Redde Northgate Annual Report 2013

FY2013 Annual Report · Redde Northgate
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Northgate plc 
Annual report and accounts 2013

Contents

Review

Highlights of the year
Chairman’s statement
Strategy and business model
Key performance indicators

1 
8 
10 
11 
12  Group at a glance
14   Operational review
17 
22 
24  Corporate social responsibility

Financial review
Principal risks and uncertainties

Governance

Board of Directors
Report of the Directors
Remuneration report
Report of the audit and risk committee

28 
30 
33 
40 
42  Corporate governance
45  Directors’ responsibilities

Accounts

46 

Independent auditor’s report to the members  
of Northgate plc

48  Consolidated income statement
Statements of comprehensive income
49 
50 
Balance sheets
51  Cash ﬂow statements
52  Notes to the cash ﬂow statements
53 
54  Notes to the accounts
97 
Five year ﬁnancial summary
98  Notice of Annual General Meeting
101  Shareholder information

Statements of changes in equity

Northgate plc

Northgate plc is the leading  
light commercial vehicle hire business 
in both the UK and Spain by fleet  
size and has been operating in the 
sector since 1981. Our core business  
is the hire of vehicles to other 
businesses on a non-contract basis, 
giving customers the flexibility to 
manage their vehicle fleet without  
a long term commitment.

ROCE1 %

Gearing7 %

5.8

8.4

11.9

13.1

11.8

571

213

163

105

102

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

UK vehicle fleet 000’s

Spanish vehicle fleet 000’s

62.9

60.9

61.2

52.9

49.9

60.4

48.9

43.5

38.4

35.1

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

Highlights of the year

Return on capital employed1 (%) 
Underlying proﬁt before taxation2 (£m) 
Statutory (loss) proﬁt before taxation (£m) 
Underlying basic earnings per share3 (p) 
Statutory basic earnings per share (p) 
Net debt4 (£m) 
Dividend per share5 (p) 

2013 

2012

11.8 
49.5 
(11.4) 
29.2 
(5.5) 
362.7 
7.3 

13.1 
59.7 
46.0 
31.5 
30.4 
371.3 
3.0

(cid:115)(cid:0) (cid:50)(cid:69)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:78)(cid:71)(cid:0)(cid:83)(cid:85)(cid:67)(cid:67)(cid:69)(cid:83)(cid:83)(cid:70)(cid:85)(cid:76)(cid:76)(cid:89)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:76)(cid:69)(cid:84)(cid:69)(cid:68)(cid:12)(cid:0)(cid:76)(cid:69)(cid:65)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:79)(cid:0)(cid:83)(cid:73)(cid:71)(cid:78)(cid:73)(cid:108)(cid:67)(cid:65)(cid:78)(cid:84)(cid:0)(cid:82)(cid:69)(cid:68)(cid:85)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:73)(cid:78)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)

charges going forward and increased operational and ﬁnancial ﬂexibility

(cid:115)(cid:0) (cid:46)(cid:69)(cid:84)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:76)(cid:89)(cid:73)(cid:78)(cid:71)(cid:0)(cid:67)(cid:65)(cid:83)(cid:72)(cid:0)(cid:71)(cid:69)(cid:78)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)6 of £92.6m (2012 – £138.2m) 

(cid:115)(cid:0) (cid:35)(cid:79)(cid:77)(cid:77)(cid:69)(cid:82)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:82)(cid:69)(cid:83)(cid:84)(cid:82)(cid:85)(cid:67)(cid:84)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:76)(cid:69)(cid:84)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:43)

(cid:115)(cid:0) (cid:53)(cid:43)(cid:0)(cid:66)(cid:82)(cid:65)(cid:78)(cid:67)(cid:72)(cid:0)(cid:69)(cid:88)(cid:80)(cid:65)(cid:78)(cid:83)(cid:73)(cid:79)(cid:78)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)(cid:0)(cid:67)(cid:79)(cid:77)(cid:77)(cid:69)(cid:78)(cid:67)(cid:69)(cid:68)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:84)(cid:72)(cid:82)(cid:69)(cid:69)(cid:0)(cid:78)(cid:69)(cid:87)(cid:0)(cid:83)(cid:73)(cid:84)(cid:69)(cid:83)(cid:0)(cid:79)(cid:80)(cid:69)(cid:78)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)

(cid:115)(cid:0) (cid:53)(cid:78)(cid:68)(cid:69)(cid:82)(cid:76)(cid:89)(cid:73)(cid:78)(cid:71)(cid:0)(cid:80)(cid:82)(cid:73)(cid:67)(cid:73)(cid:78)(cid:71)(cid:0)(cid:73)(cid:77)(cid:80)(cid:82)(cid:79)(cid:86)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:18)(cid:5)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:43)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:82)(cid:69)(cid:68)(cid:85)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:17)(cid:5)(cid:0)(cid:73)(cid:78)(cid:0)(cid:51)(cid:80)(cid:65)(cid:73)(cid:78)

(cid:115)(cid:0) (cid:33)(cid:86)(cid:69)(cid:82)(cid:65)(cid:71)(cid:69)(cid:0)(cid:85)(cid:84)(cid:73)(cid:76)(cid:73)(cid:83)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:24)(cid:24)(cid:5)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:43)(cid:0)(cid:8)(cid:18)(cid:16)(cid:17)(cid:18)(cid:0)(cid:110)(cid:0)(cid:24)(cid:25)(cid:5)(cid:9)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:25)(cid:16)(cid:5)(cid:0)(cid:73)(cid:78)(cid:0)(cid:51)(cid:80)(cid:65)(cid:73)(cid:78)(cid:0) 

(2012 – 90%)

(cid:115)(cid:0) (cid:35)(cid:76)(cid:79)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:109)(cid:69)(cid:69)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:20)(cid:25)(cid:12)(cid:25)(cid:16)(cid:16)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:43)(cid:0)(cid:8)(cid:18)(cid:16)(cid:17)(cid:18)(cid:0)(cid:110)(cid:0)(cid:21)(cid:18)(cid:12)(cid:25)(cid:16)(cid:16)(cid:9)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:19)(cid:21)(cid:12)(cid:17)(cid:16)(cid:16)(cid:0)(cid:73)(cid:78)(cid:0)(cid:51)(cid:80)(cid:65)(cid:73)(cid:78)(cid:0) 

(2012 – 38,400)

(cid:115)(cid:0) (cid:35)(cid:79)(cid:78)(cid:84)(cid:73)(cid:78)(cid:85)(cid:69)(cid:68)(cid:0)(cid:83)(cid:84)(cid:82)(cid:79)(cid:78)(cid:71)(cid:0)(cid:85)(cid:83)(cid:69)(cid:68)(cid:0)(cid:86)(cid:69)(cid:72)(cid:73)(cid:67)(cid:76)(cid:69)(cid:0)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:66)(cid:79)(cid:84)(cid:72)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:43)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:51)(cid:80)(cid:65)(cid:73)(cid:78)

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1 

Northgate plc Annual report and accounts 2013

All footnotes are located on page 21

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Our customers

We recognise that continuing 
to provide industry leading 
service excellence is critical to our 
customers across the UK and Spain. 
By continuing to improve our 
operations, there are now more 
vehicles available to rent at short 
notice, and the improved efﬁciency 
of our workshops has maximised the 
time our vehicles are kept on the 
road, allowing our customers to focus 
100% on their business.

1  Our new Customer Service 
Centre opened in the year 
which allows us to provide a 
high level of service and 
responsiveness to our 
customers.

2  Our ‘Ready for Rent’ line 
means that there are an 
increased number and range 
of vehicles available to 
customers at short notice.

1

2

2 

Northgate plc Annual report and accounts 2013

3 

Northgate plc Annual report and accounts 2013

4 

Northgate plc Annual report and accounts 2013

Our people

As a Group we value our  
employees as we understand that 
they are the key resource required  
to deliver the high levels of  
customer service that maintains  
our competitive advantage.  

Investing in the training and 
development of our workforce 
enables a high level of retention  
and allows everyone to contribute  
to their full potential.

1  During the year we have 

delivered 4,000 training days 
to our employees through our 
internal training team.

2  We are currently training 64 
workshop apprentices under 
programmes approved by two 
of our vehicle manufacturers.

1

2

5 

Northgate plc Annual report and accounts 2013

Our network

The ﬁnal quarter of the ﬁnancial  
year saw the opening of three new 
sites in the UK taking the number  
of hire locations to 65. 

These new sites mark the start of  
a wider branch expansion which  
will ﬁll in existing regional gaps by 
adding up to 20 new locations over 
the next three years, and support  
the overall strategy for growth in  
our UK business.

1  Our new Luton depot opened 

in February 2013.

2  Launch of the new Brent Cross 

site in March 2013.

3  Huddersﬁeld, our third new 
site in the year opened in 
March 2013.

6 

Northgate plc Annual report and accounts 2013

1

2

3

7 

Northgate plc Annual report and accounts 2013

Chairman’s statement

Improvements implemented over  
the past four years have established 
a strong ﬁnancial and operational 
foundation for the Group. Whilst we  
will maintain our focus on key disciplines 
of asset management, cash generation 
and cost control, we aim to maximise 
returns in both countries and will  
target growth in the UK where the 
appropriate return exists. 

The successful reﬁnancing completed in April 2013 marks an 
important milestone in the Group’s improvement programme. 
Over the past four years, the Group has focused on increasing 
the strength and resilience of the Group’s balance sheet, 
whilst improving return on capital employed (ROCE). 

Key ﬁnancial improvements over the four years include:
(cid:115)(cid:0) (cid:48)(cid:82)(cid:79)(cid:108)(cid:84)(cid:0)(cid:66)(cid:69)(cid:70)(cid:79)(cid:82)(cid:69)(cid:0)(cid:84)(cid:65)(cid:88)2 of £49.5m, an increase of £22.0m 

compared to £27.5m in the year ended 30 April 2009;
(cid:115)(cid:0) (cid:50)(cid:47)(cid:35)(cid:37)1 of 11.8%, more than double the 5.8% achieved  

in the year ended 30 April 2009;

(cid:115)(cid:0) (cid:46)(cid:69)(cid:84)(cid:0)(cid:68)(cid:69)(cid:66)(cid:84)4 of £363m, reduced by £523m from £886m at  

30 April 2009; 

(cid:115)(cid:0) (cid:39)(cid:69)(cid:65)(cid:82)(cid:73)(cid:78)(cid:71)7 of 102%, a substantial reduction compared to 

571% at 30 April 2009;

(cid:115)(cid:0) (cid:50)(cid:69)(cid:13)(cid:73)(cid:78)(cid:84)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:65)(cid:0)(cid:68)(cid:73)(cid:86)(cid:73)(cid:68)(cid:69)(cid:78)(cid:68)(cid:14)

Operational highlights include:
(cid:115)(cid:0) (cid:50)(cid:69)(cid:83)(cid:84)(cid:82)(cid:85)(cid:67)(cid:84)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:70)(cid:0)(cid:79)(cid:85)(cid:82)(cid:0)(cid:53)(cid:43)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:51)(cid:80)(cid:65)(cid:78)(cid:73)(cid:83)(cid:72)(cid:0)(cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:27)
(cid:115)(cid:0) (cid:50)(cid:69)(cid:66)(cid:82)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:70)(cid:0)(cid:66)(cid:79)(cid:84)(cid:72)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:53)(cid:43)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:51)(cid:80)(cid:65)(cid:78)(cid:73)(cid:83)(cid:72)(cid:0)(cid:66)(cid:85)(cid:83)(cid:73)(cid:78)(cid:69)(cid:83)(cid:83)(cid:69)(cid:83)(cid:27)
(cid:115)(cid:0) (cid:41)(cid:77)(cid:80)(cid:76)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:73)(cid:77)(cid:80)(cid:82)(cid:79)(cid:86)(cid:69)(cid:68)(cid:0)(cid:41)(cid:52)(cid:0)(cid:83)(cid:89)(cid:83)(cid:84)(cid:69)(cid:77)(cid:83)(cid:14)

Looking forward, the Group strategy is clear. In the UK,  
the primary focus will be on growing the business through  
our existing network and by adding new sites, where 
opportunities exist at our target levels of return. In Spain,  
the Group will continue to maximise cash generation and 
target improved returns in order to reduce our exposure to  
the troubled Spanish economy.

The Group’s ROCE1 was 11.8% (2012 – 13.1%). This 
compares to the Group’s year end weighted average cost of 
capital (WACC) of 7.9%. Individual country ROCE levels were 
14.8% in the UK and 8.4% in Spain.

Net underlying cash generation6 was £92.6m  
(2012 – £138.2m). This continued strong cash generation 
reduced gearing7 from 105% to 102%. Headroom8 on  
our committed debt facilities of £443m was £80m at  
30 April 2013.

Our balance sheet now allows the Company to move towards 
a more normal dividend policy whilst supporting ongoing 
investment in the Group’s organic growth initiatives.

UK

In a continuing difﬁcult trading environment, vehicles on hire 
declined by 3,300 vehicles in the year to 43,100. As a result, 
our operating margin9 decreased to 22.1% in the year, 
compared to 23.2% in 2012. Whilst the on hire decline is 
lower than the 7,400 reduction in the previous year, it was still 
disappointing and in hindsight was compounded by poor 
operational control within our depots which reduced the level 
of vans available for rental. We have now changed the 
management structure and organisation of our operations 
and have seen immediate improvement in these areas which 
we had allowed to fall below our own standards. 

8 

Northgate plc Annual report and accounts 2013

UK continued 

Dividend

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In recognition of the improvements noted in the Group’s 
(cid:80)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:65)(cid:0)(cid:68)(cid:73)(cid:86)(cid:73)(cid:68)(cid:69)(cid:78)(cid:68)(cid:0)(cid:87)(cid:65)(cid:83)(cid:0)(cid:82)(cid:69)(cid:13)(cid:73)(cid:78)(cid:84)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)(cid:0)
30 April 2012. The reﬁnancing, balance sheet strength and 
our conﬁdence in the business outlook allow the Group to 
move towards a more normal dividend policy. The Board 
proposes a ﬁnal dividend in respect of the year ended  
30 April 2013 of 6.0p, giving a total dividend for the year  
of 7.3p (2012 – 3.0p). This represents a 4x cover on 
underlying earnings3 and a 143% increase on the dividend 
paid in respect of the year ended 30 April 2012. 

It continues to be the Board’s intention to pay out a 
percentage of earnings having established over time  
the underlying proﬁtability, cash generation and cash 
requirements of the Group taking into consideration the  
long term growth prospects of our restructured business. 

The Board considers the balance sheet of the Group to  
be appropriately geared and there to be scope to invest 
organically to strengthen and grow returns over the medium 
term whilst establishing a long term dividend policy. 

Board changes

I am delighted to report that Jill Caseberry was appointed  
(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:0)(cid:73)(cid:78)(cid:0)(cid:36)(cid:69)(cid:67)(cid:69)(cid:77)(cid:66)(cid:69)(cid:82)(cid:0)(cid:18)(cid:16)(cid:17)(cid:18)(cid:14)(cid:0)
Jill has extensive sales, marketing and general management 
experience across a number of blue chip companies including 
Mars, PepsiCo and Premier Foods. She currently runs her  
own sales and marketing consultancy and is CEO of a  
food/beverage start up business. Jill’s experience is proving 
invaluable as we continue to build on our platform  
for growth.

Current trading and outlook

Improvements implemented over the past four years have 
established a strong ﬁnancial and operational foundation for 
the Group. Whilst we will maintain our focus on key 
disciplines of asset management, cash generation and cost 
control, we aim to maximise returns in both countries and will 
target growth in the UK where the appropriate return exists. 

The Group has begun the new ﬁnancial year in line with the 
Board’s expectations and we are conﬁdent that it is well 
placed to deliver signiﬁcant value to shareholders.

Bob Mackenzie 
Chairman

A number of changes have been made to our Commercial 
Sales operation, increasing the skills, resources and support 
within the sales team. This was initially focused on the 
Regional Sales area of the business and took place in the 
second half of the ﬁnancial year. Changes to the National 
Sales function have been completed since the year end. 

We are encouraged by the initial impact of these changes 
with vehicles on hire for our sub 100 vehicle customers 
(mainly managed by our Regional teams) stabilising during  
the year compared to a 13% fall noted in the same customer 
segment in the previous year. With the changes now 
completed we expect to see growth in the sub 100 vehicle 
sector in the current ﬁnancial year.

During the year we have identiﬁed large areas of the  
country where signiﬁcant numbers of potential customers  
are not effectively serviced by an accessible Northgate site.  
To address this, we have commenced our branch expansion 
plans, with three new sites opened in the year ended  
30 April 2013. We anticipate opening up to 20 new sites  
over the next three years. We expect the majority of sites to  
be on short term leases with moderate levels of capital 
expenditure. The ﬁnancial impact of these new sites is 
estimated at break even in year one and is targeted to exceed 
the current UK ROCE in year three as the sites reach maturity.

Spain

Whilst our Spanish business now operates at a ROCE  
above the Group’s WACC, the focus remains on increasing 
returns and generating cash. However, the economic 
backdrop continues to present very difﬁcult trading conditions. 
Vehicles on hire declined by 1,900 vehicles in the year ended 
30 April 2013 to 32,100, compared to a decline of 5,400  
in the year ended 30 April 2012. As a result, our operating 
margin10 reduced to 16.7% in the year (2012 – 19.1%). 

Cash generation continues to be a primary focus in Spain  
and underlying cash generation was €64m in the year ended 
30 April 2013.

Over the last four years capital employed has been reduced 
from €829m to €333m with net debt, before any inter group 
dividend payments, falling from €556m to €102m. 

Capital investment continues to fall with vehicle purchases 
decreasing 39% from 11,900 in the year ended 30 April 2012 
to 7,300 in the year ended 30 April 2013.

We have also implemented a new commercial structure which 
has increased new business wins across a range of sectors, 
partially offsetting declines seen in our traditional construction 
markets which now represent 31% of our business compared 
to 57% in 2009.

Reﬁnancing

During the year the Group successfully replaced its legacy 
(cid:72)(cid:73)(cid:71)(cid:72)(cid:13)(cid:67)(cid:79)(cid:85)(cid:80)(cid:79)(cid:78)(cid:0)(cid:80)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:69)(cid:0)(cid:80)(cid:76)(cid:65)(cid:67)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:12)(cid:0)(cid:73)(cid:78)(cid:83)(cid:84)(cid:73)(cid:84)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:0)(cid:76)(cid:79)(cid:65)(cid:78)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:77)(cid:85)(cid:76)(cid:84)(cid:73)(cid:0)
bank facility with a £428m single new committed multi bank 
facility maturing in June 2017. 

The revised facility will lead to a signiﬁcant reduction in future 
interest payments. The revised covenant package also gives 
the Group increased operational and ﬁnancial ﬂexibility.

9 

Northgate plc Annual report and accounts 2013

 
Strategy and business model

Our business model

Looking forward, the Group strategy is 
clear. In the UK, the primary focus will 
be on growing the business through 
our existing network and by adding 
new sites, where opportunities exist at 
our target levels of return. In Spain, the 
Group will continue to maximise cash 
generation and target improved returns.

Our view is that for many businesses 
rental of light commercial vehicles is the 
best sourcing method. It allows them 
to ﬂex their requirements in line with 
their business needs. In both countries in 
which we operate, we aim to be the ﬁrst 
choice for LCV rental, providing all our 
customers’ vehicle needs and allowing 
them to concentrate on better service to 
their customers.

10  Northgate plc Annual report and accounts 2013

Buy 

Manage 

Sell

Buy 

Our customers can choose from the widest range of 
vehicle makes and models available in our sector, with 
the ﬂexibility to switch vehicle types as their needs 
evolve. In order to achieve this, we partner with a range 
of manufacturers. Pricing is negotiated directly and 
the purchasing mix is managed in order to minimise 
the overall holding cost of vehicles to the business. The 
volume of purchases is balanced against vehicle sales 
in order to manage ﬂeet age, condition and vehicle 
utilisation to an optimal level.

Manage 

With over 30 years experience in the ﬂeet management 
sector, we are in the best position to partner our 
customers and complement their ﬂeet requirements, 
whether this is by providing a single short term hire or  
a fully outsourced ﬂeet management solution. 

Vehicle hire is at the heart of our business. We offer a 
fully ﬂexible product which allows customers to tailor 
vehicles to their exact requirements and manage the 
size and composition of their ﬂeet without penalty. Our 
national network of branches and workshops in the 
UK and Spain provide 24/7 support with replacement 
vehicles on hand to keep customers on the move. We 
offer a range of ancillary services which enable customers 
to enjoy operational beneﬁts through efﬁcient 
ﬂeet management, with our fully outsourced ﬂeet 
management service providing the ultimate solution. 

Internally we aim to deliver the very best service levels 
whilst maintaining operating efﬁciency and vehicle 
utilisation in order to maximise return on capital employed.

Sell 

In order to provide the best possible service to our 
customers we maintain a modern ﬂeet. When vehicles 
reach the end of their hire lives we aim to minimise 
overall holding costs through the effective use of our 
retail and trade sales channels. 

As we are not afﬁliated to any single manufacturer, we 
offer our customers the best available range of quality 
used commercial vehicles in the market.

Key performance indicators

Performance  

Target

Asset management

The overall holding cost of vehicles 
needs to be minimised and utilisation 
needs to be maintained at a high level 
in order to maximise return on capital 
employed (ROCE) whilst holding  
enough vehicles to meet the ﬂexible 
demands of our customers. 

Utilisation was 88% in the UK and  
90% in Spain.

A total of 20,700 vehicles were sold in 
the UK and 11,200 in Spain at improved 
residual values. Vehicle purchases  
were balanced against these disposals  
to manage the average ﬂeet age to  
21.4 months in the UK and 22.9 months 
in Spain at 30 April 2013. 

Pricing

The revenue per vehicle achieved is a key 
contributor to ROCE. Hire rates need to 
reﬂect the level of ﬂexibility and service 
offered to our customers. 

Underlying revenue per rented vehicle 
improved by 2% in the UK and reduced 
by 1% in Spain.

Customer service

In order to grow the business we must 
deliver the highest possible levels of 
customer service to set us apart from 
our competitors. 

We have various measures of assessing 
customer service, with the number of 
vehicles on hire and the number of 
customers being two of those indicators.

Vehicles on hire have reduced in the 
year, reﬂecting the difﬁcult trading 
conditions, particularly in relation to our 
larger customers. However, customer 
numbers have increased in our SME 
segments in both the UK and Spain, 
which indicates that our offering is well 
suited to their needs. 

ROCE is maximised through a 
combination of managing utilisation, 
hire rates, vehicle holding costs and 
improvements in operational efﬁciency.

Group ROCE1 for the year was 11.8%  
(2012 – 13.1%). 

Return on capital employed (ROCE)

In a capital intensive business,  
ROCE is a more important measure of 
performance than proﬁtability alone, as 
low margin business returns low value 
to shareholders. 

Earnings per share (EPS)

Basic EPS is considered to be a key short 
term measure of performance.

Basic EPS3 was 29.2p compared to 
31.5p in the prior year.

Earnings3 of £38.8m compare to 
£41.9m in the prior year. The weighted 
average number of shares was 133.2m 
in both years.

11  Northgate plc Annual report and accounts 2013

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The target for both segments is to 
maintain utilisation above 90%.
However, this will be balanced against 
the need to ensure that each branch  
has the right range of vehicles for hire 
at all times.

The holding cost of vehicles will be 
minimised through managing the mix of 
purchases and improving the quality and 
volume of vehicles sold through higher 
margin retail sales channels.

Minimum hire rate thresholds have 
been set for new vehicles so that the 
ﬂeet is grown at rates that are beneﬁcial 
to ROCE. Further improvements are 
targeted through the recovery of other 
costs incurred.

Whilst trading conditions are expected 
to remain challenging, the restructuring 
of commercial operations positions the 
Group well to target proﬁtable growth 
going forward.

Each KPI has been targeted for 
improvement to contribute to an overall 
increase in ROCE of the Group. 

In the short term ROCE will not increase  
in a period of growth as capital 
investment is required up front. In the 
longer term ROCE is targeted to increase 
above levels previously achieved.

The target is to maximise shareholder 
value by increasing EPS in the short term 
alongside longer term return on equity.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12  Northgate plc Annual report and accounts 2013

Group at a glance

Northgate partners over 9,000 
customers in the UK and Spain, 
operating across a range of sectors 
from owners operators to corporate 
customers. With such a variety of 
customers, we must deliver a service 
which complements the needs of 
each business.

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2013 

2012

415.7 
194.2 

609.9 

49,900 
35,100 

85,000 

1,835 
818 
21 

2,714 

65 
23 

88 

457.1 
249.6

706.7

52,900 
38,400

91,300

1,869 
915 
20

2,804

62 
23

85

Total revenue (£m) 
UK 
Spain 

Vehicles operated 
UK 
Spain 

Closing employees 
UK 
Spain 
Corporate 

Hire locations 
UK 
Spain 

  Fleet mix

UK 

Spain

%   

(cid:115)  Small vans 
(cid:115)  Medium vans 
(cid:115)(cid:0) Cars 
(cid:115)  Large commercial vehicles, 4x4 and other 

UK 

Spain

35 
40 
8 
17 

37 
10 
43 
10

13  Northgate plc Annual report and accounts 2013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operational review

Group

The Group now has a solid ﬁnancial and operational 
foundation. We will now target increasing returns by growing 
the business with customers who have a ﬂexible vehicle hire 
requirement. Our view is that for many businesses rental of 
light commercial vehicles (LCV) is the best sourcing method.  
It allows them to ﬂex their requirements in line with their 
business needs. In both countries in which we operate, we 
aim to be the ﬁrst choice for LCV rental, providing all our 
customers’ vehicle needs and allowing them to concentrate 
on better service to their customers.

UK

Despite the improvements achieved in pricing, operational 
efﬁciencies and used vehicle residuals, the reduction in the 
number of vehicles on hire has led to a decrease in operating 
margin9 from 23.2% to 22.1%.

Vehicle ﬂeet and utilisation

In the year the ﬂeet size reduced by 3,000 to 49,900 vehicles 
(2012 – 52,900 vehicles). 

Average utilisation rates for the year ended 30 April 2013 
were 88% (2012 – 89%). Whilst vehicle utilisation remains a 
priority and the target is to return to 2012 levels or above, the 
UK is also focused on ensuring that each branch has the right 
range of vehicles available for hire at all times.

Vehicle purchases remained constant at 16,500 for the year 
ended 30 April 2013.

The average ﬂeet age remained at 21.4 months, reﬂecting the 
Group’s commitment to run a ﬂeet with a suitable ageing 
proﬁle, efﬁciency and reliability.

Hire rates and vehicles on hire

In the year ended 30 April 2013, vehicle hire revenue per 
rented vehicle (excluding ﬂeet management income) was  
1% higher than the prior year. Adjusted for the change in 
ﬂeet mix, the increase was 2%.

Year on year closing vehicles on hire fell by 3,300  
(2012 – 7,400). 

During the year we have made key changes to our 
Commercial Sales operations including:

(cid:115)(cid:0) (cid:33)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:65)(cid:0)(cid:78)(cid:69)(cid:87)(cid:0)(cid:51)(cid:65)(cid:76)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:45)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:0)

(September 2012);

(cid:115)(cid:0) (cid:41)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:73)(cid:78)(cid:0)(cid:83)(cid:65)(cid:76)(cid:69)(cid:83)(cid:0)(cid:82)(cid:69)(cid:83)(cid:79)(cid:85)(cid:82)(cid:67)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:79)(cid:86)(cid:69)(cid:82)(cid:72)(cid:65)(cid:85)(cid:76)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:69)(cid:67)(cid:82)(cid:85)(cid:73)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)

and the training and development process for sales people. 
By April 2013 the number of sales people had increased 
by 20% over the year and of the 118 sales people 58 had 
been here less than a year, the majority being recruited in 
the second half of the ﬁnancial year.

Our commercial operations cover both regional and national 
customers. Our 4,800 regional customers, who have an 
average of six vehicles on hire, operate close to our branch 
network and accounted for 63% of the vehicles on hire  
at 30 April 2013.

Given the difﬁcult economies in which 
we operate, improving the resilience and 
strength of the Group’s balance sheet 
has been critical. This has been achieved 
in parallel with improving the operating 
platforms in both the UK and Spain.

14  Northgate plc Annual report and accounts 2013

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UK continued

Due to its relative size, the initial changes were prioritised in 
Regional Sales and were completed in the ﬁnal quarter of 
the ﬁnancial year. Planned changes in National Sales have 
taken place since the year end.

Typically our regional customers have less than 100 vehicles  
on hire. The changes made in Regional Sales have started to 
make an impact. For these customers there was a reduction 
year on year of 300 (1%) vehicles on hire compared to a 
4,000 (13%) reduction in the prior year. Additionally, the total 
number of regional customers increased by 9% over the year 
compared to a 12% fall experienced in the prior year. 
Addressing the needs of this large local customer base 
underpins our growth strategy.

Vehicles on hire to customers with more than 100 vehicles, 
typically national, declined by 3,000 (15%) in the year 
compared to a fall of 3,400 (15%) in the year ended 30 April 
2012. This decline is predominantly the result of short term 
price pressures originating in the current economic 
environment. We believe that opportunities still exist for 
growth with larger customers who would beneﬁt from our 
ﬂexible offering. We are seeking to address these 
opportunities more successfully through the changes made  
in our National Sales function.

Depot network

During the year we completed an analysis of the existing 
branch locations across the UK. We concluded that there were 
signiﬁcant gaps in our ability to attract potential customers, 
particularly in the South of England.

Based upon industry standard drive times, our national 
coverage is c.60%, highlighting that there are potentially over 
20 locations that could successfully support a Northgate 
branch, allowing access to a wider customer base.

In response to this opportunity, the ﬁnal quarter saw the 
opening of three sites, taking the number of hire locations at 
30 April 2013 to 65. The new sites are performing in line with 
our plans, however, we are cognisant that they are in their 
infancy. 

During the next ﬁnancial year we will focus on  
establishing an enhanced branch network within the London 
area which provides the largest commercial opportunity. 
Subject to availability of property, we plan to open six to eight 
sites within the London area over the next 12 months. We 
estimate that the sites will take three years to reach maturity 
and at this point will operate a ﬂeet of approximately 500 
vehicles per site.

Each new site will have an initial set up cost of c.£0.2m, 
covering property, personnel and marketing costs. If the  
new sites perform in line with our expectations, they should 
break even in year one and by year three have a ROCE in 
excess of 16%.

The Group will look to accelerate opportunities to invest in the 
network where there is an economic beneﬁt in doing so.

15  Northgate plc Annual report and accounts 2013

 
Operational review continued

UK continued

Used vehicle sales

Vehicle sales continue to perform strongly with 20,700 
vehicles (2012 – 25,200 vehicles) sold during the year at 
increased values. Disposal volumes fell year on year due to a 
reduction in the number of vehicles taken off the hire ﬂeet in 
response to lower on hire decline levels. We expect used 
vehicle sales volume to continue to fall as we target growth in 
vehicles on hire, whilst maintaining strict control over new 
vehicle purchase volumes.

Higher margin retail and semi retail channels accounted for 
22% (2012 – 19%) of disposals. Plans are being implemented 
to continue to grow the proportion of vehicles being disposed 
via the retail and semi retail channels.

The reduced number of vehicles disposed of, partially offset by 
the improvement in the values achieved, resulted in a decrease 
of £20.8m (2012 – £22.5m) in the depreciation charge.

Spain

Trading conditions in Spain remain extremely difﬁcult. 
Improved cost control, debtor management, vehicle residuals 
and continued strong ﬂeet management helped to partially 
mitigate the impact from the fall in revenue. Despite this, the 
operating margin10 fell to 16.7% (2012 – 19.1%).

Vehicle ﬂeet and utilisation

The ﬂeet size reduced from 38,400 vehicles as at 30 April 
2012 to 35,100 as at 30 April 2013. The average utilisation 
for the year was 90% (2012 – 90%).

In line with the target of cash generation and reducing the 
capital employed in Spain, vehicles purchased fell 4,600 to 
7,300 (2012 – 11,900). The ageing proﬁle remains highly 
competitive compared to the industry average with the 
average age of the ﬂeet being 22.9 months at 30 April 2013, 
an increase from 21.8 months at 30 April 2012.

Hire rates and vehicles on hire

Revenue per vehicle has also been impacted by a change in 
customer proﬁle. On average, our customers are now cleaner 
users of our vehicles and are driving lower mileages. Average 
miles at point of disposal, adjusting for disposal age, are 3% 
lower than that experienced in the year ended 30 April 2012 
and 6% lower than in the year ended 30 April 2011. This is 
evidenced by lower maintenance costs and the continued 
increase in the resale values of vehicles.

Vehicles on hire fell 1,900 in the year ended 30 April 2013, 
from 34,000 vehicles at 30 April 2012. This compares to a 
decline of 5,400 in the prior year. As in the UK, investment has 
been made in the commercial area in Spain. 

The primary focus of this investment has been to grow the 
SME business with the aim of offsetting the decline 
experienced in Spain’s construction markets. Whilst the 
number of vehicles on hire continued to fall in the year to  
30 April 2013, the number of customers increased by 300 to 
4,400, reversing the reduction of 300 customers experienced 
in the year ended 30 April 2012. Increasing commercial 
activity, coupled with targeted marketing initiatives, provides 
encouragement that this trend will continue to improve.

Depot network

Existing sites are continually reviewed for suitability, with 
consideration given to location, size and functionality. Having 
(cid:82)(cid:69)(cid:13)(cid:69)(cid:86)(cid:65)(cid:76)(cid:85)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)(cid:70)(cid:79)(cid:79)(cid:84)(cid:80)(cid:82)(cid:73)(cid:78)(cid:84)(cid:12)(cid:0)(cid:78)(cid:79)(cid:0)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:83)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:78)(cid:69)(cid:84)(cid:87)(cid:79)(cid:82)(cid:75)(cid:0)
infrastructure were made in the year. Based on the current 
ﬂeet size, the 23 locations provide the appropriate level of 
operational efﬁciency and geographical coverage. 

Used vehicle sales

A total of 11,200 vehicles were disposed of in the year  
(2012 – 16,800 vehicles). The reduced volume year on year  
is a direct consequence of the reduced level of vehicles 
purchased in the year combined with a lower level of vehicles 
being removed from the rental ﬂeet in response to the 
reducing rate of on hire decline. 

Sales to the higher margin retail market improved, with 9%  
of total vehicles sold through these channels compared to 5% 
in the prior year. The improved resale values achieved were 
partially offset by the reduced number of vehicles being 
disposed of, resulting in a reduction in the depreciation charge 
of €6.1m compared to a €4.9m reduction in the prior year.

Average hire revenue per rented vehicle in the year ended  
30 April 2013 was 2% lower than the prior year. The mix of 
vehicles on hire has been impacted by customer demand 
moving towards smaller vehicles. Adjusting for this mix 
impact, revenue per vehicle was 1% lower than the prior year. 

Bob Contreras 
Chief Executive

16  Northgate plc Annual report and accounts 2013

Financial review

Group

In April 2013 the Group successfully 
(cid:82)(cid:69)(cid:80)(cid:76)(cid:65)(cid:67)(cid:69)(cid:68)(cid:0)(cid:73)(cid:84)(cid:83)(cid:0)(cid:76)(cid:69)(cid:71)(cid:65)(cid:67)(cid:89)(cid:0)(cid:72)(cid:73)(cid:71)(cid:72)(cid:13)(cid:67)(cid:79)(cid:85)(cid:80)(cid:79)(cid:78)(cid:0)(cid:80)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:69)(cid:0)
placements, institutional loan and  
(cid:77)(cid:85)(cid:76)(cid:84)(cid:73)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:66)(cid:65)(cid:78)(cid:75)(cid:0)(cid:70)(cid:65)(cid:67)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:65)(cid:0)(cid:83)(cid:73)(cid:78)(cid:71)(cid:76)(cid:69)(cid:0)
new committed bank facility maturing  
in June 2017. The Group estimates that 
had the new facility been in place at 
1 May 2012, the cash interest savings 
would have been in excess of £15m for 
the year ended 30 April 2013.

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A summary of the Group’s underlying ﬁnancial performance 
for 2013, with a comparison to 2012, is shown below:

Revenue 
Operating proﬁt11 
Net interest expense12 
Proﬁt before tax2 
Proﬁt after tax3 
Basic earnings per share3 
Return on capital employed1 

2013 
£m 

609.9 
86.4 
(36.9) 
49.5 
38.8 
29.2p 
11.8% 

2012 
£m

706.7 
105.2 
(45.4) 
59.7 
41.9 
31.5p 
13.1%

Group revenue in 2013 decreased by 13.7% to £609.9m 
(2012 – £706.7m) or 12.4% at constant exchange rates.

Net underlying cash generation6 was £92.6m  
(2012 – £138.2m) after net capital expenditure of  
£117.7m (2012 – £133.8m) resulting in closing net debt4  
of £362.7m (2012 – £371.3m). Gearing7 improved to  
102% (2012 – 105%).

On a statutory basis, operating proﬁt was £79.5m  
(2012 – £94.5m) and loss before tax was £11.4m (2012 – 
proﬁt of £46.0m). Basic earnings per share were (5.5)p  
(2012 – 30.4p). Net cash from operations, including net 
capital expenditure on vehicles for hire was £100.9m  
(2012 – £145.8m), with net debt falling by £22.6m from 
£385.3m at 30 April 2012 to £362.7m at 30 April 2013. 
Gearing improved to 102% (2012 – 109%).

Return on capital employed

Group return on capital employed1 was 11.8% compared 
to 13.1% in the prior year. This represents a substantial 
improvement on the levels achieved in 2009 of 5.8% when 
restructuring of the Group commenced. 

Group return on equity, calculated as proﬁt after tax (excluding 
intangible amortisation and exceptional items) divided by 
average shareholders’ funds, was 10.6% (2012 – 11.9%). 

Borrowing facilities

In April 2013 the Group successfully replaced its legacy 
(cid:72)(cid:73)(cid:71)(cid:72)(cid:13)(cid:67)(cid:79)(cid:85)(cid:80)(cid:79)(cid:78)(cid:0)(cid:80)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:69)(cid:0)(cid:80)(cid:76)(cid:65)(cid:67)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:12)(cid:0)(cid:73)(cid:78)(cid:83)(cid:84)(cid:73)(cid:84)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:0)(cid:76)(cid:79)(cid:65)(cid:78)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0) 
(cid:77)(cid:85)(cid:76)(cid:84)(cid:73)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:66)(cid:65)(cid:78)(cid:75)(cid:0)(cid:70)(cid:65)(cid:67)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:65)(cid:0)(cid:83)(cid:73)(cid:78)(cid:71)(cid:76)(cid:69)(cid:0)(cid:78)(cid:69)(cid:87)(cid:0)(cid:67)(cid:79)(cid:77)(cid:77)(cid:73)(cid:84)(cid:84)(cid:69)(cid:68)(cid:0)(cid:66)(cid:65)(cid:78)(cid:75)(cid:0)
facility maturing in June 2017.

Taken together with other loans of the Group, £362.7m was 
drawn against total committed facilities of £443.1m giving 
headroom8 of £80.4m as detailed below:

Facility  Drawn 
£m 

£m 

Headroom 
£m 

Maturity

(cid:53)(cid:43)(cid:0)(cid:66)(cid:65)(cid:78)(cid:75)(cid:0)(cid:70)(cid:65)(cid:67)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0) (cid:20)(cid:18)(cid:24)(cid:14)(cid:16)(cid:0)(cid:0) (cid:19)(cid:21)(cid:20)(cid:14)(cid:25)(cid:0)(cid:0)
(cid:23)(cid:14)(cid:24)(cid:0)
(cid:47)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:76)(cid:79)(cid:65)(cid:78)(cid:83)(cid:0)

(cid:17)(cid:21)(cid:14)(cid:17)(cid:0)

(cid:23)(cid:19)(cid:14)(cid:17)(cid:0)

(cid:42)(cid:85)(cid:78)(cid:13)(cid:17)(cid:23) 
(cid:23)(cid:14)(cid:19)(cid:0) (cid:53)(cid:80)(cid:0)(cid:84)(cid:79)(cid:0)(cid:46)(cid:79)(cid:86)(cid:13)(cid:17)(cid:19)

443.1  362.7 

80.4

17  Northgate plc Annual report and accounts 2013

 
  
 
  
 
 
 
 
Financial review continued

Dividend

Borrowing facilities continued 

A one off charge of £54.0m was incurred as a consequence 
of extinguishing previous facilities and cancelling hedging 
arrangements. The net cash outﬂow relating to the reﬁnancing 
was £39.1m.

The Group estimates that had the new facility been in  
place at 1 May 2012, the cash interest savings would have 
been in excess of £15m for the year ended 30 April 2013.

The margin charged on bank debt is dependent upon 
the Group’s net debt to EBITDA ratio, and ranges from a 
maximum of 2.875% to a minimum of 2.125%. The net  
debt to EBITDA ratio at 30 April 2013 corresponds to a  
bank margin of 2.375%.

The Directors recommend the payment of a ﬁnal dividend of 
6.0p per share in relation to the Ordinary shares for the year 
ended 30 April 2013 (2012 – 3.0p). Subject to approval by 
shareholders, the dividend will be paid on 21 September 2013 
to ordinary shareholders on the register as at close of business 
on 16 August 2013. 

Including the interim dividend paid of 1.3p (2012 – £Nil),  
the total dividend relating to the year would be 7.3p (2012 – 
3.0p). The dividend is covered four times by underlying 
earnings. Going forward it is the intention of the Board to pay 
an interim dividend and a ﬁnal dividend split in line with 
normal practice.

UK

The composition of the Group’s UK revenue and operating 
proﬁt is set out below:

Following the completion of the reﬁnancing on 29 April 2013, 
interest rate swap contracts were taken out on 2 May 2013 
in order to ﬁx a proportion of bank debt at 2.9% giving an 
overall cost of the Group’s borrowings of 2.8%. This compares 
to an overall rate of 7.1% at 30 April 2012.

Revenue  
Vehicle hire 
Vehicle sales 

2013 
£m 

291.1 
124.6 

415.7 

64.2 

2012 
£m

320.8 
136.3

457.1

74.4

Operating proﬁt14 

Hire revenue reduced by 9% to £291.1m (2012 – £320.8m) 
driven by an 11% reduction in the average number of  
vehicles on hire, partially offset by a 2% increase in revenue 
per vehicle. 

An improvement in residual values was offset by a  
reduction in volume of used vehicles sold, which contributed 
to £1.7m of the decrease in operating proﬁt.

The UK operating margin was as follows:

Operating margin9 

2013 

22.1% 

2012

23.2%

The UK operating proﬁt margin9 has decreased to 22.1% 
(2012 – 23.2%) as a result of the decrease in vehicles on hire  
in the year.

Spain

The revenue and operating proﬁt generated by our Spanish 
operations are set out below:

Revenue  
Vehicle hire 
Vehicle sales 

Operating proﬁt15 

2013 
£m 

150.8 
43.4 

194.2 

25.2 

2012 
£m

182.9 
66.7

249.6

35.0

Hire revenue reduced by 18%. The reduction was 14% 
at constant exchange rates, of which 12% related to the 
reduction in vehicles on hire and 2% related to a reduction  
in revenue per vehicle.

The Group made total borrowing repayments of £410.1m in 
the year. Scheduled total bank repayments on the new bank 
facilities of £25.9m commencing in November 2015 are due 
before they mature in June 2017.

The revised ﬁnancing arrangements allow the Group increased 
operational and ﬁnancial ﬂexibility with a new set of ﬁnancial 
covenants13 in place as follows: 

1  Interest cover ratio

A minimum ratio of earnings before interest and taxation 
(EBIT) to net interest costs tested quarterly on a rolling historic 
(cid:17)(cid:18)(cid:13)(cid:77)(cid:79)(cid:78)(cid:84)(cid:72)(cid:0)(cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:14) The covenant ratio to be exceeded ranges 
between 2.0x and 3.0x, reﬂecting the reduced interest 
charges associated with the new ﬁnancing arrangements. 

Interest cover at 30 April 2013 was 2.7x (2012 – 2.4x) with 
EBIT headroom, all else being equal, of £22m.

2  Loan to value

A maximum ratio of total consolidated net borrowings to  
the book value of vehicles for hire, vehicles held for resale, 
trade receivables and freehold property, tested quarterly.  
The covenant ratio which must not be exceeded is 70%. 

Loan to value at 30 April 2013 was 50% (2012 – 53%) giving 
net debt headroom, all else being equal, of £149m.

3  Debt leverage cover ratio

A maximum ratio of net debt to earnings before interest,  
tax, depreciation and amortisation (EBITDA), tested quarterly 
(cid:79)(cid:78)(cid:0)(cid:65)(cid:0)(cid:82)(cid:79)(cid:76)(cid:76)(cid:73)(cid:78)(cid:71)(cid:0)(cid:72)(cid:73)(cid:83)(cid:84)(cid:79)(cid:82)(cid:73)(cid:67)(cid:0)(cid:17)(cid:18)(cid:13)(cid:77)(cid:79)(cid:78)(cid:84)(cid:72)(cid:0)(cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:14) The covenant ratio which 
must not be exceeded is 2.0x.

Debt leverage cover at 30 April 2013 was 1.5x (2012 – 1.3x) 
with EBITDA headroom, all else being equal, of £66m.

18  Northgate plc Annual report and accounts 2013

  
 
 
 
  
  
 
 
Spain continued 

Taxation

An improvement in used vehicle residual values has 
contributed £5.0m to operating proﬁt in the year with  
11,200 vehicles sold (2012 – 16,800). 

The Spanish operating margin was as follows:

The Group’s underlying effective tax charge for its UK and 
overseas operations was 22% (2012 – 30%). 

The underlying tax charge excludes the tax on intangible 
amortisation and exceptional items. 

Operating margin10 

2013 

16.7% 

2012

19.1%

Vehicle hire revenue and operating proﬁt15 in 2013,  
expressed at constant exchange rates, would have been 
higher than reported by £7.1m and £1.2m respectively.

Adjusting for the change in mix of the ﬂeet, revenue per 
rented vehicle reduced by 1%, demonstrating continued 
pricing discipline in a difﬁcult trading environment. 

The incidence of bad debt was £Nil compared to £2.7m  
in the prior year, with the reduction being driven by the 
collection of previously provided debt. Days sales outstanding 
continued to reduce from 71 days at 30 April 2012 to 64  
days at 30 April 2013 due to the continued improvements  
in controls and processes.

Corporate

Corporate costs16 were £3.0m compared to £4.2m in the  
prior year.

Exceptional items

During the year £2.9m of restructuring costs and £0.4m of 
property disposal losses were incurred, of which £2.0m related 
to the UK and £1.3m related to Spain.

Financing costs of £54.0m were incurred during the year 
which includes the costs of exiting the Group’s legacy debt 
and hedging. The related cash impact of these costs and of 
cancelling previous hedging arrangements was £39.1m.

Interest

Net ﬁnance charges for the year before exceptional items 
were £36.9m (2012 – £45.4m). 

(cid:52)(cid:72)(cid:69)(cid:0)(cid:67)(cid:72)(cid:65)(cid:82)(cid:71)(cid:69)(cid:0)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:69)(cid:83)(cid:0)(cid:97)(cid:22)(cid:14)(cid:21)(cid:77)(cid:0)(cid:79)(cid:70)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:67)(cid:65)(cid:83)(cid:72)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:12)(cid:0)(cid:80)(cid:82)(cid:73)(cid:77)(cid:65)(cid:82)(cid:73)(cid:76)(cid:89)(cid:0)
from borrowing fees amortised in the year (2012 – £6.6m).

The net cash interest charge has reduced by £8.4m to 
£30.4m, with a £7.2m saving as a result of the reduction in 
average net debt throughout the year, a £0.2m saving due to 
lower borrowing rates of the Group in the year and a £1.0m 
decrease due to the impact of exchange rates.

The prior year underlying tax charge also excludes an £11.5m 
credit following settlement with the UK tax authorities on an 
outstanding tax matter and a charge of £2.9m to reﬂect the 
change in UK tax rates. 

Including these items the Group’s statutory effective tax 
charge was 35% (2012 – 12%).

Earnings per share

Basic earnings per share (EPS)3, were 29.2p (2012 – 31.5p). 
Basic statutory earnings per share were (5.5)p (2012 – 30.4p). 

Underlying earnings for the purposes of calculating EPS3 were 
£38.8m (2012 – £41.9m). The weighted average number of 
shares for the purposes of calculating EPS was 133.2m, in line 
with the previous year.

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Balance sheet 

Net tangible assets at 30 April 2013 were £355.6m (2012 – 
£353.0m), equivalent to a tangible net asset value of 266.9p 
per share (2012 – 264.9p per share). 

Gearing7 at 30 April 2013 was 102% (2012 – 105%) 
reﬂecting an £8.6m reduction in net debt4. This demonstrates 
signiﬁcant progress in strengthening the balance sheet over 
the previous four years from a gearing level of 571% at 30 
April 2009.

Cash ﬂow

A summary of the Group’s cash ﬂows is shown below: 

2013 
£m 

Underlying operational cash generation  258.4  
(117.7) 
Net capital expenditure 
(48.1) 
Net taxation and interest payments 

Net underlying cash generation6 

92.6 

Net reﬁnancing payments  
(April 2013 reﬁnancing) 
Dividends 
Other 

Net cash generated  

Opening net debt4 
Net cash generated 
(cid:47)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:67)(cid:65)(cid:83)(cid:72)(cid:0)(cid:73)(cid:84)(cid:69)(cid:77)(cid:83)(cid:0)
Exchange differences 

Closing net debt4 

(39.1) 
(5.7) 
(2.3) 

45.5 

371.3 
(45.5) 
17.1 
19.8 

362.7 

2012 
£m

312.9  
(133.8) 
(40.9)

138.2

– 
– 
(2.7)

135.5

529.9 
(135.5) 
6.8 
(29.9)

371.3

Underlying cash generation6 was £92.6m compared to 
£138.2m in the previous year. 

19  Northgate plc Annual report and accounts 2013

 
  
  
 
Financial review continued

Capital management

Cashﬂow continued 

A total of £255.2m was invested in new vehicles in order 
to replace ﬂeet compared to £306.3m in the prior year. The 
Group’s new vehicle outlay was partially funded by £145.9m 
of cash generated from the sale of used vehicles. Other net 
capital expenditure amounted to £8.4m. 

After capital expenditure, payments of interest and tax of 
£48.1m, net payments of £39.1m in relation to the 
reﬁnancing in the year, dividends of £5.7m and other items  
of £2.3m, net cash generation (as deﬁned in the table above) 
was £45.5m, compared to £135.5m in the previous year. 
Excluding net reﬁnancing payments relating the April 2013 
reﬁnancing, net cash generation was £84.6m.

Treasury

The function of Group Treasury is to mitigate ﬁnancial risk, 
to ensure sufﬁcient liquidity is available to meet foreseeable 
requirements, to secure ﬁnance at minimum cost and to 
invest cash assets securely and proﬁtably. Treasury operations 
manage the Group’s funding, liquidity and exposure to 
interest rate risks within a framework of policies and 
guidelines authorised by the Board of Directors.

The Group uses derivative ﬁnancial instruments for risk 
management purposes only. Consistent with Group policy, 
Group Treasury does not engage in speculative activity and  
it is policy to avoid using more complex ﬁnancial instruments.

Credit risk

The policy followed in managing credit risk permits only 
minimal exposures, with banks and other institutions meeting 
required standards as assessed normally by reference to major 
credit agencies. Our credit exposure is limited to banks which 
maintain an A rating. Individual aggregate credit exposures  
are also limited accordingly.

Liquidity and funding

The Group has sufﬁcient funding facilities to meet its normal 
funding requirements in the medium term as discussed above. 
Covenants attached to those facilities as discussed above are 
not restrictive to the Group’s operations. 

The Group’s objective is to maintain a balance sheet structure 
that is efﬁcient in terms of providing long term returns to 
shareholders and safeguards the Group’s ﬁnancial position 
through economic cycles.

Operating subsidiary undertakings are ﬁnanced by a 
combination of retained earnings and bank borrowings.

The Group can choose to adjust its capital structure by varying 
the amount of dividends paid to shareholders, by issuing new 
shares or by adjusting the level of capital expenditure. As 
discussed above, gearing7 at 30 April 2013 was 102% 
compared to 105% at 30 April 2012. 

Interest rate management

The Group’s bank facilities and other loan agreements 
incorporate variable interest rates. The Group seeks to 
manage the risks associated with ﬂuctuating interest rates  
by having in place a number of ﬁnancial instruments covering 
at least 50% of its borrowings at any time. The Group’s 
borrowing facilities were reﬁnanced on 29 April 2013.  
All existing interest rate swaps were cancelled at that time  
and new instruments were put in place on 2 May 2013  
which hedged 64% of gross borrowings into ﬁxed rates  
(30 April 2012 – 96%).

Foreign exchange risk

The Group’s reporting currency is, and the majority of its 
revenue (67%) is generated in pounds Sterling. The Group’s 
principal currency translation exposure is to the Euro, as the 
results of operations, assets and liabilities of its Spanish and 
Irish businesses must be translated into Sterling to produce  
the Group’s consolidated ﬁnancial statements.

The average and year end exchange rates used to translate 
the Group’s overseas operations were as follows:

Average 
Year end 

2013 
£: € 

1.22 
1.18 

2012 
£: €

1.17 
1.23

The Group manages its exposure to currency ﬂuctuations  
on retranslation of the balance sheets of those subsidiary 
undertakings whose functional currency is in Euro by 
maintaining a proportion of its borrowings in the same 
currency. The exchange differences arising on these 
borrowings have been recognised directly within equity  
along with the exchange differences on retranslation of  
the net assets of the Euro subsidiaries.

Going concern 

In determining whether the Group’s 2013 accounts 
should be prepared on a going concern basis the Directors 
considered all factors likely to affect its future development, 
performance and its ﬁnancial position, including cash ﬂows, 
liquidity position and borrowings facilities and the risks and 
uncertainties relating to its business activities in the current 
economic climate.

20  Northgate plc Annual report and accounts 2013

  
 
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1  Calculated as operating proﬁt11 divided by average 

capital employed, being shareholders funds plus net 
debt4.

2  Stated before intangible amortisation of £3.6m 
(2012 – £4.0m, 2009 – £5.3m), exceptional 
administrative expenses of £3.3m (2012 – £6.7m, 
2009 – £3.1m), impairment of assets of £Nil (2012 
– £Nil, 2009 – £180.9m) and exceptional ﬁnance 
costs of £54.0m (2012 – £3.0m, 2009 – £33.8m).

3  Stated before intangible amortisation of £3.6m 

(2012 – £4.0m), exceptional administrative expenses 
of £3.3m (2012 – £6.7m), exceptional ﬁnance costs 
of £54.0m (2012 – £3.0m) and tax on intangible 
amortisation, exceptional items and exceptional tax 
credit of £14.7m (2012 – £12.3m).

4  Net debt taking into account swapped exchange 
rates for US loan notes and other loan swapped 
into Euro being retranslated to Sterling at closing 
exchange rates.

5   Full year dividend relating to the year, comprising 

interim dividend paid of 1.3p (2012 – £Nil) and ﬁnal 
dividend proposed of 6.0p (2012 – 3.0p).

6   Net increase in cash and cash equivalents before 

ﬁnancing activities and partial recovery of acquisition 
cost of subsidiary undertaking. 

7  Calculated as net debt4 divided by tangible net 

assets with tangible net assets being net assets less 
goodwill and other intangible assets.

8   Headroom calculated as facilities of £443.1m 

less net borrowings of £362.7m. Net borrowings 
represent net debt of £362.7m stated after the 
deduction of £15.0m of cash balances, which are 
available to offset against borrowings.

9   Calculated as operating proﬁt14 divided by revenue 

of £291.1m (2012 – £320.8m), excluding vehicle 
sales.

10   Calculated as operating proﬁt15 divided by revenue 

of £150.8m (2012 – £182.9m), excluding vehicle 
sales.

11  Stated before intangible amortisation of £3.6m 
(2012 – £4.0m, 2009 – £5.3m), exceptional 
administrative expenses of £3.3m (2012 – £6.7m, 
2009 – £3.1m) and impairment of assets of £Nil 
(2012 – £Nil, 2009 – £180.9m).

12  Stated before exceptional ﬁnance costs of £54.0m 

(2012 – £3.0m).

13   Calculated in accordance with covenant 
requirements of the Group’s ﬁnancing 
arrangements.

14   Excluding amortisation of intangible assets of £2.9m 
(2012 – £3.1m) and exceptional administrative 
expenses of £2.1m (2012 – £5.7m).

15   Excluding amortisation of intangible assets of £0.7m 
(2012 – £0.9m) and exceptional administrative 
expenses of £1.3m (2012 – £1.7m).

16   Excluding exceptional administrative expenses of 

£Nil (2012 – £(0.7)m).

Going concern continued 

The principal risks and uncertainties of the Group are  
outlined on pages 22 to 23. Measures taken by the Directors 
in order to mitigate those risks are also outlined. 

The Directors have reviewed trading and cash ﬂow  
forecasts as part of their going concern assessment, 
including reasonably possible downside sensitivities, which 
take into account the uncertainties in the current operating 
environment.

The Group has sufﬁcient headroom compared to its 
committed borrowing facilities and against all covenants as 
detailed in this report. 

Having considered all the factors above impacting the 
Group’s businesses, including reasonably possible downside 
sensitivities, the Directors are satisﬁed that the Group will be 
able to operate within the terms and conditions of the Group’s 
ﬁnancing facilities for the foreseeable future.

The Directors have a reasonable expectation that the 
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 Group’s 2013 accounts.

21  Northgate plc Annual report and accounts 2013

 
Principal risks and uncertainties

Economic environment

The operation of a public company 
involves a number of risks and 
uncertainties across a full range of 
commercial, operational and ﬁnancial 
areas. The following principal risks and 
uncertainties have been identiﬁed as 
being capable of impacting the Group’s 
performance over the next ﬁnancial year.

There is a link in our business between the demand for our 
products and services and the levels of economic activity in 
the countries in which the Group operates. The high level 
of operational gearing in our business model means that 
changes in demand can lead to higher levels of variation in 
proﬁtability.

The Group operates in Spain, where austerity measures have 
been implemented. These measures could impact on future 
(cid:84)(cid:82)(cid:65)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:86)(cid:79)(cid:76)(cid:85)(cid:77)(cid:69)(cid:83)(cid:14)(cid:0)(cid:52)(cid:72)(cid:69)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:76)(cid:89)(cid:73)(cid:78)(cid:71)(cid:0)(cid:77)(cid:65)(cid:67)(cid:82)(cid:79)(cid:13)(cid:69)(cid:67)(cid:79)(cid:78)(cid:79)(cid:77)(cid:73)(cid:67)(cid:0)(cid:67)(cid:79)(cid:78)(cid:68)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)
have also increased the risk of customer failure, particularly 
in Spain, which may lead to the occurrence of increased bad 
debt charges.

The construction industry in Spain and other key markets of 
the Group have been particularly sensitive to the downturn 
in the economic climate which has led to a decline in the 
number of vehicles rented in recent years.

The Spanish business generates a large proportion of revenue 
from customers in the construction industry but is seeking to 
diversify its customer base across a range of market segments.

Should there be a further signiﬁcant economic downturn the 
ﬂexible nature of the Group’s business model enables vehicles 
to be placed with other customers. Alternatively, utilisation 
can be maintained through a combination of a decrease in 
vehicle purchases and increase in disposals, which although 
affecting short term proﬁtability, generates cash and reduces 
debt levels.

No individual customer contributes more than ﬁve per cent 
of total revenue generated, and ongoing credit analysis is 
performed on new and existing customers to assess credit risk.

Eurozone

The Group operates in and generates 32% of its revenue 
in Spain, where the functional currency is the Euro. The 
risks of trading in this country are assessed in the ‘Economic 
Environment’ risk. Of the Group’s net assets, £273m (2012 – 
£294m) are located in Spain, against which the Group holds 
£234m (2012 – £240m) of Euro denominated borrowings 
providing a net investment hedge.

There is a possibility that Spain may leave the Euro. If this 
occurred and Spain were to reintroduce its own national 
currency, the Group could be materially affected by a 
weakening of this currency and higher volatility on trading 
results when translated into Sterling. Local net assets could 
depreciate while the Group’s Euro debt located in the UK 
could appreciate.

22  Northgate plc Annual report and accounts 2013

Eurozone continued 

Access to capital

The Board has conducted a detailed review of the impact of 
possible scenarios that may arise from the Eurozone crisis and 
the risks are being continually monitored. In order to minimise 
the Group’s net exposure to the Spanish currency, regular 
dividend payments of cash ﬂow generated from the Spanish 
business have been implemented, and the Board has the 
ability to increase the level of funding to the Spanish business 
from locally denominated borrowings.

Vehicle holding costs

The overall holding cost of a vehicle is affected by the pricing 
levels of new vehicles and the disposal value of vehicles sold. 

The Group purchases substantially all of its ﬂeet from suppliers 
with no agreement for the repurchase of a vehicle at the 
end of its hire life cycle. The Group is therefore exposed to 
ﬂuctuations in residual values in the used vehicle market.

An increase in the holding cost of vehicles, if not recovered 
through hire rate increases, would affect proﬁtability, 
shareholder returns and cash generation.

Risk is managed on new pricing by negotiating ﬁxed pricing 
terms with manufacturers a year in advance. Flexibility is 
maintained to make purchases throughout the year under 
variable supply terms.

Flexibility in our business model allows us to determine the 
period over which we hold a vehicle and therefore in the 
event of a decline in residual values we would attempt to 
mitigate the impact by ageing out our existing ﬂeet.

Competition and hire rates

The Group operates in highly competitive markets with 
competitors often pursuing aggressive pricing actions to 
increase hire volumes. The market is also fragmented with 
numerous competitors at a local and national level.

As our business is highly operationally geared, any increase 
or decrease in hire rates will impact proﬁt and shareholder 
returns to a greater effect.

As the Group is focused on maximising return on capital, all 
hire rates must exceed certain hurdle rates.

Our current pricing strategy is focused on charging the correct 
price for the service provided and all ancillary services offered 
which will attract customers for whom ﬂexible rental is the 
most appropriate solution but not necessarily the cheapest. 
This means that the Group will be better positioned against 
solely price led competition going forward.

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The Group requires capital to both replace vehicles that have 
reached the end of their useful life and for growth in the ﬂeet. 
Additionally, due to the level of the Group’s indebtedness, 
a proportion of the Group’s cash ﬂow is required to service 
its debt obligations. In order to continue to access its credit 
facilities the Group needs to remain in compliance with 
its ﬁnancial covenants throughout the term of its facilities. 
Current bank facilities are due to mature in June 2017. There 
is a risk that the Group cannot successfully extend its facilities 
past this date. Failure to access sufﬁcient ﬁnancing or meet 
ﬁnancial covenants could potentially adversely affect the 
prospects of the Group. 

Financial covenants are reviewed on a monthly basis in 
conjunction with cash ﬂow forecasts to ensure ongoing 
compliance. If there is a shortfall in cash generated from 
operations and/or available under its credit facilities the Group 
would reduce its capital requirements. 

The Group believes that its existing facilities provide adequate 
resources for present requirements.

The impact of access to capital on the wider risk of going 
concern is considered on pages 20 and 21.

IT systems

The Group’s business involves a high volume of  
transactions and the need to track assets which are located  
at numerous sites. 

Reliance is placed upon the proper functioning of IT systems 
for the effective running of operations. Any interruption to the 
Group’s IT systems could have a materially adverse affect on 
its business.

Prior to any material systems changes being implemented 
the Board approves a project plan. The project is then led 
by a member of the executive team, with an ongoing 
implementation review being carried out by internal audit 
and external consultants where appropriate. The objective is 
always to minimise the risk that business interruption could 
occur as a result of the system changes.

Additionally, the Group has an appropriate business  
continuity plan in the event of interruption arising from an  
IT systems failure.

23  Northgate plc Annual report and accounts 2013

 
 
 
Corporate social responsibility

We understand that we have a  
wider obligation to run our business 
in a responsible and sustainable way 
for all our stakeholders. We believe 
that supporting the communities  
in which we operate and providing  
a safe environment for our 
employees is integral to the overall 
performance of the Group. 

24  Northgate plc Annual report and accounts 2013

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25  Northgate plc Annual report and accounts 2013

 
 
Corporate social responsibility continued

The AFR’s reported are as follows:

How we manage corporate responsibility 

Taking corporate responsibility and sustainability seriously is 
of the utmost importance to Northgate. Sound and robust 
health & safety and environmental (HS&E) arrangements and 
risk controls therefore form a key part of the Group’s overall 
business strategy. 

The Group’s arrangements for HS&E governance and 
management systems are monitored by the Audit and Risk 
Committee who have designated the Chief Executive as the 
person ultimately responsible for implementing best practice 
throughout the Group.

UK 
Spain 
Group 

2013 

1.4 
1.7 
1.5 

2012

1.2 
5.5 
2.5

During the year, the Group was prosecuted in the UK by 
the HSE for one breach of the Construction (Design and 
Management) Regulations which occurred in November 2010. 
Following this, a review of internal controls was undertaken 
which allowed the Group to adopt new and improved 
procedures. We continue to work closely with all authorities 
and encourage any support and advice they may provide.

Ethics

Common and consistent standards in accordance with 
legislative and best practice requirements are applied across all 
Group operations. Risk controls and procedures are continually 
assessed to ensure that everything is being done to meet 
the highest possible standards of HS&E requirements using 
comprehensive and robust HS&E operating controls. 

Northgate holds the highest levels of ethical standards and 
communicates this to all employees by way of the Group’s 
Code of Business Conduct, which covers bribery, competition, 
conﬂicts of interest, inside information, conﬁdentiality, gifts 
and entertainment, discrimination, harassment and fair 
dealing with customers and suppliers.

In addition, the Group’s Whistleblowing Policy and Procedure 
enables every Group employee to have a voice and a means 
by which they may draw concerns to our attention.

Our employees

As a Group we value our employees as we understand that 
they are the key resource required to deliver the high levels of 
customer service that maintains our competitive advantage. At 
30 April 2013 we had 2,714 (2012 – 2,804) employees across 
the Group, 1,856 in the UK (2012 – 1,889) and 858 in Spain 
(2012 – 915). 

We recognise that our employees depend on us and we 
continually work on improving their engagement and 
motivation as the key to delivering high levels of customer 
service. Our employees are rewarded through a combination 
of competitive pay and incentive programmes which enable 
them to share in the progress towards the Group’s objectives. 

The Group’s policy is to recruit the best available people 
who are aligned with and embody our core values of 
(cid:80)(cid:82)(cid:79)(cid:70)(cid:69)(cid:83)(cid:83)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:73)(cid:83)(cid:77)(cid:12)(cid:0)(cid:84)(cid:69)(cid:65)(cid:77)(cid:87)(cid:79)(cid:82)(cid:75)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:65)(cid:78)(cid:13)(cid:68)(cid:79)(cid:0)(cid:65)(cid:84)(cid:84)(cid:73)(cid:84)(cid:85)(cid:68)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:83)(cid:69)(cid:0)
values apply throughout the Group regardless of seniority  
of position.

Health & safety

Our approach to health & safety is simple: to ensure that no 
harm comes to anyone engaged with Northgate. 

We realise that excellence in health and safety can only be 
achieved if it forms part of every individual’s responsibility 
within the Group. Our ‘Safe & Sound’ programme was 
established to create an environment of openness and 
awareness, where all employees feel able to identify and raise 
concerns about working practices and conditions. 

The Group provides training for employees in a wide range 
of health and safety disciplines, most of which is carried out 
internally by the Group’s HS&E department, which in the UK is 
accredited by the British Safety Council. 

During the year the Group’s HS&E department carried out 
formal audit reviews to measure performance of our HS&E 
management system at all locations and where necessary 
identiﬁed improvements and subsequently monitored 
compliance. The main objective of the HS&E department is to 
ensure continuous improvement across the Group and provide 
pragmatic and practical solutions to the operational risks 
within the business to all levels of employees with a strong 
focus on behavioural safety and employee involvement. 

The main way that health & safety across the business is 
monitored is by the Accident Frequency Rate (AFR) during the 
course of our work. The AFR is calculated as the number of 
accidents reportable under the Reporting of Injuries, Diseases 
and Dangerous Occurences Regulations 1995 (RIDDOR) per 
100,000 employee hours worked. Although the legislation in 
Spain deﬁnes reportable accidents under different rules to the 
UK, the data reported is in line with RIDDOR.

26  Northgate plc Annual report and accounts 2013

  
As at 30 April 2013, the UK business operated from a total 
of 74 locations including 65 rental sites. The Spanish business 
operates from a total of 32 locations including 23 rental 
sites. The vast majority of these sites are located on industrial 
estates, so our activities have minimal impact on the local 
community of the areas in which we operate. 

Our customers and suppliers

Northgate recognises the need to support our customers in 
managing a sustainable business. We work with our suppliers 
to make a ﬂeet available to our customers comprised entirely 
of modern vehicles, achieving the highest levels of exhaust 
emission standards.

In Spain we are one of the ﬁrst businesses to offer hire of 
electric vehicles to our customers and our vehicle monitoring 
systems in the UK have enabled certain customers to reduce 
fuel costs by up to 15% by reviewing the usage of their ﬂeets 
and identifying training needs to educate employees on more 
fuel efﬁcient driving methods. 

As at 30 April 2013 the UK ﬂeet of 49,900 vehicles had an 
average age of 21.4 months. The total ﬂeet in Spain was 
35,100 vehicles with an average age of 22.9 months. All 
vehicles purchases in the year ended 30 April 2013 met the 
latest Euro V standards. 

Our community

We must be a responsible employer, neighbour and member 
of the local community and therefore operate our business 
in a way that continuously improves our relationship with 
employees, customers, neighbours and the environment.

The Group is a member of the British Safety Council and the 
Royal Society for the Prevention of Accidents (RoSPA), which 
supports our commitment to corporate social responsibility.

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Our employees continued 

Northgate is committed to equality, judging applications 
for employment neither by race, nationality, gender, age, 
disability, sexual orientation nor political bias.

Investing in the training and development of our workforce 
not only improves the quality and standard of our service 
delivery but enables a high level of retention and allows 
everyone to contribute to their full potential. Regular training 
(cid:80)(cid:82)(cid:79)(cid:71)(cid:82)(cid:65)(cid:77)(cid:77)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:0)(cid:83)(cid:85)(cid:73)(cid:84)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:64)(cid:79)(cid:70)(cid:70)(cid:13)(cid:84)(cid:72)(cid:69)(cid:13)(cid:83)(cid:72)(cid:69)(cid:76)(cid:70)(cid:7)(cid:0)
training courses are available to employees in the UK. Our 
new employee induction programme has also been fully rolled 
out in the UK across the year.

In the UK, the company continues to work with two vehicle 
manufacturers to recruit apprentices. Currently, we are 
training 64 workshop apprentices.

Regular communication with our employees is vital in ensuring 
that we all share in the common goals and values of the 
Group. Our intranet provides daily updates on the progress 
of the Group and the Chief Executive hosts regular brieﬁng 
updates, with an invitation to all staff to directly raise any 
issues concerning them.

Environment

Northgate is committed to taking reasonable actions to 
minimise the risk of adverse impact on the environment 
from our business. We achieve this by adopting a set of 
environmental principles to promote and operate processes 
and procedures which avoid or minimise the contamination of 
water, air or the ground whilst maintaining a responsibility to 
(cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:0)(cid:84)(cid:72)(cid:79)(cid:83)(cid:69)(cid:0)(cid:66)(cid:89)(cid:13)(cid:80)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:87)(cid:65)(cid:83)(cid:84)(cid:69)(cid:0)(cid:77)(cid:65)(cid:84)(cid:69)(cid:82)(cid:73)(cid:65)(cid:76)(cid:83)(cid:0)(cid:71)(cid:69)(cid:78)(cid:69)(cid:82)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)
our activities, particularly from our vehicle repair workshops.

Our ‘Team Green’ environmental campaign was rolled out 
across the Group during the year to improve awareness and 
performance across all business units.

In the UK, Northgate have been awarded the internationally 
recognised Environmental Standard ISO 14001. In Spain, 
Northgate also maintained its accreditation to the  
ISO 14001 Standard.

During the year, we were able to recycle or recover 100% of 
all waste streams generated and collected from our vehicle 
repair workshops in the UK. We were able to recycle or 
recover 71% of all waste streams generated and collected 
from our business operations located in Spain. We continue to 
work closely with our waste management partners to improve 
waste management arrangements and performance across 
the Group. 

27  Northgate plc Annual report and accounts 2013

 
 
Board of Directors

I am delighted to report that 
Jill Caseberry was appointed to the 
(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:0)
in December 2012. Jill’s experience 
is proving invaluable as we 
continue to build on our platform 
for growth.

1  Bob Mackenzie 

Chairman

2  Bob Contreras  
Chief Executive

3  Chris Muir  

Group Finance Director

4  Andrew Allner 

(cid:46)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)

5  Jan Astrand 

(cid:46)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)

6  Tom Brown  

(cid:46)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)

7  Jill Caseberry 

(cid:46)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:0)

Board committees

Audit and Risk
(cid:115)(cid:0) (cid:33)(cid:78)(cid:68)(cid:82)(cid:69)(cid:87)(cid:0)(cid:33)(cid:76)(cid:76)(cid:78)(cid:69)(cid:82)(cid:0)(cid:8)(cid:35)(cid:72)(cid:65)(cid:73)(cid:82)(cid:77)(cid:65)(cid:78)(cid:9)
(cid:115)(cid:0) (cid:42)(cid:65)(cid:78)(cid:0)(cid:33)(cid:83)(cid:84)(cid:82)(cid:65)(cid:78)(cid:68)
(cid:115)(cid:0) (cid:52)(cid:79)(cid:77)(cid:0)(cid:34)(cid:82)(cid:79)(cid:87)(cid:78)
(cid:115)(cid:0) (cid:42)(cid:73)(cid:76)(cid:76)(cid:0)(cid:35)(cid:65)(cid:83)(cid:69)(cid:66)(cid:69)(cid:82)(cid:82)(cid:89)

Remuneration
(cid:115)(cid:0) (cid:52)(cid:79)(cid:77)(cid:0)(cid:34)(cid:82)(cid:79)(cid:87)(cid:78)(cid:0)(cid:8)(cid:35)(cid:72)(cid:65)(cid:73)(cid:82)(cid:77)(cid:65)(cid:78)(cid:9)
(cid:115)(cid:0) (cid:33)(cid:78)(cid:68)(cid:82)(cid:69)(cid:87)(cid:0)(cid:33)(cid:76)(cid:76)(cid:78)(cid:69)(cid:82)
(cid:115)(cid:0) (cid:42)(cid:65)(cid:78)(cid:0)(cid:33)(cid:83)(cid:84)(cid:82)(cid:65)(cid:78)(cid:68)
(cid:115)(cid:0) (cid:42)(cid:73)(cid:76)(cid:76)(cid:0)(cid:35)(cid:65)(cid:83)(cid:69)(cid:66)(cid:69)(cid:82)(cid:82)(cid:89)
(cid:115)(cid:0) (cid:34)(cid:79)(cid:66)(cid:0)(cid:45)(cid:65)(cid:67)(cid:75)(cid:69)(cid:78)(cid:90)(cid:73)(cid:69)

Nominations
(cid:115)(cid:0) (cid:34)(cid:79)(cid:66)(cid:0)(cid:45)(cid:65)(cid:67)(cid:75)(cid:69)(cid:78)(cid:90)(cid:73)(cid:69)(cid:0)(cid:8)(cid:35)(cid:72)(cid:65)(cid:73)(cid:82)(cid:77)(cid:65)(cid:78)(cid:9)
(cid:115)(cid:0) (cid:33)(cid:78)(cid:68)(cid:82)(cid:69)(cid:87)(cid:0)(cid:33)(cid:76)(cid:76)(cid:78)(cid:69)(cid:82)
(cid:115)(cid:0) (cid:42)(cid:65)(cid:78)(cid:0)(cid:33)(cid:83)(cid:84)(cid:82)(cid:65)(cid:78)(cid:68)
(cid:115)(cid:0) (cid:52)(cid:79)(cid:77)(cid:0)(cid:34)(cid:82)(cid:79)(cid:87)(cid:78)
(cid:115)(cid:0) (cid:42)(cid:73)(cid:76)(cid:76)(cid:0)(cid:35)(cid:65)(cid:83)(cid:69)(cid:66)(cid:69)(cid:82)(cid:82)(cid:89)

1

2

3

28  Northgate plc Annual report and accounts 2013

Bob Mackenzie ACA 
Chairman

Andrew Allner FCA  
(cid:46)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)

Appointed to the Board as Chairman in 
February 2010. Prior to his appointment, he 
was Chief Executive of Sea Containers Ltd, 
including the Chairmanship of its subsidiary 
GNER. He was formerly Chairman of Dometic 
Holdings AB, a Swedish based manufacturing 
company, Chairman of PHS Group plc and 
held senior executive board appointments 
with National Parking Corporation, BET 
plc, Storehouse plc and Hanson plc. He has 
also acted as a senior adviser to a number 
of private equity funds. He qualiﬁed as a 
Chartered Accountant with KPMG in 1978. 
Age 60.

Bob Contreras ACA  
Chief Executive

Appointed Chief Executive on 7 June 2010 
having been Group Finance Director since 
June 2008 when he joined the Group. A 
Chartered Accountant, Bob has held senior 
positions with Azlan Group plc, Damovo 
Group SA and most recently with Mölnlycke 
Healthcare Group. Age 50.

Chris Muir ACA  
Group Finance Director

Appointed to the Board as Group Finance 
Director on 19 May 2011. Chris originally 
joined Northgate as Group Accountant in 
2003, being appointed Group Financial 
Controller in March 2004 and UK Finance 
Director in May 2006. Qualifying as a 
Chartered Accountant in 1999, Chris worked 
for Deloitte LLP from 1997 until 2003, leaving 
as a manager. Chris has a ﬁrst class honours 
degree in Economics and Accountancy 
from the University of Newcastle upon Tyne. 
Age 37.

(cid:33)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)
Director and to the Chair of the Audit and 
Risk Committee in September 2007. Andrew 
(cid:73)(cid:83)(cid:0)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:76)(cid:89)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:35)(cid:72)(cid:65)(cid:73)(cid:82)(cid:77)(cid:65)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)
(cid:45)(cid:65)(cid:82)(cid:83)(cid:72)(cid:65)(cid:76)(cid:76)(cid:83)(cid:0)(cid:80)(cid:76)(cid:67)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:39)(cid:79)(cid:13)(cid:33)(cid:72)(cid:69)(cid:65)(cid:68)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:80)(cid:76)(cid:67)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)
Fox Marble Holdings plc. He is also Senior 
Independent Director and Chairman of the 
Audit Committee at AZ Electronic Materials 
(cid:51)(cid:33)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:83)(cid:69)(cid:82)(cid:86)(cid:69)(cid:83)(cid:0)(cid:65)(cid:83)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)
Chairman of the Audit Committee at CSR 
plc. He was Group Finance Director of RHM 
plc, taking a lead role in its ﬂotation on the 
London Stock exchange in July 2005. Prior 
to joining RHM plc, Andrew was CEO of 
Enodis plc and has served in senior executive 
positions with Dalgety plc, Amersham 
International plc and Guinness plc. He was 
(cid:65)(cid:76)(cid:83)(cid:79)(cid:0)(cid:65)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:0)(cid:79)(cid:70)(cid:0)(cid:45)(cid:79)(cid:83)(cid:83)(cid:0)(cid:34)(cid:82)(cid:79)(cid:83)(cid:0)
Group plc from 2001 to 2005. A graduate 
of Oxford University, he is a former partner 
of Price Waterhouse and is a Fellow of the 
Institute of Chartered Accountants in England 
and Wales. Age 59.

Jan Astrand MBA  
(cid:46)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)

(cid:33)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)
Director in February 2001. Jan is also currently 
(cid:65)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:0)(cid:79)(cid:70)(cid:0)(cid:44)(cid:65)(cid:86)(cid:69)(cid:78)(cid:68)(cid:79)(cid:78)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)
plc. A Swedish national, Jan was Chairman 
of CRC Group plc until January 2007. Prior 
to this, he was Chairman of Car Park Group 
AB in Stockholm and also Senior Independent 
Director of PHS Group plc. From 1994 to 
1999 he was President and Chief Executive 
of Axus (International) Inc. (previously known 
as Hertz Leasing International). From 1989 

to 1994 he was Vice President, Finance and 
Administration and Chief Financial Ofﬁcer 
of Hertz (Europe) Ltd and before that he 
was Chief Financial Ofﬁcer of Commodore 
International Ltd based in the US. Age 65.

Tom Brown MA (Oxon) MBA IMD  
(cid:46)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)

(cid:33)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)
Director in April 2005 and appointed Senior 
Independent Director in June 2007. Tom is a 
Director of a number of private companies 
and a member of the Economics Committee 
of the EEF. He was previously Chairman of 
Chamberlin plc, Group Chief Executive of 
United Industries plc and before that Group 
Managing Director of Fenner plc. In all he has 
served on the boards of UK quoted companies 
for some 25 years, following executive roles 
with GKN plc and a period consulting with 
McKinsey & Co Inc. Age 63.

Jill Caseberry 
(cid:46)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:0)

(cid:33)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)
Director in December 2012. Jill has extensive 
sales, marketing and general management 
experience across a number of blue chip 
companies including Mars, PepsiCo and 
Premier Foods. She currently runs her own 
sales and marketing consultancy and is CEO 
(cid:79)(cid:70)(cid:0)(cid:65)(cid:0)(cid:70)(cid:79)(cid:79)(cid:68)(cid:15)(cid:66)(cid:69)(cid:86)(cid:69)(cid:82)(cid:65)(cid:71)(cid:69)(cid:0)(cid:83)(cid:84)(cid:65)(cid:82)(cid:84)(cid:13)(cid:85)(cid:80)(cid:0)(cid:66)(cid:85)(cid:83)(cid:73)(cid:78)(cid:69)(cid:83)(cid:83)(cid:14)(cid:0)(cid:48)(cid:82)(cid:73)(cid:79)(cid:82)(cid:0)(cid:84)(cid:79)(cid:0)
setting up these businesses Jill was general 
manager of a Premier Foods division. Age 48.

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29  Northgate plc Annual report and accounts 2013

 
 
Report of the Directors

The Directors present their report and the audited accounts 
for the year ended 30 April 2013.

may result in restrictions on the transfer of securities or on 
voting rights.

Details of employee share schemes are set out in the 
Remuneration Report. Shares held by the Capita Trust are 
voted on the instructions of the employees on whose behalf 
they are held. Shares in the Guernsey Trust are voted at the 
discretion of the Trustees.

No person has any special rights of control over the 
Company’s share capital and all issued shares are fully paid.

With regards to the appointment and replacement of 
Directors, the Company is governed by its Articles of 
Association, the UK Corporate Governance Code, the 
Companies Act and related legislation. The Articles 
themselves may be amended by special resolution of the 
shareholders. The powers of Directors are set out in the 
Articles.

The Directors are not aware of any agreements between the 
Company and its Directors or employees that provide for 
compensation for loss of office or employment that occurs 
because of a change of control.

Interests in shares
The following interests in the issued Ordinary share capital 
of the Company have been notified to the Company 
in accordance with the provisions of Chapter 5 of the 
Disclosure and Transparency Rules:

30 April 2013

24 June 2013

9,323,756 (7.0%) 9,323,756 (7.00%)

12,465,075 (9.36%) 12,465,075 (9.36%)

Capital Group
Standard Life 
Investments Ltd
Henderson Global 
Investors Ltd
7,835,483 (5.88%) 8,022,055 (6.02%)
Aberforth Partners 7,481,552 (5.62%) 7,481,552 (5.62%)
Legal & General 
Group plc
Aviva plc
Artemis 
Investment 
Management Ltd

6,698,272 (5.03%) 6,698,272 (5.03%)
6,672,204 (5.01%) 6,672,204 (5.01%)

7,115,776 (5.34%) 6,536,818 (4.90%)

Directors
Details of the present Directors are listed on pages 28 and 
29. All have served throughout the year except Jill Caseberry 
who was appointed on 10 December 2012.

(cid:50)(cid:69)(cid:83)(cid:79)(cid:76)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:84)(cid:79)(cid:0)(cid:82)(cid:69)(cid:13)(cid:65)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:0)(cid:69)(cid:65)(cid:67)(cid:72)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:79)(cid:70)(cid:70)(cid:73)(cid:67)(cid:69)(cid:0)
at the date of this report will be proposed at the Annual 
General Meeting.

The termination provisions in respect of executive Directors’ 
contracts are set out in the Remuneration Report on 
pages 33 to 39.

Results
Loss for the year after taxation was £7,357,000 (2012 – 
profit of £40,468,000).

An interim dividend of 1.3p per share was paid on the 
Ordinary shares on 11 January 2013.

The Directors recommend the payment of a final dividend 
of 6.0p per share on the Ordinary shares. This dividend, 
if approved, will be paid on 21 September 2013 to 
shareholders on the register at close of business on 
16 August 2013.

Principal activities and business review
The Company is an investment holding company.

The principal subsidiaries are listed in Note 17 to the 
accounts.

The information that fulfils the requirements of the Business 
Review, together with a description of the principal activities 
of the business, can be found in the Operational Review and 
Financial Review on pages 14 to 23, which are incorporated 
in this report by reference.

A description of the principal risks and uncertainties facing 
the Company and the Group is set out on pages 22 and 23 
which are incorporated into this report by reference.

Close company status
So far as the Directors are aware the close company 
provisions of the Income and Corporation Taxes Act 1988 do 
not apply to the Company.

Capital structure
Details of the issued share capital, together with details of 
any movements during the year are shown in Note 24. The 
Company has one class of Ordinary share which carries no 
right to fixed income. Each share carries the right to one vote 
at general meetings of the Company.

The cumulative Preference shares of 50p each entitle the 
holder to receive a cumulative preferential dividend at the 
rate of 5% on the paid up capital and the right to a return 
of capital at either winding up or a repayment of capital. The 
cumulative Preference shares do not entitle the holders to 
any further or other participation in the profits or assets of 
the Company.

The percentage of the issued nominal value of the Ordinary 
shares is 99.255% of the total issued nominal value of all 
share capital.

There are no specific restrictions on the size of a holding nor 
on the transfer of shares, which are both governed by the 
general provisions of the Articles of Association (‘the Articles’) 
and prevailing legislation. The Directors are not aware of any 
agreements between holders of the Company’s shares that 

30  Northgate plc Annual report and accounts 2013

 
Report of the Directors

Directors continued

The following are the interests of the Directors who were in 
office at the end of the financial year in the share capital of 
the Company. All interests are beneficial.

Ordinary 
Shares 
 of 50p each 
30 April 2013

Ordinary Shares 
 of 50p each 
1 May 2012

13,090
51,920
52,634
Nil
118,168
100,000
19,053

13,090
51,920
52,634

Nil*

116,608
100,000
17,493

AJ Allner
JG Astrand
THP Brown
G Caseberry
RL Contreras
RD Mackenzie
CJR Muir

*On date of appointment.

No Director has an interest in the Preference shares of the 
Company.

No changes in the above interests have occurred between 
30 April 2013 and the date of this report.

Details of options held by the Directors under the Company’s 
various share schemes are given in the Remuneration Report 
on pages 33 to 39.

Directors’ indemnities
As permitted by the Company’s Articles of Association, 
qualifying third party indemnities for each Director of 
the Company were in place throughout the year and 
remained in force as at the date of signing of this report. 
The Company’s Articles of Association are available on the 
Company’s website.

Donations
During the year the Group made charitable donations of 
£5,000 (2012 – £3,000) principally to local charities serving 
the communities in which the Group operates.

No political donations were made.

Payment of suppliers
The Group’s policy is to pay suppliers within normal trading 
terms agreed with that supplier. The policy is made known 
to the staff who handle payments to suppliers. At 30 April 
2013 the Group’s creditor days were as shown in Note 20 to 
the accounts.

Employee consultation
Employees are kept informed on matters affecting 
them as employees and on various issues affecting the 
performance of the Group through Chief Executive briefing 
updates, announcements on the Group’s intranet, formal 
and informal meetings at local level and direct written 
communications. All employees are eligible to participate on 
an equal basis in the Group’s share incentive plan, which has 
been running successfully since its inception in 2000.

31  Northgate plc Annual report and accounts 2013

Disabled employees
Applications for employment by disabled persons are 
given full consideration, taking into account the aptitudes 
of the applicant concerned. Every effort is made to try 
to ensure that employees who become disabled whilst 
already employed are able to continue in employment by 
making reasonable adjustments in the workplace, arranging 
appropriate training or providing suitable alternative 
employment. It is Group policy that the training, career 
development and promotion of disabled persons should, 
as far as possible, be the same as that of other employees. 
The Group’s equal opportunity policy is available on the 
Company’s website.

Remuneration report
As required by the Directors’ Remuneration Report 
Regulations 2002, the Remuneration Report, set out on 
pages 33 to 39, will be put to shareholders for approval at 
the Annual General Meeting.

Power to allot shares
The present authority of the Directors to allot shares was 
granted at the Annual General Meeting held in September 
2012 and expires at the forthcoming Annual General 
Meeting. A resolution to renew that authority for a period 
expiring at the conclusion of the Annual General Meeting 
to be held in 2014 will be proposed at the Annual General 
Meeting. The authority will permit the Directors to allot up 
to an aggregate nominal amount of £22m of share capital 
which represents less than 33% of the present issued 
Ordinary share capital and is within the limits approved by 
the Investment Committees of the Association of British 
Insurers and the National Association of Pension Funds.

The Directors have no present intention of exercising such 
authority and no issue of shares which would effectively alter 
the control of the Company will be made without the prior 
approval of shareholders in general meeting.

A special resolution will be proposed to renew the authority 
of the Directors to allot Ordinary shares for cash other 
than to existing shareholders on a proportionate basis. The 
authority will be limited to an aggregate nominal amount of 
£3,330,000 representing approximately 5% of the current 
issued Ordinary share capital.

The Directors have no present intention of exercising this 
authority and confirm their intention to follow the provisions 
(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:48)(cid:82)(cid:69)(cid:13)(cid:69)(cid:77)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:7)(cid:83)(cid:0)(cid:51)(cid:84)(cid:65)(cid:84)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:48)(cid:82)(cid:73)(cid:78)(cid:67)(cid:73)(cid:80)(cid:76)(cid:69)(cid:83)(cid:0)(cid:82)(cid:69)(cid:71)(cid:65)(cid:82)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)
cumulative use of such authorities within a rolling three 
year period. The Principles provide that companies should 
not issue shares for cash representing more than 7.5% of 
the Company’s issued share capital in any rolling three year 
period, other than to existing shareholders, without prior 
consultation with shareholders.

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Report of the Directors continued

Length of notice of general meetings
The minimum notice period permitted by the Companies Act 
2006 for general meetings of listed companies is 21 days, 
but the Act provides that companies may reduce this 
period to 14 days (other than for AGMs) provided that two 
conditions are met. The first condition is that the Company 
offers a facility for shareholders to vote by electronic means. 
This condition is met if the Company offers a facility, 
accessible to all shareholders, to appoint a proxy by means 
of a website. Please refer to Note 6 to the Notice of Annual 
General Meeting on page 100 for details of the Company’s 
arrangements for electronic proxy appointment. The second 
condition is that there is an annual resolution of shareholders 
approving the reduction of the minimum notice period from 
21 days to 14 days.

A resolution to approve 14 days as the minimum period of 
notice for all general meetings of the Company other than 
AGMs will be proposed at the Annual General Meeting. The 
approval will be effective until the Company’s next AGM, 
when it is intended that the approval be renewed.

It is the Board’s intention that this authority would not be 
used as a matter of routine, but only when merited by the 
circumstances of the meeting and in the best interests of 
shareholders.

Authority for the Company to purchase its own shares
The Directors propose to renew the general authority of 
the Company to make market purchases of its own shares 
to a total of 13,300,000 Ordinary shares (representing 
approximately 10% of the issued Ordinary share capital) and 
within the price constraints set out in the special resolution to 
be proposed at the Annual General Meeting.

There is no present intention to make any purchase of own 
shares and, if granted, the authority would only be exercised 
if to do so would result in an improvement in earnings per 
share for remaining shareholders.

Financial instruments
Details of the Group’s use of financial instruments are given 
in the Financial Review on page 20 and in Notes 22 and 37 
to the accounts.

Auditor
In the case of each of the persons who are Directors of the 
Company at the date when this report was approved:

(cid:115)(cid:0)

(cid:115)(cid:0)

so far as each of the Directors is aware, there is no 
relevant audit information of which the Company’s 
auditor is unaware; and

each of the Directors has taken all the steps that he 
ought to have taken as a Director to make himself 
aware of any relevant audit information (as defined) 
and to establish that the Company’s auditor is aware of 
that information.

This confirmation is given and should be interpreted in 
accordance with the provisions of s418 Companies Act 
2006.

(cid:33)(cid:0)(cid:82)(cid:69)(cid:83)(cid:79)(cid:76)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:69)(cid:13)(cid:65)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:36)(cid:69)(cid:76)(cid:79)(cid:73)(cid:84)(cid:84)(cid:69)(cid:0)(cid:44)(cid:44)(cid:48)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:79)(cid:82)(cid:0)
of the Company will be proposed at the forthcoming Annual 
General Meeting. This proposal is supported by the Audit 
and Risk Committee.

By order of the Board

D Henderson 
Secretary

24 June 2013

32  Northgate plc Annual report and accounts 2013

Remuneration report

The Remuneration Committee has written terms of reference 
which are available on the Company’s website. Membership 
of the Committee is shown on page 28.

The Committee is responsible for making recommendations 
to the Board on the remuneration packages and terms and 
conditions of employment of the Chairman, the executive 
Directors of the Company and of the Company Secretary. 
The Committee also reviews remuneration policy generally 
throughout the Group. The Committee consults with the 
Chief Executive who may be invited to attend meetings. The 
Company Secretary is secretary to the Committee. Neither 
the Chief Executive nor the Company Secretary take part in 
discussions relating to their own remuneration.

The senior executives below Board level, both in the UK 
and Spain, also have a significant influence on the ability of 
the Company to achieve its goals. Accordingly, in addition 
to setting the remuneration of the executive Directors, the 
Committee also reviews the remuneration for these senior 
employees, to ensure that rewards are competitive with the 
market and that they are appropriate relative to the Board 
and to the remaining employees.

The Committee has access to external independent advice 
on matters relating to remuneration. During the year the 
Committee took advice from New Bridge Street (NBS) 
(an Aon plc company) on remuneration matters and 
share scheme implementation. NBS is appointed by the 
Committee. Neither NBS nor any other Aon plc company 
undertakes other work for the Company or the Group. The 
terms of engagement between the Committee and NBS are 
available on request from the Company Secretary.

Whilst the Committee has followed closely the consultation 
and pending introduction of the new Directors' 
Remuneration Reporting Regulations, these Regulations have 
not yet been approved by Parliament and are not expected 
to come into effect until 1 October 2013. This report has 
therefore been prepared in compliance with the existing 
Regulations. The Committee will report fully under the new 
Regulations, as required, in 2014.

Remuneration policy
The Committee aims to ensure that executive Directors 
are fairly and competitively rewarded for their individual 
contributions by means of basic salary, benefits in kind and 
pension benefits. High levels of performance are recognised 
by annual bonuses and the motivation to achieve the 
maximum benefit for shareholders in the future is provided 
by the allocation of long term share incentives. Only basic 
salary is pensionable.

The Committee believes that its current policy of applying 
greater weighting to the variable elements of executive 
remuneration continues to be appropriate for the business 
going forward and, in incentivising the longer term 
performance of the Company, provides greater alignment 
with the interests of shareholders.

In line with the Association of British Insurers’ Guidelines on 
Responsible Investment Disclosure, the Committee will seek 

33  Northgate plc Annual report and accounts 2013

to ensure that the incentive structure for executive Directors 
and senior management will not raise environmental, 
social or governance (ESG) risks by inadvertently motivating 
irresponsible behaviour. More generally, with regard to the 
overall remuneration structure, there is no restriction on the 
Committee which prevents it from taking into account ESG 
matters.

Service contracts
The executive Directors have rolling service contracts, which 
may be terminated by 12 months’ notice from the Company 
or by six months‘ notice from the Director. The dates of the 
contracts are:

RL Contreras
CJR Muir

27 May 2011
19 May 2011

In the event of early termination of an executive Director’s 
service contract, compensation of up to the equivalent of 
one year’s basic salary and benefits may be payable: there 
is no contractual entitlement to compensation beyond this. 
Directors have a duty to make reasonable efforts to mitigate 
any loss arising from such termination and the Committee 
will have regard to that duty on a case by case basis when 
assessing the appropriate level of compensation which 
may be payable. It is also the Board’s policy that where 
compensation on early termination is due, in appropriate 
circumstances it should be paid on a phased basis.

Basic salaries
In accordance with the Company’s policy of paying lower 
basic salaries coupled with higher incentives, the current 
basic salaries paid to the executive Directors are as follows:

RL Contreras
CJR Muir

£375,000
£225,000

Basic salaries are normally reviewed annually taking into 
account the performance of the individual, changes in 
responsibilities, market trends and pay and employment 
conditions elsewhere in the Group.

Bob Contreras has received no increase in basic pay this year.

On his appointment in May 2011, Chris Muir’s salary 
was set significantly below market level at £175,000. The 
Committee’s intention was to increase his salary to the 
market level over several years subject to both his and the 
Company’s performance. On 1 May 2012 his basic salary 
was increased by 14.0% to £200,000. Effective 1 May 2013 
his basic salary has been further increased by 12.5% to 
£225,000. This increase has moved Chris Muir closer to the 
market rate. Subject to performance, further increases may 
be made in subsequent years.

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Remuneration report continued

Total remuneration
The chart below shows the balance between fixed and 
variable performance based pay for Bob Contreras and Chris 
Muir for the year ended 30 April 2013 and projections for 
the year ending 30 April 2014.

For 2013 an expected value of 55% of the face value has 
been used in respect of the performance shares awarded in 
that year.

Total reward for 2014 can only be estimated, because the 
actual value of the cash and deferred bonus will not be 
known until the end of the relevant performance period. 
A target level of bonus of 50% of the maximum and an 
expected value of 55% of the face value has been used in 
respect of performance shares and 100% of the face value 
in respect of deferred bonus shares.

RL Contreras 

2013 

2014 

375 

375 

98 

309

98   94  94 

309

CJR Muir 

2013 

200  56  165

2014 

225 

58 56 56  185

Base salary
(cid:40)
Pension & beneﬁts
(cid:40) 
(cid:40)  Annual bonus – cash
(cid:40)  Annual bonus – deferred shares
(cid:40) 

Performance shares

External appointments
The Board recognises that executive Directors may be invited 
(cid:84)(cid:79)(cid:0)(cid:66)(cid:69)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)
that such appointments can broaden their knowledge and 
experience, to the benefit of the Group. Provided that it does 
not impact on their executive duties, Directors are generally 
allowed to accept one such appointment. As the purpose of 
(cid:83)(cid:69)(cid:69)(cid:75)(cid:73)(cid:78)(cid:71)(cid:0)(cid:83)(cid:85)(cid:67)(cid:72)(cid:0)(cid:80)(cid:79)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:73)(cid:83)(cid:0)(cid:83)(cid:69)(cid:76)(cid:70)(cid:13)(cid:69)(cid:68)(cid:85)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:82)(cid:65)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:65)(cid:78)(cid:0)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)
reward, any resulting fees would normally be expected 
to be paid to the Company as compensation for the time 
commitment involved. No such external appointments are 
currently held.

Pension schemes
Throughout the year all pension arrangements (other 
than the Willhire Pension Scheme – see Note 36 of the 
accounts) operated by the Group were defined contribution 
type schemes. The executive Directors receive a pension 
contribution of 18% of salary.

Non-executive directors
(cid:52)(cid:72)(cid:69)(cid:0)(cid:82)(cid:69)(cid:77)(cid:85)(cid:78)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:8)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:65)(cid:78)(cid:0)
the Chairman) is determined by the Board as a whole, within 
(cid:84)(cid:72)(cid:69)(cid:0)(cid:79)(cid:86)(cid:69)(cid:82)(cid:65)(cid:76)(cid:76)(cid:0)(cid:76)(cid:73)(cid:77)(cid:73)(cid:84)(cid:0)(cid:83)(cid:69)(cid:84)(cid:0)(cid:66)(cid:89)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:33)(cid:82)(cid:84)(cid:73)(cid:67)(cid:76)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:33)(cid:83)(cid:83)(cid:79)(cid:67)(cid:73)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:14)(cid:0)(cid:46)(cid:79)(cid:78)(cid:13)
executive Directors are not eligible for performance related 
payments nor may they participate in the Company’s share 
(cid:73)(cid:78)(cid:67)(cid:69)(cid:78)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:79)(cid:82)(cid:0)(cid:80)(cid:69)(cid:78)(cid:83)(cid:73)(cid:79)(cid:78)(cid:0)(cid:83)(cid:67)(cid:72)(cid:69)(cid:77)(cid:69)(cid:83)(cid:14)(cid:0)(cid:46)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:72)(cid:65)(cid:86)(cid:69)(cid:0)
letters of appointment with the Company under which their 
appointments are terminable without notice.

34  Northgate plc Annual report and accounts 2013

The original dates of appointment to the Board and of their 
current letters of appointment are:

RD Mackenzie
AJ Allner
JG Astrand
THP Brown
G Caseberry

Date of appointment
5 February 2010
26 September 2007
13 February 2001
13 April 2005

Letter of appointment
28 May 2013
22 June 2011
22 June 2011
22 June 2011
10 December 2012 10 December 2012

(cid:52)(cid:72)(cid:69)(cid:0)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)(cid:70)(cid:69)(cid:69)(cid:83)(cid:0)(cid:80)(cid:65)(cid:73)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)
shown below:

RD Mackenzie Chairman
AJ Allner
JG Astrand
THP Brown

Chairman of Audit and Risk Committee

(cid:46)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)
Senior Independent Director and Chairman 
of Remuneration Committee

G Caseberry

(cid:46)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)

£160,000

£60,000†
£50,000

£68,000*
£50,000

†  Including £10,000 in respect of his Chairmanship of the Audit and Risk Committee.
*  Including £8,000 in respect of his Chairmanship of the Remuneration 

Committee and £10,000 as Senior Independent Director.

No fees were increased on review this year. The fee structure 
(cid:70)(cid:79)(cid:82)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:82)(cid:69)(cid:70)(cid:76)(cid:69)(cid:67)(cid:84)(cid:83)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:84)(cid:73)(cid:77)(cid:69)(cid:0)(cid:67)(cid:79)(cid:77)(cid:77)(cid:73)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)
(cid:65)(cid:78)(cid:68)(cid:0)(cid:82)(cid:69)(cid:83)(cid:80)(cid:79)(cid:78)(cid:83)(cid:73)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:67)(cid:65)(cid:82)(cid:82)(cid:89)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:85)(cid:84)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:68)(cid:85)(cid:84)(cid:73)(cid:69)(cid:83)(cid:14)(cid:0)(cid:38)(cid:69)(cid:69)(cid:83)(cid:0)
are set taking into account market practice for similar roles in 
companies of a comparable size.

Performance graph
(cid:33)(cid:83)(cid:0)(cid:82)(cid:69)(cid:81)(cid:85)(cid:73)(cid:82)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:51)(cid:67)(cid:72)(cid:69)(cid:68)(cid:85)(cid:76)(cid:69)(cid:0)(cid:24)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:44)(cid:65)(cid:82)(cid:71)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:45)(cid:69)(cid:68)(cid:73)(cid:85)(cid:77)(cid:13)(cid:83)(cid:73)(cid:90)(cid:69)(cid:68)(cid:0)
Companies and Groups (Accounts and Reports) Regulations 
2008, the graph below illustrates the performance of 
Northgate plc measured by Total Shareholder Return (share 
price growth plus dividends paid) against a ‘broad equity 
market index’ over the last five years. As the Company has 
been a constituent of the FTSE 250 index for the majority 
of the last five years, that index (excluding investment 
companies) is considered to be the most appropriate 
(cid:66)(cid:69)(cid:78)(cid:67)(cid:72)(cid:77)(cid:65)(cid:82)(cid:75)(cid:14)(cid:0)(cid:52)(cid:72)(cid:69)(cid:0)(cid:77)(cid:73)(cid:68)(cid:13)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:0)(cid:80)(cid:82)(cid:73)(cid:67)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:7)(cid:83)(cid:0)
Ordinary shares at 30 April 2013 was 339p (30 April 2012 – 
199p). The range during the year was 160p to 350p.

Total shareholder return

)
£
(

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180

160

140

120

100

80

60

40

20

0

30-Apr-08

30-Apr-09

30-Apr-10

30-Apr-11

30-Apr-12

30-Apr-13

Northgate plc
FTSE 250 (Excl. Inv. Trusts) Index

Source: Thomson Reuters

This graph shows the value, by 30 April 2013, of £100 
invested in Northgate plc on 30 April 2008 compared with 
that of £100 invested in the FTSE 250 (Excl. Inv. Trusts) 
Index. The other points plotted are the values at intervening 
financial year ends.

 
 
 
 
 
 
 
 
 
The following parts of this report have been audited:

RD Mackenzie
AJ Allner
JG Astrand
THP Brown
G Caseberry***
RL Contreras
CJR Muir

Total emoluments excluding pension 
contributions

Total pension contributions

Salary/ 
fees 
£000
160
60
50
68
21
375
200

934

–

Bonus 
£000
–
–
–
–
–
–
–

–

–

Beneﬁts* 
£000
–
–
–
–
–
63
20

Total 
2013 
£000
160
60
50
68
21
438
220

Total 
2012 
£000
160
60
50
68
–
766
339

83

–

1,017

1,443

–

–

Pension contributions**

2013 
£000
–
–
–
–
–
35
36

–

71

2012 
£000
–
–
–
–
–
35
30

–

65

*   These benefits include: company car, private medical insurance, permanent health insurance, life assurance and payments in lieu of pension contributions.
**  All contributions are to a defined contribution type scheme.
***  From 10 December 2012

In addition to the fees shown above, paid in respect of his office as a Director of the Company, Jan Astrand also received fees 
of €64,800 (2012 – €129,600) in respect of his consultancy work in Spain referred to in the Corporate Governance Report on 
pages 42 to 44.

Incentive plans
(cid:40)(cid:73)(cid:83)(cid:84)(cid:79)(cid:82)(cid:73)(cid:67)(cid:65)(cid:76)(cid:76)(cid:89)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:72)(cid:65)(cid:83)(cid:0)(cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:84)(cid:72)(cid:82)(cid:69)(cid:69)(cid:0)(cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:13)(cid:66)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0)
incentive schemes. Directors participate in the Executive 
Performance Share Plan (EPSP) and Deferred Annual 
Bonus Plan (DABP) and below the Board other executives 
participate in the Management Performance Share Plan 
(MPSP) and DABP. No executive has participated in all three 
schemes at the same time. Expressed in face value terms, 
this effectively provides Directors with a cap of 200% of 
basic salary for share awards each year (150% under the 
EPSP and 50% under the DABP).

After reviewing the effectiveness of the MPSP, the 
Committee has determined that it no longer serves the 
purpose for which it was originally intended and no 
further awards will be made under the plan, the last award 
therefore being that made in August 2012. Instead, the 
Committee is introducing a new long term incentive plan 
(the 'Equity Value Management Incentive Plan') for the 
benefit of the UK senior management team only. The 
UK senior management team currently comprises four 
individuals, although the Committee has the discretion to 
include new joiners in future. Participants in this scheme will 
continue to participate in the DABP.

The participants will share in the growth in the notional 
equity value of the UK and Irish business over the five year 
life of the plan from 1 May 2013. Benefits will be paid 
wholly in cash.

The Committee believes this arrangement will provide a 
strong incentive to grow the business over that period 
and at the same time will aid retention of a relatively new 
management team.

The executive Directors will not participate in this new plan.

In line with current best practice guidelines, the Committee 
has introduced claw back provisions into the rules of all 
(cid:83)(cid:67)(cid:72)(cid:69)(cid:77)(cid:69)(cid:83)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:67)(cid:65)(cid:78)(cid:0)(cid:66)(cid:69)(cid:0)(cid:73)(cid:78)(cid:86)(cid:79)(cid:75)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:69)(cid:86)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:77)(cid:73)(cid:83)(cid:13)
statement, gross misconduct or fraud and which apply to all 
awards made from 2010 onwards.

Awards held by Directors during the year are shown in the 
table on page 37.

Deferred annual bonus plan
The DABP was introduced in 2003 for executive Directors 
and senior and middle management. Part of the bonus is 
delivered in cash and part in the form of deferred shares 
awarded following the announcement of the Group’s full 
year results. The total maximum potential bonus (cash and 
shares) which may be achieved by each executive Director 
is 100% of basic salary earned in the financial year. 50% of 
the total bonus actually earned is paid in cash and 50% is 
(cid:68)(cid:69)(cid:70)(cid:69)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0)(cid:65)(cid:83)(cid:0)(cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:83)(cid:14)(cid:0)(cid:52)(cid:72)(cid:69)(cid:0)(cid:76)(cid:69)(cid:86)(cid:69)(cid:76)(cid:0)(cid:79)(cid:70)(cid:0)(cid:66)(cid:79)(cid:78)(cid:85)(cid:83)(cid:0)(cid:80)(cid:65)(cid:89)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:64)(cid:79)(cid:78)(cid:13)(cid:84)(cid:65)(cid:82)(cid:71)(cid:69)(cid:84)(cid:7)(cid:0)
performance is 50% of salary.

The deferred shares may be received by the employee after 
three years and are subject to forfeiture if the employee 
chooses to leave during that time. This provides a strong 
retention mechanism and has the motivational benefits of 
certainty and clarity for the employee. During the retention 
period, executives continue to have an incentive to influence 
the share price so as to maximise the value on release.

Awards over 623,603 deferred shares to 70 executives were 
outstanding at 30 April 2013.

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35  Northgate plc Annual report and accounts 2013

 
 
 
 
 
 
 
 
Remuneration report continued

Deferred annual bonus plan continued

The relevant targets are:

No bonuses are payable to the executive Directors in respect 
of the year ended 30 April 2013.

The bonus for the executive Directors in respect of the year 
ending 30 April 2014 will comprise three elements reflecting 
the Group’s near term priorities:

 UK Marginal Contribution (MC). MC is defined as all 
revenue except from the sale of used vehicles, less 
the depreciation charge on hire vehicles. A UK MC 
of £180,028,000 pays zero bonus, £187,502,000 
pays one third of annual salary, with a straight line in 
between.

2010 award
2011 award
2012 award†
2013 award†

EPS in 3rd Year

Threshold
31.45p
38.50p

ROCE average over 3 years
Threshold
Stretch
10.20% 12.00%
13.50% 13.85%
CPI +3% CPI +11% 13.75% 14.41%
CPI +3% CPI +11% 11.50% 12.40% 

Stretch
37.00p
47.20p

† 

 The EPS targets will be calculated by applying the compound annual growth 
to the prior year's actual

The ROCE target for the 2013 award reflects the difficult 
economic environment in Spain and the short term effects of 
the new branch opening programme in the UK.

 Spain. Performance to be measured against a matrix 
of local net debt and ROCE, with a maximum bonus of 
one third of annual salary.

 Group ROCE. 10.4% pays zero bonus, 11.2% pays one 
third of annual salary, with a straight line in between.

The EPS target for the 2010 award was not achieved at the 
threshold level while the stretch ROCE target was achieved. 
With two thirds of the award based on EPS and one third 
on ROCE, this will result in a total vesting of one third of the 
original award, equating to 100,864 shares for the Chief 
Executive.

1. 

2. 

3. 

No element of bonus will be paid unless Group operating 
profit is at least 95% of the Group's budgeted operating 
profit for the year.

Executive performance share plan
Only executive Directors and the Company Secretary 
participate in the EPSP. Awards under the EPSP vest after 
three years subject to continued employment and the 
satisfaction of challenging performance targets. In line 
with the Committee’s policy of placing greater emphasis 
on variable pay than on base salaries, grants for executive 
Directors are currently being made at 150% of salary face 
value, being the maximum permitted under the rules. 
Consistent with the approach used in recent years, the 
performance targets applying to the grants to be made in 
2013 will be a mixture of underlying EPS and ROCE. 50% of 
the award will apply to each measure to closely reflect the 
importance the Board places on balance sheet management. 
25% of each part of the award will vest for achieving a 
threshold performance target increasing to full vesting for 
achieving a stretch performance target. The Committee 
considers that EPS and ROCE are the most appropriate 
performance measures for the EPSP since they incentivise the 
executives to both improve the earnings profile of the Group 
and manage balance sheet efficiency (important for a capital 
intensive business), both of which should flow through to 
superior returns for shareholders. Currently EPS targets are 
set for the third year of the three year performance period 
and ROCE targets are set for the average of the three years 
of the performance period.

36  Northgate plc Annual report and accounts 2013

 
 
Directors’ interests in share awards

At 
1 May 
2012

Number 
granted

Market 
price at 
grant p

 Number 
exercised

 Date of 
exercise

Exercise 
price p

Share 
price 
on 
date of 
exercise 
p

Gross 
gain on 
exercise 
£

 Number 
lapsed

At 
30 April 
2013

Executive performance share plan

RL Contreras

CJR Muir

130,952
302,593
171,546

–
–
–
– 269,138

605,091

269,138

157.5
173.5
327.9
209.0

80,054

–
– 143,450

327.9
209.0

80,054

143,450

Management performance share plan

CJR Muir

9,6021
28,5711
23,6181

61,791

Deferred annual bonus plan2

292.0
157.5
173.5

–
–
–

–

–

RL Contreras

CJR Muir

29,7195
9,149
(with
 capped
value of
£30,000)3
9,1494
44,2205
–

–
–
–
78,9475

 327.9

83,088

78,947

15,8731
9,3371
7,295
(with
 capped
value of
£23,920)3
7,2954

–  
–

 327.9

–
 –
2,908
(with
 capped
 value of

–
–
–

£6,078)3
2,9084
33,9345

209.0

32,505

36,842 

–
–
–
–

–
–

–
–
–

–

–
–
–
–

–
–

–
–

–
–
–

–
–
–
–

–
–

–
–
–

–

–
327.9
–
–

–
–

–
327.9

–
209.0
–

–
–
–
–

–
–

–
–
–

–

–
–
–
–

–
–

–
–

–
–
–

–
–
–
–

–
–

–
–
–

–

–
–
–
–

–
–

–
–

–
–
–

–
–
–
–

–

–
–

–

–
–
–

–

–

–
–
–
–

–

–
–

–
–

–
–
–

–

Normally exercisable

Oct 2012 – Oct 2019
Aug 2013 – Aug 2020
Jul 2014 – Jul 2021
Aug 2015 – Aug 2022

Jul 2014 – Jul 2021
Aug 2015 – Aug 2022

–
130,952
–
302,593
171,546
–
– 269,138

–

874,229

–
80,054
– 143,450

–

223,504

9,602
–
8,645

–
28,571
14,973

18,247

43,544

Jul 2012
Oct 2012 – Oct 2019
Jul 2013 – Jul 2020

–

–
–
–
–

–

–
–

–
–

–
–
–

–

29,719
9,149
(with 
capped
value of
£30,000)
9,149
44,220
78,947

162,035

15,873
9,337
7,295
(with
 capped
value of
£23,920)
7,295
2,908 
(with 
capped 
value of 
£6,078)
2,908
33,934

69,347

Aug 2013 – Aug 2015

Aug 2014 – Aug 2021
Aug 2014 – Aug 2021
Aug 2014 – Aug 2021
Jul 2015 – Jul 2022

Oct 2012 – Oct 2014
Aug 2013 – Aug 2015

Aug 2014 – Aug 2021
Aug 2014 – Aug 2021

Jul 2015 – Jul 2022
Jul 2015 – Jul 2022
Jul 2015 – Jul 2022

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1  These awards were made prior to his appointment to the Board
2 

 Awards can be granted in two forms: (i) a nil cost option over a number of shares (a ‘Deferred Award’) or (ii) a nil cost option over a fixed value of shares (a ‘Linked 
Deferred Award’) granted in association with a HMRC Approved Option (an ‘Option’).
 The value of a Linked Deferred Award is capped at the original face value. When calculating the maximum value of the shares under a Linked Deferred Award that 
may be granted under such award the value of the shares under the associated Option is not counted. All DABP awards ordinarily become exercisable on the third 
anniversary of their grant. Related Linked Deferred Awards and Options must be exercised at the same time unless the Option has been waived. In the table above, the 
awards made during the year were made under the revised Rules.

3  Linked Deferred Award
4  Option associated with the relevant linked Deferred Award
5  Deferred award

37  Northgate plc Annual report and accounts 2013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remuneration report continued

Management performance share plan
As mentioned above, no further awards are to be made under this scheme.

The position as at 30 April 2013 with regard to awards already made is as follows:

Original award of shares
Lapsed
Vested

2009
872,638
350,941
521,697

2010
604,664
282,437
194,309

2011
362,372
140,915
49,401

2012

Total
691,157 2,530,831
873,503
765,407

99,210
–

Remaining subject to performance

–

127,918

172,056

591,947

891,921

The above awards are held by 37 executives, including 19 in 
Spain.

All employee share scheme
The All Employee Share Scheme (‘the AESS’), which is 
approved by HM Revenue and Customs under Schedule 
8 Finance Act 2000, was introduced in 2000 to provide 
employees at all levels with the opportunity to acquire shares 
in the Company on preferential terms. The Board believes 
that encouraging wider share ownership by all staff will have 
longer term benefits for the Company and for shareholders. 
The AESS operates under a trust deed, the Trustees being 
Capita IRG Trustees Limited (‘the Capita Trust’).

To participate in the AESS, which operates on a yearly cycle, 
employees are required to make regular monthly savings 
(on which tax relief is obtained), by deduction from pay, for 
a year at the end of which these payments are used to buy 
shares in the Company (‘Partnership shares’).

For each Partnership share acquired, the employee will 
receive one additional free share (‘Matching shares’). 
Matching shares will normally be forfeited if, within three 
years of acquiring the Partnership shares, the employee 
either sells the Partnership shares or leaves the Group. After 
this three year period Partnership and Matching shares 
may be sold, although there are significant tax incentives to 
continue holding the shares in the scheme for a further two 
years. Those employees who are most committed to the 
Company will therefore receive the most benefit.

The twelfth annual cycle ended in December 2012 and 
resulted in 301 employees acquiring 145,512 Partnership 
shares at 192p each and being allocated the same number 
of Matching shares. As at 30 April 2013 the Capita Trust 
held 1,588,439 50p Ordinary shares that have been 
allocated to employees from the first 12 cycles.

The thirteenth annual cycle started in January 2013 and 
currently some 410 employees are making contributions to 
the scheme at an annualised rate of £364,000.

During the year, an award of 250 free shares was made to all 
eligible employees with one year’s service. The total number 
of shares awarded was 345,750.

Share ownership guidelines
The executive Directors of the Company are expected to 
comply with Share Ownership Guidelines. Broadly, these 

38  Northgate plc Annual report and accounts 2013

require executive Directors to accumulate, over a period 
of five years from the date of appointment, a holding of 
Ordinary shares of the Company equivalent in value to their 
basic annual salary, measured annually. It is intended that 
this should be achieved primarily through the exercise and 
vesting of share incentive awards and that directors are not 
required to go into the market to purchase shares, although 
any shares so acquired would count towards meeting the 
guidelines.

As at 30 April 2013, the value of Bob Contreras’ 
shareholding expressed as a percentage of his basic salary on 
that date was 107% (2012 – 62%) and of Chris Muir, 32% 
(2012 – 20%).

Sourcing of shares and dilution
Shares to satisfy the requirements of the Group’s existing 
share schemes are currently sourced as follows:

DABP and MPSP
To date, awards under these two schemes have been 
satisfied through open market purchases by an employee 
benefit trust based in Guernsey (‘the Guernsey Trust’). 
During the year 875,000 (2012 – 300,000) Ordinary shares 
were purchased by the Guernsey Trust and 457,582 (2012 – 
254,717) were used to satisfy the exercise of awards under 
the DABP and MPSP. At 30 April 2013 the Guernsey Trust 
held 98,037 (2012 – 265,868) Ordinary shares as a hedge 
against the Group’s obligations under these schemes.

The rules of both these schemes also allow new issue and 
treasury shares to be used to satisfy the vesting and exercise 
of awards, but to date the Board have chosen not to do so.

EPSP
Shares to satisfy the vesting of awards under the EPSP may 
be sourced either from new issue or through open market 
purchases. No options have yet been exercised under this 
scheme.

AESS
Awards may be satisfied either by new issue or market 
purchase or by a combination of the two. The total number 
of shares required to satisfy the allocation made in January 
2013 was 291,024 (2012 – 334,998) of which 239,499 
were transferred from the Guernsey Trust, with the balance 
of 51,525 (2012 – 76,825) being shares already held by the 

 
AESS continued

Capita Trust from forfeitures during the year. The 345,750 
free shares referred to above were also sourced from the 
Guernsey Trust.

At 30 April 2013 the Capita Trust held 22,891 (2012 – 
23,715) Ordinary shares which had been forfeited as a result 
of early withdrawals post January 2013.

Overall plan limits
All the above schemes operate within the following limits:

In any 10 calendar year period, the Company may not issue 
(or grant rights to issue) more than:

a) 

b) 

 10% of the issued Ordinary share capital under all the 
share plans; and

 5% of the issued Ordinary share capital under the 
executive share plans (EPSP, DABP and MPSP).

The dilution position as at 30 April 2013 was 2.78% under 
the EPSP, MPSP and DABP and 3.25% under the AESS.

Tom Brown 
Chairman of the Remuneration Committee

24 June 2013

39  Northgate plc Annual report and accounts 2013

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Report of the audit and risk committee 

Role
The Audit and Risk Committee is appointed by, and reports 
to, the Board.

The Committee’s terms of reference, which include all 
matters referred to in the UK Corporate Governance Code 
(‘the Code’), are reviewed annually by the Committee and 
are available on the Company’s website. In summary these 
include:

(cid:115)(cid:0) monitoring the integrity of financial reporting, 

reviewing the Group’s internal controls and risk 
management systems, monitoring the effectiveness of 
the Group’s internal audit function;

(cid:115)(cid:0) making recommendations to the Board regarding the 
appointment of the external auditor and approving its 
remuneration and terms of engagement;

(cid:115)(cid:0) monitoring the independence and objectivity of 

the external auditor and developing a policy for the 
(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:0)(cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:0)(cid:66)(cid:89)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:69)(cid:88)(cid:84)(cid:69)(cid:82)(cid:78)(cid:65)(cid:76)(cid:0)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:79)(cid:82)(cid:27)

(cid:115)(cid:0) monitoring the audit process and any issues arising 

therefrom; and

(cid:115)(cid:0)

all aspects of Group risk.

The terms of reference have recently been amended to take 
account of the Committee’s additional responsibilities arising 
from the FRC revisions to the UK Corporate Governance 
Code and Guidance on Audit Committees, which will impact 
on the work of the Committee in respect of the financial 
year ending 30 April 2014 and future years.

Membership
(cid:52)(cid:72)(cid:69)(cid:0)(cid:77)(cid:69)(cid:77)(cid:66)(cid:69)(cid:82)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:77)(cid:73)(cid:84)(cid:84)(cid:69)(cid:69)(cid:12)(cid:0)(cid:87)(cid:72)(cid:79)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:65)(cid:76)(cid:76)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)
Directors of the Company, are:

AJ Allner 
(Chairman)
JG Astrand
THP Brown
G Caseberry

  Date of appointment

Qualiﬁcation

26 September 2007 FCA

6 June 2001
8 June 2005
10 December 2012  

MBA
MA (Oxon), MBA IMD

The Code requires that at least one member of the 
Committee should have recent and relevant financial 
experience: currently, the Chairman of the Committee 
fulfils this requirement. All members of the Committee are 
expected to be financially literate.

Whereas Andrew Allner, Tom Brown and Jill Caseberry are 
considered to be independent, as is stated in the report on 
Corporate Governance on pages 42 to 44, Jan Astrand is not 
currently considered to be independent in terms of the Code.

Meetings
The Committee is required to meet at least three times a 
year. Details of attendance at meetings held in the year 
ended 30 April 2013 are given on page 42.

Due to the cyclical nature of its agenda, which is linked to 
events in the Group’s financial calendar, the Committee 
will generally meet four times a year. The other Directors, 
together with the head of internal audit and the external 
auditor, are normally invited to attend all meetings.

Activity
Since May 2012, the Committee has:

(cid:115)(cid:0)

reviewed the financial statements for the years ended 
30 April 2012 and 2013, the half yearly report issued in 
December 2012 and Interim Management Statements 
issued in September 2012 and March 2013. As part 
of this review process, the Committee received reports 
from Deloitte LLP on the full and half year results;

(cid:115)(cid:0)

reviewed and agreed the scope of the audit work to be 
undertaken by Deloitte LLP and agreed their fees;

(cid:115)(cid:0) monitored the Group’s risk management process and 

business continuity procedures;

(cid:115)(cid:0)

(cid:115)(cid:0)

(cid:115)(cid:0)

(cid:115)(cid:0)

(cid:115)(cid:0)

reviewed the effectiveness of the Group’s system of 
internal controls;

reviewed the Group’s whistle blowing procedures;

reviewed a report on completeness of income;

reviewed the Group’s depreciation policy;

reviewed the Group’s corporate taxation arrangements;

(cid:115)(cid:0) monitored and reviewed the activities of the Group’s 

internal audit department;

(cid:115)(cid:0)

reviewed a report on impairment;

(cid:115)(cid:0) monitored the Group’s going concern status;

(cid:115)(cid:0)

(cid:115)(cid:0)

approved the appointment of PwC as the Company’s 
adviser on tax compliance in place of Deloitte LLP;

reviewed the Group's Code of Business conduct, 
including the requirements of the Bribery Act 2010, and 
the effective monitoring of the giving and receiving of 
gifts and hospitality; and 

(cid:115)(cid:0)

reviewed its own effectiveness and terms of reference.

40  Northgate plc Annual report and accounts 2013

External auditor
(cid:52)(cid:72)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:7)(cid:83)(cid:0)(cid:80)(cid:79)(cid:76)(cid:73)(cid:67)(cid:89)(cid:0)(cid:79)(cid:78)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:0)(cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:68)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)
external auditor, developed and recommended by the 
Committee, is:

(cid:115)(cid:0)

(cid:115)(cid:0)

certain audit related work, being work that, in its 
capacity as auditor, it is best placed to carry out and 
will generally be asked to do so. Nevertheless, where 
appropriate, it will be asked for a fee quote; and

(cid:84)(cid:65)(cid:88)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:76)(cid:73)(cid:65)(cid:78)(cid:67)(cid:69)(cid:12)(cid:0)(cid:84)(cid:65)(cid:88)(cid:0)(cid:65)(cid:68)(cid:86)(cid:73)(cid:83)(cid:79)(cid:82)(cid:89)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:0)
related and general consultancy work: this type of work 
will either be placed on the basis of the lowest fee 
quote or to consultants who are felt to be best able to 
provide the expertise and working relationship required. 
Generally, the external auditor will not be invited to 
compete for this type of work.

During the year, the Committee reviewed and was satisfied 
as to the effectiveness and independence of the external 
(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:79)(cid:82)(cid:12)(cid:0)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:67)(cid:79)(cid:78)(cid:68)(cid:85)(cid:67)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:78)(cid:69)(cid:13)(cid:84)(cid:79)(cid:13)(cid:79)(cid:78)(cid:69)(cid:0)(cid:77)(cid:69)(cid:69)(cid:84)(cid:73)(cid:78)(cid:71)(cid:83)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)
audit partner.

Consequently, the Committee has recommended to the 
Board the reappointment of Deloitte LLP at the Annual 
General Meeting.

Fees paid and payable to Deloitte LLP in respect of the year 
under review are as shown in Note 5 on page 63.

Internal audit
In fulfilling its duty to monitor the effectiveness of the 
internal audit function, the Committee has:

(cid:115)(cid:0)

(cid:115)(cid:0)

(cid:115)(cid:0)

reviewed the adequacy of the resources of the internal 
audit department for both the UK and Spain;

ensured that the head of internal audit has direct access 
to the Chairman of the Board and to all members of 
the Committee;

(cid:67)(cid:79)(cid:78)(cid:68)(cid:85)(cid:67)(cid:84)(cid:69)(cid:68)(cid:0)(cid:65)(cid:0)(cid:79)(cid:78)(cid:69)(cid:13)(cid:84)(cid:79)(cid:13)(cid:79)(cid:78)(cid:69)(cid:0)(cid:77)(cid:69)(cid:69)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:72)(cid:69)(cid:65)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)
internal audit, approved the internal audit programme, 
and reviewed quarterly reports by the head of internal 
audit.

The Chairman of the Committee will be available at the 
Annual General Meeting to answer any questions about the 
work of the Committee.

Andrew Allner 
Chairman of the Audit and Risk Committee

24 June 2013

41  Northgate plc Annual report and accounts 2013

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Corporate governance

UK Listed Companies are required by the Financial Conduct 
Authority (the designated UK Listing Authority) to include a 
statement in their annual accounts on compliance with the 
principles of good corporate governance and code of best 
practice set out in the UK Corporate Governance Code (‘the 
Code’).

The provisions of the Code applicable to listed companies are 
divided into five parts, as set out below:

Leadership

1 
The business of the Company is managed by the Board of 
(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:12)(cid:0)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:76)(cid:89)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:82)(cid:73)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:87)(cid:79)(cid:0)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:70)(cid:73)(cid:86)(cid:69)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)
executive Directors, details of whom are shown on pages 28 
and 29.

The offices of the Chairman and Chief Executive Officer are 
separate. The division of their responsibilities has been set 
out in writing, approved by the Board and is available on the 
Company’s website.

The Board meets regularly to review trading results and has 
responsibility for the major areas of Group strategy, the 
annual Business Plan, financial reporting to and relationships 
with shareholders, dividend policy, internal financial and 
other controls, financing and treasury policy, insurance 
policy, major capital expenditure, acquisitions and disposals, 
Board structure, remuneration policy, corporate governance 
and compliance.

Effectiveness

2 
The Chairman ensures that all Directors are properly briefed 
to enable them to discharge their duties. In particular, 
detailed management accounts are prepared and copies sent 
to all Board members every month and, in advance of each 
Board meeting, appropriate documentation on all items to 
be discussed is circulated.

Directors’ attendance at Board and Committee meetings 
during the year is detailed below.

No. of Meetings
RD Mackenzie
AJ Allner
JG Astrand
THP Brown
G Caseberry*
RL Contreras
CJR Muir

*Since appointment.

Board
9
9
8
9
9
3
9
9

Audit and risk
4
–
3
4
4
1
–
–

Remuneration
7
7
7
7
7
3
–
–

All Directors in office at that time were present at the Annual 
General Meeting held in September 2012.

The external auditor and the head of internal audit attended 
all Audit and Risk Committee meetings.

(cid:34)(cid:69)(cid:70)(cid:79)(cid:82)(cid:69)(cid:0)(cid:65)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:12)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:82)(cid:69)(cid:81)(cid:85)(cid:73)(cid:82)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)
assure the Board that they can give the time commitment 
necessary to properly fulfill their duties, both in terms of 

42  Northgate plc Annual report and accounts 2013

availability to attend meetings and discuss matters on the 
telephone and meeting preparation time.

In accordance with the provisions of the Code, resolutions to 
(cid:82)(cid:69)(cid:13)(cid:65)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:0)(cid:65)(cid:76)(cid:76)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:76)(cid:89)(cid:0)(cid:73)(cid:78)(cid:0)(cid:79)(cid:70)(cid:70)(cid:73)(cid:67)(cid:69)(cid:0)(cid:87)(cid:73)(cid:76)(cid:76)(cid:0)(cid:66)(cid:69)(cid:0)(cid:80)(cid:82)(cid:79)(cid:80)(cid:79)(cid:83)(cid:69)(cid:68)(cid:0)(cid:65)(cid:84)(cid:0)
the Annual General Meeting.

(cid:42)(cid:65)(cid:78)(cid:0)(cid:33)(cid:83)(cid:84)(cid:82)(cid:65)(cid:78)(cid:68)(cid:7)(cid:83)(cid:0)(cid:65)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:73)(cid:78)(cid:0)(cid:36)(cid:69)(cid:67)(cid:69)(cid:77)(cid:66)(cid:69)(cid:82)(cid:0)(cid:18)(cid:16)(cid:17)(cid:17)(cid:0)(cid:65)(cid:83)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)
executive Chairman of the Board of our Spanish subsidiary, 
Northgate España Renting Flexible S.A., is ongoing. It is a role 
for which Jan is ideally suited, as he is permanently resident 
in Spain and fluent in Spanish. He receives no additional 
remuneration for this appointment.

The Board considers that the above appointment is in the 
best interests of the Company and of the shareholders and, 
whilst Jan cannot be considered to be independent in terms 
of the Code or by the National Association of Pension Funds, 
the Board is satisfied that it does not affect his independence 
of judgment when carrying out his duties as a Director of the 
Company.

As envisaged in last year’s report, Jan’s involvement in 
project work in Spain ceased in November 2012. Details of 
the consultancy fees paid in the year are shown in Note 38 
on page 96.

The Board has established a Nominations Committee, which 
(cid:73)(cid:83)(cid:0)(cid:67)(cid:72)(cid:65)(cid:73)(cid:82)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:34)(cid:79)(cid:66)(cid:0)(cid:45)(cid:65)(cid:67)(cid:75)(cid:69)(cid:78)(cid:90)(cid:73)(cid:69)(cid:14)(cid:0)(cid:33)(cid:76)(cid:76)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)
are members. Its main function is to lead the process for 
Board appointments by selecting and proposing to the Board 
suitable candidates of appropriate calibre. The Committee 
would normally expect to use the services of professional 
consultants to help in the search for candidates.

The Committee has written terms of reference which are 
available on the Company’s website.

During the year, the Committee, with the help of 
management consultants Board Mentoring, led the search 
(cid:70)(cid:79)(cid:82)(cid:0)(cid:65)(cid:0)(cid:78)(cid:69)(cid:87)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:0)(cid:72)(cid:65)(cid:86)(cid:73)(cid:78)(cid:71)(cid:12)(cid:0)(cid:73)(cid:78)(cid:0)(cid:80)(cid:65)(cid:82)(cid:84)(cid:73)(cid:67)(cid:85)(cid:76)(cid:65)(cid:82)(cid:12)(cid:0)(cid:83)(cid:65)(cid:76)(cid:69)(cid:83)(cid:0)
and marketing experience. This resulted in the appointment 
of Jill Caseberry, whose biographical details are given on 
page 29, in December 2012.

Board Mentoring have no other connection with the 
Northgate group of companies.

During the year, the Chairman led an evaluation process 
of the performance of individual Directors, of the Board 
as a whole and of its committees. The process consisted 
of a formal and detailed questionnaire completed by each 
(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:12)(cid:0)(cid:79)(cid:78)(cid:69)(cid:13)(cid:84)(cid:79)(cid:13)(cid:79)(cid:78)(cid:69)(cid:0)(cid:77)(cid:69)(cid:69)(cid:84)(cid:73)(cid:78)(cid:71)(cid:83)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:72)(cid:65)(cid:73)(cid:82)(cid:77)(cid:65)(cid:78)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)
a Board discussion. Having conducted this evaluation, 
the Chairman remains of the view that each individual 
Director’s performance continues to be effective and each 
(cid:68)(cid:69)(cid:77)(cid:79)(cid:78)(cid:83)(cid:84)(cid:82)(cid:65)(cid:84)(cid:69)(cid:83)(cid:0)(cid:67)(cid:79)(cid:77)(cid:77)(cid:73)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:79)(cid:76)(cid:69)(cid:14)(cid:0)(cid:41)(cid:78)(cid:0)(cid:65)(cid:68)(cid:68)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)
executive Directors, led by the Senior Independent Director, 
have reviewed the performance of the Chairman, taking into 
account the views of the executive Directors.

Pursuant to those provisions of the Companies Act 2006 
relating to conflicts of interest and in accordance with the 

 
Control environment
The Group has a clearly defined organisational structure 
within which individual responsibilities of line and financial 
management for the maintenance of strong internal 
controls and the production of accurate and timely financial 
management information are identified and can be 
monitored. Where appropriate, the business is required to 
comply with the procedures set out in written manuals.

To demonstrate the Board’s commitment to maintaining 
the highest business and ethical standards and to promote a 
culture of honesty and integrity amongst all staff, the Board 
has established a confidential telephone service, operated by 
an independent external organisation, which may be used by 
all staff to report any issues of concern relating to dishonesty 
or malpractice within the Group. All issues reported are 
investigated by senior management.

Identification of risks
The Board and the Group’s management have a clearly 
defined responsibility for identifying the major business risks 
facing the Group and for developing systems to mitigate and 
manage those risks. The control of key risks is reviewed by 
the Board and the Group’s management at their monthly 
meetings. The Board is therefore able to confirm that there is 
an ongoing process for identifying, evaluating and managing 
the significant risks faced by the Group, that it has been 
in place for the year under review and up to the date of 
approval of these accounts and accords with the Turnbull 
guidance.

Information and communication
The Group has a comprehensive system for reporting 
financial results to the Board. Each operating unit prepares 
monthly accounts with a comparison against their business 
plan and against the previous year, with regular review by 
management of variances from targeted performance levels. 
A business plan is prepared by management and approved 
by the Board annually. Each operating unit prepares a two 
year business plan with performance reported against key 
performance indicators on a monthly basis together with 
comparisons to plan and prior year. These are reviewed 
regularly by management. Forecasts are updated regularly 
throughout the year.

Control procedures
The Board and the Group’s management have adopted a 
schedule of matters which are required to be brought to it 
for decision, thus ensuring that it maintains full and effective 
control over appropriate strategic, financial, organisational 
and compliance issues. Measures taken include clearly 
defined procedures for capital expenditure appraisal and 
authorisation, physical controls, segregation of duties and 
routine and ad hoc checks.

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Effectiveness continued

2 
authority contained in the Company’s Articles of Association, 
the Board has put in place procedures to deal with the 
notification, authorisation, recording and monitoring of 
Directors’ conflicts of interest and these procedures have 
operated effectively throughout the year and to the date of 
signing of this report and accounts.

Diversity
The Board has considered the recommendations of the 
Davies Review into Women on Boards in the light of the 
provisions of both section B.2 of the Code, with which we 
are compliant, and of our existing policies and procedures. 
The Board recognises the benefits of diversity at all levels 
of the business and in order to reinforce the Board’s 
commitment to equality, we have endorsed a new Equal 
Opportunities Policy (which may be found on our website). 
Whilst the overriding criteria for Board appointments will 
always be based on merit, so as to encourage an appropriate 
balance of skills, experience and knowledge on the Board 
at all times, for all future appointments we will only use 
executive search firms who have committed to the Voluntary 
Code of Conduct on gender diversity. At the same time 
the Board recognises that, particularly given the nature of 
its business, the development of a pool of suitably qualified 
candidates may take time to achieve and therefore do not 
believe it is appropriate to set targets, however aspirational, 
at the present time.

Currently, 38% of our total workforce in the UK is female 
and 34% in Spain.

3  Accountability
An assessment of the Company’s position and prospects is 
included in the Chairman’s Statement and in the Operational 
Review and Financial Review on pages 14 to 23.

Internal control
Provision C.2.1 of the Code requires the Directors to conduct 
an annual review of the effectiveness of the Group’s system 
of internal controls. The Turnbull guidance provides relevant 
guidance for directors on compliance with the internal 
control provisions of the Code.

Corporate governance
The Directors are responsible for the Group’s system of 
internal controls which aims to safeguard Group assets, 
ensure proper accounting records are maintained and that 
the financial information used within the business and 
for publication is reliable. Although no system of internal 
controls can provide absolute assurance against material 
misstatement or loss, the Group’s system is designed to 
provide the Directors with reasonable assurance that, should 
any problems occur, these are identified on a timely basis 
and dealt with appropriately. The key features of the Group’s 
system of internal controls, which was in place throughout 
the period covered by the accounts, are described below:

43  Northgate plc Annual report and accounts 2013

 
more than the recommended minimum 20 working days 
notice is given. In compliance with the Transparency Rules, 
the Company publishes Interim Management Statements in 
March and September each year.

Details of proxies lodged in respect of the Annual General 
Meeting will be published on the Company’s website 
immediately following the meeting.

Compliance with the Code
The Board considers that the Company complied with 
the provisions of the Code throughout the year with 
the exception of those relating to Board and Committee 
composition. The Code states that at least half the 
Board, excluding the Chairman, should be comprised of 
(cid:73)(cid:78)(cid:68)(cid:69)(cid:80)(cid:69)(cid:78)(cid:68)(cid:69)(cid:78)(cid:84)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:26)(cid:0)(cid:65)(cid:83)(cid:0)(cid:82)(cid:69)(cid:70)(cid:69)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:65)(cid:66)(cid:79)(cid:86)(cid:69)(cid:12)(cid:0)
at the start of the year, only two out of the five relevant 
Directors were independent. Similarly, the Code states that 
both the Audit and Remuneration Committees should 
(cid:67)(cid:79)(cid:77)(cid:80)(cid:82)(cid:73)(cid:83)(cid:69)(cid:0)(cid:65)(cid:84)(cid:0)(cid:76)(cid:69)(cid:65)(cid:83)(cid:84)(cid:0)(cid:84)(cid:72)(cid:82)(cid:69)(cid:69)(cid:0)(cid:73)(cid:78)(cid:68)(cid:69)(cid:80)(cid:69)(cid:78)(cid:68)(cid:69)(cid:78)(cid:84)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:12)(cid:0)
whereas there were only two. However, since December 
2012, with the appointment of Jill Caseberry, the Company 
has been in full compliance with all aspects of the Code.

By order of the Board

D Henderson 
Secretary

24 June 2013

Corporate governance continued

Monitoring
The Board has delegated to executive management 
implementation of the system of internal control. The Board, 
including the Audit and Risk Committee, receives reports 
on the system of control from the external auditor and 
from management. An independent internal audit function 
reports quarterly to the Audit and Risk Committee primarily 
on the key areas of risk within the business. The Directors 
confirm that they have reviewed the effectiveness of the 
system of internal controls covering financial, operational and 
compliance matters and risk management, for the period 
covered by these accounts in accordance with the Turnbull 
guidance.

Audit
An account of the work of the Audit and Risk Committee 
is given in the Report of the Audit and Risk Committee on 
pages 40 and 41.

Remuneration

4 
The Company’s policy on remuneration and details of the 
remuneration of each Director are given in the Remuneration 
Report on pages 33 to 39.

Relations with shareholders

5 
Throughout the year the Company maintains a regular 
dialogue with institutional investors and brokers’ analysts, 
providing them with such information on the Company’s 
progress and future plans as is permitted within the 
guidelines of the Listing Rules. In particular, twice a year, 
at the time of announcing the Company’s half and full 
year results, they are invited to briefings given by the Chief 
Executive and Group Finance Director.

The Company’s major institutional shareholders have 
been advised by the Chief Executive that, in line with the 
provisions of the Code, the Senior Independent Director and 
(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:69)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)(cid:77)(cid:65)(cid:89)(cid:0)(cid:65)(cid:84)(cid:84)(cid:69)(cid:78)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:83)(cid:69)(cid:0)(cid:66)(cid:82)(cid:73)(cid:69)(cid:70)(cid:73)(cid:78)(cid:71)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:12)(cid:0)(cid:73)(cid:78)(cid:0)(cid:65)(cid:78)(cid:89)(cid:0)
event, would attend if requested to do so.

All shareholders are given the opportunity to raise matters 
for discussion at the Annual General Meeting, of which 

44  Northgate plc Annual report and accounts 2013

Responsibility statement
We confirm that to the best of our knowledge:

(cid:115)(cid:0)

(cid:115)(cid:0)

the financial statements, prepared in accordance with 
IFRS, give a true and fair view of the assets, liabilities, 
financial position and profit or loss of the Company and 
the undertakings included in the consolidation taken as 
a whole; and

the management report, which is incorporated into 
the Directors’ report, includes a fair review of the 
development and performance of the business and 
the position of the Company and the undertakings 
included in the consolidation taken as a whole, 
together with a description of the principal risks and 
uncertainties that they face.

By order of the Board

Bob Contreras 
Chief Executive Officer

24 June 2013

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Directors’ responsibilities

The Directors are responsible for preparing the annual 
report and accounts 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 are required to prepare the Group financial 
statements in accordance with International Financial 
Reporting Standards (IFRS) as adopted by the European 
Union and Article 4 of the IAS Regulation and have also 
chosen to prepare the Parent Company financial statements 
under IFRS as adopted by the EU. Under company law the 
Directors must not approve the accounts unless they are 
satisfied that they give a true and fair view of the state of 
affairs of the Group and Company and of the profit or loss 
of the Group for that period.

In preparing these financial statements, IAS 1 (Presentation 
of Financial Statements) requires that Directors:

(cid:115)(cid:0)

(cid:115)(cid:0)

(cid:115)(cid:0)

properly select and apply accounting policies;

present information, including accounting policies, in a 
manner that provides relevant, reliable, comparable and 
understandable information;

provide additional disclosures when compliance with 
the specific requirements in IFRS are insufficient to 
enable users to understand the impact of particular 
transactions, other events and conditions on the entity’s 
financial position and financial performance; and

(cid:115)(cid:0) make an assessment of the Group’s ability to continue 

as a going concern.

The Directors are responsible for keeping adequate 
accounting records that are sufficient to show and explain 
the Group’s and the Company’s transactions and disclose 
with reasonable accuracy at any time the financial position 
of the Group and the Company 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 Group and the Company and hence for taking 
reasonable steps for the prevention and detection of fraud 
and other irregularities.

The Directors are responsible for the maintenance and 
integrity of the corporate and financial information included 
on the Company’s website. Legislation in the United 
Kingdom governing the preparation and dissemination of 
financial statements may differ from legislation in other 
jurisdictions.

45  Northgate plc Annual report and accounts 2013

 
Independent auditor’s report to the members of Northgate plc 

We have audited the financial statements of Northgate 
plc for the year ended 30 April 2013 which comprise the 
consolidated income statement, the Group and Parent 
Company statements of comprehensive income, the Group 
and Parent Company balance sheets, the Group and Parent 
Company cash flow statements, the Group and Parent 
Company notes to the cash flow statements, the Group and 
Parent Company statements of changes in equity and the 
related notes 1 to 38. The financial reporting framework that 
has been applied in their preparation is applicable law and 
International Financial Reporting Standards (IFRS) as adopted 
by the European Union and, as regards the Parent Company 
financial statements, as applied in accordance with the 
provisions of the Companies Act 2006.

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 Directors’ Responsibilities 
statement, the Directors are responsible for the preparation 
of the 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 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 Ethical Standards for Auditors.

Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to 
give reasonable assurance that the financial statements 
are free from material misstatement, whether caused by 
fraud or error. This includes an assessment of: whether the 
accounting policies are appropriate to the Group’s and the 
Parent Company’s circumstances and have been consistently 
applied and adequately disclosed; the reasonableness of 
significant accounting estimates made by the directors; 
and the overall presentation of the financial statements. 
(cid:41)(cid:78)(cid:0)(cid:65)(cid:68)(cid:68)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:87)(cid:69)(cid:0)(cid:82)(cid:69)(cid:65)(cid:68)(cid:0)(cid:65)(cid:76)(cid:76)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)
information in the annual report to identify material 
inconsistencies with the audited financial statements. If we 
become aware of any apparent material misstatements or 
inconsistencies we consider the implications for our report.

Opinion on financial statements
In our opinion:

(cid:115)(cid:0)

(cid:115)(cid:0)

(cid:115)(cid:0)

(cid:115)(cid:0)

the financial statements give a true and fair view of 
the state of the Group’s and of the Parent Company’s 
affairs as at 30 April 2013 and of the Group’s loss for 
the year then ended;

the Group financial statements have been properly 
prepared in accordance with IFRS as adopted by the 
European Union;

the Parent Company financial statements have been 
properly prepared in accordance with IFRS as adopted 
by the European Union and as applied in accordance 
with the provisions of the Companies Act 2006; and

the financial statements have been prepared in 
accordance with the requirements of the Companies 
Act 2006 and, as regards the group financial 
statements, Article 4 of the IAS Regulation.

Opinion on other matters prescribed by the 
Companies Act 2006
In our opinion:

(cid:115)(cid:0)

(cid:115)(cid:0)

the part of the Directors’ Remuneration Report to be 
audited has been properly prepared in accordance with 
the Companies Act 2006; and

the information given in the Directors’ Report for the 
financial year for which the financial statements are 
prepared is consistent with the financial statements.

Matters on which we are required to report by 
exception
We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report to 
you if, in our opinion:

(cid:115)(cid:0)

(cid:115)(cid:0)

(cid:115)(cid:0)

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 and the part 
of the Directors’ Remuneration Report to be audited 
are not in agreement with the accounting records and 
returns; or

certain disclosures of Directors’ remuneration specified 
by law are not made; or

(cid:115)(cid:0) we have not received all the information and 
explanations we require for our audit.

46  Northgate plc Annual report and accounts 2013

Matters on which we are required to report by exception continued

Under the Listing Rules we are required to review:

(cid:115)(cid:0)

(cid:115)(cid:0)

(cid:115)(cid:0)

the Directors’ statement, contained within the Financial 
Review, in relation to going concern;

the part of the Corporate Governance Statement 
relating to the Company’s compliance with the nine 
provisions of the UK Corporate Governance Code 
specified for our review; and

certain elements of the report to shareholders by the 
Board on Directors’ remuneration.

Christopher Powell FCA (Senior Statutory Auditor) 
for and on behalf of Deloitte LLP 
Chartered Accountants and Statutory Auditor 
Leeds, United Kingdom

24 June 2013

47  Northgate plc Annual report and accounts 2013

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Consolidated income statement
For the year ended 30 April 2013

Revenue: hire of vehicles
Revenue: sale of vehicles

Total revenue

Cost of sales

Gross proﬁt
Administrative expenses (excluding exceptional items and 
intangible amortisation)
Exceptional administrative expenses
Intangible amortisation

Total administrative expenses

Operating proﬁt
Interest income

Finance costs (excluding exceptional items)
Exceptional ﬁnance costs

Total ﬁnance costs

Proﬁt (loss) before taxation
Taxation

Proﬁt (loss) for the year

Notes

4

4

4

33

14

4,5

7

8

8,33

Underlying
2013
£000

441,944
167,936

Statutory
2013
£000

441,944
167,936

Underlying
2012
£000

503,659
203,039

Statutory
2012
£000

503,659
203,039

609,880

609,880

706,698

706,698

(466,405)

(466,405)

(540,915)

(540,915)

143,475

143,475

165,783

165,783

(57,071)
–
–

(57,071)
(3,337)
(3,589)

(60,607)
–
–

(60,607)
(6,702)
(3,996)

(57,071)

(63,997)

(60,607)

(71,305)

86,404
123

79,478
123

105,176
165

94,478
165

(37,029)
–

(37,029)
(53,954)

(45,610)
–

(45,610)
(3,046)

(37,029)

(90,983)

(45,610)

(48,656)

49,498
(10,657)

(11,382)
4,025

59,731
(17,803)

45,987
(5,519)

9

38,841

(7,357)

41,928

40,468

Profit (loss) for the year is wholly attributable to owners of the Parent Company. All results arise from continuing operations.

Underlying profit excludes exceptional items as set out in Note 33, as well as intangible amortisation and the taxation thereon, 
in order to provide a better indication of the Group’s underlying business performance.

Earnings per share
Basic

Diluted

11

11

29.2p

28.3p

(5.5)p

(5.5)p

31.5p

30.8p

30.4p

29.7p

48  Northgate plc Annual report and accounts 2013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of comprehensive income
For the year ended 30 April 2013

Amounts attributable to the owners of the Parent 
Company
(Loss) proﬁt attributable to the owners
Other comprehensive income
Foreign exchange differences on retranslation of net assets of 
subsidiary undertakings
Net foreign exchange differences on long term borrowings 
and derivatives held as hedges
Deferred taxation on disposal of revalued property
Foreign exchange difference on revaluation reserve
Net fair value gains (losses) on cash ﬂow hedges
Deferred tax (charge) credit recognised directly in equity 
relating to cash ﬂow hedges
Actuarial losses/derecognition of assets on deﬁned beneﬁt 
pension scheme
Deferred tax credit recognised directly in equity relating to 
deﬁned beneﬁt pension scheme

 Group

2013
£000

2012
£000

Company

2013
£000

2012
£000

Notes

(7,357)

40,468

23,888

(2,957)

30

30

26

29

29

32

32

6,725

(16,711)

–

–

(4,132)
–
46
16,115

13,486
5
(120)
(16,188)

–
–
–
14,817

–
–
–
(14,201)

(4,301)

3,834

(3,984)

3,360

(490)

(227)

115

60

–

–

–

–

Total other comprehensive income

14,078

(15,861)

10,833

(10,841)

Total comprehensive income for the year

6,721

24,607

34,721

(13,798)

49  Northgate plc Annual report and accounts 2013

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Balance sheets
As at 30 April 2013

Non-current assets
Goodwill
Other intangible assets

Property, plant and equipment: vehicles for hire
Other property, plant and equipment

Total property, plant and equipment

Derivative ﬁnancial instrument assets
Deferred tax assets
Investments

Total non-current assets

Current assets
Inventories
Trade and other receivables
Current tax assets
Cash and bank balances

Total current assets

Total assets

Current liabilities
Trade and other payables
Derivative ﬁnancial instrument liabilities
Current tax liabilities
Short term borrowings

Total current liabilities

Net current assets (liabilities)

Non-current liabilities
Derivative ﬁnancial instrument liabilities
Long term borrowings
Deferred tax liabilities

Total non-current liabilities

Total liabilities

Net assets

Equity
Share capital
Share premium account
Revaluation reserve
Own shares reserve
Merger reserve
Hedging reserve
Translation reserve
Capital redemption reserve
Retained earnings

Total equity

 Group

2013
£000

Notes

2012
£000

3,589
9,591

3,589
7,431

589,161
78,321

623,103
74,452

667,482

697,555

 Company
2013
£000

–
77

–
2,582

2,582

2012
£000

–
–

–
2,643

2,643

–
4,688
–

11,249
1,691
–

–
997
122,892

11,249
5,198
122,894

683,190

723,675

126,548

141,984

19,192
77,417
5,862
14,962

22,213
97,278
–
9,707

–
889,274
–
3,396

–
882,710
–
964

117,433

129,198

892,670

883,674

800,623

852,873 1,019,218 1,025,658

52,592
–
1,090
7,314

63,188
1,046
4,150
135,558

375,581
1,517
–
442

394,345
1,631
–
113,654

60,996

203,942

377,540

509,630

56,437

(74,744)

515,130

374,044

–
370,371
2,604

15,951
259,487
7,357

–
370,371
–

15,951
259,273
–

372,975

282,795

370,371

275,224

433,971

486,737

747,911

784,854

366,652

366,136

271,307

240,804

66,616
113,508
1,235
(303)
67,463
(649)
(5,370)
40
124,112

66,616
113,508
1,189
(685)
67,463
(14,247)
(7,963)
40
140,215

66,616
113,508
1,371
–
63,159
–
–
40
26,613

66,616
113,508
1,371
–
63,159
(12,617)
–
40
8,727

366,652

366,136

271,307

240,804

13

14

15

16

22

23

17

18

19

20

22

21

22

21

23

24

25

26

27

28

29

30

31

32

Total equity is wholly attributable to the owners of the Parent Company.

The financial statements were approved by the Board of Directors and authorised for issue on 24 June 2013.

They were signed on its behalf by:
RD Mackenzie
Director

CJR Muir
Director

50  Northgate plc Annual report and accounts 2013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash ﬂow statements
For the year ended 30 April 2013

 Group

2013
£000

2012
£000

 Company
2013
£000

2012
£000

Net cash from (used in) operations

(a)

100,850

145,826

(28,870)

(39,688)

Investing activities
Interest received
Partial recovery of acquisition cost of subsidiary undertaking
Dividends received from subsidiary undertakings
Proceeds from disposal of other property, plant and equipment
Purchases of other property, plant and equipment
Purchases of intangible assets
Liquidation of subsidiary undertaking

123
–
–
1,760
(8,744)
(1,396)
–

165
775
–
1,876
(7,705)
(1,982)
–

80
–
123,000
–
–
(90)
2

77
–
45,000
–
–
–
–

Net cash (used in) from investing activities

(8,257)

(6,871)

122,992

45,077

Financing activities
Dividends paid
Receipt of bank loans
Repayments of bank loans and other borrowings
Debt issue costs paid relating to previous facilities
Costs paid for extinguishment of previous facilities
(Repayments to) loans from subsidiary undertakings
Settlement of ﬁnancial instruments with subsidiary 
undertaking
Payments to acquire own shares for share schemes
Termination of ﬁnancial instruments

(5,719)
369,871
(410,140)
(3,354)
(23,202)
–

–
(1,988)
(12,830)

–
–
(222,592)
(86)
–
–

(5,719)
369,871
(399,643)
(3,354)
(23,202)
(21,296)

–
–
(213,852)
(86)
–
214,160

–
(293)
(3,046)

5,479
(1,988)
(12,830)

(18,950)
(293)
(3,046)

Net cash used in ﬁnancing activities

(87,362)

(226,017)

(92,682)

(22,067)

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at 1 May
Effect of foreign exchange movements

5,231
9,707
24

(87,062)
96,885
(116)

Cash and cash equivalents at 30 April

(b) 

14,962

9,707

1,440
964
550

2,954

(16,678)
18,937
(1,295)

964

51  Northgate plc Annual report and accounts 2013

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Notes to the cash ﬂow statements
For the year ended 30 April 2013

(a) Net cash from (used in) operations

Operating proﬁt (loss)
Adjustments for:
Depreciation of property, plant and equipment
Exchange differences
Amortisation of intangible assets
Loss on disposal of property, plant and equipment
Share options fair value charge

Operating cash ﬂows before movements in working capital
(cid:8)(cid:41)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:9)(cid:0)(cid:68)(cid:69)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:73)(cid:78)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:86)(cid:69)(cid:72)(cid:73)(cid:67)(cid:76)(cid:69)(cid:0)(cid:73)(cid:78)(cid:86)(cid:69)(cid:78)(cid:84)(cid:79)(cid:82)(cid:73)(cid:69)(cid:83)
Decrease in receivables
(Decrease) increase in payables

Cash generated from (used in) operations
Income taxes paid
Interest paid

Net cash generated from (used in) operations
Purchase of vehicles
Proceeds from disposal of vehicles

 Group

2013
£000

2012
£000

 Company
2013
£000

2012
£000

79,478

94,478

(2,912)

(4,207)

163,313
(5)
3,589
445
1,502

248,322
(166)
20,185
(9,911)

258,430
(16,828)
(31,448)

192,729
25
3,996
443
2,063

293,734
229
22,456
(3,538)

312,881
(2,582)
(38,487)

210,154
(255,193)
145,889

271,812
(306,311)
180,325

61
–
13
–
1,502

(1,336)
–
1,671
694

1,029
–
(29,899)

(28,870)
–
–

62
–
–
–
2,063

(2,082)
–
329
(1,403)

(3,156)
–
(36,532)

(39,688)
–
–

Net cash from (used in) operations

100,850

145,826

(28,870)

(39,688)

(b) Cash and cash equivalents

Cash and cash equivalents comprise:
Cash and bank balances
Bank overdrafts

Cash and cash equivalents

 Group

2013
£000

14,962
–

14,962

2012
£000

9,707
–

9,707

 Company
2013
£000

3,396
(442)

2,954

2012
£000

964
–

964

52  Northgate plc Annual report and accounts 2013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of changes in equity
For the year ended 30 April 2013

Group

Total equity at 1 May 2011
Share options fair value charge
Share options exercised
Transfer on disposal of revalued 
property
Proﬁt attributable to owners of the 
Parent Company
Purchase of own shares
Transfer of shares on vesting of 
share options
Other comprehensive income
Transfers between equity reserves

Total equity at 1 May 2012
Share options fair value charge
Share options exercised
Loss attributable to owners of the 
Parent Company
Dividends paid
Purchase of own shares
Transfer of shares on vesting of 
share options
Other comprehensive income
Transfers between equity reserves

Share 
capital 
and share 
premium
£000

180,124
–
–

–

–
–

–
–
–

180,124
–
–

–
–
–

–
–
–

Own 
shares 
reserve
£000

(1,630)
–
–

–

–
(293)

1,238
–
–

(685)
–
–

–
–
(1,988)

2,370
–
–

Hedging 
reserve
£000

Translation 
reserve
£000

(1,893)
–
–

(4,738)
–
–

Other 
reserves
£000

68,866
–
–

Retained 
earnings
£000

99,030
2,063
(1,238)

Total
£000

339,759
2,063
(1,238)

–

–
–

–

–
–

(54)

54

–

–
–

40,468
–

40,468
(293)

–
(1,478)
(10,876)

(14,247)
–
–

–
(14,101)
10,876

(7,963)
–
–

–
(120)
–

–
(162)
–

68,692
–
–

140,215
1,502
(2,370)

–
–
–

–
–
–

–
8,295
5,303

–
6,112
(3,519)

–
–
–

–
46
–

(7,357)
(5,719)
–

–
(375)
(1,784)

1,238
(15,861)
–

366,136
1,502
(2,370)

(7,357)
(5,719)
(1,988)

2,370
14,078
–

Total equity at 30 April 2013

180,124

(303)

(649)

(5,370)

68,738

124,112

366,652

Other reserves comprise the capital redemption reserve, revaluation reserve and merger reserve.

Company

Total equity at 1 May 2011
Share options fair value charge
Loss attributable to owners of the 
Parent Company
Other comprehensive income

Total equity at 1 May 2012
Share options fair value charge
Proﬁt attributable to owners of the 
Parent Company
Dividends paid
Other comprehensive income
Transfers between equity reserves

Share 
capital 
and share 
premium
£000

180,124
–

–
–

180,124
–

–
–
–
–

Revaluation 
reserve
£000

1,371
–

–
–

1,371
–

–
–
–
–

Hedging 
reserve
£000

(1,776)
–

–
(10,841)

(12,617)
–

–
–
10,833
1,784

Merger 
reserve
£000

63,159
–

–
–

63,159
–

–
–
–
–

Capital 
redemption 
reserve
£000

Retained 
earnings
£000

Total
£000

40
–

–
–

40
–

–
–
–
–

9,621
2,063

252,539
2,063

(2,957)
–

8,727
1,502

23,887
(5,719)
–
(1,784)

(2,957)
(10,841)

240,804
1,502

23,887
(5,719)
10,833
–

Total equity at 30 April 2013

180,124

1,371

–

63,159

40

26,613

271,307

53  Northgate plc Annual report and accounts 2013

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Notes to the accounts

1  General information

Northgate plc is a Company incorporated in England and Wales under the Companies Act 2006. The address of the registered 
office is given on page 101. The nature of the Group’s operations and its principal activities are set out in Note 4 and in the 
Operational Review and Financial Review on pages 14 to 23.

The accounts are presented in UK Sterling because this is the currency of the primary economic environment in which the 
Group operates. Foreign operations are included in accordance with the policies set out in Note 2.

2  Principal accounting policies

Statement of compliance

The accounts have been prepared in accordance with International Financial Reporting Standards (IFRS). The accounts have 
also been prepared in accordance with IFRS adopted by the European Union (EU) and therefore the Group accounts comply 
with Article 4 of the EU IAS Regulation.

Basis of preparation

The financial information has been prepared on the historical cost basis, except for the revaluation of certain financial 
instruments.

Going concern

The accounts continue to be prepared on a going concern basis since the Directors have a reasonable expectation that the 
Company and Group have adequate resources to continue in operational existence for the foreseeable future as set out on 
pages 20 and 21 of the Financial Review.

Changes in accounting policy

(a)  New standards and interpretations becoming effective in the current financial year

The following new standards, amendments to standards and interpretations are mandatory for the financial year beginning 
1 May 2012 but have no material impact on the consolidated results or financial position of the Group.

IFRS 7

IAS 12

Financial Instruments: Disclosures – Transfers of ﬁnancial assets

Income Taxes – Amendments for deferred tax and recovery of underlying assets

(b)  New standards and interpretations issued but not yet effective

The following relevant new standards, amendments to standards and interpretations which have not been applied in these 
accounts, were in issue (and in some cases have not yet been adopted by the EU) with an effective date for financial years 
beginning on or after the dates disclosed below.

IFRS 7

IFRS 9

IFRS 10

IFRS 12

IFRS 13

IAS 1

IAS 19

IAS 27

Financial Instruments: Disclosures – Offsetting ﬁnancial assets and ﬁnancial liabilities

1 January 2013

Financial Instruments

Consolidated Financial Statements

Disclosure of Interests in Other Entities

Fair Value Measurement

Presentation of Financial Statements – Amendments relating to the disclosures of other 
comprehensive income

Employee Beneﬁts (amended)

Consolidated and Separate Financial Statements – Cost of an investment in a subsidiary, 
jointly controlled entity or associate

1 January 2015

1 January 2013

1 January 2013

1 January 2013

1 July 2012

1 January 2013

1 January 2013

IAS 32

Financial Instruments: Presentation – Offsetting ﬁnancial assets and ﬁnancial liabilities

1 January 2013

Improvements to IFRS 2011

1 January 2013

54  Northgate plc Annual report and accounts 2013

 
2  Principal accounting policies continued

The Directors are currently assessing the impact of IFRS 9 on its results, financial position and cash flows and do not expect 
that there will be any material impact on the Group’s accounts on adoption of any of the other above standards and 
interpretations.

Basis of consolidation

Subsidiary undertakings are entities controlled by the Company. Control exists when the Company has the power, directly 
or indirectly, to govern the financial and operating policies of the entity so as to obtain benefits from its activities. The 
consolidated accounts include the accounts of the Company and its subsidiary undertakings made up to 30 April 2012 and 
30 April 2013. The results of a new subsidiary undertaking are included from the date of its acquisition. Where an entity has 
ceased to be a subsidiary undertaking during the year, its results are included to the date of cessation.

On acquisition, the assets, liabilities and contingent liabilities of a subsidiary undertaking are measured at their fair values 
at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is 
recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired 
(cid:8)(cid:73)(cid:14)(cid:69)(cid:14)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:79)(cid:78)(cid:0)(cid:65)(cid:67)(cid:81)(cid:85)(cid:73)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:9)(cid:0)(cid:73)(cid:83)(cid:0)(cid:67)(cid:82)(cid:69)(cid:68)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:80)(cid:69)(cid:82)(cid:73)(cid:79)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:65)(cid:67)(cid:81)(cid:85)(cid:73)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:14)(cid:0)(cid:52)(cid:72)(cid:69)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:79)(cid:76)(cid:76)(cid:73)(cid:78)(cid:71)(cid:0)
(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:83)(cid:0)(cid:73)(cid:83)(cid:0)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:79)(cid:76)(cid:76)(cid:73)(cid:78)(cid:71)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:7)(cid:83)(cid:0)(cid:80)(cid:82)(cid:79)(cid:80)(cid:79)(cid:82)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:70)(cid:65)(cid:73)(cid:82)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:76)(cid:73)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:83)(cid:69)(cid:68)(cid:14)(cid:0)
(cid:51)(cid:85)(cid:66)(cid:83)(cid:69)(cid:81)(cid:85)(cid:69)(cid:78)(cid:84)(cid:76)(cid:89)(cid:0)(cid:65)(cid:78)(cid:89)(cid:0)(cid:76)(cid:79)(cid:83)(cid:83)(cid:69)(cid:83)(cid:0)(cid:65)(cid:80)(cid:80)(cid:76)(cid:73)(cid:67)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:79)(cid:76)(cid:76)(cid:73)(cid:78)(cid:71)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:73)(cid:78)(cid:0)(cid:69)(cid:88)(cid:67)(cid:69)(cid:83)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:79)(cid:76)(cid:76)(cid:73)(cid:78)(cid:71)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)
allocated against the interests of the parent.

Where necessary, adjustments are made to the accounts of subsidiary undertakings to bring the accounting policies used 
(cid:73)(cid:78)(cid:84)(cid:79)(cid:0)(cid:76)(cid:73)(cid:78)(cid:69)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:84)(cid:72)(cid:79)(cid:83)(cid:69)(cid:0)(cid:85)(cid:83)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:14)(cid:0)(cid:33)(cid:76)(cid:76)(cid:0)(cid:73)(cid:78)(cid:84)(cid:82)(cid:65)(cid:13)(cid:71)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:84)(cid:82)(cid:65)(cid:78)(cid:83)(cid:65)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:12)(cid:0)(cid:66)(cid:65)(cid:76)(cid:65)(cid:78)(cid:67)(cid:69)(cid:83)(cid:12)(cid:0)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:69)(cid:88)(cid:80)(cid:69)(cid:78)(cid:83)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:69)(cid:76)(cid:73)(cid:77)(cid:73)(cid:78)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)
consolidation.

Revenue recognition

Group revenue is measured at the fair value of the consideration received or receivable in respect of the hire of vehicles, sale 
of used vehicles and the supply of related goods and services in the normal course of business, net of value added tax and 
discounts.

Revenue from vehicle hire is recognised evenly over the hire period and revenue from sales of other related goods and services 
is recognised at the point of sale.

Revenue from the sale of used vehicles is recognised at the point of sale.

Goodwill

All business combinations are accounted for by applying the acquisition method. Goodwill represents amounts arising on 
acquisition of subsidiary undertakings and interests in associates and is the difference between the cost of the acquisition and 
the fair value of the net identifiable assets and liabilities acquired.

Goodwill is stated at cost less any accumulated impairment losses identified through annual or other tests for impairment. Any 
impairment is recognised immediately in the income statement and is not subsequently reversed.

Intangible assets – arising on business combinations

Amortisation of intangible assets is charged to the income statement on a straight line basis over the estimated useful lives of 
each intangible asset. Intangible assets are amortised from the date they are available for use. The estimated useful lives are as 
follows:

Customer relationships

5 to 13 years

Intangible assets – other

Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and impairment 
losses. Software assets are amortised on a straight line basis over their estimated useful lives, which do not exceed three years.

55  Northgate plc Annual report and accounts 2013

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Notes to the accounts continued

2  Principal accounting policies continued

Property, plant and equipment

Property, plant and equipment is stated at historical cost, less accumulated depreciation and any provision for impairment. 
Certain properties were revalued prior to the adoption of IFRS. These valuations were treated as deemed cost at the time of 
adopting IFRS for the first time. Depreciation is provided so as to write off the cost of assets to residual values on a straight line 
basis over the assets’ useful estimated lives as follows:

Freehold buildings

Leasehold buildings

Plant, equipment & ﬁttings

Vehicles for hire

Motor vehicles

50 years

50 years or over the life of the lease, whichever is shorter

3 to 10 years

3 to 6 years

3 to 6 years

Vehicles for hire are depreciated on a straight line basis using depreciation rates that reflect economic lives of between three 
and six years. These depreciation rates have been determined with the anticipation that the net book values at the point the 
vehicles are transferred into inventories is in line with the open market values for those vehicles. Depreciation charges reflect 
adjustments made as a result of differences between expected and actual residual values of used vehicles, taking into account 
the further directly attributable costs to sell the vehicles.

Property under construction is not depreciated. Depreciation commences when these assets are ready for their intended use. 
Freehold land is not depreciated.

On the subsequent sale or retirement of properties revalued prior to the adoption of IFRS, the attributable revaluation surplus 
remaining in the revaluation reserve is transferred directly to retained earnings. The residual value, if not insignificant, is 
reassessed annually.

Fixed asset investments

Fixed asset investments are shown at cost less any provision for impairment.

Impairment

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine 
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the 
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

The recoverable amount is the higher of fair value less selling costs and value in use. In assessing value in use, the estimated 
(cid:70)(cid:85)(cid:84)(cid:85)(cid:82)(cid:69)(cid:0)(cid:67)(cid:65)(cid:83)(cid:72)(cid:0)(cid:70)(cid:76)(cid:79)(cid:87)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:73)(cid:82)(cid:0)(cid:80)(cid:82)(cid:69)(cid:83)(cid:69)(cid:78)(cid:84)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:85)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:0)(cid:80)(cid:82)(cid:69)(cid:13)(cid:84)(cid:65)(cid:88)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:82)(cid:69)(cid:70)(cid:76)(cid:69)(cid:67)(cid:84)(cid:83)(cid:0)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:83)(cid:83)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)
of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been 
adjusted.

An impairment loss is recognised in the income statement whenever the carrying amount of an asset exceeds its recoverable 
amount. Impairment losses recognised in respect of cash generating units are allocated first to reduce the carrying amount of 
any goodwill allocated to cash generating units and then to reduce the carrying amount of other assets in the unit on a pro 
rata basis.

Where an impairment loss has been recognised in an earlier period, the Group reassesses whether there are any indications 
that such impairment has decreased or no longer exists. If an impairment no longer exists, an impairment reversal is 
recognised in the income statement to the extent required.

Inventories

Used vehicles held for resale are valued at the lower of cost or net realisable value. Net realisable value represents the 
estimated selling price less costs to be incurred in marketing, selling and distribution.

Other inventories comprise spare parts and consumables and are valued at the lower of cost or net realisable value.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

56  Northgate plc Annual report and accounts 2013

2  Principal accounting policies continued

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income 
statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes 
items that are never taxable or deductible.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and 
liabilities in the accounts and the corresponding tax bases used in the computation of taxable profit and is accounted for using 
the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and 
deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible 
temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from 
goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that 
affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer 
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and 
interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable 
that the temporary difference will not reverse in the foreseeable future.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is 
realised.

Current and deferred tax is charged or credited in the income statement, except when it relates to items charged or credited 
directly to equity, in which case the current or deferred tax is also dealt with in equity.

Financial instruments and hedge accounting

Financial assets and liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the contractual 
provision of the instrument.

(cid:52)(cid:82)(cid:65)(cid:68)(cid:69)(cid:0)(cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:65)(cid:66)(cid:76)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:66)(cid:69)(cid:65)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:73)(cid:82)(cid:0)(cid:78)(cid:79)(cid:77)(cid:73)(cid:78)(cid:65)(cid:76)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:76)(cid:69)(cid:83)(cid:83)(cid:0)(cid:65)(cid:78)(cid:89)(cid:0)(cid:65)(cid:80)(cid:80)(cid:82)(cid:79)(cid:80)(cid:82)(cid:73)(cid:65)(cid:84)(cid:69)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:73)(cid:82)(cid:82)(cid:69)(cid:67)(cid:79)(cid:86)(cid:69)(cid:82)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)
(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:83)(cid:14)(cid:0)(cid:52)(cid:82)(cid:65)(cid:68)(cid:69)(cid:0)(cid:80)(cid:65)(cid:89)(cid:65)(cid:66)(cid:76)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:66)(cid:69)(cid:65)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:73)(cid:82)(cid:0)(cid:78)(cid:79)(cid:77)(cid:73)(cid:78)(cid:65)(cid:76)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:14)

The Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from 
operational, financing and investment activities. In accordance with its treasury policy, the Group does not hold or issue 
derivative financial instruments for trading purposes.

Derivative financial instruments are stated at fair value. Any gain or loss on remeasurement to fair value is recognised 
immediately in the income statement except where derivatives qualify for hedge accounting, where recognition of the resultant 
gain or loss depends on the nature of the items being hedged.

(cid:52)(cid:72)(cid:69)(cid:0)(cid:70)(cid:65)(cid:73)(cid:82)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)(cid:73)(cid:83)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:69)(cid:83)(cid:84)(cid:73)(cid:77)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:87)(cid:79)(cid:85)(cid:76)(cid:68)(cid:0)(cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:69)(cid:0)(cid:79)(cid:82)(cid:0)(cid:80)(cid:65)(cid:89)(cid:0)(cid:84)(cid:79)(cid:0)
terminate the derivative at the balance sheet date, taking into account current interest rates and the current creditworthiness of 
the derivative counterparties.

Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are 
recognised directly in equity and the ineffective portion is recognised in the income statement. Amounts previously recognised 
in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item 
is recognised in profit or loss, in the same line of the income statement as the recognised hedged item. However, when the 
(cid:70)(cid:79)(cid:82)(cid:69)(cid:67)(cid:65)(cid:83)(cid:84)(cid:0)(cid:84)(cid:82)(cid:65)(cid:78)(cid:83)(cid:65)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:73)(cid:83)(cid:0)(cid:72)(cid:69)(cid:68)(cid:71)(cid:69)(cid:68)(cid:0)(cid:82)(cid:69)(cid:83)(cid:85)(cid:76)(cid:84)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:65)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:0)(cid:79)(cid:82)(cid:0)(cid:65)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:76)(cid:73)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:71)(cid:65)(cid:73)(cid:78)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)
losses previously accumulated in equity are transferred from equity and included in the initial measurement of the cost of the 
(cid:78)(cid:79)(cid:78)(cid:13)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:0)(cid:79)(cid:82)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:76)(cid:73)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:14)

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the 
income statement as they arise.

Hedge accounting for cash flow hedges is discontinued when the hedging instrument expires or is sold, terminated, exercised 
or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in 
equity is retained in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the 
net cumulative gain or loss recognised in equity is transferred to the income statement as a net profit or loss for the period.

Changes in the fair value of derivative financial instruments that are designated and effective as net investment hedges are 
recognised directly in equity and the ineffective portion is recognised in the income statement. Exchange differences arising on 
the net investment hedges are transferred to the translation reserve.

57  Northgate plc Annual report and accounts 2013

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Notes to the accounts continued

2  Principal accounting policies continued

Cash and cash equivalents

Cash and cash equivalents consist of cash and bank balances and bank overdrafts.

Bank loans, other loan, loan notes and issue costs

Bank loans, other loan and loan notes are stated at the amount of proceeds after deduction of issue costs, which are amortised 
over the period of the loan. Finance charges, including premiums payable on settlement or redemption and direct issue costs, 
are accounted for in the income statement on an accruals basis.

Foreign currencies

Transactions in foreign currencies other than UK Sterling are recorded at the rate prevailing at the date of the transaction or at 
the contracted rate if the transaction is covered by a forward exchange contract. At each balance sheet date, monetary assets 
and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date.

The net assets of overseas subsidiary undertakings are translated into UK Sterling at the rate of exchange ruling at the balance 
sheet date. The exchange difference arising on the retranslation of opening net assets is recognised directly in equity. The 
results of overseas subsidiary undertakings and joint ventures are translated into UK Sterling using average exchange rates for 
the financial period and variances compared with the exchange rate at the balance sheet date are recognised directly in equity. 
All other translation differences are taken to the income statement with the exception of exchange differences on foreign 
currency borrowings to the extent that they are used to finance or provide a hedge against Group equity investments in foreign 
enterprises, which are recognised directly in equity, together with the exchange difference on the net investment in these 
enterprises.

Goodwill and fair value adjustments arising on acquisition of a foreign entity are treated as assets and liabilities of the foreign 
entity. They are denominated in the functional currency of the foreign entity and translated at the exchange rate prevailing at 
the balance sheet date, with any variances reflected directly in equity.

All foreign exchange differences reflected directly in equity are shown in the translation reserve component of equity.

Leasing and hire purchase commitments

As Lessee:

Assets held under finance leases and hire purchase contracts are capitalised in the balance sheet at their fair value or, if lower, 
the present value of the future minimum lease payments and are depreciated over their useful economic lives using Group 
policies. The capital elements of future obligations under finance leases and hire purchase contracts are included as liabilities in 
the balance sheet. The interest elements of the rental obligations are charged to the income statement over the periods of the 
leases and hire purchase contracts so as to produce a constant rate of return on the outstanding balance.

Rentals payable under operating leases are charged to the income statement on a straight line basis over the lease term.

As Lessor:

Motor vehicles and equipment hired to customers under operating leases are included within property, plant and equipment. 
Income from such leases is taken to the income statement evenly over the period of the operating lease agreement.

Retirement benefit costs

The Group predominantly operates defined contribution pension schemes but has one defined benefit scheme. Contributions 
in respect of defined contribution arrangements are charged to the income statement in the period they fall due. Pension 
contributions in respect of one of these arrangements are held in trustee administered funds, independently of the Group’s 
finances.

For the defined benefit scheme, the cost of providing benefits is determined using the Projected Unit Credit Method, with 
updates to actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in full 
in the period in which they occur. They are recognised outside the income statement and presented in the statement of other 
comprehensive income.

Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a 
straight line basis over the average period until the benefits become vested.

58  Northgate plc Annual report and accounts 2013

2  Principal accounting policies continued

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation 
as adjusted for unrecognised past service cost and as reduced by the fair value of the scheme assets. Any asset resulting from 
this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions 
to the scheme.

The Group also operates group personal pension plans. The costs of these plans are charged to the income statement as they 
fall due.

Employee share schemes and share based payments

(cid:52)(cid:72)(cid:69)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:73)(cid:83)(cid:83)(cid:85)(cid:69)(cid:83)(cid:0)(cid:69)(cid:81)(cid:85)(cid:73)(cid:84)(cid:89)(cid:13)(cid:83)(cid:69)(cid:84)(cid:84)(cid:76)(cid:69)(cid:68)(cid:0)(cid:80)(cid:65)(cid:89)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:84)(cid:79)(cid:0)(cid:67)(cid:69)(cid:82)(cid:84)(cid:65)(cid:73)(cid:78)(cid:0)(cid:69)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:83)(cid:14)

(cid:37)(cid:81)(cid:85)(cid:73)(cid:84)(cid:89)(cid:13)(cid:83)(cid:69)(cid:84)(cid:84)(cid:76)(cid:69)(cid:68)(cid:0)(cid:69)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:0)(cid:83)(cid:67)(cid:72)(cid:69)(cid:77)(cid:69)(cid:83)(cid:12)(cid:0)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:69)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:0)(cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:68)(cid:69)(cid:70)(cid:69)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0)(cid:65)(cid:78)(cid:78)(cid:85)(cid:65)(cid:76)(cid:0)(cid:66)(cid:79)(cid:78)(cid:85)(cid:83)(cid:69)(cid:83)(cid:12)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:68)(cid:69)(cid:0)(cid:69)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:83)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)
the option to acquire shares of the Company. Employee share options and deferred annual bonuses are generally subject to 
performance or service conditions.

(cid:52)(cid:72)(cid:69)(cid:0)(cid:70)(cid:65)(cid:73)(cid:82)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:69)(cid:81)(cid:85)(cid:73)(cid:84)(cid:89)(cid:13)(cid:83)(cid:69)(cid:84)(cid:84)(cid:76)(cid:69)(cid:68)(cid:0)(cid:80)(cid:65)(cid:89)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:73)(cid:83)(cid:0)(cid:77)(cid:69)(cid:65)(cid:83)(cid:85)(cid:82)(cid:69)(cid:68)(cid:0)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:68)(cid:65)(cid:84)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:71)(cid:82)(cid:65)(cid:78)(cid:84)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:72)(cid:65)(cid:82)(cid:71)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:86)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:80)(cid:69)(cid:82)(cid:73)(cid:79)(cid:68)(cid:0)
during which performance or service conditions are required to be met or immediately where no performance or service criteria 
(cid:69)(cid:88)(cid:73)(cid:83)(cid:84)(cid:14)(cid:0)(cid:52)(cid:72)(cid:69)(cid:0)(cid:70)(cid:65)(cid:73)(cid:82)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:69)(cid:81)(cid:85)(cid:73)(cid:84)(cid:89)(cid:13)(cid:83)(cid:69)(cid:84)(cid:84)(cid:76)(cid:69)(cid:68)(cid:0)(cid:80)(cid:65)(cid:89)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:71)(cid:82)(cid:65)(cid:78)(cid:84)(cid:69)(cid:68)(cid:0)(cid:73)(cid:83)(cid:0)(cid:77)(cid:69)(cid:65)(cid:83)(cid:85)(cid:82)(cid:69)(cid:68)(cid:0)(cid:85)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:76)(cid:65)(cid:67)(cid:75)(cid:13)(cid:51)(cid:67)(cid:72)(cid:79)(cid:76)(cid:69)(cid:83)(cid:0)(cid:77)(cid:79)(cid:68)(cid:69)(cid:76)(cid:14)(cid:0)(cid:52)(cid:72)(cid:69)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:65)(cid:83)(cid:0)
an expense is adjusted to reflect the actual number of employee share options that vest, except where forfeiture is only due to 
market based performance criteria not being met.

The Group also operates two other employee share incentive plans. Under one plan, employees each have the option to 
purchase an amount of shares annually and receive an equivalent number of free shares. In the other plan, the Board may 
make discretionary awards of free shares to eligible employees. The Group recognises all free shares as an expense evenly 
throughout the period over which the employees must remain in the employ of the Group in order to receive the free shares.

Interest income and finance costs

Interest income and finance costs are recognised in the income statement using the effective interest rate method.

Exceptional items

Items are classified as exceptional gains or losses where they are considered by the Directors to be material and which 
individually or, if of a similar type, in aggregate need to be disclosed by virtue of their size or incidence if the accounts are to be 
properly understood.

Dividends

Dividends on Ordinary shares are recognised in the period in which they are either paid or formally approved, whichever is 
earlier.

Provisions

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of 
a past event and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is 
(cid:77)(cid:65)(cid:84)(cid:69)(cid:82)(cid:73)(cid:65)(cid:76)(cid:12)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:68)(cid:69)(cid:84)(cid:69)(cid:82)(cid:77)(cid:73)(cid:78)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:69)(cid:88)(cid:80)(cid:69)(cid:67)(cid:84)(cid:69)(cid:68)(cid:0)(cid:70)(cid:85)(cid:84)(cid:85)(cid:82)(cid:69)(cid:0)(cid:67)(cid:65)(cid:83)(cid:72)(cid:0)(cid:70)(cid:76)(cid:79)(cid:87)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:65)(cid:0)(cid:80)(cid:82)(cid:69)(cid:13)(cid:84)(cid:65)(cid:88)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:82)(cid:69)(cid:70)(cid:76)(cid:69)(cid:67)(cid:84)(cid:83)(cid:0)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:0)
assessments of the time value of money and, where appropriate, the risks specific to the liability.

Own shares

The Group makes open market purchases of its own shares in order to satisfy the requirements of the Group’s existing share 
schemes. Own shares are recognised at cost as a reduction in shareholder equity. The carrying values of own shares are 
compared to their market values at each reporting date and adjustments are made to write down the carrying value of own 
shares when, in the opinion of the Directors, there is a significant market value reduction.

59  Northgate plc Annual report and accounts 2013

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Notes to the accounts continued

3  Critical accounting judgments and key sources of estimation uncertainty

In the process of applying the Group’s accounting policies, which are described in Note 2, the Directors have made the 
following judgments that have the most significant effect on the amounts recognised in the accounts.

Depreciation

Vehicles for hire are depreciated on a straight line basis using depreciation rates that reflect economic lives of between three 
and six years. These depreciation rates have been determined with the anticipation that the net book values at the point the 
vehicles are transferred into inventories is in line with the open market values for those vehicles at that time.

Under IAS 16 (Property, Plant and Equipment), the Group is required to review its depreciation rates and estimated useful lives 
regularly to ensure that the net book value of disposals of tangible fixed assets are broadly equivalent to their market value.

Depreciation charges reflect adjustments made as a result of differences between expected and actual residual values of used 
vehicles, taking into account the further directly attributable costs to sell the vehicles.

Intangible assets

Amortisation of intangible assets is charged to the income statement on a straight line basis over the estimated useful lives 
of each intangible asset. The Directors have made assumptions with regard to the evidence in the market, at the time of 
acquisitions, when determining these estimated useful lives.

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that 
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial 
year, are discussed below.

Impairment of goodwill and other non-current assets

(cid:36)(cid:69)(cid:84)(cid:69)(cid:82)(cid:77)(cid:73)(cid:78)(cid:73)(cid:78)(cid:71)(cid:0)(cid:87)(cid:72)(cid:69)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:71)(cid:79)(cid:79)(cid:68)(cid:87)(cid:73)(cid:76)(cid:76)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:73)(cid:77)(cid:80)(cid:65)(cid:73)(cid:82)(cid:69)(cid:68)(cid:0)(cid:79)(cid:82)(cid:0)(cid:87)(cid:72)(cid:69)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:69)(cid:86)(cid:69)(cid:82)(cid:83)(cid:65)(cid:76)(cid:0)(cid:79)(cid:70)(cid:0)(cid:65)(cid:0)(cid:80)(cid:82)(cid:69)(cid:86)(cid:73)(cid:79)(cid:85)(cid:83)(cid:76)(cid:89)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)
impairment is necessary requires an estimation of their value in use in the cash generating units. The value in use calculation 
requires the entity to estimate the future cash flows expected to arise from each cash generating unit and a suitable discount 
rate in order to calculate present value.

Provision for bad and doubtful debts

Trade receivables are stated in the balance sheet at their nominal value less any appropriate provision for irrecoverable amounts. 
In determining whether provision is required against any trade receivable, judgment is required in estimating the likely levels 
of recovery. In exercising this judgment, consideration is given to both the overall economic environment in which a debtor 
operates, as well as specific indicators that the recovery of the nominal balance may be in doubt, for example days’ sales 
outstanding in excess of agreed credit terms or other qualitative information in respect of a customer.

Taxation

The Group carries out tax planning consistent with a Group of its size and makes appropriate provision, based on best 
estimates, until tax computations are agreed with the tax authorities. To the extent that tax estimates result in the recognition 
of deferred tax assets, those assets are only carried in the balance sheet to the extent that it is considered that they are likely to 
be recovered in the short term.

60  Northgate plc Annual report and accounts 2013

4  Segmental reporting

Management has determined the operating segments based upon the information provided to the executive Board of 
Directors which is considered to be the chief operating decision maker. The Group is managed and reports internally, on a basis 
consistent with its two main operating divisions, UK and Spain. The UK division includes operations in the Republic of Ireland. 
The principal activities of these divisions are set out in the Operational Review and Financial Review.

Revenue: hire of vehicles
Revenue: sale of vehicles

Total revenue

Underlying operating proﬁt (loss) *
Exceptional administrative expenses
Intangible amortisation

Operating proﬁt (loss)

Interest income
Finance costs (excluding exceptional items)
Exceptional ﬁnance costs

Loss before taxation

Other information
Capital expenditure
Depreciation

Reportable segment assets
Income tax assets

Total assets

Reportable segment liabilities
Income tax liabilities

Total liabilities

UK
2013
£000

Spain
2013
£000

Corporate
2013
£000

291,104
124,583

150,840
43,353

415,687

194,193

–
–

–

64,241
(2,051)
(2,886)

25,189
(1,286)
(690)

(3,026)
–
(13)

Total
2013
£000

441,944
167,936

609,880

86,404
(3,337)
(3,589)

59,304

23,213

(3,039)

79,478

193,514
93,501

75,272
69,751

492,818

297,255

–
61

–

288,268

142,009

–

123
(37,029)
(53,954)

(11,382)

268,786
163,313

790,073
10,550

800,623

430,277
3,694

433,971

61  Northgate plc Annual report and accounts 2013

s
t
n
u
o
c
c
a
e
h
t
o
t

s
e
t
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N

s
t
n
u
o
c
c
A

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts continued

4  Segmental reporting continued

Revenue: hire of vehicles
Revenue: sale of vehicles

Total revenue

Underlying operating proﬁt (loss) *
Exceptional administrative expenses
Intangible amortisation

Operating proﬁt (loss)

Interest income
Finance costs (excluding exceptional items)
Exceptional ﬁnance costs

Proﬁt before taxation

Other information
Capital expenditure
Depreciation

Reportable segment assets
Derivative ﬁnancial instrument assets
Income tax assets

Total assets

Reportable segment liabilities
Derivative ﬁnancial instrument liabilities
Income tax liabilities

Total liabilities

UK
2012
£000

Spain
2012
£000

Corporate
2012
£000

320,772
136,312

182,887
66,727

457,084

249,614

–
–

–

74,402
(5,670)
(3,135)

34,989
(1,724)
(861)

(4,215)
692
–

Total
2012
£000

503,659
203,039

706,698

105,176
(6,702)
(3,996)

65,597

32,404

(3,523)

94,478

194,697
110,933

120,259
81,734

510,448

329,485

–
62

–

306,477

151,756

–

165
(45,610)
(3,046)

45,987

314,956
192,729

839,933
11,249
1,691

852,873

458,233
16,997
11,507

486,737

*  Underlying operating profit (loss) stated before intangible amortisation and exceptional items is the measure used by the executive Board of Directors to assess segment 

performance.

Revenue from sale of vehicles is included as revenue in accordance with IAS 16 which requires used vehicle assets to be 
classified as inventories. Used vehicle sales are included within UK and Spain operating segments, which reflects the level at 
which the executive Board of Directors allocate resources and review performance of the Group.

There is no significant intersegment trading.

Geographical information

Revenues are attributed to countries on the basis of the company’s location. The Directors consider the United Kingdom and 
Republic of Ireland to be a single geographical segment on the grounds that the results and net assets of operations in the 
Republic of Ireland are immaterial to the Group as a whole.

United Kingdom & Republic of Ireland
Spain

Revenue 
 2013
£000

Non-current 
assets 
2013
£000

Revenue  
2012
£000

415,687
194,193

419,418
259,084

457,084
249,614

(cid:46)(cid:79)(cid:78)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)
assets 
2012
£000

429,714
281,021

609,880

678,502

706,698

710,735

There are no external customers from whom the Group derives more than 10 per cent of total revenue. Segment assets and 
liabilities exclude derivative financial instrument assets and liabilities and current and deferred tax assets and liabilities, since 
these balances are not included in the segments’ assets and liabilities as reviewed by the chief operating decision maker.

62  Northgate plc Annual report and accounts 2013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
5  Operating profit

Operating proﬁt is stated after charging:
Depreciation of property, plant and equipment (Notes 15 and 16)
Staff costs (Note 6)
Cost of inventories recognised as an expense
Net impairment of trade receivables (Note 37)
Auditor’s remuneration for audit services (below)
(cid:33)(cid:85)(cid:68)(cid:73)(cid:84)(cid:79)(cid:82)(cid:7)(cid:83)(cid:0)(cid:82)(cid:69)(cid:77)(cid:85)(cid:78)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:0)(cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:0)(cid:8)(cid:66)(cid:69)(cid:76)(cid:79)(cid:87)(cid:9)(cid:0)

2013
£000

 2012
£000

163,313
77,683
205,437
1,544
364
107

192,729
82,834
248,665
4,961
397
171

The above cost of inventories recognised as an expense includes movements in stock provisions which are immaterial.

Fees payable to the Company’s auditor for the audit of the Company’s annual accounts
Fees payable to the Company’s auditor and its associates for the audit of the
Company’s subsidiaries pursuant to legislation

Total audit fees

Other services pursuant to legislation
Tax services
Other services

Total non-audit fees

2013
£000

237

127

364

21
62
24

107

2012
£000

240

157

397

21
95
55

171

(cid:38)(cid:69)(cid:69)(cid:83)(cid:0)(cid:80)(cid:65)(cid:89)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:84)(cid:79)(cid:0)(cid:36)(cid:69)(cid:76)(cid:79)(cid:73)(cid:84)(cid:84)(cid:69)(cid:0)(cid:44)(cid:44)(cid:48)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:73)(cid:82)(cid:0)(cid:65)(cid:83)(cid:83)(cid:79)(cid:67)(cid:73)(cid:65)(cid:84)(cid:69)(cid:83)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:0)(cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:78)(cid:79)(cid:84)(cid:0)(cid:82)(cid:69)(cid:81)(cid:85)(cid:73)(cid:82)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:66)(cid:69)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:69)(cid:68)(cid:0)
because the consolidated financial statements are required to disclose such fees on a consolidated basis.

A description of the work of the Audit and Risk Committee is set out on pages 40 and 41 and includes an explanation of how 
(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:79)(cid:82)(cid:0)(cid:79)(cid:66)(cid:74)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:73)(cid:84)(cid:89)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:73)(cid:78)(cid:68)(cid:69)(cid:80)(cid:69)(cid:78)(cid:68)(cid:69)(cid:78)(cid:67)(cid:69)(cid:0)(cid:73)(cid:83)(cid:0)(cid:83)(cid:65)(cid:70)(cid:69)(cid:71)(cid:85)(cid:65)(cid:82)(cid:68)(cid:69)(cid:68)(cid:0)(cid:87)(cid:72)(cid:69)(cid:78)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:0)(cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:68)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:79)(cid:82)(cid:14)

63  Northgate plc Annual report and accounts 2013

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Notes to the accounts continued

6  Staff costs

The average number of persons employed by the Group:

United Kingdom and Republic of Ireland:
Direct operations
Administration

Spain:
Direct operations
Administration

The aggregate remuneration of Group employees comprised:
Wages and salaries
Social security costs
Other pension costs

2013
Number

2012
Number

1,369
500

1,869

757
131

888

1,514
481

1,995

800
123

923

2,757

2,918

2013
£000

2012
£000

67,646
8,791
1,246

71,870
9,557
1,407

77,683

82,834

Wages and salaries include £2,944,000 (2012 – £5,319,000) in respect of redundancies and loss of office.

Details of Directors’ remuneration, pension contributions and share options are provided in the audited part of the 
Remuneration Report on pages 33 to 39.

7 

Interest income

Interest on bank and other deposits

2013
£000

123

2012
£000

165

64  Northgate plc Annual report and accounts 2013

 
 
 
 
 
 
 
 
 
 
 
  
8 

Finance costs

Interest on bank overdrafts and loans
Amortisation of arrangement fees
(cid:33)(cid:77)(cid:79)(cid:82)(cid:84)(cid:73)(cid:83)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)
(cid:35)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)(cid:73)(cid:78)(cid:69)(cid:70)(cid:70)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:78)(cid:69)(cid:83)(cid:83)
Interest rate derivatives ineffectiveness
(cid:35)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:73)(cid:78)(cid:0)(cid:70)(cid:65)(cid:73)(cid:82)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)
Change in fair value of interest rate derivatives
(cid:33)(cid:77)(cid:79)(cid:82)(cid:84)(cid:73)(cid:83)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:68)(cid:69)(cid:13)(cid:68)(cid:69)(cid:83)(cid:73)(cid:71)(cid:78)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:51)(cid:84)(cid:69)(cid:82)(cid:76)(cid:73)(cid:78)(cid:71)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)
Preference share dividends

Finance costs (excluding exceptional items)

Exceptional ﬁnance costs
Financing costs incurred on extinguishment of bank loans, loan notes and other loan
Terminated cross currency derivatives recycled from hedging reserve on extinguishment of loan notes
Amounts recycled from hedging reserve on termination of interest rate and currency derivatives on 
extinguishment of banks loans, loan notes and other loan
Termination of Euro interest rate swaps

Total exceptional ﬁnance costs

9  Taxation

Current tax:
UK corporation tax
Adjustment in respect of prior years
Foreign tax

Deferred tax:
Origination and reversal of timing differences
Adjustment in respect of prior years
UK rate adjustment

2013
£000

30,535
7,480
(610)
368
(12)
(133)
(445)
(179)
25

2012
£000

38,991
7,799
(605)
459
(28)
(147)
(453)
(431)
25

37,029

45,610

35,903
(1,446)

19,497
–

53,954

–
–

–
3,046

3,046

90,983

48,656

2013
£000

2012
£000

1,285
118
6,466

7,869

1,897
(11,505)
488

(9,120)

(6,595)
(5,301)
2

12,044
(285)
2,880

(11,894)

14,639

(4,025)

5,519

Corporation tax is calculated at 23.92% (2012 – 25.83%) of the estimated assessable profit for the year. Taxation for other 
jurisdictions is calculated at the rates prevailing in those respective jurisdictions.

65  Northgate plc Annual report and accounts 2013

s
t
n
u
o
c
c
a
e
h
t
o
t

s
e
t
o
N

s
t
n
u
o
c
c
A

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts continued

9  Taxation continued

The net (credit) charge for the year can be reconciled to the profit before taxation as stated in the income statement as follows:

(Loss) proﬁt before taxation

Tax at the UK corporation tax rate of 23.92% (2012 – 25.83%)
Tax effect of expenses that are not deductible in determining taxable proﬁt
Tax effect of income not taxable in determining taxable proﬁt
Difference in taxation in overseas subsidiary undertakings
Reduction in UK tax rate
Adjustment to tax charge in respect of prior years

Tax (credit) charge and effective tax rate for the year

2013
£000

(11,382)

(2,723)
4,015
–
(406)
2
(4,913)

(4,025)

%

23.9
(35.3)
–
3.6
–
43.2

2012
£000

45,987

11,880
4,396
(652)
(1,195)
2,880
(11,790)

35.4

5,519

%

25.8
9.6
(1.4)
(2.6)
6.3
(25.6)

12.0

In addition to the amount charged to the income statement, a net deferred tax amount of £4,183,000 has been charged 
(2012 – £3,899,000 credited) directly to equity (Note 23).

The underlying tax charge of £10,657,000 (2012 – £17,803,000) excludes exceptional tax credits of £13,783,000 
(2012 – £11,216,000) as set out in Note 33, and tax credits on intangible amortisation of £899,000 (2012 – £1,068,000).

There has been no recognition of deferred tax assets previously derecognised.

On 1 April 2013 the UK Corporation tax rate changed from 24% to 23%. Accordingly, the tax disclosures reflect deferred tax 
measured on the new 23% rate. A further change to the UK Corporation tax rate was announced in the March 2013 budget, 
to reduce the rate to 21% from 1 April 2014, with a further reduction to 20% from 1 April 2015.  These changes are expected 
to be enacted in July 2013.  Any rate changes that have not been substantively enacted at the balance sheet date are not 
recognised in the accounts of the Group.

10  Dividends

An interim dividend of 1.3p per ordinary share was paid in January 2013 (2012 – £Nil). The Directors propose a final dividend 
for the year ended 30 April 2013 of 6.0p per ordinary share (2012 – 3.0p) which is subject to approval at the Annual General 
Meeting and has not been included as a liability as at 30 April 2013. No dividends have been paid between 30 April 2013 and 
the date of signing the Accounts.

66  Northgate plc Annual report and accounts 2013

 
 
 
 
 
11  Earnings per share

Basic and diluted earnings per share
The calculation of basic and diluted earnings per share is based 
on the following data:
Earnings
Earnings for the purposes of basic and diluted earnings per share, 
being net proﬁt (loss) attributable to the owners of the Parent 
Company

Number of shares
Weighted average number of Ordinary shares
for the purposes of basic earnings per share
Effect of dilutive potential Ordinary shares:
– share options

Weighted average number of Ordinary shares for the  
purposes of diluted earnings per share

Basic earnings (loss) per share

Diluted earnings (loss) per share

Underlying
2013
£000

Statutory
2013
£000

Underlying
2012
£000

Statutory
2012
£000

38,841

(7,357)

41,928

40,468

Number

Number

Number

Number

133,232,518 133,232,518 133,232,518 133,232,518

4,223,706

–

3,074,242

3,074,242

137,456,224 133,232,518 136,306,760 136,306,760

29.2p

28.3p

(5.5)p

(5.5)p

31.5p

30.8p

30.4p

29.7p

A total of 4,223,706 potential ordinary shares have not been included within the calculation of statutory diluted earnings per 
share for the year ended 30 April 2013 (2012 – Nil) as they are antidilutive. However, these potential Ordinary shares could 
dilute earnings per share in the future.

12  Result of the parent company

A profit of £23,887,000 (2012 – loss of £2,957,000) is dealt with in the accounts of the Company. The Directors have taken 
advantage of the exemption available under s408(3) of the Companies Act 2006 and not presented an income statement for 
the Company alone.

13  Goodwill

Group

Carrying value:
At 1 May 2012 and 30 April 2013

2013
£000

2012
£000

3,589

3,589

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are expected 
to benefit from the business combination. The Group tests goodwill annually for impairment, or more frequently if there are 
indications that goodwill might be impaired.

The Group has two cash generating units: the UK and Spain. The goodwill balance all relates the UK CGU. The Group tests 
its CGUs annually for impairment, or more frequently if there are indications that assets might be impaired. The recoverable 
amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculations are 
those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. The 
(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:69)(cid:83)(cid:84)(cid:73)(cid:77)(cid:65)(cid:84)(cid:69)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)(cid:83)(cid:0)(cid:85)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:80)(cid:82)(cid:69)(cid:13)(cid:84)(cid:65)(cid:88)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)(cid:83)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:82)(cid:69)(cid:70)(cid:76)(cid:69)(cid:67)(cid:84)(cid:0)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:83)(cid:83)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:84)(cid:73)(cid:77)(cid:69)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:77)(cid:79)(cid:78)(cid:69)(cid:89)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)
risks specific to the CGUs. The growth rates are based on industry growth rates forecasts. Changes in selling prices and direct 
costs are based on past practices and expectations of future changes in the market.

In addition to the annual test of impairment, and as required by IAS 36, there has also been an assessment as to whether there 
(cid:72)(cid:65)(cid:83)(cid:0)(cid:66)(cid:69)(cid:69)(cid:78)(cid:0)(cid:65)(cid:78)(cid:89)(cid:0)(cid:73)(cid:78)(cid:68)(cid:73)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:65)(cid:78)(cid:0)(cid:73)(cid:77)(cid:80)(cid:65)(cid:73)(cid:82)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:76)(cid:79)(cid:83)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:65)(cid:78)(cid:0)(cid:69)(cid:65)(cid:82)(cid:76)(cid:73)(cid:69)(cid:82)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:0)(cid:72)(cid:65)(cid:83)(cid:0)(cid:68)(cid:69)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0)(cid:79)(cid:82)(cid:0)(cid:78)(cid:79)(cid:0)
longer exists.

67  Northgate plc Annual report and accounts 2013

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Notes to the accounts continued

13  Goodwill continued

(cid:52)(cid:72)(cid:69)(cid:0)(cid:73)(cid:77)(cid:80)(cid:65)(cid:73)(cid:82)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:83)(cid:83)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:87)(cid:65)(cid:83)(cid:0)(cid:66)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)(cid:82)(cid:73)(cid:83)(cid:75)(cid:13)(cid:65)(cid:68)(cid:74)(cid:85)(cid:83)(cid:84)(cid:69)(cid:68)(cid:0)(cid:67)(cid:65)(cid:83)(cid:72)(cid:0)(cid:70)(cid:76)(cid:79)(cid:87)(cid:0)(cid:70)(cid:79)(cid:82)(cid:69)(cid:67)(cid:65)(cid:83)(cid:84)(cid:83)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:69)(cid:68)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:65)(cid:0)(cid:84)(cid:87)(cid:79)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:0)(cid:66)(cid:85)(cid:83)(cid:73)(cid:78)(cid:69)(cid:83)(cid:83)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)(cid:0)(cid:65)(cid:80)(cid:80)(cid:82)(cid:79)(cid:86)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)
the Directors in April 2013 using growth rates of 1% over a 10 year period, including terminal values, using a discount rate of 
9.9% for the UK CGU and 11.2% for the Spain CGU. The projected terminal value is calculated based on the Gordon Growth 
Model assuming cash flows are generated into perpetuity.

(cid:41)(cid:84)(cid:0)(cid:87)(cid:65)(cid:83)(cid:0)(cid:67)(cid:79)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:69)(cid:68)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:82)(cid:69)(cid:0)(cid:87)(cid:69)(cid:82)(cid:69)(cid:0)(cid:78)(cid:79)(cid:0)(cid:73)(cid:78)(cid:68)(cid:73)(cid:67)(cid:65)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:65)(cid:68)(cid:68)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:0)(cid:73)(cid:77)(cid:80)(cid:65)(cid:73)(cid:82)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:82)(cid:0)(cid:82)(cid:69)(cid:86)(cid:69)(cid:82)(cid:83)(cid:65)(cid:76)(cid:0)(cid:79)(cid:70)(cid:0)(cid:73)(cid:77)(cid:80)(cid:65)(cid:73)(cid:82)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)
previously charged for both the UK CGU and Spain CGU.

(cid:41)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:80)(cid:82)(cid:73)(cid:79)(cid:82)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:73)(cid:77)(cid:80)(cid:65)(cid:73)(cid:82)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:83)(cid:83)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:87)(cid:65)(cid:83)(cid:0)(cid:66)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)(cid:82)(cid:73)(cid:83)(cid:75)(cid:13)(cid:65)(cid:68)(cid:74)(cid:85)(cid:83)(cid:84)(cid:69)(cid:68)(cid:0)(cid:67)(cid:65)(cid:83)(cid:72)(cid:0)(cid:70)(cid:76)(cid:79)(cid:87)(cid:0)(cid:70)(cid:79)(cid:82)(cid:69)(cid:67)(cid:65)(cid:83)(cid:84)(cid:83)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:69)(cid:68)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:65)(cid:0)(cid:84)(cid:87)(cid:79)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:0)(cid:66)(cid:85)(cid:83)(cid:73)(cid:78)(cid:69)(cid:83)(cid:83)(cid:0)
plan approved by the Directors in April 2012 using growth rates of 1% to 2% over a 10 year period, including terminal values, 
using a discount rate of 10.3% for the UK CGU and 11.7% for the Spain CGU. The projected terminal value was calculated 
based on the Gordon Growth Model assuming cash flows are generated into perpetuity. It was concluded that there were no 
indicators of additional impairment or reversal of impairment previously charged for both the UK CGU and Spain CGU.

The value in use assessment is sensitive to changes in the key assumptions used, most notably the discount rate and growth 
rates. A sensitivity analysis has been performed on the UK CGU and Spain CGU. Based on this sensitivity analysis, no reasonably 
possible changes to the assumptions used for the UK CGU resulted in an additional impairment charge being required. The 
Spain CGU had headroom of £55m at the balance sheet date. An increase in the discount rate of 2.03% would eliminate the 
headroom in the Spain CGU.

14  Other intangible assets

Customer
relationships 
£000

Group

Other
software
£000

Company

Other
software
£000

Total
£000

22,680
–
–
(571)

22,109
–
(7,185)
177

9,558
1,982
(408)
(122)

11,010
1,396
–
45

32,238
1,982
(408)
(693)

33,119
1,396
(7,185)
222

15,101

12,451

27,552

13,742
2,212
–
(435)

15,519
1,642
(7,185)
161

10,137

4,964

6,590

6,687
1,784
(357)
(105)

8,009
1,947
–
28

9,984

2,467

3,001

20,429
3,996
(357)
(540)

23,528
3,589
(7,185)
189

20,121

7,431

9,591

–
–
–
–

–
90
–
–

90

–
–
–
–

–
13
–
–

13

77

–

Cost:
At 1 May 2011
Additions
Disposals
Exchange differences

At 1 May 2012
Additions
Disposals
Exchange differences

At 30 April 2013

Amortisation:
At 1 May 2011
Charge for the year
Disposals
Exchange differences

At 1 May 2012
Charge for the year
Disposals
Exchange differences

At 30 April 2013

Carrying amount:
At 30 April 2013

At 30 April 2012

68  Northgate plc Annual report and accounts 2013

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15  Property, plant and equipment: vehicles for hire

Group

Cost:
At 1 May 2011
Additions
Transfer to motor vehicles
Transfer to inventories
Exchange differences

At 1 May 2012
Additions
Transfer from plant, equipment & ﬁttings
Transfer to motor vehicles
Transfer to inventories
Exchange differences

At 30 April 2013

Depreciation:
At 1 May 2011
Charge for the year
Transfer to motor vehicles
Transfer to inventories
Exchange differences

At 1 May 2012
Charge for the year
Transfer from plant, equipment & ﬁttings
Transfer to motor vehicles
Transfer to inventories
Exchange differences

At 30 April 2013

Carrying amount:

At 30 April 2013

At 30 April 2012

£000

1,153,675
305,401
(223)
(454,236)
(40,036)

964,581
258,961
1,233
(467)
(322,071)
14,012

916,249

439,633
188,443
(93)
(271,213)
(15,292)

341,478
158,608
1,173
(91)
(179,434)
5,354

327,088

589,161

623,103

At 30 April 2013, the Group had entered into contractual commitments for the acquisition of vehicles for hire amounting to 
£29,935,000 (2012 – £27,784,000).

The depreciation rate on vehicles for hire in the UK was reduced by 1% on 1 May 2012. This resulted in a reduction in the 
depreciation charge of £4m in the year ended 30 April 2013.

69  Northgate plc Annual report and accounts 2013

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Notes to the accounts continued

16  Other property, plant and equipment

Group

Cost:
At 1 May 2011
Additions
Transfer from vehicles for hire
Exchange differences
Disposals

At 1 May 2012
Additions
Transfer (to) from vehicles for hire
Exchange differences
Disposals

At 30 April 2013

Depreciation:
At 1 May 2011
Charge for the year
Transfer from vehicles for hire
Exchange differences
Disposals

At 1 May 2012
Charge for the year
Transfer (to) from vehicles for hire
Exchange differences
Disposals

At 30 April 2013

Carrying amount:

At 30 April 2013

At 30 April 2012

Land and buildings by category:
Freehold and long leasehold
Short leasehold

Land & 
buildings
£000

Plant, 
equipment 
& ﬁttings
£000

87,599
3,092
–
(4,366)
(4,590)

81,735
3,849
–
1,765
(1,399)

20,010
3,541
–
(811)
(5,872)

16,868
3,946
(1,233)
350
(1,542)

Motor 
vehicles
£000

1,769
940
223
–
(551)

2,381
634
467
–
(1,107)

Total
£000

109,378
7,573
223
(5,177)
(11,013)

100,984
8,429
(766)
2,115
(4,048)

85,950

18,389

2,375

106,714

18,336
1,831
–
(818)
(2,796)

16,553
1,827
–
339
(437)

13,182
1,940
–
(358)
(5,613)

9,151
2,372
(1,173)
187
(1,263)

552
515
93
–
(332)

828
506
91
–
(588)

32,070
4,286
93
(1,176)
(8,741)

26,532
4,705
(1,082)
526
(2,288)

18,282

9,274

837

28,393

67,668

65,182

9,115

7,717

1,538

78,321

1,553

 74,452

2013
£000

2012
£000

62,864
4,804

59,984
5,198

67,668

65,182

At 30 April 2013, the Group had entered into contractual commitments for the acquisition of property, plant and equipment 
amounting to £81,000 (2012 – £309,000).

70  Northgate plc Annual report and accounts 2013

  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
16  Other property, plant and equipment continued

Company

Cost:
At 1 May 2011, 1 May 2012 and 30 April 2013

Depreciation:
At 1 May 2011
Charge for the year

At 1 May 2012
Charge for the year

At 30 April 2013

Carrying amount:
At 30 April 2013

At 30 April 2012

17  Investments

Company

Cost:
At 1 May 2011
Capital reduction of subsidiary undertaking

At 1 May 2012
Liquidation of subsidiary undertaking

At 30 April 2013

Accumulated provisions:
At 1 May 2011, 1 May 2012 and 30 April 2013

Carrying amount:
At 30 April 2013

At 30 April 2012

Land &
buildings
£000

3,239

534
62

596
61

657

2,582

2,643

Shares in 
subsidiary 
undertakings
£000

Loans 
to subsidiary 
undertaking
£000

Total
£000

103,329
(25,000)

78,329
(2)

47,000
–

47,000
–

150,329
(25,000)

125,329
(2)

78,327

47,000

125,327

2,435

–

2,435

75,892

47,000

122,892

75,894

47,000

122,894

A full list of the Company’s subsidiaries was included with the Annual Return filed with the Registrar of Companies.

At 30 April 2013, the principal subsidiary undertakings of the Group, all of which are wholly owned and are registered in 
England and Wales unless otherwise stated, were as follows:

Northgate (CB) Limited* 
Northgate (CB2) Limited* 
Northgate España Renting Flexible S.A.* (incorporated in Spain) 
Northgate (Europe) Limited 
Northgate (Malta) Limited* (incorporated in Malta) 
Northgate (MT) Limited* (incorporated in Malta) 
Northgate Vehicle Hire (Ireland) Limited* (incorporated in the Republic of Ireland) 
Northgate Vehicle Hire Limited

*interest held indirectly by the Company

71  Northgate plc Annual report and accounts 2013

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Notes to the accounts continued

18  Inventories

Vehicles held for resale
Spare parts and consumables

19  Trade and other receivables

Trade receivables
Amounts due from subsidiary undertakings
Other taxes
Other debtors and prepayments

The average credit period given on trade sales is

 Group

2013
£000

14,410
4,782

2012
£000

17,771
4,442

19,192

22,213

Group

2013
£000

68,633
–
–
8,784

2012
£000

84,930
–
–
12,348

Company
2013
£000

2012
£000

–
889,090
86
98

–
880,854
1,827
29

77,417

97,278

889,274

882,710

UK
Spain

2013
38 days
64 days

2012
42 days
71 days

Allowances for estimated irrecoverable amounts and the Group’s credit risk are considered in Note 37.

The Directors consider that the carrying amount of trade and other receivables approximates to their fair value due to their 
short term nature.

20  Trade and other payables

Trade payables
Amounts due to subsidiary undertakings
Social security and other taxes
Accruals and deferred income

Trade payables comprise amounts outstanding for trade purchases.

The average credit period taken on trade purchases is

Group

2013
£000

24,188
–
4,789
23,615

2012
£000

23,446
–
9,655
30,087

Company
2013
£000

2012
£000

445
370,066
165
4,905

34
381,936
97
12,278

52,592

63,188

375,581

394,345

UK
Spain

2013
36 days
59 days

2012
48 days
78 days

The Directors consider that the carrying amount of trade and other payables approximates to their fair value due to their short 
term nature.

72  Northgate plc Annual report and accounts 2013

 
  
 
 
  
 
 
 
 
21  Borrowings

Except as detailed in Note 37, the Directors consider that the carrying amounts of the Group’s borrowings approximate to their 
fair value.

Bank loans and overdrafts
Loan notes
Other loan
Cumulative Preference shares
Property loans
Conﬁrming facilities

The borrowings are repayable as follows:

On demand or within one year
(shown within current liabilities)
Bank loans and overdrafts
Loan notes
Property loans
Conﬁrming facilities

In the second year
Loan notes
Property loans

In the third to ﬁfth years
Bank loans
Loan notes

Due after more than ﬁve years
Other loan
Cumulative Preference shares

Group

2013
£000

375,549
–
–
500
223
1,413

2012
£000

129,282
161,002
97,752
500
862
5,647

Company
2013
£000

2012
£000

370,313
–
–
500
–
–

113,673
161,002
97,752
500
–
–

377,685

395,045

370,813

372,927

Group

2013
£000

2012
£000

Company
2013
£000

2012
£000

5,678
–
223
1,413

83,312
45,951
648
5,647

7,314

135,558

–
–

–

42,717
214

42,931

442
–
–
–

442

–
–

–

67,703
45,951
–
–

113,654

42,717
–

42,717

369,871
–

45,970
72,334

369,871
–

45,970
72,334

369,871

118,304

369,871

118,304

–
500

500

97,752
500

98,252

–
500

500

97,752
500

98,252

Total borrowings

377,685

395,045

370,813

372,927

Less: Amount due for settlement within one year
(shown within current liabilities)

7,314

135,558

442

113,654

Amount due for settlement after one year

370,371

259,487

370,371

259,273

The UK syndicated bank loans, totalling £369,871,000 at 30 April 2013, would become repayable in full in the event of a 
change in control of the Group.

73  Northgate plc Annual report and accounts 2013

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Notes to the accounts continued

21  Borrowings continued

Bank loans

Bank loans and overdrafts are secured and bear interest at rates of 2.38% to 2.85% (2012 – 1.50% to 2.75%) above the 
relevant interest rate index, being LIBOR for Sterling denominated debt and EURIBOR for Euro denominated debt.

Loan notes

In 2006 and 2007, the Company issued unsecured loan notes to investors principally based in the United States. The total of 
the loan notes (‘the US Notes’) issued by the Group was US$357,000,000 and £21,000,000. During the year, the Group repaid 
the remaining loan notes in full in advance of their maturity date with total repayments in the year amounting to $249,837,000 
and £15,631,000 respectively (2012 – $7,070,000 and £Nil). In accordance with the terms of the US Notes, on early repayment 
(cid:77)(cid:65)(cid:75)(cid:69)(cid:13)(cid:87)(cid:72)(cid:79)(cid:76)(cid:69)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:79)(cid:0)(cid:4)(cid:18)(cid:16)(cid:12)(cid:21)(cid:23)(cid:19)(cid:12)(cid:16)(cid:16)(cid:16)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:97)(cid:18)(cid:12)(cid:18)(cid:19)(cid:17)(cid:12)(cid:16)(cid:16)(cid:16)(cid:0)(cid:87)(cid:65)(cid:83)(cid:0)(cid:80)(cid:65)(cid:73)(cid:68)(cid:14)(cid:0)(cid:53)(cid:78)(cid:65)(cid:77)(cid:79)(cid:82)(cid:84)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:70)(cid:69)(cid:69)(cid:83)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:82)(cid:69)(cid:77)(cid:65)(cid:73)(cid:78)(cid:69)(cid:68)(cid:0)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:68)(cid:65)(cid:84)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)
early repayment were recognised as finance costs in the income statement in the year with total costs recognised in the year of 
£8,315,000 (2012 – £3,054,000). The comparative information at 30 April 2012 was as follows:

Value of loan notes

$37,201,000 5 year loan notes
$86,620,000 7 year loan notes
$89,318,000 10 year loan notes
£15,631,000 10 year loan notes
$36,698,000 10 year loan notes
Unamortised ﬁnance fees relating to the US Dollar denominated loan Notes
Unamortised ﬁnance fees relating to the Sterling denominated loan Notes

Weighted
average
fixed interest
rate on the
US Notes

Overall
weighted
average
fixed
interest rate

7.72%
7.86%
7.99%
7.89%
7.99%

8.19%
9.02%
8.91%
7.89%
8.89%

Carrying  
value
£000

22,867
53,245
54,904
15,631
22,558
(7,202)
(1,001)

161,002

Other loan

The other loan was repaid in full in April 2013 six years prior to maturity in the amount of £100,000,000. Unamortised finance 
fees remaining at the date of early repayment were recognised in finance costs within the income statement in the year with 
total costs recognised in the year of £2,248,000 (2012 – £250,000).

Cumulative Preference shares

The cumulative Preference shares of 50p each entitle the holder to receive a cumulative preferential dividend at the rate of 
5% on the paid up capital and the right to a return of capital at either winding up or a repayment of capital. The cumulative 
Preference shares do not entitle the holders to any further or other participation in the profits or assets of the Company. These 
shares have no voting rights other than in exceptional circumstances.

The total number of authorised cumulative Preference shares of 50p each is 1,300,000 (2012 – 1,300,000), of which 
1,000,000 (2012 – 1,000,000) were allotted and fully paid at the balance sheet date.

Property loans

All property loans relate to land and buildings held in Spain and are accounted for as finance lease obligations. The loans are 
secured on the properties to which they relate.

The average remaining lease term is one year (2012 – one year). At 30 April 2013, the average borrowing rate for property 
loans was 2.0% (2012 – 2.8%). All loans are on a fixed repayment basis and no arrangements have been entered into for 
contingent rental payments.

Confirming facilities

Spanish confirming facilities of £1,413,000 (2012 – £5,647,000) are unsecured and all fall due within one year. It is common 
practice in Spain for businesses to have a bank facility which enables their suppliers to be paid earlier than under normal credit 
terms. When this is the case the supplier pays to Northgate España’s bank a discount fee for early settlement. When invoices 
fall due for payment, Northgate España settles such invoices with its bank. The Group pays no interest on confirming.

74  Northgate plc Annual report and accounts 2013

 
 
 
 
 
 
 
 
 
 
 
21  Borrowings continued

Total borrowing facilities

The Group has various borrowing facilities available to it. The undrawn committed facilities at the balance sheet date, in respect 
of which all conditions precedent had been met at that date, are as follows:

Less than one year
In one year to ﬁve years

2013
£000

2012
£000

7,262
58,197

3,946
261,998

65,459

265,944

The total amount permitted to be borrowed by the Company and its subsidiary undertakings in terms of the Articles of 
Association shall not exceed six times the aggregate of the issued share capital of the Company and Group reserves, as defined 
in those Articles.

Analysis of consolidated net debt

An analysis of movements in the Group’s consolidated net debt is as follows:

Cash at bank and in hand
Bank loans
Loan notes
Other loan
Cumulative Preference shares
Property loans and other borrowings

At 1 May
2012
£000

(9,707)
129,282
161,002
97,752
500
6,509

Cash ﬂow
£000

(5,231)
229,643
(169,273)
(100,000)
–
(639)

Other
(cid:78)(cid:79)(cid:78)(cid:13)(cid:67)(cid:65)(cid:83)(cid:72)
changes
£000

–
10,891
8,203
2,248
–
(4,234)

Foreign
exchange
movements
£000

(24)
5,733
68
–
–
–

At 30 April
2013
£000

(14,962)
375,549
–
–
500
1,636

385,338

(45,500)

17,108

5,777

362,723

The Group calculates gearing to be net borrowings as a percentage of shareholders’ funds less goodwill and the net book value 
of intangible assets, where net borrowings comprise borrowings less cash at bank. At 30 April 2013, the gearing of the Group 
amounted to 102.0% (2012 – 109.2%) where net borrowings are £362,723,000 (2012 – £385,338,000) and shareholders’ 
funds less goodwill and the net book value of intangible assets are £355,632,000 (2012 – £352,956,000).

Financial instruments (see also Note 37)

Financial assets

The Group’s principal financial assets are bank balances and cash, and trade and other receivables.

The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of 
allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based 
on previous experience, is evidence of a reduction in the recoverability of the cash flows.

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high 
(cid:67)(cid:82)(cid:69)(cid:68)(cid:73)(cid:84)(cid:13)(cid:82)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:83)(cid:0)(cid:65)(cid:83)(cid:83)(cid:73)(cid:71)(cid:78)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:78)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:0)(cid:67)(cid:82)(cid:69)(cid:68)(cid:73)(cid:84)(cid:13)(cid:82)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:71)(cid:69)(cid:78)(cid:67)(cid:73)(cid:69)(cid:83)(cid:14)

The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and 
customers. The credit risk associated with trade receivables in Spain is more concentrated in larger customers than the UK and, 
consequently, as in the UK the Group has a credit insurance policy in place to mitigate this risk.

Treasury policies and the management of risk

The function of Group Treasury is to mitigate financial risk, to ensure sufficient liquidity is available to meet foreseeable 
requirements, to secure finance at minimum cost and to invest cash assets securely and profitably. Treasury operations manage 
the Group’s funding, liquidity and exposure to interest rate risks within a framework of policies and guidelines authorised by 
the Board of Directors.

75  Northgate plc Annual report and accounts 2013

s
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s
e
t
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A

 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts continued

21  Borrowings continued

The Group uses derivative financial instruments for risk management purposes only. Consistent with Group policy, Group 
Treasury does not engage in speculative activity and it is policy to avoid using more complex financial instruments. Further 
details regarding derivative financial instruments are shown in Note 22.

The policy followed in managing credit risk permits only minimal exposures, with banks and other institutions meeting required 
standards as assessed normally by reference to major credit rating agencies. Deals are authorised only with banks with which 
dealing mandates have been agreed and which maintain an A rating. Individual aggregate credit exposures are limited 
accordingly.

Financing and interest rate risk

The Group’s policy is to finance operating subsidiary undertakings by a combination of retained earnings, and medium term 
bank loans.

Cash at bank and on deposit yield interest based principally on interest rate indices applicable to periods of less than three 
months, those indices being LIBOR for Sterling denominated cash and EURIBOR for Euro denominated cash. The Group’s 
exposure to interest rate fluctuations on its borrowings and deposits is managed through the use of interest rate derivatives 
as detailed in Note 22. These derivatives are also used to manage the Group’s desired mix of fixed and floating rate debt. The 
policy is to fix or cap a substantial element of the interest cost on outstanding debt. The Group’s borrowing facilities were 
(cid:82)(cid:69)(cid:83)(cid:84)(cid:82)(cid:85)(cid:67)(cid:84)(cid:85)(cid:82)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)(cid:18)(cid:25)(cid:0)(cid:33)(cid:80)(cid:82)(cid:73)(cid:76)(cid:0)(cid:18)(cid:16)(cid:17)(cid:19)(cid:0)(cid:79)(cid:78)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:68)(cid:65)(cid:84)(cid:69)(cid:0)(cid:65)(cid:76)(cid:76)(cid:0)(cid:69)(cid:88)(cid:73)(cid:83)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:87)(cid:69)(cid:82)(cid:69)(cid:0)(cid:67)(cid:65)(cid:78)(cid:67)(cid:69)(cid:76)(cid:76)(cid:69)(cid:68)(cid:14)(cid:0)(cid:33)(cid:84)(cid:0)(cid:19)(cid:16)(cid:0)(cid:33)(cid:80)(cid:82)(cid:73)(cid:76)(cid:0)
2013 0.5% (2012 – 96%) of gross borrowings were at fixed rates of interest comprising £500,000 of preference shares and 
£1,413,000 of confirming facilities. New interest rate swaps were entered into on 2 May 2013. On that date 61% of gross 
borrowings were at fixed rates of interest, comprising £55,000,000 and €206,500,000 of interest rate swaps, £500,000 of 
preference shares and £1,413,000 of confirming facilities (30 April 2012 – £100,000,000 and €152,832,000 of interest rate 
(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:12)(cid:0)(cid:4)(cid:18)(cid:20)(cid:25)(cid:12)(cid:24)(cid:19)(cid:23)(cid:12)(cid:16)(cid:16)(cid:16)(cid:0)(cid:79)(cid:70)(cid:0)(cid:53)(cid:51)(cid:0)(cid:36)(cid:79)(cid:76)(cid:76)(cid:65)(cid:82)(cid:15)(cid:51)(cid:84)(cid:69)(cid:82)(cid:76)(cid:73)(cid:78)(cid:71)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:12)(cid:0)(cid:97)(cid:17)(cid:21)(cid:12)(cid:22)(cid:19)(cid:17)(cid:12)(cid:16)(cid:16)(cid:16)(cid:0)(cid:79)(cid:70)(cid:0)(cid:51)(cid:84)(cid:69)(cid:82)(cid:76)(cid:73)(cid:78)(cid:71)(cid:0)(cid:68)(cid:69)(cid:78)(cid:79)(cid:77)(cid:73)(cid:78)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:76)(cid:79)(cid:65)(cid:78)(cid:0)(cid:78)(cid:79)(cid:84)(cid:69)(cid:83)(cid:12)(cid:0)(cid:97)(cid:21)(cid:16)(cid:16)(cid:12)(cid:16)(cid:16)(cid:16)(cid:0)
of preference shares and £5,647,000 of confirming facilities), as detailed in Note 22.

Foreign currency exchange risk

The Group maintains borrowings in the same currency as its cash requirements, with the exception of borrowings maintained 
in Euro as net investment hedges against its Euro denominated investments (Note 22) and with the exception of US Dollar 
denominated loan notes, as explained above.

An analysis of the Group’s borrowings by currency is given below:

Group

At 30 April 2013
Bank loans
Cumulative Preference shares
Property loans
Conﬁrming facilities

Group

At 30 April 2012
Bank loans
Loan notes
Other loan
Cumulative Preference shares
Property loans
Conﬁrming facilities

76  Northgate plc Annual report and accounts 2013

Sterling
£000

Euro
£000

US Dollars
£000

Total
£000

136,000
500
–
–

239,549
–
223
1,413

136,500

241,185

–
–
–
–

–

375,549
500
223
1,413

377,685

Sterling
£000

Euro
£000

US Dollars
£000

Total
£000

–
14,630
97,752
500
–
–

129,282
–
–
–
862
5,647

–
146,372
–
–
–
–

129,282
161,002
97,752
500
862
5,647

112,882

135,791

146,372

395,045

 
 
 
 
 
 
 
 
 
 
 
 
21  Borrowings continued

(cid:52)(cid:72)(cid:69)(cid:82)(cid:69)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:78)(cid:79)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:80)(cid:76)(cid:65)(cid:67)(cid:69)(cid:0)(cid:65)(cid:84)(cid:0)(cid:19)(cid:16)(cid:0)(cid:33)(cid:80)(cid:82)(cid:73)(cid:76)(cid:0)(cid:18)(cid:16)(cid:17)(cid:19)(cid:14)(cid:0)(cid:46)(cid:69)(cid:84)(cid:0)(cid:66)(cid:79)(cid:82)(cid:82)(cid:79)(cid:87)(cid:73)(cid:78)(cid:71)(cid:83)(cid:0)(cid:65)(cid:78)(cid:65)(cid:76)(cid:89)(cid:83)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:12)(cid:0)(cid:84)(cid:65)(cid:75)(cid:73)(cid:78)(cid:71)(cid:0)(cid:73)(cid:78)(cid:84)(cid:79)(cid:0)(cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)
swapped exchange rates for the US loan notes and the other loan swapped into Euro being retranslated to Sterling at closing 
exchange rates, are as follows:

Group

At 30 April 2013
Cash at bank and in hand
Bank loans
Cumulative Preference shares
Property loans
Conﬁrming facilities

Group

At 30 April 2012
Cash at bank and in hand
Bank loans
Loan notes
Other loan
Cumulative Preference shares
Property loans
Conﬁrming facilities

Sterling
£’000

Euro
£’000

Total
£’000

(11,616)
136,000
500
–
–

(3,346)
239,549
–
223
1,413

(14,962)
375,549
500
223
1,413

124,884

237,839

362,723

Sterling
£’000

Euro
£’000

Total
£’000

(8,382)
–
132,122
–
500
–
–

(1,325)
129,282
22,780
89,815
–
862
5,647

(9,707)
129,282
154,902
89,815
500
862
5,647

124,240

247,061

371,301

At 30 April 2012, the gearing of the Group reflecting the above fixed swapped exchange rates amounted to 105.2% where 
net borrowings were £371,301,000 and shareholders’ funds less goodwill and the net book value of intangible assets were 
£352,956,000.

22  Derivative financial instruments

(cid:52)(cid:72)(cid:69)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:7)(cid:83)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:73)(cid:78)(cid:83)(cid:84)(cid:82)(cid:85)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:66)(cid:65)(cid:76)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:83)(cid:72)(cid:69)(cid:69)(cid:84)(cid:0)(cid:68)(cid:65)(cid:84)(cid:69)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:82)(cid:73)(cid:83)(cid:69)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:14)

Their net estimated fair values are as follows:

Interest rate derivatives
(cid:35)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)

They are represented in the balance sheet as follows:
(cid:46)(cid:79)(cid:78)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:73)(cid:78)(cid:83)(cid:84)(cid:82)(cid:85)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)
Current derivative ﬁnancial instrument liabilities
(cid:46)(cid:79)(cid:78)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:73)(cid:78)(cid:83)(cid:84)(cid:82)(cid:85)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:76)(cid:73)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)

Group

2013
£000

2012
£000

Company
2013
£000

2012
£000

–
–

–

–
–
–

–

(16,314)
10,566

–
(1,517)

(16,314)
9,981

(5,748)

(1,517)

(6,333)

11,249
(1,046)
(15,951)

–
(1,517)
–

11,249
(1,631)
(15,951)

(5,748)

(1,517)

(6,333)

77  Northgate plc Annual report and accounts 2013

s
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A

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts continued

22  Derivative financial instruments continued

Interest rate derivatives

The Group’s exposure to interest fluctuations on its borrowings is managed through the use of interest rate derivatives. These 
derivatives are also used to manage the Group’s desired mix of fixed and floating rate debt. The policy is to fix a substantial 
element of the interest cost on outstanding debt. The Group’s borrowing facilities were restructured on 29 April 2013 on which 
(cid:68)(cid:65)(cid:84)(cid:69)(cid:0)(cid:65)(cid:76)(cid:76)(cid:0)(cid:69)(cid:88)(cid:73)(cid:83)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:87)(cid:69)(cid:82)(cid:69)(cid:0)(cid:67)(cid:65)(cid:78)(cid:67)(cid:69)(cid:76)(cid:76)(cid:69)(cid:68)(cid:14)(cid:0)(cid:46)(cid:69)(cid:87)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:87)(cid:69)(cid:82)(cid:69)(cid:0)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:84)(cid:79)(cid:0)(cid:79)(cid:78)(cid:0)(cid:18)(cid:0)(cid:45)(cid:65)(cid:89)(cid:0)
2013. The Group was therefore not party to any interest rate derivatives at 30 April 2013. The interest rate derivatives to which 
the Group was party as at 30 April 2012 are summarised below:

30 April 2012
Sterling denominated interest rate swaps
Euro denominated interest rate swaps

Total 
nominal 
values

Weighted
average ﬁxed 
contract net 
pay rates

 Weighted
average 
remaining 
life

£100,000,000
€152,832,000

4.45% 9.0 years
2.35% 0.4 years

During the year, the following transactions relating to interest rate derivatives occurred:

£25,000,000 and €152,832,000 of interest rate swaps with a weighted average fixed contract pay rate of 2.44% and 2.35% 
matured;

£25,000,000 of interest rate swaps with a weighted average fixed contract receive rate of 1.13% matured;

€76,416,000 of interest rate swaps which were entered into in the year ended 30 April 2011 commenced with a weighted 
average fixed contract pay rate of 3.12% and a weighted average life of 2.0 years;

€76,416,000 of interest rate swaps with a weighted average fixed contract pay rate of 3.12% and a remaining weighted 
average life of 1.4 years were cancelled at a cash cost of £2,709,000. This was in connection with the extinguishment of bank 
debt; and

£100,000,000 Sterling interest rate swaps with a weighted average fixed contract pay rate of 3.62% and weighted average 
remaining life of 8.0 years were cancelled at a cash cost of £16,841,000. This was in connection with the early repayment of 
the other loan.

During the prior year the following transactions relating to interest rate derivatives occurred:

£38,000,000 and €60,000,000 of interest rate swaps with a weighted average fixed contract pay rate of 2.44% and 2.35% 
respectively matured;

€59,000,000 of interest rate swaps due to commence in September 2012 with a weighted average fixed contract pay rate of 
3.13% and a remaining weighted average life of 2.4 years were cancelled at a cash cost of £3,046,000. This was in connection 
with a voluntary prepayment of the bank term debt; and

£38,000,000 of interest rate swaps with a weighted average fixed contract receive rate of 1.13% matured.

Subsequent to completing the Group's refinancing of its borrowing facilities, on 2 May 2013, £55,000,000 and €206,500,000 
of interest rate swaps with a weighted average fixed contract pay rate of 0.68% and 0.48% respectively, all of which had a 
maturity of 3.6 years, commenced.

All the Group’s interest rate swaps were designated as cash flow hedges and their fair value to the point of either maturity or 
termination, along with changes in fair value in the current year, were deferred in equity. To the extent that the interest rate 
swaps were not 100% effective, a net amount of £12,000 (2012 – £28,000) has been credited to the income statement  
(Note 8).

The total change in fair values of interest rate derivatives credited to the income statement of £445,000 (2012 – £453,000) is 
shown within finance costs (Note 8).

78  Northgate plc Annual report and accounts 2013

  
 
 
 
 
22  Derivative financial instruments continued

Cross-currency derivatives

(cid:45)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:83)(cid:0)(cid:72)(cid:65)(cid:86)(cid:69)(cid:0)(cid:66)(cid:69)(cid:69)(cid:78)(cid:0)(cid:85)(cid:83)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:68)(cid:69)(cid:84)(cid:69)(cid:82)(cid:77)(cid:73)(cid:78)(cid:69)(cid:0)(cid:70)(cid:65)(cid:73)(cid:82)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:69)(cid:65)(cid:67)(cid:72)(cid:0)(cid:66)(cid:65)(cid:76)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:83)(cid:72)(cid:69)(cid:69)(cid:84)(cid:0)(cid:68)(cid:65)(cid:84)(cid:69)(cid:14)

The estimated fair values are as follows:

(cid:51)(cid:84)(cid:69)(cid:82)(cid:76)(cid:73)(cid:78)(cid:71)(cid:15)(cid:53)(cid:51)(cid:0)(cid:36)(cid:79)(cid:76)(cid:76)(cid:65)(cid:82)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)
(cid:37)(cid:85)(cid:82)(cid:79)(cid:15)(cid:51)(cid:84)(cid:69)(cid:82)(cid:76)(cid:73)(cid:78)(cid:71)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)

2013
£000

–
–

–

2012
£000

2,702
7,864

10,566

Sterling/US Dollar cross-currency swaps

In April 2013 the Group made early repayment of all outstanding US Dollar denominated loan notes with a capital value 
of $178,502,000 with total repayments in the year of $249,837,000 (2012 – closing capital value of $249,837,000 with 
repayments in the year of $7,070,000).

During the period in which these US Dollar denominated notes were in issue they bore fixed rate interest in US Dollars. The 
payment of this interest and the capital repayment of the loan notes at maturity exposed the Group to foreign exchange risk. 
(cid:52)(cid:79)(cid:0)(cid:77)(cid:73)(cid:84)(cid:73)(cid:71)(cid:65)(cid:84)(cid:69)(cid:0)(cid:84)(cid:72)(cid:73)(cid:83)(cid:0)(cid:82)(cid:73)(cid:83)(cid:75)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:80)(cid:82)(cid:69)(cid:86)(cid:73)(cid:79)(cid:85)(cid:83)(cid:76)(cid:89)(cid:0)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:84)(cid:79)(cid:0)(cid:65)(cid:0)(cid:83)(cid:69)(cid:82)(cid:73)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:51)(cid:84)(cid:69)(cid:82)(cid:76)(cid:73)(cid:78)(cid:71)(cid:15)(cid:53)(cid:51)(cid:0)(cid:36)(cid:79)(cid:76)(cid:76)(cid:65)(cid:82)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:14)(cid:0)(cid:52)(cid:72)(cid:69)(cid:0)(cid:69)(cid:70)(cid:70)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:83)(cid:84)(cid:65)(cid:82)(cid:84)(cid:0)
dates and termination dates of these contracts were the same as the loan notes against which hedging relationships were 
designated and which are shown in Note 21.

The Group had interest cash outflows in Sterling and interest cash inflows in US Dollars over the life of the contracts. On the 
termination date of each of the contracts, the Group paid a principal amount in Sterling and received a principal amount in US 
Dollars. The weighted average interest rate that the Group paid in Sterling in the year was 8.86% (2012 – 8.86%).

(cid:33)(cid:76)(cid:76)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:7)(cid:83)(cid:0)(cid:51)(cid:84)(cid:69)(cid:82)(cid:76)(cid:73)(cid:78)(cid:71)(cid:15)(cid:53)(cid:51)(cid:0)(cid:36)(cid:79)(cid:76)(cid:76)(cid:65)(cid:82)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:84)(cid:79)(cid:0)(cid:73)(cid:78)(cid:0)(cid:51)(cid:69)(cid:80)(cid:84)(cid:69)(cid:77)(cid:66)(cid:69)(cid:82)(cid:0)(cid:18)(cid:16)(cid:16)(cid:25)(cid:0)(cid:87)(cid:69)(cid:82)(cid:69)(cid:0)(cid:68)(cid:69)(cid:83)(cid:73)(cid:71)(cid:78)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:87)(cid:69)(cid:82)(cid:69)(cid:0)(cid:72)(cid:73)(cid:71)(cid:72)(cid:76)(cid:89)(cid:0)
effective as cash flow hedges and their fair value to the point of either maturity or termination, along with changes in fair 
(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:12)(cid:0)(cid:87)(cid:69)(cid:82)(cid:69)(cid:0)(cid:68)(cid:69)(cid:70)(cid:69)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:69)(cid:81)(cid:85)(cid:73)(cid:84)(cid:89)(cid:14)(cid:0)(cid:52)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:69)(cid:88)(cid:84)(cid:69)(cid:78)(cid:84)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:87)(cid:69)(cid:82)(cid:69)(cid:0)(cid:78)(cid:79)(cid:84)(cid:0)(cid:17)(cid:16)(cid:16)(cid:5)(cid:0)(cid:69)(cid:70)(cid:70)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:12)(cid:0)(cid:65)(cid:0)(cid:78)(cid:69)(cid:84)(cid:0)
amount of £368,000 has been charged (2012 – £459,000) to the income statement (Note 8).

(cid:41)(cid:78)(cid:0)(cid:46)(cid:79)(cid:86)(cid:69)(cid:77)(cid:66)(cid:69)(cid:82)(cid:0)(cid:18)(cid:16)(cid:17)(cid:18)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:65)(cid:0)(cid:84)(cid:79)(cid:84)(cid:65)(cid:76)(cid:0)(cid:78)(cid:79)(cid:84)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:4)(cid:23)(cid:17)(cid:12)(cid:19)(cid:19)(cid:21)(cid:12)(cid:16)(cid:16)(cid:16)(cid:0)(cid:77)(cid:65)(cid:84)(cid:85)(cid:82)(cid:69)(cid:68)(cid:14)

(cid:41)(cid:78)(cid:0)(cid:33)(cid:80)(cid:82)(cid:73)(cid:76)(cid:0)(cid:18)(cid:16)(cid:17)(cid:19)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:65)(cid:0)(cid:84)(cid:79)(cid:84)(cid:65)(cid:76)(cid:0)(cid:78)(cid:79)(cid:84)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:4)(cid:17)(cid:23)(cid:24)(cid:12)(cid:21)(cid:16)(cid:18)(cid:12)(cid:16)(cid:16)(cid:16)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:87)(cid:69)(cid:73)(cid:71)(cid:72)(cid:84)(cid:69)(cid:68)(cid:0)(cid:65)(cid:86)(cid:69)(cid:82)(cid:65)(cid:71)(cid:69)(cid:0)(cid:82)(cid:69)(cid:77)(cid:65)(cid:73)(cid:78)(cid:73)(cid:78)(cid:71)(cid:0)(cid:76)(cid:73)(cid:70)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)
2.4 years were cancelled with a cash outflow of $400,000.

In the prior year, the following transactions occurred:

(cid:41)(cid:78)(cid:0)(cid:38)(cid:69)(cid:66)(cid:82)(cid:85)(cid:65)(cid:82)(cid:89)(cid:0)(cid:18)(cid:16)(cid:17)(cid:18)(cid:12)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:65)(cid:0)(cid:84)(cid:79)(cid:84)(cid:65)(cid:76)(cid:0)(cid:78)(cid:79)(cid:84)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:4)(cid:23)(cid:12)(cid:16)(cid:23)(cid:16)(cid:12)(cid:16)(cid:16)(cid:16)(cid:0)(cid:87)(cid:69)(cid:82)(cid:69)(cid:0)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:84)(cid:79)(cid:0)(cid:73)(cid:78)(cid:0)(cid:67)(cid:79)(cid:78)(cid:78)(cid:69)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)
a voluntary prepayment offer to the note holders. At that time, these swaps had a weighted average life of 1.3 years and a 
weighted average contract Sterling receive rate of 8.08%. The change in fair value between that date and 30 April 2012 was 
taken to the income statement.

Euro/Sterling cross-currency swaps

In November 2012, cross currency swaps with a total notional amount of €27,623,000 matured.

(cid:41)(cid:78)(cid:0)(cid:33)(cid:80)(cid:82)(cid:73)(cid:76)(cid:0)(cid:18)(cid:16)(cid:17)(cid:19)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:67)(cid:65)(cid:78)(cid:67)(cid:69)(cid:76)(cid:76)(cid:69)(cid:68)(cid:0)(cid:65)(cid:76)(cid:76)(cid:0)(cid:82)(cid:69)(cid:77)(cid:65)(cid:73)(cid:78)(cid:73)(cid:78)(cid:71)(cid:0)(cid:37)(cid:85)(cid:82)(cid:79)(cid:15)(cid:51)(cid:84)(cid:69)(cid:82)(cid:76)(cid:73)(cid:78)(cid:71)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:65)(cid:0)(cid:84)(cid:79)(cid:84)(cid:65)(cid:76)(cid:0)(cid:78)(cid:79)(cid:84)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)€114,157,000 
(2012 – €141,780,000). The Group had interest cash inflows in Sterling and interest cash outflows in Euro over the life of the 
contract. On termination date of the contract, the Group paid a principal amount in Euro and received a principal amount in 
Sterling. The interest rate that the Group paid in Euro during the year was 8.18% (2012 – 8.18%).

In the prior year the following transactions occurred:

(cid:41)(cid:78)(cid:0)(cid:33)(cid:85)(cid:71)(cid:85)(cid:83)(cid:84)(cid:0)(cid:18)(cid:16)(cid:17)(cid:17)(cid:12)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:65)(cid:0)(cid:78)(cid:79)(cid:84)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)€17,145,000 commenced. At that time, these swaps had a 
weighted average life of 3.1 years and a weighted average contract Euro pay rate of 7.90%. The change in fair value from that 
date has been deferred into equity.

79  Northgate plc Annual report and accounts 2013

s
t
n
u
o
c
c
a
e
h
t
o
t

s
e
t
o
N

s
t
n
u
o
c
c
A

 
 
 
 
 
 
Notes to the accounts continued

22  Derivative financial instruments continued

Gross movement in fair values initially deferred in hedging reserve:
At 30 April 2012
Movement in fair value of hedged instruments

At 30 April 2013

Cumulative amounts recycled to the income statement:
At 30 April 2012
Movement for the year

At 30 April 2013

Cumulative amounts recycled to the currency translation reserve:
At 30 April 2012
Movement for the year

At 30 April 2013

Cumulative amounts recycled to retained earnings
At 30 April 2012
Movement for the year

At 30 April 2013

Net fair value deferred in hedging reserve:
At 30 April 2013

At 30 April 2012

Sterling/ 
US Dollar
£000

Euro/ 
Sterling
£000

36,724
(2,059)

(941)
(2,213)

34,665

(3,154)

(36,712)
263

(36,449)

12
(8)

4

–
–

–

(1,213)
3,519

2,306

–
1,784

1,784

–
–

–

–

12

(844)

(2,142)

Amounts recycled to the income statement from the hedging reserve represent the movements on the foreign exchange 
elements of the total fair value of the Sterling/US Dollar swaps. This matches the exchange difference on retranslation of the 
loan notes at the exchange rate prevailing at the balance sheet date, leaving a net impact of £Nil in the income statement. The 
gross exchange difference on retranslation of the loan notes at the exchange rate prevailing at the balance sheet date was a 
loss of £68,000 (2012 – £3,887,000). In addition, the amount includes the amortisation of the interest legs of the terminated 
swaps over their residual life. The amount recycled to the translation reserve represents the movement on the foreign exchange 
elements of the total fair value of the derivative subsequent to the designation of the Euro/Sterling swap as a net investment 
hedge. The net fair value remaining in the hedging reserve represents the fair value of the interest rate element of the 
derivatives (Note 29).

Net investment hedges

The Group manages its exposure to currency fluctuations on retranslation of the balance sheets of those subsidiary 
undertakings whose functional currency is in Euro by maintaining a proportion of its borrowings in the same currency. In 
(cid:65)(cid:68)(cid:68)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:69)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:84)(cid:79)(cid:0)(cid:65)(cid:0)(cid:78)(cid:85)(cid:77)(cid:66)(cid:69)(cid:82)(cid:0)(cid:79)(cid:70)(cid:0)(cid:51)(cid:84)(cid:69)(cid:82)(cid:76)(cid:73)(cid:78)(cid:71)(cid:15)(cid:37)(cid:85)(cid:82)(cid:79)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:68)(cid:69)(cid:83)(cid:73)(cid:71)(cid:78)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:65)(cid:83)(cid:0)(cid:78)(cid:69)(cid:84)(cid:0)(cid:73)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)
hedges. The hedging objective is to reduce the risk of spot retranslation of the Euro subsidiaries from Euro to Sterling at each 
reporting date. Exchange differences arising on the borrowings and net investment hedges have been recognised directly 
within equity along with the exchange differences on retranslation of the net assets of the Euro subsidiaries.

The hedges are considered highly effective in the current and prior year.

Company cross-currency swaps

(cid:33)(cid:84)(cid:0)(cid:19)(cid:16)(cid:0)(cid:33)(cid:80)(cid:82)(cid:73)(cid:76)(cid:0)(cid:18)(cid:16)(cid:17)(cid:19)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)(cid:72)(cid:69)(cid:76)(cid:68)(cid:0)(cid:51)(cid:84)(cid:69)(cid:82)(cid:76)(cid:73)(cid:78)(cid:71)(cid:15)(cid:37)(cid:85)(cid:82)(cid:79)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:65)(cid:0)(cid:83)(cid:85)(cid:66)(cid:83)(cid:73)(cid:68)(cid:73)(cid:65)(cid:82)(cid:89)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:84)(cid:65)(cid:75)(cid:73)(cid:78)(cid:71)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:72)(cid:65)(cid:68)(cid:0)(cid:65)(cid:0)(cid:70)(cid:65)(cid:73)(cid:82)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)
of £(1,517,000) (2012 – £(585,000)) and weighted average remaining life of one year (2012 – one year) with a weighted 
average Euro interest receivable rate of 1.20% (2012 – 2.02%) and weighted average GBP interest payable rate of 1.53% 
(2012 – 2.50%).

80  Northgate plc Annual report and accounts 2013

 
 
 
 
 
 
 
 
 
 
 
23   Deferred tax

The following are the major deferred tax liabilities and (assets) recognised by the Group and movements thereon during the 
current and prior years:

Group

At 1 May 2011
Charge (credit) to income
Credit to equity
Exchange differences
Adjustment to UK tax rate charged 
(credited) to income
Adjustment to UK tax rate charged 
to equity
Adjustments in respect of prior years
Transfer from current tax

At 1 May 2012
(Credit) charge to income
Charge to equity
Exchange differences
Adjustment to UK tax rate charged 
(credited) to income
Adjustment to UK tax rate charged 
to equity
Adjustments in respect of prior years

Accelerated 
capital 
allowances
£000

Revaluation 
of buildings
£000

(191)
34,185
–
(1,433)

1,743
(136)
(5)
(38)

2,855

(95)

–
(42)
506

35,880
(12,558)
–
815

–
–
–

1,469
(56)
–
13

35

(45)

–
(4,662)

–
–

Share 
based 
payment
£000

(1,072)
(51)
–
–

86

–
–
–

(1,037)
129
–
–

38

–
–

Intangible 
assets
£000

2,377
(605)
–
(38)

Losses
£000

(3,317)
(22,196)
–
1,491

Other 
timing 
differences
£000

(5,486)
847
(4,267)
287

Total
£000

(5,946)
12,044
(4,272)
269

(41)

–

75

2,880

–
–
–

1,693
(430)
–
6

(49)

–
–

–
(627)
–

(24,649)
4,862
–
(799)

–

–
–

373
384
97

(7,690)
1,458
4,175
(74)

23

8
(639)

373
(285)
603

5,666
(6,595)
4,175
(39)

2

8
(5,301)

At 30 April 2013

19,510

1,381

(870)

1,220

(20,586)

(2,739)

(2,084)

Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The analysis of the 
deferred tax balances after offset is as follows:

At 30 April 2013
Deferred tax assets
Deferred tax liabilities

Net deferred tax assets

At 30 April 2012
Deferred tax assets
Deferred tax liabilities

Net deferred tax liabilities

(4,688)
2,604

(2,084)

(1,691)
7,357

5,666

In the current year, the net charge to equity of £4,183,000 (2012 – £3,894,000 credit), in respect of other timing differences 
included £4,301,000 (2012 – £3,834,000 credit) relating to derivative financial instruments which has been reflected in the 
hedging reserve (Note 29).

There are no deferred tax assets which are not recognised in the balance sheet. Deferred tax assets of £20,586,000 
(2012 – £24,649,000) have been recognised in the balance sheet in respect of losses, as it is considered probable that there will 
be sufficient future taxable profits against which these losses will be utilised.

Net deferred tax assets of £2,739,000 (2012 – £7,690,000) classified as other timing differences relate to movements on fair 
values of interest rate and foreign currency derivatives, retirement benefit obligations, other timing differences in relation to tax 
payable in various tax jurisdictions in which the Group operates and other timing differences within the UK.

81  Northgate plc Annual report and accounts 2013

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Notes to the accounts continued

23   Deferred tax continued

The following are the major deferred tax assets recognised by the Company and movements thereon during the current and 
prior years:

Company

At 1 May 2011
(Credit) charge to income
Credit to equity
Change in UK tax rate charged to income
Change in UK tax rate charged to equity

At 1 May 2012
Charge to income
Charge to equity
Change in UK tax rate charged to income

At 30 April 2013

24  Share capital

Group and Company

Allotted and fully paid:
133,232,518 (2012 – 133,232,518) Ordinary shares of 50p each

25  Share premium account

Group and Company

At 1 May 2011, 1 May 2012 and 30 April 2013

26  Revaluation reserve

At 1 May 2011
Transfer to retained earnings on disposal of revalued property
Foreign exchange differences

At 1 May 2012
Foreign exchange differences

At 30 April 2013

27  Own shares reserve

At 1 May 2011
Purchase of own shares
Transfer of shares on vesting of share options

At 1 May 2012
Purchase of own shares
Transfer of shares on vesting of share options

At 30 April 2013

82  Northgate plc Annual report and accounts 2013

Share 
based 
payment
£000

Other 
timing 
differences
£000

(1,072)
(51)
–
86
–

(1,037)
129
–
38

(838)
34
(3,692)
3
332

(4,161)
47
3,984
3

Total
£000

(1,910)
(17)
(3,692)
89
332

(5,198)
176
3,984
41

(870)

(127)

(997)

2013
£000

2012
£000

66,616

66,616

2013
£000

2012
£000

113,508

113,508

Group
£000

1,363
(54)
(120)

1,189
46

1,235

Company
£000

1,371
–
–

1,371
–

1,371

Group
£000

Company
£000

(1,630)
(293)
1,238

(685)
(1,988)
2,370

(303)

–
–
–

–
–
–

–

 
 
 
 
 
 
 
 
 
 
 
 
 
27  Own shares reserve continued

The own shares reserve represents shares held by employee trusts in order to meet commitments under the Group’s various 
share schemes (Note 36). At 30 April 2013 the Guernsey Trust held 98,037 (2012 – 265,868) 50p Ordinary shares and the 
Capita Trust held 22,891 (2012 – 23,715) 50p Ordinary shares. The total number of shares held by these employee trusts 
represents 0.1% of the alloted and fully paid share capital of the Group.

The results of the trusts are consolidated into the results of the Group in accordance with SIC 12 (Consolidation – Special 
Purpose Entities).

28  Merger reserve

At 1 May 2011, 1 May 2012 and 30 April 2013

29  Hedging reserve

At 1 May 2011
Movement in fair value of hedged interest rate derivatives
Movement in fair value of hedged foreign currency derivatives
Deferred tax on fair value of interest rate and foreign currency derivatives
Amortisation of terminated foreign currency derivatives
Transfer to income statement
Transfer to translation reserve (Note 30)

At 1 May 2012
Movement in fair value of hedged interest rate derivatives
Movement in fair value of hedged foreign currency derivatives
Deferred tax on fair value of interest rate and foreign currency derivatives
Amortisation of terminated foreign currency derivatives
Transfer to income statement
Transfer to retained earnings (Note 32)
Transfer to translation reserve (Note 30)

At 30 April 2013

Group
£000

Company
£000

67,463

63,159

Group
£000

Company
£000

(1,893)
(11,368)
11,176
3,834
(605)
(4,515)
(10,876)

(14,247)
(3,236)
(4,272)
(4,301)
(610)
20,714
1,784
3,519

(1,776)
(11,368)
2,280
3,360
(598)
(4,515)
–

(12,617)
(3,236)
(2,059)
(3,984)
(602)
20,714
1,784
–

(649)

–

The hedging reserve represents the cumulative amounts of changes in fair values of hedged interest rate and foreign currency 
derivatives that are deferred in equity, as explained in Note 2 and Note 22, less amounts transferred to the income statement 
and other components of equity.

30  Translation reserve

At 1 May 2011
Foreign exchange differences on retranslation of net assets of subsidiary undertakings
Net foreign exchange differences on long term borrowings held as hedges
Foreign exchange element of fair value movement of hedged derivatives transferred 
from hedging reserve (Note 29)

At 1 May 2012
Foreign exchange differences on retranslation of net assets of subsidiary undertakings
Net foreign exchange differences on long term borrowings held as hedges
Foreign exchange element of fair value movement of hedged derivatives transferred 
from hedging reserve (Note 29)

At 30 April 2013

83  Northgate plc Annual report and accounts 2013

Group
£000

Company
£000

(4,738)
(16,711)
2,610

10,876

(7,963)
6,725
(613)

(3,519)

(5,370)

–
–
–

–

–
–
–

–

–

s
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u
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Notes to the accounts continued

30  Translation reserve continued

The translation reserve represents the aggregate of the cumulative exchange differences arising from the retranslation of the 
balance sheets of the Euro based subsidiary undertakings and the cumulative exchange differences arising from long term 
borrowings held as hedges and the foreign exchange element of fair value movements of hedged derivatives.

The management of the Group’s foreign exchange translation risks is detailed in Note 22.

31  Capital redemption reserve

At 1 May 2011, 1 May 2012 and 30 April 2013

32  Retained earnings

At 1 May 2011
Proﬁt (loss) for the year
Transfer from revaluation reserve on disposal of revalued property
Deferred taxation on disposal of revalued property
Share options exercised
Share options fair value charge
Deﬁned beneﬁt pension charge recognised directly in equity
Net deferred tax credit recognised directly in equity

At 1 May 2012
(Loss) proﬁt for the year
Dividends paid
Share options exercised
Share options fair value charge
Deﬁned beneﬁt pension charge recognised directly in equity
Net deferred tax credit recognised directly in equity
Transfer from hedging reserve

Group
£000

40

Company
£000

40

Group
£000

Company
£000

99,030
40,468
54
5
(1,238)
2,063
(227)
60

140,215
(7,357)
(5,719)
(2,370)
1,502
(490)
115
(1,784)

9,621
(2,957)
–
–
–
2,063
–
–

8,727
23,887
(5,719)
–
1,502
–
–
(1,784)

At 30 April 2013

124,112

26,613

84  Northgate plc Annual report and accounts 2013

 
 
 
 
33  Exceptional items

During the year, the Group recognised exceptional items in the income statement made up as follows:

Restructuring costs
Partial recovery of acquisition cost of subsidiary undertaking
Net property losses

Exceptional administrative expenses

Costs associated with April 2013 reﬁnancing (Note 8)
Termination of Euro interest rate swaps

Exceptional ﬁnance costs

Total pre-tax exceptional items

Tax credit on exceptional items
Exceptional tax credit relating to prior year items (Note 9)
Exceptional tax charge to recognise change in UK tax rate (Note 9)

Exceptional tax credit

Restructuring costs

2013
£000

2,892
–
445

3,337

53,954
–

53,954

57,291

(13,783)
–
–

2012
£000

7,034
(775)
443

6,702

–
3,046

3,046

9,748

(2,591)
(11,505)
2,880

(13,783)

(11,216)

During the year, the Group incurred total exceptional restructuring costs of £2,892,000 (2012 – £7,034,000), of which 
£2,075,000 (2012 – £5,562,000) arose in the United Kingdom and £817,000 (2012 – £1,472,000) in Spain.

Partial recovery of acquisition cost of subsidiary undertaking

During the prior year, the Group received an exceptional credit of £775,000 relating to the partial recovery of the cost of a 
previous acquisition.

Net property losses

Net property losses were £445,000 (2012 – £443,000), of which £24,000 profit (2012 – £191,000 loss) arose in the United 
Kingdom and £469,000 (2012 – £252,000) arose in Spain.

Costs associated with April 2013 refinancing

In April 2013 the group incurred £53,954,000 of costs relating to the extinguishment of the Group's bank loans, loan notes 
and other loan, and termination of related hedging arrangements.  These costs comprised £42,752,000 of cash costs and 
(cid:97)(cid:17)(cid:17)(cid:12)(cid:18)(cid:16)(cid:18)(cid:12)(cid:16)(cid:16)(cid:16)(cid:0)(cid:79)(cid:70)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:67)(cid:65)(cid:83)(cid:72)(cid:0)(cid:67)(cid:79)(cid:83)(cid:84)(cid:83)(cid:14)(cid:0)(cid:47)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:78)(cid:69)(cid:84)(cid:0)(cid:67)(cid:65)(cid:83)(cid:72)(cid:0)(cid:73)(cid:78)(cid:70)(cid:76)(cid:79)(cid:87)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:97)(cid:19)(cid:12)(cid:22)(cid:21)(cid:18)(cid:12)(cid:16)(cid:16)(cid:16)(cid:0)(cid:78)(cid:79)(cid:84)(cid:0)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:69)(cid:68)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:12)(cid:0)(cid:87)(cid:69)(cid:82)(cid:69)(cid:0)
(cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:84)(cid:79)(cid:0)(cid:67)(cid:65)(cid:78)(cid:67)(cid:69)(cid:76)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:67)(cid:69)(cid:82)(cid:84)(cid:65)(cid:73)(cid:78)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:79)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:69)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:78)(cid:71)(cid:0)(cid:68)(cid:65)(cid:84)(cid:69)(cid:14)(cid:0)(cid:52)(cid:72)(cid:69)(cid:0)(cid:78)(cid:69)(cid:84)(cid:0)(cid:67)(cid:65)(cid:83)(cid:72)(cid:0)(cid:79)(cid:85)(cid:84)(cid:70)(cid:76)(cid:79)(cid:87)(cid:0)(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)
extinguishment of debt and cancellation of previous hedging arrangements was therefore £39,100,000.

Termination of Euro interest rate swaps

During the prior year, €59,000,000 interest rate swaps were closed out at a cash cost of £3,046,000. At that time, these swaps 
were in a hedging relationship with the Euro term loan. The notional amount closed out was the amount of Euro term loan 
which was repaid and cancelled on that date. The net amount deferred into equity at that date of £3,046,000 was expensed in 
the prior year income statement.

85  Northgate plc Annual report and accounts 2013

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Notes to the accounts continued

34  Operating lease arrangements

As lessee

Group

2013
£000

2012
£000

Minimum lease payments under operating leases recognised in the income statement for the year

5,193

5,224

(cid:33)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:66)(cid:65)(cid:76)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:83)(cid:72)(cid:69)(cid:69)(cid:84)(cid:0)(cid:68)(cid:65)(cid:84)(cid:69)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:72)(cid:65)(cid:68)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:67)(cid:79)(cid:77)(cid:77)(cid:73)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:70)(cid:85)(cid:84)(cid:85)(cid:82)(cid:69)(cid:0)(cid:77)(cid:73)(cid:78)(cid:73)(cid:77)(cid:85)(cid:77)(cid:0)(cid:76)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:80)(cid:65)(cid:89)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)
cancellable operating leases, which fall due as follows:

Group

Within one year
In the second to ﬁfth years inclusive
After ﬁve years

2013
£000

4,581
13,549
20,163

2012
£000

4,367
11,683
17,145

38,293

33,195

Operating lease payments represent rentals payable by the Group for certain of its operating sites as well as rentals for certain 
equipment.

Leases are negotiated for an average term of 13 years (2012 – 13 years) and rentals are fixed for an average term of seven years 
(2012 – seven years).

As lessor

The revenue of the Group is principally generated from the hire of vehicles under operating lease arrangements. There is no 
minimum contracted rental period. The revenue of the Group under these arrangements is as shown in the income statement. 
There are no contingent rentals recognised in income.

35  Share based payments

The Group’s and Company’s various share incentive plans are explained in the Remuneration Report on pages 33 to 39.

(cid:52)(cid:72)(cid:69)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:84)(cid:65)(cid:76)(cid:0)(cid:69)(cid:88)(cid:80)(cid:69)(cid:78)(cid:83)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:97)(cid:17)(cid:12)(cid:21)(cid:16)(cid:18)(cid:12)(cid:16)(cid:16)(cid:16)(cid:0)(cid:8)(cid:18)(cid:16)(cid:17)(cid:18)(cid:0)(cid:110)(cid:0)(cid:97)(cid:18)(cid:12)(cid:16)(cid:22)(cid:19)(cid:12)(cid:16)(cid:16)(cid:16)(cid:9)(cid:0)(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:69)(cid:81)(cid:85)(cid:73)(cid:84)(cid:89)(cid:13)(cid:83)(cid:69)(cid:84)(cid:84)(cid:76)(cid:69)(cid:68)(cid:0)(cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:13)(cid:66)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0)
payment transactions in the year.

All options granted under the Deferred Annual Bonus Plan (DABP), Management Performance Share Plan (MPSP) and Executive 
Performance Share Plan (EPSP) are nil cost options.

The All Employee Share Scheme (AESS) has a 12 month accumulation period. Partnership shares are purchased by the 
employee at the end of the accumulation period from the amount contributed by the employee during that period. The 
Company allocates an amount of free matching shares equivalent to the number of partnership shares purchased. The vesting 
period for matching shares is three years.

Matching shares are forfeited if the employee either sells the related partnership shares or leaves the Group before the three 
years have elapsed.

In August 2012 Free Share awards were granted to all eligible employees of the UK business who had completed one year’s 
service and have a vesting period of three years.

86  Northgate plc Annual report and accounts 2013

 
 
 
35  Share based payments continued

Details regarding the plans in the year ended 30 April 2013 are outlined below.

At 1 May 2012
Granted/allocated during the year
Exercised during the year
Forfeited/lapsed during the year

DABP 
Number of 
share options 
2013

MPSP 
Number of 
share options 
2013

EPSP 
Number of 
share options 
2013

592,839
160,332
(117,015)
(12,553)

1,320,542
691,157
(337,915)
(486,725)

685,145
412,588
–
–

AESS
Number of 
matching 
shares 
2013

475,716
145,512
(230,958)
(27,201)

Free Shares 
Number of 
free shares 
2013

–
345,750
(23,750)
(23,500)

At 30 April 2013

623,603

1,187,059

1,097,733

363,069

298,500

Exercisable at the end of the year

23,799

51,428

130,952

–

–

Weighted average remaining contractual life at 
the end of the year
Weighted average share price at the date of 
exercise of options in the year
Date options granted/allocated in the year
Aggregate estimated fair value of options at the 
date of grant

(cid:52)(cid:72)(cid:69)(cid:0)(cid:73)(cid:78)(cid:80)(cid:85)(cid:84)(cid:83)(cid:0)(cid:73)(cid:78)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:76)(cid:65)(cid:67)(cid:75)(cid:13)(cid:51)(cid:67)(cid:72)(cid:79)(cid:76)(cid:69)(cid:83)(cid:0)(cid:77)(cid:79)(cid:68)(cid:69)(cid:76)(cid:0)(cid:87)(cid:69)(cid:82)(cid:69)(cid:0)(cid:65)(cid:83)(cid:0)
follows:
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk free rate
Expected dividends

DABP 
2013

MPSP 
2013

EPSP 
2013

AESS 
2013

Free Shares 
2013

3.0 years

3.4 years

3.2 years

1.8 years

2.3 years

£2.57

£2.80
July 2012 August 2012 August 2012 January 2013 August 2012

£3.29

£2.48

–

£242,000

£1,050,000

£628,000

£410,000

£506,000

£2.07
£Nil
83.2%
3 years
0.8%
3.0%

£2.10
£Nil
69.4%
3 years
0.7%
3.2%

£2.10
£Nil
69.4%
3 years
0.7%
3.2%

£3.31
£Nil
62.1%
5 years
0.9%
3.1%

£2.02
£Nil
74.7%
3 years
0.6%
3.1%

Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous three years.

87  Northgate plc Annual report and accounts 2013

s
t
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A

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts continued

35  Share based payments continued

Details regarding the plans in the year ended 30 April 2012 are outlined below.

At 1 May 2011
Granted/allocated during the year
Exercised during the year
Forfeited/lapsed during the year

At 30 April 2012

DABP 
Number of 
share options 
2012
520,119
260,080
(153,344)
(34,016)

MPSP 
Number of 
share options 
2012
1,285,859
362,372
(87,786)
(239,903)

EPSP 
Number of 
share options 
2012
482,858
251,600
–
(49,313)

 AESS
Number of 
matching 
shares 
2012
625,949
167,499
(255,999)
(61,733)

592,839

1,320,542

685,145

475,716

Exercisable at the end of the year

74,591

64,814

130,952

DABP 
2012

MPSP 
2012

EPSP 
2012

–

 AESS
2012

Weighted average remaining contractual life at the end of the 
year
Weighted average share price at the date of exercise of options 
in the year
Date options granted/allocated in the year
Aggregate estimated fair value of options at the date of grant

3.5 years

1.2 years

0.7 years

1.6 years

£3.24
August 2011
£652,000

£2.58
July 2011
£925,000

–

£2.09
July 2011 January 2012
£297,000
£643,000

(cid:52)(cid:72)(cid:69)(cid:0)(cid:73)(cid:78)(cid:80)(cid:85)(cid:84)(cid:83)(cid:0)(cid:73)(cid:78)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:76)(cid:65)(cid:67)(cid:75)(cid:13)(cid:51)(cid:67)(cid:72)(cid:79)(cid:76)(cid:69)(cid:83)(cid:0)(cid:77)(cid:79)(cid:68)(cid:69)(cid:76)(cid:0)(cid:87)(cid:69)(cid:82)(cid:69)(cid:0)(cid:65)(cid:83)(cid:0)(cid:70)(cid:79)(cid:76)(cid:76)(cid:79)(cid:87)(cid:83)(cid:26)
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk free rate
Expected dividends

£2.70
£Nil
133.2%
3 years
1.5%
2.5%

£2.76
£Nil
133.3%
3 years
1.9%
2.5%

£2.76
£Nil
133.3%
3 years
1.9%
2.5%

£2.09
£Nil
117.7%
5 years
1.0%
3.2%

In the prior year, 12,323 options with a weighted average exercise price of £19.39 were forfeited in relation to the Northgate 
Share Option Scheme. No share options were granted or exercised in relation to this scheme and no options remained at 
30 April 2012.

In the prior year, 3,809 options with a weighted average exercise price of £9.53 lapsed in relation to the Executive Incentive 
Scheme. No share options were granted or exercised in relation to this scheme and no options remained at 30 April 2012.

36  Retirement benefit schemes

During the year the Group operated two group personal pension plans and The Willhire Pension Scheme (‘the Scheme’) 
or (‘Scheme’), which includes both defined benefit and defined contribution sections. The total operating pension cost to 
the Group of all these arrangements was £1,246,000 (2012 – £1,407,000) all of which related to the defined contribution 
schemes.

The Scheme

The Scheme, which is established under Trust, is financed through separate trustee administered funds managed by 
independent professional fund managers on behalf of the Trustees.

The Scheme is closed to both new members and to future service accrual for existing members.

Contributions to the Scheme are based upon actuarial advice following the most recent actuarial valuation of the fund. The 
most recent actuarial valuation of the Scheme was performed at 6 April 2010 by JLT Pension Capital Strategies.

88  Northgate plc Annual report and accounts 2013

 
 
 
 
 
 
 
 
 
 
 
36  Retirement benefit schemes continued

The present value of the defined benefit obligation, the related current service cost and the past service cost were measured 
using the projected unit credit method and the following principal assumptions set out below.

Discount rate
Inﬂation rate – RPI
Inﬂation rate – CPI
Salary increases
Future pension increases
Life expectancy of retirees in current year
Life expectancy of retirees 25 years hence

2013
Valuation
% pa

2012
Valuation
% pa

4.3
3.3
2.6
n/a
2.6

4.6
3.1
2.4
n/a
2.4
23 to 26 years 23 to 26 years
25 to 28 years 25 to 28 years

The Directors do not consider that the Group is materially sensitive to changes in these key assumptions.

Amounts recognised as costs (income) in respect of the Scheme are as follows:

Interest cost
Expected return on plan assets

Total pension charge

2013
£000

201
(106)

95

2012
£000

231
(165)

66

Actuarial gains and losses have been reported directly in equity, within retained earnings. The cumulative net amount of 
actuarial losses reflected directly in equity since 3 February 2006 is £9,000 (2012 – £133,000).

The actual return on the scheme assets was a gain of £591,000 (2012 – £280,000). There are no reimbursement rights.

The amount included in the balance sheet arising from the Group’s obligations in respect of its defined retirement benefit 
scheme is as follows:

Present value of deﬁned beneﬁt obligations
Fair value of Scheme assets

Surplus in the Scheme

Amounts not recognised

Asset recognised in the balance sheet

2013
£000

(4,901)
5,515

614

(614)

–

2012
£000

(4,402)
4,477

75

–

75

The surplus in the Scheme has not been recognised since the present value of the economic benefits of the surplus on a 
reduction in contributions is £Nil.

The net movements in the surplus (deficit) were as follows:

At 1 May
Pension charge recognised in the income statement
Actuarial gains (losses)
Contributions

At 30 April

89  Northgate plc Annual report and accounts 2013

2013
£000

75
(95)
124
510

614

2012
£000

(142)
(66)
(227)
510

75

s
t
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u
o
c
c
a
e
h
t
o
t

s
e
t
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t
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Notes to the accounts continued

36  Retirement benefit schemes continued

Movements in the present value of the defined benefit obligations were as follows:

At 1 May
Interest cost
Actuarial losses
Beneﬁts paid

At 30 April

Movements in the fair value of Scheme assets were as follows:

At 1 May
Expected return on Scheme assets
Contributions
Beneﬁts paid
Actuarial gains

At 30 April

2013
£000

4,402
201
361
(63)

4,901

2013
£000

4,477
106
510
(63)
485

5,515

2012
£000

4,832
231
342
(1,003)

4,402

2012
£000

4,690
165
510
(1,003)
115

4,477

The derivation of the overall expected return on assets reflects the actual asset allocation at the measurement date combined 
with an expected return for each asset class. The bond return is based on the prevailing return available on bonds. The return 
on equities and property is based on a number of factors including the income yield at the measurement date, the long term 
growth prospects for the economy in general, the long term relationship between each asset class and the bond returns and 
the movement in market indices since the previous measurement date.

The analysis of the Scheme assets and the expected rate of return at the balance sheet date was as follows:

Equity instruments
Debt instruments
Other

2013
Expected
return
%

2013
Fair value
of assets
£000

 –
1.9
1.9

–
5,461
54

5,515

2012
Expected
return
%

3.9
1.9
1.9

2012
Fair value
of assets
£000

813
3,530
134

4,477

The Scheme assets do not comprise any of the Group’s own financial instruments nor does the Group occupy any property or 
use any other assets held by the Scheme.

During the current year, contributions totalled £510,000 in accordance with latest actuarial advice received. The estimated 
amount of contributions expected to be paid to the Scheme during the year ending 30 April 2014 is £510,000.

90  Northgate plc Annual report and accounts 2013

 
 
 
 
 
 
 
 
 
 
 
36  Retirement benefit schemes continued

The history of experience adjustments for the last five years is as follows:

Funded status:
Present value of deﬁned beneﬁt obligation
Fair value of Scheme assets

Surplus (deﬁcit) in the Scheme

Experience adjustments on Scheme obligations:
Amount
Percentage of Scheme obligations (%)

Experience adjustments on Scheme assets:
Amount
Percentage of Scheme assets (%)

2013
£000

2012
£000

2011
£000

2010
£000

2009
£000

(4,901)
5,515

614

(4,402)
4,477

75

(4,832)
4,690

(142)

(4,501)
3,962

(539)

(3,659)
3,194

(465)

6
0.1%

(75)
(1.7)%

485
8.8%

115
2.6%

35
0.7%

64
1.4%

65
1.4%

(59)
(1.6)%

539
13.6%

(609)
(19.1)%

37  Financial instruments

The following disclosures and analysis relate to the Group’s financial instruments.

Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising 
the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists 
of debt, which includes the borrowings disclosed in Note 21, cash and cash equivalents and equity attributable to equity 
holders of the parent, comprising issued share capital, reserves and retained earnings as disclosed in Notes 24 to 32.

Foreign currency risk management

The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations 
arise. Exchange rate exposures are managed within approved policy parameters as discussed in Notes 21 and 22.

Foreign currency sensitivity analysis

During the year, the Group has been exposed to movements in the exchange rate between Euro and Sterling and US Dollars 
and Sterling, where Sterling is the functional currency of the Group. As explained in more detail below and in Note 22, identical 
(cid:75)(cid:69)(cid:89)(cid:0)(cid:84)(cid:69)(cid:82)(cid:77)(cid:83)(cid:0)(cid:66)(cid:69)(cid:84)(cid:87)(cid:69)(cid:69)(cid:78)(cid:0)(cid:53)(cid:51)(cid:0)(cid:36)(cid:79)(cid:76)(cid:76)(cid:65)(cid:82)(cid:0)(cid:68)(cid:69)(cid:78)(cid:79)(cid:77)(cid:73)(cid:78)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:76)(cid:79)(cid:65)(cid:78)(cid:0)(cid:78)(cid:79)(cid:84)(cid:69)(cid:0)(cid:76)(cid:73)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:51)(cid:84)(cid:69)(cid:82)(cid:76)(cid:73)(cid:78)(cid:71)(cid:15)(cid:53)(cid:51)(cid:0)(cid:36)(cid:79)(cid:76)(cid:76)(cid:65)(cid:82)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)(cid:77)(cid:69)(cid:65)(cid:78)(cid:84)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)
profit and loss and equity of the Group is not materially sensitive to fluctuations in the exchange rate between US Dollars and 
Sterling.

This means that the material sensitivity of the profit or loss and equity of the Group to exchange rate movements arises due to 
fluctuations in the exchange rate between Euro and Sterling only.

The following tables detail the Group’s sensitivity to a €0.10 (2012 – €0.10) increase and decrease in the Euro/Sterling 
exchange rate.

91  Northgate plc Annual report and accounts 2013

s
t
n
u
o
c
c
a
e
h
t
o
t

s
e
t
o
N

s
t
n
u
o
c
c
A

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts continued

37  Financial instruments continued

A €0.10 (2012 – €0.10) movement in the rate in either direction is management’s assessment of the reasonably possible 
change in foreign exchange rates in the near term. The sensitivity analysis includes only any outstanding foreign currency 
denominated monetary items and adjusts their translation at the period end for a €0.10 (2012 – €0.10) change in foreign 
currency rates.

2013

Total equity

2012

Total equity

As stated in
annual report
£000

As would be
stated if
€0.10 
increase
£000

As would be
stated if
€0.10 
decrease
£000

366,652

362,338

371,763

As stated in
annual report
£000

As would be
stated if
€0.10 increase
£000

As would be
stated if
€0.10 decrease
£000

366,136

363,577

369,146

There is no material impact on the income statement in either year.

Sterling/US Dollar cross-currency derivatives

(cid:33)(cid:83)(cid:0)(cid:69)(cid:88)(cid:80)(cid:76)(cid:65)(cid:73)(cid:78)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:46)(cid:79)(cid:84)(cid:69)(cid:0)(cid:18)(cid:18)(cid:12)(cid:0)(cid:85)(cid:78)(cid:84)(cid:73)(cid:76)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:69)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:73)(cid:78)(cid:0)(cid:33)(cid:80)(cid:82)(cid:73)(cid:76)(cid:0)(cid:18)(cid:16)(cid:17)(cid:19)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:72)(cid:65)(cid:68)(cid:0)(cid:51)(cid:84)(cid:69)(cid:82)(cid:76)(cid:73)(cid:78)(cid:71)(cid:15)(cid:53)(cid:51)(cid:0)(cid:36)(cid:79)(cid:76)(cid:76)(cid:65)(cid:82)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)
derivatives to manage its exposure to foreign exchange movements between US Dollars, the denomination of loan note 
liabilities, and Sterling, the functional currency of the Group. The movement in fair value of these derivatives was a function of 
both the Sterling/US Dollar exchange rate and market interest rates prevailing in the United Kingdom and United States.

(cid:33)(cid:83)(cid:0)(cid:65)(cid:0)(cid:82)(cid:69)(cid:83)(cid:85)(cid:76)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:75)(cid:69)(cid:89)(cid:0)(cid:84)(cid:69)(cid:82)(cid:77)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:76)(cid:79)(cid:65)(cid:78)(cid:0)(cid:78)(cid:79)(cid:84)(cid:69)(cid:83)(cid:12)(cid:0)(cid:65)(cid:71)(cid:65)(cid:73)(cid:78)(cid:83)(cid:84)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:65)(cid:0)(cid:72)(cid:69)(cid:68)(cid:71)(cid:73)(cid:78)(cid:71)(cid:0)(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:72)(cid:73)(cid:80)(cid:0)(cid:73)(cid:83)(cid:0)
(cid:68)(cid:69)(cid:83)(cid:73)(cid:71)(cid:78)(cid:65)(cid:84)(cid:69)(cid:68)(cid:12)(cid:0)(cid:66)(cid:69)(cid:73)(cid:78)(cid:71)(cid:0)(cid:73)(cid:68)(cid:69)(cid:78)(cid:84)(cid:73)(cid:67)(cid:65)(cid:76)(cid:12)(cid:0)(cid:65)(cid:78)(cid:89)(cid:0)(cid:71)(cid:65)(cid:73)(cid:78)(cid:83)(cid:0)(cid:79)(cid:82)(cid:0)(cid:76)(cid:79)(cid:83)(cid:83)(cid:69)(cid:83)(cid:0)(cid:79)(cid:78)(cid:0)(cid:70)(cid:79)(cid:82)(cid:69)(cid:73)(cid:71)(cid:78)(cid:0)(cid:69)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:70)(cid:65)(cid:73)(cid:82)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:51)(cid:84)(cid:69)(cid:82)(cid:76)(cid:73)(cid:78)(cid:71)(cid:15)(cid:53)(cid:51)(cid:0)(cid:36)(cid:79)(cid:76)(cid:76)(cid:65)(cid:82)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)
currency swaps was transferred to the income statement and was exactly offset in the income statement by an equal and 
opposite amount on retranslation of the US dollar loan notes to the closing rate prevailing at the balance sheet date, leaving a 
net impact of £Nil on the income statement for all Sterling/US Dollar exchange rates.

The net impact on the hedging reserve, arising from these particular derivatives, therefore represents only the gain or loss on 
the interest rate element of the fair value of the derivatives, as explained further in Note 22. Consequently, any fluctuation in 
the rate of the US Dollar has no impact on either profit and loss or equity.

Interest rate risk management

The Group is exposed to interest rate risk, as entities within the Group borrow funds at both fixed and floating interest rates. 
The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings and by the 
use of interest rate swap contracts. Hedging activities are reviewed regularly to align with interest rate views and defined risk 
appetite, ensuring optimal hedging strategies are applied.

The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management 
section of this note.

Interest rate sensitivity analysis

The sensitivity analyses below have been determined on the exposure to interest rates for floating rate liabilities and related 
derivatives. For the floating rate liabilities, the analysis is prepared on the basis of both the average liability outstanding over 
the period and average rate applicable for the period. In all instances it is assumed that any derivatives designated in hedging 
relationships are 100% effective.

92  Northgate plc Annual report and accounts 2013

 
 
  
 
 
  
37  Financial instruments continued

A 1.0% (2012 – 1.0%) increase or decrease has been used in the analyses and represents management’s best estimate of a 
reasonably possible change in interest rate in the near term.

2013

Loss before taxation

Total equity

2012

Proﬁt before taxation

Total equity

Interest rate swap contracts

As stated in
annual report
£000

As would be 
stated if
1.0% increase
£000

As would be
stated if
1.0% 
decrease
£000

(11,382)

(11,800)

(10,965)

366,652

366,335

366,970

As stated in
annual report
£000

As would be
stated if
1.0% increase
£000

As would be
stated if
1.0% decrease
£000

45,987

45,022

46,952

366,136

365,421

366,850

Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest 
amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing 
interest rates and the cash flow exposures on the issued variable rate debt held. The fair value of interest rate swaps at the 
reporting date is determined by discounting the future cash flows using the curves at the reporting date and the credit risk 
inherent in the contract and is disclosed below. The average interest rate is based on the outstanding balances at the end of the 
financial year.

The following table details the notional principal amounts and remaining terms of interest rate swap contracts outstanding at 
the reporting date:

Outstanding receive ﬂoating pay
ﬁxed contracts

Sterling
In less than one year
After ﬁve years

Euro
In less than one year
In the third to ﬁfth years inclusive

Outstanding pay ﬂoating receive ﬁxed contracts

Sterling
In less than one year

Liquidity risk management

Average contract 
ﬁxed interest rate

Notional principal 
amount

2013
%

2012
%

2013
£000

2012
£000

 Fair value
2013
£000

2012
£000

–
–

–
–

–

2.44%
3.62%

2.35%
3.12%

1.13%

–
–

–
–

–

25,000
100,000

152,832
76,416

25,000

–
–

–
–

–

(152)
(12,251)

(894)
(3,036)

19

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity 
risk management framework for the management of the Group’s short, medium and long term funding and liquidity 
requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing 
facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and 
liabilities. Included in Note 21 is a description of additional undrawn facilities that the Group has at its disposal to further reduce 
liquidity risk.

93  Northgate plc Annual report and accounts 2013

s
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o
c
c
A

 
 
 
 
 
 
  
 
 
  
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts continued

37  Financial instruments continued

Liquidity and interest risk tables

(cid:52)(cid:72)(cid:69)(cid:0)(cid:70)(cid:79)(cid:76)(cid:76)(cid:79)(cid:87)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:68)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:83)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:7)(cid:83)(cid:0)(cid:82)(cid:69)(cid:77)(cid:65)(cid:73)(cid:78)(cid:73)(cid:78)(cid:71)(cid:0)(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:65)(cid:67)(cid:84)(cid:85)(cid:65)(cid:76)(cid:0)(cid:77)(cid:65)(cid:84)(cid:85)(cid:82)(cid:73)(cid:84)(cid:89)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:73)(cid:84)(cid:83)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:76)(cid:73)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:14)(cid:0)(cid:52)(cid:72)(cid:69)(cid:0)(cid:84)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:72)(cid:65)(cid:83)(cid:0)
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can 
be required to pay. The table includes both interest and principal cash flows. All interest cash flows and the weighted average 
effective interest rate have been calculated using interest rate conditions prevailing at the balance sheet date.

2013

(cid:46)(cid:79)(cid:78)(cid:13)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:66)(cid:69)(cid:65)(cid:82)(cid:73)(cid:78)(cid:71)
Fixed interest rate instruments
Variable interest rate instruments

2012

(cid:46)(cid:79)(cid:78)(cid:13)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:66)(cid:69)(cid:65)(cid:82)(cid:73)(cid:78)(cid:71)
Fixed interest rate instruments
Variable interest rate instruments

Weighted
average
effective
interest
rate

0.00%
5.00%
2.67%

Weighted
average
effective
interest
rate

0.00%
7.89%
4.46%

<1 year
£000

25,601
25
15,877

41,503

<1 year
£000

29,093
58,102
93,106

2nd year
£000

–
25
9,868

3-5 years
£000

–
75
389,093

9,893

389,168

>5 years
£000

–
500
–

500

Total
£000

25,601
625
414,838

414,064

2nd year
£000

–
52,947
8,022

(cid:19)(cid:13)(cid:21)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:83)
£000

–
94,894
73,714

>5 years
£000

–
500
106,140

Total
£000

29,093
206,443
280,982

180,301

60,969

168,608

106,640

516,518

At the balance sheet date, there are no derivative financial instruments in existence. The following table details the Group’s 
liquidity analysis for its derivative financial instruments at 30 April 2012. It includes both liabilities and assets to illustrate how the 
cashflows are matched in each period.

2012

Liabilities
Net settled:
Interest rate swaps
Gross settled:
(cid:35)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)

Assets
Gross settled:
(cid:35)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)

<1 year
£000

2nd year
£000

(cid:19)(cid:13)(cid:21)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:83)
£000

>5 years
£000

Total
£000

4,472

4,110

8,436

8,242

25,260

64,592

59,047

81,860

–

205,499

69,064

63,157

90,296

8,242

230,759

62,396

59,818

82,251

62,396

59,818

82,251

–

–

204,465

204,465

Fair value of financial instruments

The Group is required to analyse financial instruments that are measured subsequent to initial recognition at fair value, grouped 
into Levels 1 to 3 based on the degree to which fair value is observable:

(cid:115)(cid:0)

(cid:115)(cid:0)

(cid:115)(cid:0)

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or 
liabilities;

Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are 
observable for the asset or liability either directly (i.e. prices) or indirectly (i.e. derived from prices); and

Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability 
that are not based on observable market data (unobservable inputs).

All the financial instruments below are categorised as Level 2.

94  Northgate plc Annual report and accounts 2013

 
 
 
 
 
 
  
 
 
  
  
  
  
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
37  Financial instruments continued

The fair values of financial assets and financial liabilities are determined as follows:

Derivative financial instruments are measured at the present value of future cash flows estimated and discounted based on 
applicable yield curves derived from quoted interest rates; and

(cid:52)(cid:72)(cid:69)(cid:0)(cid:70)(cid:65)(cid:73)(cid:82)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:76)(cid:73)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:68)(cid:69)(cid:84)(cid:69)(cid:82)(cid:77)(cid:73)(cid:78)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:65)(cid:67)(cid:67)(cid:79)(cid:82)(cid:68)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:71)(cid:69)(cid:78)(cid:69)(cid:82)(cid:65)(cid:76)(cid:76)(cid:89)(cid:0)
accepted pricing models based on discounted cash flow analysis.

Except as detailed in the following table, the carrying amounts of financial assets and financial liabilities recorded at amortised 
(cid:67)(cid:79)(cid:83)(cid:84)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:70)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:65)(cid:80)(cid:80)(cid:82)(cid:79)(cid:88)(cid:73)(cid:77)(cid:65)(cid:84)(cid:69)(cid:0)(cid:84)(cid:72)(cid:69)(cid:73)(cid:82)(cid:0)(cid:70)(cid:65)(cid:73)(cid:82)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:83)(cid:0)(cid:79)(cid:82)(cid:12)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:67)(cid:65)(cid:83)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)(cid:0)(cid:83)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:12)(cid:0)
are held at fair value:

Financial liabilities
Loan notes

Credit risk management

Carrying amount

2013
£000

2012
£000

Fair value
2013
£000

2012
£000

–

161,002

–

173,316

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.

The Group’s credit risk is primarily attributable to its trade receivables. The trade receivable amounts presented in the balance 
sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss 
event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

Trade receivables
Trade receivables (maximum exposure to credit risk)
Allowance for doubtful receivables

Ageing of trade receivables not impaired
Not overdue
Past due not more than two months
Past due more than two months but not more than four months
Past due more than four months but not more than six months

2013
£000

2012
£000

85,457
(16,824)

105,308
(20,378)

68,633

84,930

61,545
5,023
517
1,548

63,363
17,789
2,361
1,417

68,633

84,930

Before accepting any new customers, the Group will perform credit analysis to assess the credit risk on an individual basis. This 
enables the Group only to deal with creditworthy customers therefore reducing the risk of financial loss from defaults. Of the 
trade receivables balance at the end of the year, approximately £685,000 (2012 – £1,688,000) is due from the Group’s largest 
customer. There are no customers who represent more than five per cent of the total balance of trade receivables.

The Group has no significant concentration of credit risk as trade receivables consist of a large number of customers, spread 
across diverse industries and geographical areas in the UK and Spain.

Included in the Group’s trade receivables balance are debtors with a carrying amount of £7,088,000 (2012 – £21,567,000) 
which are past due at the reporting date for which the Group has not provided as there has not been a significant change in 
credit quality and the amounts are still considered recoverable.

Movement in the allowance for doubtful receivables
At 1 May
Impairment losses recognised
Amounts written off as uncollectible
Impaired losses reversed
Exchange differences

At 30 April

95  Northgate plc Annual report and accounts 2013

2013
£000

2012
£000

20,378
5,894
(5,615)
(4,350)
517

22,210
9,364
(5,319)
(4,403)
(1,474)

16,824

20,378

s
t
n
u
o
c
c
a
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o
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A

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts continued

37  Financial instruments continued

In determining the recoverability of a trade receivable the Group considers any change in the credit quality of the trade 
receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to 
the customer base being large and mainly unrelated. Accordingly, the Directors believe that there is no further credit provision 
required in excess of the allowance for doubtful receivables.

Included in the allowance for doubtful receivables are trade receivables which have been placed under liquidation of £164,000 
(2012 – £260,000).

Ageing of impaired trade receivables
Not overdue
Past due not more than two months
Past due more than two months but not more than four months
Past due more than four months but not more than six months
Past due more than six months but not more than one year

2013
£000

2012
£000

481
419
3,078
736
12,110

1,605
862
4,926
733
12,252

16,824

20,378

The Directors consider that the carrying amount of trade and other receivables approximates their fair value.

The Company has no trade receivables and no intercompany receivables past due date.

38  Related party transactions

Transactions with subsidiary undertakings

Transactions between the Company and its subsidiary undertakings, which are related parties, are £7,394,000 (2012 – 
£5,868,000) net interest payable.

Balances with subsidiary undertakings at the balance sheet date are shown in Notes 19 and 20.

Remuneration of key management personnel

In the current and prior year, the Directors of Northgate plc are determined to be the key management personnel of the 
Group. There are other senior executives in the Group who are able to influence the Company in the achievement of its goals. 
However, in the opinion of the Directors, only the Directors of the Company have significant authority for planning, directing 
and controlling the activities of the Group.

During the year, consultancy fees of £55,000 (2012 – £111,000) were paid by Northgate España Renting Flexible S.A to 
JG Astrand. The details of the consultancy are set out in the Corporate Governance report on pages 42 to 44.

(cid:41)(cid:78)(cid:0)(cid:82)(cid:69)(cid:83)(cid:80)(cid:69)(cid:67)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:69)(cid:78)(cid:83)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:75)(cid:69)(cid:89)(cid:0)(cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:80)(cid:69)(cid:82)(cid:83)(cid:79)(cid:78)(cid:78)(cid:69)(cid:76)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:83)(cid:72)(cid:79)(cid:82)(cid:84)(cid:0)(cid:84)(cid:69)(cid:82)(cid:77)(cid:0)(cid:69)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:0)(cid:66)(cid:69)(cid:78)(cid:69)(cid:70)(cid:73)(cid:84)(cid:83)(cid:12)(cid:0)(cid:80)(cid:79)(cid:83)(cid:84)(cid:13)(cid:69)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:8)(cid:80)(cid:69)(cid:78)(cid:83)(cid:73)(cid:79)(cid:78)(cid:9)(cid:0)
benefits, termination benefits and details of share options granted are set out in the audited part of the Remuneration 
(cid:50)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:0)(cid:79)(cid:78)(cid:0)(cid:80)(cid:65)(cid:71)(cid:69)(cid:83)(cid:0)(cid:19)(cid:19)(cid:0)(cid:84)(cid:79)(cid:0)(cid:19)(cid:25)(cid:14)(cid:0)(cid:52)(cid:72)(cid:69)(cid:0)(cid:70)(cid:65)(cid:73)(cid:82)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:67)(cid:72)(cid:65)(cid:82)(cid:71)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:73)(cid:78)(cid:0)(cid:82)(cid:69)(cid:83)(cid:80)(cid:69)(cid:67)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:69)(cid:81)(cid:85)(cid:73)(cid:84)(cid:89)(cid:13)(cid:83)(cid:69)(cid:84)(cid:84)(cid:76)(cid:69)(cid:68)(cid:0)(cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:13)(cid:66)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0)(cid:80)(cid:65)(cid:89)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)
transactions with the Directors is £299,000 (2012 – £418,000). There are no other long term benefits accruing to key 
management personnel, other than as set out in the audited part of the Remuneration Report.

96  Northgate plc Annual report and accounts 2013

 
 
 
 
 
Five year ﬁnancial summary 

Based on the consolidated accounts for years ended 30 April and adjusted to reflect the effect of subsequent changes in 
accounting policy.

Income statement

Revenue: hire of vehicles

Operating proﬁt (loss)
Net ﬁnance costs

(Loss) proﬁt before taxation
Taxation

(Loss) proﬁt for the year

Basic (loss) earnings per Ordinary share
Dividends
Dividends per Ordinary share

Balance sheet

Assets employed
(cid:46)(cid:79)(cid:78)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)
Net current assets (liabilities)
(cid:46)(cid:79)(cid:78)(cid:13)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)(cid:76)(cid:73)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)

Financed by
Share capital
Share premium account
Reserves

2013
£000

2012
£000

2011
£000

2010
£000

2009
£000

441,944

503,659

537,285

563,698

609,645

79,478
(90,860)

(11,382)
4,025

94,478
(48,491)

45,987
(5,519)

(7,357)

40,468

(5.5)p

5,719

4.3p

30.4p
–
–

82,575
(56,035)

26,540
2,853

29,393

22.1p
–
–

71,109
(61,494)

9,615
14,741

(117,531)
(78,083)

(195,614)
9,912

24,356

(185,702)

23.1p
–
–

(572.6)p
19,359

25.0p

2013
£000

2012
£000

2011
£000

2010
£000

2009
£000

683,190
56,437
(372,975)

723,675
(74,744)
(282,795)

819,082
145,170
(624,493)

885,124
(6,024)
(573,994)

983,173
172,373
(972,787)

366,652

366,136

339,759

305,106

182,759

66,616
113,508
186,528

66,616
113,508
186,012

66,616
113,508
159,635

66,475
113,269
125,362

3,527
67,972
111,260

366,652

366,136

339,759

305,106

182,759

Net asset value per Ordinary share

275p

275p

255p

229p

563p

97  Northgate plc Annual report and accounts 2013

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Notice of Annual General Meeting 

Notice is hereby given that the one hundred and fifteenth 
Annual General Meeting of Northgate plc (‘the Company‘) 
will be held at 60 Great Portland Street, London W1W 
7RT at 11.30 a.m. on 19 September 2013 for the purpose 
of considering and, if thought fit, passing the following 
resolutions of which resolutions 1 to 13 will be proposed as 
ordinary resolutions and resolutions 14, 15 and 16 will be 
proposed as special resolutions:

14.   That subject to the passing of Resolution 13 the Board 
be and it is hereby empowered pursuant to s570 of the 
Companies Act 2006 to allot equity securities (within 
the meaning of s560 of the Act) for cash pursuant to 
the authority conferred by the previous resolution as 
(cid:73)(cid:70)(cid:0)(cid:83)(cid:85)(cid:66)(cid:13)(cid:83)(cid:69)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:8)(cid:17)(cid:9)(cid:0)(cid:79)(cid:70)(cid:0)(cid:83)(cid:21)(cid:22)(cid:17)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:33)(cid:67)(cid:84)(cid:0)(cid:68)(cid:73)(cid:68)(cid:0)(cid:78)(cid:79)(cid:84)(cid:0)(cid:65)(cid:80)(cid:80)(cid:76)(cid:89)(cid:0)(cid:84)(cid:79)(cid:0)
any such allotment provided that this power shall be 
limited:

1. 

 To receive the Directors’ report and audited accounts of 
the Company for the year ended 30 April 2013.

2.   To declare a final dividend of 6p per Ordinary share.

3. 

(cid:20)(cid:14)(cid:0)

5. 

(cid:22)(cid:14)(cid:0)

(cid:23)(cid:14)(cid:0)

(cid:24)(cid:14)(cid:0)

(cid:25)(cid:14)(cid:0)

 To receive and approve the Remuneration Report for 
the financial year ended 30 April 2013 set out on pages 
33 to 39 of the 2013 Annual Report and Accounts.

(cid:0)(cid:52)(cid:79)(cid:0)(cid:82)(cid:69)(cid:13)(cid:65)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:0)(cid:36)(cid:69)(cid:76)(cid:79)(cid:73)(cid:84)(cid:84)(cid:69)(cid:0)(cid:44)(cid:44)(cid:48)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:79)(cid:82)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)
to hold office until the conclusion of the next Annual 
General Meeting.

 To authorise the Audit and Risk Committee to 
determine the remuneration of the auditor.

(cid:52)(cid:79)(cid:0)(cid:82)(cid:69)(cid:13)(cid:69)(cid:76)(cid:69)(cid:67)(cid:84)(cid:0)(cid:45)(cid:82)(cid:0)(cid:50)(cid:36)(cid:0)(cid:45)(cid:65)(cid:67)(cid:75)(cid:69)(cid:78)(cid:90)(cid:73)(cid:69)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:0)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:14)

(cid:52)(cid:79)(cid:0)(cid:82)(cid:69)(cid:13)(cid:69)(cid:76)(cid:69)(cid:67)(cid:84)(cid:0)(cid:45)(cid:82)(cid:0)(cid:33)(cid:42)(cid:0)(cid:33)(cid:76)(cid:76)(cid:78)(cid:69)(cid:82)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:0)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:14)

(cid:52)(cid:79)(cid:0)(cid:82)(cid:69)(cid:13)(cid:69)(cid:76)(cid:69)(cid:67)(cid:84)(cid:0)(cid:45)(cid:82)(cid:0)(cid:42)(cid:39)(cid:0)(cid:33)(cid:83)(cid:84)(cid:82)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:0)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:14)

(cid:52)(cid:79)(cid:0)(cid:82)(cid:69)(cid:13)(cid:69)(cid:76)(cid:69)(cid:67)(cid:84)(cid:0)(cid:45)(cid:82)(cid:0)(cid:52)(cid:40)(cid:48)(cid:0)(cid:34)(cid:82)(cid:79)(cid:87)(cid:78)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:0)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:14)

(cid:17)(cid:16)(cid:14)(cid:0) (cid:52)(cid:79)(cid:0)(cid:82)(cid:69)(cid:13)(cid:69)(cid:76)(cid:69)(cid:67)(cid:84)(cid:0)(cid:45)(cid:82)(cid:0)(cid:50)(cid:44)(cid:0)(cid:35)(cid:79)(cid:78)(cid:84)(cid:82)(cid:69)(cid:82)(cid:65)(cid:83)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:0)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:14)

(cid:17)(cid:17)(cid:14)(cid:0) (cid:52)(cid:79)(cid:0)(cid:82)(cid:69)(cid:13)(cid:69)(cid:76)(cid:69)(cid:67)(cid:84)(cid:0)(cid:45)(cid:82)(cid:0)(cid:35)(cid:42)(cid:50)(cid:0)(cid:45)(cid:85)(cid:73)(cid:82)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:0)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:14)

(cid:17)(cid:18)(cid:14)(cid:0) (cid:52)(cid:79)(cid:0)(cid:82)(cid:69)(cid:13)(cid:69)(cid:76)(cid:69)(cid:67)(cid:84)(cid:0)(cid:45)(cid:73)(cid:83)(cid:83)(cid:0)(cid:39)(cid:0)(cid:35)(cid:65)(cid:83)(cid:69)(cid:66)(cid:69)(cid:82)(cid:82)(cid:89)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:0)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:14)

13.   That the Board be and it is hereby generally and 

unconditionally authorised pursuant to s551 of the 
Companies Act 2006 (‘the Act’) to exercise all powers 
of the Company 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 an 
aggregate nominal amount of £22,000,000 provided 
that this authority shall expire on the date of the 
next annual general meeting of the Company after 
the passing of this resolution save that the Company 
may before such expiry make an offer or agreement 
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 Board may 
allot shares or grant rights to subscribe for or convert 
securities into shares in pursuance of such an offer or 
agreement as if the authority conferred hereby had not 
expired.

a. 

b. 

 to the allotment of equity securities in connection 
with a rights issue in favour of Ordinary 
shareholders where the equity securities 
respectively attributable to the interests of all 
Ordinary shareholders are proportionate (as nearly 
as may be) to the respective numbers of Ordinary 
shares held by them; and

 to the allotment (otherwise than pursuant to 
(cid:83)(cid:85)(cid:66)(cid:13)(cid:80)(cid:65)(cid:82)(cid:65)(cid:71)(cid:82)(cid:65)(cid:80)(cid:72)(cid:0)(cid:8)(cid:65)(cid:9)(cid:0)(cid:65)(cid:66)(cid:79)(cid:86)(cid:69)(cid:9)(cid:0)(cid:79)(cid:70)(cid:0)(cid:69)(cid:81)(cid:85)(cid:73)(cid:84)(cid:89)(cid:0)(cid:83)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:85)(cid:80)(cid:0)(cid:84)(cid:79)(cid:0)
an aggregate nominal value of £3,330,000 and 
shall expire on the date of the next annual general 
meeting of the Company after the passing of this 
resolution save that the Company may before 
such expiry make an offer or agreement which 
would or might require equity securities to be 
allotted after such expiry and the Board may allot 
equity securities in pursuance of such an offer or 
agreement as if the power conferred hereby had 
not expired.

15.   That a general meeting, other than an annual general 
meeting, may be called on not less than 14 clear days’ 
notice.

16.   That the Company be generally and unconditionally 

authorised to make market purchases (within the 
meaning of s693(4) of the Companies Act 2006) of 
Ordinary shares of 50p each of the Company on such 
terms and in such manner as the Directors may from 
time to time determine, provided that:

a. 

b. 

c.  

 the maximum number of Ordinary shares 
hereby authorised to be acquired is 13,300,000 
representing approximately 10% of the issued 
Ordinary share capital of the Company as at 24 
June 2013;

 the minimum price which may be paid for any 
such Ordinary share is 50p;

 the maximum price (excluding expenses) which 
may be paid for any such Ordinary share is an 
amount equal to 105% of the average of the 
middle market quotations for an Ordinary share in 
the Company as derived from The London Stock 

98  Northgate plc Annual report and accounts 2013

 
 
 
 
 
d. 

e. 

Exchange Daily Official List for the five business 
days immediately preceding the day on which 
such share is contracted to be purchased;

 the authority hereby conferred shall expire at 
the end of the next annual general meeting of 
the Company after the passing of this resolution 
unless previously renewed, varied or revoked by 
the Company in general meeting; and

 the Company may make a contract to purchase 
its Ordinary shares under the authority hereby 
conferred prior to the expiry of such authority, 
which contract will or may be executed wholly or 
partly after the expiry of such authority, and may 
purchase its Ordinary shares in pursuance of any 
such contract.

The Directors of the Company consider that all the proposals 
set out in the above Resolutions are in the best interests 

of the Company and of the shareholders as a whole. They 
unanimously recommend that you vote in favour of them as 
they intend to do in respect of their own beneficial holdings 
which amount in aggregate to 354,865 shares representing 
approximately 0.27% of the issued Ordinary share capital of 
the Company.

24 June 2013 
By Order of the Board

D Henderson 
Secretary

Registered office: 
Norflex House 
Allington Way 
Darlington, DL1 4DY

99  Northgate plc Annual report and accounts 2013

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Notice of Annual General Meeting continued

NOTES

1. 

2. 

3. 

4. 

5. 

6. 

7. 

 A member entitled to attend and vote at the Annual General Meeting 
(‘the Meeting’) may appoint another person(s) (who need not be a 
member of the Company) to exercise all or any of his rights to attend, 
speak and vote at the Meeting. A member can appoint more than one 
proxy in relation to the Meeting, provided that each proxy is appointed 
to exercise the rights attaching to different shares held by him.

 A proxy does not need to be a member of the Company but must 
attend the Meeting to represent you. Your proxy could be the 
Chairman, another director of the Company or another person who 
has agreed to attend to represent you. Your proxy must vote as you 
instruct and must attend the Meeting for your vote to be counted. 
Appointing a proxy does not preclude you from attending the 
Meeting and voting in person.

 A proxy form which may be used to make this appointment and give 
proxy instructions accompanies this notice. Details of how to appoint 
a proxy are set out in the notes to the proxy form. As an alternative 
to completing a hard copy proxy form, proxies may be appointed by 
using the electronic proxy appointment service in accordance with the 
procedures set out in Note 6 below. CREST members may appoint 
proxies using the CREST electronic proxy appointment service (see 
Note 7 below). In each case the appointment must be received by the 
Company not less than 48 hours before the time of the Meeting.

 A copy of this notice has been sent for information only to persons 
who have been nominated by a member to enjoy information rights 
under section 146 of the Act (‘a Nominated Person’). The rights to 
appoint a proxy cannot be exercised by a Nominated Person: they can 
only be exercised by the member. However, a Nominated Person may 
have a right under an agreement between him and the member by 
whom he was nominated to be appointed as a proxy for the Meeting 
or to have someone else so appointed. If a Nominated Person does 
not have such a right or does not wish to exercise it, he may have a 
right under such an agreement to give instructions to the member as 
to the exercise of voting rights.

 To be entitled to attend and vote, whether in person or by proxy, at 
the Meeting, members must be registered in the register of members 
of the Company 48 hours before the time of the Meeting (or, if 
the Meeting is adjourned, 48 hours before the adjourned meeting). 
Changes to entries on the register after this time shall be disregarded 
in determining the rights of persons to attend or vote (and the 
number of votes they may cast) at the Meeting or adjourned meeting.

 Shareholders wishing to appoint a proxy online should visit www.
capitashareportal.com and follow the instructions on screen. If you 
have not already registered with The Share Portal you will need to 
identify yourself with your personal Investor Code (see Attendance 
Card). To be valid your proxy appointment(s) and instructions should 
reach Capita Registrars no later than 48 hours before the time set for 
the Meeting.

 CREST members who wish to appoint a proxy or proxies by utilising 
the CREST electronic proxy appointment service may do so by utilising 
the procedures described in the CREST Manual on the Euroclear 
website (www.euroclear.com/CREST). CREST Personal Members or 
other CREST sponsored members and those members who have 
appointed a voting service provider(s), should refer to their CREST 
sponsor or voting service provider(s), who will be able to take the 
appropriate action on their behalf. In order for a proxy appointment 
made by means of CREST to be valid, the appropriate CREST message 
(‘a CREST Proxy Instruction’) must be properly authenticated in 
accordance with Euroclear UK & Ireland Limited’s (EUI) specifications 
and must contain the information required for such instructions, as 
described in the CREST Manual. The message regardless of whether 
it constitutes the appointment of a proxy or an amendment to the 
instruction given to a previously appointed proxy must, in order to 
be valid, be transmitted so as to be received by the issuer’s agent (ID 
RA10) by the latest time(s) for receipt of proxy appointments specified 
in the Notice of Meeting. For this purpose, the time of receipt will 
be taken to be the time (as determined by the timestamp applied 
to the message by the CREST Applications Host) from which the 
issuer’s agent is able to retrieve the message by enquiry to CREST in 
the manner prescribed by CREST. The Company may treat as invalid 
a CREST Proxy Instruction in the circumstances set out in regulation 
35(5)(a) of the Uncertificated Securities Regulations 2001.

100  Northgate plc Annual report and accounts 2013

8. 

9. 

 A member of the Company which is a corporation may authorise 
a person or persons to act as its representative(s) at the Meeting. In 
accordance with the provisions of the Act, each such representative 
may exercise (on behalf of the corporation) the same powers as the 
corporation could exercise if it were an individual member of the 
Company, provided that they do not do so in relation to the same 
shares. It is no longer necessary to nominate a designated corporate 
representative.

 Members satisfying the thresholds in section 527 of the Act can 
require the Company to publish a statement on its website setting 
out any matter relating to (a) the audit of the Company’s accounts 
(including the auditor’s report and the conduct of the audit) that are 
to be laid before the Meeting; or (b) any circumstances connected 
with an auditor of the Company ceasing to hold office since the last 
Annual General Meeting, that the members propose to raise at the 
Meeting. The Company cannot require the members requesting the 
publication to pay its expenses. Any statement placed on the website 
must also be sent to the Company’s auditor no later than the time 
it makes its statement available on the website. The business which 
may be dealt with at the Meeting includes any statement that the 
Company has been required to publish on its website.

10.   The Company must cause to be answered at the Meeting any 

question relating to the business being dealt with at the Meeting 
which is put by a member attending the Meeting, except in certain 
circumstances, including if it would interfere unduly with the 
preparation for the Meeting or if it is undesirable in the interests 
of the Company or the good order of the Meeting that the 
question be answered or if to do so would involve the disclosure of 
confidential information.

11.   As at 24 June 2013 (being the latest practicable date prior to the 

publication of this notice), the Company’s issued share capital consists 
of 133,232,518 Ordinary shares of 50 pence each, carrying one vote 
each and 1,000,000 preference shares of 50 pence each, which do 
not carry any rights to vote on the above resolutions. Therefore the 
total voting rights in the Company are 133,232,518.

12.   The contents of this notice of meeting, details of the total number 

of shares in respect of which members are entitled to exercise voting 
rights at the Meeting, the total voting rights that members are 
entitled to exercise at the Meeting and, if applicable, any members’ 
statements, members’ resolutions or members’ matters of business 
received by the Company after the date of this notice will be available 
on the Company’s website: www.northgateplc.com.

13.   You may not use any electronic address provided in this notice of 

meeting to communicate with the Company for any purposes other 
than those expressly stated.

14.   Under sections 338 and 338A of the Act, members meeting the 

threshold requirements in those sections have the right to require the 
Company (i) to give, to members of the Company entitled to receive 
notice of the Meeting, notice of a resolution which those members 
intend to move (and which may properly be moved) at the Meeting; 
and/or (ii) to include in the business to be dealt with at the Meeting 
any matter (other than a proposed resolution) which may properly be 
included in the business at the Meeting. A resolution may properly be 
moved, or a matter properly included in the business, unless (a) (in the 
case of a resolution only) it would, if passed, be ineffective (whether 
by reason of any inconsistency with any enactment or the Company’s 
constitution or otherwise); (b) it is defamatory of any person; or (c) it 
is frivolous or vexatious. A request made pursuant to this right may be 
in hard copy or electronic form, must identify the resolution of which 
notice is to be given or the matter to be included in the business, must 
be authenticated by the person(s) making it and must be received by 
the Company not later than 7 August 2013, being the date 6 clear 
weeks before the Meeting, and (in the case of a matter to be included 
in the business only) must be accompanied by a statement setting out 
the grounds for the request.

Shareholder information

Classification

Information concerning day to day movements in the price of the Company’s Ordinary shares can be found on the Company’s 
website at www.northgateplc.com.

The Company’s listing symbol on the London Stock Exchange is NTG.

The Company’s joint corporate brokers are Barclays Bank plc and Numis Securities Limited and the Company’s Ordinary shares 
are traded on SETSmm.

Financial calendar

December

Publication of Half Yearly Report

January

Payment of interim dividend

March

Publication of Interim Management Statement

June

Announcement of year end results

July

Report and accounts posted to shareholders

September

 Annual General Meeting 
Payment of final dividend 
Publication of Interim Management Statement

Secretary and registered office

D Henderson FCIS 
Norflex House 
Allington Way 
Darlington 
DL1 4DY

Tel: 01325 467558

Registrars

Capita Registrars 
Shareholder Administration Support 
34 Beckenham Road 
Beckenham 
Kent 
BR3 9ZA

Tel: 0871 6640300 (calls cost 10p per minute plus network extras) 
Overseas: (+44) 208 6393399

101  Northgate plc Annual report and accounts 2013

Northgate plc 
Norﬂex House, Allington Way 
Darlington, DL1 4DY

Tel 
01325 467558

Fax 
01325 363204

Web 
northgateplc.com