Judges Scientific plc
ANNUAL REPORT & ACCOUNTS 2012
CONTENTS
Consolidated financial statements
Chairman’s statement
Directors’ report
Independent auditor’s report
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
2 – 3
4 – 8
9
10
11
12
13
Notes to the consolidated financial statements
14 – 32
Parent company financial statements
Independent auditor’s report
Parent company balance sheet
34
35
Notes to the parent company financial statements
36 – 39
Company meetings
Notice of Annual General Meeting
40 – 41
Form of Proxy for the Annual General Meeting
43 – 44
Front Page: True Triaxial Apparatus
The True Triaxial Apparatus, as developed
by GDS Instruments, is a hydraulically
actuated soil testing device for applying
stress and strain to a brick shaped soil
specimen for geo-material strength
investigation.
The name 'True' Triaxial comes from the
fact that it allows the loading of the
sample in 3 axes (x, y and z), whereas
traditionally this type of apparatus can
only load independently in 2 axes
(y and z axes are effectively the same).
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Revenue and adjusted operating profit
Dec 2005
Dec 2006
Dec 2007
Dec 2008
Dec 2009
Dec 2010
Dec 2011
Dec 2012
Revenue Adjusted operating profit Adjusted operating profit as a percentage of revenue
Earnings, dividends and share price
Dec 2005
Dec 2006
Dec 2007
Dec 2008
Dec 2009
Dec 2010
Dec 2011
Dec 2012
Dividend per share Adjusted basic earnings per share Share price in pence at the end of the week
Adjusted net debt
Dec 2005
Dec 2006
Dec 2007
Dec 2008
Dec 2009
Dec 2010
Dec 2011
Dec 2012
Balance of net debt existing at previous year-end
Net debt arising in year from new acquisitions
Net debt as a percentage of Net Assets adjusted for derivatives
(shown under IFRS since transition on 1 Jan 2006)
25%
20%
15%
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CHAIRMAN’S STATEMENT
Group revenues for the financial year ended
31 December 2012 registered a 35% advance
from £20.8 million to £28.0 million.This
reflects organic growth of 7.5% and includes a
full year's contribution from Deben UK
Limited ("Deben") and a maiden contribution
from Global Digital Systems Limited ("GDS").
Profit before tax, exceptional items and
minorities, rose by 42% to a record
£5.6 million (2011: £3.9 million), with the
operating contribution of the businesses
owned as at 1 January 2011 growing by 12.9%.
Basic earnings per share, before exceptional
items, rose by one third, from 61.0p to 81.3p
despite the dilution caused by the placing and
the conversion of most of the Convertible
Redeemable shares. Fully diluted earnings per
share, before exceptional items, progressed
39.5% to 73.5p (2011: 52.7p).
Exceptional items include the amortisation of
intangible assets, acquisition expenses and tax
relief arising from the issue of shares to
employees.They also reflect the difference in
valuation from one year-end to the next of the
Convertible Redeemable shares, with the
strong progress in the Company's share price
during 2012 producing an accounting "loss" of
£1.6 million.Your Board regards this accounting
charge as unrelated to the Group's operating
performance and it is therefore treated as an
exceptional item. Conscious that this artificial
loss was an irritation for the investing
community, the Board proposed a resolution
to encourage premature conversion.This was
duly adopted at the last AGM and all but 4.2%
of the original Convertible Redeemable shares
were converted before the year-end. The
2012 IFRS results are thankfully the last ones
to be significantly affected by this accounting
oddity but, of course, exceptional items will
persist as long as the Group continues to
complete acquisitions.
Profit, including exceptional items but before
tax and minorities, amounted to £321,000
(2011: £2.9 million).After tax, this equates to a
basic loss per share, including exceptional
items, of 4.2p (2011: 45.2p earnings).The fully
diluted loss per share, after exceptional items,
amounted to 4.2p (2011: 42.9p earnings).
Corporate activity
On 6 March 2012, Deben completed the
purchase of the business of KE Developments
Limited ("KED"). KED designs and
manufactures accessories for electron
microscopes, addressing the same client base
as Deben.The purchase price will depend on
KED’s five year sales and will be capped at a
maximum of £340,000.The business was
integrated into Deben during the course of
2012 and is expected to contribute to Deben’s
profitability with effect from 2013.
Also on 6 March 2012, Judges acquired the
entire share capital of GDS for a cash
consideration of £7.65 million. GDS designs,
manufactures and sells instruments used to
test the physical properties of soil and rocks.
The acquisition was financed by an extension
of the facilities provided by Lloyds Bank. It is
appropriate to recognise the contribution of
Lloyds (and Bank of Scotland until their merger
into Lloyds) to the execution of our strategy
and we are grateful for this enduring
relationship that has persisted despite the
recent upheavals within the banking industry;
we believe that prudent lending to sensible
companies to finance profitable projects is
available from Lloyds.
In May, the Company restored its ability to
complete acquisitions by raising new equity of
£3.0 million (£2.8 million net of costs).The
placing comprised of 500,000 new Ordinary
shares priced at 600p and was almost three
times subscribed.The shares were placed to
existing and new institutional holders and to
some private investors.
Trading in 2012
Overall trading was positive in 2012,
particularly in the vacuum division and the
Group achieved a healthy growth in order
intake, sales, profit and cash generation.The
newly acquired businesses operated in line
with management expectations, with a good
performance at GDS, including buoyant order
intake towards the end of the year. The Group
has continued to focus on the updating of its
product range.
As expected, the acquisition of GDS, because
of its size and the purchase multiple paid,
slightly reduced the Company’s Return On
Total Invested Capital which eased from 46.2%
to 40.3%.The mechanical impact of this large
transaction was mitigated by the positive
operating performance of GDS and the
remainder of the Group.
Planning permission was obtained to develop
the Stonecross site in Laughton, beyond the
Judges Chairman, Alex Hambro
The Group has now completed
its first decade and has been
engaged in the design and
manufacture of scientific
instruments for seven and a half
years. It gives me much pleasure
to be able to report record
revenues and profits for the
seventh consecutive year.
2
area available at the time of its purchase, and
construction is now under way. On completion
in 2013, the businesses of UHV Design and of
both Quorum locations will be consolidated
into one factory, allowing us to improve
Quorum’s operations and profitability. UHV
Design will benefit from the additional space it
has been lacking following its rapid growth of
recent years.
incorporation will amount to 46.4p, almost
half of the 95p invested by the original
shareholders at the time of the flotation in
January 2003.
The proposed final dividend will be payable on
5 July 2013 to shareholders on the register on
7 June 2013 and the shares will go ex-dividend
on 5 June 2013.
Financial position
Net debt as at 31 December 2012 stood
at £2.0 million; excluding subordinated
amounts owed to minority shareholders but
including amounts still owed in respect of
acquisitions, net debt stood at £1.75 million
(2011: £0.73 million).The £8.0 million net debt
taken on to purchase GDS was eroded by
operating cash flow of £4.7 million and the
£2.8 million proceeds from the placing (net of
costs). Capital investment increased to £0.9
million primarily due to spending on the new
Laughton factory; this will accelerate in 2013
and the asset will, on completion, be partially
refinanced by Lloyds.
Year-end cash balances progressed from
£4.0 million to £5.4 million.
Although a significant proportion of our debt
is denominated in US dollars and Euros in
order to hedge our contractual foreign
currency exposure, the strength of Sterling
during 2012 led to an adverse variance in our
gross profit margins against budget.At the
conclusion of the financial year we elected to
hedge our 2013 budgeted margins through the
utilisation of currency options and forward
sales contracts. Should the downward trend
in Sterling witnessed during the early months
of 2013 continue, these measures will
attenuate the unbudgeted gain that would
otherwise accrue.
Dividends
Your Board is pleased to recommend a final
dividend of 10.0p per share (2011: 6.7p per
share) which, subject to approval at the
forthcoming Annual General Meeting on
29 May 2013, will make a total distribution of
15.0p per share for 2012 (2011: 10.0p per
share). Despite the proposed increase, the
dividend total is still covered more than five
times by adjusted earnings per share. If the
proposed dividend is approved, the total of all
dividends paid by the Company since its
Share Incentive Plan
During 2012, the Company launched a Share
Incentive Plan ("SIP") to enable all employees
with a minimum of 12 months' service to
purchase shares in a tax efficient manner up to
a value of £1,500 per annum, commencing in
April 2012. In the SIP’s first tax year, the
Company matched, pound-for-pound, individual
employees' investments of up to £600 and this
will be repeated in 2013/2014.This scheme
provides an opportunity for employees, who
work hard to support the Group's progress, to
have a share in the value that they help to
create.The Board is pleased that 67 Group
employees, approximately one-third of eligible
staff, have elected to participate in the SIP and
it is particularly gratifying that the early
participants have already benefited from the
momentum in the Company’s share price.
As ever, we are grateful to our employees for
their ingenuity and hard work which has
contributed so decisively to the results that we
are able to announce this year.
Current trading and prospects
The global economic background may well
show some improvement in 2013.Trading
conditions in Europe are lacklustre rather than
dire, there are plausible grounds for
anticipating some recovery in the US but the
onus for significant growth still lies essentially
with the developing nations.With Sterling
retreating from its 2012 gains, our export-
dominated sector, resilient at the worst of
times, may enjoy a more benign trading
environment than in the recent past.The new
year has started well for the Group and a solid
order intake is buttressing the visibility
afforded by the satisfactory year-end backlog.
Alex Hambro
Chairman
Date: 21 March 2013
3
DIRECTORS’ REPORT
The directors present their report and financial statements for the
year ended 31 December 2012.
Principal activities
The company is the parent of a trading group involved in the design
and manufacture of scientific instruments.
Business review
The group’s activities continued to show resilience in 2012 despite
the economic difficulties afflicting large parts of the global economy
and the slowing pace of economic growth even in the more buoyant
economies. On a like-for-like basis, increases were seen in 2012 in
both revenues and profits.
In addition to this organic growth, both
Deben UK Limited ("Deben", in which a 51% interest was acquired in
March 2011) and Global Digital Systems Limited ("GDS", which was
acquired in March 2012) performed fully in line with expectations.
This combination of organic growth and earnings enhancement
through acquisitions fuelled a 33% increase in earnings per share
(undiluted, excluding exceptional items), following a 35% increase the
year before.
A significant proportion of group output is sold to customers
financed directly or indirectly by the public sector, albeit in a
diversified portfolio of regions and countries. The immediate future
holds challenges for the group’s businesses as governments in many
parts of the developed world continue to struggle to bring public
sector debt and spending under control. Movements in exchange
rates also influence international competitiveness and trading margins.
In this context, the modest strengthening of Sterling during 2012
against both the US dollar and the Euro has had some dampening
effect on profitability; as a result, the Directors have extended the
group’s currency hedging arrangements to afford some protection for
2013, albeit that the early part of the current year has seen greater
volatility and a weakening trend in Sterling.
In addition to the dilution
The company’s business model calls for a steady increase in the scope
of its operations, achieved both through acquisitions of companies
operating in its chosen field of activity and through the ongoing
performance of its established subsidiaries.
of head office costs that results from acquisitions, the company
closely monitors the return it derives on the capital invested in its
subsidiaries. The annual rate of return on total invested capital
("ROTIC") is computed monthly, both overall and in respect of each
subsidiary, by comparing attributable earnings excluding exceptional
items and before interest, tax and amortisation ("EBITA") with the
investment in property, plant and equipment, goodwill and other
In 2011 the
intangibles and net current assets (excluding cash).
overall return computed in this manner amounted to 46.2%.
Inevitably, when a material acquisition is made, the overall group
ROTIC is diluted, given the profit multiples that such businesses
command. This was the case in 2012, following the acquisition of
GDS. Taking this into account, the directors view the 2012 ROTIC of
40.3% with satisfaction.
• Acquisitions: on 6 March 2012, the company acquired the
entire issued share capital of GDS, a company which designs,
manufactures and sells instruments used to test the physical
properties of soil and rocks. Also on 6 March 2012, the
company’s 51%-owned subsidiary, Deben UK Limited, completed
the acquisition of the trade and certain assets of KE
Developments Limited. Further details of these transactions are
set out in notes 31 and 32. The trading performance of these
two acquisitions has been entirely satisfactory.
paramount that acquisitions are completed only when the
directors are satisfied that the target business has sound long-
term strength.
It is regarded as
• Ongoing performance: the directors regard the trend of
earnings per share (excluding exceptional items), reduction in net
debt and the company’s ability to pay dividends to its
shareholders as key indicators of overall group performance.
Undiluted earnings per share (excluding exceptional items) rose
from 61.0p in 2011 to 81.3p in 2012; the directors consider
undiluted earnings to be a better measure than diluted because,
under current accounting standards, volatility in the share price
affects the latter in a way that is not necessarily correlated with
the company’s performance. Net debt increased from £1,227,000
at 31 December 2011 to £2,000,000 at 31 December 2012,
reflecting the acquisition of GDS, as described below. Dividends
totalling 15.0p per share (2011: 10.0p) will be recommended in
respect of 2012 (including those that have already been paid at
the interim stage).
These are covered 2.4 times by earnings excluding the derivative
charge (2011: 5.4 times) and 5.4 times (2011: 6.1 times) by
earnings adjusted as set out in note 13, despite the proposed 50%
increase in the dividend.
• Revenue trends
• The Materials Sciences group: growth on a like-for-like
basis was modest in the year but the acquisition of GDS had
a major impact on the revenues of this division, which as a
result rose by 58.4% in comparison with 2011.
• The Vacuum group: revenues rose by 19.5%, driven by
strong growth at Quorum Technologies Limited ("Quorum")
and the impact of a full year’s trading at Deben.
Profitability
The group’s operating profit margin (excluding exceptional items)
progressed from 19.9% in 2011 to 21.2% in 2012.
Cash generation and management
Cash generated from operations amounted to £6,360,000
(2011: £4,750,000). This benefited from a material increase in profits
before exceptional items and in particular before the charge relating
to the amortisation of intangible assets (largely arising from the GDS
acquisition) which did not represent an operating cash flow item in
the year.
The investment in the GDS acquisition resulted in an outflow (net of
inherited cash) of £6,644,000, financed by bank loans and existing
cash resources. Subsequent to the acquisition, the company
4
conducted a £3 million share placing (£2.8 million net of costs) with
the aim of restoring the group’s financial capacity to complete further
acquisitions. Consolidated net debt at 31 December 2012 amounted
to £2,000,000, a level considered by the directors to reflect
encouraging financial strength in the context of the size of the group’s
earnings and balance sheet.
Commercial risks and uncertainties
The group’s customers are located in all parts of the globe and a
major part of sales is to enterprises that are state-owned or closely
tied to state spending. Accordingly, the prevailing uncertainties in the
world economy, and particularly the borrowing constraints currently
affecting many western nations, represent a risk to the group’s
prospects.
to possible adverse impacts on the international competitiveness of
their activities caused by fluctuations in exchange rates. The group
seeks, so far as is practicable, to mitigate these currency effects, as set
out in note 29.
In addition, the group’s exporting subsidiaries are exposed
An important element of the group’s business model is development
through acquisition; the group is exposed to the risk of an
insufficient availability of target companies of requisite quality and to
the risk that an acquired company does not meet its expected
profitability. The group manages this risk by maintaining relationships
with organisations that market appropriate targets and by performing
detailed research into potential acquisitions.
Across all the group’s activities lies the exposure to human resource
shortages. This reflects the small niche-serving nature of the group’s
businesses and the impracticality at this stage of the group’s
development of providing significant back-up support in respect of
key roles.
The principal drivers of the individual segments within the group,
together with their individual commercial risks and uncertainties, are
as follows:
•
•
The Materials Sciences group supplies measurement equipment
across both public and private sectors. The principal risks relate
to the degree of funding available to public-sector customers.
Sales to the private sector into industries with a history of
cyclicality are at risk of periodic downturns in activity. Overall,
the long-term growth of the business is supported by the
development of safety regulations internationally and by the
globalisation of trade, as well as by maintaining a strong global
presence;
It is continuing to benefit from the buoyancy of the
The Vacuum group designs and manufactures instruments to
prepare samples for examination in electron microscopes and to
create motion, heating and cooling within ultra high vacuum
chambers.
high-tech markets which it serves, though the directors consider
that there is scope to improve the division’s output and market
share through technical innovation and increased production
capability. The division is engaged in a high level of development
work, with the attendant risk of technical failure or delays. The
directors seek to mitigate this risk through the quality of the
division’s technical skills base and through its contractual
arrangements with its customers. The degree of funding available
to its public-sector customer base also represents a risk.
Financial risk management objectives and policies
The group utilises financial instruments, other than derivatives (see
note 28), comprising borrowings, cash and cash equivalents and
various other items such as trade receivables and payables that arise
directly from its operations. The main purpose of these financial
instruments is to raise finance for the group's operations. The main
risks arising from the group’s financial instruments relate to interest
rates, liquidity, credit and foreign currency exposure. The directors
review and agree policies for managing each of these risks, which are
described and evaluated in more detail in note 29 and which are
summarised below. Except as stated, the policies have remained
unchanged from previous years.
1.
Interest rate risk
The group finances its operations through a mixture of bank
borrowings, equity and retained profits. With net debt of just
£1,503,000 at 31 December 2012 (excluding £497,000 of
subordinated loans which do not bear interest), exposure to
interest rate fluctuations is not considered to be a major threat
to the group; however, the group’s loans are subject to interest
rate hedges, as described in note 29.
2. Liquidity risk
The group seeks to manage liquidity risk by ensuring that
sufficient funds are available to meet foreseeable needs and to
invest cash assets safely and profitably. Primarily this is achieved
through loans arranged at group level. Short term flexibility is
achieved through the availability of overdraft facilities and through
the significant cash balances that the group currently holds.
3. Credit risk
The group reviews the credit risk relating to its customers by
ensuring, wherever possible, that it deals with long established
trading partners, agents and government / university backed
bodies, where the risk of default is considered low. Where
considered appropriate, the group insists on up-front payment
and requires letters of credit to be provided.
4. Currency risk
With exports representing a significant proportion of its sales, the
main risk area to which the group is exposed is that of foreign
currencies (principally US$ and Euros). The group adopts a
strategy to hedge against this risk by maintaining a proportion of
its bank loans in these currencies, although this does not
represent a hedge under IAS 39. The directors review the value
of this economic hedge on a regular basis. There remains,
nevertheless, an ongoing threat to the group’s competitive
position in international markets from any sustained period of
Sterling strength. During 2012 and for the first time, the group
entered into a number of forward and option contracts in both
US$ and Euros maturing in the subsequent year; these were
aimed at protecting the ensuing year’s competitive position and
margins from adverse currency movements.
5
The directors have a reasonable expectation that the parent company
and the group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to
adopt the going concern basis in preparing the annual report and
accounts.
Results and dividends
The results for the financial year to 31 December 2012 are set out
in the Consolidated Statement of Comprehensive Income. The
company paid an interim dividend of 5.0p per Ordinary share on
2 November 2012. At the forthcoming Annual General Meeting, the
directors will recommend payment of a final dividend for the year of
10.0p per Ordinary share to be paid on Friday 5 July 2013 to
shareholders on the register on Friday 7 June 2013.The shares will
go ex-dividend on Wednesday 5 June 2013.
Directors
The following directors have held office during the year:
Hon AR Hambro1 - non-executive
Mr DE Cicurel
Mr D Barnbrook
Mr RL Cohen
Mr RJ Elman1 - non-executive
Mr GC Reece1 - non-executive
1 Member of the audit and remuneration committees
Directors' interests
The directors' interests in the Ordinary shares of the company were
as stated below :
Ordinary of 5p each
Hon AR Hambro
Mr DE Cicurel
Mr D Barnbrook
Mr RL Cohen
Mr RJ Elman
Mr GC Reece
31 December 2012 1 January 2012
Shares
110,000
916,236
22,248
50,755
82,429
-
Options
-
-
50,000
43,100
-
-
Shares
100,000
538,841
15,000
15,000
75,791
3,000
Options
-
-
55,000
72,000
-
-
Dividends paid in the year to directors who hold shares amounted to
£108,000 in aggregate (2011: £57,000).
Details of share options and Share Incentive Plan purchases by
directors are set out in note 24.
5. Price risk
The conversion terms of the Convertible Redeemable shares give
rise to a derivative financial instrument, which is affected by
fluctuations in the company’s Ordinary share price. As described
in note 25, the great majority of the Convertible Redeemable
shares were converted or redeemed during 2012, which will all
but eliminate this risk for 2013 and subsequent years.
6. Cash flow risk
The group manages its cash flow through a mixture of working
capital, bank borrowings, equity and retained profits. With net
debt at 31 December 2012 of just £2,000,000 and cash and cash
equivalents of £5,418,000, the group’s cash position is considered
to be one of its key strengths.
Capital management objectives
The group monitors capital on the basis of the carrying amount of
equity, less cash and cash equivalents as presented on the face of the
balance sheet.The directors manage the capital structure and make
adjustments to it in the light of changes in economic conditions and
the risk characteristics of the underlying assets. In order to maintain
its capital structure the group may adjust the amount of dividends
paid to shareholders, issue new shares or sell assets to reduce debt.
The directors seek to maintain a conservative gearing position (16%
at 31 December 2012, 2011: 17%) as they utilise bank funding to
support their acquisition strategy.
In pursuance of this policy, the
directors concluded that the group’s borrowing capacity had been
stretched by the purchase of GDS to a point where further
acquisition activity would be compromised; as a result, a £3 million
placing of new shares was successfully completed in May 2012,
thereby restoring the group’s ability to complete further acquisitions.
The directors’ capital management objectives are to ensure the
group’s ability to continue as a going concern and to provide an
adequate return to shareholders. The parent and subsidiary
companies’ boards meet regularly to review performance and discuss
future opportunities and threats with the aim of optimising
sustainable returns and minimising risk.
Going concern
The consolidated financial statements have been prepared on a going
concern basis. The directors have taken note of guidance issued by
the Financial Reporting Council on Going Concern Assessments in
determining that this is the appropriate basis of preparation of the
financial statements. The group’s principal operating companies
experienced a strong trading environment in 2012 and overall the
group enjoys good visibility for 2013, albeit that the global economic
environment remains uncertain. The directors consider the financial
position of the group to be healthy, with cash balances at 31
December 2012 in excess of £5.4 million and net debt of just
£2,000,000. As a consequence, the directors believe that the parent
company and the group are well placed to manage their business
risks successfully despite the uncertainties surrounding the current
economic outlook.
6
In addition to the above holdings of Ordinary shares, the following
directors had interests in the Convertible Redeemable share capital
of the company:
Convertible Redeemable of 1p each (quarter-paid)
1 January 2012
Shares
31 December 2012
Shares
In order to encourage holders to convert these shares before their
final maturity date on 31 December 2014, a resolution was passed at
the 2012 Annual General Meeting to open a short window of
opportunity during which holders would be able to redeem part or
all of their shares at a discount of 15% to their theoretical conversion
value. The majority of these shares were converted or redeemed
during the remainder of the year as a result of this change.
Hon AR Hambro
Mr DE Cicurel
Mr D Barnbrook
Mr RL Cohen
Mr RJ Elman
-
-
-
-
208,333
468,751
3,439,641
52,083
52,083
260,416
The conversion terms of the Convertible Redeemable shares and
movements in the year are detailed in note 25. Following a full
conversion of the remaining Convertible Redeemable shares to
Ordinary shares, the directors’ interests in the enlarged share capital
of the company as at 31 December 2012 would have been as follows:
Hon AR Hambro
Mr DE Cicurel
Mr D Barnbrook
Mr RL Cohen
Mr RJ Elman
Mr GC Reece
Ordinary Shares
110,000
916,236
22,248
50,755
109,125
-
Directors' remuneration
The remuneration paid to or receivable by each person who served as a director during the year was as follows:
Non Executive Directors
Hon AR Hambro
Mr RJ Elman
Mr GC Reece
Executive Directors
Mr DE Cicurel
Mr D Barnbrook
Mr RL Cohen
Total
Base
salary/fees
Performance
related bonus
£000
£000
Contribution
to pension
schemes
£000
Benefits
£000
25
15
20
135
116
124
435
-
-
-
27
23
24
74
-
-
-
-
6
1
7
-
-
-
4
12
5
21
2012
Total
£000
25
15
20
166
157
154
537
During 2012 two directors exercised share options as disclosed under note 24.
2011
Total
£000
25
15
20
153
148
141
502
7
During 2012, five directors converted and/or redeemed some or all of
their holdings of Convertible Redeemable shares. Under current tax
law, conversions of these shares are considered to give rise to deemed
"remuneration", the amounts of which were as follows:
Hon AR Hambro
Mr RJ Elman
Mr DE Cicurel
Mr D Barnbrook
Mr RL Cohen
2012
Total
£000
38
8
313
8
8
2011
Total
£000
-
-
-
-
-
Payment policy
The group’s policy is to agree terms and conditions with suppliers
before business takes place and to pay agreed invoices in accordance
with the terms of payment. Trade creditor days of the company at the
end of the year represented 22 days (2011: 18 days).
Directors' responsibilities
The directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements
for each financial year. Under that law the directors have elected to
prepare the parent company financial statements in accordance with
United Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice) and the consolidated financial
statements in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRSs). Under company
law the directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of
affairs and of the profit or loss of the company and the group for
that period.
and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
In so far as each of the directors is aware:
•
•
there is no relevant audit information of which the company's
auditor is unaware; and
the directors have taken all steps that they ought to have taken to
make themselves aware of any relevant audit information and to
establish that the auditor is aware of that information.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the company's
website.
countries and legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Information published on the website is accessible in many
Corporate governance
The directors have established an audit committee and a remuneration
committee with formally delegated duties and responsibilities. The
members of both committees are the non-executive directors.
The audit committee determines the terms of engagement of the
company’s auditor and, in consultation with the company’s auditor, the
scope of the audit. The audit committee has unrestricted access to
the company’s auditor. The remuneration committee has delegated
authority to determine the scale and structure of the executive
directors’ remuneration and the terms of their service contracts. The
remuneration of the non-executive directors is determined by the
board as a whole.
Auditor
Grant Thornton UK LLP have expressed willingness to continue in
office.
In accordance with section 489(4) of the Companies Act 2006,
a resolution to reappoint Grant Thornton UK LLP will be proposed at
the Annual General Meeting.
In preparing these financial statements, the directors are required to:
On behalf of the board
RL Cohen
Director and Company Secretary
Judges Scientific plc
Company registration number: 4597315
21 March 2013
select suitable accounting policies and then apply them consistently
•
• make judgements and accounting estimates that are reasonable
•
•
and prudent
state whether applicable UK Accounting Standards or IFRSs have
been followed, subject to any material departures disclosed and
explained in the financial statements
prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the company’s transactions and
disclose with reasonable accuracy at any time the financial position of
the company and the group and enable them to ensure that the
financial statements comply with the Companies Act 2006.They are
also responsible for safeguarding the assets of the company and group
8
INDEPENDENT AUDITOR’S
REPORT
We have audited the consolidated financial statements of Judges
Scientific plc for the year ended 31 December 2012 which comprise
the consolidated statement of comprehensive income, the
consolidated balance sheet, the consolidated statement of changes in
equity, the consolidated cash flow statement and notes 1 to 32. The
financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them
in an auditor's report and for no other purpose.To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body, for
our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the statement of directors’ responsibilities,
the directors are responsible for the preparation of the consolidated
financial statements and for being satisfied that they give a true and fair
view. Our responsibility is to audit and express an opinion on the
consolidated financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland).Those standards
require us to comply with the Auditing Practices Board’s (APB’s)
Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is
provided on the APB's website at
www.frc.org.uk/apb/scope/private.cfm
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion the information given in the Directors' Report for the
financial year for which the consolidated financial statements are
prepared is consistent with the consolidated financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where
the Companies Act 2006 requires us to report to you if, in our
opinion:
•
certain disclosures of directors’ remuneration specified by law are
not made; or
• we have not received all the information and explanations we
require for our audit.
Other matter
We have reported separately on the parent company
financial statements of Judges Scientific plc for the year ended
31 December 2012.
Paul Houghton
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
East Midlands
21 March 2013
Opinion on financial statements
In our opinion the consolidated financial statements:
•
give a true and fair view of the state of the group's affairs as at 31
December 2012 and of its loss for the year then ended;
have been properly prepared in accordance with IFRS as adopted
by the European Union; and
have been prepared in accordance with the requirements of the
Companies Act 2006
•
•
9
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Note
Before)
exceptional)
items)
£000)
Exceptional)
items)
2012)
Total)
£000)
£000)
Before)
exceptional)
items)
£000)
Exceptional)
items)
2011)
Total)
£000)
£000)
Revenue
Operating costs excluding exceptional items
Operating profit excluding exceptional items
Exceptional items
Amortisation of intangible assets
Net insurance recovery
Charge relating to derivative financial instruments
Acquisition costs
7
8
16
25
31/32
28,041)
(22,097)
5,944)
-)
-)
-)
28,041)
20,810)
(22,097)
(16,677)
5,944)
4,133)
-)
-)
-)
-)
-)
-)
-)
(3,294)
-)
(1,573)
(444)
(3,294)
-)
(1,573)
(444)
-)
-)
-)
-)
(1,155)
596)
(304)
(196)
20,810)
(16,677)
4,133)
(1,155)
596)
(304)
(196)
633)
7)
(319)
321)
(452)
(131)
(200)
69)
4,133)
(1,059)
3,074)
7)
(195)
-)
-)
7)
(195)
3,945)
(1,059)
2,886)
(1,017)
2,928)
2,588)
340)
61.0p)
52.7p)
210)
(849)
(668)
(181)
-)
-)
(807)
2,079)
1,920)
159)
45.2p)
42.9p)
(4,087)
(374)
-)
-)
(4.2)p)
(4.2)p)
Operating profit/(loss)
Interest receivable
Interest payable
Profit/(loss) before tax
Taxation
5,944)
(5,311)
10
10
7)
(319)
-)
-)
5,632)
(5,311)
11
(1,302)
850)
Profit/(loss) and total comprehensive income for the year
4,330)
(4,461)
Attributable to:
Equity holders of the parent company
Non-controlling interest
Earnings per share – total and continuing
Basic
Diluted
3,887)
443)
81.3p)
73.5p)
13
13
There are no items of other comprehensive income for the two years in question.
The accompanying notes form an integral part of these consolidated financial statements.
10
CONSOLIDATED BALANCE SHEET
ASSETS
Non-current assets
Property, plant and equipment
Goodwill
Other intangible assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Derivative financial instruments
Payables relating to acquisitions
Current portion of long-term borrowings
Current tax payable
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Total liabilities
Net assets
EQUITY
Share capital
Share premium account
Capital redemption reserve
Merger reserve
Retained earnings
Equity attributable to equity holders of the parent company
Non-controlling interest
Total equity
Note
14
15
16
17
18
19
25
20
21
23
24
2012)
£000)
2,702)
5,809)
7,095)
15,606)
3,529)
3,988)
5,418)
12,935)
28,541)
(5,659)
(234)
(246)
(2,028)
(633)
(8,800)
(5,390)
(1,562)
(6,952)
(15,752)
12,789)
265)
6,467)
22)
475)
5,254)
12,483)
306)
12,789)
The accompanying notes form an integral part of these consolidated financial statements.
The financial statements were approved by the board on 21 March 2013
D.E. Cicurel
Director
R.L. Cohen
Director
2011)
£000)
1,940)
5,316)
2,133)
9,389)
2,052)
3,674)
3,954)
9,680)
19,069)
(3,465)
(1,739)
-)
(1,762)
(851)
(7,817)
(3,419)
(122)
(3,541)
(11,358)
7,711)
214)
3,195)
3)
475)
3,489)
7,376)
335)
7,711)
11
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
Capital
Share
Share
capital premium redemption
reserve
£000
£000
£000
Merger Retained
earnings
reserve
Total*
£000
£000)
£000)
Non-
controlling
interest
£000)
Total)
equity)
£000)
214
3,195
-
-
51
3,272
-
-
51
3,272
-
-
-
-
3
-
-
19
19
-
-
475
3,489)
7,376)
335)
7,711)
-
-
-
-
-
-
(587)
(587)
(98)
(685)
-)
3,323)
2,552)
2,571)
-)
-)
3,323)
2,571)
1,965)
5,307)
(98)
5,209)
(200)
(200)
(200)
(200)
69)
69)
(131)
(131)
265
6,467
22
475
5,254)
12,483)
306)
12,789)
209
3,092
-
5
-
5
-
-
-
103
-
103
-
-
-
-
-
3
3
-
-
3
475
1,606)
5,382)
249)
5,631)
-
-
-
-
-
-
(351)
(351)
(73)
(424)
-)
314)
108)
317)
-)
-)
108)
317)
(37)
74)
(73)
1)
1,920)
1,920)
159)
2,079)
1,920)
1,920)
159)
2,079)
475
3,489)
7,376)
335)
7,711)
Note
12
24
25
12
24
25
Balance at 1 January 2012
Dividends
Issue of share capital
Arising on conversion and redemption of Convertible
Redeemable shares
Transactions with owners
(Loss)/profit for the year
Total comprehensive income for the year
Balance at 31 December 2012
Balance at 1 January 2011
Dividends
Issue of share capital
Arising on conversion and redemption of Convertible
Redeemable shares
Transactions with owners
Profit for the year
Total comprehensive income for the year
Balance at 31 December 2011
214
3,195
* - Total represents amounts attributable to equity holders of the parent company.
The accompanying notes form an integral part of these consolidated financial statements.
12
CONSOLIDATED CASH FLOW
STATEMENT
Cash flows from operating activities
(Loss)/profit after tax
Adjustments for:
Charge relating to derivative financial instruments
Depreciation
Amortisation of intangible assets
Foreign exchange (gain)/loss on foreign currency loans
Interest receivable
Interest payable
Tax expense recognised in income statement
(Increase)/decrease in inventories
Decrease/(increase) in trade and other receivables
Increase in trade and other payables
Cash generated from operations
Interest paid
Tax paid
Net cash from operating activities
Cash flows from investing activities
Paid on acquisition of new subsidiary
Gross cash inherited on acquisition
Acquisition of subsidiaries, net of cash acquired
Paid on the acquisition of trade and certain assets
Purchase of property, plant and equipment
Interest received
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Repaid on conversion/redemption of Convertible Redeemable shares
Repayments of borrowings
Proceeds from bank loans
Issue of loan notes
Dividends paid – equity share holders
Dividends paid – non-controlling interest in subsidiary
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The accompanying notes form an integral part of these consolidated financial statements.
2012)
£000)
(131)
1,573)
235)
3,294)
(78)
(7)
319)
452)
(581)
277)
1,007)
6,360)
(324)
(1,374)
4,662)
(8,022)
1,378)
(6,644)
(94)
(909)
7)
(7,640)
3,323)
(516)
(3,155)
5,475)
-)
(587)
(98)
4,442)
1,464)
3,954)
5,418)
2011)
£000)
2,079)
304)
170)
1,155)
3)
(7)
195)
807)
220)
(577)
401)
4,750)
(190)
(1,136)
3,424)
(4,622)
1,655)
(2,967)
-)
(579)
7)
(3,539)
108)
(1)
(1,075)
2,422)
497)
(351)
(73)
1,527)
1,412)
2,542)
3,954)
13
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1. General information
5. Changes in accounting policies
Judges Scientific plc is the ultimate parent company of the
group, whose principal activities comprise the design,
manufacture and sale of scientific instruments.
5.1 Standards adopted for the first time
No new standards have been adopted during the year.
2.
Registered office
The address of the registered office and principal place of
business of Judges Scientific plc is Unit 19, Charlwoods Road,
East Grinstead,West Sussex RH19 2HL.
3. Basis of accounting
The consolidated financial statements have been prepared under
the historical cost convention except for certain financial
instruments which are carried at fair value.
Being listed on the Alternative Investment Market of the
London Stock Exchange, the company is required to present its
consolidated financial statements in accordance with
International Financial Reporting Standards (IFRS) as
adopted by the European Union. Accordingly, these financial
statements have been prepared in accordance with the
accounting policies set out below which are based on the IFRS
in issue as adopted by the European Union (EU) and in effect at
31 December 2012.
4. Use of accounting estimates and judgements
Many of the amounts included in the consolidated financial
statements involve the use of judgement and/or estimation.
These judgements and estimates are based on management’s
best knowledge of the relevant facts and circumstances, having
regard to prior experience, but actual results may differ from
the amounts included in the consolidated financial statements.
Information about such judgements and estimation is contained
in the accounting policies and/or the notes to the consolidated
financial statements and the key areas are summarised below:
Judgements in applying accounting policies:
•
the directors must judge whether all of the conditions
required for revenues to be recognised in the income
statement of the financial year, as set out in note 6.4
below, have been met;
Sources of estimation uncertainty:
•
depreciation rates are based on estimates of the useful
lives and residual values of the assets involved (see note
6.6);
estimates of future profitability are required for the
decision whether or not to create a deferred tax asset
(see note 23);
estimates are required as to intangible asset carrying
values, their useful lives and goodwill impairment charges.
These are assessed by reference to budgeted profits and
cash flows for future periods for the relevant income
generating units and an estimate of their values in use (see
notes 15 and 16);
warranty provisions are based on estimates of the likely
cost of repairing or replacing faulty units.
•
•
•
14
5.2 Standards, amendments and interpretations to existing
Standards that are not yet effective
At the date of authorisation of these consolidated financial
statements, certain new standards, amendments and
interpretations to existing standards have been published
but are not yet effective, and have not been adopted early by
the group.
Management anticipates that all of the pronouncements will
be adopted in the group's accounting policies for the first
period beginning after the effective date of the pronouncement.
None of these new standards, amendments and interpretations
are expected to have a significant impact on the group's
financial statements.
IFRS 9 Financial Instruments (effective 1 January 2015)
IFRS 10 Consolidated Financial Statements
(effective 1 January 2013)
IFRS 12 Disclosure of Interests in Other Entities
(effective 1 January 2013)
IFRS 13 Fair Value Measurement (effective 1 January 2013)
IAS 27 (Revised), Separate Financial Statements
(effective 1 January 2013)
Presentation of Items of Other Comprehensive Income
- Amendments to IAS 1 (effective 1 July 2012)
Disclosures - Offsetting Financial Assets and Financial Liabilities
- Amendments to IFRS 7 (effective 1 January 2013)
Offsetting Financial Assets and Financial Liabilities
- Amendments to IAS 32 (effective 1 January 2014)
Mandatory Effective Date and Transition Disclosures
- Amendments to IFRS 9 and IFRS 7 (effective 1 January 2015)
Annual Improvements 2009-2011 Cycle
(effective 1 January 2013)
Transition Guidance – Amendments to IFRS 10, IFRS 11 and
IFRS 12 (effective 1 January 2013)
6. Accounting policies
6.1 Basis of consolidation
The consolidated financial statements include those of the
parent company and its subsidiaries, all drawn up to
31 December 2012. Subsidiaries are entities over which the
group has the power to control the financial and operating
policies so as to obtain benefits from their activities. The group
obtains and exercises control through voting rights.
Income,
expenditure, unrealised gains and intra-group balances arising
from transactions within the group are eliminated. Unrealised
losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred. Amounts
reported in the financial statements of subsidiaries have been
adjusted where necessary to ensure consistency with the
accounting policies adopted by the group.
Acquisitions of subsidiaries are dealt with by the acquisition
method.The acquisition method involves the recognition at fair
value of all identifiable assets and liabilities, including contingent
liabilities of the subsidiary, at the acquisition date, regardless of
whether or not they were recorded in the financial statements
In the case of acquisitions
of the subsidiary prior to acquisition.
after 31 December 2005, goodwill is stated after separating out
identifiable intangible assets. Goodwill represents the excess of
acquisition cost over the fair value of the group's share of the
identifiable net assets of the acquired subsidiary at the date of
acquisition. Acquisition-related transaction costs are recorded
as an expense in the income statement.
The parent company is entitled to the merger relief that was
offered by section 131 of the Companies Act 1985 in respect of
the fair value of the consideration received in excess of the
nominal value of the equity shares issued in connection with the
acquisition of Fire Testing Technology Limited and UHV Design
Limited.
6.2 Business combinations completed prior to the date of
transition to IFRS
The group has elected not to apply IFRS 3 Business
Combinations retrospectively to business combinations prior to
the date of transition to IFRS on 1 January 2006. Accordingly
the classification of the combination (acquisition, reverse
acquisition or merger) remains unchanged from that used under
UK GAAP. Assets and liabilities are recognised at the date of
transition if they would be recognised under IFRS, and are
measured using their UK GAAP carrying amounts immediately
post-acquisition as deemed cost under IFRS, unless IFRS
requires fair value measurement. Amounts recorded as goodwill
under UK GAAP have not been re-assessed to identify
intangible assets. Deferred tax and minority interest are
adjusted for the impact of any consequential adjustments after
taking advantage of the transitional provisions.
6.3 Goodwill
Goodwill, representing the excess of the cost of acquisition
over the fair value of the group’s share of the identifiable net
assets acquired, is capitalised and reviewed annually for
impairment. Goodwill is carried at cost less accumulated
impairment losses. Negative goodwill (where the fair value of
net assets acquired exceeds the purchase price) is recognised
immediately after acquisition in the income statement.
The carrying value of negative goodwill at the date of transition
has been credited to reserves. There is no re-instatement of
goodwill or negative goodwill that was amortised prior to
transition to IFRS.
6.4 Revenue
Revenue is measured by reference to the fair value of
consideration received or receivable by the group, excluding
Value Added Tax, and is recognised when all the following
conditions have been satisfied:
•
sales of instruments and spares are recognised on point of
despatch to the customer;
income from services such as installation, support, training
or consultancy is recognised when the service is
performed;
the amount of revenue and the costs incurred or to be
incurred in respect of the transaction can be measured
reliably; and
it is probable that the economic benefits associated with
the transaction will flow to the group.
•
•
•
Interest income is recognised using the effective interest
method which calculates the amortised cost of a financial asset
and allocates the interest income over the relevant period.
Dividend income is recognised when the shareholder’s right to
receive payment is established.
6.5 Intangible assets acquired as part of a business
combination
In accordance with IFRS 3 Business Combinations, an intangible
asset acquired in a business combination is deemed to have a
cost to the group of its fair value at the acquisition date. The
fair value of the intangible asset reflects market expectations
about the probability that the future economic benefits
embodied in the asset will flow to the group.
Amortisation charges are included as adjusting items in
operating costs in the income statement. Amortisation begins
when the intangible asset is first available for use and is
provided at rates calculated to write off the cost of each
intangible asset over its expected useful life, as follows:
Customer relationships
Non-competition agreements
Distribution agreements
Research and development
Sales order backlog
Brand and domain names
3 years
2 years
Between 2 and 5 years
5 years
On shipment
Between 1 and 5 years
Subsequent to initial recognition, intangible assets are
stated at deemed cost less accumulated amortisation and
impairment charges.
6.6 Property, plant and equipment
Property, plant and equipment is stated at cost, net of
depreciation and any provision for impairment.
Disposal of assets: the gain or loss arising on the disposal of an
asset is determined as the difference between the disposal
proceeds and the carrying amount of the asset and is
recognised in the income statement.
15
Depreciation: Depreciation is provided at annual rates
calculated to write off the cost less residual value of each asset
over its expected useful life, within the following ranges:
• Property:
2% straight-line on cost of buildings
(excluding the estimated cost of land)
• Plant and machinery: 15% on written down value to 25%
• Fixtures, fittings and
equipment:
• Motor vehicles:
• Building
improvements:
straight-line on cost
15% on written down value to 33%
straight-line on cost
25% on written down value to 25%
straight-line on cost
over the minimum life of the
lease
Material residual value estimates and expected useful lives are
updated as required but at least annually.
6.7 Impairment testing of goodwill, other intangible assets
and property, plant and equipment
For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are largely independent cash
inflows (cash-generating units). As a result, some assets are
tested individually for impairment and some are tested at cash-
generating unit level. Goodwill is allocated to those cash-
generating units that are expected to benefit from synergies of
the related business combination and represent the lowest level
within the group at which management monitors goodwill.
Cash-generating units to which goodwill has been allocated are
tested for impairment at least annually. All other individual
assets or cash-generating units are tested whenever events or
changes in circumstances indicate that the carrying amount may
not be recoverable.
An impairment loss is recognised for the amount by which the
asset’s or cash-generating unit’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of
fair value, reflecting market conditions less costs to sell, and
value in use based on estimated future cash flows from each
cash-generating unit, discounted at a suitable rate in order to
calculate the present value of those cash flows. The data used
for impairment testing procedures is directly linked to the
group’s latest approved budgets, adjusted as necessary to
exclude any future restructuring to which the group is not yet
committed. Discount rates are determined individually for each
cash-generating unit and reflect their respective risk profiles as
assessed by the directors.
Impairment losses for cash-generating units reduce first the
carrying amount of any goodwill allocated to that cash-
generating unit. Any remaining impairment loss is charged pro
rata to the other assets in the cash-generating unit. With the
exception of goodwill, all assets are subsequently reassessed for
indications that an impairment loss previously recognised may
no longer exist.
Impairment charges are included in operating
costs in the income statement. An impairment charge that has
been recognised is reversed if the cash-generating unit’s
recoverable amount exceeds its carrying amount.
6.8 Leases
For finance leases, in accordance with IAS 17, the economic
ownership of a leased asset is transferred to the lessee if the
lessee bears substantially all the risks and rewards related to the
ownership of the leased asset. The related asset is recognised
as an asset in the balance sheet at the time of inception of the
lease at the fair value of the leased asset or, if lower, the present
value of the minimum lease payments plus incidental payments, if
any, to be borne by the lessee. A corresponding amount is
recognised as a finance lease liability. The interest element of
leasing payments represents a constant proportion of the capital
balance outstanding and is charged to the income statement
over the period of the lease.
All other leases are regarded as operating leases and the
payments made under them are charged to the income
statement on a straight line basis over the period of the lease
term. Lease incentives are spread over the term of the lease.
6.9 Inventories
Inventories are stated at the lower of cost and net realisable
value. Costs of ordinarily interchangeable items are assigned
using the first-in, first-out cost formula. Cost includes materials,
direct labour and an attributable proportion of manufacturing
overheads based on normal levels of activity.
6.10 Taxation
Current tax is the tax currently payable based on taxable profit
for the year.
Deferred taxes are calculated using the liability method on
temporary differences. Deferred tax is generally provided on
the difference between the carrying amounts of assets and
liabilities and their tax bases. However, deferred tax is not
provided on the initial recognition of goodwill, nor on the initial
recognition of an asset or liability unless the related transaction
is a business combination or affects tax or accounting profit.
Deferred tax on temporary differences associated with shares in
subsidiaries is not provided if reversal of those temporary
differences can be controlled by the group and it is probable
that reversal will not occur in the foreseeable future.
addition, tax losses available to be carried forward as well as
other income tax credits to the group are assessed for
recognition as deferred tax assets.
In
Deferred tax liabilities are provided in full, with no discounting.
Deferred tax assets are recognised to the extent that it is
probable that the underlying deductible temporary differences
will be able to be offset against future taxable income. Current
and deferred tax assets and liabilities are calculated at tax rates
that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted
at the balance sheet date.
16
Changes in deferred tax assets or liabilities are recognised as a
component of tax expense in the income statement, except
where they relate to items that are charged or credited
•
directly to equity in which case the related deferred tax is
also charged or credited directly to equity, or
where items are recognised in other comprehensive
income, in which case the related deferred tax is
recognised in other comprehensive income.
•
6.11 Share-based payments
IFRS 2 has been applied, in accordance with IFRS 1 and
where the effect is material, to equity-settled share options
granted on or after 7 November 2002 and not vested prior
to 1 January 2006.
All goods and services received in exchange for the grant of any
share-based payment are measured at their fair values. Where
employees are rewarded using share-based payments, the fair
values of employees’ services are determined indirectly by
reference to the fair value of the instrument granted to the
employee. This fair value is appraised at the grant date and
excludes the impact of non-market vesting conditions.
All equity-settled share-based payments are ultimately
recognised as an expense in the income statement, with a
corresponding credit to "other reserve".
If vesting periods or other non-market vesting conditions apply,
the expense is allocated over the vesting period, based on the
best available estimate of the number of share options expected
to vest. Estimates are subsequently revised if there is any
indication that the number of share options expected to vest
differs from previous estimates. Any cumulative adjustment
prior to vesting is recognised in the current period. The impact
of the revision of the original estimates, if any, is recognised in
the income statement over the remaining vesting period, with a
corresponding adjustment to the appropriate reserve. No
adjustment is made to any expense recognised in prior periods
if share options ultimately exercised are different to that
estimated on vesting.
Upon exercise of share options, the proceeds received net of
attributable transaction costs are credited to share capital and,
where appropriate, share premium.
6.12 Financial assets
Financial assets (other than cash) are assigned to relevant
categories by management on initial recognition, depending on
the purpose for which they were acquired. At the balance sheet
date, the group held only loans and receivables.
All financial assets are recognised when the group becomes a
party to the contractual provisions of the instrument. Loans
and receivables are recognised initially at fair value plus
transaction costs.
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. Trade receivables are classified as loans and receivables.
Loans and receivables are measured subsequent to initial
recognition at amortised cost using the effective interest
method, less provision for impairment. Any change in their
value through impairment or reversal of impairment is
recognised in operating costs in the income statement.
Provision against trade and other receivables is made when
there is objective evidence that the group will not be able to
collect all amounts due to it in accordance with the original
terms of those receivables. The amount of the write-down is
determined as the difference between the asset's carrying
amount and the present value of estimated future cash flows,
discounted at the original effective interest rate.
A financial asset is derecognised only where the contractual
rights to the cash flows from the asset expire or the financial
asset is transferred and that transfer qualifies for derecognition.
A financial asset is transferred if the contractual rights to
receive the cash flows of the asset have been transferred or the
group retains the contractual rights to receive the cash flows of
the asset but assumes a contractual obligation to pay the cash
flows to one or more recipients. A financial asset that is
transferred qualifies for derecognition if the group transfers
substantially all the risks and rewards of ownership of the asset,
or if the group neither retains nor transfers substantially all the
risks and rewards of ownership but does transfer control of
that asset.
6.13 Financial liabilities
Financial liabilities are obligations to pay cash or other financial
assets and are recognised when the group becomes a party to
the contractual provisions of the instrument. Financial liabilities
are recorded initially at fair value net of direct issue costs if they
are not held at fair value through profit and loss. Derivatives
are recorded at fair value through profit or loss. The fair value
of derivative financial instruments is determined by reference to
active market transactions or using a valuation technique where
no active market exists.
All financial liabilities with the exception of Convertible
Redeemable shares (see paragraph 6.19), interest rate swaps,
foreign currency options and foreign currency contracts are
recorded at amortised cost using the effective interest method,
with interest-related charges recognised as an expense in
finance cost in the income statement. These financial liabilities
include trade and other payables and borrowings, including bank
loans, subordinated loans and hire purchase commitments.
Finance charges, including premiums payable on settlement or
redemption and direct issue costs, are charged to the income
statement on an accruals basis using the effective interest
method and are added to the carrying amount of the
instrument to the extent that they are not settled in the period
in which they arise.
17
Interest rate swaps, foreign currency options and foreign
currency contracts are treated as derivative financial
instruments and are accounted for at fair value through profit
and loss.
A financial liability is derecognised only when the obligation is
extinguished, that is, when the obligation is discharged or
cancelled or expires.
6.14 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits, together with other short-term, highly liquid
investments that are readily convertible into known amounts
of cash and which are subject to an insignificant risk of changes
in value.
6.15 Pensions
Companies in the group operate defined contribution pension
schemes for employees and directors.The assets of the schemes
are held by investment managers separately from those of the
group. The pension costs charged against profits are the
contributions payable to the schemes in respect of the
accounting period.
6.16 Foreign currencies
Transactions in foreign currencies are translated at the exchange
rate ruling at the date of the transaction. Monetary assets and
liabilities in foreign currencies are translated at the rates of
exchange ruling at the balance sheet date. Exchange differences
arising on the settlement of monetary items or on translating
monetary items at rates different from those at which they
were initially recorded are recognised in the income statement
in the period in which they arise.
•
•
•
"Retained earnings" represents retained profits and losses.
"Revaluation reserve" represents gains and losses due to
the revaluation of certain financial assets.
"Non-controlling interest" represents retained profits and
losses attributable to minority shareholders in subsidiary
companies.
6.19 Convertible Redeemable shares
Under the terms of IAS 39 Financial Instruments – Recognition
and Measurement, the Convertible Redeemable shares in the
company are deemed to represent a derivative financial
instrument. As such, it is a requirement that they be fair-valued
at each accounting date, with changes in fair-value being
recognised through profit and loss. The fair value is calculated
with reference to the market price of the company’s Ordinary
shares and the exercise price.
Financial Instruments: Presentation, on conversion the fair value
of the Convertible Redeemable shares converted is transferred
directly to equity.
In accordance with IAS 32
6.20 Exceptional items
Exceptional items are those which by their size or nature are
considered by the directors to be necessary to be disclosed
separately so as to inform users of the financial statements. The
fair value charge for the Convertible Redeemable shares (see
note 25) and the related deferred tax asset represent
accounting adjustments reflecting fluctuations in the company’s
share price rather than the underlying trading performance of
the group. As such the directors have concluded that they
should be treated as exceptional items for the purposes of
presenting results and earnings per share figures.
7.
Segment reporting
6.17 Dividends
7.1 Identification of reportable segments
Dividend distributions payable to equity shareholders are
included in trade and other payables when the dividends are
approved in general meeting but not paid prior to the balance
sheet date.
The group’s activities are predominantly in or in support of the
design and manufacture of scientific instruments. The group
operates two main business segments: the Materials Sciences
group and the Vacuum group.
6.18 Equity
Equity comprises the following:
•
"Share capital" represents the nominal value of equity
shares.
"Share premium" represents the excess over nominal value
of the fair value of consideration received for equity
shares, net of expenses of the share issue.
"Capital redemption reserve" represents amounts set aside
from retained earnings on conversion of Convertible
Redeemable shares equal to the reduction then arising in
the overall nominal value of share capital of all classes.
"Merger reserve" represents the fair value of the
consideration received in excess of the nominal value of
equity shares issued in connection with acquisitions where
the company has exercised entitlement to the merger
relief that was offered by section 131 of the Companies
Act 1985.
•
•
•
18
7.2 Management of operating segments
Each of the operating segments is managed independently, each
range of instruments having its individual requirements in terms
of design, manufacture and marketing.
7.3 Measurement policies
The results of operating segments are prepared by reference to
their contributions to group earnings before interest, tax and
exceptional items ("group EBITA"). This is stated before the
allocation of head office costs and after elimination of non-
controlling interest. Assets and liabilities directly attributable to
the activities of the operating segments are included in their
respective balance sheets; corporate assets and liabilities held
by the parent company are not allocated to subsidiaries.
7.4 Segment analysis
Segment analysis is as follows:
2012
Consolidated group revenues from external customers
Contributions to group EBITA
Depreciation
Amortisation of intangible assets
Segment assets
Segment liabilities
Intangible assets – goodwill
Other intangible assets
Additions to non-current assets
Materials Sciences
£000
12,949
3,448
72
2,184
6,141
3,180
5,157
5,802
8,740
2011
Materials Sciences
Consolidated group revenues from external customers
Contributions to group EBITA
Depreciation
Amortisation of intangible assets
Segment assets
Segment liabilities
Intangible assets – goodwill
Other intangible assets
Additions to non-current assets
£000
8,177
2,298
37
24
3,211
1,564
4,664
29
30
Vacuum
£000
15,092
2,700
155
1,110
6,273
5,764
652
1,293
174
Total
£000
28,041
6,148
227
3,294
12,414
8,944
5,809
7,095
8,914
Vacuum
£000
Total
£000
12,633
20,810
2,083
126
1,131
6,150
5,212
652
2,104
3,568
4,381
163
1,155
9,361
6,776
5,316
2,133
3,598
Segmental revenue is presented on the basis of the destination of the goods where known, failing which on the geographical location of
customers. Segment assets are based on the geographical location of assets.
United Kingdom (domicile)
Rest of Europe
United States/Canada
Rest of the world
Total
2012
Revenue
£000
Non-current
assets
£000
3,517
9,375
4,434
10,715
28,041
15,606
-
-
-
15,606
Revenue
£000
2,660
7,164
3,635
7,351
20,810
2011
Non-current
assets
£000
9,389
-
-
-
9,389
19
7.4 Segment analysis - continued
Reconciliations between totals presented by operating segment and the group’s consolidated figures are as follows:
Contribution to group EBITA
Total contribution to group EBITA
Expenses not allocated
Exceptional items
Net insurance recovery
Charge relating to derivative financial instruments
Amortisation of intangible assets
Acquisition costs attributable to group
Acquisition costs attributable to non-controlling interest
Acquisition costs expensed
Elimination of non-controlling interest adjustment in contribution to group EBITA
Operating profit after exceptional items
Interest receivable
Interest payable
Profit before tax
Depreciation
Total segment depreciation charge
Head office depreciation not allocated
Consolidated depreciation charge
Segment assets and liabilities
Total segment assets
Parent company assets (excluding corporation tax)
Assets eliminated on consolidation
Other assets – goodwill
Other assets - intangible assets
Net insurance recovery
Consolidated total assets
Total segment liabilities
Parent company liabilities
Derivative financial instruments
Liabilities eliminated on consolidation
Acquisition related loans
Other liabilities
Convertible Redeemable shares
Deferred tax
Consolidated total liabilities
2012)
£000)
6,148)
(806)
-)
(1,573)
(3,294)
(428)
(16)
(444)
602)
633)
7)
(319)
321)
227)
8)
235)
12,414)
5,667)
(2,444)
5,809)
7,095)
-)
28,541)
8,944)
5,578)
234)
(2,441)
1,316)
583)
1)
1,537)
15,752)
2011)
£000)
4,381)
(731)
596)
(304)
(1,155)
(110)
(86)
(196)
483)
3,074)
7)
(195)
2,886)
163)
7)
170)
9,361)
3,396)
(1,733)
5,316)
2,133)
596)
19,069)
6,776)
2,829)
1,739)
(1,722)
1,316)
320)
11)
89)
11,358)
Revenues are derived from the sales of manufactured products; revenues from installation and support services are not material. There are no major
customers which make up 10% or more of the group’s revenues.
Expenses not allocated comprise head office costs. Parent company assets include £562,000 (2011: £562,000) in respect of a freehold property partly let at
open market value to a member of the Materials Sciences segment.
20
8. Operating costs
11. Taxation
Raw materials and consumables
Other external charges
Staff costs
Depreciation
Other operating costs, excluding exceptional items
Charge relating to derivative financial instruments
Net insurance recovery
Amortisation of intangible assets
Acquisition costs
Total operating costs, including exceptional items
9. Operating profit
2012)
£000)
2011)
£000)
11,334)
3,424)
7,104)
235)
22,097)
1,573)
-)
3,294)
444)
27,408)
8,529)
2,433)
5,545)
170)
16,677)
304)
(596)
1,155)
196)
17,736)
2012)
£000)
2011)
£000)
Operating profit is stated after charging:
Fees payable to the company's auditor
for the audit of the company's annual accounts
20)
20)
Fees payable to the company's auditor for other services:
for the audit of the company's subsidiaries,
pursuant to legislation
for tax services
for corporate finance transactions
for all other services
Depreciation
Loss on foreign exchange
Amortisation of intangible assets
Operating lease rentals - land and property
Operating lease rentals - vehicles
10.
Interest receivable and payable
60)
17)
53)
6)
235)
147)
3,294)
270)
22)
51)
11)
28)
15)
170)
115)
1,155)
249)
24)
2012)
£000)
2011)
£000)
Interest receivable - short-term bank deposits
7)
7)
UK corporation tax at 24.5% (2011: 26.5%)
Current year
Prior years
Deferred tax - origination and reversal of
temporary differences:
Current year - excluding derivative
financial instruments
Current year - derivative financial instruments
Prior years
Tax on profit for the year - current year
Tax on profit for the year - prior years
Factors affecting the tax charge for the year:
Profit before tax
Profit before tax multiplied by standard rate of
UK corporation tax of 24.5% (2011 - 26.5%)
Carry back against prior year losses
Exercise of share options
Provisions and expenditure not deductible
for tax purposes
Derivative charge
Other differences
Change in the rate of corporation tax
Tax on profit for the year - current year
Tax on profit for the year - prior years
Total net taxation charge
2012)
£000)
2011)
£000)
1,099)
(95)
1,004)
1,168)
(44)
1,124)
(973)
426)
(547)
(5)
(552)
552)
(100)
452)
(363)
47)
(316)
(1)
(317)
852)
(45)
807)
321)
2,886)
76)
-)
(138)
60)
)
707)
3)
(156)
552)
(100)
452)
765)
(35)
-)
46)
88)
-)
(12)
852)
(45)
807)
12. Dividends
2012
2011
p/share
£000 p/share
£000
Interest payable - bank loans
Net interest payable
(319)
(195)
(312)
(188)
Final dividend for the previous year
Interim dividend for the current year
6.7
5.0
11.7
325
262
587
5.0
3.3
8.3
210
141
351
The directors will propose a final dividend of 10p per share,
amounting to £531,600, for payment on 5 July 2013. As this
remains conditional on shareholders’ approval, provision has not
been made in these consolidated financial statements.
Dividends declared by subsidiaries that are not wholly-owned are
paid to the non-controlling interest in the period in which they are
declared and amounted to £98,500 in the year (2011: £73,500).
21
13. Earnings per share
Options over Ordinary shares and rights of conversion of the
Convertible Redeemable shares are described in notes 24 and 25. The
calculation of basic earnings per share is derived from the earnings
attributable to Ordinary shareholders divided by the weighted average
number of shares in issue during the period. The calculation of diluted
earnings per share is derived from the basic earnings per share,
adjusted to allow for the issue of shares on the assumed conversion of
all dilutive options and other dilutive potential Ordinary shares in line
with the treasury method prescribed in IAS 33. This regards the
assumed proceeds from these instruments as having been received
from the issue of Ordinary shares at the average market price of
Ordinary shares during the period. The difference between the
number of Ordinary shares issued on the assumed exercise of the
dilutive options and the number of Ordinary shares that would have
been issued at the average market price of Ordinary shares during the
period is treated as an issue of Ordinary shares for no consideration,
and thus dilutive.
For the current year the number of shares for the calculation of
diluted earnings per share (including exceptional items) is the same as
the calculation of basic earnings per share (including exceptional items)
as the effect of exercise of potential shares would reduce the loss per
share and are therefore not dilutive under IAS 33.
Reconciliations of the earnings and the weighted average number of
shares used in the calculations are set out below:
Year to 31 December 2012
Earnings attributable to equity) Weighted average)
holders of the parent company) number of shares)
no.)
£000)
Earnings)
per share)
pence)
Loss after tax including exceptional items for calculation of basic and diluted earnings per share
Add-back exceptional items net of tax and non-controlling interest, as applicable:
Charge relating to derivative financial instruments
Tax relief on exercise of share options
Amortisation of intangible assets
Acquisition-related transactions costs
Utilisation of prior year tax losses
Basic and diluted profit after tax, excluding exceptional items
(200)
1,895)
(133)
1,972)
358)
(5)
3,887)
Number of shares for calculation of basic earnings per share including exceptional items
Effect of potential shares
Number of shares for calculation of diluted earnings per share including exceptional items
Dilutive effect of potential derivative financial instruments
Number of shares for calculation of diluted earnings per share excluding exceptional items
4,780,562)
209,208)
4,989,770)
299,106)
5,288,876)
Basic earnings per share (including exceptional items)
Diluted earnings per share (including exceptional items)
Basic earnings per share (excluding exceptional items)
Diluted earnings per share (excluding exceptional items)
Year to 31 December 2011
(4.2)
(4.2)
81.3)
73.5)
Earnings attributable to equity) Weighted average)
holders of the parent company) number of shares)
no.)
£000)
Earnings)
per share)
pence)
Profit after tax including exceptional items for calculation of basic and diluted earnings per share
Add-back exceptional items net of tax and non-controlling interest, as applicable:
Charge relating to derivative financial instruments
Net insurance recovery
Amortisation of intangible assets
Acquisition-related transactions costs
Utilisation of prior year tax losses
Basic and diluted profit after tax, excluding exceptional items
1,920)
351)
(224)
481)
95)
(35)
2,588)
Number of shares for calculation of basic earnings per share including exceptional items
Dilutive effect of potential shares
Number of shares for calculation of diluted earnings per share including exceptional items
Dilutive effect of potential derivative financial instruments
Number of shares for calculation of diluted earnings per share excluding exceptional items
4,243,571)
231,433)
4,475,004)
432,959)
4,907,963)
Basic earnings per share (including exceptional items)
Diluted earnings per share (including exceptional items)
Basic earnings per share (excluding exceptional items)
Diluted earnings per share (excluding exceptional items)
22
45.2)
42.9)
61.0)
52.7)
14. Property, plant and equipment
Cost / deemed cost
1 January 2011
Additions
Acquisitions
Disposals and reclassifications
31 December 2011
Additions
Acquisitions
31 December 2012
Depreciation
1 January 2011
Charge
Disposals and reclassifications
31 December 2011
Charge
31 December 2012
Net book value - 31 December 2012
Net book value – 31 December 2011
Plant &)
machinery)
£000)
Fixtures,)
fittings &)
equipment)
£000)
Motor
vehicles
£000
Property
& building
improvements
£000
476)
15)
23)
(48)
466)
167)
-)
633)
323)
61)
(47)
337)
65)
402)
231)
129)
324)
75)
-)
(23)
376)
196)
25)
597)
159)
64)
(14)
209)
97)
306)
291)
167)
67
-
28
-
95
13
-
108
24
23
-
47
28
75
33
48
658
489
534
-
1,681
573
23
2,277
63
22
-
85
45
130
2,147
1,596
Total)
£000)
1,525)
579)
585)
(71)
2,618)
949)
48)
3,615)
569)
170)
(61)
678)
235)
913)
2,702)
1,940)
Included in the net book value of property and building improvements at 31 December 2012 is £978,000 relating to the development, currently in progress,
of a new factory in Laughton, East Sussex. The remaining contractual commitment under this project, not provided for in these financial statements,
amounts to £2,000,000.
15. Goodwill
Cost
1 January
Addition in year
31 December
2012
£000
5,316
493
5,809
2011
£000
5,290
26
5,316
An analysis of goodwill by operating segment is given in note 7.
The increase in goodwill during 2012 related to the acquisition
of Global Digital Systems Limited.
There have been no impairment charges in either 2012 or 2011.
Goodwill is tested annually for impairment by reference to the
value in use of the relevant cash generating units, which are the
group’s operating segments. This is calculated on the basis of
projected cash flows for the following five years derived from
detailed budgets for the ensuing year based on past experience,
with subsequent years including modest nominal rates of sales
and cost growth of 3% per annum and generally steady gross
margins. The 3% long term growth rate takes into account both
UK and overseas markets. These cash flows are adjusted to
present day values at a discount rate based on a weighted
average cost of capital of 11.33% (2011: 12.24%) per annum,
calculated by reference to year-end data on equity values and
interest, dividend and tax rates. The long term growth rate and
discount rate is consistent for all segments on the basis that
they all operate in similar markets and are exposed to similar
risks. The residual value at the end of the five years, computed
by reference to projected year six cash flows and discounted, is
also included. There was no requirement for any impairment
provision at 31 December 2012.
The directors have considered the sensitivity of the key
assumptions and have concluded that any possible changes that
may be reasonably contemplated in these key assumptions
would not result in the value in use falling below the carrying
value of goodwill, given the amount of headroom available.
23
16. Other intangible assets
Gross carrying amount
1 January 2011
Additions
31 December 2011
Additions
31 December 2012
Amortisation and impairment
1 January 2011
Charge for the year
31 December 2011
Charge for the year
31 December 2012
Carrying amount 31 December 2012
Carrying amount 31 December 2011
Non- Distribution
agreements
compete
agreement
£000
Research
and
development
£000
180
250
430
2,500
2,930
56
76
132
502
634
2,296
298
Sales order
backlog
£000
342
221
563
792
1,355
342
221
563
792
1,355
-
-
Brand and
domain
names
£000
Customer
relationships
Total
£000
£000
242
350
592
2,300
2,892
139
94
233
492
725
209
1,354
1,563
1,861
3,424
209
357
566
968
1,534
1,492
2,869
4,361
8,256
12,617
1,073
1,155
2,228
3,294
5,522
2,167
1,890
7,095
359
997
2,133
£000
496
220
716
803
1,519
305
219
524
302
826
693
192
23
474
497
-
497
22
188
210
238
448
49
287
An analysis of other intangible assets by business segment is given in note 7. The additions to other intangible assets during 2012 relate to the acquisitions
of Global Digital Systems Limited and certain assets and the trade of KE Developments Limited.
17.
Inventories
18. Trade and other receivables
Raw materials
Work in progress
Finished goods
2012
£000
2,499
857
173
2011
£000
1,573
469
10
3,529
2,052
Trade receivables
Prepayments and accrued income
Other receivables
2012
£000
3,370
325
293
2011
£000
2,343
205
1,126
3,988
3,674
In 2012, a total of £11,334,000 of inventories was included in
the income statement as an expense (2011: £8,529,000). This
includes an amount of £28,000 (2011: £198,000) resulting from
write-downs of inventories and an amount of £101,000
(2011: nil) which is the reversal of previous write-downs. The
carrying amount of inventories held at fair value less costs to
sell is £31,000 (2011: £12,000). All group inventories form part
of the assets pledged as security in respect of bank loans.
The carrying value of receivables, all of which are short-term, is
considered a reasonable approximation of fair value. All trade
and other receivables have been reviewed for impairment with
no material provision being required.
In addition, some of the unimpaired trade receivables were past
due at the balance sheet date as follows:
Not more than 3 months
More than 3 months but not more than 6 months
More than 6 months but not more than 1 year
Greater than one year
2012
£000
1,238
270
7
-
2011
£000
807
66
9
7
1,515
889
24
19. Trade and other payables
22. Maturity of borrowings and net debt
Trade payables
Accruals and deferred income
Social security and other taxes
Other payables
2012
£000
3,286
1,554
256
563
2011
£000
1,466
1,367
261
371
5,659
3,465
All amounts are short-term and their carrying values are
considered reasonable approximations of fair value. Other
payables also include £521 (2011: £10,682) of non equity shares
classed as financial liabilities (see note 25).
20. Current portion of long-term borrowings
Bank loans
Subordinated loans
2012
£000
1,531
497
2011
£000
1,265
497
2,028
1,762
All amounts are short-term and their carrying values are
considered reasonable approximations of fair value.
The subordinated loans were advanced by minority shareholders
in Bordeaux Acquisition Limited. They are unsecured, interest free
and repayable at the discretion of that company.
21. Long-term borrowings
Bank loans
2012
£000
2011
£000
5,390
3,419
Borrowings comprise three bank loans and a mortgage secured
on assets of the group. The repayment profile of borrowings is
as set out in note 22:
•
The first loan is repayable in quarterly instalments over the
period ending 31 March 2017 and bears interest at 3.35%
above LIBOR-related rates.
The second loan is repayable in quarterly instalments with
a final payment in March 2016 and bears interest at 3.25%
above LIBOR-related rates.
The third loan is repayable in quarterly instalments over
the period ending 31 March 2019 and bears interest at
3.75% above LIBOR-related rates.
The mortgage is repayable in quarterly instalments over
the period ending 31 December 2016 with a final payment
in March 2017 and bears interest at 3.35% above LIBOR-
related rates.
•
•
•
31 December 2012
Bank Subordinated
loans
loan
£000
£000
Repayable in less than 6 months
Repayable in months 7 to 12
Current portion of long-term
borrowings
Repayable in years 1 to 5
Later than 5 years
Total borrowings
Less:
interest included above
cash and cash equivalents
Total net debt
31 December 2011
934
919
1,853
5,832
59
7,744
823
5,418
1,503
Repayable in less than 6 months
Repayable in months 7 to 12
Current portion of long-term
borrowings
Repayable in years 1 to 5
Later than 5 years
Total borrowings
Less:
interest included above
cash and cash equivalents
Total net debt
686
772
1,458
3,611
109
5,178
494
3,954
730
Bank Subordinated
loans
loan
£000
£000
-
-
823
5,418
497
2,000
Total
£000
1,431
919
2,350
5,832
59
8,241
Total
£000
1,183
772
1,955
3,611
109
5,675
497
-
497
-
-
497
497
-
497
-
-
497
-
-
494
3,954
497
1,227
A proportion of the group’s bank loans is drawn in foreign
currencies to provide a hedge against assets denominated in
those currencies. The Sterling equivalent at 31 December 2012
of loans denominated in US$ was £984,000 (2011: £772,000)
and in Euros was £1,460,000 (2011: £893,000). These amounts
are included in the figures above for bank loans, repayable in
years 1 to 5.
The group enters into derivative financial instruments in order
to manage its interest rate and foreign currency exposure. The
principal derivatives used include interest rate swaps, forward
foreign currency contracts and foreign currency options.
Further details are set out in note 29 below.
25
23. Deferred tax (liabilities)/assets
2012)
£000)
2011)
£000)
1 January
Acquisition in year – amount recognised
Acquisition in year – attributable to intangible assets
Credit to income statement in the year
Attributable to the derivative financial instruments
31 December
(122)
(3)
(1,989)
978)
(426)
(1,562)
Deferred tax balances relate to temporary
differences as follows:
Accelerated capital allowances
Provisions allowable for tax in subsequent period
Intangible assets
Attributable to the derivative financial instruments
Total
(25)
45)
(1,582)
-)
(1,562)
348)
(12)
(774)
363)
(47)
(122)
(35)
20)
(533)
426)
(122)
Amounts provided in respect of deferred tax are computed at
23% (2011: 25%).
The group had unrelieved tax losses at 31 December 2012 of
£173,000 (2011: £192,000). The ability to utilise these losses,
which reside in the parent company, is significantly affected by
unpredictable factors. The group has therefore not recognised a
deferred tax asset (2012: £40,000; 2011: £48,000) in respect of
these losses as it cannot be considered probable that taxable
profits will be available in the near term against which they can
be utilised. However they are available to be offset against
future profits of the parent company.
24. Share capital
2012
£000
2011
£000
Allotted, called up and fully paid -
Ordinary shares of 5p each
1 January: 4,289,967 shares (2011: 4,180,242)
Placing of 500,000 new Ordinary shares at 600p/share
Exercise of share options: 89,900 shares (2011: 3,000)
Exercise of warrants to subscribe: nil (2011: 23,840 shares)
Conversion of Convertible Redeemable shares:
432,632 shares (2011: 82,885)
31 December: 5,312,499 shares (2011: 4,289,967)
214
25
4
-
22
265
209
-
-
1
4
214
Allotments of Ordinary shares in 2012 were made:
•
by way of the above placing on 10 May, when the share price
was 628.5p, with the aim of restoring the group’s financial
capacity to complete further acquisitions following the
purchase of Global Digital Systems Limited in March 2012;
26
•
•
to satisfy the exercise of 89,900 share options in aggregate on
7 occasions during the year when the share price was within
the range of 626.5p to 972.5p (2011: the exercise of 3,000
share options on 6 October 2011 when the share price was
405p); and
on the conversion of 2,907,870 Convertible Redeemable
shares into 377,229 Ordinary shares on 21 August 2012
when the Ordinary share price was 750.0p, the conversion of
78,102 Convertible Redeemable shares into 10,000 Ordinary
shares on 28 August 2012 when the Ordinary share price
was also 750.0p and the conversion of 356,249 Convertible
Redeemable shares into 45,403 Ordinary shares on 4
December 2012 when the Ordinary share price was 947.5p.
Equity share options and warrants
At 31 December 2012, options had been granted and remained
outstanding in respect of 268,100 Ordinary shares in the company,
all priced by reference to the mid-market price of the shares on the
date of grant and all exercisable, following a 3-year vesting period,
between the third and tenth anniversaries of grant, as below:
2012 2011
Number)) Weighted Number) Weighted
average
exercise
price
p/share
average
exercise
price
p/share
2005 Approved Plan
211,350)
Outstanding at 1 January
10,000)
Granted in year
Exercised or lapsed in year
(80,900)
Outstanding at 31 December 140,450)
154.2
821.5
105.3
229.9
198,850)
25,500)
(13,000)
211,350)
112.1
472.4
133.5
154.2
Of which exercisable at
31 December
92,950)
104.8
129,450)
109.4
2005 Unapproved Plan
136,650)
Outstanding at 1 January
-)
Granted in year
Exercised or lapsed in year
(9,000)
Outstanding at 31 December 127,650)
180.9
-
107.2
186.1
108,150)
28,500)
-)
136,650)
104.7
470.0
-
180.9
Of which exercisable at
31 December
99,150)
104.5
92,550)
106.8
Total
348,000)
Outstanding at 1 January
10,000)
Granted in year
Exercised or lapsed in year
(89,900)
Outstanding at 31 December 268,100)
164.7
821.5
105.4
209.1
307,000)
54,000)
(13,000)
348,000)
109.5
471.1
133.5
164.7
Of which exercisable at
31 December
192,100)
104.6
222,000)
108.4
Exercise prices at 31 December 2012 ranged from 92p/share to
865.0p/share (2011: 92p/share to 470.0p/share), with a weighted
average remaining contractual life of 5.74 years (2011: 6.40 years).
24. Share capital - continued
Options were exercised during 2012 by two directors
(2011: nil) as follows:
Grant of options Market price on Mr D Barnbrook Mr R L Cohen
Number of shares
Convertible Redeemable shares
The conversion rights set out in note 25 would have resulted in
the issue of 26,696 Ordinary shares if conversion of all the
outstanding Convertible Redeemable shares had taken place on
31 December 2012.
date of exercise
per share
25. Convertible Redeemable shares classed as
financial liabilities
22 March 2006 at 103.5p
24 September 2007 at 94p
28 April 2008 at 124p
23 July 2009 at 92p
972.5p
647.5p
647.5p
870.0p
5,000
-
-
-
5,000
-
10,000
10,000
8,900
28,900
Options remain exercisable by two directors as follows:
Grant of options
Number of shares
Mr D Barnbrook
Mr R L Cohen
20 October 2005 at 101.5p
22 March 2006 at 103.5p
23 March 2007 at 106.5p
24 September 2007 at 94p
28 April 2008 at 124p
23 July 2009 at 92p
9 May 2011 at 470p
5,000
5,000
10,000
5,000
10,000
10,000
5,000
50,000
37,000
-
-
-
-
1,100
5,000
43,100
The market price of the company’s Ordinary shares on
31 December 2012 was 970.0p, the highest price during 2012
was 982.5p on 7 December, the lowest price during 2012 was
412.5p on 3 January and the price on 15 March 2013 was
1,135.0p.
In accordance with IFRS 2, a Black Scholes valuation model has
been used. This has indicated that no material expense is
required to be charged for the years ended 31 December 2012
and 31 December 2011. As such, no adjustment has been
made to either the consolidated or parent company
financial statements.
In at least the first two
During 2012, the group launched the Judges Scientific Share
Incentive Plan, enabling all eligible employees to invest in the
company’s shares in a tax-efficient way.
tax years of the scheme, the group is giving a free "matching
share" for every share purchased up to a maximum value of
£600 per employee per tax year. By 31 December 2012, a total
of 58 employees had participated in the scheme, purchasing
9,225 shares in total (including matching shares).
Included in
these figures, shares acquired by directors (including matching
shares) were 166 acquired by David Cicurel, 330 by David
Barnbrook and 217 by Ralph Cohen.
2012)
£000)
2011)
£000)
11)
Allotted – shares of 1p each
1 January 2012: 4,272,974 shares (2011: 5,000,000)
– all 1/4p paid
Paid up to 1p per share – 4,064,641 shares (2011: nil) 31)
Conversion into Ordinary shares: 3,342,221
(34)
shares (2011: 727,026) - see note 24
Redemption – 722,420 shares (2011: nil)
31 December 2012: 208,333 shares
(2011: 4,272,974) – all 1/4p paid
(7)
1)
12)
-)
(1)
-)
11)
At the Annual General Meeting in May 2012, shareholders
approved a resolution to amend the redemption rights attaching
to the Convertible Redeemable shares. As a result, a window of
opportunity was opened until 28 December 2012 during which
the holders could redeem for cash part or all of their
Convertible Redeemable shares at a 15% discount to their
theoretical conversion value. Following this change, 95% of the
shares outstanding on 1 January 2012 were redeemed or
converted into Ordinary shares, leaving just 208,333 outstanding
at 31 December 2012.
In accordance with IAS 32, Financial Instruments: Presentation,
the Convertible Redeemable shares are classified as financial
liabilities. Under the terms of IAS 39 Financial Instruments,
Recognition and Measurement, the conversion and redemption
feature within the Convertible Redeemable shares is deemed to
represent a derivative financial instrument. As such, it is a
requirement that they be fair-valued at each accounting date,
with changes in fair-value being recognised through the income
statement. The continuing increase in the market price of
the company’s Ordinary shares has correspondingly increased
the fair value of the Convertible Redeemable shares.
This has resulted in a £1,573,000 charge before tax
(£1,895,000 including related tax charge) in the year ended
31 December 2012 (2011: £304,000 charge before tax,
£351,000 including tax). Before 31 December 2012 the
majority of these Convertible Redeemable shares were
converted or redeemed. Reductions in the provision arising
on these redemptions and conversions into Ordinary shares
have been transferred directly to equity, with cash payments
arising on redemptions being charged against the provision.
The fair value liability at 31 December 2012 is £234,000
(2011: £1,739,000).
27
Under the Articles of Association the principal conditions attached to
the Convertible Redeemable shares are as follows:
26. Emoluments of directors and key
management personnel
•
•
•
•
•
There is no right to participate in the profits of the company.
On a winding up or other return of capital, any surplus assets
remaining after payment of liabilities shall be applied:
i)
ii)
Firstly in equally repaying the paid up capital on both the
Ordinary shares and the Convertible Redeemable shares;
Secondly in distributing the remainder amongst the holders
of the Ordinary shares according to the amounts paid up.
The holders of the Convertible Redeemable shares are not
entitled to attend or vote at General Meetings of the company
unless the meeting is to consider a resolution for the winding up
of the company.
The remaining Convertible Redeemable shares are convertible no
later than 31 December 2014 into such number of Ordinary
shares as would represent 0.5% of the company’s Ordinary share
capital as enlarged if all remaining Convertible Redeemable shares
had been converted at 31 December 2012 (2011: 10.26%); the
exercise price is 95p per Ordinary share less amounts already paid
on the Convertible Redeemable shares.
The holders of Convertible Redeemable shares shall (subject to the
provisions of the Companies Acts) be entitled at any time to
redeem all or any of the Convertible Redeemable shares
outstanding out of any profits or monies of the company which
may lawfully be applied for such purpose.
Executive directors
Non-executive directors
Total directors’ emoluments:
Emoluments
Defined contribution pension scheme contributions
Emoluments of the highest paid director:
Emoluments
2012
no.
2011
no.
3
3
6
3
3
6
£000
£000
530
7
537
490
12
502
166
153
During the year two directors participated in a defined contribution
pension scheme (2011: two)
Compensation of key management personnel
Emoluments, benefits, pension contributions
and social security costs
1,157
1,064
Short term employee benefits:
Salaries including bonuses and social security costs
Company car allowance and other benefits
Total short term employee benefits
1,062
49
1,111
980
41
1,021
Post-employment benefits:
Defined contribution pension plans
Total post-employment benefits:
Total remuneration
46
46
43
43
1,157
1,064
Key management personnel comprise directors of the parent
company and the managing directors of the principal operating
companies. The compensation of the non-executive directors of
the parent company is determined by the Board of directors as
a whole, that of the executive directors of the parent company
is determined by the Remuneration Committee of the Board
(comprising the non-executive directors) and that of the
managing directors of the principal operating companies is
determined by the group Chief Executive.
28
27. Employees
Number of employees
By function – manufacturing
By function – sales and administration
By business segment
Materials Sciences group
Vacuum group
head office (including 3 non-executive directors
in both years)
Employment costs
Wages and salaries
Social security costs
Pension costs
28. Financial instruments
2012
no.
2011
no.
89
87
176
87
81
8
71
64
135
55
72
8
176
135
2012
£000
6,261
671
172
7,104
2011
£000
4,879
521
145
5,545
The group’s policies on treasury management, capital
management objectives and financial instruments are given in
the directors’ report.
Fair value of financial instruments
Financial instruments include the borrowings set out in note 22.
The group enters into derivative financial instruments in order to
manage its interest rate and foreign currency exposure. The
principal derivatives used include interest rate swaps, forward
foreign currency contracts and foreign currency options. Material
changes in the carrying values of these instruments are
recognised in the income statement in the periods in which the
changes arise. All financial instruments denominated in foreign
currencies are translated at the rate of exchange ruling at the
balance sheet date. The directors believe that there is no
material difference between the book value and fair value of all
financial instruments.
Borrowing facilities
The group had an undrawn committed overdraft facility of
£3.8 million at 31 December 2012 (2011: £500,000).
Trade payables
All amounts are short-term (all payable within six months) and
their carrying values are considered reasonable approximations of
fair value. The values are set out in note 19.
Fair value hierarchy
The fair value hierarchy has the following levels:
•
Level 1:quoted prices (unadjusted) in active markets for
identical assets or liabilities
Level 2:inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (ie as prices) or indirectly (ie derived from prices)
Level 3:inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
•
•
The derivative financial instruments in respect of the Convertible
Redeemable shares are measured at fair value in accordance with
the fair value hierarchy and are classed as level 2.
Summary of financial assets and financial liabilities by category
Financial Assets
Trade and other receivables
Cash and cash equivalents
Loans and receivables
Financial Liabilities
Derivative financial instruments
Financial liabilities designated at fair value
through profit or loss
Trade payables
Accruals
Other payables
Trade and other payables relating to acquisitions
Current portion of long-term borrowings
Long-term borrowings
Financial liabilities measured at amortised cost
Total financial liabilities
Net financial liabilities
Non financial assets and financial liabilities not
within the scope of IAS 39
Property, plant and equipment
Goodwill
Other intangible assets
Inventories
Prepayments and accrued income
Social security and other taxes
Current tax payable
Deferred tax liabilities
Total equity
2012)
£000)
3,663)
5,418)
9,081)
2011)
£000)
3,469)
3,954)
7,423)
234)
234)
1,739)
1,739)
3,286)
1,554)
563)
246)
2,028)
5,390)
13,067)
1,466)
1,367)
371)
-)
1,762)
3,419)
8,385)
13,301)
10,124)
4,220)
2,701)
2,702)
5,809)
7,095)
3,529)
325)
(256)
(633)
(1,562)
17,009)
1,940)
5,316)
2,133)
2,052)
205)
(261)
(851)
(122)
10,412)
12,789)
7,711)
29
28. Financial instruments - continued
exposure and the converted bank loans, both translated into
Sterling at each date of measurement.
Financial assets
The group’s financial assets (which are summarised in note 29
– credit risk) comprise cash and cash equivalents and trade and
other receivables.
•
The amounts derived from these assets and included as
interest income in the income statement are £7,000
(2011: £7,000).
Cash and cash equivalents are principally denominated in
sterling and earn interest at floating rates.
There is no material difference between the book and fair
values of the financial assets.
At 31 December 2012 the group had trade
receivables denominated in foreign currency as follows:
US$ - £511,000 (2011: £217,000) and Euros - £472,000
(2011: £318,000).
•
•
•
Financial liabilities
The group's principal financial liabilities are bank loans, trade and
other payables, derivative financial instruments and Convertible
Redeemable shares classed as financial liabilities. The group also
holds interest rate swaps, forward foreign currency contracts
and foreign currency options:
•
•
The costs attributable to these liabilities and included as
interest expense in the income statement amounted to
£319,000 (2011: £195,000), as analysed in note 10. Foreign
exchange gains attributable to bank loans (see below) and
included as operating costs in the income statement
amounted to £78,000 (2011: loss £3,000); this
approximately equates to the foreign exchange gains arising
in the subsidiary companies whose currency exposure the
foreign exchange bank loans are designed to hedge.
A proportion of the bank loans are denominated in foreign
currencies to provide a hedge against currency risk on
group assets, as described in note 22.
29. Risk management objectives and policies
The group is exposed to market risks, arising predominantly from
currency exposure resulting from its export activities, interest
rate fluctuation on its loans and deposits and credit and liquidity
risks. Risk management strategies are co-ordinated by the board
of directors of the parent company.
Foreign currency sensitivity
The group exports a substantial proportion of its sales, frequently
denominated in foreign currencies (principally in US$ and Euros).
Exposure to currency rate fluctuations exists from the moment a
sales order is confirmed through to the time when the related
remittance is converted into Sterling. This exposure is computed
monthly (along with offsetting exposure on purchases, generally of
minimal amounts) and counter-balanced by the conversion of a
proportion of the group’s bank loans into equivalent foreign
currencies. The net exposure to risk is therefore substantially
reduced. Residual exposure is the difference between the net
.
30
31 December 2012
Sterling)
equivalent)
of US$)
£000)
Sterling)
equivalent)
of €)
£000)
Sterling loans denominated in foreign
currencies at year-end
Residual exposure at year-end – short
Impact on pre-tax profits of a 5%
variation in exchange rate on year-end
residual exposure
Impact on equity of a 5% variation
in exchange rate on year-end
residual exposure
984)
(108)
5)
4)
1,460)
(85)
4)
3)
31 December 2011
Sterling)
equivalent)
of US$)
£000)
Sterling)
equivalent)
of €)
£000)
Sterling loans denominated in foreign
currencies at year-end
Residual exposure at year-end – short
Impact on pre-tax profits of a 5%
variation in exchange rate on year-end
residual exposure
Impact on equity of a 5% variation
in exchange rate on year-end
residual exposure
772)
89)
4)
3)
893)
311)
15)
11)
Following approval of the 2013 budget, the group sought to
mitigate the impact of currency fluctuations on trading
performance in that year. This was achieved by entering into
forward exchange contracts to sell US$1.6 million and
€1.2 million and options to sell a further US$1.6 million and
€1.2 million, all at pre-determined exchange rates. The fair
value of these financial instruments was not material at
31 December 2012 and has therefore not been recognised in
these accounts.
Interest rate sensitivity
The group’s interest rate exposure arises in respect of its bank
loans, which are LIBOR-linked for interest rate purposes and its
surplus funds, which are bank base-rate-linked. During the year
the group also entered into an interest rate swap at a
pre-determined rate. The fair value of these financial
instruments was not material at 31 December 2012 and has
therefore not been recognised in these accounts. The group’s
sensitivity to interest rate changes is as follows:
needs, the group regularly compares its projected requirements
with available cash and borrowing facilities; the directors
continue to augment existing cash surpluses with overdraft
facilities amounting to £3.8 million at 31 December 2012
(31 December 2011: £500,000) none of which was outstanding
at either date.
The periods of maturity of the group’s borrowings are set
out in note 22. The maturity of all trade and other payables is
within the period of less than six months.
Price risk
Price risk exposure arises in respect of the value of the
derivative financial instrument which is affected by fluctuations
in the company’s share price. The group’s sensitivity to such
changes is as follows:
2012)
£000)
2011)
£000)
Operating profit including exceptional items
Impact on pre-tax profits of a 10% rise in share price
633)
(26)
3,074)
(227)
30. Operating lease commitments
Operating lease payments expensed during the year:
Land and property
Vehicles
Minimum operating lease commitments falling due:
Within one year – Land and property
Within one year – Vehicles
Between one and five years – Land and property
Between one and five years – Vehicles
2012
£000
2011
£000
270
22
292
275
22
297
346
53
399
249
24
273
199
14
213
224
25
249
Total commitment
696
462
Land and property leases represent operating sites leased at
East Grinstead, Laughton, Ashford, Ringmer,Wokingham and
Hook. The earliest exits from these leases fall during May 2016,
February 2014, March 2015, June 2013, December 2016 and
August 2014 respectively.
Unhedged bank loans outstanding at year-end
Impact on pre-tax profits of a 1% change in LIBOR
Impact on equity of a 1% change in LIBOR
Surplus funds at year-end
Impact on pre-tax profits of a 1% change in bank
base rates
Impact on equity of a 1% change in bank base rates
2012
£000
581
6
5
5,418
54
2011
£000
4,684
47
35
3.954
39
41
29
Credit risk
The group’s exposure to credit risk is limited to the carrying
amounts of financial assets recognised at the balance sheet date,
as follows:
Cash and cash equivalents
Trade and other receivables
2012
£000
5,418
3,663
9,081
2011
£000
3,954
3,469
7,423
The group reviews the credit risk relating to its customers by
ensuring wherever possible that it deals with long established
trading partners, and agents and government / university backed
bodies, where the risk of default is considered low. Where
considered appropriate, the group insists on up-front payment
and requires letters of credit to be provided. The directors
consider that all the group’s financial assets that are not
impaired at each of the reporting dates under review are of
good credit quality, including those that are past due (see note
18). None of the financial assets are secured by collateral or
other credit enhancements.
Group companies generally trade through overseas agents and
credit exposure to an individual agent can be significant at times.
At 31 December 2012, one counterparty owed more than 10%
of the group’s total trade and other receivables, being the China
agent of Fire Testing Technology Limited (11.9%) (2011: none).
The credit risk for liquid funds and other short-term financial
assets is considered small. The substantial majority of these
assets is deposited with Bank of Scotland, part of the Lloyds
Banking Group. The British Government holds a substantial
interest in this group.
Liquidity risk
The group’s longer-term financing needs, principally in respect of
business acquisitions, are satisfied by bank loans, with the
objective of servicing repayments from the cash flow arising
from the businesses acquired. Following the acquisition of
Global Digital Systems Limited in March 2012, the group raised
£2.8 million (net) through a placing of 500,000 new Ordinary
shares to restore its financial capacity to complete further
acquisitions in the future. For short and medium term financial
31
The figures described below include interest charges that have
been incurred by the company as a result of this acquisition.
The acquisition of GDS resulted in a profit after tax (before
exceptional items) attributable to equity holders of the parent
company of £853,000 in the 43 weeks from 6 March 2012 to
31 December 2012. After amortisation of intangible assets, the
contribution to the equity holders of the parent company’s
results amounted to a loss of £651,000 after tax.
If GDS had been acquired on 1 January 2012, based on
pro-forma 2011 results, revenue for the group for the period to
31 December 2012 would have increased by £873,000 and
profit after tax attributable to equity holders of the parent
company would have increased by £118,000 after allowing for
interest costs but before charging amortisation of intangible
assets (a reduction of £104,000 after charging additional
amortisation of intangible assets of £222,000).
32. Acquisition of certain assets and the trade of
KE Developments Limited
On 6 March 2012, the company’s indirect subsidiary, Deben UK
Limited ("Deben") acquired certain assets and the trade of KE
Developments Limited ("KED"), a company based in the UK.
KED was based in Toft, Cambridgeshire and, like Deben,
designs and manufactures accessories for electron microscopy.
Management transferred KED’s business operations to
Deben’s premises in Woolpit, Suffolk, and all of KED’s
employees were offered the opportunity to continue their
employment at Deben.
Deben purchased KED’s fixed assets for £40,000 being their fair
value and will make a contingent goodwill payment capped at
£300,000 based on the existing customer relationships, as
disclosed in note 16. The payment, spread over a period of five
years, will be determined by the sales of the business post
completion.
amounted to £82,000 before tax.
KED’s sales totalled £975,000 and normalised profit was around
break-even.
In the year to 31 December 2012 this goodwill
In the year to 30 June 2011,
Acquisition-related transaction costs charged in the income
statement amounted to £33,000.
31. Acquisition of Global Digital Systems Limited
On 6 March 2012 the company acquired the entire issued share
capital of Global Digital Systems Limited ("GDS"), a company
based in the UK. The total cost of acquisition, all of which was
paid in cash, includes the components stated below.
Consideration
Payment to vendors
Gross cash inherited on acquisition
Cash retained in the business
Payment to vendors in respect of surplus
working capital (paid in July 2012)
Total consideration transferred
Acquisition-related transaction costs charged
in the income statement
£000)
7,650)
1,378)
(1,006)
372)
8,022)
411)
The amounts recognised for each class of the acquiree’s assets,
liabilities and contingent liabilities at the acquisition date are
as follows:
Pre-)
acquisition)
carrying)
amount)
£000)
Property, plant and equipment
Intangible assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Deferred tax liabilities
Trade payables
Current tax liability
Total liabilities
Net identifiable assets
and liabilities
Goodwill arising on acquisition
Total cost of acquisition
48)
-)
896)
591)
1,378)
2,913)
(3)
(1,197)
(151)
(1,351)
1,562)
Adjustment)
to fair value)
£000)
-)
7,957)
-)
-)
-)
7,957)
(1,989)
-)
-)
(1,989)
5,968)
Recognised)
at)
acquisition)
date)
£000)
48)
7,957)
896)
591)
1,378)
10,870)
(1,992)
(1,197)
(151)
(3,340)
7,530)
492)
8,022)
The goodwill that arose on the combination can be attributed
to the profitability of GDS.
32
A scanning electron microscopy (SEM)
image showing red palm mites
preparing to mate. Prepared using a
Quorum Technologies cryo preparation
system in combination with an Hitachi
S-4700 SEM.
The smaller male positions itself under
the immature female and curls up it
posterior end for mating.
Image courtesy of Dr. Gary Bauchan
and Dr. Ronald Ochoa, USDA-ARS,
Beltsville, MD USA.
INDEPENDENT AUDITOR’S
REPORT
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where
the Companies Act 2006 requires us to report to you if, in our
opinion:
• adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
• the parent company financial statements are not in agreement with
the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are
not made; or
• we have not received all the information and explanations we
require for our audit.
Other matter
We have reported separately on the consolidated financial statements
of Judges Scientific plc for the year ended 31 December 2012.
Paul Houghton
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
East Midlands
21 March 2013
We have audited the parent company financial statements of Judges
Scientific plc for the year ended 31 December 2012 which comprise
the parent company balance sheet and notes 1 to 13.The financial
reporting framework that has been applied in their preparation is
applicable law and United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice).
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them
in an auditor's report and for no other purpose.To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members as a
body, for our audit work, for this report, or for the opinions we
have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors’
Responsibilities, the directors are responsible for the preparation of
the parent company financial statements and for being satisfied that
they give a true and fair view. Our responsibility is to audit and
express an opinion on the parent company financial statements in
accordance with applicable law and International Standards on
Auditing (UK and Ireland).Those standards require us to comply with
the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is
provided on the APB's website at
www.frc.org.uk/apb/scope/private.cfm
Opinion on financial statements
In our opinion the parent company financial statements:
• give a true and fair view of the state of the company's affairs as at
31 December 2012;
• have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the
Companies Act 2006.
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion the information given in the Directors' Report for the
financial year for which the financial statements are prepared is
consistent with the parent company financial statements.
34
PARENT COMPANY
BALANCE SHEET
Fixed assets
Tangible assets
Investments in subsidiaries
Current assets
Debtors
Cash in hand and at bank
Creditors: amounts falling due within one year
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after more than one year
Total net assets
Capital and reserves
Called up share capital
Share premium
Capital redemption reserve
Profit and loss account
Shareholders' funds
Note
3
4
5
6
7
9
10
10
10
10
2012)
£000)
1,540)
16,535)
18,075)
2,294)
1,838)
4,132)
(1,605)
2,527)
20,602)
(3,973)
16,629)
265)
6,467)
22)
9,875)
16,629)
2011)
£000)
1,016)
8,361)
9,377)
1,656)
724)
2,380)
(1,206)
1,174)
10,551)
(1,634)
8,917)
214)
3,195)
3)
5,505)
8,917)
In accordance with the exemptions permitted by section 408 of the Companies Act 2006, the profit and loss account of the parent company has not been
presented.
These parent company financial statements were approved by the board on 21 March 2013.
D.E. Cicurel
Director
R.L. Cohen
Director
35
NOTES TO THE PARENT COMPANY
FINANCIAL STATEMENTS
1. General information
These separate financial statements of the parent company
have been prepared under the historical cost convention and in
accordance with applicable United Kingdom Accounting
Standards.
2. Accounting policies
2.1 Tangible fixed assets
Property is stated at cost, net of depreciation and any provision
for impairment.
Depreciation is provided at annual rates calculated to write off
the cost less residual value of each asset over its expected
useful life at the following rate:
•
Property: 2% straight-line on cost of buildings (excluding
the estimated value of land).
2.2 Investments
All material equity-settled share-based payments are ultimately
recognised as an expense in the profit and loss account, with a
corresponding credit to "other reserve".
If vesting periods or other non-market vesting conditions apply,
the expense is allocated over the vesting period, based on the
best available estimate of the number of share options expected
to vest. Estimates are subsequently revised if there is any
indication that the number of share options expected to vest
differs from previous estimates. Any cumulative adjustment
prior to vesting is recognised in the current period. The impact
of the revision of the original estimates, if any, is recognised in
the profit and loss account over the remaining vesting period,
with a corresponding adjustment to the appropriate reserve.
No adjustment is made to any expense recognised in prior
periods if share options ultimately exercised are different to
that estimated on vesting. Upon exercise of share options, the
proceeds received net of attributable transaction costs are
credited to share capital and, where appropriate, share premium.
Fixed asset investments in subsidiaries are stated at cost less
provision for impairment.
2.6 Foreign currencies
Monetary assets and liabilities denominated in foreign
currencies are translated into sterling at the rates of exchange
prevailing at the balance sheet date. Transactions in foreign
currencies are recorded at the rate of exchange prevailing at
the date of transaction. All differences are taken to the profit
and loss account.
2.7 Convertible Redeemable shares
In accordance with FRS 25, the Convertible Redeemable shares
have been recorded as a current liability at the net proceeds
received and any future conversion into Ordinary shares has
not been taken into account. The underlying finance cost is not
reflected until conversion takes place.
3. Tangible assets
Cost
1 January 2012
Additions
31 December 2012
Depreciation
1 January 2012
Charge
31 December 2012
Net book value - 31 December 2012
Net book value - 31 December 2011
Property
£000
1,045
532
1,577
29
8
37
1,540
1,016
2.3 Taxation
Current tax is provided at amounts expected to be paid or
recovered either directly or through group relief arrangements.
Tax assets and liabilities are calculated at rates that are
expected to apply to their respective period of realisation,
provided they are enacted or substantively enacted at the
balance sheet date.
2.4 Pensions
The company operates a defined contribution pension scheme
for employees and directors.The assets of the scheme are held
by investment managers separately from those of the company
and group. The pension costs charged against operating results
represent the amount of the contributions payable to the
scheme in respect of the accounting period.
2.5 Share-based payments
FRS 20 has been applied, where the effect is material, to equity-
settled share options granted on or after 7 November 2002 and
not vested prior to 1 January 2006. The Black Scholes valuation
model is used and, up to 31 December 2012, has indicated that
no material adjustment to results is required. The impact of a
material adjustment would be reflected in the accounts of any
affected subsidiary company.
All goods and services received in exchange for the grant of any
share-based payment are measured at their fair values. Where
employees are rewarded using share-based payments, the fair
values of employees’ services are determined indirectly by
reference to the fair value of the instrument granted to the
employee. This fair value is appraised at the grant date and
excludes the impact of non-market vesting conditions.
36
4.
Investments in subsidiaries
5. Debtors
Cost
1 January
Addition – acquisition of Global Digital
Systems Ltd (note 13)
31 December
2012
£000
8,361
8,174
16,535
2011
£000
7,834
527
8,361
The group’s trading subsidiaries at 31 December 2012, all of
which were incorporated and operate in the United Kingdom,
were as follows:
Company
Principal activity
Class of shares % held
Fire Testing
Technology
Limited
Design and assembly of Ordinary £1
fire testing instruments
100%
•
PE.fiberoptics Design and assembly of "A" Ordinary £1 100% of "A"
class; 51% of
Limited
total equity
fibre-optic testing
instruments
Amounts owed by group companies
Corporation tax
Prepayments and accrued income
2012
£000
2,174
5
115
2011
£000
1,620
-
36
2,294
1,656
Included in amounts owed by group companies are:
•
the sum of £294,000 (2011: £244,000) which is repayable
on demand at any time after 30 June 2014 provided that all
liabilities to third parties falling due on or before that date
have been met; and
a loan to Fire Testing Technology Limited, made during
2010 to finance the acquisition of Sircal Instruments (UK)
Limited, amounting to £1,316,000 at 31 December 2012
(2011: £1,316,000). This loan is unsecured, repayable on
demand and bears interest at the rate of 7.5% per annum.
UHV Design Design and manufacture Ordinary £1
of instruments used to
Limited
manipulate objects in
ultra high vacuum
chambers
100%
Except as stated, all amounts are recoverable in less than 1 year.
6. Creditors: amounts falling due within one year
Aitchee
Engineering
Limited
Quorum
Technologies
Limited
Manufacture of
engineering parts and
finished products
Design, manufacture
and distribution of
instruments that
prepare samples for
examination in electron
microscopes
Sircal
Instruments
(UK) Limited
Design, manufacture
and distribution of
rare gas purifiers for
use in metals analysis
Ordinary £1
100%
Ordinary £1
100%
Ordinary £1
100%
Deben UK
Limited
Design and manufacture Ordinary £1
of devices used to enable
or improve the
observation of objects
under a microscope
Global Digital Design and manufacture "A" and "B"
of instruments used to Ordinary £1
Systems
test the physical
Limited
properties of soil
and rocks
51%
100%
Trade and other payables
Amounts owed to group companies
Accruals and deferred income
Social security and other taxes
Current portion of bank loans
Other creditors
2012
£000
30
151
210
47
1,166
1
1,605
2011
£000
45
-
162
88
900
11
1,206
Other creditors comprise £10,682 (2010: £12,500) of non
equity shares classed as financial liabilities (see note 25 to the
consolidated financial statements).
7. Creditors: amounts falling due after more than one year
Bank loans
2012
£000
2011
£000
3,973
1,634
All of the above companies are owned directly by Judges
Scientific plc, with the exception of Aitchee Engineering Limited
and Sircal Instruments (UK) Limited, both of which are owned
directly by Fire Testing Technology Limited, and Deben UK
Limited, which is wholly-owned by a 51%-owned intermediate
holding company, Bordeaux Acquisition Limited.
Borrowings comprise a bank loan and a mortgage secured on
assets of the group.
•
The loan is repayable in quarterly instalments over the
period ending 31 March 2017 and bears interest at 3.35%
above LIBOR-related rates.
37
10. Statement of movements in shareholders’ funds
Share
Share
Capital
capital premium Redemption
Reserve
account
Profit and)
loss)
account)
£000
£000
£000)
£000)
Total)
share-)
holders)
funds)
£000)
1 January 2012
214
3,195
Profit for the year
Shares issued in
the year
Arising on
conversion and
redemption of
Convertible
Redeemable shares
Dividends paid in
the year
-
-
51
3,272
-
-
-
-
31 December 2012 265
6,467
3
-
-
19
-
22
5,505)
8,917)
5,413)
5,413)
-)
3,323)
(456)
(437)
(587)
(587)
9,875)
16,629)
The profit for the financial year in the accounts of the parent
company amounted to £5,413,000 (2011: £1,812,000).
Details relating to the dividends paid in the year are set out in
note 12 to the consolidated financial statements.
11. Related party transactions
The company is exempt under the terms of FRS 8 from
disclosing transactions with its wholly owned subsidiaries.
Funds were advanced by the company in 2011 to its 51%-owned
subsidiary, Bordeaux Acquisition Limited, to facilitate the
purchase during that year of the entire issued share capital of
Deben UK Limited. The amount of £517,000 was outstanding at
31 December 2012 (2011: £517,000). There are no interest or
repayment terms to these advances.
Dividends paid in the year to directors who hold shares
amounted to £108,000 in aggregate (2011: £57,000).
•
The mortgage is repayable in quarterly instalments over
the period ending 31 December 2016 with a final payment
in March 2017 and bears interest at 3.35% above LIBOR-
related rates
The repayment profile of borrowings is as follows:
Repayable in less than 1 year
Repayable in years 1 to 5
Less:
interest included above
Bank loan
£000
1,404
4,341
5,745
606
5,139
A proportion of the company’s bank loans is drawn in
foreign currencies to provide a hedge against group assets
denominated in those currencies. The Sterling equivalent at
31 December 2012 of loans denominated in US$ was £984,000
(2011: £772,000) and in Euros was £1,460,000 (2011: £893,000).
These amounts are included in the figures above for bank loans,
repayable in years 1 to 5.
The company enters into derivative financial instruments in
order to manage its interest rate and foreign currency
exposure. The principal derivatives used include interest
rate swaps, forward foreign currency contracts and foreign
currency options.
The parent company has a contingent liability in respect of
its cross-guarantees of bank overdraft facilities made available
to it and its subsidiary companies amounting in aggregate
to £3.8 million, none of which was outstanding at
31 December 2012.
8. Taxation
The parent company had unrelieved tax losses at
31 December 2012 of £173,000 (2011: £192,000). The ability to
utilise these losses is significantly affected by unpredictable
factors. The company has therefore not recognised a deferred
tax asset (2012: £40,000; 2011: £48,000) in respect of these
losses as it cannot be considered probable that taxable profits
will be available in the near term against which they can be
utilised. However, they are available to be offset against future
profits of the parent company.
9.
Share capital
Details relating to the parent company’s share capital are set
out in notes 24 and 25 to the consolidated financial statements.
38
12. Directors and employees
Total directors’ emoluments
Emoluments
Defined contribution pension
scheme contributions
2012
£000
530
7
537
2011
£000
490
12
502
Emoluments of the highest paid director
Emoluments
166
153
During the year, two directors participated in a defined
contribution pension scheme (2011: two)
Employees
Number of directors
Administrative staff
Total
no.
no.
6
2
8
6
2
8
13. Acquisition of Global Digital Systems Limited
On 6 March 2012 the company acquired the entire issued share
capital of Global Digital Systems Limited ("GDS"), a company
based in the UK and engaged in the design and manufacture of
instruments used to test the physical properties of soil and
rocks. The total cost of acquisition, all of which was paid in
cash, amounted to £8,174,000.
acquisition is £152,000 which was capitalised in these financial
statements under UK GAAP but expensed in the consolidated
figures under IFRS. Further details of the transaction are set
out in note 31 to the consolidated financial statements.
Included in the cost of
39
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the tenth Annual General Meeting of Judges
Scientific plc (the "Company") will be held at The Lansdowne Club,
9 Fitzmaurice Place, London W1X 6JD on Wednesday 29 May 2013 at
12.00 noon for the purpose of dealing with the following business of
which items 6, 7 and 8 are special business.
Ordinary Business
1.
2.
3.
4.
5.
To receive and adopt the reports of the directors and the auditor
and the audited financial statements of the Company for the year
ended 31 December 2012.
To re-appoint Ralph Elman, who retires by rotation, as a director.
To re-appoint Ralph Cohen, who retires by rotation, as a director.
To approve a final dividend of 10.0 pence per Ordinary share.
To re-appoint Grant Thornton UK LLP as auditor to hold office
from the conclusion of this meeting until the conclusion of the next
general meeting at which financial statements are laid before the
Company and to authorise the directors to fix the remuneration of
the auditor for the year ending 31 December 2013.
Special Business
To consider and, if thought fit, to pass the following resolutions, as to the
resolution numbered 6 as an ordinary resolution and as to the
resolutions numbered 7 and 8 as special resolutions:
Ordinary Resolution
6.
That the directors of the Company be and are hereby generally and
unconditionally authorised pursuant to section 551 of the
Companies Act 2006 (the "Act") to allot shares in the Company and
to grant rights to subscribe for or to convert any security into
shares in the Company up to a maximum aggregate nominal amount
of £88,600 provided that this authority unless renewed shall expire
at the close of the next Annual General Meeting of the Company,
save that the Company may before such expiry make any offer,
agreement or other arrangement which would or might require
shares to be allotted or rights to subscribe for or convert securities
into shares to be granted after such expiry and the directors of the
Company may allot shares or grant rights to subscribe for or
convert securities into shares in pursuance of such offer, agreement
or other arrangement as if the authority conferred hereby had not
expired, this authority to replace any previous authority which is
hereby revoked with immediate effect.
Special Resolutions
7.
That:
defined for the purposes of section 560 of the Act) for cash,
pursuant to the authority granted by resolution 6 above, as if
section 561 of the Act did not apply to any such allotment, provided
that such power shall be limited to:
(i)
the allotment of equity securities in connection with a relevant
rights issue or open offer in favour of Ordinary shareholders where
the equity securities attributable to the respective interests of all
Ordinary shareholders are proportionate to the respective
numbers of Ordinary shares held by them on the record date for
such allotment, but subject to such exclusions as the directors may
deem fit to deal with fractional entitlements or impediments arising
under the laws of any overseas territory or the requirements of any
recognised regulatory body or stock exchange; and
(ii)
the allotment (otherwise than pursuant to sub-paragraph (i) above)
of equity securities for cash up to an aggregate nominal amount of
£88,600.
and, unless previously renewed, revoked or varied, such power shall
expire at the close of the next Annual General Meeting of the
Company, save that the Company may before such expiry make any
offer, agreement or other arrangement which would or might
require equity securities to be allotted after such expiry and the
directors of the Company may allot equity securities in pursuance
of such offer, agreement or other arrangement as if the power
conferred hereby had not expired.
(b) For the purposes of this resolution:
(i)
(ii)
8.
"relevant rights issue" means an offer of equity securities open for
acceptance for a period fixed by the directors of the Company to
holders on the register on a fixed record date of Ordinary shares in
the Company in proportion (or as nearly as may be practicable) to
their respective holdings but subject in any case to such exclusions
or other arrangements as the directors of the Company may deem
necessary or desirable to deal with fractional entitlements or legal
or practical impediments under the laws of any overseas territory
or the requirements of any recognised regulatory body or stock
exchange; and
the nominal amount of any securities shall be taken to be, in the
case of rights to subscribe for or convert any securities into shares
of the Company, the nominal amount of such shares, which may be
allotted pursuant to such rights.
That the Company be and is hereby generally and unconditionally
authorised for the purpose of section 701 of the Act to make one
or more market purchases (within the meaning of section 693(4) of
the Act) of Ordinary shares of 5 pence each in the capital of the
Company on such terms and in such manner as the directors of the
Company may from time to time determine, provided that:
(a)
subject to and conditional upon the passing of resolution 6 above,
the directors of the Company be and they are hereby empowered
pursuant to section 570 of the Act to allot equity securities (as
(a)
the maximum aggregate number of Ordinary shares hereby
authorised to be purchased is 796,868 (representing approximately
14.99 per cent. of the Company’s issued share capital);
40
(b)
the minimum price which may be paid for such shares is the
nominal value of 5 pence per Ordinary share (exclusive of
expenses);
(c) unless the Company makes market purchases of its own Ordinary
proxy (which, in aggregate, should not exceed the number of shares
held by you). Please also indicate if the proxy is one of multiple
instructions being given. All forms must be signed and should be
returned together in the same envelope.
shares by way of a tender or partial offer made to all holders of
Ordinary shares on the same terms, the maximum price (exclusive
of expenses) which may be paid for an Ordinary share shall not be
more than five per cent. above the average of the market values for
an Ordinary share as derived from the AIM Appendix to the
London Stock Exchange Official List for the five business days
immediately preceding the date on which the Ordinary share is
purchased;
4
5
(d) unless previously renewed, varied or revoked, the authority hereby
conferred shall expire at the conclusion of the next Annual General
Meeting of the Company to be held in 2014 or 15 months from the
date of passing of this resolution, whichever shall be the earlier; and
the Company may validly make a contract or contracts to purchase
Ordinary shares under the authority hereby conferred prior to the
expiry of such authority which will or may be executed wholly or
partly after the expiry of such authority and may make a purchase
of Ordinary shares in pursuance of any such contract or contracts.
(e)
The completion and return of a Form of Proxy will not preclude a
member of the Company from subsequently attending and voting in
person at the meeting should he/she so wish. If you appoint a proxy
and attend the meeting in person, your proxy appointment will
automatically be terminated.
Pursuant to Regulation 41 of The Uncertificated Securities
Regulations 2001, only those members registered in the Register of
Members of the Company as at 12 noon on 27 May 2013 (being
not more than 48 weekday hours prior to the time fixed for the
Meeting) or, if the Meeting is adjourned, such time being not more
than 48 weekday hours prior to the time fixed for the adjourned
meeting are entitled to attend or vote at the meeting in respect of
the number of Ordinary shares registered in their name at that
time. Changes to entries in the Register after that time shall be
disregarded in determining the rights of any person to attend or
vote at the meeting.
6
In the case of joint holders the vote of the first-named holder on
the Register of Members (whether voting in person or proxy) will
be accepted to the exclusion of the votes of the other joint
holders.
In order to facilitate voting by corporate representatives at the
meeting, arrangements will be put in place at the meeting so that
(i) if a corporate shareholder has appointed the chairman of the
meeting as its corporate representative to vote on a poll in
accordance with the directions of all of the other corporate
representatives for that shareholder at the meeting, then on a poll
those corporate representatives will give voting directions to the
chairman and the chairman will vote (or withhold a vote) as
corporate representatives in accordance with those directions; or
(ii) any corporation which is a member can appoint one or more
corporate representatives who may exercise on its behalf all of its
powers as a member provided that they do not do so in relation to
the same shares.
By Order of the Board
RL Cohen
Company Secretary
3 May 2013
Registered Office:
Unit 19, Charlwoods Road
East Grinstead
West Sussex RH19 2HL
Notes:
1
2
3
A member entitled to attend, speak and vote at the meeting
convened by the Notice set out above is entitled to appoint one or
more proxies to exercise all or any of your rights to attend, speak
and vote at a general meeting of the Company. A proxy need not be
a member of the Company. A Form of Proxy is enclosed for your
use. Please carefully read the instructions on how to complete the
form.
To be valid, the instrument appointing a proxy together with any
power of attorney or other authority under which it is signed or a
notarially certified copy of such power or authority, must be
deposited at the registered office of the Company not less than 48
weekday hours before the time fixed for holding the meeting or any
adjournment thereof.
To appoint more than one proxy you may photocopy the Form of
Proxy. Please indicate the proxy holder’s name and the number of
shares in relation to which he/she is authorised to act as your
41
UHV Design specialises in the design,
manufacture and supply of high precision
instruments used in the high and
ultra-high vacuum markets for materials
research. All products are assembled in
clean room conditions to eliminate
virtually all contamination. The company
follows stringent quality control methods
to ensure the ultimate in quality
and reliability.
Form of Proxy
for the Annual General Meeting of Judges Scientific plc on 29 May 2013 at 12.00 noon at The Lansdowne Club, 9 Fitzmaurice Place,
London W1X 6JD
If you are unable to attend the Annual General Meeting, you may appoint a proxy to exercise all or any of your rights to
attend, speak and vote in your place. A proxy need not be a member of Judges Scientific plc but must attend the meeting to represent
you. A proxy must vote as you have instructed.
crossing out the words ‘Chairman of the meeting’ and writing another proxy’s name and address in the space provided. You may appoint more
than one proxy, provided each proxy is appointed to exercise rights attached to different shares. Please indicate for each Resolution how you
wish your proxy to vote by placing a tick in the relevant box. If you do not tell your proxy how to vote, your proxy may vote or withhold
his/her vote as he/she thinks fit on the Resolutions or any other business at the meeting (including amendments to Resolutions).
If you wish to appoint a proxy other than the Chairman of the meeting you may do so by
I/We
of
Chairman of the meeting or
(Block Letters)
appoint the
as my/our proxy in
respect of
to attend and, on a poll, to vote on my/our behalf at the Annual General Meeting of Judges Scientific plc to be held at 12.00 noon on
29 May 2013, and at any adjournment(s) of that meeting.
Ordinary shares
Approval and adoption of Annual Report and Accounts
For
Against
Vote
Withheld
Re-appointment of Ralph Elman
Re-appointment of Ralph Cohen
Approval of final dividend
Re-appointment of auditor
Authority to allot shares
Authority to disapply pre-emption rights
Authority to make market purchases
1
2
3
4
5
6
7
8
If this proxy is signed by someone else on your behalf, their authority must also be returned with this form. In the case of joint holdings, any
one holder may sign this form. In the case of a corporation, the proxy must be executed under its common seal or under the hand of a duly
authorised officer or attorney. Even if you complete and return this proxy form, you may still attend the meeting and vote in person should
you later decide to do so.
Please sign here:
Date:
Please indicate here with an ‘X’ if this proxy is one of multiple appointments being made.
Please post this form once you have completed it to the address printed overleaf. To be valid, this form must be received no later than
48 weekday hours before the time fixed for holding the meeting or any adjournment thereof.
Please refer to the notes in the Notice of Meeting to which this proxy relates if you require any assistance.
Any alterations to this form must be initialled.
Mailing address for Form of Proxy
The Company Secretary, Judges Scientific plc, Unit 19, Charlwoods Road
East Grinstead,West Sussex RH19 2HL
Mailing address for Form of Proxy
The Company Secretary, Judges Scientific plc, Unit 19, Charlwoods Road,
East Grinstead,West Sussex RH19 2HL
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COMPANY INFORMATION
Directors
The Hon. Alexander Robert Hambro (Non-Executive Chairman)
David Elie Cicurel (Chief Executive)
David Barnbrook (Chief Operating Officer)
Ralph Leslie Cohen (Finance Director)
Ralph Julian Elman (Non-Executive Director)
Glynn Carl Reece (Non-Executive Director)
Company Secretary
Ralph Leslie Cohen
Registered Office
Unit 19, Charlwoods Road
East Grinstead
West Sussex RH19 2HL
Registrar
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Nominated Adviser
Shore Capital and Corporate Ltd
Bond Street House
14 Clifford Street
London W1S 4JU
Stockbroker
Shore Capital Stockbrokers Ltd
Bond Street House
14 Clifford Street
London W1S 4JU
Auditor
Grant Thornton UK LLP
Statutory Auditor
Chartered Accountants
Regent House
80 Regent Road
Leicester LE1 7NH
Principal Bankers
Lloyds Bank Corporate Markets
125 Colmore Row
Birmingham B3 3SF
Solicitors
Hogan Lovells
Atlantic House
Holborn Viaduct
London EC1A 2FG
Registered in England and Wales, Company No. 4597315
Judges Scientific plc
Judges Scientific plc
Unit 19, Charlwoods Road
East Grinstead
West Sussex RH19 2HL
01342.323600
Tel:
01342.323608
Fax:
Website: www.judges.uk.com
E-mail: enquiries@judges.uk.com