of the year
ended 31 March 1998. The dividend for the year was
covered 3.9 times by adjusted earnings per share
(1998: 3.7 times).
investors comprise over a third of the Company’s
shareholder base and the Irish Stock Exchange now
quotes DCC’s share price in Euros. Against this
background the Board has deemed it appropriate
for DCC to adopt the Euro as its reporting
currency. All comparative figures have been
restated from Irish pounds to Euros. A resolution
will be proposed at the 1999 AGM to redenominate
the Company’s share capital into Euros.
6
DCC plc Annual Report and Accounts 1999
Year 2000
extensive industry knowledge. Business growth and
DCC’s Year 2000 compliance programme is now
acquisitions continue to expand the Group’s
nearing completion. This programme has involved
employment base. While most of DCC’s 2,700
the compilation of an inventory of all IT systems,
employees are based in Ireland and Britain, the
embedded chip based systems, customers and
Group’s geographic spread now extends to three
suppliers,
followed by a detailed risk assessment
continents - Europe, the US and Asia. The
and prioritisation phase. Non-compliant systems
commitment to excellence of management and
have been updated, replaced or retired as
employees throughout the Group has been a
appropriate. DCC’s Head of Group IT, Donal
significant factor in DCC’s consistent record of
Murphy, is responsible for the Group’s Year 2000
profitable growth.
programme supported by a designated member of
the senior management team in each of the Group’s
Outlook
subsidiaries. Progress against plan is monitored by
The strong growth which has been achieved across
the Board of Directors.
the Group demonstrates the benefits of the
Group’s focused approach to the management and
The Group is working closely with its suppliers and
development of each of its four divisions. DCC
customers to satisfy itself that they too will be Year
places a particular emphasis on organic growth that
2000 compliant. The Group’s current priority is on
increases cash generation and generates higher
the testing of all critical systems and equipment to
returns on capital employed.
In addition, DCC is
ensure compliance and on contingency planning
active in seeking acquisitions that provide synergies
covering the Group’s own operations as well as
and additional scale.
those of important suppliers and customers.
Corporate Governance
With a proven strategy of broadly based growth,
excellent operating businesses and a strong balance
DCC is committed to compliance with best
sheet, DCC is optimistic about the prospects for
practice in the governance of its business and a
the coming year and beyond.
statement on the Company’s application of
the principles set out in the Combined Code
on Corporate Governance is set out on pages 26
and 27.
Alex Spain
Chairman
7 May 1999
Management and Employees
DCC’s management comprises a powerful blend of
entrepreneurial and professional skills with
DCC plc Annual Report and Accounts 1999
7
Chief Executive/Deputy Chairman’s Review
Jim Flavin
Chief Executive/
Deputy Chairman
Adding Value in Marketing and Distribution
Approximately 84% of DCC’s profits in the year to
31 March 1999 arose from added value marketing
and distribution.
This is the Group’s core
competence which is applied throughout our four
divisions. Highly motivated telesales operations,
excellent management information systems and
efficient transport and logistics, together with tight
control of working capital, lie at the heart of many
Growth Record
DCC’s consistent strategy since 1992 has resulted
of our businesses.
Increasingly we seek to
in an accelerating rate of compound growth in
propagate best practice in these areas across the
adjusted earnings per share as follows:
Group in our continuing quest for improved
Over the last 7 years
- 18.1% pa
Over the last 5 years
- 18.2% pa
Over the last 3 years
- 21.4% pa
Over the last year
- 25.9%
returns.
IT and Electronic Commerce
There is continuing development of the information
technology infrastructure across the Group, to
ensure that we leverage technology for maximum
The Group’s excellent earnings record has largely
competitive advantage. The advent of electronic
been driven by organic growth. This results from a
commerce offers the opportunity to drive real
focus on developing DCC’s business in market
business benefits through service improvement,
segments where there are opportunities for
operational cost reduction, an alternative sales
superior organic growth.
channel and the ability to reach new markets.
Critically this earnings momentum has been
Within DCC SerCom we have a strategic focus on
accompanied by continued growth in operating cash
flow – up 28.9% in 1999 to E65.5 million – and
electronic commerce with a number of projects in
the development phase. This will allow us to do
return on capital employed (including acquisition
business with the customers and suppliers of DCC
goodwill), which increased in 1999 to 21.2%.
In
SerCom more effectively by streamlining the
addition, the Group is in a strong financial position
with shareholders’ funds of E195.2 million and a net
debt / equity ratio of only 10.4% at 31 March 1999.
procurement process and increasing the volume of
automated business to business transactions.
8
DCC plc Annual Report and Accounts 1999
Management Process
DCC SerCom
DCC’s management processes are structured to
In DCC SerCom we are providing a broad range of
ensure that the Group’s operating management
distribution and manufacturing services to the
continually strive to deliver volume growth and
rapidly growing computer hardware and software
margin improvement while maintaining tight control
industry. We are confident that the opportunity to
of operating costs and working capital. Group and
grow this division is significant based on the strong
divisional management have particular responsibility
growth of the computer industry worldwide
for providing strategic direction, specific growth
combined with the increasing trend by the industry
initiatives, management development, acquisitions
to out-source distribution and manufacturing
and financial control. Treasury and tax are managed
activities.
During the year, DCC SerCom
centrally. Executive management at Board and
completed the planned increase in its shareholding
subsidiary level have material equity interests in the
in
its
computer distribution
subsidiaries,
Group.
Micro Peripherals, Sharptext and Gem, from 92.4%
Development Strategy
to 100%.
While organic development is at the forefront of
The large British market, where its market share is
our thoughts, we recognise the opportunity to drive
still modest, offers DCC SerCom’s distribution
further
growth
through
acquisitions. Our
business a particular opportunity for substantial
preference is for bolt-on acquisitions which offer
growth and expansion into Continental Europe is
the potential for integration synergies. DCC also
also planned.
seeks to add value in management development and
through improving IT, treasury and financial control
SerCom Solutions’ manufacturing activities are
systems. We encourage management to stay and
strategically well located in Ireland and Scotland, the
contribute to the further development of the DCC
principal centres for the computer industry in
Group.
Europe.
It has undertaken significant investment in
IT and personnel to meet the extensive range of
Acquisition expenditure (inclusive of debt and net
supply chain, manufacturing and localisation services
of cash acquired) during the year amounted to
E75.4 million, all of which was bolt-on in nature.
required by its international computer hardware
and software customers. SerCom Solutions’ strong
track record of providing a flexible and reliable
I set out below a summary of DCC’s strategy for
service to exacting quality standards leaves it well
each of its divisions and further details on the
positioned for growth.
acquisitions undertaken during the year.
DCC plc Annual Report and Accounts 1999
9
Chief Executive/Deputy Chairman’s Review Continued
DCC Energy
Kylemore Group operates the largest fresh bakery
DCC Energy is building on its strong market
in Ireland, runs the successful Café Kylemore chain
position in the cash generative liquefied petroleum
of nine restaurants and owns twenty five bread/cake
gas distribution business in Ireland and Britain and is
shops around Ireland. The investment in Kylemore
the fastest growing oil distribution business in
provides DCC Foods with a platform to develop
Ireland.
into fresh food manufacturing and Kylemore’s retail
operations provide a new dimension to DCC
DCC Energy completed the acquisition of the fuels
Foods’ growing activities in the catering sector.
business of Burmah Ireland in January 1999.
Burmah Ireland sells distillates (heating oils and
DCC Foods has a broad customer base for its
diesel) into the commercial, industrial and domestic
products including multiple grocers, symbol groups,
markets, both directly and through distributors,
independents, pharmacies and the catering sector,
throughout the Republic of Ireland.
It also sells
which is a particular focus for growth.
petrol and diesel to 130 service stations around the
Republic of Ireland. The business of Burmah Ireland
DCC Healthcare
is complementary to that of Emo Oil and has
DCC Healthcare is expanding its hospital supply
significantly increased the scale of DCC Energy’s oil
business
in
Ireland and Britain, expanding
distribution activities and provided an entry into the
internationally in the growing mobility and rehab
petrol market in Ireland. The integration of Burmah
market and building a vibrant health supplements
Ireland within Emo Oil has already been completed
business in Britain.
and the combined business is well placed to
generate strong volume growth in the coming year.
The position of Fannin Healthcare as the market
DCC Foods
leader in the Irish hospital supply business was
strengthened through the acquisition in November
DCC Foods is growing its business in the marketing
1998 of BM Browne, the leading supplier of
and distribution of its own branded and third party
laboratory equipment and related consumables to
branded products for higher growth segments of
hospital laboratories in Ireland. BM Browne is also
the Irish food trade. These products include
a supplier of surgical equipment to Irish hospitals
healthfoods, snackfoods, hot and cold beverages,
and has a growing business supplying laboratory and
wine, chilled and frozen foods and, through the
surgical equipment to British hospitals.
Fannin
Group’s recent acquisition of a 50% share of the
Healthcare’s extensive range of high quality
Kylemore Group, fresh and frozen bakery products.
products and its strengths in customer service and
10
DCC plc Annual Report and Accounts 1999
IT will facilitate further growth in Ireland and Britain.
Looking Forward
We are focused on optimising DCC’s expertise and
DCC Healthcare continues to build an international
strengths in value added marketing and distribution
business in mobility and rehabilitation. The US
across the four divisions and on shareholder value
marketing and distribution company set up in
enhancing acquisition activity.
January 1998 has made good progress. We now
plan to strengthen our distribution capabilities in
DCC operates in growth markets and has an
Continental Europe.
immensely strong financial position. We are
committed to driving maximum growth from this
The health supplements business in Britain was
strong base.
expanded through the acquisitions of EuroCaps in
July 1998 and Thompson & Capper in March 1999.
DCC Healthcare’s health supplements business
now embraces contract manufacture of tablets and
hard and soft gel capsules as well as the marketing
of branded and private label health supplements.
Jim Flavin
Chief Executive/Deputy Chairman
7 May 1999
DCC plc Annual Report and Accounts 1999
11
Divisional Review
DCC SerCom achieved strong growth, led by an
of components, warehousing, sub-assembly and
excellent performance in its computer distribution
delivery of product directly to their production
businesses
- Micro Peripherals and Gem
lines on a "just in time" basis. DCC SerCom has
Distribution in Britain and Sharptext in Ireland.
been making the necessary investment in IT systems
and personnel to augment its capabilities in these
The computer distribution channel continues to
areas and to take advantage of the expected growth
grow in importance for products in areas such as
in demand for outsourced services including
networking, storage, printers and consumables.
internet localisation. While this adds cost in the
DCC SerCom’s focused sales approach is delivering
short term, DCC SerCom is well positioned for
a superior performance for its key suppliers in each
future growth in manufacturing services due to its
of these product categories. Strong volume growth
proven skills and flexibility in meeting the exacting
together with efficient logistics and back office
standards of its multinational customers.
functions leveraged off a low cost base enabled the
distribution businesses to again improve operating
margins. Being well positioned in this large, rapidly
growing market in Britain and Ireland, DCC
SerCom has significant potential for further strong
growth.
Turnover
1999
1998
I416.5m
I336.9m
+23.6%
DCC SerCom’s manufacturing services business
Operating Profit
had a challenging second half. The high activity
levels experienced during the first half by SerCom
Solutions (the planned new name for Printech
International) fell back in the second six months and
localisation results were
impacted by
the
investment required in building a global sales and
operational structure.
Increasingly SerCom
Solutions’ customers are seeking partners to take a
greater involvement in managing
significant aspects of their supply
chains such as the procurement
1999
1998
I18.3m
I15.5m
+18.2%
Operating Margin
1999
1998
4.4%
4.6%
Return on Capital Employed
1999
1998
42.8%
47.6%
12
DCC plc Annual Report and Accounts 1999
SerCom Solutions
provides a range of
supply chain management
services, including the
production of memory cards (as
pictured), to many of the world’s
leading software and hardware manufacturers,
from its modern premises in Dublin and Scotland.
ITP is a global provider of
localisation services for computer
software, hardware and internet
based applications. ITP employs
200 staff in 11 centres in Europe,
the USA and Asia.
Micro Peripherals, Gem and Sharptext are leading
distributors of many of the world’s largest hardware and
software brands to computer dealers, value added resellers
and retailers in Britain and Ireland.
Tommy Breen
Managing Director
DCC SerCom
Paul Donnelly
Managing Director
Gem Distribution
Kevin Henry
Joint Managing Director
SerCom Solutions
David MacDonald
Chief Executive
ITP
Gordon McDowell
Managing Director
Micro Peripherals
Paul White
Managing Director
Sharptext
DCC plc Annual Report and Accounts 1999
13
DCC Energy achieved excellent profit growth in the
division’s LPG business in Ireland and Britain and in
oil distribution in Ireland. Strong volume growth,
particularly in oil, combined with tight control of
operating costs resulted in a further improvement
in unit operating margins.
Flogas continued to focus on cylinder and bulk
propane sales to the commercial and catering
sectors and experienced good volume growth in
Britain and the Republic of Ireland.
In Britain the
company increased the proportion of its cylinder
sales directly to end users which will enable it to
improve returns in this segment of the market.
Emo Oil achieved exceptional volume growth due
to a singular focus on the development of its
distillates business (heating oils and diesel). Emo
significantly increased the level of its direct sales and
improved its geographic coverage in rural areas
local
through distributors which
commercial, agricultural and domestic customers.
service
Emo’s success in generating superior organic
growth, coupled with the acquisition of Burmah, has
enabled DCC Energy to double its Republic
of Ireland distillate market share during the year
to 8%.
Divisional Review
The acquisition of Burmah has also provided an
entry to the retail petrol/diesel market in the
Republic of Ireland, significantly increasing DCC
Energy’s presence in the faster growing transport
fuels business. The integration of Burmah within
Emo has been completed and is yielding significant
cost savings.
Strong cash generation continues to be a key
feature of DCC Energy’s business.
Turnover
1999
1998
I193.3m
I160.9m
+20.2%
Operating Profit
1999
1998
I18.2m
I13.2m
+37.8%
Operating Margin
1999
1998
9.4%
8.2%
Return on Capital Employed
1999
1998
32.5%
24.2%
14
DCC plc Annual Report and Accounts 1999
Emo Oil provides a nationwide oil
delivery service to a wide range of
commercial, industrial, agricultural
and domestic customers.
In Ireland DCC Energy owns LPG import facilities in
Drogheda, Belfast and Cork and owns or has access to
oil import facilities nationwide.
Flogas is a leading supplier of
LPG in Britain and Ireland.
Kevin Murray
Managing Director
DCC Energy
Sam Chambers
Managing Director
DCC Energy (NI)
Patrick Kilmartin
Managing Director
Flogas Britain
Patrick Mercer
Managing Director
Flogas (ROI)
Daniel Murray
Managing Director
Emo Oil (ROI)
DCC plc Annual Report and Accounts 1999
15
DCC Foods’ concentration on higher growth
segments of the Irish food trade continued to
generate good organic growth in sales and profits.
More people are choosing to eat out, driving
growth in the catering sector, while consumers are
also demanding a greater variety of health foods and
convenience foods. As a leading supplier of branded
products in expanding markets such as snackfoods,
healthfoods, ground coffee, wine and parbaked
breads, DCC Foods is benefiting from these trends.
Kelkin, the market leader in healthfoods in Ireland,
had another excellent year, particularly in its major
snacks, cereal and soya product categories. Robt.
Roberts achieved good growth across its product
range
including KP snackfoods and margins
recovered from the levels of the previous year.
The focus placed by DCC Foods on development in
the expanding catering sector resulted in further
strong sales growth in ground coffee, wine and
catering equipment. The acquisition of a 50%
shareholding in the Kylemore bakery and restaurant
group offers further opportunities to build on DCC
Foods’ strengths in the catering sector.
In frozen and chilled foods Allied Foods achieved an
Its skills and experience as a cost
improved result.
efficient provider of logistics services enabled it to
win contracts with two major retail groups.
Divisional Review
Included in DCC Foods’ results for the year is
DCC’s 10.3% share of Fyffes plc’s operating profit
for Fyffes’ year ended 31 October 1998. Fyffes,
which is the leading fresh produce company in
Europe, continued to achieve strong growth with
operating profit up 12.0% and earnings per share up
21.3%.
Turnover
1999
1998
I314.2m
I293.3m
+7.1%
Operating Profit
1999
1998
I15.0m
I12.9m
+16.1%
Operating Margin
1999
1998
4.8%
4.4%
Return on Capital Employed
1999
1998
32.1%
31.7%
16
DCC plc Annual Report and Accounts 1999
KP, Ireland’s number one savoury
snack food brand, is brought to the
Irish consumer through Robt. Roberts’
extensive distribution network.
With great coffee and the latest technology in coffee
machines Robt. Roberts, coffee specialist, provides the
complete catering beverage service to a rapidly growing
consumer base.
Kelkin, Ireland’s leading
healthfoods brand, provides
naturally wholesome products
as part of a healthy lifestyle.
Kevin Murray
Managing Director
DCC Foods
Ken Peare
Managing Director
Robt. Roberts
Mitchel Barry
Chief Executive
Allied Foods
Brian Hogan
Managing Director
Kylemore Group
Bernard Rooney
Managing Director
Kelkin
DCC plc Annual Report and Accounts 1999
17
Divisional Review
The strong sales growth in DCC Healthcare
resulted from good volume increases across the
division and successful acquisition activity in hospital
supply and health supplements. The start-up
mobility and rehab business in the US had a modest
impact on operating margin.
However, substantial progress was made in building
a vertically integrated business through the
acquisition of the EuroCaps encapsulation business
in July 1998 and the Thompson & Capper tabletting
business in March 1999, providing a platform for
cost effective growth in this area.
The hospital supply business enjoyed improved
margins and strong growth, aided by the acquisition
of BM Browne and the smooth completion of the
first phase of its integration with Fannin. While the
full benefits of integration will only be realised
during the coming year, significant progress has been
made to date including the full integration of the
two operations in Britain to produce a stronger
base for further growth in that market.
In mobility and rehabilitation,
sales growth
moderated in DMA due principally to keener
competition in the UK market. DCC Healthcare’s
competitive position in this business was improved
recently by a reduction in product costs from
Taiwan. The start-up business in the US made a
modest profit in its first full year of operation.
The health supplements business experienced a
combination of pricing pressure and increased raw
material costs leading to some pressure on margins.
Turnover
1999
1998
Operating Profit
1999
1998
Operating Margin
1999
1998
II114.8m
+41.1%
+36.1%
I81.3m
II9.8m
I7.2m
8.5%
8.8%
Return on Capital Employed
1999
1998
31.8%
29.5%
18
DCC plc Annual Report and Accounts 1999
Shoprider powerchairs and
scooters provide mobility and
independence.
Morgan Crowe
Managing Director
DCC Healthcare
Colman O’Keeffe
Finance Director
DCC Healthcare
John Dalton
Chief Executive
DMA
Peter Woods
Chief Executive
Fannin Healthcare
Fannin Healthcare supplies a wide range of high tech medical, surgical and laboratory
equipment and consumables to hospitals and laboratories in Britain and Ireland.
The Healthilife Style range, produced in the
Group’s own encapsulation and tabletting
facilities, provides the vitamin and health
supplements essential to modern everyday living.
DCC plc Annual Report and Accounts 1999
19
Financial Review
The adoption of FRS 11 and FRS 12 did not give rise
to changes in accounting policies or additional
In accordance with FRS 13,
disclosure for DCC.
information on the impact of financial instruments
on the Group’s risk profile, the effect these risks
may have and how these risks are being managed is
set out in note 28 to the financial statements on
pages 61 to 63. Reflecting the requirements of FRS
14, both basic and fully diluted earnings per share
are set out in the profit and loss account on page 40
and the calculation of both is set out in note 14 to
the financial statements on page 52.
Profit and Loss Account
Turnover
Turnover increased by 18.7% to E1,059.3 million.
Acquisitions during the year contributed a quarter
of the increase with good volume growth across the
Group largely responsible for the rest of the
increase. Turnover of subsidiaries increased by
23.8% to E791.7 million and DCC's share of
associates' turnover rose by 5.9% to E267.6
million.
Turnover
+18.7%
I’million
1000
800
600
400
200
0
1998
I892.3m
1999
II1,059.3m
Fergal O’Dwyer
Chief Financial Officer
Application of Accounting Standards
DCC's financial statements have been prepared on
the basis of current guidance issued by the
Accounting Standards Board. This guidance includes
a number of newly issued Financial Reporting
Standards which were applied for the first time by
DCC in its financial statements for the year ended
31 March 1999 as follows:
FRS 10 - Goodwill and Intangible Assets
FRS 11 - Impairment of Fixed Assets and Goodwill
FRS 12 - Provisions, Contingent Liabilities
and Contingent Assets
FRS 13 - Derivatives and Other Financial
Instruments: Disclosures
FRS 14 - Earnings per Share
The adoption of FRS 10 resulted in a change in
DCC’s accounting policy for goodwill. Previously
goodwill arising on subsidiaries acquired up to 31
March 1998 was eliminated from the balance sheet
through reserves in the year in which it arose.
Goodwill written off to reserves up to 31 March
1998 amounted to E105.8 million.
In accordance
with FRS10, goodwill arising on the acquisition of
subsidiaries from 1 April 1998 is capitalised on the
balance sheet and amortised on a straight line basis
over its estimated useful economic life. Goodwill
arising on the acquisition of subsidiaries in the year
ended 31 March 1999 and capitalised in accordance
with the new accounting policy amounted to
E46.9 million.
20
DCC plc Annual Report and Accounts 1999
Operating Profit
Operating profit before goodwill amortisation
increased by 24.7% to E63.7 million. 17.8% of this
growth was organic and 6.9% was derived from
acquisitions made during the year. Profits of
subsidiaries increased by 26.9% to E51.5 million
and DCC's share of associates' profits rose by
16.1 % to E12.1 million.
Operating Profit before Goodwill
Amortisation
+24.7%
I’million
70
60
50
40
30
20
10
0
1998
I51.1m
1999
II63.7m
The operating profit of DCC's four divisions and its
other interests, together with details of operating
margin and return on capital employed, is set out
below:
E’m Operating ROCE
(excl
Margin
ROCE
(incl
goodwill) goodwill)
DCC SerCom
DCC Energy
DCC Foods
DCC Healthcare
Other Interests
Total
18.3
18.2
15.0
9.8
2.4
63.7
4.4% 42.8% 25.1%
9.4% 32.5% 17.7%
4.8% 32.1% 24.3%
8.5% 31.8% 15.1%
11.6% 29.2% 29.2%
6.0% 36.3% 21.2%
Reviews of DCC’s divisions are set out on pages 12
to 19.
The Group’s principal other interest is its 49%
shareholding in Manor Park Homebuilders. Building
has commenced at Manor Park’s new housing
development in Cork - Pembroke Wood - which is
being undertaken with a joint venture partner, while
the company’s major residential development at
Clare Hall in Dublin will be completed during 1999.
Manor Park’s land bank, which principally comprises
a 166 acre residential development site in west
County Dublin, has been acquired at attractive
purchase prices.
The Group's return on tangible capital employed
increased to 36.3% (1998: 33.6%), while inclusive of
acquisition goodwill the return increased to 21.2%
(1998: 20.0%).
Interest
The net interest charge was similar to the previous
year at E4.5 million. Interest cover was 14.3 times
(1998: 11.5 times).
Profit Before Taxation
Profit before goodwill amortisation and tax
increased by 27.0% to E59.2 million. Overall the
Group was a modest net beneficiary of the strength
of sterling during the year. After a goodwill charge
of E1.5 million, profit before taxation increased by
24.4% to E57.7 million.
Taxation
A portion of the Group's profits is earned from
manufacturing activities in Ireland which are taxed
at a 10% rate. This manufacturing tax rate will
DCC plc Annual Report and Accounts 1999
21
Financial Review Continued
Dividend per Share
I’cents
20
15
10
5
0
1998
I12.19 cents
1999
II14.66 cents
Balance Sheet and Funding
Operating Assets
Tangible fixed assets employed in the Group of
E106.7 million are stated after depreciation for the
year of E16.2 million, capital expenditure, net of
disposals, of E16.7 million and net translation losses
of E2.1 million.
Working capital at 31 March 1999 increased to
E53.2 million from E41.0 million in 1998, reflecting
acquisition activity and a year of strong sales
growth. The level of working capital was equivalent
to approximately 17.4 days sales which is a further
improvement on the previous year’s 18.1 days.
Shareholders' Funds
Shareholders' funds at 31 March 1999 increased to
E195.2 million principally due to retained earnings
of E35.0 million and the issue of share capital.
DCC shares with a value of E9.5 million were issued
during the year as a result of the exercise of options
and the payment up of partly paid shares under
employee share incentive schemes and the issue of
shares under the Company's scrip dividend scheme.
continue until the year 2010. The Irish government
has indicated a commitment to reduce the standard
rate of corporation tax on a phased basis to 12.5%
by the year 2003. The tax charge of E8.9 million
represents an effective tax rate on profits for the
year of 15.0% compared with 16.0% for 1998.
Earnings per Share
Basic earnings per share increased by 22.9% to
E55.39 cents. Adjusted basic earnings per share
increased by 25.9% from E45.41 cents to E57.19
cents.
Adjusted Basic Earnings per Share
I’cents
60
50
40
30
20
10
0
1998
I45.41 cents
1999
II57.19 cents
Adjusted fully diluted earnings per share increased
by 27.7% to E56.08 cents. Adjusted earnings per
share excludes goodwill amortisation and is
considered by the Directors to be a more
appropriate long term measure of underlying
performance.
Dividend
The total net dividend for the year of E14.66 cents
represents an increase of 20.3% over the total net
dividend of E12.19 cents paid in respect of the previous
The dividend was covered 3.9 times by
adjusted earnings per share (1998: 3.7 times).
year.
22
DCC plc Annual Report and Accounts 1999
Financial Strength and Liquid Resources
Net debt at 31 March 1999 amounted to E20.3
million (1998: net cash of E7.0 million) giving a net
debt/equity ratio of 10.4%. Net debt at 31 March
1999 was made up as follows:
Cash and term deposits
Bank loans and other debt
repayable within 1 year
Bank loans and other debt
repayable after 1 year
Unsecured Notes due 2008/11
Total
E’m
311.3
(41.7)
(192.3)
(97.6)
(20.3)
As regards liquidity, the Group had cash balances at
31 March 1999 of E311.3 million. In addition, at 31
March 1999 43% of the Group’s gross borrowings
of E331.6 million matures after five years.
This maturity profile and the Group’s cash balances,
finance and
along with existing sources of
operational cash flows, gives DCC a strong, well
balanced capital structure to support future growth
and development. Notes 24 to 28 of the financial
statements on pages 59 to 63 provide details of the
maturity and profile of the Group's gross debt.
Cash Flow
Operating cash flow for the year amounted to
E65.5 million, a 28.9% increase over 1998,
notwithstanding the funding of sales growth of
23.8% in subsidiary undertakings. After net capital
expenditure in cash of E16.8 million and acquisition
expenditure in cash of E59.1 million, the Group’s
net debt at 31 March 1999 amounted to E20.3
million:
Operating cash flow
Share issues (net)
Interest
Taxation
Capital expenditure (net)
Acquisitions
Dividends
Other
Net cash (outflow)/inflow
Translation adjustment
Movement in net (debt)/cash
Opening net cash/(debt)
Closing net (debt)/cash
1999
EE'm
65.5
8.7
(4.1)
(5.8)
(16.8)
(59.1)
(10.5)
(7.9)
(30.0)
2.7
(27.3)
7.0
(20.3)
1998
E’m
50.8
1.2
(3.4)
(4.6)
(16.3)
(8.6)
(6.8)
7.5
19.8
(8.3)
11.5
(4.5)
7.0
Acquisition and Development Expenditure
Acquisition and development expenditure in the
year amounted to E93.4 million as follows:-
Acquisitions
E’m
42.8
17.1
8.3
7.2
75.4
Capital
Expenditure
E’m
2.4
7.9
6.2
1.5
18.0
Total
E’m
45.2
25.0
14.5
8.7
93.4
DCC Healthcare
DCC Energy
DCC SerCom
DCC Foods
Total
Acquisition expenditure (inclusive of debt and net
of cash acquired) amounted to E75.4 million as the
Group continued its policy of supplementing its
strong organic growth with shareholder value
enhancing acquisitions. The cash impact in the year
was E59.1 million with an amount of E6.6 million
payable in 1999/2000 and E9.7 million deferred for
future payment. Capital expenditure of E18.0
million included plant, vehicles and computer
equipment with no individual significant items.
DCC plc Annual Report and Accounts 1999
23
Financial Review Continued
Interest Rate Risk Management
The Group finances its operations through a
mixture of retained profit and bank borrowings.
The Group borrows in the desired currencies at
both fixed and floating rates of interest and then
uses interest rate swaps to generate the desired
interest profile and to manage the Group’s
exposure to interest rate fluctuations.
Note 28 to the financial statements on pages 61 to
63 includes an analysis of the currency and interest
rate composition of the Group's gross debt and
cash portfolios after taking currency and interest
rate swaps into account.
Year 2000
Details of the Group’s Year 2000 compliance
programme are set out in the Chairman’s Statement
on pages 6 and 7. The incremental capital costs
associated with Year 2000 compliance are expected
to amount to E1.4 million. The incremental costs
(both internal and bought in) to be expensed by the
Group in ensuring its systems are Year 2000
compliant are not material and are included within
operating costs.
Treasury Policy and Management
Treasury policy is reviewed annually by the Board.
The principal objective is the minimisation of
financial risk at reasonable cost. The Group does
not take speculative positions but seeks, where
considered appropriate, to hedge underlying trading
and asset/liability exposures by using derivative
financial instruments (such as interest rate and
currency swaps and forward contracts).
The Group Treasury function manages centrally the
Group's cash and debt and administers the Group’s
funding requirements. Divisional and subsidiary
management manage trading foreign currency and
commodity price exposures and working capital.
Currency Risk Management
Principal trading foreign currency exposures are to
sterling and the US dollar. Trading foreign currency
exposures are generally hedged by using forward
contracts to cover specific or estimated purchases
and receivables.
Approximately half of the Group’s profits was
earned by subsidiaries based in the sterling area.
The Group’s policy is, where appropriate, to put in
place hedges using forward contracts against
sterling and other currencies to minimise the
volatility of the Group’s earnings arising from
fluctuations in exchange rates.
In order to protect shareholders’ funds from
material variations due to sterling exchange
movements, a significant proportion of overseas net
sterling assets are hedged where practicable, by
taking out equivalent foreign currency borrowings.
24
DCC plc Annual Report and Accounts 1999
Corporate Information
Directors
Auditors
Alex Spain* - Chairman
Jim Flavin - Chief Executive / Deputy Chairman
Tony Barry* - Senior Independent Director
Morgan Crowe
Paddy Gallagher*
* Non-executive
PricewaterhouseCoopers
Chartered Accountants
& Registered Auditors
Wilton Place
Dublin 2
Audit Committee
Alex Spain - Chairman
Tony Barry
Paddy Gallagher
Nomination Committee
Alex Spain - Chairman
Jim Flavin
Tony Barry
Paddy Gallagher
Remuneration Committee
Alex Spain - Chairman
Tony Barry
Paddy Gallagher
Chief Financial Officer
Fergal O’Dwyer
Secretary
Michael Scholefield
Solicitors
William Fry
Fitzwilton House
Wilton Place
Dublin 2
Stockbrokers
Davy Stockbrokers
49 Dawson Street
Dublin 2
Warburg Dillon Read
2 Finsbury Avenue
London EC2M 2PP
Bankers
ABN AMRO Bank
AIB Bank
Bank of Ireland
Irish Intercontinental Bank
National Westminster Bank
Ulster Bank Markets
Donal Murphy
Head of Group IT
Michael Scholefield
Group Secretary and
Investor Relations Manager
Daphne Tease
Group Treasurer
Registered and Head Office
Registrars and Transfer Office
Ger Whyte
Group Internal Auditor
DCC House
Stillorgan
Blackrock
Co Dublin
Computershare Services (Ireland) Limited
Heron House
Corrig Road
Sandyford Industrial Estate
Dublin 18
DCC plc Annual Report and Accounts 1999
25
Corporate Governance
The Board of Directors
Directors: The Board of DCC consists of two executive and three non-executive Directors and the roles of Chairman
and Chief Executive are separate. The Board has appointed Tony Barry as the senior independent Director. Brief biographies
of the Directors are set out underneath their photographs on page 5. All of the Directors bring independent judgement to
bear on issues of strategy, performance, resources, key appointments and standards. Directors are subject to re-election at
least every three years.
Board Procedures: The Board holds regular meetings (normally at least six per annum) and there is contact between
meetings as required in order to progress the Group’s business. The Directors receive regular and timely information in a
form and quality appropriate to enable the Board to discharge its duties. The Board has a formal schedule of matters
specifically reserved to it for decision, which covers key areas of the Group’s business including approval of financial
statements, budgets (including capital expenditure), acquisitions and dividends. Certain additional matters are delegated to
Board Committees. There is an established procedure for Directors in the furtherance of their duties to take independent
professional advice if they consider this necessary. All Directors have access to the advice and services of the Company
Secretary who is responsible to the Board for ensuring that Board procedures are followed and that applicable rules and
regulations are complied with.
Board Committees: There are three Board Committees with formal terms of reference: the Audit Committee, the
Nomination Committee and the Remuneration Committee. The Audit Committee and the Remuneration Committee
comprise the three non-executive Directors. All of the non-executive Directors are considered by the Board to be
independent of management and free of any relationships which could interfere with the exercise of their independent
judgement. The Nomination Committee, comprising the non-executive Directors and the Chief Executive/Deputy Chairman,
was established on 1 February 1999.
Directors’ Remuneration
The Board’s report on Directors’ remuneration is set out on pages 30 to 33.
Relations with Shareholders
DCC attaches considerable importance to shareholder communications and has a well-established investor relations
function. There is regular dialogue with institutional investors and shareholders as well as presentations after the interim and
preliminary results. Results announcements are sent promptly to all shareholders and published on the company’s web site
at www.dcc.ie. The web site contains additional information for investors which is regularly updated.
At the Company’s Annual General Meeting the Group Chief Executive makes a presentation and answers questions on the
Group’s business and its performance during the prior year.
Arrangements have been made for the 1999 annual report and AGM notice to be sent to shareholders 20 working days
before the meeting and for the level of proxy votes cast on each resolution, and the numbers for and against, to be announced
at the meeting. The 1999 AGM will be held at 11am in the Conrad International Hotel, Earlsfort Terrace, Dublin 2 on
25 June 1999.
Accountability and Audit
The written terms of reference of the Audit Committee deal clearly with its authority and duties which include, inter alia,
consideration of the appointment of the external auditors and their fees and review of the scope and results of the work
performed by both internal and external auditors.
As permitted by the Irish and London Stock Exchanges, the Company has complied with the Combined Code provisions in
respect of internal control by reporting on internal financial controls in accordance with the guidance for Directors on
internal control and financial reporting issued in December 1994.
26
DCC plc Annual Report and Accounts 1999
Corporate Governance
The Directors acknowledge that they are responsible for the Group’s system of internal financial control, which is established
to provide reasonable assurance of
• the safeguarding of assets against unauthorised use or disposition; and
• the maintenance of proper accounting records and the reliability of financial information used within
the business or for publication.
This system can provide only reasonable and not absolute assurance against material misstatement or loss.
The Directors have established a number of key procedures designed to provide an effective system of internal financial
control, including providing a basis for the Directors to review the effectiveness of the system. The more important of these
procedures, which are supported by detailed controls and processes, include
• developing an organisation structure with clearly defined lines of authority and accountability
• a comprehensive system of financial reporting involving budgeting, monthly reporting and variance analysis
• maintenance of a highly skilled and experienced workforce, particularly at senior management level
• a treasury risk management policy which limits the exposure of the Group in this area
• a formally constituted audit committee which meets with internal and external auditors and reviews the
Group’s financial reporting and internal financial control systems
• an independent Group internal audit function.
The Directors have reviewed the effectiveness of the Group’s system of internal financial control and will continue to do so
on a regular basis.
After making enquiries, the Directors have formed a judgement, at the time of approving the financial statements, that there
is a reasonable expectation that the Company and the Group as a whole have adequate resources to continue in operational
For this reason, they continue to adopt the going concern basis in preparing the
existence for the foreseeable future.
financial statements. The Directors’ responsibility for preparing the financial statements is explained on page 34 and the
reporting responsibilities of the auditors are set out in their report on pages 35 and 36.
Compliance
DCC has complied, during the year ended 31 March 1999, with all of the Principles of Good Governance and Code of Best
Practice ("the Combined Code") derived by the Committee on Corporate Governance from the Committee’s Final Report
and from the Cadbury and Greenbury Reports, save in respect of the following matters:
Directors’ remuneration:
Disclosures regarding Directors’ remuneration have been drawn up on an aggregate basis in accordance with the Listing
Rules of the Irish Stock Exchange.
Annual General Meeting:
The 1998 Annual Report and Notice of Annual General Meeting were circulated to shareholders 18 rather than 20
working days before the meeting and details of proxy votes cast on each resolution were not announced at the meeting.
As stated above, arrangements have been made to comply with the requirements of the Combined Code in relation to
both these matters in respect of the 1999 AGM.
Senior independent non-executive Director:
As stated above, the Board has appointed Tony Barry as senior independent non-executive Director. However, this
appointment was not effective for the whole of the financial year ended 31 March 1999.
DCC plc Annual Report and Accounts 1999
27
Report of the Directors
for the year ended 31 March 1999
The Directors present their report and the audited financial statements for the year ended 31 March 1999.
Principal Activities
DCC is an industrial group with four focused divisions operating in the computer, energy, food and healthcare sectors. A
summary of the Group’s activities is set out on pages 2 and 3. Details of the Company’s principal subsidiaries are set out on
pages 73 to 76. Details of its principal associated undertakings are set out on page 56 in note 17 to the financial statements.
Results and Business Review
The profit on ordinary activities before taxation for the year amounted to e57.7 million. Details of the results and
appropriations for the year are set out in the consolidated profit and loss account on page 40 and in the related notes. A
full review of the Group’s performance and development during the year is set out in the Chairman’s Statement, the Chief
Executive/Deputy Chairman’s Review, the Divisional Reviews and the Financial Review on pages 6 to 24.
Dividends
An interim dividend of IR4.250p (e5.396 cents) per share with a related tax credit of IR0.503639p (e0.639490 cents) per
share was paid on 27 November 1998. A second interim dividend of IR7.296p (e9.264 cents) per share with a related tax
credit of IR0.884612p (e1.123226 cents) was paid on 1 April 1999 in lieu of a final dividend for the year. The total net
dividend for the year ended 31 March 1999 amounted to IR11.546p (e14.660 cents).
Share Capital
Details of ordinary shares issued during the year ended 31 March 1999 are set out in note 32 to the financial statements on
page 66.
Research and Development
Certain Group companies carry out development work aimed at improving the quality, competitiveness and range of their
products. This expenditure is not material in relation to the size of the Group and is written off to the profit and loss
account as it is incurred.
Substantial Shareholdings
At 7 May 1999, the Company had been advised of the following interests in its issued share capital:
Bank of Ireland Nominees Limited*
FMR Corp and its direct and indirect subsidiaries**
Allied Irish Banks plc and its subsidiaries***
Guinness Ireland Group Pension Scheme*
Standard Life Assurance Company
3i Group plc
Irish Life Assurance plc
The Scottish Provident Institution
No of IR20p
Ordinary Shares
% of Issued
Share Capital
14,179,396
8,911,152
5,664,706
4,179,635
4,020,385
3,620,796
3,286,790
3,042,500
16.2%
10.2%
6.5%
4.8%
4.6%
4.1%
3.8%
3.5%
*
**
***
The 16.2% interest of Bank of Ireland Nominees Limited is a non-beneficial interest and includes the 4.8% interest
of Guinness Ireland Group Pension Scheme also shown above.
Under Irish and UK law the shares are held by non-beneficial holders.
Notified as non-beneficial interests.
Norwich Union Life Insurance Ireland Limited has advised the Company that it holds between 3% and 5% of the Company’s
issued share capital.
Apart from these holdings, the Company has not been notified of any other interest of 3% or more in its issued ordinary
share capital.
28
DCC plc Annual Report and Accounts 1999
Report of the Directors
for the year ended 31 March 1999
Directors
There was no change in the Directors of the Company during the year. The names of the Directors and a short biographical
In accordance with Article 80 of the Articles of Association, Jim Flavin and Paddy
note on each Director appear on page 5.
Gallagher retire by rotation at the 1999 Annual General Meeting and, being eligible, offer themselves for re-appointment.
Neither of the retiring Directors has a service contract with the Company or any member of the Group with a notice period
in excess of one year or with provisions for predetermined compensation on termination which exceeds one year’s salary
and benefits in kind. Details of the Directors’ interests in the share capital of the Company are set out in the Board’s Report
on Directors’ Remuneration on pages 30 to 33.
Health and Safety
It is the policy of the Group to ensure the safety, health and welfare of employees by maintaining a safe place of work. This
policy is based on the requirements of the Safety, Health and Welfare at Work Act, 1989. Safety statements have been
prepared by each of the relevant companies in the Group and the policies set out in these statements are kept under regular
review.
Auditors
The auditors, Coopers & Lybrand, who now practise in the name of PricewaterhouseCoopers, will continue in office in
accordance with the provisions of Section 160(2) of the Companies Act, 1963.
Alex Spain, Jim Flavin, Directors
DCC House, Stillorgan,
Blackrock, Co Dublin.
7 May 1999
DCC plc Annual Report and Accounts 1999
29
Report on Directors’ Remuneration
Remuneration Committee
The Remuneration Committee consists solely of the independent non-executive Directors - Alex Spain (Chairman), Tony
Barry and Paddy Gallagher.
The terms of reference for the Remuneration Committee are to determine the remuneration packages of the executive
Directors and to approve the grant of share options. The Chief Executive is consulted about remuneration proposals for the
other executive Director and the Remuneration Committee is authorised to obtain access to professional advice if deemed
desirable.
Policy on Executive Directors’ Remuneration
The Company’s policy on executive Directors’ remuneration recognises that employment and remuneration conditions for
the Group’s senior executives must properly reward and motivate them to perform in the best interest of the shareholders.
The typical elements of the remuneration package for executive Directors are basic salary and benefits, pensions and
It is the policy of the Remuneration Committee that share incentive
participation in share incentive arrangements.
arrangements be offered to all key managers within the Group to encourage identification with shareholders’ interests. The
share incentive arrangements offered to executive Directors form a significant part of their total remuneration package and
form part of a long term policy within the Company to encourage senior management to build, over time, a shareholding in
the Company which is material to their net worth. The Remuneration Committee believe this long standing policy has been
instrumental in motivating and retaining the quality of senior management required to run a successful business and the
achievement of DCC’s record of strong growth over many years. Share options are offered on a phased basis and all
employees are encouraged to hold their options beyond the earliest exercise date.
Information on share options held by each Director and details of exercise prices and dates are set out on pages 32 and 33.
Employee Share Schemes
The DCC plc 1998 Employee Share Option Scheme was approved by shareholders at the 1998 Annual General Meeting.
The percentage of share capital which can be issued under the scheme and the individual grant limits comply with guidelines
published by the institutional investment associations. The scheme provides for the granting of both basic and second tier
options. At 31 March 1999 employees held basic tier options to subscribe for 1,299,000 ordinary shares and second tier
options to subscribe for 1,120,000 ordinary shares under this scheme.
The DCC plc 1998 Employee Share Option Scheme replaced the DCC Employee Partly Paid Share Scheme which was
terminated in May 1998 due to changes in the taxation treatment of partly paid shares in the Finance Act, 1998. Under the
terminated DCC Employee Partly Paid Share Scheme, 210,000 (1998: 2,725,990) shares remain partly paid. Under a
terminated 1986 DCC Executive Share Option Scheme, which applied before DCC became a public company, employees
hold options to subscribe for 650,000 ordinary shares (1998: 1,287,500 ordinary shares).
Executive Directors’ Salary and Benefits
The salaries of executive Directors are reviewed annually having regard to personal performance, company performance and
competitive market practice. Employment related benefits consist principally of a company car. No fees are payable to
executive Directors.
Non-executive Directors’ Remuneration
The remuneration of the non-executive Directors is determined by the Board. The fees paid to non-executive Directors
reflect their experience and ability and the time demands of their Board and Board sub-committee duties.
Pensions
Pensions for executive Directors are calculated on basic salary only - no benefit elements are included - and aim to provide
for two thirds of salary at age 60.
A pension is funded for the Chairman, based on his annual fee, to provide a 1/60th accrual for each year of service.
30
DCC plc Annual Report and Accounts 1999
Report on Directors’ Remuneration
The table below shows the increase in the accrued pension benefits to which the Directors became entitled during the year
ended 31 March 1999 and the transfer value of the increase in accrued benefits:
Executive
Directors
e’000
Non-executive
Chairman
e’000
Increase in accrued annual pension benefits (excl inflation) during the year
Accumulated accrued annual pension benefits at year end
Transfer value equivalent to increase in accrued annual pension benefits at year end
45
311
601
2
27
27
The transfer value has been calculated on the basis of actuarial advice in accordance with Actuarial Guidance Note GN11.
Directors’ Service Agreements
There are no service agreements between any Director of the Company and the Company or any of its subsidiaries with a
notice period in excess of one year or with provisions for predetermined compensation on termination which exceeds one
year’s salary and benefits in kind.
Directors’ Interests in Contracts
There were no contracts (other than a service agreement with a notice period of one year) at any stage during the year
between the Company or other Group undertaking and any Director of the Company.
Directors’ Remuneration
Notes
Executive Directors
Salary and benefits:
Basic salary
Benefits
Other costs:
Pension charge for year
Total executive Directors’ remuneration
% change on prior year
Number of executive Directors
Non-executive Directors
Fees
Pension charge for Chairman
Total non-executive Directors’ remuneration
% change on prior year
Number of non-executive Directors
Retired Director
Payment to retired Director
Total Directors’ Remuneration
% change on prior year
1
2
3
4
2
5
1999
EE’000
584
49
633
167
800
15.0% increase
2
126
21
147
5.7% increase
3
15
962
13.2% increase
1998
E’000
509
49
558
138
696
2
120
19
139
3
15
850
Notes
1. Benefits relate principally to use of a company car.
2. The pension charge for each year represents payments made to a pension fund as advised by an independent actuary.
3. There were no performance related emoluments in respect of the two years ended 31 March 1999.
4.
Includes Chairman’s and Board sub-committee fees.
5. Ex gratia pension paid to a retired non-executive Director.
DCC plc Annual Report and Accounts 1999
31
Report on Directors’ Remuneration
Directors’ and Company Secretary’s Interests
The interests of the Directors and the Company Secretary (including their respective family interests) in the share capital
of DCC plc at 31 March 1999, together with their interests at 31 March 1998, were:
At 31 March 1999
Alex Spain
Jim Flavin
Tony Barry
Morgan Crowe
Paddy Gallagher
Michael Scholefield (Secretary)
At 31 March 1998
Alex Spain
Jim Flavin
Tony Barry
Morgan Crowe
Paddy Gallagher
Michael Scholefield (Secretary)
Fully paid
No of Ordinary Shares
Partly paid
(IR0.2p paid)
Under option
15,634
2,283,349
7,000
731,339
1,040
153,518
15,499
1,500,000
7,000
580,175
1,040
1,249
Nil
Nil
Nil
Nil
Nil
Nil
Nil
1,077,500
Nil
230,990
Nil
127,500
Nil
625,000
Nil
200,000
Nil
94,500
Nil
350,000
Nil
100,000
Nil
137,500
All of the above interests were beneficially owned. There were no changes in the interests of the Directors and the
Company Secretary between 31 March 1999 and 7 May 1999. At 31 March 1999, Jim Flavin had a non-beneficial interest
in 2,012 DCC IR20p fully paid ordinary shares (1998: 2,012 shares).
Apart from the interests disclosed above neither the Directors nor the Company Secretary were interested at any time in
the year in the share capital or loan stock of the Company or other Group undertakings.
On 21 May 1998 Jim Flavin paid up the outstanding balance of IR£2,397,970 (E3,044,794) on 1,077,500 partly paid shares
issued to him under the DCC plc Employee Partly Paid Share Scheme and previous schemes. On the same date Morgan
Crowe paid up the outstanding balance of IR£504,298 (E640,326) on 230,990 partly paid shares issued to him under the
DCC plc Employee Partly Paid Share Scheme and previous schemes. The market price of DCC shares on 21 May 1998
was IR700p (E889 cents).
32
DCC plc Annual Report and Accounts 1999
Report on Directors’ Remuneration
Directors’ Share Options
The following are details of share options granted to Directors under the DCC plc 1998 Employee Share Option Scheme:
Jim Flavin
Basic
Second Tier
Morgan Crowe
Basic
Second Tier
No of Options
Weighted Average Normal
31 March
1998
Granted
in year
Exercised
in year
31 March
1999
Option Price
E cents
Exercise Period
-
-
-
-
-
200,000
200,000
50,000
50,000
500,000
-
-
-
-
-
200,000
200,000
50,000
50,000
500,000
720.6
720.6
700.4
700.9
June 2001 - Nov 2008
June 2003 - Nov 2008
June 2001 - Nov 2008
June 2003 - Nov 2008
Basic tier options may not normally be exercised earlier than three years from the date of grant nor second tier options
earlier than five years from the date of grant.
Basic tier options may normally only be exercised if there has been growth in the adjusted earnings per share of the Company
equivalent to the increase in the Consumer Price Index plus 2%, compound, per annum over the period following the date
of grant.
Second tier options may normally only be exercised if the growth in the adjusted earnings per share over the previous five
years is such as would place the Company in the top quartile of companies on the ISEQ index in terms of comparison of
growth in adjusted earnings per share and if there has been growth in the adjusted earnings per share of the Company
equivalent to the increase in the Consumer Price Index plus 10%, compound, per annum in that period.
The following are the details of share options granted to Directors under the terminated 1986 DCC Executive Share Option
Scheme which applied before DCC became a public company:
Jim Flavin
Morgan Crowe
31 March
1998
350,000
100,000
450,000
No of Options
Granted
in year
Exercised
in year
31 March
1999
Option Price
E cents
Exercise Period
-
-
-
(125,000)
-
(125,000)
225,000
100,000
325,000
253.9
253.9
Feb 1989 - Feb 2001
Feb 1991 - Feb 2001
On 21 May 1998 Jim Flavin exercised options over 125,000 shares at an option price of IR200p (E253.9 cents) per share.
The market price of DCC shares on that date was IR700p (E889 cents).
No options lapsed during the year. The market price of DCC shares on 31 March 1999 was E725 cents and the range
during the year was E432 cents (IR340p) to E902 cents (IR710p).
DCC plc Annual Report and Accounts 1999
33
Statement of Directors’ Responsibilities
The following statement, which should be read in conjunction with the statement of auditors’ responsibilities set out within
their report on pages 35 and 36, is made with a view to distinguishing for shareholders the respective responsibilities of the
Directors and of the auditors in relation to the financial statements.
The Directors are required by company law to ensure that the Company prepares financial statements for each financial year
which give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group
for that year.
Following discussions with the auditors, the Directors consider that in preparing the financial statements on pages 37 to 72,
which have been prepared on the going concern basis, the Company has used appropriate accounting policies, consistently
applied and supported by reasonable and prudent judgements and estimates, and that all accounting standards which they
consider applicable have been followed (subject to any explanations or material departures disclosed in the notes to the
financial statements).
The Directors are required to take all reasonable steps to secure compliance by the Company with its obligations in relation
to the preparation and maintenance of proper books of account and financial statements which disclose with reasonable
accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply
with the Companies Acts, 1963 to 1990 and the European Communities (Companies: Group Accounts) Regulations, 1992.
The Directors have a general duty to act in the best interests of the Company and must, therefore, take such steps as are
reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
34
DCC plc Annual Report and Accounts 1999
Report of the Auditors
for the year ended 31 March 1999
To the Members of DCC plc
We have audited the financial statements on pages 37 to 72 which have been prepared under the historical cost convention
and the accounting policies set out on pages 37 to 39, and the detailed information on Directors’ emoluments, pensions and
interests in shares, partly paid shares and share options on pages 30 to 33.
Respective Responsibilities of Directors and Auditors
The directors are responsible for preparing the Annual Report, including as described on page 34 the financial statements.
Our responsibilities, as independent auditors, are established by statute, the Auditing Practices Board, the Listing Rules of the
Irish Stock Exchange and our profession’s ethical guidance.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in
accordance with the Companies Acts, 1963 to 1990, and the European Communities (Companies: Group Accounts)
Regulations, 1992. We state whether we have obtained all the information and explanations we consider necessary for the
purposes of our audit and whether the balance sheet of the Company is in agreement with the books of account. We also
report to you our opinions as to:
• whether the company has kept proper books of account;
• whether the directors’ report is consistent with the financial statements; and
• whether, at the balance sheet date, there existed a financial situation which may require the Company to hold
an extraordinary general meeting because the net assets of the Company, as shown in the balance sheet of
the Company, are not more than half of its called up share capital.
We also report to you if, in our opinion, any information required by law or the Irish Listing Rules regarding directors’
remuneration or directors’ transactions is not disclosed.
We read the other information contained in the Annual Report and consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies with the financial statements.
We review whether the statement on page 27 reflects the Company’s compliance with those provisions of the Combined
Code on corporate governance specified for our review by the Irish Stock Exchange, and we report if it does not. We are
not required to form an opinion on the effectiveness of the Company’s or Group’s corporate governance procedures or
internal controls.
Basis of 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 financial statements. It also includes
an assessment of the significant estimates and judgements made by the Directors in the preparation of the financial
statements, and of whether the accounting policies are appropriate to the Company’s circumstances, consistently applied 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 financial statements are 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 information in the financial statements.
DCC plc Annual Report and Accounts 1999
35
Report of the Auditors
for the year ended 31 March 1999
Opinion
In our opinion, the financial statements give a true and fair view of the state of affairs of the Company and of the Group at
31 March 1999 and of the profit and cash flows of the Group for the year then ended and have been properly prepared in
accordance with the Companies Acts, 1963 to 1990, and the European Communities (Companies: Group Accounts)
Regulations, 1992.
We have obtained all the information and explanations we consider necessary for the purposes of our audit. In our opinion,
proper books of account have been kept by the Company. The balance sheet of the Company at 31 March 1999 is in
agreement with the books of account.
In our opinion, the information given in the Report of the Directors on pages 28 and 29 is consistent with the financial
statements.
The net assets of the Company, as stated in the balance sheet on page 43, are more than half of the amount of its called up
share capital, and in our opinion, on that basis there did not exist at 31 March 1999 a financial situation which, under Section
40(1) of the Companies (Amendment) Act, 1983, would require the convening of an extraordinary general meeting of the
Company.
PricewaterhouseCoopers
Chartered Accountants and Registered Auditors
7 May 1999
Dublin
36
DCC plc Annual Report and Accounts 1999
Accounting Policies
Accounting Convention
The financial statements have been prepared under the historical cost convention and in accordance with applicable
accounting standards. The currency used in these financial statements is the Euro, denoted by the symbol I.
Basis of Consolidation
The consolidated financial statements include the Company and all its subsidiaries. Two of the Group’s subsidiary
undertakings have, for commercial considerations, financial years ending 28 February 1999.
In respect of these subsidiary
undertakings, audited financial statements for the year ended 28 February 1999, together with interim accounts for March
1999 less interim accounts for March 1998, have been used in preparing the consolidated financial statements.
The results of subsidiary and associated undertakings acquired or disposed of during the year are included in the
consolidated profit and loss account from the date of their acquisition or up to the date of their disposal.
Goodwill
Goodwill comprises the excess of consideration paid to acquire new businesses over the fair value of the net assets acquired.
Goodwill arising on the acquisition of subsidiaries pre 1 April 1998 was eliminated from the balance sheet through reserves
in the year in which it arose. Goodwill arising on the acquisition of subsidiaries from 1 April 1998 is capitalised on the balance
sheet and amortised on a straight line basis over its estimated useful economic life.
In the case of interests acquired by the Group in associated undertakings, goodwill is capitalised as part of their carrying
In the case of similar interests acquired by associated
value and amortised over its expected useful economic life.
undertakings of the Group, the accounting treatment followed in respect of goodwill is that adopted by that associated
undertaking.
The useful economic life of capitalised goodwill arising on acquisitions after 1 April 1998 is estimated to equate to 20 years.
Subsidiaries
Subsidiaries are included in the Company balance sheet at cost less provision for any permanent diminution in value.
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 using 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 goodwill amortised. Provision is made, where
appropriate, where the directors consider there has been an impairment in value.
Turnover
Turnover comprises the invoiced value, including excise duty and excluding value added tax, of goods supplied and services
rendered.
DCC plc Annual Report and Accounts 1999
37
Accounting Policies
Stocks
Stocks 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 stocks,
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 stocks.
Tangible Fixed Assets
Tangible fixed assets are stated at cost less accumulated depreciation.
Depreciation is provided on a straight line basis at the rates stated below, which are estimated to reduce the assets to their
net realisable values by the end of their expected working lives:
Freehold and Long Term Leasehold Buildings
Plant and Machinery
Cylinders
Motor Vehicles
Fixtures, Fittings and Office Equipment
Land is not depreciated.
Annual Rate
2%
5% - 33 %
1
3/
6 %
2
3/
10% - 33 %
10% - 33 %
1
3/
1
3/
Leased Assets
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. 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 profit
and loss account over the term of the lease on an actuarial basis.
The annual rentals under operating leases are charged to the profit and loss account as incurred.
Capital Grants
Capital grants received and receivable by the Group are credited to capital grants and are amortised to the profit and loss
account on a straight line basis over the expected useful lives of the assets to which they relate.
Deferred Taxation
Full provision under the liability method is made for deferred taxation on timing differences to the extent that, in the opinion
of the directors, it is probable that a liability will crystallise in the foreseeable future.
Timing differences are temporary differences between profit as computed for taxation purposes and profit as stated in the
financial statements which arise because certain items of income and expenditure in the financial statements are dealt with
in different periods for taxation purposes.
38
DCC plc Annual Report and Accounts 1999
Accounting Policies
Foreign Currencies
The 1999 financial statements and the 1998 comparative amounts are presented in Euros. The Euro amounts have been
arrived at by converting the underlying Irish Pound figures at the fixed conversion rate of E1 = IR£0.787564.
Assets and liabilities denominated in foreign currencies are translated into Irish Pounds at the exchange rates ruling at the
balance sheet date or at contracted rates, where appropriate.
The trading results of overseas subsidiaries are translated into Irish Pounds at the average rate of exchange for the year.
Profits and losses arising on transactions in foreign currencies during the year are included in the profit and loss account at
the exchange rate ruling on the date of the transactions.
Exchange differences arising from a re-translation of the opening net investment in subsidiary and associated undertakings
are dealt with in retained profits net of differences on related currency borrowings.
Derivative Financial Instruments
The Group is a party to derivative financial instruments (derivatives), primarily to manage its exposure to fluctuations in
foreign currency exchange rates and interest rates and to manage its exposure to changes in the prices of certain commodity
products.
Gains and losses on derivative contracts used to hedge foreign exchange and commodity price trading exposures are
recognised in the profit and loss account when the hedged transactions occur.
As part of exchange rate risk management, foreign currency swap agreements are used to convert US dollar borrowings into
Sterling borrowings. Gains and losses on these derivatives are deferred and recognised on the maturity of the underlying
debt, together with the matching loss or gain on the debt.
Interest rate swap agreements and similar contracts are used to manage interest rate exposures. Amounts payable or
receivable in respect of these derivatives are recognised as adjustments to interest expense over the period of the contracts.
Pension Costs
Pension costs are accounted for on the basis of charging the expected cost of providing pensions over the period during
which the Group benefits from the employees’ services. The effect of variations from regular cost are spread over the
expected average remaining service lives of the members in the schemes. The basis of contributions is determined on the
advice of independent qualified actuaries.
DCC plc Annual Report and Accounts 1999
39
Consolidated Profit and Loss Account
for the year ended 31 March 1999
Notes
e’000
e’000
e’000
e’000
1999
1998
Turnover
Subsidiary undertakings
Share of turnover of associated undertakings
Total turnover
Turnover - subsidiary undertakings
Continuing activities
Acquisitions
Cost of sales
Gross profit
Net operating costs
Operating profit - parent and subsidiary undertakings
Share of operating profit of associated undertakings
Operating profit before goodwill amortisation
Continuing activities
Acquisitions
Goodwill amortisation
Operating profit
Net interest payable and similar charges
- parent and subsidiary undertakings
Share of net interest payable and similar charges
- associated undertakings
Profit on ordinary activities before taxation
Continuing activities
Acquisitions
Taxation
Profit after taxation
Minority interests
Profit for the financial year attributable to
Group shareholders
Dividends paid
Dividends proposed
Profit retained for the year
Earnings per ordinary share
- basic (cents)
- fully diluted (cents)
Adjusted earnings per ordinary share
- basic (cents)
- fully diluted (cents)
1
1
1
2
2
2
2
1
1
6
7
8
9
3
10
11
12
13
13
14
14
14
14
60,149
3,512
63,661
54,021
3,644
57,665
791,706
267,560
1,059,266
753,166
38,540
791,706
(624,760)
166,946
(115,414)
51,532
12,129
63,661
(1,557)
62,104
(4,364)
(75)
57,665
(8,883)
48,782
(802)
47,980
(4,922)
(8,070)
34,988
e55.39c
e54.32c
e57.19c
e56.08c
51,250
(193)
51,057
46,547
(193)
46,354
639,591
252,729
892,320
638,944
647
639,591
(503,852)
135,739
(95,133)
40,606
10,451
51,057
(278)
50,779
(4,133)
(292)
46,354
(7,467)
38,887
(1,422)
37,465
(3,790)
(6,476)
27,199
e45.08c
e43.60c
e45.41c
e43.92c
Alex Spain, Jim Flavin, Directors
The notes on pages 45 to 72 and the accounting policies on pages 37 to 39 form part of these financial statements.
Report of the Auditors pages 35 and 36.
40
DCC plc Annual Report and Accounts 1999
Statement of Total Recognised Gains and Losses
for the year ended 31 March 1999
Profit attributable to Group shareholders
Other movements on associated company reserves
Exchange adjustments
Total recognised gains relating to the year
1999
e’000
47,980
(454)
(220)
47,306
1998
e’000
37,465
(767)
1,435
38,133
Notes of Historical Cost Profits and Losses
for the year ended 31 March 1999
There is no difference between the profit on ordinary activities before taxation and the profit retained for the year on an
historical cost basis and the amounts shown in the consolidated profit and loss account on page 40.
The notes on pages 45 to 72 and the accounting policies on pages 37 to 39 form part of these financial statements.
Report of the Auditors pages 35 and 36.
DCC plc Annual Report and Accounts 1999
41
Consolidated Balance Sheet
as at 31 March 1999
Notes
1999
e’000
Fixed Assets
Intangible assets - goodwill
Tangible fixed assets
Financial assets - associated undertakings
Current Assets
Stocks
Debtors
Cash and term deposits
Creditors: Amounts falling due within one year
Trade and other creditors
Acquisition creditors
Bank and other debt
Corporation tax
Proposed dividend
Net Current Assets
Total Assets less Current Liabilities
Financed by:
Creditors: Amounts falling due after more than one year
Bank and other debt
Unsecured Notes due 2008/11
Acquisition creditors
Provisions for Liabilities and Charges
Capital and Reserves
Called up equity share capital
Share premium account
Reserves
Equity Shareholders’ Funds
Equity minority interests
Capital grants
15
16
17
19
20
22
23
24
13
24
24
29
32
33
34
35
36
37
46,028
106,697
56,844
209,569
54,133
150,924
311,314
516,371
152,914
10,167
41,759
10,762
8,070
223,672
292,699
502,268
192,295
97,557
9,868
299,720
2,244
301,964
22,128
120,796
52,297
195,221
3,902
1,181
200,304
502,268
1998
e’000
-
98,761
46,474
145,235
44,204
117,065
289,362
450,631
128,878
3,063
17,423
7,731
6,476
163,571
287,060
432,295
163,151
101,754
3,722
268,627
2,569
271,196
21,309
112,090
20,683
154,082
5,295
1,722
161,099
432,295
Alex Spain, Jim Flavin, Directors
The notes on pages 45 to 72 and the accounting policies on pages 37 to 39 form part of these financial statements.
Report of the Auditors pages 35 and 36.
42
DCC plc Annual Report and Accounts 1999
Company Balance Sheet
as at 31 March 1999
Notes
Fixed Assets
Tangible fixed assets
Financial assets
- associated undertakings
- subsidiary undertakings
Current Assets
Debtors: Amounts falling due within one year
Debtors: Amounts falling due after more than one year
Cash and term deposits
Creditors: Amounts falling due within one year
Trade and other creditors
Bank and other debt
Proposed dividend
Net Current Assets
Total Assets less Current Liabilities
Financed by:
Creditors: Amounts falling due after more than one year
Bank and other debt
Amounts owed to subsidiary undertakings
Provisions for Liabilities and Charges
Capital and Reserves
Called up equity share capital
Share premium account
Profit and loss account
Equity Shareholders’ Funds
16
17
18
20
20
22
23
24
13
24
29
32
33
34
1999
e’000
512
1,233
67,385
69,130
2,167
212,414
1,930
216,511
1,366
-
8,070
9,436
207,075
276,205
886
87,394
88,280
4
88,284
22,128
120,796
44,997
187,921
276,205
1998
e’000
418
1,233
57,283
58,934
1,713
195,420
3,469
200,602
1,052
2,413
6,476
9,941
190,661
249,595
13,580
55,660
69,240
4
69,244
21,309
112,090
46,952
180,351
249,595
Alex Spain, Jim Flavin, Directors
The notes on pages 45 to 72 and the accounting policies on pages 37 to 39 form part of these financial statements.
Report of the Auditors pages 35 and 36.
DCC plc Annual Report and Accounts 1999
43
Consolidated Cash Flow Statement
for the year ended 31 March 1999
Cash flow from operating activities
Returns on investments and servicing of finance
Taxation paid
Capital expenditure
Acquisitions and disposals
Equity dividends paid
Cash (outflow)/inflow before management of
liquid resources and financing
Decrease/(Increase) in liquid resources
Financing
Increase in cash for the year
Notes
39
40
40
40
41
40
41
1999
e’000
65,530
(4,214)
(5,768)
(16,816)
(59,124)
(10,527)
(30,919)
140,319
29,478
138,878
1998
e’000
50,833
(3,643)
(4,577)
(16,285)
(8,600)
(6,835)
10,893
(133,524)
127,276
4,645
Reconciliation of Net Cash Flow to Movement in Net (Debt) / Cash
for the year ended 31 March 1999
Increase in cash for the year
(Decrease)/increase in liquid resources
Net loans drawn down
Funds paid/(raised) on finance lease arrangements
Changes in net (debt)/cash resulting from cash flow
Exchange movements
Movement in net (debt)/cash in the year
Net cash /(debt) at start of year
Net (debt)/cash at end of year
Notes
41
41
41
41
41
41
41
1999
e’000
138,878
(140,319)
(31,260)
2,693
(30,008)
2,677
(27,331)
7,034
(20,297)
1998
e’000
4,645
133,524
(77,789)
(40,567)
19,813
(8,313)
11,500
(4,466)
7,034
The notes on pages 45 to 72 and the accounting policies on pages 37 to 39 form part of these financial statements.
Report of the Auditors pages 35 and 36.
44
DCC plc Annual Report and Accounts 1999
Notes to the Financial Statements
for the year ended 31 March 1999
1. Segmental Information
(a) Segmental Analysis by Class of Business
An analysis by class of business of the Group’s turnover, profit before taxation and net assets is set out below:
(i) Summary
DCC SerCom
DCC Energy
DCC Foods
DCC Healthcare
Other Interests
Goodwill amortisation
Interest (net)
Net (debt)/cash
Acquisition creditors
Capitalised goodwill
Minority interests
Group unallocated net assets
Turnover*
e’000
416,513
193,305
314,179
114,759
20,510
1,059,266
-
-
-
-
-
-
-
1999
Profit
before
Taxation
e’000
18,311
18,213
14,984
9,780
2,373
63,661
(1,557)
(4,439)
-
-
-
-
-
Net
Assets
e’000
50,636
55,740
51,198
34,523
8,985
201,082
-
-
(20,297)
(20,035)
46,028
(3,902)
(7,655)
Turnover
e’000
336,931
160,880
293,304
81,347
19,858
892,320
-
-
-
-
-
-
-
1998
Profit
Before
Taxation
e’000
15,491
13,213
12,909
7,188
2,256
51,057
(278)
(4,425)
-
-
-
-
-
Net
Assets
e’000
34,923
56,332
42,174
29,289
7,294
170,012
-
-
7,034
(6,785)
-
(5,295)
(10,884)
1,059,266
57,665
195,221
892,320
46,354
154,082
* Comprises turnover of subsidiary and associated undertakings.
(ii) Turnover
Subsidiary
1999
Associated
Undertakings Undertakings
e’000
e’000
1998
Associated
Total Undertakings Undertakings
e’000
e’000
e’000
Subsidiary
DCC SerCom
DCC Energy
DCC Foods
DCC Healthcare
Other Interests
416,074
193,305
79,071
103,256
-
439
-
235,108
11,503
20,510
416,513
193,305
314,179
114,759
20,510
336,065
160,880
71,452
71,194
-
866
-
221,852
10,153
19,858
Total
e’000
336,931
160,880
293,304
81,347
19,858
Turnover**
791,706
267,560
1,059,266
639,591
252,729
892,320
** Of which acquisitions in the year contributed E42.531 million (1998: E0.647 million).
DCC plc Annual Report and Accounts 1999
45
Notes to the Financial Statements
for the year ended 31 March 1999
1. Segmental Information continued
(iii) Profit before Taxation
1999
1998
Parent and
Subsidiary
Associated
Undertakings Undertakings
e’000
e’000
Parent and
Subsidiary
Associated
Total Undertakings Undertakings
e’000
e’000
e’000
DCC SerCom
DCC Energy
DCC Foods
DCC Healthcare
Other Interests
Operating profit before
goodwill amortisation*
Goodwill amortisation
Operating profit
Interest (net)
18,284
18,213
5,950
9,085
-
51,532
(830)
50,702
(4,364)
27
-
9,034
695
2,373
12,129
(727)
11,402
(75)
18,311
18,213
14,984
9,780
2,373
63,661
(1,557)
62,104
(4,439)
15,369
13,213
5,109
6,915
-
40,606
-
40,606
(4,133)
122
-
7,800
273
2,256
10,451
(278)
10,173
(292)
Total
e’000
15,491
13,213
12,909
7,188
2,256
51,057
(278)
50,779
(4,425)
Profit before taxation
46,338
11,327
57,665
36,473
9,881
46,354
* Of which acquisitions in the year contributed a profit of E3.512 million (1998: Loss of E0.193 million).
(iv) Net Assets
1999
1998
Parent and
Subsidiary
Associated
Undertakings Undertakings
e’000
e’000
Parent and
Subsidiary
Associated
Total Undertakings Undertakings
e’000
e’000
e’000
DCC SerCom
DCC Energy
DCC Foods
DCC Healthcare
Other Interests
Net (debt)/cash
Acquisition creditors
Capitalised goodwill
Minority interests
Group unallocated net assets
50,603
55,740
8,875
29,020
-
144,238
(20,297)
(20,035)
46,028
(3,902)
(7,655)
33
-
42,323
5,503
8,985
56,844
-
-
-
-
-
50,636
55,740
51,198
34,523
8,985
201,082
(20,297)
(20,035)
46,028
(3,902)
(7,655)
34,786
56,332
8,361
24,059
-
123,538
7,034
(6,785)
-
(5,295)
(10,884)
137
-
33,813
5,230
7,294
46,474
-
-
-
-
-
Total
e’000
34,923
56,332
42,174
29,289
7,294
170,012
7,034
(6,785)
-
(5,295)
(10,884)
Net assets
138,377
56,844
195,221
107,608
46,474
154,082
46
DCC plc Annual Report and Accounts 1999
Notes to the Financial Statements
for the year ended 31 March 1999
1. Segmental Information continued
(b) Segmental Analysis by Geographical Area
An analysis by geographical area of turnover, profit before taxation and net assets is set out below:
(i) Summary
1999
Profit
before
Taxation
e’000
26,786
24,746
51,532
12,129
63,661
(1,557)
(4,439)
-
-
-
-
-
Turnover
by Origin
e’000
348,626
443,080
791,706
267,560
1,059,266
-
-
-
-
-
-
-
Net
Assets
e’000
70,899
73,339
144,238
56,844
201,082
-
-
(20,297)
(20,035)
46,028
(3,902)
(7,655)
1998
Profit
before
Taxation
e’000
Turnover
by Origin
e’000
269,612
369,979
639,591
252,729
892,320
-
-
-
-
-
-
-
20,431
20,175
40,606
10,451
51,057
(278)
(4,425)
-
-
-
-
-
Net
Assets
e’000
52,477
71,061
123,538
46,474
170,012
-
-
7,034
(6,785)
-
(5,295)
(10,884)
1,059,266
57,665
195,221
892,320
46,354
154,082
1999
e’000
320,708
429,596
15,173
21,173
5,056
267,560
1,059,266
1998
e’000
239,625
365,769
12,951
15,834
5,412
252,729
892,320
Ireland
Rest of the World
Associated undertakings
Goodwill amortisation
Interest (net)
Net (debt)/cash
Acquisition creditors
Capitalised goodwill
Minority Interests
Group unallocated net assets
(ii) Turnover by Destination
Ireland
United Kingdom
Rest of Europe
USA
Other
Share of associated undertakings
DCC plc Annual Report and Accounts 1999
47
Notes to the Financial Statements
for the year ended 31 March 1999
2. Cost of Sales and Net Operating Costs
1999
1998
Continuing
Operations Acquisitions
e’000
e’000
Total
e’000
Continuing
Operations Acquisitions
e’000
e’000
Total
e’000
Cost of sales
(596,633)
(28,127)
(624,760)
(503,384)
(468)
(503,852)
Gross profit
156,533
10,413
166,946
135,560
179
135,739
Operating costs
Distribution
Administrative
Other operating expenses
Other operating income
Net operating costs
Operating profit before
goodwill amortisation
- parent and subsidiaries
3. Acquisitions
(55,697)
(53,619)
(178)
(109,494)
1,082
(108,412)
(3,432)
(3,659)
(5)
(7,096)
94
(7,002)
(59,129)
(57,278)
(183)
(116,590)
1,176
(115,414)
(49,224)
(45,859)
(20)
(95,103)
342
(94,761)
(152)
(220)
-
(372)
-
(372)
(49,376)
(46,079)
(20)
(95,475)
342
(95,133)
48,121
3,411
51,532
40,799
(193)
40,606
The profit or loss on ordinary activities before taxation arising from acquisitions represents the aggregate of net
incremental profit or loss resulting from the acquisition of subsidiary and associated undertakings in the relevant financial
year.
4. Employee Information
The average weekly number of persons (including executive directors) employed by the Group during the year analysed
by class of business was:
DCC SerCom
DCC Energy
DCC Foods
DCC Healthcare
The staff costs for the above were:
Wages and salaries
Social welfare costs
Pension costs
1999
Number
1,239
457
244
724
2,664
1999
e’000
67,113
6,440
3,119
76,672
1998
Number
1,144
412
249
489
2,294
1998
e’000
58,301
5,577
2,802
66,680
48
DCC plc Annual Report and Accounts 1999
Notes to the Financial Statements
for the year ended 31 March 1999
5. Directors’ Emoluments and Interests
Directors’ emoluments and interests are given in the Report on Directors’ Remuneration on pages 30 to 33.
6. Goodwill Amortisation
Amortisation of capitalised goodwill arising on the acquisition
of subsidiaries after 1 April 1998 (note 15)
Amortisation of goodwill included in the carrying value of
associated undertakings (note 17)
1999
e’000
830
727
1,557
7. Net Interest Payable and Similar Charges - Parent and Subsidiary Undertakings
Interest receivable and similar income
Interest on cash and term deposits
Other interest receivable
Interest payable and similar charges
On bank loans, overdrafts and Unsecured Notes 2008/11
- repayable within 5 years, not by instalments
- repayable within 5 years, by instalments
- repayable wholly or partly in more than 5 years
On loan notes
- repayable within 5 years, not by instalments
- repayable wholly or partly in more than 5 years
On finance leases
Notional interest
1999
e’000
17,792
259
18,051
(8,171)
(310)
(8,293)
(296)
(1,663)
(3,484)
(198)
(22,415)
(4,364)
1998
e’000
-
278
278
1998
e’000
13,497
12
13,509
(6,934)
(283)
(8,046)
(504)
(1,384)
(222)
(269)
(17,642)
(4,133)
Where acquisitions involve further payments which are deferred or contingent on levels of performance achieved in
the years following acquisition, the profit and loss account is charged with notional interest to eliminate the benefit
which the Group is temporarily deriving. The notional interest charge is calculated by reference to the period of
deferral, current interest rates and the estimated amount of the likely payments.
8. Share of Net Interest Payable and Similar Charges - Associated Undertakings
This comprises the Group’s share of the net interest payable and similar charges of its associated undertakings.
DCC plc Annual Report and Accounts 1999
49
Notes to the Financial Statements
for the year ended 31 March 1999
9. Profit on Ordinary Activities Before Taxation
Profit on ordinary activities before taxation is stated after charging/(crediting):
Auditors’ remuneration
Revenue grants
Amortisation of capital grants
Operating leases
- land and buildings
- plant and machinery
- motor vehicles
Depreciation
- owned assets
- leased assets
10. Taxation
Irish Corporation Tax at 31% (1998: 35%)
- Current
- Deferred
- Less: manufacturing relief
United Kingdom Corporation Tax at 31%
- Current
- Deferred
United States Corporation Tax
Netherlands Corporation Tax
Other
(Over)/under provision in respect of prior years
- Current
- Deferred
Associated undertakings
1999
e’000
317
(17)
(366)
1,938
48
700
11,772
4,404
1999
e’000
7,476
(65)
(3,799)
2,881
(10)
(48)
336
67
(307)
(374)
6,157
2,726
8,883
1998
e’000
254
(95)
(395)
961
32
494
14,295
373
1998
e’000
7,415
(311)
(4,528)
2,632
(609)
(76)
265
27
78
-
4,893
2,574
7,467
Manufacturing relief is scheduled to expire in the year 2010.
The Irish government has indicated a commitment to reduce the standard rate of corporation tax on a phased basis
to 12.5% by the year 2003.
50
DCC plc Annual Report and Accounts 1999
Notes to the Financial Statements
for the year ended 31 March 1999
11. Minority Interests
Subsidiary undertakings
Associated undertakings
1999
e’000
137
665
802
1998
e’000
719
703
1,422
12. Profit for the Financial Year Attributable to Group Shareholders
As permitted by Section 3(2) of the Companies (Amendment) Act, 1986, a separate profit and loss account for the
holding company has not been included in these financial statements. The profit for the financial year attributable
to DCC shareholders dealt with in the financial statements of the holding company amounted to e11,037,000
(1998: e19,968,000).
13. Dividends
Per Ordinary Share
Interim dividend paid of e5.396 cents per fully paid share
(1998: e4.470 cents)
Additional dividend
Total dividend paid
Proposed second interim dividend of e9.264 cents per fully paid share
Proposed final dividend of e7.720 cents per fully paid share
1999
e’000
4,698
224
4,922
8,070
-
12,992
1998
e’000
3,729
61
3,790
-
6,476
10,266
The additional dividend of e224,000 (1998: e61,000) is in respect of shares issued after the date of approval of the
relevant accounts but qualifying for receipt of the dividend declared.
DCC plc Annual Report and Accounts 1999
51
Notes to the Financial Statements
for the year ended 31 March 1999
14. Earnings Per Ordinary Share and Adjusted Earnings per Ordinary Share
Profit after taxation and minority interests
Goodwill amortisation
Adjusted profit after taxation and minority interests
Basic earnings per ordinary share
Basic earnings per ordinary share (cents)
Goodwill amortisation
Adjusted basic earnings per ordinary share (cents)
1999
e’000
47,980
1,557
49,537
e cents
55.39
1.80
57.19
Weighted average number of shares in issue during the year (’000)
86,621
Fully diluted earnings per ordinary share
Fully diluted earnings per ordinary share (cents)
Goodwill amortisation
Adjusted fully diluted earnings per ordinary share (cents)
Fully diluted weighted average number of ordinary shares (’000)
e cents
54.32
1.76
56.08
88,504
1998
e’000
37,465
278
37,743
e cents
45.08
0.33
45.41
83,111
e cents
43.60
0.32
43.92
85,936
The adjusted figures for basic earnings per ordinary share and fully diluted earnings per ordinary share are intended
to demonstrate the results of the Group after eliminating the impact of goodwill amortisation.
The weighted average number of ordinary shares used in calculating the fully diluted earnings per share for the year
ended 31 March 1999 was 88.504 million (1998: 85.936 million). A reconciliation of the weighted average number of
ordinary shares used for the purposes of calculating the fully diluted earnings per share amounts is as follows:
Weighted average number of shares used for the calculation
of basic earnings per share amounts
Dilutive effect of options and partly paid shares
Dilutive effect of shares potentially issuable under deferred
contingent consideration arrangements
1999
’000
86,621
917
966
1998
’000
83,111
2,325
500
Weighted average number of shares used for the calculation
of diluted earnings per share amounts
88,504
85,936
The earnings used for the purpose of the fully diluted earnings per share calculations were E48.079 million
(1998: E37.465 million) and E49.636 million (1998: E37.743 million) for the purposes of the adjusted diluted
earnings per share calculation.
52
DCC plc Annual Report and Accounts 1999
Notes to the Financial Statements
for the year ended 31 March 1999
15. Intangible Assets - Goodwill
Group
Arising on the acquisition of subsidiaries:
At 1 April
Arising during the year (note 38)
Amortised to profit and loss account (note 6)
At 31 March
16. Tangible Fixed Assets
(a) Group
Freehold &
long term
Plant &
leasehold land machinery &
cylinders
e’000
& buildings
e’000
33,159
8,126
2,007
-
(47)
(570)
42,675
5,286
1,727
881
(47)
-
(41)
7,806
128,662
6,368
8,709
(184)
(2,438)
(2,594)
138,523
73,731
4,337
9,405
(1,919)
(142)
(1,295)
84,117
Cost
At 1 April 1998
Acquisitions (note 38)
Additions
Reclassifications
Disposals
Exchange adjustments
At 31 March 1999
Depreciation
At 1 April 1998
Acquisitions (note 38)
Charge for year
Disposals
Reclassifications
Exchange adjustments
At 31 March 1999
Net Book Value
At 31 March 1999
At 31 March 1998
1999
e’000
-
46,858
(830)
46,028
Total
e’000
200,595
17,775
18,014
-
(5,657)
(3,681)
227,046
101,834
8,296
16,176
(4,359)
-
(1,598)
120,349
Fixtures,
fittings
& office
equipment
e’000
17,495
2,908
3,130
71
(507)
(90)
23,007
11,754
2,089
2,773
(432)
142
(38)
16,288
Motor
vehicles
e’000
21,279
373
4,168
113
(2,665)
(427)
22,841
11,063
143
3,117
(1,961)
-
(224)
12,138
34,869
27,873
54,406
54,931
6,719
5,741
10,703
10,216
106,697
98,761
The net book value of tangible fixed assets includes an amount of e24,136,000 (1998: e29,125,000) in respect of
assets held under finance leases.
DCC plc Annual Report and Accounts 1999
53
Notes to the Financial Statements
for the year ended 31 March 1999
16. Tangible Fixed Assets continued
(b) Company
Cost
At 1 April 1998
Additions
Disposals
At 31 March 1999
Depreciation
At 1 April 1998
Charge for year
Disposals
At 31 March 1999
Net Book Value
At 31 March 1999
At 31 March 1998
Fixtures
fittings & office
equipment
e’000
Motor
vehicles
e’000
960
48
(9)
999
700
110
(8)
802
197
260
379
246
(85)
540
221
87
(83)
225
315
158
17. Financial Assets - Associated Undertakings
(a) Group
At 1 April
Additions
Retained profits less dividends
Other movements in reserves
Amortisation of goodwill (note 6)
Acquired as a subsidiary in the year (note 38)
At 31 March
1999
e’000
46,474
7,194
7,175
(3,154)
(727)
(118)
56,844
Total
e’000
1,339
294
(94)
1,539
921
197
(91)
1,027
512
418
1998
e’000
41,920
-
5,887
(767)
(278)
(288)
46,474
The principal investment in associated undertakings made by the Group during the year was the acquisition of a 50%
shareholding in Sparrowrock Limited, the holding company for the Kylemore group of companies.
54
DCC plc Annual Report and Accounts 1999
Notes to the Financial Statements
for the year ended 31 March 1999
17. Financial Assets - Associated Undertakings continued
The carrying value of associated undertakings is analysed as follows:
Interest in net assets
Goodwill (net of amortisation)
Share of post acquisition reserves
1999
e’000
25,615
13,865
17,364
56,844
1998
e’000
20,826
12,187
13,461
46,474
Included in the above are amounts of e28,169,000 (1998: e27,273,000) in respect of a listed associated undertaking
which, at 31 March 1999, had a market value of e78,025,000 (1998: e81,804,000).
The Group’s aggregate share of its associate undertakings’ fixed assets, current assets, liabilities due within one year and
liabilities due after more than one year were as follows:
Fixed assets
Current assets
Liabilities due within one year
Liabilities due after more than one year and minority interests
The movement in goodwill of associated undertakings is as follows:
Cost
At 1 April
Additions
At 31 March
Amortisation
At 1 April
Amortisation for the year
At 31 March
Net Book Value
At 31 March
1999
e’000
33,455
90,428
(59,979)
(20,925)
1999
e’000
13,732
2,405
16,137
1,545
727
2,272
1998
e’000
22,540
79,528
(43,038)
(24,743)
1998
e’000
13,732
-
13,732
1,267
278
1,545
13,865
12,187
DCC plc Annual Report and Accounts 1999
55
Notes to the Financial Statements
for the year ended 31 March 1999
17. Financial Assets - Associated Undertakings continued
Details of the Group’s principal associated undertakings at 31 March 1999 are set out below. All of these companies
are incorporated and operate principally in their country of registration except Fyffes plc, which is incorporated in
Ireland and has significant subsidiaries in Ireland, the United Kingdom and Continental Europe.
Name and Registered Office Nature of Business
% Shareholding
Relevant Share Capital
DCC Foods
Fyffes plc,
1 Beresford Street,
Dublin 7, Ireland.
Distribution of fresh fruit and vegetables.
10.7%*
8.1%
294,197,490 ordinary shares
of IR5p each
56,797,295 convertible cumulative
preference shares of IR£1 each
* If all of the convertible cumulative preference shares of Fyffes plc in issue were converted into ordinary shares, the Group would hold
10.3% of the ordinary shares of Fyffes plc
KP (Ireland) Limited,
79 Broomhill Road,Tallaght,
Dublin 24, Ireland.
Millais Investments Limited,
Kinsale Road, Cork, Ireland.
Manufacture of snack foods.
50.0%
Holding company for Allied Foods
Limited, a distributor of frozen and
chilled foods.
50.0%
Sparrowrock Limited,
DCC House,
Stillorgan, Blackrock,
Co Dublin, Ireland.
Holding company for the Kylemore group
of companies whose principal activity is the
baking, wholesaling and retailing of bakery
products and the operation of restaurants.
50.0%
500,000 ordinary shares
of IR£1 each
1,750,000 "A" ordinary shares
of IR10p each
1,750,000 "B" ordinary shares
of IR10p each
1,000,000 "D" ordinary shares
of IR10p each
916,166 "E" ordinary shares
of IR10p each
2,500,000 "A" ordinary shares
of IR£1 each
2,500,000 "C" ordinary shares
of IR£1 each
DCC Healthcare
Merits Health Products
Company Limited,
9 Road 36,
Taichung Industrial Park,
Taichung,Taiwan.
Other Associated Undertakings
Manor Park Homebuilders Limited,
“The Gables”,Torquay Road,
Dublin 18, Ireland.
(b) Company
At 31 March
Manufacture of mobility aids.
45.0%
7,387 capital stock of NT$10,000 each
Residential house building.
49.0%
90,000 ordinary shares of IR£1 each
1999
e’000
1,233
1998
e’000
1,233
56
DCC plc Annual Report and Accounts 1999
Notes to the Financial Statements
for the year ended 31 March 1999
18. Financial Assets - Subsidiary Undertakings
Company
At 1 April
Additions
Disposals
At 31 March
1999
e’000
57,283
10,209
(107)
67,385
1998
e’000
76,677
3,122
(22,516)
57,283
The Group’s principal operating subsidiary undertakings and the location of their principal operations and registered
office are shown on pages 73 to 76. All of these subsidiaries are wholly owned except Broderick Holdings Limited
(82.5%), International Translation and Publishing Limited (90.0%), Virtus Limited (51.0%), EuroCaps Limited (80.0%)
where put and call options exist in respect of the remaining 20.0%, and Fannin Limited (75.0%) where put and call
options exist in respect of the remaining 25.0%.
The Group’s principal overseas holding company subsidiaries are DCC Holdings (UK) Limited, a company operating,
incorporated and registered in England and Wales and DCC International Holdings BV, a company operating,
incorporated and registered in the Netherlands. The registered office of DCC Holdings (UK) Limited is at Days Medical
Aids Limited, Litchard Industrial Estate, Bridgend, Mid Glamorgan CF31 2AL, Wales. The registered office of DCC
International Holdings BV is Drentestaete, Drentestraat 24, 1083 HK Amsterdam,The Netherlands.
19. Stocks
Group
Raw materials and consumables
Work in progress
Finished goods and goods for resale
1999
e’000
5,407
552
48,174
54,133
1998
e’000
4,680
943
38,581
44,204
The replacement cost of stocks is not considered to be materially different from the amounts shown above.
DCC plc Annual Report and Accounts 1999
57
Notes to the Financial Statements
for the year ended 31 March 1999
20. Debtors
Amounts falling due within one year:
Trade debtors
Amounts owed by subsidiary undertakings
Corporation tax recoverable
Value added tax recoverable
Prepayments and accrued income
Investments
Other debtors (note 21)
Amounts falling due after more than one year:
Amounts owed by subsidiary undertakings
Other debtors (note 21)
Group
1999
e’000
1998
e’000
134,074
-
850
729
9,202
673
2,030
147,558
103,938
-
1,006
58
9,984
673
1,114
116,773
Company
1999
e’000
1998
e’000
421
1,064
-
-
667
-
15
2,167
248
648
6
-
795
-
16
1,713
-
3,366
3,366
-
292
292
212,318
96
212,414
195,218
202
195,420
150,924
117,065
214,581
197,133
21. Directors’ Loan Accounts
Other debtors include e29,000 (1998: e65,000) in respect of house loans to executive Directors as follows:
Balance at 1 April 1998
Interest
Repayments
Balance at 31 March 1999
Maximum amount outstanding during year
J Flavin M Crowe
e’000
e’000
Total
e’000
32
1
(33)
-
32
33
1
(5)
29
33
65
2
(38)
29
65
Interest was charged at rates varying from 3% to 5% per annum. No provision is considered necessary in respect of
the above loan.
22. Cash and Term Deposits
Cash in hand and at bank
Term deposits
Group
1999
e’000
1998
e’000
201,751
109,563
311,314
32,197
257,165
289,362
Company
1999
e’000
128
1,802
1,930
1998
e’000
969
2,500
3,469
For the purposes of the consolidated cash flow statement, cash in hand and at bank comprises cash on demand. The
movements in cash in hand and at bank and term deposits are set out in note 41.
58
DCC plc Annual Report and Accounts 1999
Notes to the Financial Statements
for the year ended 31 March 1999
23. Trade and Other Creditors
Amounts falling due within one year:
Trade creditors
Other creditors and accruals
PAYE and PRSI
Value added tax
Capital grants (note 37)
Interest payable
Amounts due in respect of fixed assets
Amounts due to associated undertakings
24. Bank and Other Debt
Bank loans (note 25)
Loan notes (note 26)
Obligations under finance leases (note 27)
Unsecured Notes due 2008/11 (note 25)
Bank and other loans and leases:
- repayable within one year
- repayable after more than one year
Unsecured Notes due 2008/11
Group
1999
e’000
1998
e’000
Company
1999
e’000
1998
e’000
113,183
21,880
1,911
9,626
245
2,035
714
3,320
152,914
91,407
17,061
4,551
9,268
231
2,614
974
2,772
128,878
Group
1999
e’000
1998
e’000
164,767
28,655
40,632
234,054
97,557
331,611
41,759
192,295
97,557
331,611
102,638
32,686
45,250
180,574
101,754
282,328
17,423
163,151
101,754
282,328
284
933
136
13
-
-
-
-
1,366
145
778
104
25
-
-
-
-
1,052
Company
1999
e’000
-
886
-
886
-
886
-
886
-
886
1998
e’000
12,634
3,359
-
15,993
-
15,993
2,413
13,580
-
15,993
In September 1996 the Group raised US$100 million of senior unsecured notes in a private placement with US
institutional investors. Of this amount US$92.5 million is due in 2008 and US$7.5 million is due in 2011. The funds
have been swapped to sterling at a margin over LIBOR.
DCC plc Annual Report and Accounts 1999
59
Notes to the Financial Statements
for the year ended 31 March 1999
25. Bank Loans, Overdrafts and Unsecured Notes due 2008/11
Repayable as follows:
In one year or less
Between one and two years
Between two and five years
In five years or more
The above amounts are further analysed as follows:
Wholly repayable within one year
Repayable by instalments:
- between one and two years
- between two and five years
Repayable other than by instalments:
- between one and two years
- between two and five years
- in five years or more
Group
1999
e’000
1998
e’000
35,730
61,054
67,983
97,557
262,324
6,061
846
95,731
101,754
204,392
35,730
6,061
180
11,208
60,874
56,775
97,557
262,324
846
235
-
95,496
101,754
204,392
Company
1999
e’000
-
-
-
-
-
-
-
-
-
-
-
-
1998
e’000
-
-
12,634
-
12,634
-
-
-
-
12,634
-
12,634
26. Loan Notes
Group
1999
e’000
1998
e’000
Company
1999
e’000
1998
e’000
The loan notes are repayable as follows:
In one year or less
Between one and two years
Between two and five years
In five years or more
Loan notes are further analysed as follows:
Wholly repayable within one year
Repayable by instalments:
- between one and two years
- between two and five years
Repayable other than by instalments:
- between one and two years
- between two and five years
- in five years or more
2,241
69
896
25,449
28,655
7,926
9
834
23,917
32,686
2,241
7,926
8
11
61
885
25,449
28,655
9
-
-
834
23,917
32,686
-
-
886
-
886
-
-
-
-
886
-
886
2,413
-
513
433
3,359
2,413
-
-
-
513
433
3,359
The above loan notes are unsecured and e28,402,000 (1998: e30,151,000) are supported by bank guarantees. The
Company and certain of its subsidiaries have guaranteed the obligations of the relevant banks in respect of the loan
notes which are guaranteed by the banks.
60
DCC plc Annual Report and Accounts 1999
Notes to the Financial Statements
for the year ended 31 March 1999
27. Finance Leases
The net finance lease obligations to which the Group is committed are:
In one year or less
Between one and two years
Between two and five years
In five years or more
1999
e’000
3,788
3,784
12,862
20,198
36,844
40,632
1998
e’000
3,436
3,623
12,813
25,378
41,814
45,250
28. Derivative and Other Financial Instruments
The Group’s treasury activities are designed to finance its operations and to reduce or eliminate the financial risks arising
from those operations.
A number of the Group’s operating and financial costs and revenues are exposed to movements in the financial and
commodity markets which are outside the Group’s control.
In particular, interest rates can fluctuate, affecting the cost
of borrowings, and commodity price movements can impact on the cost of certain raw materials purchased.
Furthermore, foreign exchange movements can impact on the cost of products sourced and revenues generated from
overseas markets and can also impact on the translation of the results and net operating assets or operating liabilities
of the Group’s overseas operations save to the extent that they are hedged by borrowings in the same currency.
In
order to reduce these exposures and to bring both stability and more certainty to the Group’s costs and revenues, the
Group uses various derivative financial instruments to hedge its position going forward.
All transactions in derivatives (which are mainly interest rate swaps, forward foreign currency and commodity contracts
and purchased currency and commodity options) are designed to manage risks without engaging in speculative
transactions.
(a) Fair Values of Financial Liabilities and Financial Assets
The Group has entered into cross currency and interest rate swaps to manage its exposure to the US dollar liability
arising from the issue of Unsecured Notes due 2008/11 in a private placement with US institutional investors (note
24). The fair value of these cross currency and interest rate swaps at 31 March 1999 equated to a loss of e2.714
million. The fair value of the currency and the interest rate swaps has been calculated by discounting future cash flows
at prevailing interest rates.
The fair values of the Group’s financial liabilities and financial assets are not considered to be materially different to
their book values disclosed in paragraph (b) with the exception of the fair value of the Unsecured Notes due 2008/11
which on a fair value basis would show a liability of e94.843 million compared with their book value liability of
e97.557 million.
The fair value of foreign currency contracts outstanding at 31 March 1999 equates to a loss of e2.976 million (book
value: enil). At 31 March 1999 the Group did not have any material commodity contracts outstanding.
DCC plc Annual Report and Accounts 1999
61
Notes to the Financial Statements
for the year ended 31 March 1999
28. Derivative and Other Financial Instruments continued
(b) Interest Rate Risk Profile of Financial Liabilities and Financial Assets
The following table analyses the currency and interest rate composition of the Group’s gross debt and cash portfolio,
as stated on the balance sheet, after taking cross currency and interest rate swaps into account:
1999
e equivalent
Financial
Assets
e’000
Financial
Liabilities
e’000
(220)
(39,445)
(39,665)
-
66,303
66,303
Net
e’000
(220)
26,858
26,638
(97,579)
(194,335)
(291,914)
91,553
150,133
241,686
(6,026)
(44,202)
(50,228)
-
(32)
(32)
-
3,325
3,325
-
3,293
3,293
1998
e equivalent
Financial
Assets
e’000
-
128,455
128,455
95,493
63,848
159,341
-
1,566
1,566
Financial
Liabilities
e’000
-
(81,667)
(81,667)
(114,871)
(85,790)
(200,661)
-
-
-
Net
e’000
-
46,788
46,788
(19,378)
(21,942)
(41,320)
-
1,566
1,566
(331,611)
311,314
(20,297)
(282,328)
289,362
7,034
e Fixed
e Floating
e Total
Stg£ Fixed
Stg£ Floating
Stg£ Total
US$ Fixed
US$ Floating
US$ Total
Total
The Group’s acquisition creditors of e20.035 million, as stated on the balance sheet, comprises e16.247 million of
e floating rate financial liabilities and e3.788 million of Stg£ floating rate financial liabilities (1998: e6.785 million of
Stg£ floating rate financial liabilities) payable as follows:
In one year or less
In more than one year but not more than two years
In more than two years but not more than five years
1999
e’000
10,167
3,268
6,600
20,035
1998
e’000
3,063
3,722
-
6,785
The Group’s floating rate financial liabilities and financial assets primarily bear interest rates based on:
• 1 - 6 month EURIBOR
• 1 month LIBOR
• US$ prime rate
1999
Weighted average interest rate %
1998
Weighted average interest rate %
Fixed rate
Fixed rate
financial liabilities financial assets
Fixed rate
financial liabilities
Fixed rate
financial assets
e
Stg£
7.8%
8.8%
n/a
8.0%
n/a
8.6%
n/a
8.0%
62
DCC plc Annual Report and Accounts 1999
Notes to the Financial Statements
for the year ended 31 March 1999
28. Derivative and Other Financial Instruments continued
1999
Weighted average period for which
rate is fixed
1998
Weighted average period for which
rate is fixed
Fixed rate
Fixed rate
financial liabilities financial assets
Fixed rate
financial liabilities
Fixed rate
financial assets
e
Stg£
1.5 years
9.0 years
n/a
9.5 years
n/a
9.0 years
n/a
10.5 years
The maturity profile of the Group’s gross debt is set out in notes 25 to 27 and can be summarised as follows:
In one year or less
In more than one year but not more than two years
In more than two years but not more than five years
In more than five years
1999
e’000
41,759
64,907
81,741
143,204
331,611
1998
e’000
17,423
4,478
109,378
151,049
282,328
(c) Gains and Losses on Hedges
The Group enters into forward foreign currency contracts to eliminate the currency exposures that arise on revenue
and costs denominated in foreign currencies. Changes in the fair value of instruments used as hedges are not
recognised in the financial statements until the hedged position matures. An analysis of these unrecognised gains and
losses is as follows:
Unrecognised gains and losses on
hedges at 31 March 1998
Gains and losses arising in previous years
that were recognised in 1998/1999
Gains and losses arising before 31 March 1998
that were not recognised in 1998/1999
Gains and losses arising in 1998/1999 that
were not recognised in 1998/1999
Unrecognised gains and losses on hedges
at 31 March 1999
Of which:
Gains and losses expected to be recognised
in 1999/2000
Gains and losses expected to be recognised thereafter
Gains
e’000
365
365
-
356
356
356
-
356
Losses
e’000
1,646
1,316
330
3,002
3,332
1,879
1,453
3,332
Total net
gains/(losses)
e’000
(1,281)
(951)
(330)
(2,646)
(2,976)
(1,523)
(1,453)
(2,976)
(d) Currency Exposures
At 31 March 1999, after taking into account the effects of foreign currency contracts, the Group had no material
currency exposures.
(e) Treasury Policy
The Group’s treasury policy and management of derivatives and of financial instruments is discussed in the Financial
Review on page 24.
DCC plc Annual Report and Accounts 1999
63
Notes to the Financial Statements
for the year ended 31 March 1999
29. Provisions for Liabilities and Charges
1999
Pensions
and similar
obligations
(note 31)
e’000
Deferred
taxation
(note 30)
e’000
Deferred
taxation
(note 30)
e’000
Total
e’000
2,524
(449)
147
(22)
2,200
45
(1)
-
-
44
2,569
3,407
(450)
147
(22)
2,244
(920)
-
37
2,524
(a) Group
At 1 April
Credited to profit and
loss account
Acquisitions
Exchange adjustments
At 31 March
(b) Company
Deferred taxation at 31 March (note 30)
30. Deferred Taxation
1998
Pensions
and similar
obligations
(note 31)
e’000
46
(1)
-
-
45
Total
e’000
3,453
(921)
-
37
2,569
1999
e’000
1998
e’000
4
4
Deferred taxation provided in the financial statements and the full potential liability are as follows:
(a) Group
Tax effect of timing differences due to:
Excess of accelerated capital allowances over depreciation
Other short term timing differences
Amount Provided
1998
1999
e’000
e’000
Full Potential Liability
1998
e’000
1999
e’000
2,454
(254)
2,200
2,872
(348)
2,524
2,587
(254)
2,333
3,048
(348)
2,700
No provision is made for certain potential taxation liabilities amounting to e133,000 (1998: e176,000) arising from
accelerated capital allowances as it is considered that the related taxation will not become payable in the foreseeable
future.
No provision is made for taxation liabilities which would arise on the distribution of profits retained by overseas
subsidiaries as there is no intention in the foreseeable future to remit such profits.
(b) Company
1999
Amount Provided Full Potential Liability
1998
e’000
1998
e’000
1999
e’000
e’000
Tax effect of timing differences due to:
Excess of accelerated capital allowances over depreciation
Other short term timing differences
3
1
4
3
1
4
3
1
4
3
1
4
64
DCC plc Annual Report and Accounts 1999
Notes to the Financial Statements
for the year ended 31 March 1999
31. Pensions and Similar Obligations
The Group operates defined benefit and defined contribution pension schemes in the parent and subsidiary
undertakings. The pension scheme assets are held in separate trustee administered funds.
Total pension costs for the year amounted to e3,119,000 (1998: e2,802,000) of which e1,331,000 (1998: e1,130,000)
was paid in respect of defined contribution schemes.
The pension costs relating to the Group’s defined benefit schemes are assessed in accordance with the advice of
independent qualified actuaries. Either the attained age or the accrued benefits method are used to assess pension costs.
The most recent actuarial valuations range from 1 May 1996 to 1 January 1998.
The assumptions which have the most significant effect on the results of the actuarial valuations are those relating to
the rates of return on investments and the rates of increase in remuneration and pensions.
It was assumed that the
rates of return on investments would, on average, exceed annual remuneration increases by 2% and pension increases
by 3% per annum.
At the dates of the most recent actuarial valuations, the market value of the assets of the Group’s defined benefit
schemes totalled e18,837,000 (1998: e13,502,000).
After allowing for expected future increases in earnings and pension payments, the actuarial values of the various
schemes’ assets were sufficient to cover between 79% and 112% (Group weighted average cover: 99%) of the benefits
that had accrued to the members of the individual schemes. The actuarial deficit is being spread over the average
remaining service lives of current employees.
At the year end, e48,000 (1998: e31,743) was included in creditors in respect of pension liabilities and e721,000
(1998: e717,000) was included in debtors in respect of pension prepayments.
In general, actuarial valuations are not available for public inspection, although the results of valuations are advised to
the members of the various pension schemes.
DCC plc Annual Report and Accounts 1999
65
Notes to the Financial Statements
for the year ended 31 March 1999
32. Called up Equity Share Capital
Group and Company
Authorised
150,000,000 ordinary shares of IR20p each
Issued
87,134,555 ordinary shares of IR20p each, fully paid
(1998: 83,882,974 ordinary shares of IR20p each, fully paid)
210,000 ordinary shares of IR20p each, IR0.2p paid
(1998: 2,725,990 ordinary shares of IR20p each, IR0.2p paid)
Movements during year
Ordinary shares of IR20p each
At 1 April 1998
Exercise of share options
Scrip issues
Payment up of partly paid shares
At 31 March 1999
1999
e’000
38,092
22,128
-
22,128
No of shares (’000)
86,609
638
98
-
87,345
1998
e’000
38,092
21,303
6
21,309
e’000
21,309
161
26
632
22,128
Under the DCC plc 1998 Employee Share Option Scheme, employees hold basic options to subscribe for 1,299,000
ordinary shares and second tier options to subscribe for 1,120,000 ordinary shares. The number of shares in respect
of which basic tier and second tier options may be granted under this scheme may not exceed 5% of all numbers of
shares in issue in each case.
Under the terminated DCC Employee Partly Paid Share Scheme, at 31 March 1999 210,000 (1998: 2,725,990) shares
remain partly paid.
Under a terminated 1986 DCC Executive Share Option Scheme, which applied before DCC became a public company,
employees hold options exercisable up to February 2001 to subscribe for 650,000 ordinary shares
(1998: 1,287,500 ordinary shares) at IR200p (e254 cents) per share.
All shares, whether fully or partly paid, carry equal voting rights and rank for dividends to the extent to which the total
amount payable on each share is paid up.
33. Share Premium Account
Group and Company
At 1 April
Premium on issue of shares
Share issue expenses
At 31 March
1999
e’000
112,090
8,769
(63)
120,796
1998
e’000
103,152
9,027
(89)
112,090
66
DCC plc Annual Report and Accounts 1999
34. Reserves
(a) Group
Notes to the Financial Statements
for the year ended 31 March 1999
Profit
Goodwill
arising on
and loss acquisition of
subsidiaries
account
e’000
e’000
Associated
undertaking
reserves
e’000
At 1 April 1998
Profit retained for the year
Reclassification of reserves
Movement on other reserves
- associated undertakings
Exchange adjustments
At 31 March 1999
111,978
27,813
(105,694)
-
(220)
33,877
(105,812)
-
105,812
-
-
-
13,461
7,175
(118)
(3,154)
-
17,364
Other
reserves
e’000
1,056
-
-
-
-
1,056
Total
e’000
20,683
34,988
-
(3,154)
(220)
52,297
In accordance with the Group’s accounting policy, goodwill arising on the acquisition of subsidiaries prior to 1 April
1998, eliminated from the balance sheet through reserves, amounts to e105.812 million. This goodwill will be charged
in the profit and loss account should the Group dispose of the businesses to which it relates.
(b) Company Profit and Loss Account
At 1 April 1998
Loss retained
At 31 March 1999
35. Reconciliation of Movements in Equity Shareholders’ Funds
Group
Profit attributable to Group shareholders
Dividends
Movement on associated undertaking reserves
Equity share capital issued (net of expenses)
Goodwill arising on acquisitions written off to reserves
Exchange adjustments
Net movement in shareholders’ funds
Opening equity shareholders’ funds
Closing equity shareholders’ funds
1999
e’000
47,980
(12,992)
34,988
(3,154)
9,525
-
(220)
41,139
154,082
195,221
e’000
46,952
(1,955)
44,997
1998
e’000
37,465
(10,266)
27,199
(767)
9,536
(5,805)
1,435
31,598
122,484
154,082
DCC plc Annual Report and Accounts 1999
67
Notes to the Financial Statements
for the year ended 31 March 1999
36. Equity Minority Interests
Group
At 1 April
Acquisitions (note 38)
Acquisition of minority interest in subsidiary
undertakings (note 38)
Share of profit for the financial year (note 11)
Dividends to minority
Exchange and other adjustments
At 31 March
37. Capital Grants
Group
At 1 April
Received in year
Amortisation in year
Exchange and other adjustments
At 31 March
Disclosed as due within one year (note 23)
1999
e’000
5,295
(166)
(1,289)
137
(135)
60
3,902
1999
e’000
1,953
14
(366)
(175)
1,426
(245)
1,181
1998
e’000
4,867
53
(202)
719
(251)
109
5,295
1998
e’000
2,183
161
(395)
4
1,953
(231)
1,722
38. Acquisitions of Subsidiary Undertakings
The principal acquisitions completed during the year were an increase in the Group’s interest in Sharptext Limited,
Micro Peripherals Limited and Gem Distribution Limited (from 92.4% to 100%), the acquisition of 100% interests in
BM Browne Limited, Burmah Castrol (Ireland) Limited (since renamed Classic Fuel & Oil Limited) and Thompson &
Capper Limited and an 80% interest in EuroCaps Limited.
68
DCC plc Annual Report and Accounts 1999
Notes to the Financial Statements
for the year ended 31 March 1999
38. Acquisitions of Subsidiary Undertakings continued
A summary of the effect of these acquisitions is as follows:
Acquisition
of subsidiary
undertakings
e’000
Fair value
adjustments
e’000
Fair value
at acquisition
e’000
Acquisition
of minority
interest in
subsidiaries
e’000
10,241
6,022
17,256
3,112
(12,585)
(2,223)
166
21,989
Tangible fixed assets
Stock and work in progress
Debtors
Net cash
Creditors
Tax and deferred tax
Minority interests
Net assets acquired
Carrying value as an associate
Goodwill
Cost
Satisfied by:
Cash
Acquisition creditors payable in 1999/2000
Deferred contingent consideration
(762)
(127)
(453)
-
(326)
-
-
(1,668)
9,479
5,895
16,803
3,112
(12,911)
(2,223)
166
20,321
(118)
39,913
60,116
-
-
-
-
-
-
1,289
1,289
-
6,945
8,234
Total
e’000
9,479
5,895
16,803
3,112
(12,911)
(2,223)
1,455
21,610
(118)
46,858
68,350
52,104
6,573
9,673
68,350
Acquisition accounting has been adopted in respect of the above acquisitions. The fair value adjustments relate to fixed
assets, stocks, debtors and creditors and the alignment of accounting policies with those of the Group.
An analysis of the net outflow of cash in respect of the acquisition of subsidiary undertakings and the purchase of
minority interests in certain subsidiaries is as follows:
Cost
Net cash acquired
Acquisition creditors payable in 1999/2000
Deferred contingent consideration
Net outflow of cash
Comprised of:
Purchase of subsidiary (net of cash acquired) (note 40 (c))
Purchase of minority interests (note 40 (c))
1999
e’000
68,350
(3,112)
(6,573)
(9,673)
48,992
40,758
8,234
48,992
The vendors of BM Browne Limited received shares, representing a 25% shareholding in Fannin Limited (the immediate
parent of BM Browne Limited), as part consideration. Put and call options exist over these shares and Fannin Limited
is treated as a 100% subsidiary of the Group. The total shown above in respect of the acquisition creditors payable in
1999/2000 includes an amount in respect of a planned exercise of a call option over 7% of the shares in Fannin Limited
and an amount payable in respect of the acquisition of Burmah Castrol (Ireland) Limited. The deferred contingent
consideration amount set out above represents an estimate of the additional acquisition payments, which are
contingent on the future performance of Fannin Limited, payable on the exercise of the put or call options over the
remaining 18% of Fannin Limited.
DCC plc Annual Report and Accounts 1999
69
Notes to the Financial Statements
for the year ended 31 March 1999
38. Acquisitions of Subsidiary Undertakings continued
The deferred contingent consideration amounts provided represent those amounts that are reasonably expected to
be payable discounted to their present value. Further performance related payments beyond these amounts up to a
maximum of E4.4 million may be made up to 2002. The estimation of deferred contingent consideration will be
revised as more certain information becomes available with corresponding adjustments being made to goodwill.
39. Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities
Group
Operating profit
Operating profit of associated undertakings
Dividends received from associated undertakings
Depreciation of tangible fixed assets
Amortisation of capital grants
Profit on sale of tangible fixed assets
Increase in stocks
Increase in debtors
Increase in creditors
Other
Cash flow from operating activities
1999
e’000
63,661
(12,129)
2,268
16,176
(366)
(146)
(5,151)
(20,680)
22,479
(582)
65,530
40. Analysis of Cashflows for Headings netted in the Consolidated Cash Flow Statement
(a) Returns on investments and servicing of finance
Interest received and similar receipts
Interest paid and similar payments
Dividends paid to minority interests
Net cash outflow from returns on investments and servicing of finance
19,032
(23,112)
(134)
(4,214)
1999
e’000
(b) Capital expenditure
Expenditure on tangible fixed assets
Proceeds on sale of tangible fixed assets
Grants received
Net cash outflow from capital expenditure
(c) Acquisitions and disposals
Purchase of subsidiary undertakings (net of cash acquired) (note 38)
Investment in associated undertakings (note 17)
Purchase of minority interests (note 38)
Payment of deferred consideration/accruals in respect of acquisitions
Net cash outflow from acquisitions and disposals
(d) Financing
Issues of share capital (including share premium)
Capital element of finance lease payments
Loans drawn down
Other
Net cash inflow from financing
(18,274)
1,444
14
(16,816)
(40,758)
(7,194)
(8,234)
(2,938)
(59,124)
8,656
(2,693)
31,260
(7,745)
29,478
70
DCC plc Annual Report and Accounts 1999
1998
e’000
51,057
(10,451)
2,276
14,668
(395)
(293)
(8,637)
(10,186)
13,775
(981)
50,833
1998
e’000
13,688
(17,079)
(252)
(3,643)
(19,147)
2,701
161
(16,285)
(3,007)
-
(1,875)
(3,718)
(8,600)
1,175
40,567
77,789
7,745
127,276
At
31 March
1999
e’000
201,751
(33,294)
168,457
109,563
(160,128)
(40,632)
(97,557)
(20,297)
1998
e’000
1,487
6,490
Other
e’000
112
192
142
446
Notes to the Financial Statements
for the year ended 31 March 1999
41. Analysis of Movement in Net Cash/(Debt)
At
1 April
1998
e’000
32,197
(6,061)
26,136
257,165
(129,263)
(45,250)
(101,754)
7,034
Cash in hand and at bank
Overdrafts
Term deposits
Bank loans and loan notes
Finance leases
Unsecured Notes due 2008/11
Total
42. Capital Commitments
Group
Capital expenditure that has been contracted for
but has not been provided for in the financial statements
Capital expenditure that has been authorised by the
directors but has not yet been contracted for
Cash
Flow
e’000
Exchange
Movements
e’000
166,887
(28,009)
138,878
(140,319)
(31,260)
2,693
-
(30,008)
2,667
776
3,443
(7,283)
395
1,925
4,197
2,677
1999
e’000
7,004
11,482
43. Operating Lease Commitments
At 31 March 1999 the Group had annual commitments under operating leases as follows:-
1999
1998
Land and
Buildings
e’000
59
519
1,352
1,930
Other
e’000
50
425
-
475
Land and
Buildings
e’000
102
184
512
798
Expiring within one year
Expiring between two and five years
Expiring after five years
44. Contingent Liabilities
(a) Bank and Other Loans
The parent undertaking has guaranteed borrowings amounting to e330,057,000 (1998: e265,848,000) in respect of
certain subsidiaries.
The parent undertaking and certain subsidiaries have given guarantees in respect of borrowings of e330,943,000
(1998: e281,840,000) by the parent undertaking itself and other group undertakings.
(b) Grants
In certain circumstances capital grants amounting to a maximum of e4,797,000 (1998: e4,916,000) and revenue grants
amounting to a maximum of e863,000 (1998: e1,169,000) may become repayable.
DCC plc Annual Report and Accounts 1999
71
Notes to the Financial Statements
for the year ended 31 March 1999
44. Contingent Liabilities continued
(c) Other
Included in trade creditors and amounts due in respect of tangible fixed assets acquired is an amount of approximately
e7,860,000 (1998: e3,492,000) due to creditors who have reserved title to goods supplied. Since the extent to which
these creditors are effectively secured at any time depends on a number of conditions, the validity of some of which is
not readily determinable, it is not possible to indicate how much of the above amount was effectively secured by
reservation of title. However, the amount referred to above is matched in terms of net book value of fixed assets and
stocks of raw materials in the possession of the Group which were supplied subject to reservation of title and
accordingly the creditors referred to could be regarded as effectively secured to the extent of at least this amount.
Pursuant to the provisions of Section 17, Companies (Amendment) Act, 1986, the Company has guaranteed the liabilities
of Flogas Ireland Limited and Alvabay Limited and as a result, these companies have been exempted from the filing
provisions of Section 7, Companies (Amendment) Act, 1986.
45. Reporting Currency
The primary currency used in these financial statements is the Euro which is denoted by the symbol e. The exchange
rates used in translating sterling balance sheets and profit and loss account amounts were as follows:
Balance sheet (closing rate)
Profit and loss (average rate)
46. Comparative Amounts
1999
e1=Stg£
0.666
0.681
1998
e1=Stg£
0.639
0.704
Comparative amounts have been translated to Euros at the fixed translation rate of e1 = IR£0.787564 and have been
regrouped and restated, where necessary, on the same basis as those for the current year.
47. Transactions with Related Parties
On 7 July 1998 the Company increased to 100% its shareholding in the issued share capital of Sharptext Group Limited
and Runsole Limited, the holding companies for DCC’s computer distribution subsidiaries - Micro Peripherals, Gem
Distribution and Sharptext - by acquiring 7.6% of their issued share capital from Mr Patrick Garvey, a director of these
companies. The total value of the consideration amounted to e8.063 million which was satisfied in cash.
In addition
put and call options are held by management of the computer distribution companies and DCC, exercisable in the year
2000, over shares which may be issued to management, arising from the exercise by them of share options over an
effective 4.7% of the equity of these companies.
48. Approval of Financial Statements
The financial statements were approved by the Board of Directors on 7 May 1999.
72
DCC plc Annual Report and Accounts 1999
Group Directory
Name and Address of Subsidiary
Nature of Business
Telephone/Fax/Email
and web site if applicable
DCC SerCom
DCC SerCom Limited,
DCC House,
Stillorgan, Blackrock,
Co. Dublin, Ireland.
Holding and divisional management
company
Micro Peripherals Limited,*
Shorten Brook Way,
Altham Business Park, Altham,
Accrington, Lancashire BB5 5YJ, England.
Computer products distribution
Sharptext Limited,
1 Airton Close,Tallaght,
Dublin 24, Ireland.
Computer products and office
equipment distribution
Gem Distribution Limited,*
Lovet Road,The Pinnacles,
Harlow, Essex CM19 5TB, England.
Computer products distribution
SerCom Solutions Limited,
Cloverhill Industrial Estate,
Clondalkin, Dublin 22, Ireland.
Provision of manufacturing services
for the computer industry
International Translation
and Publishing Limited,
The Boulevard, Quinsboro Road,
Bray, Co.Wicklow, Ireland.
Localisation and translation services
for the computer industry
+353 1 283 1011
+353 1 283 1017
sercom@dcc.ie
www.dcc.ie
+44 1282 776 776
+44 1282 770 001
www.microp.co.uk
+353 1 451 6311
+353 1 451 6927
distribution@sharptext.com
www.sharptext.com
+44 1279 822 800
+44 1279 416 228
www.gem.co.uk
+353 1 405 6500
+353 1 405 6555
info@sercomsolutions.ie
www.sercomsolutions.com
+353 1 205 0200
+353 1 282 8395
info@itp.ie
www.itp.ie
All the above companies are incorporated and operate principally in the Republic of Ireland except those indicated with * which are
incorporated and operate principally in England and Wales.
DCC plc Annual Report and Accounts 1999
73
Group Directory
Name and Address of Subsidiary
Nature of Business
Telephone/Fax/Email
and web site if applicable
DCC Energy
DCC Energy Limited,
DCC House,
Stillorgan, Blackrock,
Co. Dublin, Ireland.
Flogas Ireland Limited,
Dublin Road, Drogheda,
Co. Louth, Ireland.
Holding and divisional management
company
Manufacture and distribution of
liquefied petroleum gas
DCC Energy (NI) Limited,
Airport Road West, Sydenham,
Belfast BT3 9ED, Northern Ireland.
Distribution of:
- Flogas liquefied petroleum gas
- Emo oil products
Flogas UK Limited,
Merrylees,
Leicestershire LE9 9FE, England.
Distribution of liquefied
petroleum gas
Emo Oil Limited,
Clonminam Industrial Estate,
Portlaoise, Co. Laois, Ireland.
Atlas Oil Limited,
Clonminam Industrial Estate,
Portlaoise, Co. Laois, Ireland.
Distribution of oil products
Environmental services to garages
+353 1 278 2577
+353 1 283 1017
energy@dcc.ie
www.dcc.ie
+353 41 983 1041
+353 41 983 4652
info@flogas.ie
www.flogas.ie
+44 1232 732 611
+44 1232 732 020
+44 1232 454 555
+44 1232 457 371
enquiries@emooil.com
www.emooil.com
+44 1530 230 352
+44 1530 230 253
info@flogas.co.uk
www.flogas.co.uk
+353 502 74 700
+353 502 74 750
info@emo.ie
+353 502 74 747
+353 502 74 757
info@atlasoil.iol.ie
All the above companies are incorporated and operate principally in the Republic of Ireland except Flogas UK Limited which is
incorporated and operates principally in England and Wales and DCC Energy (NI) Limited which is incorporated and operates
principally in Northern Ireland.
74
DCC plc Annual Report and Accounts 1999
Group Directory
Name and Address of Subsidiary
Nature of Business
Telephone/Fax/Email
and web site if applicable
DCC Foods
DCC Foods Limited,
DCC House,
Stillorgan, Blackrock,
Co. Dublin, Ireland.
Holding and divisional management
company
Robt. Roberts Limited,
79 Broomhill Road,Tallaght,
Dublin 24, Ireland.
Marketing and distribution of
branded food and beverage
products
+353 1 283 1011
+353 1 283 1017
foods@dcc.ie
www.dcc.ie
+353 1 404 7300
+353 1 459 9369
Kelkin Limited,
Unit 1, Crosslands Industrial Park,
Ballymount Cross, Dublin 12, Ireland.
Marketing and distribution of
branded healthfood products
+353 1 460 0400
+353 1 460 0411
kelkin@tinet.ie
Broderick Holdings Limited,
Broderick Buildings,
John F. Kennedy Industrial Estate,
Naas Road, Dublin 12, Ireland.
Distribution and service of equipment
and consumables to the food
processing, retailing and catering
industries
+353 1 450 9083
+353 1 450 9570
broderickbros@tinet.ie
All the above companies are incorporated and operate principally in the Republic of Ireland.
DCC plc Annual Report and Accounts 1999
75
Group Directory
Name and Address of Subsidiary
Nature of Business
Telephone/Fax/Email
and web site if applicable
DCC Healthcare
DCC Healthcare Limited,
DCC House,
Stillorgan, Blackrock,
Co. Dublin, Ireland.
Days Medical Aids Limited,*
Litchard Industrial Estate,
Bridgend, Mid Glamorgan CF31 2AL,
Wales.
DCC Shoprider Inc.,
3635 SW30th Avenue,
Fort Lauderdale, Florida 33312, USA.
Fannin Limited,
Fannin House,
106 Dublin Industrial Estate,
Dublin 11, Ireland.
Virtus Limited,
Adamstown, Lucan,
Co. Dublin, Ireland.
Holding and divisional management
company
+353 1 283 1011
+353 1 283 1017
healthcare@dcc.ie
www.dcc.ie
Manufacture and distribution of
mobility and rehabilitation products
+44 1656 657 495
+44 1656 767 178
daysmedical@btinternet.com
Distribution of mobility scooters
and power chairs
+1 954 797 2955
+1 954 797 7081
Distribution of healthcare
products
Manufacture and distribution of
healthcare products
+353 1 830 9211
+353 1 830 9291
fannin@iol.ie
+353 1 628 0571
+353 1 628 0572
info@virtus.ie
Healthilife Limited, *
Charlestown House, Otley Road,
Baildon, Shipley,
West Yorkshire BD17 7JS, England.
Manufacture and distribution of
vitamins and food supplements
+44 1274 595 021
+44 1274 581 515
enquiries@healthilife.com
EuroCaps Limited, *
Crown Business Park,
Dukestown,Tredegar,
Gwent NP2 4EF,
Wales.
Manufacture and distribution of
soft gelatine capsules
Thompson & Capper Limited, *
Hardwick Road, Astmoor,
Runcorn, Cheshire WA7 1PH,
England.
Manufacture and sale of
tablets and capsules
+44 1495 308 900
+44 1495 308 990
enquiries@softgels.co.uk
www.softgels.co.uk
+44 1928 573 734
+44 1928 580 694
tablets@t-cuk.u-net.com
www.t-cuk.u-net.com
All the above companies are incorporated and operate principally in the Republic of Ireland except those indicated with * which are
incorporated and operate principally in England and Wales and DCC Shoprider Inc. which is incorporated and operates principally in
the United States of America.
76
DCC plc Annual Report and Accounts 1999
Shareholder Information
Shareholder Analysis at 7 May 1999
Number
of accounts
% of
accounts
Number of
shares (’000)
1 - 1,000
1,001 - 10,000
10,001 - 50,000
50,001 - 100,000
100,001 - 250,000
Over 250,000
Total
1,268
1,089
84
22
32
40
2,535
50.0%
43.0%
3.3%
0.8%
1.3%
1.6%
677,856
2,900,840
1,946,100
1,513,684
5,072,875
75,023,200
% of
shares
0.8%
3.4%
2.2%
1.7%
5.8%
86.1%
100.0%
87,134,555
100.0%
Share Price Data (EE cents)
Year ended 31 March 1999
Year ended 31 March 1998
High
902
902
Low
432
387
31 March
725
825
The market capitalisation of DCC plc at 31 March 1999 was E632 million (1998: E692 million) and
at 7 May 1999 was E762 million (E8.75 per share).
Investor Relations
Registrars
For investor enquiries please contact:
Michael Scholefield,
Investor Relations Manager,
DCC plc, DCC House, Brewery Road,
Stillorgan, Blackrock, Co Dublin.
Tel:
+ 353 1 283 1011.
Fax: + 353 1 283 1018.
email: investorrelations@dcc.ie
Web Site
DCC’s web site address is www.dcc.ie
Administrative enquiries about the holding of
DCC shares should be directed in the first
instance to the Company’s Registrars at:
Computershare Services (Ireland) Limited,
Heron House, Corrig Road, Dublin 18.
Tel:
+ 353 1 216 3100
Fax: + 353 1 216 3151
DCC plc Annual Report and Accounts 1999
77
Shareholder Information
Amalgamation of Accounts
Shareholders who receive duplicate sets of
company mailings owing to multiple accounts in
their name should write to the Company’s
Registrars at the address on page 77 to have their
accounts amalgamated.
Dividends
Shareholders will be offered the option of having
future dividends paid in Euros, Irish pounds or
pounds sterling. Shareholders will also be offered
the opportunity of having future dividends paid
directly to their bank account.
Due to changes in the taxation of dividends in
Ireland, dividends paid after 5 April 1999 will no
In addition, dividends
longer carry a tax credit.
paid to certain shareholders will be paid net of
withholding tax, currently at the rate of 24%.
Some shareholders will be entitled to an
exemption from this witholding tax.
As an
interim measure, no witholding tax will apply in
respect of dividends paid to a person, whether or
not the beneficial owner, whose address in the
share register is in another Member State of the
EU or in a country with which Ireland has
concluded a double taxation treaty. This interim
measure applies only in respect of dividends paid
before 6 April 2000. In addition, provided certain
administrative procedures are adhered to, a
witholding tax exemption will also apply to Irish
resident companies, Revenue approved pension
funds, certain residents of other EU Member
States or tax treaty countries, companies
controlled by residents of other EU Member
States or tax treaty countries and companies
whose principal class of shares (or those of their
parent companies) are regularly traded on a
recognised Stock Exchange. There
is no
witholding tax exemption available for individuals
who are tax resident in Ireland.
The Company will write to shareholders to
provide further details of all these matters at the
time of the next dividend announcement
(expected to be in early November 1999.)
Annual General Meeting
The Annual General Meeting will be held at the
Conrad International Hotel, Earlsfort Terrace,
Dublin 2 on Friday 25 June 1999 at 11.00am. The
Notice of Meeting together with an explanatory
letter from the Chairman and a proxy card
accompany this report.
CREST
DCC is a member of the CREST share settlement
system. Shareholders may continue to hold paper
share certificates or hold their shares in
electronic form.
Financial Calendar
Preliminary results announced
Annual Report posted
Annual General Meeting
Interim results announced
Payment date for interim dividend
10 May 1999
26 May 1999
25 June 1999
early November 1999
early January 2000
78
DCC plc Annual Report and Accounts 1999
Index
Page
37
37
23
68
78
72
54
25
Directors' Report
Directors' Share Options
Dividend Cover
Dividends (note 13)
Divisional Reviews
DCC SerCom
DCC Energy
DCC Foods
35,36
DCC Healthcare
Accounting Convention
Accounting Policies
Acquisition and Development Expenditure
Acquisitions of Subsidiary Undertakings (note 38)
Annual General Meeting
Approval of Financial Statements (note 48)
Associated Undertakings (note 17)
Audit Committee Members
Auditors' Report
Bank and other Debt (notes 24-26)
Capital Commitments (note 42)
Capital Expenditure
Capital Grants (note 37)
Cash and Term Deposits (note 22)
Chairman's Statement
Chief Executive/Deputy Chairman's Review
Company Balance Sheet
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Consolidated Profit and Loss Account
Contingent Liabilities (note 44)
Corporate Governance
Corporate Profile
Creditors,Trade and Other (note 23)
CREST
Currency Risk Management
Debtors (note 20)
Deferred Taxation (note 30)
Depreciation
Derivative Financial Instruments (note 28)
Directors' and Company Secretary's Interests
Directors' Interests in Contracts
Directors of the Company
Directors' Remuneration (Report on)
59
78
24
58
64,50
53,50
61,24
32
31
5
30
Earnings Per Share (note 14)
52,22,1
59
71
Employee Information (note 4)
Employee Share Schemes
23,70
Euro
68
58
6
8
43
42
44
40
71
Finance Leases (note 27)
Financial Assets (note 17)
Financial Calendar
Financial Highlights
Financial Strength
Financial Review
Financial Summary and Key Ratios 1992 - 1999
Fixed Assets (note 16)
7,26
Forward Contracts - currency
Inside Cover
Going Concern
Goodwill
Group at a Glance
Group Directory
Health and Safety
Interest Payable & Similar Charges (notes 7 & 8) 49,21
Interest Rate Risk Management
Internal Financial Controls
Investor Relations
24
27
77
Page
28
33
22
51,78,28
12
14
16
18
48
30
6
61
54
78
1
23
20
4
53
63
27
20,53
2
73
29
DCC plc Annual Report and Accounts 1999
79
Index
Subsidiary Undertakings (note 18)
Substantial Shareholdings
Swaps - currency
Swaps - interest rates
Taxation (note 10)
Treasury Policy and Management
Page
57
28
62
62
50
24
Turnover Segmental Analysis
45,47
Web Site
Working Capital
Year 2000
77
22
7,24
Minority Interests (note 11)
Net Cash/Debt (note 41)
Net Debt/Equity Ratio
Nomination Committee Members
Notes to the Financial Statements
Operating Assets
Operating Cash Flow
Operating Lease Commitments (note 43)
Operating Profit by Division
Pensions and Similar Obligations (note 31)
Pensions - Directors
Provisions for Liabilities and Charges (note 29)
Reconciliation of Movements in Equity
Shareholders' Funds (note 35)
Reconciliation of Net Cash Flow to
Movement in Net (Debt) / Cash
Registrars
Related Party Transactions (note 47)
Remuneration Committee
Reporting Currency (note 45)
Reserves (note 34)
Page
51
71
23
25
45
22
23,70
71
1
65
30
64
67
44
77
72
30
72
67
Return on Capital Employed (ROCE)
1,21
Segmental Information (note 1)
Service Agreements
Share Capital (note 32)
Share Premium (note 33)
Share Price Data
Shareholder Information
Shareholders' Funds
Statement of Directors' Responsibilities
Statement of Total Recognised Gains and Losses
Stocks (note 19)
45
31
66
66
77
77
22,67
34
41
57
80
DCC plc Annual Report and Accounts 1999