Contents
Adding Value in Marketing and Distribution
DCC is a value added marketing and distribution group, which operates principally in growth
segments of the IT, energy and healthcare markets. DCC holds strong market positions in
the UK and Ireland and is expanding its IT and healthcare activities in Continental Europe.
The Company's shares are quoted on the Irish and London stock exchanges.
Contents
Financial Highlights
inside front cover
Group at a Glance
inside front flap
DCC is diversified in the
markets we address. We are
highly focused in what we do -
adding value in marketing
and distribution.
Procurement
DCC builds enduring
relationships with key
suppliers and leading
brand owners, driving
superior volume growth.
High quality operations
DCC develops skilled
management teams who
drive consistent strong
growth through:
• Product focused sales teams
• Excellent technical support
• Effective use of IT
• Focus on working capital
• Strong cash generation
Directors
Chairman’s Statement
Chief Executive/
Deputy Chairman’s Review
Operating Review
Financial Review
Management
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
Market penetration
DCC's deep distribution
reach penetrates a broad
range of customers across
market sectors.
Group Directory
Shareholder Information
Corporate Information
Index
2
4
6
10
20
24
26
28
30
34
35
37
40
45
74
77
79
80
Five Year Summary and Key Ratios
inside back cover
ANNUAL REPORT AND ACCOUNTS 2001
1
Directors
Board of Directors
Alex Spain: Chairman
Alex Spain, B.Comm., F.C.A. (aged 68),
is non-executive Chairman of DCC 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.
Chairman of the Audit, Remuneration and
Nomination committees
Jim Flavin: Chief Executive/Deputy Chairman
Jim Flavin, B.Comm., D.P.A., F.C.A. (aged 58), 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 Deputy Chairman of Eircom plc.
Member of the Nomination committee
Tommy Breen
Tommy Breen, B.Sc. (Econ), F.C.A.,
(aged 42), executive Director, joined
DCC in 1985, having previously worked
with KPMG. He is Managing Director
of DCC SerCom. Mr Breen joined the
Board in 2000.
Tony Barry
Tony Barry, Chartered Engineer (aged 66), non-executive
Director, is a member of the Court of Bank of Ireland,
Chairman of Greencore Group plc and a director of Ivernia
West plc. He was Chairman of CRH plc from 1994 to May
2000, having previously been Chief Executive. He is a past
President of The Irish Business and Employers’
Confederation. Mr Barry joined the Board in 1995.
Member of the Audit, Remuneration and Nomination
committees
2
ANNUAL REPORT AND ACCOUNTS 2001
Directors
Morgan Crowe
Morgan Crowe, Dip. Eng., M.B.A.
(aged 56), 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
Paddy Gallagher, B.L., D.P.A. (aged 61), non-executive
Director, retired as Head of Legal and Pensions
Administration at Guinness Ireland Group in 2000. He
previously worked with Aer Lingus, the Irish national airline,
and is a former Chairman of the Irish Association of Pension
Funds. He is a member of the Committee of Management of
Irish Pension Fund Property Unit Trust. Mr Gallagher joined
the Board in 1976.
Member of the Audit, Remuneration and Nomination
committees
Kevin Murray
Kevin Murray, B.E., F.C.A. (aged 42),
executive Director, joined DCC in 1988,
having previously worked with Shell
Chemicals in London and Arthur
Andersen in Dublin. He is Managing
Director of DCC Energy and DCC
Foods. Mr Murray joined the Board
in 2000.
Fergal O’Dwyer
Fergal O’Dwyer, F.C.A. (aged 41), executive Director, joined
DCC in 1989 having previously worked with KPMG in
Johannesburg and Price Waterhouse in Dublin. He was
appointed Chief Financial Officer in 1994. Mr O’Dwyer joined
the Board in 2000.
ANNUAL REPORT AND ACCOUNTS 2001
3
Chairman’s Statement
Chairman’s Statement
Results
DCC again achieved excellent growth in the year to 31 March 2001. Turnover grew by
42.1% to s1.87 billion and operating profit increased by 24.3% to s91.7 million. Adjusted
earnings per share increased by 23.1% to 84.7 cent. The return on tangible capital
employed increased to 48.1% from 40.6% and inclusive of acquisition goodwill the return
increased to 23.7% from 20.9%.
Dividend
The Directors are recommending a final dividend of 13.38 cent
per share which, added to the interim dividend of 7.74 cent per
share, gives a total dividend for the year of 21.12 cent per
share. This represents an increase of 20.0% on the dividend
of 17.60 cent per share paid in respect of the year ended 31
March 2000. The dividend for the year is covered 4.0 times by
adjusted earnings per share (2000: 3.9 times). The final
dividend will be paid on 10 July 2001 to shareholders on the
register at the close of business on 25 May 2001.
4
ANNUAL REPORT AND ACCOUNTS 2001
Chairman’s Statement
Financial strength & share buy back
operates throughout Britain and Ireland, is now the largest
DCC has achieved excellent growth since its listing in 1994.
distributor of fuel oils and distillates in Northern Ireland.
Adjusted earnings per share have increased at a compound
rate of 19.7% per annum over this period. Reflecting the high
Corporate governance
quality of the Group's earnings, DCC has also been strongly
DCC is committed to pursuing best practice in relation to
cash generative and had net cash at 31 March 2001 of D83.2
corporate governance matters. Following publication of the
million. In light of this position, DCC availed of the opportunity
Turnbull guidance for directors on internal control, Internal
during the year to buy back 2.56 million of its own shares
Control: Guidance for Directors on the Combined Code, the
(representing 2.9% of its issued share capital) at D9.50 per
Board is satisfied that the Group has effective ongoing
share, costing D24.7 million in total. The share buy back was
processes for identifying, evaluating and managing risks faced
by the Group.
The future
The Group will continue to seek opportunities to invest both
organically and by acquisition to exploit growth opportunities
in its markets.
Alex Spain
Chairman
11 May 2001
earnings enhancing and has had a minimal impact on DCC's
financial capacity. Selective share buy backs are intended to
complement, rather than substitute for, the Group's capital
investment and acquisition programmes.
Development
During the year a total of D74.2 million was invested in
organic growth and acquisitions (2000: D52.3 million). The
expenditure was incurred across the Group and included the
extension of SerCom Distribution's UK warehousing and
distribution hub. DCC's principal acquisition during the year
was Fuel Services which has been successfully integrated with
the Group‘s existing energy operations in Northern Ireland. As
a result of the acquisition, DCC's energy division, which
ANNUAL REPORT AND ACCOUNTS 2001
5
Chief Executive/Deputy Chairman’s Review
Chief Executive/
Deputy Chairman’s Review
Strong, consistent and high quality earnings growth
DCC is committed to creating shareholder value through delivering consistent, long-term
quality returns well in excess of our cost of capital. Compound annual growth in adjusted
earnings per share over the last five years of 21.5% reflects well on DCC’s focus on
growth markets and its disciplined and rigorous operating and financial controls. The
"quality" of DCC’s earnings growth record is underscored by high and increasing returns on
capital employed and excellent cash generation.
It is interesting to note that since the listing of DCC in 1994 the
growth and development of operations outside of the Republic of
Ireland have generated the greater proportion of DCC’s earnings
growth over that period. The table below sets out the
geographical split of operating profit for the years ended 31 March
2001 and 2000.
UK
Other areas
Republic of Ireland
2001
48%
6%
54%
46%
2000
44%
1%
45%
55%
100%
100%
6
ANNUAL REPORT AND ACCOUNTS 2001
Chief Executive/Deputy Chairman’s Review
Core strengths and values
internationally, both organically and by acquisition. Other
Our core strengths and values are:
activities in food, supply chain management services and
• Organic growth – we are focused on recurring revenue
house building generated 18% of DCC’s operating profit. While
businesses operating in growth market sectors.
smaller than the Group’s principal core divisions, these
• Bolt-on acquisitions – we seek to augment organic growth
businesses are of significant importance to DCC and we will
with bolt-on acquisitions which can be integrated with or
continue to strive for cost effective growth in each.
complement existing operations, and which extend DCC’s
reach in markets we know.
DCC remains robust in the view that the ongoing pace of
• High returns on capital employed – we like low working
technological advances will continue to drive above average
capital intensity businesses and we constantly focus on
growth in the IT market into the long term. Furthermore,
achieving high and increasing returns on capital employed.
particular segments of the IT market, including storage and
• Market sector diversity – we see our market sector diversity
networking, will grow very strongly. This will benefit DCC’s
as a great strength.
specialist storage distributor Distrilogie, which has a strong
• Focused activity – we apply our core skills and
presence in Southern Europe, and the growing storage and
competencies in value added marketing and distribution –
networking business of DCC’s UK and Irish IT distribution
focused sales teams, deep market knowledge, distribution
operations. DCC’s business-to-business IT distribution model,
reach, high quality service to vendors and customers and
which is based on an excellent reputation with its vendors
after sales service – in each of our market sectors. 94% of
and reseller customer base, has consistently delivered
Group revenues in the past year were generated through
superior profit growth and returns. With a modest share of a
business-to-business trading.
large, fragmented European market, DCC’s proven strategy
• Commercially adventurous but financially prudent – finally,
leaves the Group well placed for continued strong growth.
DCC seeks to be commercially adventurous while at the
DCC has achieved consistently excellent returns on tangible
same time financially prudent – financial prudence
capital employed in its IT distribution business – 67.5% in the
engenders corporate poise and stability and facilitates
past year.
appropriate risk taking.
The recurring nature of profit and cash flows in the oil and LPG
Focus on IT, energy and healthcare
distribution sector have underpinned DCC’s energy division. In
In the past year 82% of DCC’s operating profit was generated
addition to a strong LPG distribution business in Ireland and
from the Group’s activities in the IT, energy and healthcare
the UK, DCC has, in recent years, built a significant presence in
markets – up from 65% five years ago. Each of these markets
the oil distribution sector in Ireland by developing excellent
has good growth characteristics, which are discussed further
supply relationships with oil majors and by identifying and
below, and provide the opportunity for DCC to expand
ANNUAL REPORT AND ACCOUNTS 2001
7
Chief Executive/Deputy Chairman’s Review
successfully integrating value enhancing bolt-on acquisitions.
Quality and best practice
The expansion of the Group’s oil distribution operations into
DCC promotes a quality culture through consistent
the UK is now a key strategic aim of DCC’s energy business.
improvement in all aspects of its business. A continuous focus
Building on a strong relationship with BP, a key supplier in
on key areas such as procurement, management development,
Northern Ireland, DCC recently entered into a Heads of
information technology, financial management and
Agreement to acquire part of its commercial, agricultural and
acquisitions contributes to improvements in operational and
domestic oil business in Scotland and Northern England. The
financial performance.
UK oil distribution market is fragmented and this planned
acquisition will establish a strong base from which DCC will
In procurement, for example, DCC’s scale and group
grow both organically and through bolt-on acquisitions in the
purchasing expertise generates cost savings across many key
British oil distribution market. DCC achieves high returns on
overhead areas. In addition, DCC is leveraging the Group’s
tangible capital employed and strong cash generation in its
scale, financial strength and track record in securing new
Energy division – return on tangible capital employed in the
agencies and products for business units.
past year was 44.8%.
The healthcare market has excellent long-term growth
best practice in all aspects of our business, is a perpetual one
characteristics. It continues to benefit from a number of
which drives continuous improvement in all areas of
The ambition to be world class, through the achievement of
significant underlying trends. These include an ageing
DCC’s business.
population in the developed world and increased government
spending on healthcare. In addition, there is an increasing
Information technology
awareness of health issues among the general population.
The effective use of information technology is an essential part
DCC’s healthcare businesses in hospital supplies, mobility
of DCC’s strategy to drive cost effective growth and maximise
products and nutraceuticals should benefit from these key
competitive advantage. The intelligent use of technology,
trends. In this area also, DCC achieved an excellent return on
including the selective implementation of Enterprise
tangible capital employed in the past year of 43.3%.
Resource Planning systems, is generating significant benefits
for DCC’s businesses.
8
ANNUAL REPORT AND ACCOUNTS 2001
Chief Executive/Deputy Chairman’s Review
Human resources
corporate websites. The new website provides users with a
Sustainability of superior performance depends more than
flexible and easily navigable information resource on all
anything on the quality of leadership and the engagement
aspects of DCC. It incorporates an interactive share price
and contribution of employees. DCC employs over 3,000
monitor, audio and video investor presentations and an
people, led by entrepreneurial management teams and,
extensive library of historical information which is constantly
through its group leadership development processes, is
updated with news releases and announcements.
focused on optimising and developing DCC’s uniquely
diverse talent bank of people. The fact that many employees
Looking forward
have equity interests in DCC motivates them to take an
In these more uncertain times, DCC’s application of its core
interest in the performance not just of their own business but
skills in value added marketing and distribution in diverse
that of the DCC Group as a whole.
growth markets, combined with an immensely strong balance
sheet, leaves DCC well positioned to continue its consistent
Investor relations
record of strong growth and excellent long-term
DCC has a substantial international shareholder base which
shareholder returns.
is continuing to expand. Significant senior management
resources are committed to communicating with the
Jim Flavin
investment community and DCC’s Investor Relations function
Chief Executive/Deputy Chairman
strives to ensure that the support the company provides is
11 May 2001
consistent with best international practice.
Corporate websites are an increasingly important platform for
communicating with the investment community. During the
year, DCC’s website (www.dcc.ie)was redesigned following
benchmarking against many of the best European and US
ANNUAL REPORT AND ACCOUNTS 2001
9
Operating Review
10
ANNUAL REPORT AND ACCOUNTS 2001
Operating Review
SerCom Distribution’s
specialised telesales
teams provide a
proactive, product-
focused service to it’s
8,000 customers
across Europe.
Operating Review
(IT) SerCom Distribution
This was another excellent year for SerCom Distribution with very strong
Marketing and distributing a broad range of
computer hardware and software products.
• Britain: SerCom Distribution is a leading
distributor of computer hardware, including
performances in all operating subsidiaries. Distrilogie, the Continental
European specialist storage equipment distributor, achieved excellent
growth in its first full year of contribution.
PCs, peripherals, consumables, networking
The British hardware distribution business continued to
and storage products, to its extensive
computer reseller customer base. It is also
the leading distributor of consumer software,
produce excellent results in a highly competitive marketplace.
Its key strengths of proactive, product-focused sales teams
marketing and distributing business and
and the breadth of its customer base contributed to good
leisure software to retail outlets, mail order
businesses and computer resellers.
growth and consolidated its position as one of the leading
distributors in Britain. A new specialist division in the high
• Ireland: SerCom Distribution is one of the
growth area of computer storage products was established
country's leading IT distributors selling a
broad range of major hardware and
software brands.
during the year.
• Continental Europe: SerCom Distribution is
the leading specialist distributor of high and
The British software distribution business benefited from its
focused strategy of specialising in consumer software
mid-range storage solutions in France, with
distribution and generated excellent profit growth.
expanding operations in Spain and Portugal.
ANNUAL REPORT AND ACCOUNTS 2001
11
Operating Review
SerCom Distribution is constantly expanding its product portfolio. In the
past 12 months it has broadened its offering in Personal Digital Assistant
(PDA), mobile computing and storage products.
The extension of the warehousing and distribution hub in
Distrilogie had a strong performance in the year and will
Altham, near Manchester, completed during the year,
continue to benefit from the increasing demand for storage
increased the logistics capacity of SerCom Distribution in
products. The specialist service offered by Distrilogie is
Britain by a factor of 2.5 times.
valued by major vendors such as IBM and Sun and has
enabled Distrilogie to attract additional suppliers such as
The Irish business again produced excellent growth during the
Compaq and Network Appliance.
year. The company benefited from the significant investment
in its new and larger distribution facility in Dublin which was
SerCom Distribution
completed in the previous year. This facilitated a further
broadening of its product range, including the introduction of
new server and storage products.
Turnover
Operating profit
Operating margin
Return on capital employed
- excluding goodwill
- including goodwill
2001
2000
E753.9m
E31.2m
4.1%
a542.3m
a20.5m
3.8%
+39.0%
+52.5%
67.5%
33.9%
62.3%
33.6%
12
ANNUAL REPORT AND ACCOUNTS 2001
Operating Review
Flogas has a 24%
share of the
fast growing UK
autogas market.
Energy
Energy achieved strong organic growth and enhanced its position in the
Marketing and distributing oil and liquefied
petroleum gas (LPG) products in Ireland and
Britain under DCC’s own Emo, Flogas and other
local brands.
Northern Ireland market through the acquisition of Fuel Services in July 2000.
The increase in turnover reflects strong volume growth and
higher selling prices, which were due to increases in the cost
• Oil: DCC is a substantial and the fastest
of oil and LPG - crude oil prices remained high throughout the
growing player in the Irish oil
distribution market (heating and transport
oils); it has nationwide access to
importation facilities.
• LPG: DCC markets and distributes propane and
butane products, including autogas; it has a
leading market position in Ireland and a
nationwide distribution network in Britain.
year, exacerbated by the strength of the dollar. Extreme
volatility in refined oil product prices at certain times in the
year had a somewhat negative impact on the growth of oil
profits. However, the volume increases drove excellent
operating profit growth overall.
Oil volumes grew substantially to in excess of 1 billion litres
• Environmental Services: DCC is a waste
with continued strong organic growth in the Republic of Ireland
management services provider, principally to
the Irish petrol retailing sector and to the
industrial sector.
and Northern Ireland. Fuel Services was acquired in July 2000
and was successfully integrated into DCC's existing operations
ANNUAL REPORT AND ACCOUNTS 2001
13
Operating Review
Emo Oil is Ireland’s fastest growing independent oil distributor and is a
leading supplier of home heating oil in Dublin.
in Northern Ireland, making DCC the leading marketer of fuel
oil and distillates in this region. The continuing roll-out of the
new Emo logo is generating increased brand awareness,
particularly in the Republic of Ireland where DCC has a modest
presence in the retail petrol market.
LPG volumes showed satisfactory growth and margins
improved as sales price increases were implemented in
Energy
response to increased product costs and the strengthening of
the dollar. The use of LPG autogas as a transport fuel in
Britain continues to develop as a result of government policy
to promote its use as a more environmentally friendly fuel;
DCC has a significant market share in this small but fast-
growing market segment.
Turnover
Operating profit
Operating margin
Return on capital employed
- excluding goodwill
- including goodwill
2001
2000
E610.3m
E23.6m
3.9%
a369.8m
a20.0m
5.4%
+65.0%
+17.8%
44.8%
21.0%
38.6%
19.0%
14
ANNUAL REPORT AND ACCOUNTS 2001
Operating Review
Healthcare
Marketing and distribution of mobility and
rehabilitation equipment, hospital supplies
and nutraceuticals.
• Mobility and rehabilitation: DCC has a strong
position in the UK mobility and rehabilitation
market, with a growing presence in Continental
Europe and the US, particularly in electrically
powered scooters and powerchairs.
• Hospital supplies: DCC is the leading supplier of
medical, surgical and laboratory equipment and
consumables to Irish healthcare sector.
Fannin Healthcare’s highly trained and qualified sales teams provide extensive technical support to
its customers in Irish hospitals and laboratories
Healthcare had another year of excellent growth, all of which was
organically generated.
In mobility and rehabilitation, DCC increased its share of the
British and German markets for powered mobility products. In
order to exploit the opportunities presented by the continuing
growth of the mobility and rehabilitation market, DCC has
significantly augmented its management team in this area.
DCC's British based nutraceuticals business achieved excellent
• Nutraceuticals: DCC is a leading full-service
sales and profit growth. DCC has increased the level of
supplier of private label and branded
nutraceuticals (vitamins and supplements) in
Britain with a growing export customer base.
DCC provides marketing, category management
and contract manufacturing (tablets, hard-gel and
soft-gel capsules) services.
integration of the tablet manufacturing and soft gel
ANNUAL REPORT AND ACCOUNTS 2001
15
Operating Review
encapsulation businesses. This will provide a better platform
supplies) was completed. This has consolidated Fannin
from which to penetrate further the British and European
Healthcare's leadership position both in the scale of its
nutraceuticals markets. The loss of an important customer, with
business and in the breadth of its product offering to
effect from September next, will adversely impact the
customers. The company is at an advanced stage in
nutraceuticals business in the shorter term, but the longer term
developing an e-commerce system, tailored to meet the
outlook for the business and the sector continues to be positive.
particular needs of Irish hospitals.
DCC's Irish hospital supply business performed satisfactorily.
During the year the integration of Fannin (medical and
surgical supplies) and BM Browne (hospital laboratory
Healthcare
Turnover
Operating profit
Operating margin
Return on capital employed
- excluding goodwill
- including goodwill
DCC’s nutraceuticals
operations provide a
‘one-stop shop’
service to its
customers, from
product development
and manufacture,
through to marketing
and distribution.
2001
2000
E182.7m
E20.3m
11.1%
a155.6m
a16.0m
10.3%
+17.4%
+27.4%
43.3%
19.1%
41.3%
16.8%
DCC is the exclusive
European distributor
of the leading
Shoprider range of
powered scooters
and powerchairs.
Other Activities
Other activities, including the food businesses and supply chain
DCC's principal other activities comprise its
management services, showed a modest reduction in profitability,
food, supply chain management services and
principally reflecting significant developmental investment in IT systems,
house building businesses.
skilled personnel and management resources in SerCom Solutions.
• Food: DCC markets and distributes leading
own and third party branded food and
beverage products, focused on growth
segments of the Irish food market, to
an extensive retail and food-service
customer base.
Food - DCC's focus on higher growth segments of the Irish
food market - including healthy foods, soft drinks, wine and
snacks - generated sales growth of 13.7% to d182.4 million,
• Supply Chain Management Services: SerCom
with particularly good growth in the food service sector. DCC
has a deep distribution reach, supplying a broad retail and
food service customer base. During the year, this distribution
reach was extended through investment in additional sales
Solutions provides outsourced supply chain
management solutions to leading global
manufacturers in the IT and
telecommunications sectors.
• Other interests: DCC's principal other
interest is its 49% shareholding in Manor
Park Homebuilders, one of Ireland's leading
house builders, which has a substantial land
bank available for future development.
16
ANNUAL REPORT AND ACCOUNTS 2001
Operating Review
KP, whose products have been successfully marketed in Ireland for many
years by DCC, grew its market share further during the year.
and marketing resources, including an expanded van sales
force, which contributed to the strong sales performance.
Operating profits were d8.5 million compared with d8.9
million in the prior year. Operating margins reduced due
to the increased euro cost of sterling purchases, together
with planned investment in additional sales and
marketing resources.
DCC’s product portfolio includes many leading food and beverage brands.
Following the acquisition of the Robinsons agency last year, DCC is
strengthening its share of the growing soft drinks market.
ANNUAL REPORT AND ACCOUNTS 2001
17
Operating Review
DCC markets and distributes an excellent range of wines including leading
names such as Torres, Brown Brothers and Bollinger.
Supply Chain Management Services - DCC's supply chain
management services business, SerCom Solutions, continued
to invest in the development of its business. This has included
®
the installation of a new SAP
system and a significant
strengthening of the management team across all disciplines.
Sales grew by 68.2% to d103.6 million. Operating profit was
d2.8 million compared with d3.8 million in the prior year,
reflecting the significant developmental investment in IT
systems, skilled personnel and management resources.
Other - Operating profit from other interests increased by
16.4% to d5.3 million.
The principal other interest is DCC’s 49% shareholding in
Manor Park Homebuilders, which has commenced operations
on a major housing development at Clonee, west Dublin.
Manor Park has a substantial land bank, which has been
acquired at a very attractive cost relative to current market
values, leaving it well placed for continued profit growth in
the future.
Other Activities
Turnover
Operating profit
Operating margin
Return on capital employed
- excluding goodwill
- including goodwill
* continuing activities
2001
2000*
E323.3m
E16.6m
5.1%
a248.4m
a17.3m
7.0%
+30.2%
-4.2%
37.1%
21.8%
41.6%
23.7%
SerCom Solutions manages the online sale and worldwide fulfillment of
certain software upgrades for IBM.
18
ANNUAL REPORT AND ACCOUNTS 2001
Operating Review
ANNUAL REPORT AND ACCOUNTS 2001
19
Financial Review
Financial Review
Delivering superior performance
DCC is committed to creating shareholder value through delivering consistent, long-term
returns in excess of our cost of capital. An investment of d1,000 in DCC on 1 April 1996,
when combined with the reinvestment of dividends in DCC, grew to a value of d3,953 over
the five years to 31 March 2001. This represents a compound annual increase of 31.6%,
compared with compound annual growth in the ISEQ index of 18.1% over the same period.
DCC’s focus on shareholder value aligns corporate and
shareholder goals and drives decision making processes
across the Group. The commitment to long-term value
creation is reflected in DCC’s focus on driving organic growth
and seeking complementary acquisition and
development opportunities.
Strong growth
Excellent organic profit growth and a further increase in DCC’s
high return on capital employed are the key features of DCC's
results for the year ended 31 March 2001.
Turnover of continuing activities grew by 42.1% to d1,870.1
million, while operating profit of continuing activities
increased by 24.3% to d91.7 million. The chart below shows
the breakdown of operating profit by division and a detailed
Operating Review is set out on pages 10 to 19.
20
ANNUAL REPORT AND ACCOUNTS 2001
Financial Review
Operating profit - Divisional analysis
was 20.8 times (2000: 12.1 times). Profit before net
exceptional gains, goodwill amortisation and tax rose by
IT 34%
Energy 26%
22.4% to d87.3 million.
Dividend
The total dividend for the year of 21.12 cent per share
represents an increase of 20.0% over the previous year. The
dividend is covered 4.0 times (2000: 3.9 times) by adjusted
earnings per share.
Taxation
Other Activities 18%
Healthcare 22%
The Group's taxation charge on ordinary activities for the year
represents an effective tax rate of 15.0%, unchanged from last
The Group's operating margin of 4.9% compared with 5.6% in
year. The effective tax rate reflects the impact of Irish
the prior year. However, the main reason for the change was a
manufacturing relief and the international spread of DCC's
substantial increase in oil product costs and in the downstream
profits. Manufacturing relief results in an effective tax rate of
energy market profitability is driven by a contribution per litre
10% being applied to manufacturing profits in Ireland and this
of product sold and not a percentage margin.
arrangement will continue until 2010. The standard rate of
corporation tax in Ireland, set at 20% on 1 January 2001, will be
The Group's return on tangible capital employed increased to
reduced on a phased basis to 12.5% by 1 January 2003. An
48.1% from 40.6% in 2000, while the return inclusive of
analysis of the taxation charge is contained in note 11 to the
acquisition goodwill increased to 23.7% from 20.9%.
financial statements.
The net interest charge reduced to d4.4 million from d6.4
million, reflecting strong operating cash flow generation and
disposals made in the second half of last year. Interest cover
ANNUAL REPORT AND ACCOUNTS 2001
21
Financial Review
Cash flow
Balance sheet
DCC focuses on increasing operating cash flow to maximise
DCC has a very strong balance sheet with shareholders’ funds
shareholder value over the long-term. Operating cash flow is
of d354.7 million at 31 March 2001 and net cash of d83.2
used to fund investment in existing operations,
million. The composition of net cash at 31 March 2001 is
complementary bolt-on acquisitions and dividend payments.
shown in the following table.
Cash flow from operating activities was excellent at d83.4
Balance Sheet
million, compared with operating profits from subsidiaries of
d82.8 million. Strong organic sales growth resulted in an
increased investment in working capital of d19.9 million.
Cash and term deposits
Bank and other debt repayable
2001
E’m
2000
E’m
454.6
551.3
within one year
(200.6)
(191.8)
Working capital efficiency remained excellent and equated to
Bank and other debt repayable
13.2 days’ sales at the year end.
after more than one year
(65.8)
(161.7)
Unsecured notes due 2008/11
(105.0)
(108.6)
The table below sets out a summary of cash flows.
Net cash
83.2
89.2
The Group's cash is analysed in note 22 to the financial
statements. An analysis of DCC's debt at 31 March 2001,
including currency, interest rates and maturity periods, is
shown in notes 23 to 26 to the financial statements.
Cash Flow Summary
Inflows
Operating cash flow
Disposal proceeds
Share issues (net)
Outflows
Capital expenditure (net)
Acquisitions
Acquisition of own shares
Interest paid
Taxation paid
Dividends paid
Net cash (outflow)/inflow
Translation adjustment
Movement in net cash/(debt)
Opening net cash/(debt)
Closing net cash
2001
E’m
2000
E’m
83.4
16.0
1.9
96.3
109.7
-
101.3
206.0
29.5
26.0
24.7
2.6
9.1
16.4
108.3
24.7
37.6
-
5.6
9.4
13.7
91.0
(7.0)
115.0
1.0
(5.5)
(6.0)
109.5
89.2
83.2
(20.3)
89.2
22
ANNUAL REPORT AND ACCOUNTS 2001
Financial Review
Treasury policy and management
are sterling denominated. In order to protect shareholders'
The principal objective of the Group's treasury policy is the
funds from material variations due to sterling exchange
minimisation of financial risk at reasonable cost. This policy is
movements, a proportion of the Group’s sterling net
reviewed and approved annually by the Board. The Group
operating assets are hedged by an equivalent amount of
does not take speculative positions but seeks, where
sterling denominated borrowings.
considered appropriate, to hedge underlying trading and
asset/liability exposures by way of derivative financial
Interest rate risk management: The Group finances its
instruments (such as interest rate and currency swaps and
operations through a mixture of retained profit, cash and
forward contracts). DCC's Group Treasury function centrally
borrowings. The Group borrows in certain currencies at
manages the Group’s funding and liquidity requirements.
both fixed and floating rates of interest and utilises interest
Divisional and subsidiary management, in conjunction with
rate swaps to manage the Group's exposure to interest
Group Treasury, manage foreign currency and commodity
rate fluctuations.
price exposures within approved guidelines. An analysis of the
Group's hedging positions is contained in note 27(b) to the
Credit risk management: DCC transacts with a variety of
financial statements.
financial institutions for the purpose of placing deposits and
entering into derivative contracts. The Group actively
Currency risk management: DCC's reporting currency and
monitors its credit exposure to each counterparty within
that in which its share capital is denominated is the euro.
guidelines approved by the Board.
Due to the nature of the Group's activities, exposures arise
in the course of ordinary trading to other currencies,
Commodity price risk management: Commodity forwards,
principally sterling and the US dollar. Trading foreign
swaps and options are used to hedge potential price
currency exposures are generally hedged by using forward
movements in liquefied petroleum gas products and oil
contracts to cover specific or estimated purchases and
products purchased by the Group's energy businesses in
receivables. Approximately half of the Group's operating
Britain and Ireland. All such contracts are entered into with
profits are sterling denominated and, where appropriate,
counterparties approved by the Board and hedge projected
hedges are put in place to minimise the related exchange
future purchases or sales of the commodity in question,
rate volatility. However, certain natural hedges also exist
usually for a period not exceeding two months.
within the Group as a proportion of the Group's interest
payments and of purchases by certain of its Irish businesses
ANNUAL REPORT AND ACCOUNTS 2001
23
Management
Senior GroupManagement
Jim Flavin
Chief Executive/
Deputy Chairman
Tommy Breen
Morgan Crowe
Kevin Murray
Fergal O'Dwyer
Managing Director
Managing Director
Managing Director
Chief Financial Officer
SerCom
Healthcare
Energy & Food
Ann Keenan
Head of Group
Human Resources
Donal Murphy
Colman O’Keeffe
Head of Group IT Deputy Managing Director
Healthcare
Michael Scholefield
Finance Director
Energy & Food
Gerard Whyte
Group Secretary and Head
of Group Risk Management
Senior Subsidiary Company Management
IT
Patrice Arzillier
Directeur General
Distrilogie
Gordon McDowell
Managing Director
Micro Peripherals
Healthcare
Mike Davies
Managing Director
Primacy Healthcare
Barry Leonard
Managing Director
Virtus
Barry O’Neill
Managing Director
Days Medical Aids
Energy
Paul Donnelly
Managing Director
Gem Distribution
Sam Chambers
Managing Director
Paddy Kilmartin
Managing Director
DCC Energy Northern Ireland Flogas UK
Paul White
Pat Mercer
Daniel Murray
Managing Director
Managing Director
Managing Director
Sharptext
Flogas Ireland
Emo Oil
Declan Ryan
Managing Director
Atlas Environmental
Other Activities
Richard Godfrey
Managing Director Designate Ken Peare
DCC Nutraceuticals
Food
Managing Director
Bernard Rooney
Managing Director
Processing
Robt. Roberts
Kelkin
Stephen O’Connor
General Manager
EuroCaps
Michael Scanlon
Managing Director
Broderick Bros.
Dan Teeters
President
Supply Chain Management Services
Kevin Henry and Ultan Reilly
DCC Shoprider Inc
Joint Managing Directors
SerCom Solutions
Frank Tiemann
Reg Witheridge
Managing Director Designate Managing Director
CasaCare
Thompson & Capper
Peter Woods
Chief Executive
Fannin Healthcare
& Deputy Managing Director
DCC Healthcare
24
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 25
Directors’ Report & Financial Statements
Directors' Report & Financial Statements 2001
ANNUAL REPORT AND ACCOUNTS 2001
25
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 26
Corporate Governance
The Board of Directors
Directors: The Board of DCC consists of five executive and three non-executive Directors and the roles of the
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 with their photographs on pages 2 and 3. All of the
Directors bring independent judgement to bear on issues of strategy, risk, 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 to take independent professional advice in the furtherance of their duties
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. The Board gives consideration as to whether new
Directors require additional training for their role.
Board Committees: There are three Board Committees with formal terms of reference: the Audit Committee,
the Remuneration Committee and the Nomination Committee. The Audit Committee and the Remuneration
Committee comprise the three non-executive Directors. The Nomination Committee comprises the non-
executive Directors and the Chief Executive/Deputy Chairman. 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.
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 website contains additional
information for investors which is regularly updated.
At the Company’s Annual General Meeting the Chief Executive/Deputy Chairman makes a presentation and
answers questions on the Group’s business and its performance during the prior year.
The 2000 Annual Report and Notice of AGM were sent to shareholders 20 working days before the meeting
and the level of proxy votes cast on each resolution, and the numbers for and against, were announced at the
meeting. Similar arrangements have been made for the 2001 Annual Report and AGM. The 2001 AGM will
be held on 6 July 2001 at 11am at the Burlington Hotel, Upper Leeson Street, Dublin 4.
Accountability and Audit
Audit Committee
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 the DCC Risk Committee and by both the Group Risk
Management function (incorporating Internal Audit) and the external auditors.
Internal Control
The Board is ultimately responsible for the Group’s system of internal control and for reviewing its
effectiveness. However, such a system is designed to manage rather than eliminate the risk of failure to
achieve business objectives, and can provide only reasonable and not absolute assurance against material
misstatement or loss.
26
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 27
Corporate Governance
In accordance with the Turnbull guidance for directors on internal control, Internal Control: Guidance for
Directors on the Combined Code, the Board confirms that there is an ongoing process for identifying,
evaluating and managing the significant risks faced by the Group, that it has been in place for the year under
review and up to the date of approval of the financial statements, and that this process is regularly reviewed
by the Board.
The key risk management and internal control procedures, which are supported by detailed controls and
processes, include:
•
•
•
•
•
an organisation structure with clearly defined lines of authority and accountability;
a comprehensive system of financial reporting involving budgeting, monthly reporting and variance
analysis;
a Risk Committee, comprising Group senior management, whose main role is to keep under review and
report to the Audit Committee of the Board on the principal risks facing the Group, the controls in place
to manage those risks and the monitoring procedures;
an independent Group Risk Management function (incorporating Internal Audit); and
a formally constituted Audit Committee which reviews the operation of the Risk Committee and the
Group Risk Management function, liaises with the external auditors and reviews the Group’s internal
control systems.
The Board has reviewed the effectiveness of the Group’s system of internal control. This review covered all
controls including financial, operational and compliance controls and risk management.
Going Concern
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 existence for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing the financial statements. The Directors’ responsibility
for preparing the financial statements is explained on page 34 and the reporting responsibilities of the
auditors is set out in their report on pages 35 and 36.
Compliance
DCC has complied, during the year ended 31 March 2001, with all of the Principles of Good Governance and
Code of Best Practice set out in the Combined Code.
ANNUAL REPORT AND ACCOUNTS 2001
27
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 28
Report of the Directors
For the year ended 31 March 2001
The Directors present their report and the audited financial statements for the year ended 31 March 2001.
Principal Activities
DCC is a value added marketing and distribution group which operates principally in the IT, energy and
healthcare markets. DCC holds strong positions in growth market sectors in the UK and Ireland and is
expanding its IT and healthcare activities in Continental Europe. A summary of the Group’s activities is set
out on pages 10 to 18.
Subsidiary and Associated Companies
Details of the Company’s principal subsidiaries are set out on pages 74 to 76. Details of its principal
associated undertakings are set out on page 56, in note 18 to the financial statements.
Results and Business Review
The profit for the financial year attributable to Group shareholders amounted to €68.1 million as set out in
the Consolidated Profit and Loss Account on page 40.
The Chairman’s Statement on pages 4 and 5, the Chief Executive/Deputy Chairman’s Review on pages 6 to 9,
the Financial Review on pages 20 to 23 and the Operating Review on pages 10 to 19 contain a review of the
development of the Group’s business during the year, of the state of affairs of the business at 31 March 2001,
of recent events and of likely future developments.
Dividends
An interim dividend of 7.74 cent per share, amounting to €6.7 million was paid on 8 December 2000. The
Directors recommend the payment of a final dividend of 13.38 cent per share, amounting to €11.4 million.
Subject to shareholders’ approval at the Annual General Meeting on 6 July 2001, this dividend will be paid on
10 July 2001 to shareholders on the register on 25 May 2001. The total dividend for the year ended 31 March
2001 amounts to 21.12 cent per share, a total of €18.1 million.
The balance of profit attributable to Group shareholders, which is retained in the business, amounts to €49.9
million.
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 11 May 2001, the Company had been advised of the following interests in its issued share capital:
No. of €0.25
Ordinary Shares
% of Issued
Share Capital
FMR Corp. and its direct and indirect subsidiaries*
Bank of Ireland Asset Management Limited**
Merril Lynch Investment Managers Limited
Allied Irish Banks plc and its subsidiaries**
3i Group plc
Aberdeen Asset Managers Limited
9,402,894
9,208,877
4,599,678
4,408,253
3,340,796
2,706,475
10.7%
10.4%
5.2%
5.0%
3.8%
3.1%
Under Irish and UK law the shares are held by non-beneficial holders.
*
** Notified as non-beneficial interests.
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
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 29
Report of the Directors
For the year ended 31 March 2001
Directors
There was no change in the Directors of the Company during the year. The names of the Directors and a
short biographical note on each Director appear on pages 2 and 3. In accordance with Article 80 of the
Articles of Association, Alex Spain, Jim Flavin and Paddy Gallagher retire by rotation at the 2001 Annual
General Meeting and, being eligible, offer themselves for re-election. None 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 safe places
and systems 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.
Euro
DCC’s preparation for euro changeover is proceeding satisfactorily with most companies in the Group
already in a position to engage in dual currency trading. Costs of preparation for the euro are not expected
to have a significant impact on the Group’s financial position or its trading activities.
Political Contributions
There were no political contributions which would require disclosure under the Electoral Act, 1997.
Auditors
The auditors, 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
11 May 2001
ANNUAL REPORT AND ACCOUNTS 2001
29
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 30
Report on Directors’ Remuneration
Remuneration Committee
The Remuneration Committee comprises the three independent non-executive Directors - Alex Spain
(Chairman), Tony Barry and Paddy Gallagher.
The terms of reference of 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 Directors and the Remuneration Committee is authorised to
obtain access to professional advice if deemed desirable.
Executive Directors’ Remuneration
The Company’s remuneration policy recognises that employment and remuneration conditions for the
Group’s senior executives must properly reward and motivate them to perform in the best interests of the
shareholders.
The typical elements of the remuneration package for executive Directors are basic salary, performance
related remuneration consisting of annual performance related bonuses and share options, pension benefits
and a company car.
Salaries
The salaries of executive Directors are reviewed annually on 1 January having regard to personal
performance, Company performance and competitive market practice. No fees are payable to executive
Directors.
Performance Related Bonuses
Performance related bonuses are paid, in respect of the financial year to 31 March, to executive Directors as
to a maximum of one half based on trading performance and to a maximum of one half based on corporate
development in their areas of responsibility. The total bonus potential for the year ended 31 March 2001 for
individual Directors ranged from 5% to 33% of basic salary.
Share Options
Executive Directors and other senior executives participate in the DCC plc 1998 Employee Share Option
Scheme, which was approved by shareholders in 1998. The Scheme encourages identification with
shareholders’ interests by enabling senior management to build, over time, a shareholding in the Company
which is material to their net worth.
The percentage of share capital which can be issued under the Scheme, the phasing of the grant of options
and the individual grant limits comply with guidelines published by the institutional investment associations.
The Scheme provides for the grant of both basic and second tier options, in each case up to a maximum of
5% of the Company’s issued share capital. 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.
Additional information in relation to the DCC plc 1998 Employee Share Option Scheme appears in note 32 on
page 66 of the financial statements.
Directors 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 page 33.
Pension Benefits
Pensions for executive Directors are calculated on pensionable salary (being salary plus 5% bonus) - no
benefit elements are included - and aim to provide for two thirds of pensionable salary at normal retirement
date.
30
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 31
Report on Directors’ Remuneration
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 Committee
duties.
A pension is funded for the Chairman, based on his annual fee, to provide a 1/60th accrual for each year of
pensionable service.
Directors’ Service Agreements
Other than for the Chief Executive, there are no service agreements between any Director of the Company
and the Company or any of its subsidiaries. The Chief Executive’s service agreement provides for one year’s
notice of termination by the Company.
Directors’ Remuneration
The remuneration payable in respect of Directors who held office for any part of the financial year is as
follows:
Salary and Fees1
Bonus
2000
2001
€’000 €’000
2000
2001
€’000 €’000
Benefits2
2000
2001
€’000 €’000
Pension
Contribution3
2000
2001
€’000 €’000
Total
2000
2001
€’000 €’000
Executive Directors
Jim Flavin
Morgan Crowe
Tommy Breen *
Kevin Murray *
Fergal O’Dwyer *
Total for executive
Directors
538
230
198
198
197
473
214
28
28
28
25
29
57
57
45
-
-
4
4
3
30
17
17
17
15
31
16
2
2
2
161
72
62
62
64
135
61
7
7
8
754
348
334
334
321
639
291
41
41
41
1,361
771
213
11
96
53
421
218
2,091 1,053
Non-executive Directors
Alex Spain
Tony Barry
Paddy Gallagher
79
32
32
73
29
29
Total for non-executive
Directors
143
131
Pension payment to
retired Director
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22
-
-
22
-
-
101
32
32
95
29
29
22
22
165
153
15
15
2,271 1,221
* In respect of the year ended 31 March 2000, remuneration for Tommy Breen, Kevin Murray and Fergal
O’Dwyer is included only for the period from the date of their appointment to the Board, on 7 February 2000,
to 31 March 2000.
Notes
1 Fees are only payable to non-executive Directors and include Chairman’s and Board Committee fees.
2 Benefits relate principally to the use of a company car.
3 Pension contributions represent payments to a defined benefit pension scheme, in accordance with actuarial
advice, to provide pension benefits.
ANNUAL REPORT AND ACCOUNTS 2001
31
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 32
Report on Directors’ Remuneration
Directors’ Pensions
The table below shows the increase in the accrued pension benefits to which the Directors have become
entitled during the year ended 31 March 2001 and the transfer value of the increase in accrued benefit:
Increase in
accrued pension
benefit (excl
inflation) during
the year
€’000
Transfer value
equivalent to the
increase in accrued
pension benefit
€’000
Accumulated
accrued pension
benefit at year end
€’000
48
14
11
11
10
94
4
715
189
67
62
56
1,089
50
334
127
51
46
42
600
36
Executive Directors
Jim Flavin
Morgan Crowe
Tommy Breen
Kevin Murray
Fergal O’Dwyer
Total
Non-executive Chairman
Alex Spain
The transfer value has been calculated on the basis of actuarial advice in accordance with Actuarial Guidance
Note GN11. The transfer value represents a liability of a pension scheme operated by the Group and not a
sum paid to or due to the Director noted.
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 2001, together with their interests at 31 March 2000 (or date of
appointment, if later), were:
Alex Spain
Jim Flavin
Tony Barry
Tommy Breen
Morgan Crowe
Paddy Gallagher
Kevin Murray
Fergal O’Dwyer
Gerard Whyte (Secretary)
* At date of appointment – 28 August 2000
No. of Ordinary Shares
At 31 March 2001
At 31 March 2000
15,634
2,456,033
7,000
211,512
807,640
2,540
212,306
212,506
124,667
15,634
2,284,355
7,000
173,362
731,339
1,040
164,618
113,765
124,667*
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 2001 and 11 May 2001.
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.
32
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 33
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:
Executive Directors
At 31 March
2000 and 2001
Weighted Average
Exercise Price
€
Normal Exercise
Period
Jim Flavin
Basic Tier
Second Tier
Basic Tier
Second Tier
Morgan Crowe
Basic Tier
Second Tier
Basic Tier
Second Tier
Tommy Breen
Basic Tier
Second Tier
Basic Tier
Second Tier
Kevin Murray
Basic Tier
Second Tier
Basic Tier
Second Tier
Fergal O’Dwyer
Basic Tier
Second Tier
Basic Tier
Second Tier
200,000
200,000
75,000
75,000
550,000
50,000
50,000
50,000
50,000
200,000
45,000
45,000
50,000
50,000
190,000
45,000
45,000
50,000
50,000
190,000
45,000
45,000
50,000
50,000
190,000
7.206
7.206
7.000
7.000
7.004
7.009
7.000
7.000
7.091
7.096
7.000
7.000
7.091
7.096
7.000
7.000
7.091
7.096
7.000
7.000
June 2001 - Nov 2008
June 2003 - Nov 2008
Nov 2002 - Nov 2009
Nov 2004 - Nov 2009
June 2001 - Nov 2008
June 2003 - Nov 2008
Nov 2002 - Nov 2009
Nov 2004 - Nov 2009
June 2001 - Nov 2008
June 2003 - Nov 2008
Nov 2002 - Nov 2009
Nov 2004 - Nov 2009
June 2001 - Nov 2008
June 2003 - Nov 2008
Nov 2002 - Nov 2009
Nov 2004 - Nov 2009
June 2001 - Nov 2008
June 2003 - Nov 2008
Nov 2002 - Nov 2009
Nov 2004 - Nov 2009
No options were granted to, exercised by or allowed to lapse by Directors under the DCC plc 1998 Employee
Share Option Scheme during the year.
The market price of DCC shares on 31 March 2001 was €10.55 and the range during the year was €9.00 to
€12.35.
The Company’s Register of Directors’ Interests (which is open to inspection) contains full details of Directors’
shareholdings and share options.
The following are details of share options exercised during the year which had been granted to Directors
under the terminated 1986 DCC Executive Share Option Scheme which applied before DCC became a public
company:
Executive
Directors
31 March
2000
Jim Flavin
Morgan Crowe
Tommy Breen
Kevin Murray
Fergal O’Dwyer
225,000
100,000
50,000
62,500
137,500
No. of Options
Exercised
31 March
2001
Exercise price
€
Expiry date
(225,000)
(100,000)
(50,000)
(62,500)
(137,500)
-
-
-
-
-
2.539
2.539
2.539
2.539
2.539
14 February 2001
14 February 2001
14 February 2001
14 February 2001
14 February 2001
All of the above options were exercised on 23 May 2000 when the market price was €10.80.
ANNUAL REPORT AND ACCOUNTS 2001
33
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 34
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 73, 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 1999 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
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 35
Report of the Auditors
for the year ended 31 March 2001
To the Members of DCC plc
We have audited the financial statements on pages 37 to 73 and the detailed information on Directors’
emoluments, pensions and interests in shares and share options on pages 30 to 33.
Respective Responsibilities of Directors and Auditors
The Directors are responsible for preparing the Annual Report. As described on page 34, this includes
responsibility for preparing the financial statements in accordance with Accounting Standards generally
accepted in Ireland. Our responsibilities, as independent auditors, are established in Ireland 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 Irish statute comprising the Companies Acts, 1963 to 1999, 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 Company balance sheet is in agreement with the books of account. We also report to you our
opinion 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
convene an extraordinary general meeting; such a financial situation may exist if the net assets of the
Company, as stated in the Company balance sheet, are not more than half of its called-up share capital.
We also report to you if, in our opinion, information specified by law or the Listing Rules regarding Directors’
remuneration and 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 the seven provisions
of the Combined Code specified for our review by the Irish Stock Exchange, and we report if it does not. We
are not required to consider whether the Board’s statements on internal control cover all risks and controls or
to form an opinion on the effectiveness of the Company’s or Group’s corporate governance procedures or its
risk and control procedures.
Basis of Audit Opinion
We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An
audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the
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.
ANNUAL REPORT AND ACCOUNTS 2001
35
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 36
Report of the Auditors
for the year ended 31 March 2001
Opinion
In our opinion, the financial statements give a true and fair view of the state of affairs of the Company and
the Group at 31 March 2001 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 1999, 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 Company balance sheet 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 2001 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
Dublin
11 May 2001
36
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 37
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 €.
Comparative amounts have been regrouped and restated, where necessary, on the same basis as the
amounts for the current year.
Basis of Preparation
The financial statements have been prepared in accordance with accounting standards generally accepted in
Ireland and Irish statute comprising the Companies Acts, 1963 to 1999. Accounting standards generally
accepted in Ireland in preparing financial statements giving a true and fair view are those published by the
Institute of Chartered Accountants in Ireland and issued by the Accounting Standards Board.
Basis of Consolidation
The consolidated financial statements include the Company and all its subsidiaries.
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 prior to 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 since
1 April 1998 is capitalised on the balance sheet and amortised on a straight line basis over its estimated
useful economic life. On disposal of an undertaking acquired prior to 1 April 1998, goodwill eliminated
against reserves in respect of that undertaking is included in the determination of the profit or loss on
disposal.
In the case of interests acquired by the Group in associated undertakings, goodwill is capitalised as part of
their carrying value and amortised over its expected useful economic life. In the case of similar interests
acquired by associated 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 since 1 April 1998 is estimated to be
20 years.
Subsidiaries
Subsidiaries are included in the Company balance sheet at cost less provision for any impairment 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 by way of the equity method of accounting. Associated undertakings are stated in the consolidated
balance sheet at cost plus the attributable portion of their retained reserves from the date of acquisition less
goodwill amortised. Provision is made, where appropriate, where the Directors consider there has been an
impairment in value.
ANNUAL REPORT AND ACCOUNTS 2001
37
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 38
Accounting Policies
Turnover
Turnover comprises the invoiced value, including excise duty and excluding value added tax, of goods
supplied and services rendered.
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 residual level 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
Annual Rate
2%
5% - 33⅓%
6⅔%
10% - 33⅓%
10% - 33⅓%
Land is not depreciated.
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 Consideration
Where acquisitions involve further payments which are deferred or contingent on levels of performance
achieved in the years following the acquisition, a discounted deferred acquisition creditor is accrued.
Notional interest is charged to the profit and loss account over the relevant period by reference to the period
of deferral, current interest rates and the amount of the likely payments.
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
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 39
Accounting Policies
Foreign Currencies
Assets and liabilities denominated in foreign currencies are translated into euro 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 euro 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 will be
recognised on the maturity of the underlying debt, together with the matching gain or loss 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 are determined on the advice of independent qualified actuaries.
ANNUAL REPORT AND ACCOUNTS 2001
39
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 40
Consolidated Profit and Loss Account
For the year ended 31 March 2001
Notes
€’000
€’000
€’000
€’000
2001
2000
Turnover
Subsidiary undertakings
Share of turnover of associated undertakings
Total turnover - continuing activities
Discontinued activities
Total turnover
Turnover - subsidiary undertakings
Continuing activities
Acquisitions
Discontinued activities
Cost of sales
Gross profit
Net operating costs
Operating profit before goodwill amortisation
- parent and subsidiary undertakings
Share of operating profit before goodwill
amortisation of associated undertakings
Operating profit before goodwill amortisation
Continuing activities
Acquisitions
Discontinued activities
Goodwill amortisation
Operating profit
Net exceptional gains on sale of associated and
subsidiary undertakings - discontinued activities
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
Discontinued activities
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 (cent)
- diluted (cent)
Adjusted earnings per ordinary share
- basic (cent)
- diluted (cent)
1
1
1
1
2
2
2
2
1
1
6
1
7
8
9
10
3
11
12
13
14
14
15
15
15
15
1,712,402
157,739
1,870,141
-
1,870,141
1,643,194
69,208
1,712,402
-
1,712,402
(1,452,786)
259,616
(176,829)
82,787
8,950
91,737
(4,923)
86,814
-
(3,121)
(1,281)
82,412
(13,100)
69,312
(1,230)
68,082
(6,691)
(11,449)
49,942
78.98c
78.28c
84.69c
83.94c
90,659
1,078
91,737
-
91,737
81,342
1,070
82,412
-
82,412
1,203,758
112,353
1,316,111
210,889
1,527,000
1,154,860
48,898
1,203,758
16,480
1,220,238
(1,005,720)
214,518
(152,654)
61,864
15,879
77,743
(3,535)
74,208
71,365
(6,132)
(268)
139,173
(18,701)
120,472
(631)
119,841
(5,631)
(9,735)
104,475
137.39c
133.43c
68.80c
66.89c
73,187
598
73,785
3,958
77,743
63,333
306
63,639
75,534
139,173
Alex Spain, Jim Flavin, Directors
40
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 41
Profit for the financial year
Other movements on associated company reserves
Exchange adjustments
Total recognised gains for the financial year
Statement of Total Recognised Gains and Losses
For the year ended 31 March 2001
2001
€’000
68,082
(25)
(2,356)
65,701
2000
€’000
119,841
2,307
4,968
127,116
Note of Historical Cost Profits and Losses
For the year ended 31 March 2001
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.
ANNUAL REPORT AND ACCOUNTS 2001
41
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 42
Consolidated Balance Sheet
As at 31 March 2001
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
Bank and other debt
Trade and other creditors
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
Deferred acquisition consideration
Provisions for Liabilities and Charges
Capital and Reserves
Called up equity share capital
Share premium account
Other reserves
Profit and loss
Equity Shareholders’ Funds
Equity minority interests
Capital grants
Alex Spain, Jim Flavin, Directors
Notes
2001
€’000
2000
€’000
16
17
18
20
21
22
23
28
23
23
29
32
33
34
35
36
37
38
84,447
135,241
38,458
258,146
93,063
296,804
454,582
844,449
200,621
328,328
18,959
11,449
559,357
75,559
123,094
34,598
233,251
76,016
248,401
551,276
875,693
191,781
266,133
17,937
9,735
485,586
285,092
390,107
543,238
623,358
65,753
104,977
11,464
182,194
1,801
183,995
22,034
124,450
1,400
206,802
354,686
3,493
1,064
359,243
161,725
108,611
17,569
287,905
2,090
289,995
21,827
121,987
1,400
183,909
329,123
3,274
966
333,363
543,238
623,358
42
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 43
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
Bank and other debt
Trade and other creditors
Corporation tax
Proposed dividend
Net Current Assets
Total Assets less Current Liabilities
Financed by:
Creditors: Amounts falling due after more than one year
Amounts owed to subsidiary undertakings
Provisions for Liabilities and Charges
Capital and Reserves
Called up equity share capital
Share premium account
Other reserves
Profit and loss
Equity Shareholders’ Funds
Alex Spain, Jim Flavin, Directors
Company Balance Sheet
As at 31 March 2001
Notes
2001
€’000
2000
€’000
17
18
19
21
21
22
23
28
29
32
33
34
35
1,077
733
1,522
82,715
85,314
1,233
70,860
72,826
7,138
203,084
3,178
213,400
1,359
1,331
4
11,449
14,143
3,396
226,944
4,792
235,132
644
1,176
4
9,735
11,559
199,257
223,573
284,571
296,399
117,773
107,104
4
117,777
4
107,108
22,034
124,450
344
19,966
166,794
21,827
121,987
344
45,133
189,291
284,571
296,399
ANNUAL REPORT AND ACCOUNTS 2001
43
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 44
Consolidated Cash Flow Statement
For the year ended 31 March 2001
Cash flow from operating activities
Returns on investments and servicing of finance
Taxation paid
Capital expenditure
Acquisitions and disposals
Equity dividends paid
Cash inflow before management of
liquid resources and financing
Increase in liquid resources
Financing
(Decrease)/increase in cash for the year
Reconciliation of Net Cash Flow to Movement in Net Cash/(Debt)
For the year ended 31 March 2001
(Decrease)/increase in cash for the year
Increase in liquid resources
Net loans repaid/(drawn down)
Capital element of finance lease payments
Changes in net cash resulting from cash flow
Exchange movements
Net (outflow)/inflow in the year
Net cash/(debt) at start of year
Net cash at end of year
Notes
2001
€’000
2000
€’000
40
41
41
41
42
41
42
83,369
(2,587)
(9,073)
(29,506)
(9,943)
(16,426)
15,834
(165,894)
(137,704)
96,297
(5,635)
(9,400)
(24,736)
72,170
(13,701)
114,995
(46,231)
95,255
(287,764)
164,019
Notes
2001
€’000
2000
€’000
42
42
42
42
42
42
42
(287,764)
165,894
110,853
4,113
(6,904)
976
(5,928)
89,159
164,019
46,231
(99,116)
3,870
115,004
(5,548)
109,456
(20,297)
83,231
89,159
44
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 45
Notes to the Financial Statements
For the year ended 31 March 2001
1. Segmental Information
(a) Segmental Analysis by Class of Business
An analysis by class of business of turnover, profit before taxation and net assets is set out below:
2001
Profit
Before
Taxation
€’000
31,203
23,617
20,313
16,604
91,737
-
91,737
(4,923)
-
(4,402)
(i) Summary
IT
Energy
Healthcare
Other Activities
Continuing activities
Discontinued activities
Turnover
€’000
753,887
610,257
182,657
323,340
1,870,141
-
1,870,141
Goodwill amortisation
Net exceptional gains
Interest (net)
Net cash
Amounts due in respect of acquisitions
Investments
Disposal proceeds receivable
Capitalised goodwill - subsidiaries
Capitalised goodwill - associates
Minority interests
Proposed dividend
Net
Assets
€’000
53,775
57,447
49,728
46,994
207,944
-
207,944
83,231
(21,976)
7,128
-
84,447
8,854
(3,493)
(11,449)
Turnover
€’000
542,298
369,812
155,555
248,446
1,316,111
210,889
1,527,000
2000
Profit
Before
Taxation
€’000
20,458
20,053
15,951
17,323
73,785
3,958
77,743
(3,535)
71,365
(6,400)
Net
Assets
€’000
38,645
48,044
44,207
42,449
173,345
-
173,345
89,159
(28,569)
7,128
16,100
75,559
9,410
(3,274)
(9,735)
1,870,141
82,412
354,686
1,527,000
139,173
329,123
(ii) Split between Subsidiary Undertakings and Associated Undertakings
Subsidiary
2001
Associated
Undertakings Undertakings
€’000
€’000
2000
Associated
Total Undertakings Undertakings
€’000
€’000
Subsidiary
€’000
Total
€’000
Turnover
- continuing activities
- discontinued activities
1,712,402
-
1,712,402
157,739
-
157,739
1,870,141
-
1,870,141
1,203,758
16,480
1,220,238
112,353
194,409
306,762
1,316,111
210,889
1,527,000
Operating profit before goodwill
amortisation
- continuing activities
- discontinued activities
Goodwill amortisation
Operating profit
Net exceptional gains
Interest (net)
82,787
-
82,787
(4,367)
78,420
-
(3,121)
8,950
-
8,950
(556)
8,394
-
(1,281)
91,737
-
91,737
(4,923)
86,814
-
(4,402)
66,256
(4,392)
61,864
(2,710)
59,154
10,365
(6,132)
7,529
8,350
15,879
(825)
15,054
61,000
(268)
73,785
3,958
77,743
(3,535)
74,208
71,365
(6,400)
Profit before taxation
75,299
7,113
82,412
63,387
75,786
139,173
Net assets (including
capitalised goodwill)
316,228
38,458
354,686
294,525
34,598
329,123
ANNUAL REPORT AND ACCOUNTS 2001
45
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 46
Notes to the Financial Statements
For the year ended 31 March 2001
1. Segmental Information continued
(iii) Other Activities
Other Activities are analysed as follows:
2001
Profit
Before
Taxation
€’000
Turnover
€’000
Net
Assets
€’000
Turnover
€’000
2000
Profit
Before
Taxation
€’000
Net
Assets
€’000
Food
Supply Chain
Management Services
Other Interests
182,367
8,464
17,483
160,372
8,916
15,489
103,558
37,415
2,791
5,349
15,915
13,596
61,551
26,523
3,812
4,595
16,035
10,925
323,340
16,604
46,994
248,446
17,323
42,449
(iv) Acquisitions
Acquisitions in the year contributed turnover of €69.208 million (2000: €48.898 million) and operating profit
before goodwill amortisation of €1.078 million (2000: €0.598 million).
46
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 47
Notes to the Financial Statements
For the year ended 31 March 2001
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
Ireland
Rest of the World
Associated undertakings
Continuing activities
Discontinued activities
Turnover
by Origin
€’000
709,425
1,002,977
1,712,402
157,739
1,870,141
-
1,870,141
Goodwill amortisation
Net exceptional gains
Interest (net)
Net cash
Amounts due in respect of acquisitions
Investments
Disposal proceeds receivable
Capitalised goodwill - subsidiaries
Capitalised goodwill - associates
Minority interests
Proposed dividend
2001
Profit
Before
Taxation
€’000
36,130
46,657
82,787
8,950
91,737
-
91,737
(4,923)
-
(4,402)
Net
Assets
€’000
Turnover
by Origin
€’000
61,964
116,376
178,340
29,604
207,944
-
207,944
515,921
687,837
1,203,758
112,353
1,316,111
210,889
1,527,000
2000
Profit
Before
Taxation
€’000
35,451
30,805
66,256
7,529
73,785
3,958
77,743
(3,535)
71,365
(6,400)
83,231
(21,976)
7,128
-
84,447
8,854
(3,493)
(11,449)
354,686
1,527,000
139,173
Net
Assets
€’000
47,155
101,002
148,157
25,188
173,345
-
173,345
89,159
(28,569)
7,128
16,100
75,559
9,410
(3,274)
(9,735)
329,123
1,870,141
82,412
(ii) Turnover by Destination - Continuing Activities
Ireland
United Kingdom
Rest of Europe
USA
Other
Share of associated undertakings
2001
€’000
2000
€’000
681,722
872,860
127,795
24,807
5,218
157,739
1,870,141
502,875
636,394
44,883
15,259
4,347
112,353
1,316,111
ANNUAL REPORT AND ACCOUNTS 2001
47
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 48
Notes to the Financial Statements
For the year ended 31 March 2001
2. Cost of Sales and Net Operating Costs
2001
2000
Continuing
Continuing
Discontinued
Activities Acquisitions
€’000
€’000
Total
€’000
Activities Acquisitions
€’000
€’000
Activities
€’000
Total
€’000
Cost of sales
(1,390,624)
(62,162)
(1,452,786)
(953,410)
(41,153)
(11,157)
(1,005,720)
Gross profit
252,570
7,046
259,616
201,450
7,745
5,323
214,518
Operating costs
Distribution
Administrative
Other operating expenses
(83,295)
(90,394)
(212)
(3,640)
(2,328)
-
(86,935)
(92,722)
(212)
(72,163)
(67,307)
(214)
(5,143)
(2,024)
(8)
-
(9,312)
(403)
(77,306)
(78,643)
(625)
(173,901)
(5,968)
(179,869)
(139,684)
(7,175)
(9,715)
(156,574)
Other operating income
3,040
-
3,040
3,920
-
-
3,920
Net operating costs
(170,861)
(5,968)
(176,829)
(135,764)
(7,175)
(9,715)
(152,654)
Operating profit before
goodwill amortisation
- parent and subsidiaries
81,709
1,078
82,787
65,686
570
(4,392)
61,864
3. Acquisitions
The profit on ordinary activities before taxation arising from acquisitions represents the aggregate of net
incremental profit 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 subsidiaries of the Group
during the year analysed by class of business was:
IT
Energy
Healthcare
Other Activities
The staff costs for the above were:
Wages and salaries
Social welfare costs
Pension costs
2001
Number
2000
Number
737
620
832
867
3,056
2001
€’000
97,717
10,321
4,228
112,266
704
515
759
955
2,933
2000
€’000
86,114
8,408
3,875
98,397
5. Directors’ Emoluments and Interests
Directors’ emoluments and interests are given in the Report on Directors’ Remuneration on pages 30 to 33.
48
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 49
Notes to the Financial Statements
For the year ended 31 March 2001
6. Goodwill Amortisation
Amortisation of capitalised goodwill arising on the acquisition
of subsidiaries after 1 April 1998 (note 16)
Amortisation of goodwill included in the carrying value of
associated undertakings (note 18)
7. Net Exceptional Gains on Sale of Associated and Subsidiary Undertakings
Profit on sale of associated undertaking
Profit on sale of subsidiary net tangible assets
Other
Goodwill previously eliminated against reserves
8. Net Interest Payable and Similar Charges - Parent and Subsidiary Undertakings
Interest receivable and similar income
Interest on cash and term deposits
Other interest and similar income receivable
Interest payable and similar charges
On bank loans, overdrafts and Unsecured Notes due 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
2001
€’000
2000
€’000
4,367
2,710
556
4,923
825
3,535
2001
€’000
2000
€’000
-
-
-
-
-
-
2001
€’000
25,010
512
25,522
(14,150)
(54)
(9,352)
(48)
(1,694)
(2,891)
(454)
(28,643)
76,000
18,000
(1,902)
92,098
(20,733)
71,365
2000
€’000
19,496
4
19,500
(11,968)
(73)
(9,042)
(50)
(1,551)
(2,637)
(311)
(25,632)
(3,121)
(6,132)
ANNUAL REPORT AND ACCOUNTS 2001
49
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 50
Notes to the Financial Statements
For the year ended 31 March 2001
9. 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.
10. 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
11. Taxation
Irish Corporation Tax at 23% (2000: 27%)
- current
- deferred
- less: manufacturing relief
United Kingdom Corporation Tax at 30%
- current
- deferred
Other overseas tax
Capital gains tax
Tax on net exceptional gains
(Over)/under provision in respect of prior years
- current
- deferred
Associated undertakings
2001
€’000
470
(264)
(327)
1,791
62
1,173
13,989
6,777
2001
€’000
7,931
(107)
(2,062)
5,635
102
1,610
98
-
(1,535)
(280)
11,392
1,708
13,100
2000
€’000
444
(79)
(296)
2,316
12
988
13,655
5,235
2000
€’000
5,368
(244)
(2,625)
4,003
40
947
-
8,000
(202)
26
15,313
3,388
18,701
Manufacturing relief is scheduled to expire in the year 2010.
The standard rate of corporation tax in Ireland will be reduced on a phased basis to 12.5% by 1 January 2003.
50
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 51
12. Minority Interests
Subsidiary undertakings
Associated undertakings
Notes to the Financial Statements
For the year ended 31 March 2001
2001
€’000
489
741
1,230
2000
€’000
3
628
631
13. 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
€17,641,000 (2000: €15,502,000).
14. Dividends
Per Ordinary Share
Interim dividend of 7.74 cent per share
(2000: 6.45 cent per share)
Proposed final dividend of 13.38 cent per share
(2000: 11.15 cent per share)
Additional dividend
2001
€’000
2000
€’000
6,619
5,631
11,449
72
18,140
9,735
-
15,366
The additional dividend of €72,000 is in respect of shares issued after the date of approval of the 31 March
2000 financial statements but qualifying for receipt of the final dividend declared.
ANNUAL REPORT AND ACCOUNTS 2001
51
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 52
Notes to the Financial Statements
For the year ended 31 March 2001
15. Earnings per Ordinary Share and Adjusted Earnings per Ordinary Share
Profit after taxation and minority interests
Net exceptional gains (net of taxation)
Goodwill amortisation
Adjusted profit after taxation and minority interests
Basic earnings per ordinary share
Basic earnings per ordinary share
Net exceptional gains
Goodwill amortisation
Adjusted basic earnings per ordinary share
2001
€’000
68,082
-
4,923
73,005
cent
78.98
-
5.71
84.69
2000
€’000
119,841
(63,365)
3,535
60,011
cent
137.39
(72.64)
4.05
68.80
Weighted average number of ordinary shares in issue during the year (’000)
86,202
87,225
Diluted earnings per ordinary share
Diluted earnings per ordinary share
Net exceptional gains
Goodwill amortisation
Adjusted diluted earnings per ordinary share
cent
78.28
-
5.66
83.94
cent
133.43
(70.46)
3.92
66.89
Diluted weighted average number of ordinary shares (’000)
87,030
89,925
The adjusted figures for basic earnings per ordinary share and diluted earnings per ordinary share are
intended to demonstrate the results of the Group after eliminating the impact of goodwill amortisation and
net exceptional items which are not expected to recur regularly.
The weighted average number of ordinary shares used in calculating the diluted earnings per ordinary share
for the year ended 31 March 2001 was 87.030 million (2000: 89.925 million). A reconciliation of the weighted
average number of ordinary shares used for the purpose of calculating the diluted earnings per share
amounts is as follows:
Weighted average number of ordinary shares in issue used for the calculation
of basic earnings per ordinary share amounts
Dilutive effect of options and partly paid shares
Dilutive effect of ordinary shares potentially issuable under deferred
contingent consideration arrangements
Weighted average number of ordinary shares in issue used for the
2001
’000
86,202
601
2000
’000
87,225
943
227
1,757
calculation of diluted earnings per ordinary share amounts
87,030
89,925
The earnings used for the purpose of the diluted earnings per ordinary share calculations were €68.131
million (2000: €119.989 million) and €73.054 million (2000: €60.159 million) for the purpose of the adjusted
diluted earnings per ordinary share calculations.
52
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 53
Notes to the Financial Statements
For the year ended 31 March 2001
16. Intangible Assets - Goodwill
The movement in goodwill arising on the acquisition of subsidiaries is as follows:
Cost
At 1 April
Additions (note 39)
At 31 March
Amortisation
At 1 April
Amortisation for the year (note 6)
At 31 March
Net Book Value
At 31 March
17. Tangible Fixed Assets
(a) Group
Cost
At 1 April 2000
Acquisitions (note 39)
Additions
Reclassifications
Disposals
Exchange adjustments
At 31 March 2001
Depreciation
At 1 April 2000
Charge for year
Disposals
Exchange adjustments
At 31 March 2001
Net Book Value
At 31 March 2001
At 31 March 2000
2001
€’000
2000
€’000
79,099
13,255
92,354
3,540
4,367
7,907
46,858
32,241
79,099
830
2,710
3,540
84,447
75,559
Freehold &
long term
Fixtures
Plant &
& fittings
leasehold land machinery &
& office
& buildings
€’000
cylinders
€’000
equipment
€’000
Motor
vehicles
€’000
49,840
558
5,464
-
(504)
(504)
54,854
8,245
1,242
(144)
(94)
9,249
157,513
1,129
13,633
(84)
(3,848)
(2,785)
165,558
98,664
11,405
(3,090)
(1,670)
105,309
27,124
-
8,031
84
(1,367)
(351)
33,521
16,875
3,622
(860)
(190)
19,447
26,873
1,807
6,934
-
(3,874)
(493)
31,247
14,472
4,497
(2,735)
(300)
15,934
Total
€’000
261,350
3,494
34,062
-
(9,593)
(4,133)
285,180
138,256
20,766
(6,829)
(2,254)
149,939
45,605
41,595
60,249
58,849
14,074
10,249
15,313
12,401
135,241
123,094
The net book value of tangible fixed assets includes an amount of €15,101,000 (2000: €20,361,000) in respect
of assets held under finance leases.
ANNUAL REPORT AND ACCOUNTS 2001
53
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 54
Notes to the Financial Statements
For the year ended 31 March 2001
17. Tangible Fixed Assets continued
(b) Company
Cost
At 1 April 2000
Additions
Disposals
At 31 March 2001
Depreciation
At 1 April 2000
Charge for year
Disposals
At 31 March 2001
Net Book Value
At 31 March 2001
At 31 March 2000
18. Financial Assets - Associated Undertakings
(a) Group
At 1 April
Additions
Disposals/transfer to investments
Retained profits less dividends
Other movements in reserves
Amortisation of goodwill (note 6)
At 31 March
Fixtures &
fittings & office
equipment
€’000
Motor
vehicles
€’000
1,142
283
(22)
1,403
898
93
(22)
969
434
244
740
342
(148)
934
251
173
(133)
291
643
489
Total
€’000
1,882
625
(170)
2,337
1,149
266
(155)
1,260
1,077
733
2001
€’000
34,598
325
-
4,116
(25)
(556)
38,458
2000
€’000
56,844
726
(34,144)
9,505
2,492
(825)
34,598
54
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 55
18. Financial Assets - Associated Undertakings continued
The carrying value of associated undertakings is analysed as follows:
Interest in net assets
Share of post acquisition reserves
Goodwill (net of amortisation)
Notes to the Financial Statements
For the year ended 31 March 2001
2001
€’000
7,404
22,200
29,604
8,854
38,458
2000
€’000
7,079
18,109
25,188
9,410
34,598
At 31 March 2001 the Group’s aggregate share of its associated undertakings’ fixed assets, current assets,
liabilities due within one year and liabilities due after more than one year was 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
Disposals
At 31 March
Amortisation
At 1 April
Amortisation for the year
Disposals
At 31 March
Net Book Value
At 31 March
2001
€’000
2000
€’000
20,765
69,721
(40,600)
(20,282)
29,604
17,155
62,586
(35,942)
(18,611)
25,188
2001
€’000
10,680
-
-
10,680
1,270
556
-
1,826
2000
€’000
16,137
685
(6,142)
10,680
2,272
825
(1,827)
1,270
8,854
9,410
ANNUAL REPORT AND ACCOUNTS 2001
55
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 56
Notes to the Financial Statements
For the year ended 31 March 2001
18. Financial Assets - Associated Undertakings continued
Details of the Group’s principal associated undertakings at 31 March 2001 are set out below. All of these
companies are incorporated and operate principally in their country of registration.
Name and Registered Office
Nature of Business
Shareholding
Healthcare
Merits Health Products Company Limited,
Manufacture of mobility aids.
45.0%
9 Road 36,
Taichung Industrial Park,
Taichung, Taiwan.
Other Activities
KP (Ireland) Limited,
79 Broomhill Road, Tallaght,
Dublin 24, Ireland.
Manufacture of snack foods.
50.0%
Kylemore Foods Holdings Limited,
Holding company for the Kylemore group of
50.0%
DCC House,
Stillorgan, Blackrock,
Co. Dublin, Ireland.
Millais Investments Limited,
Kinsale Road, Cork, Ireland.
companies whose principal activities are the
baking, wholesale and retailing of bakery
products and the operation of restaurants.
Holding company for Allied Foods
Limited, a distributor of frozen and
chilled foods.
51.5% *
* The Group holds 50% of the voting share capital of Millais Investments Limited.
Manor Park Homebuilders Limited,
Residential house building.
49.0%
“The Gables”, Torquay Road,
Dublin 18, Ireland.
(b) Company
At April 1
Additions
At 31 March
2001
€’000
1,233
289
1,522
2000
€’000
1,233
-
1,233
56
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 57
19. Financial Assets - Subsidiary Undertakings
Company
At 1 April
Additions
At 31 March
Notes to the Financial Statements
For the year ended 31 March 2001
2001
€’000
70,860
11,855
82,715
2000
€’000
67,385
3,475
70,860
The Group’s principal operating subsidiary undertakings are shown on pages 74 to 76. All of these
subsidiaries are wholly owned except Broderick Holdings Limited (82.5%), Virtus Limited (51.0%), EuroCaps
Limited (85.0%) where put and call options exist to acquire the remaining 15.0%, Distrilogie SA (55.0%) where
put and call options exist to acquire the remaining 45.0% and Fannin Limited (88.0%), where put and call
options exist to acquire the remaining 12.0%.
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 B.V., 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 B.V. is Drentestraat 24, 1083 HK Amsterdam, the
Netherlands.
20. Stocks
Group
Raw materials and consumables
Work in progress
Finished goods and goods for resale
2001
€’000
7,825
1,280
83,958
93,063
2000
€’000
6,873
1,852
67,291
76,016
The replacement cost of stocks is not considered to be materially different from the amounts shown above.
ANNUAL REPORT AND ACCOUNTS 2001
57
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 58
Notes to the Financial Statements
For the year ended 31 March 2001
21. Debtors
Amounts falling due within one year:
Trade debtors
Amounts owed by subsidiary undertakings
Disposal proceeds receivable
Corporation tax recoverable
Value added tax recoverable
Prepayments and accrued income
Other debtors
Amounts falling due after more than one year:
Amounts owed by subsidiary undertakings
Investments
Other debtors
22. Cash and Term Deposits
Cash in hand and at bank
Term deposits
2001
€’000
259,327
-
-
-
3,263
16,283
6,950
285,823
-
7,128
3,853
10,981
Group
Company
2000
€’000
201,816
-
16,100
1,492
2,413
12,771
3,043
237,635
2001
€’000
1,591
2,453
-
-
-
3,094
-
7,138
2000
€’000
866
1,812
-
-
11
707
-
3,396
-
7,128
3,638
10,766
203,084
-
-
203,084
226,944
-
-
226,944
296,804
248,401
210,222
230,340
Group
Company
2001
€’000
127,972
326,610
454,582
2000
€’000
389,247
162,029
551,276
2001
€’000
-
3,178
3,178
2000
€’000
85
4,707
4,792
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 42.
58
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 59
23. Bank and Other Debt
Bank loans and overdrafts (note 24)
Loan notes (note 25)
Obligations under finance leases (note 26)
Unsecured Notes due 2008/11 (note 24)
Bank and other loans and leases:
- repayable within one year
- repayable after more than one year
Unsecured Notes due 2008/11
Notes to the Financial Statements
For the year ended 31 March 2001
Group
Company
2001
€’000
198,764
32,013
35,597
266,374
104,977
371,351
200,621
65,753
104,977
371,351
2000
€’000
279,271
33,205
41,030
353,506
108,611
462,117
191,781
161,725
108,611
462,117
2001
€’000
846
513
-
1,359
-
1,359
1,359
-
-
1,359
2000
€’000
-
644
-
644
-
644
644
-
-
644
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.
24. Bank Loans, Overdrafts and Unsecured Notes due 2008/11
Repayable as follows:
Within one year
Between one and two years
Between two and five years
After five years
2001
€’000
195,217
2,413
542
105,569
303,741
Group
2000
€’000
186,324
79,652
12,675
109,231
387,882
Company
2001
€’000
2000
€’000
846
-
-
-
846
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
- after five years
Repayable other than by instalments:
- between one and two years
- after five years
195,217
186,324
846
2,413
542
592
-
104,977
303,741
630
12,675
620
79,022
108,611
387,882
-
-
-
-
-
846
ANNUAL REPORT AND ACCOUNTS 2001
59
-
-
-
-
-
-
-
-
-
-
-
-
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 60
Notes to the Financial Statements
For the year ended 31 March 2001
25. Loan Notes
The loan notes are repayable as follows:
Within one year
After five years
Loan notes are further analysed as follows:
Wholly repayable within one year
Repayable other than by instalments:
- after five years
Group
2000
€’000
1,251
31,954
33,205
2001
€’000
1,128
30,885
32,013
1,128
1,251
30,885
32,013
31,954
33,205
Company
2001
€’000
2000
€’000
513
-
513
513
-
513
644
-
644
644
-
644
The above loan notes are unsecured and €10,911,000 (2000: €33,152,000) 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.
26. Finance Leases
The net finance lease obligations to which the Group is committed are:
Within one year
Between one and two years
Between two and five years
After five years
2001
€’000
2000
€’000
4,276
4,206
5,135
14,469
11,717
31,321
4,418
14,900
17,506
36,824
35,597
41,030
27. 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 revenues and costs 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 or deposits in the same currency. In order to reduce these exposures and to bring both stability
and more certainty to the Group’s revenues and costs, the Group uses various derivative financial
instruments to hedge its positions 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.
60
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 61
Notes to the Financial Statements
For the year ended 31 March 2001
27. Derivative and Other Financial Instruments continued
(a) Interest Rate Risk Profile of Financial Assets and Financial Liabilities
The following tables analyse the currency and interest rate composition of the Group’s gross cash and debt
portfolio, as stated on the balance sheet, after taking cross currency and interest rate swaps into account:
2001
€ equivalent
Financial
Liabilities
€’000
(1,655)
(33,232)
(34,887)
(98,759)
(236,982)
(335,741)
-
(723)
(723)
Financial
Assets
€’000
-
135,765
135,765
98,517
213,069
311,586
-
7,231
7,231
Net
€’000
(1,655)
102,533
100,878
(242)
(23,913)
(24,155)
-
6,508
6,508
Financial
Assets
€’000
-
201,792
201,792
101,921
241,584
343,505
-
5,979
5,979
2000
€ equivalent
Financial
Liabilities
€’000
(1,983)
(77,979)
(79,962)
(101,929)
(279,697)
(381,626)
-
(529)
(529)
Net
€’000
(1,983)
123,813
121,830
(8)
(38,113)
(38,121)
-
5,450
5,450
€ Fixed
€ Floating
€ Total
Stg£ Fixed
Stg£ Floating
Stg£ Total
US$ Fixed
US$ Floating
US$ Total
Total
454,582
(371,351)
83,231
551,276
(462,117)
89,159
The Group’s deferred acquisition consideration of €21,976,000 as stated on the balance sheet, comprises
€20,102,000 of € floating rate financial liabilities and €1,874,000 of Stg£ floating rate financial liabilities
(2000: €28,569,000 of € floating rate financial liabilities) payable as follows:
Within one year
Between one and two years
Between two and five years
2001
€’000
10,512
7,428
4,036
21,976
2000
€’000
11,000
7,166
10,403
28,569
The Group’s floating rate financial assets and financial liabilities primarily bear interest rates based on:
• 1 - 6 month EURIBOR
• 1 - 12 month LIBOR
• US$ prime rate
At 31 March the interest rate profile of the Group’s fixed rate financial assets and financial liabilities was as
follows:
2001
Weighted average interest rate
Fixed rate
Fixed rate
financial liabilities
financial assets
2000
Weighted average interest rate
Fixed rate
Fixed rate
financial liabilities
financial assets
n/a
8.0%
4.7%
8.8%
n/a
8.0%
5.2%
8.8%
2001
Weighted average period
for which rate is fixed
2000
Weighted average period
for which rate is fixed
Fixed rate
financial assets
Fixed rate
financial liabilities
Fixed rate
financial assets
Fixed rate
financial liabilities
n/a
7.5 years
8.3 years
7.5 years
n/a
8.5 years
6.9 years
8.5 years
€
Stg£
€
Stg£
ANNUAL REPORT AND ACCOUNTS 2001
61
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 62
Notes to the Financial Statements
For the year ended 31 March 2001
27. Derivative and Other Financial Instruments continued
The maturity profile of the Group’s financial liabilities is set out in notes 24 to 26 and can be summarised as
follows:
Within one year
Between one and two years
Between two and five years
After five years
2001
€’000
200,621
7,548
15,011
148,171
371,351
2000
€’000
191,781
84,070
27,575
158,691
462,117
(b) Gains and Losses on Hedges
The Group enters into forward foreign currency contracts to eliminate the currency exposures that arise on
revenues and costs denominated in foreign currencies. The Group also enters into commodity swap
contracts in order to eliminate the exposure to price movements of oil and LPG. 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:
At 1 April
Portion recognised in current year
Arising in current year
At 31 March
Of which, expected to be recognised:
- within one year
- after one year
Gains
€’000
429
(429)
5,100
5,100
2,650
2,450
5,100
2001
Losses
€’000
(6,393)
5,898
(490)
(985)
Total
€’000
(5,964)
5,469
4,610
4,115
(673)
(312)
(985)
1,977
2,138
4,115
Gains
€’000
356
(356)
429
429
429
-
429
2000
Losses
€’000
(3,332)
1,879
(4,940)
(6,393)
(5,898)
(495)
(6,393)
Total
€’000
(2,976)
1,523
(4,511)
(5,964)
(5,469)
(495)
(5,964)
The above table does not include cross currency interest rate swaps where unrecognised gains or losses on
the swaps are matched by equal and opposite gains or losses in the fair value of Unsecured Notes due
2008/11 as described in the accounting policy for derivative financial instruments.
(c) Fair Value of Financial Instruments
The carrying amounts and estimated fair values of the financial assets and financial liabilities of the Group
are as follows:
Assets:
Cash and short term deposits
Liabilities:
Deferred acquisition consideration
Short term debt
Medium and long term debt
Unsecured Notes due 2008/11
Derivative financial instruments:
Commodity swaps
Forward exchange rate contracts
Interest rate contracts
2001
2000
Carrying
amount
€’000
Fair
value
€’000
Carrying
amount
€’000
Fair
value
€’000
454,582
454,582
551,276
551,188
(21,976)
(200,621)
(65,753)
(104,977)
(21,976)
(200,621)
(65,682)
(104,977)
(28,569)
(191,781)
(161,725)
(108,611)
(28,569)
(191,781)
(161,637)
(108,611)
-
-
-
61,255
575
3,540
-
65,441
-
-
-
60,590
(1,199)
(4,765)
-
54,626
62
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 63
Notes to the Financial Statements
For the year ended 31 March 2001
27. Derivative and Other Financial Instruments continued
The following methods and assumptions were used by the Group in estimating its fair value disclosures for
financial instruments:
Cash, short term deposits and short term debt:
The carrying amount reported in the balance sheet generally approximates to fair value because of the short
maturity of these instruments.
Deferred acquisition consideration:
The carrying amount reported in the balance sheet approximates to fair value because the future amounts
payable are discounted back to their present value.
Medium and long term debt:
The fair value of the Group’s medium and long term debt generally approximates to fair value because these
instruments re-price frequently at market rates.
Unsecured Notes due 2008/11:
The fair value of the Group’s Unsecured Notes due 2008/11 is shown net of the gain or loss on the sterling
cross currency interest rate swap used to hedge these loan notes (note 23). At 31 March 2001 the cross
currency interest rate swap had a fair value equating to a profit of €19,821,000 (2000: loss of €3,338,000) and
the fair value of the Unsecured Notes 2008/11 was lower than the book value by the same amount.
Commodity and forward exchange rate contracts:
The fair value of these instruments is based on the estimated replacement cost of equivalent instruments at
the balance sheet date.
Interest rate contracts:
The fair value of these instruments is based on the estimated replacement cost of equivalent instruments at
the balance sheet date. The Group uses interest rate contracts to swap floating rate assets and liabilities into
fixed rate assets and liabilities. The fair value of the interest rate contracts attributable to financial assets is
offset by the fair value of the interest rate contracts attributable to financial liabilities.
(d) Undrawn Bank Borrowing Facilities
The Group has various borrowing facilities available to it. At 31 March 2001 the Group has no undrawn
committed bank borrowing facilities (2000: €4,250,000).
(e) Short Term Debtors and Creditors
Short term debtors and creditors are not included in the above disclosures of financial assets and financial
liabilities.
(f) Currency Exposures
At 31 March 2001, after taking into account the effects of foreign currency contracts, the Group had no
material currency exposures.
(g) Treasury Policy
The Group’s treasury policy and management of derivatives and of financial instruments is discussed in the
Financial Review on pages 20 to 23.
ANNUAL REPORT AND ACCOUNTS 2001
63
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 64
Notes to the Financial Statements
For the year ended 31 March 2001
28. Trade and Other Creditors
Amounts falling due within one year:
Trade creditors
Other creditors and accruals
Deferred acquisition consideration
PAYE and PRSI
Value added tax
Capital grants (note 38)
Interest payable
Amounts due in respect of fixed assets
Amounts due to associated undertakings
29. Provisions for Liabilities and Charges
(a) Group
At 1 April
Credited to profit and
loss account
Exchange adjustments
At 31 March
(b) Company
Deferred taxation at 31 March (note 30)
30. Deferred Taxation
Group
Company
2001
€’000
254,278
38,099
10,512
2,535
14,939
305
2,744
1,163
3,753
328,328
2000
€’000
199,454
34,900
11,000
2,450
12,049
235
2,401
905
2,739
266,133
2001
€’000
155
1,002
-
-
174
-
-
-
-
1,331
2000
€’000
73
941
-
162
-
-
-
-
-
1,176
Total
€’000
2,244
(179)
25
2,090
2001
€’000
2000
€’000
4
4
2001
Pension
Deferred and similar
taxation obligations
(note 31)
(note 30)
€’000
€’000
2000
Pension
Deferred and similar
taxation obligations
(note 31)
(note 30)
€’000
€’000
Total
€’000
2,047
(285)
(4)
1,758
43
-
-
43
2,090
2,200
(285)
(4)
1,801
(178)
25
2,047
44
(1)
-
43
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
2000
2001
€’000
€’000
Full Potential Liability
2000
€’000
2001
€’000
2,112
(354)
1,758
2,097
(50)
2,047
2,577
(354)
2,223
2,204
(50)
2,154
No provision is made for potential taxation liabilities amounting to €465,000 (2000: €107,000) 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.
64
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 65
Notes to the Financial Statements
For the year ended 31 March 2001
30. Deferred Taxation continued
(b) Company
Tax effect of timing differences due to:
Excess of accelerated capital allowances over depreciation
Other short term timing differences
Amount Provided
2000
2001
€’000
€’000
Full Potential Liability
2000
€’000
2001
€’000
3
1
4
3
1
4
3
1
4
3
1
4
31. Pension 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 €4,228,000 (2000: €3,875,000) of which €1,493,000
(2000: €1,332,000) 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 projected unit benefits method are
used to assess pension costs. The most recent actuarial valuations range from 1 April 1997 to 1 April 2000.
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 €33,220,000 (2000: €24,643,000).
After allowing for expected future increases in earnings and pension payments, the actuarial values of the
various schemes’ assets were sufficient to cover between 84% and 110% (Group weighted average cover:
100%) of the benefits that had accrued to the members of the individual schemes. Any actuarial deficits are
being spread over the average remaining service lives of current employees.
At 31 March 2001, €48,000 (2000: €71,000) was included in creditors in respect of pension liabilities and
€2,486,000 (2000: €566,000) 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.
ANNUAL REPORT AND ACCOUNTS 2001
65
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 66
Notes to the Financial Statements
For the year ended 31 March 2001
32. Called up Equity Share Capital
Group and Company
Authorised
152,368,568 ordinary shares of €0.25 each
Issued
88,134,404 ordinary shares (including 2,563,045 ordinary shares
held as Treasury Shares) of €0.25 each, fully paid
(2000: 87,306,376 ordinary shares of €0.25 each, fully paid)
90,000 ordinary shares of €0.25 each, €0.0025 paid
(2000: 205,000 ordinary shares of €0.25 each, €0.0025 paid)
Movements during year
Ordinary shares of €0.25 each
At 1 April 2000
Exercise of share options
Acquisition issues
Payment up of partly paid shares
At 31 March 2001
2001
€’000
2000
€’000
38,092
38,092
22,034
21,827
-
22,034
-
21,827
No of shares (’000)
87,511
650
63
-
88,224
€’000
21,827
162
16
29
22,034
During the year the Group purchased 2,563,045 of its own ordinary shares of €0.25 each at a total cost of
€24,668,000. These shares are held as Treasury Shares and they are not included in the calculation of
earnings per share from the date they were purchased by the Group.
Under the DCC plc 1998 Employee Share Option Scheme, employees hold basic tier options to subscribe for
2,095,500 ordinary shares and second tier options to subscribe for 1,913,500 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 2001, 90,000 shares
(2000: 205,000 shares) remain partly paid.
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.
66
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 67
33. Share Premium Account
Group and Company
At 1 April
Premium on issue of shares
Share issue expenses
At 31 March
34. Other Reserves
(a) Group
Notes to the Financial Statements
For the year ended 31 March 2001
2001
€’000
2000
€’000
121,987
2,493
(30)
124,450
120,796
1,203
(12)
121,987
Capital
Conversion
Reserve
Fund
€’000
Other
Reserves
€’000
Total
€’000
At 31 March 2001 and 31 March 2000
344
1,056
1,400
(b) Company
At 31 March 2001 and 31 March 2000
35. Profit and Loss
(a) Group
At 1 April 2000
Profit retained for the year
Share buyback (note 32)
Movement on other reserves - associated undertakings
Exchange adjustments
At 31 March 2001
Capital
Conversion
Reserve
Fund
€’000
344
Profit
and Loss
Account
€’000
183,909
49,942
(24,668)
(25)
(2,356)
206,802
In accordance with the Group’s accounting policy, goodwill arising on the acquisition of the subsidiaries prior
to 1 April 1998, eliminated from the balance sheet through reserves, amounts €100.079 million.
(b) Company
At 1 April 2000
Profit retained
Share buyback (note 32)
At 31 March 2001
Profit
and Loss
Account
€’000
45,133
(499)
(24,668)
19,966
ANNUAL REPORT AND ACCOUNTS 2001
67
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 68
Notes to the Financial Statements
For the year ended 31 March 2001
36. Reconciliation of Movements in Equity Shareholders’ Funds
Profit for the financial year
Dividends
Movement on associated undertaking reserves
Goodwill realised previously eliminated against reserves (note 7)
Equity share capital issued (net of expenses)
Share buyback (note 32)
Exchange adjustments
Net movement in shareholders’ funds
Opening equity shareholders’ funds
Closing equity shareholders’ funds
37. Equity Minority Interests
At 1 April
Acquisitions
Acquisition of minority interest in subsidiary undertakings
Disposal of minority interest in subsidiary undertaking
Share of profit for the financial year (note 12)
Dividends to minorities
Exchange adjustments
At 31 March
38. Capital Grants
At 1 April
Received in year
Amortisation in year
Exchange adjustments
At 31 March
Disclosed as due within one year (note 28)
2001
€’000
2000
€’000
68,082
(18,140)
49,942
(25)
-
2,670
(24,668)
(2,356)
25,563
329,123
354,686
119,841
(15,366)
104,475
2,492
20,733
1,234
-
4,968
133,902
195,221
329,123
2001
€’000
3,274
-
(61)
-
489
(173)
(36)
3,493
2001
€’000
1,201
502
(327)
(7)
1,369
(305)
1,064
2000
€’000
3,902
326
-
(947)
3
(86)
76
3,274
2000
€’000
1,426
62
(296)
9
1,201
(235)
966
68
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 69
Notes to the Financial Statements
For the year ended 31 March 2001
39. Acquisitions of Subsidiary Undertakings
The principal acquisition completed during the year was Fuel Services. A number of smaller oil and LPG
distributors were also acquired.
A summary of the effect of these acquisitions is as follows:
Tangible fixed assets
Stocks
Debtors
Net debt
Creditors
Net assets acquired
Goodwill
Cost
Satisfied by:
Cash
Shares
Deferred consideration and deferred contingent consideration
Acquisition
of subsidiary
undertakings
€’000
3,494
922
3,777
(3,140)
(2,001)
3,052
13,255
16,307
10,726
740
4,841
16,307
Acquisition accounting has been adopted in respect of the above acquisitions. No fair value adjustments
were made to the assets acquired.
An analysis of the net outflow of cash in respect of the acquisition of subsidiary undertakings is as follows:
Cost
Net debt acquired
Shares issued
Deferred consideration and deferred contingent consideration
Net outflow of cash
2001
€’000
16,307
3,140
(740)
(4,841)
13,866
ANNUAL REPORT AND ACCOUNTS 2001
69
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 70
Notes to the Financial Statements
For the year ended 31 March 2001
40. Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities
Operating profit before goodwill amortisation
Operating profit of associated undertakings
Dividends received from associated undertakings
Depreciation of tangible fixed assets
Increase in stocks
Increase in debtors
Increase in creditors
Other
Cash flow from operating activities
2001
€’000
2000
€’000
91,737
(8,950)
1,896
20,766
(17,650)
(66,961)
64,682
(2,151)
83,369
77,743
(15,879)
2,768
18,890
(11,081)
(45,941)
72,845
(3,048)
96,297
41. Analysis of Cash Flows 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
(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 debt/cash acquired) (note 39)
Investment in associated undertakings (note 18)
Purchase of minority interests
Sale of subsidiary
Sale of associated undertaking
Payment of deferred consideration in respect of acquisitions
Net cash (outflow)/inflow from acquisitions and disposals
(d) Financing
Issues of share capital (including share premium)
Share buyback
Capital element of finance lease payments
Loans (repaid)/drawn down
Net cash (outflow)/inflow from financing
2001
€’000
2000
€’000
25,432
(27,846)
(173)
(2,587)
(33,804)
3,796
502
(29,506)
(13,866)
(325)
(61)
16,026
-
(11,717)
(9,943)
1,930
(24,668)
(4,113)
(110,853)
(137,704)
19,432
(24,981)
(86)
(5,635)
(28,815)
4,017
62
(24,736)
(28,427)
(726)
-
3,456
106,289
(8,422)
72,170
9
-
(3,870)
99,116
95,255
70
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 71
42. Analysis of Movement in Net Cash
Cash in hand and at bank
Overdrafts
Term deposits
Bank loans and loan notes
Unsecured Notes due 2008/11
Finance leases
Total
43. Capital Commitments
Group
Notes to the Financial Statements
For the year ended 31 March 2001
At
1 April
2000
€’000
389,247
(33,763)
355,484
162,029
(278,713)
(108,611)
(41,030)
89,159
Cash
Exchange
flow movements
€’000
€’000
(251,321)
(36,443)
(287,764)
165,894
110,853
-
4,113
(6,904)
(9,954)
767
(9,187)
(1,313)
6,522
3,634
1,320
976
At
31 March
2001
€’000
127,972
(69,439)
58,533
326,610
(161,338)
(104,977)
(35,597)
83,231
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
2001
€’000
2000
€’000
5,264
4,248
18,037
12,707
44. Operating Lease Commitments
At 31 March 2001 the Group had annual commitments under operating leases as follows:
Expiring within one year
Expiring between two and five years
Expiring after five years
Land and
Buildings
€’000
155
460
1,339
1,954
2001
Other
€’000
434
519
11
964
Land and
Total Buildings
€’000
€’000
589
979
1,350
2,918
178
173
1,547
1,898
2000
Other
€’000
73
648
-
721
Total
€’000
251
821
1,547
2,619
ANNUAL REPORT AND ACCOUNTS 2001
71
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 72
Notes to the Financial Statements
For the year ended 31 March 2001
45. Contingent Liabilities
(a) Bank and Other Loans
The parent undertaking and certain subsidiaries have given guarantees of up to €339,776,000 (2000:
€454,280,000) in respect of borrowings by the parent undertaking itself and other group undertakings.
(b) Grants
In certain circumstances capital grants amounting to a maximum of €84,000 (2000: €4,759,000) may become
repayable.
(c) Other
Included in trade creditors is an amount of approximately €14,193,000 (2000: €8,909,000) 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 Alvabay Limited, Atlas Oil Refining Company Limited, Classic Fuel & Oil Limited, DCC Energy
Limited, DCC SerCom Limited, Emo Oil Limited and Flogas Ireland Limited and, as a result, these companies
have been exempted from the filing provisions of Section 7, Companies (Amendment) Act, 1986.
46. Reporting Currency
The primary currency used in these financial statements is the euro which is denoted by the symbol €. 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)
2001
€1=Stg£
2000
€1=Stg£
0.619
0.613
0.599
0.643
72
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 73
Notes to the Financial Statements
For the year ended 31 March 2001
47. Transactions with Related Parties
On 3 July 2000, DCC acquired 3.7% of the share capital of SerCom Distribution Limited from the management
of that company at a cost of €7,298,000. These shareholdings arose from the exercise of options by
management over 4.7% of the share capital of SerCom Distribution Limited. Put and call options exist over
the remaining shares, exercisable up to 2004.
On 16 August 2000, the Company increased its shareholding in EuroCaps Limited to 85.0% through the
acquisition of 5.0% of the issued share capital from the minority shareholders. The total value of the
consideration amounted to Stg£412,000 which was satisfied in cash. The remaining 15.0% is also subject to
put and call options exercisable up to 2002.
On 26 September 2000, the Company increased its shareholding in Fannin Limited to 88% by acquiring 6% of
the issued share capital from the minority shareholders in Fannin Limited, which was subject to put and call
options exercisable by DCC and the Fannin minority shareholders. The total value of the consideration
amounted to €3,277,000 of which €3,276,000 was satisfied in cash and €1,000 in shares. The remaining 12%
shareholding is also subject to put and call options exercisable up to 2003.
On 26 February 2001, the Company acquired the remaining 10% shareholding held by minority shareholders
in BM Browne (UK) Limited for a consideration of Stg£463,000 satisfied through the issue of shares.
48. Approval of Financial Statements
The financial statements were approved by the Board of Directors on 11 May 2001.
ANNUAL REPORT AND ACCOUNTS 2001
73
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 74
Group Directory
Name and Registered Office Address
Principal Activity
Holding and divisional management
company
Holding and divisional management
company
Distribution of computer products and
office equipment
Distribution of computer products
Distribution of computer software
IT (SerCom Distribution)
DCC SerCom Limited
DCC House, Stillorgan,
Blackrock, Co. Dublin,
Ireland
SerCom Distribution Limited
DCC House, Stillorgan,
Blackrock, Co. Dublin,
Ireland
Sharptext Limited
M50 Business Park,
Ballymount Road Upper,
Dublin 12, Ireland
Micro Peripherals Limited *
Shorten Brook Way,
Altham Business Park, Altham,
Accrington, Lancashire BB5 5YJ,
England
Gem Distribution Limited *
Lovet Road, The Pinnacles,
Marlow, Essex CM19 5TB,
England
Distrilogie SA
12, Rue des Frères Caudron,
78147 Vélizy Cedex,
France
Energy
DCC Energy Limited
DCC House, Stillorgan,
Blackrock, Co. Dublin,
Ireland
Flogas Ireland Limited
Dublin Road, Drogheda,
Manufacture and distribution of liquified
petroleum gas
Co. Louth,
Ireland
DCC Energy (NI) Limited
Airport Road West,
Sydenham, Belfast BT3 9ED,
Northern Ireland
Flogas (UK) Limited *
Merrylees,
Leicestershire LE9 9FE,
England
Marketing and distribution of petroleum
products
Processing and distribution of liquified
petroleum gas
Atlas Environmental Ireland Limited
Clonminam Industrial Estate,
Provision of environmental services
including recycling of oils
Portlaoise, Co. Laois,
Ireland
74
Telephone/Fax/email
and website if applicable
Tel: + 353 1 2799 400
Fax: + 353 1 2831 017
email: sercom@dcc.ie
www.dcc.ie
Tel: + 353 1 2799 400
Fax: + 353 1 2831 017
email: sercom@dcc.ie
www.dcc.ie
Tel: + 353 1 4087 171
Fax: + 353 1 4599 421
email: info@sharptext.com
www.sharptext.com
Tel: + 44 1282 776 776
Fax: + 44 1282 770 001
email: info@micro-p.com
www.micro-p.com
Tel: + 44 1279 822 800
Fax: + 44 1279 416 228
email: info@gem.co.uk
www.gem.co.uk
Tel: + 353 1 2799 400
Fax: + 353 1 2831 017
email: energy@dcc.ie
www.dcc.ie
Tel: + 353 41 9831 041
Fax: + 353 41 9834 652
email: info@flogas.ie
www.flogas.ie
Tel: + 44 28 9073 2611
Fax: + 44 28 9073 2020
email: enquiries@emooil.com
www.emooil.com
Tel: + 44 1530 230 352
Fax: + 44 1530 230 253
email: info@flogas.co.uk
www.flogas.co.uk
Tel: + 353 502 747 47
Fax: + 353 502 747 57
email: info@atlasireland.com
www.atlasireland.com
ANNUAL REPORT AND ACCOUNTS 2001
Distribution of computer storage
products
Tel: + 33 1 34 58 47 00
Fax: + 33 1 34 58 47 27
email: distrilogie@distrilogie.com
www.distrilogie.com
Holding and divisional management
company
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 75
Name and Registered Office Address
Principal Activity
Emo Oil Limited
Clonminam Industrial Estate,
Portlaoise, Co. Laois,
Ireland
Healthcare
DCC Healthcare Limited
DCC House, Stillorgan,
Blackrock, Co. Dublin,
Ireland
Marketing and distribution of petroleum
products
Holding and divisional management
company
Days Medical Aids Limited *
Litchard Industrial Estate, Bridgend,
Manufacture and distribution of
rehabilitation and mobility products
Mid Glamorgan CF31 2AL,
Wales
DCC Shoprider Inc.
3540 Northwest 56th Street, Suite 206,
Fort Lauderdale, Florida 33309,
USA
Fannin Limited
Blackthorn Road,
Sandyford Industrial Estate,
Foxrock, Dublin 18,
Ireland
Virtus Limited
Adamstown,
Lucan, Co. Dublin,
Ireland
Healthilife Limited *
Charleston House, Otley Road,
Baildon, Shipley,
West Yorkshire BD17 7JS,
England
EuroCaps Limited *
Crown Business Park,
Dukestown, Tredegar,
Gwent NP22 4EF,
Wales
Distribution of mobility scooters and
power chairs
Distribution of medical and scientific
equipment and consumables
Manufacture and distribution of vitamin
and mineral supplements
Manufacture and distribution of soft
gelatine capsules
CasaCare GmbH & Co KG
Gewerbestraße 13,
Manufacture and distribution of
rehabilitation and mobility products
32584 Löhne,
Germany
Primacy Healthcare Limited *
9-12 Hardwick Road,
Astmoor Industrial Estate,
Runcorn, Cheshire WA7 1PH,
England
Manufacture and distribution of tablets
and capsules
Group Directory
Telephone/Fax/email
and website if applicable
Tel: + 353 502 747 00
Fax: + 353 502 747 50
email: emo@iol.ie
www.emo.ie
Tel: + 353 1 2799 400
Fax: + 353 1 2831 017
email: healthcare@dcc.ie
www.dcc.ie
Tel: + 44 1656 657 495
Fax: + 44 1656 767 178
email: sales@daysmedical.com
Tel: + 1 954 535 0781
Fax: + 1 954 535 0956
email: sales@dcc-shoprider.com
www.dcc-shoprider.com
Tel: + 353 1 294 4500
Fax: + 353 1 295 3818
email: info@fanninhealthcare.com
Tel: + 44 1274 595 021
Fax: + 44 1274 581 515
email: enquiries@healthilife.com
www.healthilife.com
Tel: + 44 1495 308 900
Fax: + 44 1495 308 990
email: enquiries@softgels.co.uk
www.softgels.co.uk
Tel: + 49 5731 786 50
Fax: + 49 5731 786 520
email: sales@casacare.de
www.casacare.de
Tel: +44 1928 573734
Fax: +44 1928 580694
email: enquiries@tablets2buy.com
www.tablets2buy.com
Manufacture and distribution of
pneumatic healthcare appliances
Tel: + 353 1 628 0571
Fax: + 353 1 628 0572
email: info@virtus.ie
ANNUAL REPORT AND ACCOUNTS 2001
75
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 76
Group Directory
Name and Registered Office Address
Principal Activity
Other Activities
DCC Foods Limited
DCC House, Stillorgan,
Blackrock, Co. Dublin,
Ireland
Robt. Roberts Limited
79 Broomhill Road,
Tallaght, Dublin 24,
Ireland
Holding and divisional management
company
Marketing and distribution of branded
food and beverage products
Kelkin Limited
Unit 1, Crosslands Industrial Park,
Marketing and distribution of branded
healthy foods
Ballymount Cross,
Dublin 12,
Ireland
Telephone/Fax/email
and website if applicable
Tel: + 353 1 2799 400
Fax: + 353 1 2831 017
email: foods@dcc.ie
www.dcc.ie
Tel: + 353 1 4047 300
Fax: + 353 1 4599 369
email: info@robt-roberts.ie
Tel: + 353 1 4600 400
Fax: + 353 1 4600 411
email: info@kelkin.ie
Broderick Holdings Limited
JFK Industrial Estate, Naas Road,
Marketing, distribution and service of
equipment for the food processing and
Tel: + 353 1 4509 083
Fax: + 353 1 4509 570
Dublin 12,
Ireland
SerCom Solutions Limited
Cloverhill Industrial Estate,
Clondalkin, Dublin 22,
Ireland
catering industries
email: broderickbros@eircom.net
Provision of manufacturing services to
the computer industry
Tel: + 353 1 405 6500
Fax: + 353 1 405 6555
email: info@sercomsolutions.com
www.sercomsolutions.com
All of 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, Distrilogie SA
incorporated and operating principally in France, DCC Energy (NI) Limited incorporated and operating principally
in Northern Ireland, DCC Shoprider Inc. incorporated and operating principally in the United States of America
and CasaCare GmbH & Co KG incorporated and operating principally in Germany.
A full list of subsidiary and associated undertakings will be annexed to the Annual Return of the Company to be
filed with the Irish Registrar of Companies.
76
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 77
Shareholder Analysis at 11 May 2001
Number
of accounts
% of
accounts
1 – 1,000
1,001 – 10,000
10,001 – 50,000
50,001 – 100,000
100,001 – 250,000
Over 250,000
Total
Share Price Data (€)
Year ended 31 March 2001
Year ended 31 March 2000
1,626
1,127
95
26
33
39
2,946
55.2
38.3
3.2
0.9
1.1
1.3
100.0
High
12.35
13.00
Shareholder Information
Number of
shares
867,038
3,055,114
2,176,395
1,888,070
5,350,526
72,234,216
85,571,359
% of
shares
1.0
3.6
2.5
2.2
6.3
84.4
100.0
Low
9.00
6.55
31 March
10.55
11.15
The market capitalisation of DCC plc at 31 March 2001 was €904 million (2000: €976 million) and at 11 May
2001 was €890 million (€10.40 per share).
Website
DCC’s website address is www.dcc.ie.
DCC’s website provides comprehensive corporate and financial information to the investment community
and other interested parties. It incorporates a variety of useful features which enable users to access and
analyse current and archived financial data, download this and archived annual reports, register for news and
other announcements and view interactive audio and video investor presentations.
Investor Relations
For investor enquiries please contact:
Conor Costigan,
Investor Relations Manager,
DCC plc, DCC House,
Brewery Road, Stillorgan, Co. Dublin, Ireland.
Tel: +353 1 2799 400.
Fax: +353 1 2831 018.
email: investorrelations@dcc.ie
Registrar
Administrative enquiries about the holding of DCC shares should be directed in the first instance to the
Company’s Registrar:
Computershare Investor Services (Ireland) Limited,
Heron House, Corrig Road,
Sandyford Industrial Estate,
Dublin 18, Ireland.
Tel: +353 1 2163 100.
Fax: +353 1 2163 151.
email: web.queries@computershare.ie
ANNUAL REPORT AND ACCOUNTS 2001
77
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 78
Shareholder Information
Amalgamation of Accounts
Shareholders who receive duplicate sets of Company mailings owing to multiple accounts in their names
should write to the Company’s Registrar to have their accounts amalgamated.
Dividends
Shareholders are offered the option of having dividends paid in euro or pounds sterling. Shareholders may
also elect to receive dividend payments either by cheque or by electronic funds transfer directly into their
bank accounts. Shareholders should contact the Company’s Registrar for details.
Dividend Withholding Tax ("DWT")
The Company is obliged to deduct tax at the standard rate of income tax in Ireland (currently 20%) from
dividends paid to its shareholders, unless a particular shareholder is entitled to an exemption from DWT and
has completed and returned to the Company’s Registrar a declaration form claiming entitlement to the
particular exemption. Exemption from DWT may be available to shareholders resident in another EU
Member State, or in a country with which the Republic of Ireland has a double taxation agreement in place,
and to certain non-individual shareholders resident in Ireland (e.g. companies, pension funds, charities).
An explanatory leaflet entitled "Dividend Withholding Tax Information Leaflet" has been published by the
Irish Revenue Commissioners and can be obtained by contacting the Company’s Registrar. This leaflet can
also be downloaded from the Irish Revenue Commissioners website at
http://www.revenue.ie/pdf/dwtinfv2.pdf. Declaration forms for claiming an exemption are available from the
Company’s Registrar.
Annual General Meeting
The Annual General Meeting will be held at the Burlington Hotel, Upper Leeson Street, Dublin 4 on Friday 6
July 2001 at 11.00 a.m. 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.
Share Listings
DCC’s shares are traded on the Irish Stock Exchange (symbol: DCC.I) and the London Stock Exchange
(symbol: DCC.L). DCC’s shares are quoted on the official lists of both the Irish Stock Exchange and the UK
Listing Authority.
Financial Calendar
Preliminary results announced
Ex-dividend date for the final dividend
Record date for the final dividend
Annual Report posted
Annual General Meeting
Proposed final dividend payment date
Interim results announced
Payment date for the interim dividend
14 May 2001
23 May 2001
25 May 2001
7 June 2001
6 July 2001
10 July 2001
early November 2001
early December 2001
78
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 79
Solicitors
William Fry
Fitzwilton House
Wilton Place
Dublin 2
Stockbrokers
Davy Stockbrokers
49 Dawson Street
Dublin 2
Cazenove
12 Tokenhouse Yard
London EC2R 7AN
Auditors
PricewaterhouseCoopers
Chartered Accountants
& Registered Auditors
Wilton Place
Dublin 2
Corporate Information
Registered and Head Office
DCC House
Stillorgan
Blackrock
Co. Dublin
Registrar and Transfer Office
Computershare Investor Services (Ireland) Limited
Heron House
Corrig Road
Sandyford Industrial Estate
Dublin 18
Bankers
ABN AMRO Bank
Allied Irish Banks
Bank of Ireland
IIB Bank
KBC Bank
Royal Bank of Scotland
Ulster Bank
ANNUAL REPORT AND ACCOUNTS 2001
79
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 80
Index
Page
Financial Review
20
Accounting Convention
Accounting Policies
Acquisitions
37
37
5
Five Year Summary and Key Ratios
1997 - 2001
Fixed Assets (note 17)
Inside Back Cover
Acquisitions of Subsidiary Undertakings (note 39) 69
Forward Contracts - currency and commodity
78
73
54
26
35
59
8
71
5
68
58
4
6
43
42
44
40
72
7
5,26
79
64
23,60
23,60
78
23,60
58
50,64
50,53
23,60
7
32
2
30
28
33
21
Annual General Meeting
Approval of Financial Statements (note 48)
Associated Undertakings (note 18)
Audit Committee
Auditors' Report
Bank and Other Debt (notes 23)
Best Practice
Capital Commitments (note 43)
Capital Expenditure
Capital Grants (note 38)
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 45)
Core Strengths and Values
Corporate Governance
Corporate Information
Creditors, Trade and Other (note 28)
Credit Risk Management
Commodity Price Risk Management
CREST
Currency Risk Management
Debtors (note 21)
Deferred Tax (note 30)
Depreciation
Derivative Financial Instruments (note 27)
Development Focus
Directors' and Company Secretary's Interests
Directors of the Company
Directors' Remuneration
Directors' Report
Directors' Share Options
Dividend Cover
Dividends (note 14)
Dividend Withholding Tax
Earnings Per Share (note 15)
Employee Information (note 4)
Euro
Exceptional Gains on Sale of Associated and
Subsidiary Undertakings (note 7)
Fair Value of Financial Instruments
Finance Leases (note 26)
Financial Assets (note 18)
Financial Calendar
Financial Highlights
Financial Strength
Going Concern
Goodwill
Group at a Glance
Group Directory
Growth Strategy
Health and Safety
Human Resources
Inside Front Flap
Interest Payable & Similar Charges (note 8)
Interest Rate Risk Management
Internal Control
Investor Relations
Information Technology
Minority Interests (note 12)
Net Cash/(Debt) (note 43)
Note of Historical Cost Profits
and Losses
Notes to the Financial Statements
Operating Cash Flow
Operating Lease Commitments (note 44)
Operating Profit - geographical split
Operating Reviews
IT (SerCom Distribution)
Energy
Healthcare
Other Activities
Pension and Similar Obligations (note 31)
Pensions - Directors
Provisions for Liabilities and Charges (note 29)
Quality and Best Practice
Reconciliation of Movements in Equity
Shareholders' Funds (note 36)
53
62
27
49,53
74
7
29
9
49
23,61
26
9,77
8
51
22,44,71
41
45
22,70
71
6
11
13
15
16
65
32
64
8
68
44
77
73
30
72
67
21
45
24
66
78
67
28,51
Reconciliation of Net Cash Flow to
78
52
48
29
49
62
60
54
78
Movement in Net Cash/(Debt)
Registrar
Related Party Transactions (note 47)
Remuneration Committee
Reporting Currency (note 46)
Reserves (note 34)
Return on Capital Employed (ROCE)
Segmental Information (note 1)
Senior Group and Subsidiary Company
Management
Share Capital (note 32)
Inside Front Cover
Share Listings
5
Share Premium (note 33)
80
ANNUAL REPORT AND ACCOUNTS 2001
DCC 2001 Accounts - Final 28/5/01 11:58 AM Page 81
Index
Share Price Data
Shareholder Information
Shareholders' Funds
Statement of Directors' Responsibilities
Statement of Total Recognised Gains and Losses
Stocks (note 20)
Subsidiary Undertakings (note 19)
Substantial Shareholdings
Taxation (note 11)
Treasury Policy and Management
Undrawn Bank Borrowing Facilities
77
77
68
34
41
57
57
28
50
23
63
Website
9,77
ANNUAL REPORT AND ACCOUNTS 2001
81