Annual Report and Accounts
for the 52 weeks ended 30 March 2013
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BY APPOINTMENT TO
HER MAJESTY THE QUEEN
CARPET MANUFACTURERS
VICTORIA CARPETS LTD
KIDDERMINSTER
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Victoria PLC is a manufacturer, supplier and
distributor of design-led carpets, carpet tiles
and other floorcoverings, targeting the mid
to high-end markets in which we operate.
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Our Performance
02 Chairman’s Statement
04 Operating and Financial Review
Our Governance
09 Directors
10 Directors’ Report
13 Corporate Governance Statement
14 Statement of Directors’
Responsibilities
Our Financials
Independent Auditor’s Report
15
16 Consolidated Income Statement
Consolidated Statement of
16
Comprehensive Income
17 Consolidated and Company
18
Balance Sheets
Consolidated and Company
Statements of Changes in Equity
19 Consolidated and Company
Statements of Cash Flows
20 Significant Accounting Policies
26 Notes to the Accounts
52 Five Year Record
53 Shareholder Information
54 Glossary
IBC Principal Subsidiaries and
their Directors
IBC Financial Calendar
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Group financial highlights
Revenue
Operating (loss)/profit before exceptional items
Finance costs
(Loss)/profit before tax and exceptional items
Exceptional items
(Loss)/profit before tax
Tax
(Loss)/profit after tax
Net debt
2013
£m
70.91
(0.42)
(0.47)
(0.89)
(2.63)
(3.52)
0.74
(2.78)
7.51
2012
£m
77.13
2.67
(0.46)
2.21
(0.66)
1.55
(0.46)
1.09
7.75
See further information online:
www.victoriaplc.com
Use you phone’s bar code app
to go to our website
www.victoriaplc.com
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Chairman’s Statement
Geoffrey Wilding, Executive Chairman
Introduction
2013 was the year when the chickens came home to
roost at Victoria. Over recent years Victoria’s financial
results have been sustained by overseas profits
generated in a buoyant Australian economy. However,
with a decline in the Australian market from early 2012,
the underlying issues – poor execution of key strategies,
failure to address the main issues facing the Company
(as summarised in the half year results), and a lack of
focus on shareholder value by previous boards and
management – were exposed in the financial results for
the year ended 30 March 2013:
• Group revenues declined by 8.1% (7.9% in constant
currency terms) from £77.13m to £70.91m
• Group operating profit before exceptional items fell
from £2.67m to a loss of £0.42m
• Group profit before tax and exceptional items
decreased from £2.21m to a loss of £0.89m
• After exceptional items, the Group recorded a loss
before tax of £3.52m, compared with a £1.55m profit
before tax in the prior year.
So what are the new Board doing to address the
situation?
Over the last six months we have focussed on reducing
costs and improving the Company’s cash position.
Actions taken have included the following:
— In the UK, we have taken out a substantial amount
of overhead (given the size of the business), and the
impact of this on earnings will start to be reflected in
the new financial year. There are more cost savings
available but we need to balance the desire to
minimise costs rapidly with the requirement to ensure
changes are not made so quickly as to be disruptive
to the functioning of the business.
— In Australia, the Company’s two spinning mills have
gone through a period of rationalisation. Earlier in the
year, capacity was reduced in response to the shift
away from wool to synthetic carpets. Redundancies
and costs associated with this move totalled
c£0.9m. However, the new Board did not believe
this restructuring went far enough as neither mill was
operating at full capacity and early in the new financial
year the two mills were consolidated on to one site at
Bendigo. Although this will cost approximately £0.6m,
the move will reduce our yarn conversion costs
(the expense of turning wool into yarn capable of
being made into carpet), and will help our Australian
business remain competitive in what has become a
very tough market.
— Excessive stock levels have been reduced in both
the UK and Australia, but there is more progress
to be made. Although the disposal of excess stock
(some of which was out of fashion or not of perfect
quality) impacted on gross margins, its sale helped
reduce the Company’s debt and, in the UK, allowed
the closure of an external warehouse that had been
rented in Kidderminster saving c£0.1m in annual
running costs.
— Debt has been reduced. As at 4 October 2012, when
the new Board was elected to the Company, UK
debt was £9.59m and Group debt stood at £8.87m.
Despite having to meet substantial restructuring and
exceptional costs, at year end UK debt had been
reduced to £8.00m and Group debt to £7.51m.
— The carrying value of some assets has been written
down to more accurately reflect their market value.
This has had no impact on the Company’s cash
position and should give shareholders some comfort
as to the strength of the Company’s balance sheet.
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Looking ahead into 2013/14 the Board
is actively seeking opportunities to grow
Victoria, improve performance, and generate
cash for distribution to shareholders.
The whole Company is now working to turn that
success into financial success and wealth creation for
shareholders.
Dividend
The Board declares a final dividend of 6.00p per share
(2012: 7.00p), which, subject to shareholder approval,
will be paid on 3 October 2013 to members on the
register at the close of business on 6 September 2013.
Geoffrey Wilding
Executive Chairman
30 July 2013
These steps have not been without some pain – reflected
in the exceptional items – but were essential for future
value creation. Further progress is needed (and the drive
to minimise costs never ends) but the Board believes a
satisfactory start has been made.
Looking ahead into 2013/14 the Board is actively seeking
opportunities to grow Victoria, improve performance, and
generate cash for distribution to shareholders. These are
not mutually exclusive objectives and early indications of
the impact the changes have made are encouraging. The
Board was fortunate in finding some really talented and
committed people at Victoria and it has certainly made
our job easier having some people that can be relied
upon to deliver on their promises.
Finally, it is important to note that Victoria remains
well regarded by its customers and it continues to
manufacture a high quality product. Victoria’s carpets
are in Buckingham Palace, Balmoral Castle and several
other Royal residences. It made the carpet that graced
Westminster Abbey for the Royal Wedding a couple of
years ago. These are fantastic achievements – we make
some of the finest carpets in the world – and, earlier this
year, Victoria was granted a Royal Warrant to Her Majesty
the Queen.
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Operating and Financial Review
Victoria has an excellent brand and we are
determined to enhance our position as a
manufacturer of the finest quality carpets in
both Australasia and the United Kingdom.
Operating Review
United Kingdom & Ireland
Tough market conditions and economic uncertainty
both in the UK and the Eurozone has continued to
have a detrimental effect on consumer confidence and
discretionary spend on ‘big ticket’ items including carpet.
Consequentially UK & Ireland experienced a 7.8% decline
in revenue from £30.08m to £27.73m.
Australia
The Australian economy is being impacted by the decline
in the key resources sector as a result of slowing growth
in China. The tough market conditions flagged at the half
year have continued through the second half and are the
most difficult faced by local manufacturers for 25 years.
With wage growth lagging behind inflation rates,
consumers’ disposable income continues to be
squeezed and, as a result, we are seeing a market
trend towards less expensive products. Victoria will be
launching a number of product ranges in the current
financial year to address this market trend.
Gross margins were impacted in the period by the stock
rationalisation in the second half of the year. Underlying
margins (after adjusting for the stock rationalisation)
showed a slight improvement on the prior year, reflecting
some easing in wool prices.
A number of operational initiatives were identified by the
new Board in the second half that will result in substantial
cost savings and the full benefits will flow into future
financial periods.
As a result of the above, the UK & Ireland recorded a loss
before tax and exceptional items of £2.03m. This result is
unacceptable but Victoria management are confident the
actions already taken and plans in place will address this.
The major factors affecting the business are:
— Reduced residential and commercial construction
activity;
— Lower real estate sale activity levels;
— Increased import competition on the back of the
strong Australian Dollar;
— Consumer trend away from wool to synthetics; and
— Competition eroding producer margins in an overall
weak market.
Consumers remain cautious about personal debt levels
and household savings levels continue to rise despite
lower interest rates. Expectations are that this trend will
continue and the improvement in household balance
sheets certainly provides a solid foundation for a revival
in the building and construction sector in Australia. There
are some early signs that residential building activity and
property clearance rates are improving which should
provide some momentum into the calendar year of 2014.
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The rate of decline in revenue on the previous year
slowed in the second half with the second half revenue
down 4.2% on the same period last year, whilst full year
revenue at A$66.14m was down 7.9% on the prior year
(A$71.84m). Intense competition has impacted margins
through compressed selling prices.
Outlook
United Kingdom & Ireland
We anticipate economic and market conditions to
remain difficult in the short to medium term as household
incomes continue to get squeezed.
With demand for ‘softer handle’ products on the rise our
new range of synthetic products, such as EverSoft®,
continues to bring success and improve our share of that
market.
On a more positive note, one of the key drivers of carpet
sales is house sales resulting in new buyers redecorating
and we are encouraged by recent reports that housing
sales are increasing.
Similarly we have produced some encouraging
results with our range of tile products and see further
opportunities ahead.
With tight and effective stock control, we have been able
to reduce inventory levels by A$2.46m (-10.7%) against
prior year. The Australian business continues to generate
good cash flows and was effectively debt free at year
end.
Canada
Revenue in our Canadian associate company, Colin
Campbell, was up by 5.5% from C$7.62m to C$8.04m
with growth underpinned by relatively strong commercial
contract sales. The company recorded a pre-tax profit
of C$0.29m compared to C$0.31m in the comparative
period last year.
We see the UK well positioned to significantly improve
its performance in the new financial year and will be
focussing on the cost reduction initiatives discussed
elsewhere, together with the active management of the
business.
Australia
Given the current performance and state of the
Australian economy, we continue to see a difficult trading
environment in the short term. The low interest rates and
potential softening of the Australian Dollar are, however,
likely to lead to an increase in building and construction
activity providing uplift for the sector and our business.
We remain focussed on developing new and
innovative products, reviewing all costs to ensure
we are competitive and prudently managing working
capital to position ourselves for an improved operating
environment.
Summary
Victoria has an excellent brand and we are determined
to enhance our position as a manufacturer of the finest
quality carpets in both Australasia and the United
Kingdom.
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Operating and Financial Review continued
Financial Review
The Group’s financial performance for the year ended 30 March 2013 is summarised as follows:
Revenue
Operating (loss)/profit before exceptional items
Finance costs
(Loss)/profit before tax and exceptional items
Exceptional items
(Loss)/profit before tax
Tax
(Loss)/profit after tax
Net debt
2013
£m
70.91
(0.42)
(0.47)
(0.89)
(2.63)
(3.52)
0.74
(2.78)
7.51
2012
£m
%
Change
-8.1%
77.13
-115.8%
2.67
+0.9%
(0.46)
2.21
-140.1%
(0.66) +299.1%
-327.5%
1.55
+260.1%
(0.46)
1.09
7.75
-356.2%
-3.1%
Revenue and profitability have been described in detail in the Operating Review above.
Exceptional Items
The exceptional charge for 2013 is made up of the following items:
Restructuring of Australia's spinning mills
Move to AIM
Incentive plan
General Meeting costs
Write off of certain intangible assets
Impairment of investment in associate company
Ireland restructuring costs
2013
£m
0.87
0.23
0.23
0.60
0.44
0.26
—
2.63
2012
£m
—
—
—
0.29
—
—
0.37
0.66
Some restructuring of the two Australian spinning mills was undertaken in April 2012 as a result of declining demand
for woollen yarns. With the trend away from wool to synthetic carpets continuing, the decision was taken to close
the smaller of the two mills and relocate key equipment to improve efficiencies at the larger mill. As a result, further
exceptional costs will be incurred in the new financial year to consolidate the two sites.
The Company’s shares were transferred from the Official List to the AIM market of the London Stock Exchange on
17 January 2013.
The incentive plan costs relate to a proposed remuneration scheme that was subsequently withdrawn and a Contract
for Difference between the Company and Mr G Wilding which received shareholder approval in the year. The contract
was entered into in April 2013 and set up to establish a direct link between the remuneration of Mr G Wilding and the
creation of value for all shareholders.
General Meeting costs in 2013 relate to expenses incurred in holding the General Meeting on 3 October 2012 (that
resulted in changes to the Board composition) and expenditure by the previous Board in their unsuccessful attempts
to generate shareholder support.
The write off of certain intangible assets principally relates to the intangible asset recognised on acquisition of certain
assets of C&H Distribution in September 2011 and was in respect to the customer list, brand name and an exclusive
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supplier agreement. The asset was written off in the period on the basis that the C&H brand and products have largely
been replaced by the launch of our own Victoria Luxury Flooring (‘VLF’) branded products.
The Board has reviewed its investment in the Canadian associate company Colin Campbell & Sons Limited, and that
assessment has resulted in impairment in value of the investment held.
Taxation
The tax credit in the year was £0.74m (2012: tax charge of £0.46m), equivalent to an effective tax rate of 21.0%. The
tax credit is lower than the current UK standard rate of 24% primarily due to the tax effect of permanently disallowable
items, the effect of bringing in our share of the Canadian associate after tax and the effect of a different standard tax
rate in Australia.
Cash Flow and Debt
Operating (loss)/profit before exceptional items
Depreciation and non-cash items
Foreign exchange
Movement in working capital
Operating cash flow (before exceptional items)
EBITDA*
Operating cash flow conversion % (against EBITDA*)
* Earnings before interest, tax, depreciation, amortisation and exceptional items.
2013
£m
(0.42)
2.69
0.12
2.12
4.51
2012
£m
2.67
2.99
0.01
(2.24)
3.43
2.33
193.7%
5.64
60.8%
The Group recorded strong operating cash flows in the period (before exceptional items) relative to EBITDA (before
exceptional items), driven by reduced working capital levels. The Group has focussed on reducing inventory levels and
at year-end inventory was £5.10m below prior year at £20.87m.
Capital expenditure remained relatively modest at £0.75m (2012: £1.38m) and significantly below depreciation levels.
The Group remains well invested with modern plant and equipment and capital expenditure levels are expected to
remain at a relatively low level in the new financial period.
Net debt levels reduced slightly to £7.51m (2012: £7.75m) and headroom against current facilities is at a comfortable
level.
A refinancing of the Group’s UK facilities occurred in July 2012 which converted the majority of UK borrowings from
short term overdraft to a committed three year revolving credit facility expiring in July 2015. The facilities are subject to
financial covenants measured against Group results and at 30 March 2013 all lending covenants were satisfied.
Future funding
The Group’s renewal of banking facilities was completed in June 2012 in Australia and facilities were renegotiated in
the UK in July 2012. Australia facilities are due for renewal in September 2013 and there are no problems anticipated
on renewal given Australia's current cash position. The current facilities across the Group provide sufficient capacity in
Australian Dollars, Sterling and Euros to cover all anticipated capital expenditure and working capital requirements in the
year ahead.
Going concern
The consolidated financial statements have been prepared on a going concern basis. The Group’s business
activities, together with the factors likely to affect its future development, performance and position, are set out in
the Chairman’s Statement and this Operating and Financial Review. In addition, note 26 to the financial statements
includes details of the Group’s financial instruments, hedging activities and its exposure to and management of credit
risk, liquidity risk, currency risk and interest rate risk.
www.victoriaplc.com
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Having reviewed the Group’s budgets, projections and funding requirements, and taking account of reasonable
possible changes in trading performance, the Directors believe they have reasonable grounds for stating that the
Group has adequate resources to continue in operational existence for the foreseeable future.
The Directors are of the view that the Group is well placed to manage its business risks despite the difficult economic
and market conditions. Accordingly, the Directors continue to adopt the going concern basis in preparing the Annual
Report and Accounts.
Accounting standards
The financial statements have been produced in accordance with International Financial Reporting Standards
(IFRS), as endorsed and adopted for use in the EU. There have been no changes to IFRS this year that have a
material impact on the Group’s results. There have been no changes in the accounting policies of the Group and its
subsidiaries this year.
Key performance indicators (KPIs)
The KPIs monitored by the Group Board are set out in the table below:
KPI
Sales growth (constant currency)
Operating margin (pre exceptional items)
Return on operating assets (pre exceptional items)
(Loss)/earnings per share (basic adjusted)
Net debt to EBITDA*
Interest Cover (against EBITDA*)
* Earnings before interest, tax,depreciation, amortisation and exceptional items.
Principal risks and uncertainties
The principal risks facing the business are set out as follows:
2013
2012
2011
-7.9%
-0.6%
-0.9%
-11.0p
3.3 times
4.8 times
+4.6%
3.5%
5.6%
23.7p
1.4 times
12.1 times
+3.3%
3.4%
5.2%
18.4p
1.2 times
11.4 times
Competition
The Group companies operate in mature and highly competitive markets, resulting in pressure on pricing and margins.
Management regularly reviews competitor activity to devise strategies to protect the Group’s position as far as
possible.
Global economic conditions
The operating and financial performance of the Group is influenced by economic conditions in the geographic areas
it operates, particularly the UK, Eurozone, Australia and the USA. The Group is managing the current downturn in
our markets through operational efficiency improvements, cost reductions and product development to better align
operations with current market conditions.
Key input prices
Material adverse changes in certain raw material prices, in particular wool prices, could affect the Group’s profitability.
These prices are closely monitored and forward contracts placed to help manage shorter term volatility.
Fluctuations in currency exchange rates
A significant amount of the Group’s purchases are made in US Dollars and Euros and therefore the Group is exposed
to foreign currency fluctuations. The Group manages this risk through the use of forward contracts where appropriate.
Geoffrey Wilding
Executive Chairman
30 July 2013
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Directors
Geoffrey Wilding
Executive Chairman
Alexander Anton
Non-executive Director
Geoff Wilding BSc is a former investment banker. He set
up his own investment company in New Zealand in 1989.
He is also a director of Chorus Law Limited.
Alexander Anton, a member of the founding family of
Victoria, was appointed to the main Board in 1995 and
is a former Chairman. He is currently a Trustee of The
Queen’s Club, London and Chairman of Legacy Portfolio.
Geoff was appointed Executive Chairman at the General
Meeting on 3 October 2012.
Alexander was appointed to the Board at the General
Meeting on 3 October 2012.
Andrew Harrison
Non-executive Director
Andrew Harrison has more than 20 years experience as
a solicitor in private practice, specialising in company
law. He has advised on a wide variety of corporate
transactions, including management buy-outs and
buy-ins, corporate acquisitions and disposals and listed
company take-overs.
Andrew was appointed to the Board at the General
Meeting on 3 October 2012 and is the Senior
Independent Non-executive Director.
Terry Danks
Company Secretary, Victoria PLC
Finance Director, Victoria Carpets UK
Appointed as Company Secretary to Victoria PLC in
1993. Terry joined Victoria Carpets in 1985 as Chief
Accountant and has been responsible for both the
accounting and IT function within the Company since
that date. Terry was subsequently appointed as Finance
Director of Victoria Carpets in 1989. Terry has a breadth
of experience and knowledge of the industry and his high
standards of financial control are invaluable to the Group.
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Directors’ Report
The Directors present their Annual Report and the audited financial statements for the Group for the year ended
30 March 2013.
Principal activities and business review
The Group’s principal activities are the manufacture, distribution and sale of floorcoverings and carpet yarns. A review
of the business during the financial year and its future development is included in the Chairman’s Statement and the
Operating and Financial Review on pages 2 to 8.
Results and dividends
The results include those of Victoria PLC and its subsidiaries for the full year and are set out in the accounts on pages
16 to 51.
Loss attributable to shareholders
Total dividend paid in the financial year
Retained loss
£000
2,782
627
3,409
The Directors recommend the payment of a final dividend for the financial year ended 30 March 2013 of 6.00 pence
per Ordinary share. Subject to shareholder approval at the Annual General Meeting, the final dividend will be paid in
cash on 3 October 2013 to members on the register at the close of business on Friday, 6 September 2013, with the
ex-dividend date being Wednesday, 4 September 2013.
Financial risk management
Details of the Group’s financial risk management policies are set out in note 26.
Directors and their interests
The current Directors of the Company together with their biographical details are listed on page 9.
Other Directors who served on the Board during the year were:
A Bullock (Group Managing Director until 31 August 2012)
I Davies (Group Finance Director until 8 August 2012)
B Poynter (Executive Director until 31 August 2012)
Sir B Nicholson (Non-executive Director until 8 August 2012)
K Innes Ker (Chairman until 3 October 2012)
D Garman (Non-executive Director from 8 August 2012 until 3 October 2012)
R Hoyle (Non-executive Director from 8 August 2012 until 31 August 2012)
The Directors of the Company who held office at 30 March 2013 had the following interests in the Ordinary shares of
the Company:
Alexander Anton
Geoffrey Wilding
Andrew Harrison
30 March 2013
31 March 2012
Beneficial
71,075*
—
—
Non-
Beneficial
80,000
—
—
Beneficial
71,075*
—
—
Non-
Beneficial
80,000
—
—
* This includes 47,500 shares held in trust of which Alexander Anton is the beneficiary.
Alexander Anton is also deemed by the Panel on Takeovers and Mergers to form part of the concert party formed
in December 2011. New Fortress Finance Holdings Limited was part of the concert party formed in December 2011
but are no longer deemed to be in the concert party. At 30 March 2013 the concert party held 22.7% of the issued
shares in the Company.
The interests of the Directors in the shares of the Company and its subsidiaries have not changed between the year-
end and 30 July 2013 (being the last practicable date before production of this report).
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In accordance with the Company’s Articles of Association, the Director retiring by rotation at the 2013 Annual General
Meeting is Alexander Anton who, being eligible, offers himself for re -election pursuant to Article 86.
Details of the contracts of the Directors who held office at 30 March 2013 are as follows:
Geoffrey Wilding
The services of Geoffrey Wilding as Executive Chairman are provided under a service contract dated 3 October 2012.
The notice period from the Company is three months.
Alexander Anton
The services of Alexander Anton as Non-executive Director are provided under a contractual letter of continuing
appointment dated 3 October 2012. The contract does not include any provision for early termination.
Andrew Harrison
The services of Andrew Harrison as Non-executive Director are provided under a contractual letter of continuing
appointment dated 3 October 2012. The contract does not include any provision for early termination.
No Director, either during or at the end of the financial year, was materially interested in any significant contract with
the Company or any subsidiary undertaking, with the exception of:
— A Contract for Difference (‘CFD’) between the Company and G Wilding received shareholder approval at a General
Meeting on 20 February 2013. The contract was entered into after the year-end (detailed further in the Post
balance sheet events section on page 12).
The Company has made qualifying third party indemnity provisions for the benefit of its Directors which were made
following approval at the 2005 AGM and remain in force at the date of this report.
Directors’ emoluments
The emoluments of all Directors for the financial year ended 30 March 2013 were:
Executive
Geoffrey Wilding*
Non-executive
Alexander Anton*
Andrew Harrison (appointed 3 October 2012)
Former Directors
Alan Bullock (until 31 August 2012)
Ian Davies (until 8 August 2012)
Barry Poynter (until 31 August 2012)
Katherine Innes Ker (until 3 October 2012)
Sir Bryan Nicholson (until 8 August 2012)
David Garman (8 August 2012 – 3 October 2012)
Roger Hoyle (8 August 2012 – 31 August 2012)
Nikki Beckett (until 5 March 2012)
Peter Jensen (until 5 March 2012)
Salary/ Fees
£000
Benefits in
kind
£000
Bonus
£000
45
30
17
72
54
97
33
12
6
2
—
—
368
—
—
—
8
7
12
—
—
—
—
—
—
27
—
—
—
—
—
—
—
—
—
—
—
—
—
Total
2013
£000
45
30
17
80
61
109
33
12
6
2
—
—
395
Total
2012
£000
3
3
—
221
194
305
5
3
—
—
60
32
826
* Geoffrey Wilding and Alexander Anton were appointed to the Board as Non-executive Directors on 6 March 2012 and resigned from the Board on
8 August 2012. They were subsequently re-elected to the Board on 3 October 2012, with Geoffrey Wilding appointed as Executive Chairman whilst
Alexander Anton returned to the Board as a Non-executive Director.
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Directors’ Report continued
Directors’ pension entitlements
Three Directors were members of money purchase schemes. Contributions paid by the Group in respect of such
schemes were:
Alan Bullock (until 31 August 2012)
Ian Davies (until 8 August 2012)
Barry Poynter (until 31 August 2012)
2013
£000
20
8
10
38
2012
£000
50
23
24
97
Alan Bullock and Barry Poynter served on the Victoria PLC Board until 31 August 2012, but remained as Directors of
the UK and Australia businesses respectively until their retirements later in the year. During this period they remained
in the pension schemes and continued to receive contributions from the Group in respect of these schemes until
retirement.
Employees
Employees are encouraged to attend training courses and there is regular consultation with employee representatives
to ensure that employees are informed of all matters affecting them. Applications for employment by disabled persons
are given full and fair consideration having regard to their particular aptitudes and abilities. Appropriate training within
their capabilities is provided for disabled employees seeking career development. Employees who become disabled
during their employment have continued in employment wherever possible.
Payment policy
The Group does not have a written code or standard on payment practice. It negotiates settlement terms with each of
its suppliers. Payments are then made to suppliers in accordance with those terms provided the supplier has carried
out his agreed obligations in a satisfactory manner. The amount due to trade creditors on 30 March 2013 represented
67 days’ purchases from suppliers (2012: 59 days).
Taxation status
The Directors are advised that the Company is not a ‘close company’ within the provisions of the Income and
Corporation Taxes Act 1988.
Going concern
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern
basis in preparing the accounts.
Post balance sheet events
(a) Australia Spinning Mill
In response to declining demand for woollen yarns from the Company’s two spinning mills the Company has
decided to concentrate all future woollen yarn production at the larger spinning mill in Bendigo. This decision
required the closure of the Castlemaine operation and production ceased at the end of June 2013. Key items of
equipment will be relocated to Bendigo to improve efficiencies at the mill. Substantial one-off costs will be incurred
to consolidate the two sites.
(b) Contract for Difference (‘CFD’)
A CFD between the Company and G Wilding was entered into on 19 April 2013, following shareholder approval at
a General Meeting of the Company on 20 February 2013. The CFD was established to link the performance and
reward of G Wilding to the creation of wealth for all shareholders.
12
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Auditor
Each of the persons who is a Director at the date of approval of this Annual Report confirms that:
(a) So far as the Director is aware, there is no relevant audit information of which the Company’s Auditor is unaware;
and
(b) the Director has taken all steps that he ought to have taken as a Director in order to make himself aware of any
such relevant audit information and to establish that the Company’s Auditor is aware of that information.
The above is in accordance with the provisions of Section 418 of the Companies Act 2006.
Nexia Smith & Williamson, who were appointed in the year, has expressed its willingness to continue in office as
Auditor and a resolution to reappoint them will be proposed at the forthcoming Annual General Meeting.
Annual General Meeting
Notice of the 2013 Annual General Meeting to be held on 24 September 2013, together with a description of the
business to be discussed at the AGM, is set out in the accompanying Notice. The proposed resolutions relate to
standard matters that are dealt with at every AGM.
Corporate Governance Statement
As an AIM listed group, Victoria PLC is not required to comply with the UK Corporate Governance Code. The Group
applies certain principles of good governance it believes appropriate to a group of this size.
By Order of the Board
Terry A Danks
Secretary
30 July 2013
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Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law, the
Directors are required to prepare the Group financial statements in accordance with International Financial Reporting
Standards (IFRSs) 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 the IFRSs as adopted by the European Union. 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 and Company for that period.
In preparing these financial statements the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed, subject to any material departures disclosed
and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group
and Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and
the Company and enable them to ensure that the financial statements comply with the Companies Act 2006, and as
regards the Group financial statements, Article 4 of the IAS Regulation. 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, www.victoriaplc.com. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
By Order of the Board
Terry A Danks
Secretary
30 July 2013
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Independent Auditor’s Report
to the Members of Victoria PLC
We have audited the financial statements of Victoria PLC
for the 52 weeks ended 30 March 2013 which comprise
the Consolidated Income Statement, the Consolidated
Statement of Comprehensive Income, the Consolidated
and Company Balance Sheets, the Consolidated
and Company Statements of Changes in Equity, the
Consolidated and Company Statements of Cash Flows,
significant accounting policies and the related notes
1 to 29. The financial reporting framework that has
been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs)
as adopted by the European Union 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 Statement of Directors’
Responsibilities set out on page 14, 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 (APB’s) Ethical Standards for
Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial
statements is provided on the FRC’s website at
www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion:
•
the parent company financial statements have been
properly prepared in accordance with IFRSs 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.
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion the information given in the Directors’
Report for the financial year for which the financial
statements are prepared is consistent with the financial
statements.
Matters on which we are required to report by
exception
We have nothing to report in respect of the following
matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept by
the parent company, or returns adequate for our audit
have not been received from branches not visited by
us; or
•
the parent company financial statements are not in
agreement with the accounting records and returns;
or
• certain disclosures of Directors’ remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
Sancho Simmonds
Senior Statutory Auditor, for and on behalf of
Nexia Smith & Williamson
Chartered Accountants and Statutory Auditor
25 Moorgate, London, EC2R 6AY, United Kingdom
•
•
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 March 2013 and of the Group’s loss
for the 52 week period then ended;
30 July 2013
the Group financial statements have been properly
prepared in accordance with IFRSs as adopted by
the European Union;
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Consolidated Income Statement
For the 52 weeks ended 30 March 2013
Continuing operations
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Other operating income
Share of results of associated company
Operating (loss)/profit
Analysed between:
Operating (loss)/profit before exceptional items
Exceptional items
Finance costs
(Loss)/profit before tax
Taxation
(Loss)/profit for the period
(Loss)/earnings per share — pence
diluted
basic
52 weeks
ended
30 March
2013
£000
70,909
(53,679)
17,230
(14,041)
(6,230)
168
(182)
(3,055)
(421)
(2,634)
(465)
(3,520)
738
(2,782)
(39.56)
(39.56)
52 weeks
ended
31 March
2012
£000
77,126
(56,787)
20,339
(14,070)
(4,730)
384
85
2,008
2,668
(660)
(461)
1,547
(461)
1,086
15.64
14.12
Notes
1,2
1
1
1,3
4
1,5
7
9
9
Consolidated Statement of Comprehensive Income
For the 52 weeks ended 30 March 2013
Exchange differences on translation of foreign operations
Other comprehensive income for the period
(Loss)/profit for the period
Total comprehensive (loss)/income for the period
52 weeks
ended
30 March
2013
£000
1,597
1,597
(2,782)
(1,185)
52 weeks
ended
31 March
2012
£000
72
72
1,086
1,158
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Consolidated and Company Balance Sheets
As at 30 March 2013
Non-current assets
Intangible assets
Property, plant and equipment
Investment property
Investment in subsidiary undertakings
Deferred tax asset
Total non-current assets
Current assets
Inventories
Trade and other receivables
Current tax assets
Cash at bank and in hand
Assets held for sale
Total current assets
Total assets
Current liabilities
Trade and other payables
Current tax liabilities
Other financial liabilities
Total current liabilities
Non-current liabilities
Trade and other payables
Other financial liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Retained earnings
Share-based payment reserve
Total equity
Group
Company
30 March
2013
£000
31 March
2012
£000
30 March
2013
£000
31 March
2012
£000
Notes
11
12
13
13
19
15
16
14
17
18
17
18
19
20
21
21
21
248
23,778
180
—
1,323
25,529
20,866
11,163
361
1,091
389
33,870
59,399
9,624
—
7,709
17,333
1,954
890
749
3,593
20,926
38,473
1,758
829
35,724
162
38,473
742
24,978
180
—
812
26,712
25,966
11,676
—
806
558
39,006
65,718
13,467
31
8,165
21,663
2,253
388
1,094
3,735
25,398
40,320
1,736
829
37,575
180
40,320
—
4,966
180
3,322
—
8,468
—
4,281
—
—
56
4,337
12,805
229
—
4,246
4,475
—
500
471
971
5,446
7,359
1,758
829
4,669
103
7,359
—
5,027
180
3,322
—
8,529
—
4,812
—
—
56
4,868
13,397
1,055
—
3,078
4,133
—
—
784
784
4,917
8,480
1,736
829
5,802
113
8,480
Company Registered Number (England & Wales) 282204
The financial statements on pages 16 to 51 were approved by the Board of Directors and authorised for issue on
30 July 2013.
They were signed on its behalf by:
Geoffrey Wilding
Executive Chairman
30 July 2013
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Consolidated Statement of Changes in Equity
For the 52 weeks ended 30 March 2013
At 1 April 2012
Loss for the period
Other comprehensive income for the period
Dividends paid
Movement in share-based payment reserve
Deferred tax on share option scheme
Issue of share capital in connection with
exercise of share options under LTIP plan
At 30 March 2013
At 3 April 2011
Profit for the period
Other comprehensive income for the period
Dividends paid
Movement in share-based payment reserve
Deferred tax on share option scheme
At 31 March 2012
Share
capital
£000
1,736
—
—
—
—
—
22
1,758
1,736
—
—
—
—
—
1,736
Share
premium
£000
829
—
—
—
—
—
—
829
829
—
—
—
—
—
829
Retained
earnings
£000
37,575
(2,782)
1,597
(627)
—
(39)
—
35,724
37,067
1,086
72
(660)
—
10
37,575
Share-based
payment
reserve
£000
180
—
—
—
(18)
—
—
162
130
—
—
—
50
—
180
Company Statement of Changes in Equity
For the 52 weeks ended 30 March 2013
At 1 April 2012
Loss for the period
Dividends paid
Movement in share-based payment reserve
Deferred tax on share option scheme
Issue of share capital in connection with
exercise of share options under LTIP plan
At 30 March 2013
At 3 April 2011
Profit for the period
Dividends paid
Movement in share-based payment reserve
Deferred tax on share option scheme
At 31 March 2012
Share
capital
£000
1,736
—
—
—
—
22
1,758
1,736
—
—
—
—
1,736
Share
premium
£000
Retained
earnings
£000
Share-based
payment
reserve
£000
829
—
—
—
—
—
829
829
—
—
—
—
829
5,802
(467)
(627)
—
(39)
—
4,669
6,115
337
(660)
—
10
5,802
113
—
—
(10)
—
—
103
87
—
—
26
—
113
Total
equity
£000
40,320
(2,782)
1,597
(627)
(18)
(39)
22
38,473
39,762
1,086
72
(660)
50
10
40,320
Total
equity
£000
8,480
(467)
(627)
(10)
(39)
22
7,359
8,767
337
(660)
26
10
8,480
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Consolidated and Company Statement of Cash Flows
For the 52 weeks ended 30 March 2013
Net cash inflow/(outflow) from
operating activities
Investing activities
Purchases of property, plant and equipment
Acquisition of intangible assets
Proceeds on disposal of property, plant and
equipment
Investment in subsidiary
Net cash (used)/generated in investing
activities
Financing activities
Increase/(decrease) in long term loans
Receipts from financing of assets
Repayment of obligations under finance
leases/HP
Dividends paid
Net cash used in financing activities
Net increase/(decrease) in cash and
cash equivalents
Cash and cash equivalents at beginning
of period
Effect of foreign exchange rate changes
Cash and cash equivalents at end of
period
Group
Company
52 weeks
ended
30 March
2013
£000
52 weeks
ended
31 March
2012
£000
52 weeks
ended
30 March
2013
£000
52 weeks
ended
31 March
2012
£000
Notes
23
1,611
885
(1,049)
1,285
(850)
—
96
—
(1,464)
(400)
85
—
(754)
(1,779)
500
—
(327)
(627)
(454)
(973)
321
(872)
(660)
(2,184)
—
—
8
—
8
500
—
—
(627)
(127)
403
(3,078)
(1,168)
(13)
—
—
(1)
(14)
—
—
—
(660)
(660)
611
(6,920)
42
(3,866)
24
(3,078)
—
(3,689)
—
24
(6,475)
(6,920)
(4,246)
(3,078)
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Significant Accounting Policies
Basis of accounting
The financial statements have been prepared in
accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU, IFRIC
interpretations and Companies Act 2006 that applies to
companies reporting under IFRS.
The financial statements have been prepared on
the historical cost basis, except for certain financial
instruments which are recorded at fair value in
accordance with IAS 39. Land and buildings were
professionally valued at 4 April 2004 and this valuation
was adopted as deemed cost on adoption of IFRS. The
accounting policies have been applied consistently in the
current and prior year. The principal accounting policies
adopted are set out below.
Basis of preparation
The consolidated financial statements have been
prepared on a going concern basis. The Operating and
Financial Review on pages seven and eight sets out the
justification for this basis of preparation.
Basis of consolidation
The consolidated financial statements incorporate
the financial statements of the Company and entities
controlled by the Company (its subsidiaries). Control is
achieved where the Company has the power to govern
the financial and operating policies of an entity so as to
obtain benefits from its activities.
All intra-group transactions, balances, income and
expenses are eliminated on consolidation.
Segmental reporting
The Group’s internal organisation and management
structure and its system of internal financial reporting to
the Board of Directors are based on the geographical
locations of its businesses. The chief operating decision-
maker has been identified as the Board of Directors.
Non-current assets held for sale
Non-current assets and disposal groups are classified
as held for sale if their carrying amount will be recovered
through a sale transaction rather than through continuing
use. This condition is regarded as met only when the
sale is highly probable and the asset (or disposal group)
is available for immediate sale in its present condition.
Management must be committed to the sale, which
should be expected to qualify for recognition as a
completed sale within one year from the date of
classification.
Non-current assets (and disposal groups) classified as
held for sale are measured at the lower of the assets’
previous carrying amount and fair value less costs to sell.
The investment in our Canadian associate has been
classified as an asset held for sale in the year ended
30 March 2013, having previously been accounted for on
an equity accounting basis.
Investment property
The investment properties are valued on an historical cost
basis, having been professionally valued at 4 April 2004
on adoption of IFRS, and is considered to be the deemed
cost.
Revenue recognition
Revenue is measured at the fair value of the
consideration received or receivable and represents
amounts receivable for goods and services provided
in the normal course of business, net of discounts and
sales related taxes. Sales of goods are recognised when
goods are despatched.
Interest income is accrued on a time basis, by reference
to the principal outstanding and at the effective interest
rate applicable, which is the rate that exactly discounts
estimated future cash receipts through the expected life
of the financial asset to that asset’s net carrying amount.
Dividend income from investments is recognised when
the shareholders’ rights to receive payment have been
established.
Leasing
Leases are classified as finance leases whenever the
terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee. All other leases are
classified as operating leases.
Assets held under finance leases are recognised as
assets of the Group at their fair value at the inception of
the lease or, if lower, at the present value of the minimum
lease payments. The corresponding liability to the lessor
is included in the balance sheet as a finance lease
obligation. Lease payments are apportioned between
finance charges and reduction of the lease obligation so
as to achieve a constant rate of interest on the remaining
balance of the liability.
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Finance charges are charged to profit or loss, unless
they are directly attributable to qualifying assets, in which
case they are capitalised in accordance with the Group’s
general policy on borrowing costs (see below).
Rentals payable under operating leases are charged to
profit or loss on a straight-line basis over the term of the
relevant lease. Benefits received and receivable as an
incentive to enter into an operating lease are also spread
on a straight-line basis over the lease term.
Foreign currencies
The individual financial statements of each Group entity
are presented in the currency of the primary economic
environment in which the entity operates (its functional
currency). For the purpose of the consolidated financial
statements, the results and financial position of each
entity are expressed in Sterling, which is the functional
currency of the Company, and the presentation currency
for the consolidated financial statements.
In preparing the financial statements of the individual
entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded
at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary items
denominated in foreign currencies are retranslated at the
rates prevailing on the balance sheet date. Non-monetary
items carried at fair value that are denominated in foreign
currencies are retranslated at the rates prevailing on the
date when the fair value was determined. Non-monetary
items that are measured in terms of historical cost in a
foreign currency are not retranslated.
Exchange differences arising on the settlement of
monetary items, and on the retranslation of monetary
items, are included in profit or loss for the period.
Exchange differences arising on the retranslation of
non-monetary items carried at fair value are included in
profit or loss for the period except for differences arising
on the retranslation of non-monetary items in respect of
which gains and losses are recognised in equity. For such
non-monetary items, any exchange component of that
gain or loss is also recognised in equity. In order to hedge
its exposure to certain foreign exchange risks, the Group
enters into forward contracts and options (see below for
details of the Group’s accounting policies in respect of
such derivative financial instruments).
For the purpose of presenting consolidated financial
statements, the assets and liabilities of the Group’s
foreign operations (including comparatives) are
expressed in Sterling using exchange rates prevailing
on the balance sheet date. Income and expense items
(including comparatives) are translated at the average
exchange rates for the period, unless exchange rates
fluctuated significantly during that period, in which case
the exchange rates at the dates of the transactions are
used. Exchange differences arising, if any, are classified
as equity. Such translation differences are recognised in
profit or loss in the period in which the foreign operation
is disposed of.
Government grants
Government grants relating to property, plant and
equipment are treated as deferred income, and released
to profit or loss over the expected useful lives of the
assets concerned. Other government grants, including
those towards staff training costs, are recognised in
profit or loss over the periods necessary to match them
with the related costs and are deducted in reporting the
related expense.
Retirement benefit costs
Payments to defined contribution retirement benefit plans
are charged as an expense as they fall due. Payments
made to state managed retirement benefit schemes
are dealt with as payments to defined contribution
plans where the Group’s obligations under the plans
are equivalent to those arising in a defined contribution
retirement benefit plan.
Taxation
Income tax expense represents the sum of the tax
currently payable and deferred tax.
The tax currently payable is based on taxable profit for
the year. Taxable profit differs from 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. The Group’s liability for current tax
is calculated using tax rates that have been enacted or
substantively enacted by the balance sheet date.
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Significant Accounting Policies continued
Deferred tax is recognised on differences between
the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases
used in the computation of taxable profit, and are
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 taxable
profit nor the accounting profit.
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.
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.
Depreciation on buildings is charged to profit or loss.
Plant and machinery, fixtures, vehicles and equipment
are stated at cost less accumulated depreciation and any
accumulated impairment losses. Depreciation is charged
so as to write off the cost or valuation of assets, other
than land and properties under construction, less any
anticipated residual value, over their estimated useful
lives.
Assets held under finance leases are depreciated over
their expected useful lives on the same basis as owned
assets or, where shorter, the term of the relevant lease.
The expected useful lives of assets are:
Buildings
Plant and machinery
Fixtures and equipment
Motor vehicles
50 years
3 to 20 years
3 to 20 years
4 to 5 years
The gain or loss arising on the disposal or retirement of
an item of property, plant and equipment is determined
as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in profit
or loss.
Intangible assets
Deferred tax is calculated at the tax rates that are
expected to apply in the period when the liability is settled
or the asset realised. Deferred tax is charged or credited
to profit or loss, except when it relates to items charged
or credited directly to equity, in which case the deferred
tax is also dealt with in equity.
i.
Intangible assets acquired in a business
combination
Intangible assets acquired in a business combination
and recognised separately from goodwill are initially
recognised at their fair value at the acquisition date.
Deferred tax assets and liabilities are offset when there
is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to
income taxes levied by the same taxation authority and
the Group intends to settle its current tax assets and
liabilities on a net basis.
Property, plant and equipment
Land and buildings held for use in the production
or supply of goods or services, or for administrative
purposes, are stated in the balance sheet at their
deemed cost, being the fair value at the date of adoption
of IFRS, less any subsequent accumulated depreciation
and subsequent accumulated impairment losses.
Subsequent to initial recognition, intangible assets
acquired in a business combination are reported at
cost less accumulated amortisation and accumulated
impairment losses, on the same basis as intangible
assets that are acquired separately.
ii. Amortisation of intangible assets
Amortisation is charged to the income statement
on a straight-line basis over 20 years which is
the estimated useful lives of intangible assets.
Amortisation commences from the date the intangible
asset becomes available for use.
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iii. Derecognition of intangible assets
An intangible asset is derecognised on disposal or
when no future economic benefits are expected
from use or disposal. Gains or losses arising from
derecognition of an intangible asset, measured as the
difference between the net disposal proceeds and the
carrying amount of the asset, are recognised in profit
or loss when the asset is derecognised.
iv. Impairment of tangible and intangible assets
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). Where it is not possible
to estimate the recoverable amount of an individual
asset, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-
generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable
amount. An impairment loss is recognised
immediately in profit or loss, unless the relevant asset
is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the
carrying amount of the asset (cash-generating unit)
is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount
does not exceed the carrying amount that would
have been determined had no impairment loss been
recognised for the asset (cash-generating unit) in prior
years. A reversal of an impairment loss is recognised
immediately in profit or loss, unless the relevant asset
is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation
increase.
Inventories
Inventories are stated at the lower of cost and net
realisable value. Cost comprises direct materials
and, where applicable, direct labour costs and those
overheads that have been incurred in bringing the
inventories to their present location and condition. Cost
is calculated using the weighted average method. Net
realisable value represents the estimated selling price
less all estimated costs of completion and costs to be
incurred in marketing, selling and distribution.
Share-based payments
The Group has applied the requirements of IFRS 2 Share-
based payment. In accordance with IFRS 1, IFRS 2 has
been applied to all grants of equity instruments after
7 November 2002 that were unvested at 1 January 2005.
The Group issues equity settled share-based payments
to certain employees. Equity settled share-based
payments are measured at fair value (excluding the effect
of non-market based vesting conditions) at the date of
grant. The fair value determined at the grant date of the
equity settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the
Group’s estimate of the shares that will eventually vest
and adjusted for the effect of non-market based vesting
conditions.
Fair value is measured by use of the Black–Scholes
model. The expected life used in the model has been
adjusted, based on Management’s best estimate, for the
effects of non-transferability, exercise restrictions, and
behavioural considerations.
The liability in respect of equity settled amounts is
included in equity.
Exceptional items
Non-recurring transactions which are material by virtue of
their size or incidence are disclosed as exceptional items.
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Significant Accounting Policies continued
Financial instruments
(a) Financial assets
The Group’s financial assets fall into the categories
discussed below, with the allocation depending to
an extent on the purpose for which the asset was
acquired. Although the Group occasionally uses
derivative financial instruments in economic hedges
of currency rate risk, it does not hedge account for
these transactions. The Group has not classified any
of its financial assets as held to maturity.
Unless otherwise indicated, the carrying amounts
of the Group’s financial assets are a reasonable
approximation of their fair values.
The Group derecognises a financial asset only when
the contractual rights to the cash flows from the
asset expire, or it transfers the financial asset and
substantially all the risks and rewards of ownership of
the asset to another entity.
i.
Loans and receivables
These assets are non-derivative financial assets
with fixed or determinable payments that are not
quoted in an active market. They arise principally
through the provision of goods and services to
customers (e.g. trade receivables) and deposits
held at banks but may also incorporate other
types of contractual monetary asset. They are
initially recognised at fair value plus transaction
costs that are directly attributable to the
acquisition or issue and subsequently carried
at amortised cost less provision for impairment,
where appropriate.
The effect of discounting on these financial
instruments is not considered to be material.
Impairment provisions are recognised when there
is objective evidence (such as significant financial
difficulties on the part of the counterparty or
default or significant delay in payment) that the
Group will be unable to collect all of the amounts
due under the terms receivable; the amount of
such a provision being the difference between the
net carrying amount and the present value of the
future expected cash flows associated with the
impaired receivable. For trade receivables, such
provisions are recorded in a separate allowance
account with the loss being recognised within
distribution expenses in the income statement. On
confirmation that the trade receivable will not be
collectable, the gross carrying value of the asset is
written off against the associated provision.
ii. Fair value through profit or loss
This category comprises only ‘in the money’
foreign exchange derivatives to the extent
that they exist (see (b)(ii) for ‘out of the money’
derivatives). They are carried in the balance sheet
at fair value with changes in fair value recognised
in finance income or expense. Other than these
derivative financial instruments, the Group does
not have any assets held for trading nor has it
designated any financial assets as being at fair
value through profit or loss.
The fair value of the Group’s foreign exchange
derivatives is measured using quoted forward
exchange rates and yield curves derived from
quoted interest rates matching maturity of the
contracts.
(b) Financial liabilities
The Group classifies its financial liabilities into one of
two categories depending on the purpose for which
the liability was incurred. Although the Group uses
derivative financial instruments in economic hedges
of currency risk, it does not hedge account for these
transactions.
Unless otherwise indicated, the carrying amounts
of the Group’s financial liabilities are a reasonable
approximation of their fair values.
The Group derecognises financial liabilities when, and
only when, the Group’s obligations are discharged,
cancelled or they expire.
i. Financial liabilities measured at amortised cost
These liabilities include the following items:
•
Trade payables and other short term monetary
liabilities, which are initially recognised at fair
value and subsequently carried at amortised
cost.
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Adoption of new and revised standards
During the year a number of amendments to IFRS
became effective and were adopted by the Group, none
of which had a material impact on the Group’s net cash
flows, financial position, total comprehensive income or
earnings per share.
At the date of authorisation of these financial statements,
a number of revised and amended standards and
interpretations were in issue but not yet effective, none of
which are likely to have a material impact on the Group’s
net cash flows, financial position, total comprehensive
income or earnings per share.
•
Bank borrowings and loan notes are initially
recognised at fair value net of any transaction
costs directly attributable to the issue of the
instrument. Such interest bearing liabilities are
subsequently measured at amortised cost.
Interest is recognised as a finance expense in
the income statement.
ii. Fair value through profit or loss
This category comprises only ‘out of the money’
derivatives to the extent that they exist (see (a)(ii)
for ‘in the money’ derivatives). They are carried in
the balance sheet at fair value with changes in fair
value recognised in finance income or expense.
Other than these derivative financial instruments,
the Group does not have any liabilities held for
trading nor has it designated any financial liabilities
as being at fair value through profit or loss.
The methods used for calculating the fair value
of the Group’s interest rate and foreign exchange
derivatives have been described in (a)(ii) above.
(c) Share capital
The Group’s Ordinary shares are classified as equity
instruments. Share capital includes the nominal value
of the shares. Any share premium attaching to the
shares is shown as share premium.
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Notes to the Accounts
1 Segmental information
The Group is organised into two operating divisions, the UK & Ireland and Australia. Our share of the Canadian
associate result is also presented separately.
Geographical segment information for revenue, operating (loss)/profit and a reconciliation to entity net (loss)/profit
is presented below.
Income statement
For the 52 weeks ended 30 March 2013
Segmental
operating
(loss)/
profit
£000
Exceptional
operating
items
£000
Finance
costs
£000
Revenue
£000
Loss
before
tax*
£000
Segmental
operating
profit
£000
Exceptional
operating
items
£000
Revenue
£000
For the 52 weeks ended 31 March 2012
27,729
43,180
70,909
(1,820)
2,027
207
(442)
(1,082)
(1,524)
(206)
(154)
(360)
(2,468) 30,080
47,046
(1,677) 77,126
791
308
3,134
3,442
(369)
(369)
77
(259)
(182)
85
Finance
costs
£000
(128)
(231)
(359)
Profit
before
tax*
£000
(189)
2,903
2,714
85
(705)
(851)
(105)
(1,661)
(859)
(291)
(102)
(1,252)
70,909
(421)
(2,634)
(465)
(3,520) 77,126
2,668
(660)
(461)
738
(2,782)
1,547
(461)
1,086
UK & Ireland
Australia
Share of
Canadian
associate
Unallocated
central
expenses
Total
continuing
operations
Tax
(Loss)/profit
after tax from
continuing
activities
* The share of results of the associated company is shown net of tax as required by IAS 1.
Intersegment sales between the UK & Ireland and Australia were immaterial in the current and comparative
periods.
Management information is reviewed on a segmental basis to (loss)/profit before tax.
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1 Segmental information continued
Balance sheet
UK & Ireland
Australia
Assets held for sale
Unallocated central assets/liabilities
As at 30 March 2013
Segment
assets
£000
Segment
liabilities
£000
As at 31 March 2012
Segment
assets
£000
Segment
liabilities
£000
22,203
36,627
389
180
59,399
7,965
7,912
—
5,049
20,926
27,649
37,255
558
256
65,718
10,480
9,889
—
5,029
25,398
Assets held for sale relates to the investment in the associated company, which is held directly by the parent entity
and does not relate specifically to any geographic segment.
Other segmental information
Depreciation and amortisation
UK & Ireland
Australia
Unallocated central
No other significant non-cash expenses were deducted in measuring segment results.
Capital expenditure
UK & Ireland
Australia
Unallocated central
52 weeks
ended
30 March
2013
£000
792
1,960
—
2,752
52 weeks
ended
30 March
2013
£000
593
257
—
850
52 weeks
ended
31 March
2012
£000
821
2,149
4
2,974
52 weeks
ended
31 March
2012
£000
361
1,090
13
1,464
Business segments
The Directors consider that substantially all of the Group’s operations relate to a single activity, that of the
manufacture and sale of carpets and other floorcoverings.
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Notes to the Accounts continued
2 Revenue
Continuing operations
Sale of goods
Other operating income
3 Exceptional items
(a) Restructuring of Australia’s spinning mills
(b) Move to AIM
(c) Incentive plan
(d) General Meeting costs
(e) Write off of certain intangible assets
(f) Impairment of investment in associate company
(g) Ireland restructuring costs
52 weeks
ended
30 March
2013
£000
70,909
168
71,077
52 weeks
ended
30 March
2013
£000
869
233
227
604
442
259
—
2,634
52 weeks
ended
31 March
2012
£000
77,126
384
77,510
52 weeks
ended
31 March
2012
£000
—
—
—
291
—
—
369
660
All exceptional items are classified within administrative expenses except where noted.
(a) Relates to costs associated with “right-sizing” and reorganising the two spinning mills to meet reduced volume
requirements as a result of declining demand for woollen yarns.
(b) Relates to costs incurred in the move from the Official List to the AIM market of the London Stock Exchange.
(c) Relates to professional fees in connection with a proposed incentive remuneration plan subsequently
withdrawn, and a Contract for Difference between the Company and Mr Wilding which received shareholder
approval in February 2013. The contract was signed in April 2013.
(d) Relates to costs in connection with various General Meetings of the Company, resulting in changes to the
Board composition.
(e) Relates to the write off of intangible assets held in relation to 1) the acquisition of certain assets of C&H
Distribution and 2) the Munster brand in respect to the UK contract market where it is no longer used. Refer to
note 11 ‘Intangible assets’ for further detail.
(f) The Board has reviewed its investment in the associate company and that assessment has resulted in
impairment in the value of the investment held. This impairment is included within the 'Share of results of
associated company' on the Consolidated Income Statement.
(g) Relates to closure costs associated with the restructuring, with the largest cost relating to redundancies. The
Irish business and brands are now being marketed and traded under a distribution model and reported within
the UK operation.
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4 Finance costs
Interest on loans and overdrafts wholly repayable within five years
Movement in fair value of interest rate swap
Hire purchase and finance lease interest
5
(Loss)/profit on ordinary activities before taxation
After charging/(crediting)
Net foreign exchange gains
Depreciation of property, plant and equipment
Amortisation of intangible assets (see note 11)
Staff costs (see note 6)
Cost of inventories recognised as an expense
Loss on sale of fixed assets
Government grants (see note 25)
Other operating lease rentals
Auditor's remuneration:
Fees payable to the Company’s Auditor for the audit of the Company’s annual
financial statements
The audit of the Company’s subsidiaries pursuant to legislation
Total audit fees
Other services pursuant to legislation
Tax services
Total non-audit fees
52 weeks
ended
30 March
2013
£000
52 weeks
ended
31 March
2012
£000
426
—
39
465
2013
£000
(479)
2,700
52
18,795
53,679
13
(369)
555
16
54
70
—
6
6
409
(18)
70
461
2012
£000
(584)
2,932
42
20,498
56,787
59
(393)
557
27
78
105
10
18
28
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Notes to the Accounts continued
6 Staff costs
Wages and salaries
Share-based payments
Social security costs
Other pension costs
Termination benefits
2013
£000
16,203
—
1,134
1,160
298
18,795
2012
£000
17,798
47
1,283
1,370
—
20,498
Directors’ remuneration is included as part of the staff costs above. Directors’ remuneration is disclosed separately
in the Directors’ Report on page 11 and forms part of these financial statements. Termination benefits were in
respect of former Directors Mr A Bullock and Mr B Poynter.
Average number employed (including executive directors of subsidiaries)
Directors
Sales and Marketing
Production
Logistics
Maintenance
Finance, IT and Administration
2013
10
74
333
47
37
41
542
2012
10
74
421
46
40
42
633
Pension costs
The Group operates a number of money purchase pension schemes. The companies and the employees
contribute towards the schemes. The total pension cost for the Group was £1,160,000 (2012: £1,370,000), of
which £364,000 (2012: £430,000) relates to the UK schemes. The total contributions outstanding at year-end was
£nil (2012: £nil ).
7 Taxation
Current tax
— Current year UK
— Current year overseas
— Adjustments in respect of prior years
Deferred tax (note 19)
— Credit recognised in the current year
— Adjustments in respect of prior years
— Effect of rate change
Total tax
Tax (credit)/charge before effect of exceptional items
Tax credit in respect of exceptional items
Total tax
2013
£000
—
165
(52)
113
(854)
12
(9)
(851)
(738)
(428)
(310)
(738)
2012
£000
—
823
—
823
(270)
(1)
(91)
(362)
461
561
(100)
461
Corporation tax is calculated at 24% and 30% (2012: 26% and 30%) of the estimated assessable loss/profit for
the year in the UK and Australia respectively. Taxation for other jurisdictions is calculated at the prevailing rates.
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7 Taxation continued
The tax (credit)/charge for the year can be reconciled to the (loss)/profit per the income statement as follows:
2013
£000
2013
%
(Loss)/profit before tax
Continuing operations
Tax at the UK corporation tax rate of 24% (2012: 26%)
Tax effect of share of result of associate
Tax effect of items that are not deductible/non taxable
in determining taxable profit
Effect of different tax rates of subsidiaries operating in
other jurisdictions
Effect of change in rate
Movement in deferred tax on land due to indexation
Tax adjustments in relation to share options
Tax losses not recognised for deferred tax
Adjustments to prior periods
Tax (credit)/expense and effective tax rate for the year
(3,520)
(845)
44
38
53
(9)
(6)
22
5
(40)
(738)
24.0
(1.3)
(1.1)
(1.5)
0.3
0.2
(0.6)
(0.1)
1.1
21.0
8 Dividends
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 March 2012 paid during the period
7.0p per share (2012: 6.0p)
Interim dividend for the year ended 30 March 2013 paid during the period
2.0p per share (2012: 3.5p)
Proposed final dividend for the year ended 30 March 2013 of 6.0p per share
(2012: 7.0p)
2012
£000
1,547
402
(22)
9
152
(91)
(19)
31
(1)
461
2013
£000
486
141
627
422
2012
%
26.0
(1.4)
0.6
9.8
(5.9)
(1.2)
2.0
(0.1)
29.8
2012
£000
417
243
660
486
The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not
been included as a liability in these financial statements.
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Notes to the Accounts continued
9
(Loss)/earnings per share
The calculation of the basic, adjusted and diluted (loss)/earnings per share is based on the following data:
(Loss)/profit attributable to ordinary equity holders of
the parent entity
Exceptional items (net of tax effect):
Restructuring of Australia’s spinning mills
Move to AIM
Incentive plan
General Meeting costs
Write off of certain intangible assets
Impairment of investment in associated company
Ireland restructuring costs
(Loss)/earnings for the purpose of basic, adjusted and
diluted (loss)/earnings per share
Weighted average number of shares
Basic
2013
£000
Adjusted
2013
£000
Basic
2012
£000
Adjusted
2012
£000
(2,782)
(2,782)
1,086
1,086
—
—
—
—
—
—
—
608
177
173
459
336
259
—
—
—
—
—
—
—
—
—
—
—
216
—
—
344
(2,782)
(770)
1,086
1,646
Weighted average number of ordinary shares for the purposes of
basic (loss)/earnings per share
Effect of dilutive potential ordinary shares:
Long Term Incentive Plan and Performance Share Plan *
Weighted average number of ordinary shares for the purposes of
diluted (loss)/earnings per share
The Group’s (loss)/earnings per share are as follows:
Basic adjusted
Diluted adjusted *
Basic
Diluted *
2013
Number of
shares
(000)
2012
Number of
shares
(000)
7,033
6,944
—
747
7,033
7,691
2013
Pence
(10.95)
(10.95)
(39.56)
(39.56)
2012
Pence
23.71
21.40
15.64
14.12
* There was no difference in the weighted average number of shares used for the calculation of basic and diluted
loss per share in 2013 as the effect of all potentially dilutive shares outstanding was anti-dilutive.
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10 Rates of exchange
The results of overseas subsidiary and associated undertakings have been translated into Sterling at the average
exchange rates prevailing during the periods. The balance sheets are translated at the exchange rates prevailing at
the period ends:
Australia — A$
Ireland — €
Canada — C$
11 Intangible assets
Cost
Amortisation
Net book value
At 3 April 2011
Additions
Exchange differences
At 31 March 2012
At 1 April 2012
Exchange differences
At 30 March 2013
At 3 April 2011
Exchange differences
Charges for the period
At 31 March 2012
At 1 April 2012
Exchange differences
Charges for the period
Impairment
At 30 March 2013
At 30 March 2013
At 31 March 2012
At 2 April 2011
2013
2012
Average
1.5317
1.2215
1.5841
Year-end
1.4565
1.1825
1.5427
Average
1.5270
1.1559
1.5870
Year-end
1.5423
1.1998
1.5969
Group
Total
£000
653
400
(8)
1,045
1,045
—
1,045
264
(3)
42
303
303
—
52
442
797
248
742
389
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The intangible assets held at 30 March 2013 relate to the acquisition of the trade and assets of Munster Carpets
and Navan Carpets and relate to customer lists acquired and the brand names. They are amortised over 20
years. Part of this intangible asset related to the use of the Munster brand in the UK contract market and is no
longer used in this specific market. As a result, the remaining balance of £72,000 relating to this element was fully
impaired in the year ended 30 March 2013.
The £400,000 addition to intangible assets in the prior year related to the acquisition of the trade and certain
assets of C&H Distribution in September 2011 and was in respect to customer lists acquired, the brand name and
a supplier exclusivity agreement. The C&H brand and products have now largely been replaced with the launch of
our own Victoria Luxury Flooring (‘VLF’) branded products. As a result, the remaining balance of £370,000 relating
to this has been fully impaired in the year ended 30 March 2013.
No intangible assets were held by the Company.
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Notes to the Accounts continued
12 Property, plant and equipment
Property, plant and equipment
Freehold
land and
buildings
£000
11,695
12
17
56
—
11,780
11,780
283
—
—
12,063
820
1
121
—
942
942
19
122
—
1,083
10,980
10,838
10,875
Cost
At 3 April 2011
Exchange differences
Additions
Transfers
Disposals
At 31 March 2012
At 1 April 2012
Exchange differences
Additions
Disposals
At 30 March 2013
Accumulated depreciation
At 3 April 2011
Exchange differences
Charge for the year
Disposals
At 31 March 2012
At 1 April 2012
Exchange differences
Charge for the year
Disposals
At 30 March 2013
Net book value
At 30 March 2013
At 31 March 2012
At 2 April 2011
Group
Fixtures,
vehicles
and
equipment
£000
Plant and
machinery
£000
44,617
73
886
(56)
(545)
44,975
44,975
1,634
97
(257)
46,449
29,798
32
2,497
(513)
31,814
31,814
1,178
2,218
(251)
34,959
11,490
13,161
14,819
3,339
3
561
—
(439)
3,464
3,464
118
753
(808)
3,527
2,496
1
314
(326)
2,485
2,485
79
360
(705)
2,219
1,308
979
843
Total
£000
59,651
88
1,464
—
(984)
60,219
60,219
2,035
850
(1,065)
62,039
33,114
34
2,932
(839)
35,241
35,241
1,276
2,700
(956)
38,261
23,778
24,978
26,537
Company
Fixtures,
vehicles
and
equipment
£000
37
—
—
—
—
37
37
—
—
(37)
—
32
—
4
—
36
36
—
—
(36)
—
—
1
5
Freehold
land and
buildings
£000
5,493
—
13
—
—
5,506
5,506
—
—
—
5,506
420
—
60
—
480
480
—
60
—
540
4,966
5,026
5,073
Total
£000
5,530
—
13
—
—
5,543
5,543
—
—
(37)
5,506
452
—
64
—
516
516
—
60
(36)
540
4,966
5,027
5,078
Land and buildings were professionally valued at 4 April 2004 and this valuation was adopted as deemed cost on
adoption of IFRS.
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12 Property, plant and equipment continued
Included within fixed assets are the following:
Held under finance leases:
Cost at 30 March 2013
Accumulated depreciation at 30 March 2013
Depreciation charged in year
Held under finance leases:
Cost at 31 March 2012
Accumulated depreciation at 31 March 2012
Depreciation charged in year
There were no assets under hire purchase at 30 March 2013.
Being acquired under hire purchase agreements:
Cost at 31 March 2012
Accumulated depreciation at 31 March 2012
Depreciation charged in year
Capital expenditure authorised and committed at the period end :
Contracts placed
Group
Fixtures,
vehicles
and
equipment
£000
Plant and
machinery
£000
—
—
—
—
—
—
3,623
1,417
125
729
220
143
796
238
149
—
—
—
Group
2013
£000
6
Total
£000
729
220
143
796
238
149
3,623
1,417
125
2012
£000
—
The Company held no assets under finance lease or hire purchase agreements and had no capital commitments
at either year-end.
13 Fixed asset investments
Investment property
Investment in subsidiaries
Group
Company
2013
£000
180
—
2012
£000
180
—
2013
£000
180
3,322
2012
£000
180
3,322
Note
(a)
(b)
a) Investment property
Investment properties were professionally valued at 4 April 2004 and this valuation was adopted as deemed cost
on adoption of IFRS.
The Company is in negotiations to sell its 6.25 acre sports field in Kidderminster, Worcestershire to Wyre Forest
District Council for £850,000. The land has an existing use value in the balance sheet of £80,000.
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Notes to the Accounts continued
13 Fixed asset investments continued
a) Investment property continued
The Board does not consider the investment property to have met the criteria for a non-current asset held for sale
in accordance with IFRS 5 as at the year-end 30 March 2013, and is therefore held at deemed cost.
b) Investment in subsidiaries
The investment represents shares in subsidiaries at cost.
Victoria PLC owns directly or indirectly the whole of the allotted ordinary share capital of the following principal
subsidiary companies.
Victoria Carpets Limited
Westwood Yarns Limited
The Victoria Carpet Company Pty Limited
Country of incorporation
and operation
Nature of
business
England
England
Australia
Carpet manufacture
Yarn manufacture
Carpet manufacture
14 Assets held for sale
Victoria PLC owns 50% of the common shares of Colin Campbell & Sons Limited, a carpet distributor
incorporated in Canada, whose accounting period ended on 31 March 2013 (2012: 31 March).
Cost of investment
Return of capital
Share of post-acquisition profits (retained by
associated company)
Impairment of investment in associate company
Group
Company
2013
£000
101
(45)
592
(259)
389
2012
£000
101
(45)
502
—
558
2013
£000
101
(45)
—
—
56
2012
£000
101
(45)
—
—
56
The Board has resolved to dispose of the Group’s investment in its Canadian associate Colin Campbell & Sons
Limited. The investment, which is expected to be sold within 12 months, has been classified as an asset held for
sale and presented separately on the balance sheet. The Board has reviewed the value of its investment and that
assessment has resulted in impairment in the value of the investment held.
15 Inventories
Raw materials
Work-in-progress
Finished goods
Group
2013
£000
6,454
673
13,739
20,866
2012
£000
6,371
1,154
18,441
25,966
The Company held no inventories at either year-end. There is no material difference between the balance sheet
value of inventories and their replacement cost.
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16 Trade and other receivables
Amounts falling due within one year :
Trade debtors
Amounts owed by subsidiaries
Amounts owed by associated company
Other debtors
Prepayments and accrued income
Group
Company
2013
£000
10,667
—
106
55
335
11,163
2012
£000
10,812
—
166
76
622
11,676
2013
£000
—
4,213
—
—
68
4,281
2012
£000
—
4,735
76
—
1
4,812
The average credit period taken on sale of goods is 55 days (2012: 51 days). No interest is charged on past due
receivables.
Amounts owed by subsidiaries to the Company are not considered to be impaired.
The above amounts are stated net of an allowance (net of VAT) of £212,000 (2012: £174,000) made for
estimated irrecoverable amounts from sale of goods. The movement of this allowance account during the year is
summarised below:
Opening balance at 1 April 2012
Increase in provisions
Written off against provisions
Recovered amounts
Exchange differences
Closing balance at 30 March 2013
2013
£000
174
103
(64)
(6)
5
212
2012
£000
369
37
(207)
(22)
(3)
174
An analysis of the age of trade receivables that are past due at the reporting date but not impaired can be seen in
the table below:
1–30 days overdue
31–60 days overdue
> 60 days overdue
Total
2013
£000
2,687
78
94
2,859
2012
£000
2,417
104
268
2,789
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Notes to the Accounts continued
16 Trade and other receivables continued
An analysis of the age of impaired trade receivables is as follows:
Current
1–30 days overdue
31–60 days overdue
> 60 days overdue
Total
2013
£000
—
185
19
197
401
2012
£000
1
222
48
170
441
The main factors in assessing the impairment of trade receivables are the age of the balance and the
circumstances of the individual customer. The Directors consider that the carrying amount of all receivables,
including those impaired, approximate to their fair value.
17 Trade and other payables
Amounts falling due within one year:
Trade creditors
Amounts due to subsidiaries
Other creditors
Accruals and deferred income
Amounts falling due after one year:
Other creditors and deferred income
Group
Company
2013
£000
5,075
—
2,269
2,280
9,624
2012
£000
9,226
—
2,169
2,072
13,467
2013
£000
—
32
—
197
229
Group
Company
2013
£000
1,954
1,954
2012
£000
2,253
2,253
2013
£000
—
—
2012
£000
—
886
—
169
1,055
2012
£000
—
—
Other creditors and deferred income relate primarily to the deferred income of government grants as shown in
note 25.
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18 Other financial liabilities
Amounts falling due within one year:
Bank loans and overdrafts
Hire purchase and finance lease creditors
Amounts falling due after more than one year:
Bank loans
— Between one and two years
Hire purchase and finance lease obligations payable
— Between one and two years
— Between two and five years
Group
Company
2013
£000
7,566
143
7,709
2012
£000
7,726
439
8,165
2013
£000
4,246
—
4,246
2012
£000
3,078
—
3,078
Group
Company
2013
£000
500
163
227
890
2012
£000
—
143
245
388
2013
£000
500
—
—
500
2012
£000
—
—
—
—
2012
£000
—
—
The loans falling due after more than one year are repayable as follows:
— Between one and two years
— Between two and five years
Group
Company
2013
£000
500
—
2012
£000
—
—
2013
£000
500
—
The Directors consider that the carrying amounts of other financial liabilities approximate to their fair value.
Bank borrowings in the United Kingdom amounting to £7.87m (2012: £7.51m) are secured by charges over a
freehold property and a debenture. Bank borrowings of the Australian subsidiary are secured by a mortgage on
certain freehold properties and a floating charge over its assets; however, the Australian company was in a net
cash position of £1.0m at the year-end (2012: net cash position of £0.77m).
The Company has guaranteed the bank borrowings of its UK subsidiaries and there is a Composite Accounting
Agreement between the Company, Victoria Carpets Limited, Westwood Yarns Limited and Barclays Bank PLC.
The bank borrowings of UK subsidiaries guaranteed by the Company at 30 March 2013 was £3.12m
(2012: £4.43m). The Company has also guaranteed an overdraft facility provided by Barclays Bank PLC to
Munster Carpets Limited of which £0.19m was outstanding at 30 March 2013 (2012: £0.22m).
During the year the Group refinanced its UK bank facilities, transferring the majority of its borrowings from short
term overdraft to a three year facility expiring in July 2015.
The average effective interest rate of borrowings is set out in note 26 “Financial instruments”.
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£000
2012
£000
2013
£000
2012
£000
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Notes to the Accounts continued
18 Other financial liabilities continued
Operating lease arrangements
The Group as lessee
The Company had no operating leases during the years ended 30 March 2013 and 31 March 2012. Details of
operating lease arrangements for the Group are as follows:
Minimum lease payments under operating leases recognised in the
income statement for the year
2013
£000
555
2012
£000
557
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under
non-cancellable operating leases, which fall due as follows:
Minimum lease payments
Within one year
In the second to fifth years inclusive
After five years
Present value of minimum lease payments
Within one year
In the second to fifth years inclusive
After five years
2013
£000
456
687
38
1,181
2013
£000
401
483
18
902
2012
£000
458
854
7
1,319
2012
£000
403
595
3
1,001
Operating lease payments represent rentals payable by the Group principally for vehicles and certain of its
properties. Leases of vehicles are usually negotiated for a term of 3–5 years and rentals are fixed for the term of
the lease. Leases of land and buildings are usually negotiated for 5–15 years and rentals reviewed after 5 years.
19 Deferred taxation
At 3 April 2011
Exchange adjustment
Credit to income statement (note 7)
Effect of rate change (note 7)
Deferred tax on share option scheme taken to equity
At 31 March 2012
At 1 April 2012
Exchange adjustment
Credit to income statement (note 7)
Effect of rate change (note 7)
Deferred tax on share option scheme taken to equity
At 30 March 2013
Group
£000
657
(3)
(271)
(91)
(10)
282
282
(44)
(842)
(9)
39
(574)
Company
£000
978
—
(119)
(65)
(10)
784
784
—
(332)
(20)
39
471
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19 Deferred taxation continued
The provision for deferred taxation is as follows:
Capital allowances
Liability on recovering value through sale
Deferred grant income
Tax losses
Other timing differences
Group
Company
2013
£000
1,361
429
(532)
(1,346)
(486)
(574)
2012
£000
1,560
467
(613)
(511)
(621)
282
2013
£000
567
304
—
(402)
2
471
2012
£000
597
324
—
(59)
(78)
784
The provision is based on taxation rates of 23% in the UK and 30% in Australia (2012: 24% and 30% respectively).
Effect on UK deferred tax balances of proposed changes in the UK corporation tax rate
Legislation reducing the main rate of corporation tax from 24% to 23% with effect from 1 April 2013 was
substantively enacted during the period. Accordingly, current tax has been provided for at a rate of 24% and
deferred tax has been provided for at a rate of 23% in these financial statements.
In the 2013 Budget, issued on 20 March 2013, the Government announced that the main rate of corporation tax
would be reduced to 20% with effect from 1 April 2015 and had previously announced a reduction to 21% with
effect from 1 April 2014. These rate reductions have not yet been substantively enacted, so their effect has not
been reflected in these financial statements.
The proposed reductions of the main rate of corporation tax to 21% from 1 April 2014 and 20% from 1 April 2015
are expected to be enacted separately each year. If the deferred tax liabilities of the UK were all to reverse after
2015, the effect of the reduction from 23% to 20% would be to reduce the net deferred tax liability by £0.03m. To
the extent that the net deferred tax liability reverses more quickly than this, the impact of the rate reductions on the
net deferred tax liability will be reduced.
Deferred tax assets and liabilities
The deferred tax balances shown on the balance sheet are:
Deferred tax liabilities
Deferred tax assets
Group
Company
2013
£000
749
(1,323)
(574)
2012
£000
1,094
(812)
282
2013
£000
471
—
471
2012
£000
784
—
784
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Notes to the Accounts continued
20 Share capital
Allotted, called up and fully paid
7,033,185 Ordinary shares of 25p each (2011: 6,943,556)
The Company has one class of Ordinary shares which carry no right to fixed income.
2013
£000
2012
£000
1,758
1,736
The Company issued 89,629 fully paid ordinary shares of 25p each during the year ended 30 March 2013, in
connection with the exercise of share options under the Company’s Long Term Incentive Plan.
Capital risk management
The Group considers its capital to comprise its Ordinary share capital, share premium, accumulated retained
earnings and net debt. In managing its capital, the Group’s primary objective is to ensure its continued ability to
provide a consistent return for its equity shareholders through a combination of capital growth and distributions.
In order to achieve this objective, the Group monitors its gearing to balance risks and returns at an acceptable
level and also to maintain a sufficient funding base to enable the Group to meet its working capital and strategic
investment needs. In making decisions to adjust its capital structure to achieve these aims, either through altering
its dividend policy, new share issues, or the reduction of debt, the Group considers not only its short term position
but also its long term operational and strategic objectives.
Following the refinancing of the Group’s UK facilities in July 2012, which converted the majority of the UK facilities
from a short term overdraft to a longer term three year facility, the Group is subjected to two financial covenants.
These covenants are tested quarterly and were not breached during the year and have not been subsequently.
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21 Reserves
i. Share premium and retained earnings
52 weeks ended 31 March 2012
At
2 April
2011
£000
Income
statement
£000
Dividends
paid
Other
movements
£000
52 weeks ended 30 March 2013
At
31 March
2012
£000
Income
statement
£000
Dividends
paid
Other
movements
£000
At
30 March
2013
£000
Group
Share premium
Profit and loss
account
Adjustments arising
out of consolidation:
Goodwill
Exchange rates
Retained earnings
Company
Share premium
Retained earnings
829
—
—
—
829
—
—
—
829
30,274
1,086
(660)
10 30,710
(2,782)
(627)
(39) 27,262
(1,533)
8,326
37,067
—
—
1,086
829
6,115
—
337
—
—
(660)
—
(660)
— (1,533)
72
8,398
82 37,575
—
—
(2,782)
—
10
829
5,802
—
(467)
—
—
(627)
—
(627)
— (1,533)
1,597
9,995
1,558 35,724
—
(39)
829
4,669
The loss of the Company for the year determined in accordance with the Companies Act 2006 was £467,000
(2012: profit of £337,000). The Company is exempt under Section 408 of the Companies Act 2006 from
presenting its own income statement and statement of comprehensive income.
ii. Share-based payment reserve
Group
Company
Balance at 31 March 2012
Movement in Income Statement in year
Issue of share capital through LTIP scheme
Exchange rates
Balance at 30 March 2013
2013
£000
180
—
(22)
4
162
2012
£000
130
47
—
3
180
22 Reconciliation of movements of shareholders’ equity of Group
(Loss)/profit on ordinary activities after taxation
Dividends
Exchange differences on translation of foreign operations
Movement in share-based payment reserve
Issue of share capital
Deferred tax on share options
Net (reduction)/addition to shareholders’ funds
Opening shareholders’ equity
Closing shareholders’ equity
2013
£000
113
—
(10)
—
103
2013
£000
(2,782)
(627)
(3,409)
1,597
(18)
22
(39)
(1,847)
40,320
38,473
2012
£000
87
26
—
—
113
2012
£000
1,086
(660)
426
72
50
—
10
558
39,762
40,320
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Notes to the Accounts continued
23 Reconciliation of operating (loss)/profit to net cash inflow/(outflow) from operating activities
Group
Company
Operating (loss)/profit from continuing operations
Adjustments for:
— Depreciation charges
— Amortisation of intangible assets
— Impairment of intangible assets
— Share-based payment charge
— Share of loss/(profit) of associated company
— Loss/(profit) on disposal of property, plant and
equipment
— Exchange rate difference on consolidation
Operating cash flows before movements in
working capital
Decrease/(increase) in working capital
Cash generated/(used) by operations
Interest paid
Income taxes paid
Net cash inflow/(outflow) from operating activities
24 Analysis of net debt
Cash
Bank loans payable less than one year
and overdrafts
Cash and cash equivalents
Finance leases and hire purchase
agreements
— Payable less than one year
— Payable more than one year
Bank loans payable more than one year
Net debt
At
31 March
2012
£000
806
(7,726)
(6,920)
(439)
(388)
—
(7,747)
2013
£000
(3,055)
2,700
52
442
—
182
13
124
458
2,124
2,582
(465)
(506)
1,611
Cash
flow
£000
240
163
403
327
—
(500)
230
2012
£000
2,008
2,932
42
—
47
(85)
59
4
5,007
(2,239)
2,768
(478)
(1,405)
885
2013
£000
(714)
60
—
—
—
—
(8)
—
(662)
(282)
(944)
(105)
—
(1,049)
Other
non-cash
changes
£000
Exchange
movement
£000
—
—
—
(20)
20
—
—
45
(3)
42
(11)
(22)
—
9
2012
£000
254
64
—
—
26
—
—
—
344
1,061
1,405
(120)
—
1,285
At
30 March
2013
£000
1,091
(7,566)
(6,475)
(143)
(390)
(500)
(7,508)
The Group’s policy on derivatives and other financial instruments is set out in note 26 “Financial instruments”.
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25 Government grants
During the year ended 30 March 2013, the Group’s Australian operations benefited from government assistance
under the SIP (Strategic Investment Programme) which was accounted for as follows:
Deferred income at 31 March 2012
Total grant income in the year
Less: grants related to income (taken to income and shown as other operating
income)
Less: amortisation to deferred income by release through cost of production in the
year
Exchange differences
Deferred income at 30 March 2013
Presented in:
Current liabilities
Non-current liabilities
Deferred income at 30 March 2013
2013
£000
2,042
—
2012
£000
2,396
50
—
(21)
(369)
101
1,774
370
1,404
1,774
(393)
10
2,042
366
1,676
2,042
There are no unfulfilled conditions or other contingencies attaching to government assistance that has been
recognised.
26 Financial instruments
Background
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments.
This note describes the Group’s objectives, policies and processes for managing those risks and the methods
used to measure them. Further quantitative information in respect of these risks is presented throughout the
financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives,
policies and processes for managing those risks or the methods used to measure them from previous periods
unless otherwise stated in this note.
The “financial instruments” which are affected by these risks comprise borrowings, cash and liquid resources
used to provide finance for the Group’s operations, together with various items such as trade debtors and trade
creditors that arise directly from its operations, inter-company payables and receivables, and any derivatives
transactions (such as interest rate swaps and forward foreign currency contracts) used to manage the risks from
interest rate and currency rate volatility.
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies
and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating
processes that ensure the effective implementation of the objectives and policies to the Group’s finance function.
The Board receives monthly reports through which it reviews the effectiveness of the processes put in place and
the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly
affecting the Group’s competitiveness and flexibility. Further details regarding these policies are set out as follows:
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Notes to the Accounts continued
26 Financial instruments continued
Credit risk
The Group’s principal financial assets are bank balances and cash, trade and other receivables and investments.
The Group’s exposure to credit risk is primarily attributable to its trade receivables. Credit risk is managed locally
by the management of each business unit. Prior to accepting new customers, credit checks are obtained from
reputable external sources. The amounts presented in the balance sheet are net of allowance 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 on the recoverability of the cash flows.
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks
with low credit risk assigned by international credit-rating agencies.
The Group has no significant concentration of credit risk, with exposure spread over a large number of
counterparties and customers.
The Company has no significant concentration of credit risk, other than with its own subsidiaries, the
performances of which are closely monitored. The Directors confirm that the carrying amounts of monies owed by
its subsidiaries approximate to their fair value.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital and the finance charges and principal
repayments on its debt instruments. It is the risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due. The Group’s policy is to ensure that it will always have sufficient cash to allow it to
meet its liabilities when they become due.
To achieve this aim, the cash position is continuously monitored to ensure that cash balances (or agreed facilities)
meet expected requirements for a period of at least 90 days.
The Board monitors annual cash budgets and updated forecasts against actual cash position on a monthly basis.
At the balance sheet date, these projections indicated that the Group expected to have sufficient liquid resources
to meet its obligations under all reasonably expected circumstances.
The maturity of financial liabilities is detailed in note 18 ‘Other financial liabilities’.
Market risk
Market risk arises from the Group’s use of interest bearing and foreign currency financial instruments. It is the risk
that the fair value of future cash flows of a financial instrument will fluctuate because of changes in interest rates
(interest rate risk) or foreign exchange rates (currency risk).
a) Interest rate risk
The Group finances its operations through a mixture of retained profits, equity capital and bank facilities, including
hire purchase and lease finance. The Group borrows in the desired currency at floating or fixed rates of interest
and may then use interest rate swaps to secure the desired interest profile and manage exposure to interest rate
fluctuations.
Interest rate sensitivity
The annualised effect of a 50 basis point decrease in the interest rate at the balance sheet date on the variable
rate debt carried at that date would, all other variables held constant, have resulted in a decrease in post-tax loss
for the year of £28,000. (2012: increase in post-tax profit £28,000). A 50 basis point increase in the interest rate
would, on the same basis, have increased the loss for the year by the same amount.
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26 Financial instruments continued
Effective interest rate analysis
In respect of income-earning financial assets and interest bearing financial liabilities, the following table indicates
their effective interest rates for the rermaining contractual maturity based on the discounted cash flows of financial
liabilities based on the earliest date on which the Group can be required to pay.
As at 30 March 2013
As at 31 March 2012
Effective
interest
rate
%
Total
£000
0–1
years
£000
1–2
years
£000
2–5
years
£000
Effective
interest
rate
%
Total
£000
0–1
years
£000
1–2
years
£000
2–5
years
£000
Group
Cash and cash
equivalents
Bank loans &
overdraft
Finance lease
and HP
Company
Bank loans &
overdraft
0.94
1,091
1,091
—
—
0.96
806
806
3.38 (8,066)
(7,566)
(500)
—
2.82
(7,726)
(7,726)
(533)
7.51
4.03 (7,508)
(129)
(6,604)
(45)
(545)
(359)
(359)
6.58
3.41
(827)
(7,747)
(319)
(7,239)
—
—
(65)
(65)
—
—
(443)
(443)
2.65 (4,746)
(4,246)
(500)
—
2.65
(3,078)
(3,078)
—
—
Non-interest bearing liabilities
Non-interest bearing liabilities falling due within one year
Details of trade and other payables falling due within one year are set out in note 17.
2013
£000
9,624
2012
£000
13,467
b) Currency risk
The main currency exposure of the Group arises from the ownership of the Australian subsidiary, which accounts
for approximately 75% of the Group’s net assets.
It is the Board’s policy not to hedge against movements in the Sterling/Australian exchange rate.
Other currency exposure derives from trading operations where goods are exported or raw materials and capital
equipment are imported. These exposures may be managed by forward currency contracts, particularly when the
amounts or periods to maturities are significant and at times when currencies are particularly volatile.
Currency risk sensitivity
The effect of a 10% strengthening of the Australian Dollar against Sterling over the full year would, all other
variables held constant, have resulted in a decrease in Group post-tax loss for the year of £64,000 (2012:
increased Group post-tax profit by £226,000). A 10% weakening in the exchange rate would, on the same basis,
have increased Group post-tax loss by £52,000 (2012: decreased Group post-tax profit by £185,000).
The effect of a 10% strengthening of the Australian Dollar against Sterling at year-end rates would have resulted
in an increase to equity of £3,190,000 (2012: an increase of £3,041,000). A 10% weakening in the exchange rate
would, on the same basis, have decreased equity by £2,610,000 (2012: decrease of £2,488,000).
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Notes to the Accounts continued
26 Financial instruments continued
The effect of a 10% strengthening of the Euro against Sterling over the full year would, all other variables held
constant, have resulted in an increase in Group post-tax loss for the year of £2,000 (2012: decreased Group post-
tax profit by £29,000). A 10% weakening in the exchange rate would, on the same basis, have decreased Group
post-tax loss by £1,000 (2012: increased Group post-tax profit by £24,000).
The effect of a 10% strengthening of the Euro against Sterling at year-end rates would have resulted in a decrease
to equity of £2,000 (2012: £nil). A 10% weakening in the exchange rate would, on the same basis, have increased
equity by £1,000 (2012: £nil).
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the
reporting date are as follows:
Australian Dollar
Liabilities
2013
£000
7,912
2012
£000
9,889
Assets
2013
£000
2012
£000
36,627
37,255
c) Trading
It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments
shall be undertaken.
27 Key sources of estimation uncertainty
In applying the Group’s accounting policies, appropriate estimates have been made in a number of areas and the
actual outcome may vary from the position described in the Group’s and Company’s balance sheets at 30 March
2013. The key sources of uncertainty at the balance sheet date that may give rise to a material adjustment to the
carrying value of assets and liabilities within the next financial year are as follows:
Deferred tax assets (£1,323,000; 2012: £812,000)
Deferred tax assets are recognised at the balance sheet date based on the assumption that there is a high
expectation that the asset will be realised in due course. This assumption is dependent on the UK and Australia’s
ability to generate sufficient future taxable profits.
Inventories (£20,866,000; 2012: £25,966,000)
A proportion of inventory is made up of stocks which are not expected to sell for the full normal selling price, either
because they are remnants, come from discontinued ranges, or are below the required quality standard. This
inventory is carried at a value which reflects the Directors’ best estimates of achievable selling prices. The carrying
amount of inventories carried at fair value less costs to sell amounted to £1,831,000 (2012: £1,434,000). During
the year, provisions relating to these stocks increased by £326,000 (2012: an increase of £454,000).
Trade receivables
Details of the provision made for non-recoverability of debts due to the Group from the sale of goods are set out
under note 16.
Assets held for sale
The impairment charge in our Canadian associate is an estimate as set out under note 14.
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28 Share-based payments
Victoria PLC 2008 Long Term Incentive Plan and 2011 Performance Share Plan
The Group has a Long Term Incentive Plan (LTIP) which was established in 2008 and Performance Share Plan
(PSP) established in 2011 which entitle Executive Directors to purchase shares in the Company subject to
achievement of specific performance conditions.
The following options were held at 30 March 2013 under the Group’s LTIP plan:
At
31 March
2012
Granted in
period
Market
price
on issue
(p)
Earliest
date
of exercise
Expired or
forfeited
in period
Exercised
in period
At
30 March
2013
Victoria PLC 2008 Long
Term Incentive Plan
Alan Bullock
Ian Davies
Barry Poynter
Terry Danks
Shaun Lewis
Neil Glover
Trevor Chippendale
Anne Seymour
135,531
103,641
157,275
50,525
46,190
44,343
47,332
84,593
—
—
—
—
—
—
—
—
LTIP:
At start of period
Forfeited during the period
Exercised during the period
Expired during the period
Outstanding at end of the period
Exercisable at end of the period
— 28/07/2012
—
—
—
—
— 28/07/2012
— 28/07/2012
—
—
—
—
—
—
59,095
45,190
74,463
22,030
20,140
19,335
20,631
40,949
—
58,451
82,812
—
—
25,008
26,701
43,644
76,436
—
—
28,495
26,050
—
—
—
Number of shares
2013
Weighted average exercise price (p)
2012
2013
2012
669,430
—
(236,616)
(301,833)
130,981
130,981
727,530
(58,100)
—
—
669,430
—
189.3
—
—
—
170.8
170.8
189.3
—
—
—
189.3
—
The 236,616 of share options exercised in the year were net settled, resulting in the issue of 89,629 Ordinary shares.
The LTIP options outstanding at 30 March 2013 had a weighted average exercise price of 170.8p and a weighted
average remaining contractual life of one year. The vesting period is three years from the date of issue of the LTIP.
The following options were held at 30 March 2013 under the Group’s PSP plan:
At
31 March
2012
Granted in
period
Market
price
on issue
(p)
Earliest
date
of exercise
Expired or
forfeited
in period
Exercised
in period
At
30 March
2013
Victoria PLC 2011
Performance Share Plan
Alan Bullock
Ian Davies
Barry Poynter
Anne Seymour
19,278
15,464
27,305
15,332
—
—
—
—
—
—
—
—
—
—
— 07/12/2014
19,278
15,464
27,305
—
—
—
—
—
—
—
—
15,332
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Notes to the Accounts continued
28 Share-based payments continued
PSP:
At start of period
Granted during the period
Forfeited during the period
Exercised during the period
Expired during the period
Outstanding at end of the period
Exercisable at end of the period
Number of shares
2013
Weighted average exercise price (p)
2012
2013
2012
77,379
—
(62,047)
—
—
15,332
—
—
77,379
—
—
—
77,379
—
0.0
—
—
—
—
0.0
—
—
0.0
—
—
—
0.0
—
In the year ended 31 March 2012, options were granted in December 2011 under the PSP plan. The aggregate
of the estimated fair value of the options granted in the year ended 31 March 2012 is £175,000. The PSP options
have an exercise price of 0.0p. The weighted average remaining contractual life of the PSP options is three years.
The vesting period is three years from the date of issue of the PSP share options.
The total stock option charge in the year is £nil (2012: £47,000).
The fair value of the LTIP and PSP rights are calculated at the date of grant using the Black-Scholes model. The
inputs into the Black–Scholes are as follows:
Number of share options awards
Exercise price
Expected volatility
Expected life
Risk-free interest rate
Expected dividend yields
Dec 11
PSP award
77,379
0.00
41%
5 years
1.1%
5%
Dec 10
LTIP award
206,192
236.0
41%
5 years
2.6%
5%
Jul 09
LTIP award
521,338
170.8
41%
5 years
2.6%
5%
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the
previous five years. The expected useful life in the model has been adjusted, based on Management’s best
estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
29 Related parties
Transactions between the Company and its subsidiaries have been eliminated on consolidation.
Identity of related parties
The Group has a related party relationship with its associate and its Directors and executive officers.
The Company has a related party relationship with its associate, its subsidiaries and its Directors and executive
officers.
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29 Related parties continued
Transactions with key management personnel
Key management personnel are considered to be the Directors of the Company and its subsidiaries.
As at 30 March 2013, the key management personnel, and their immediate relatives controlled 1.2% of the voting
shares of the Company.
The remuneration of the key management personnel of the Group is set out below in aggregate for each of the
categories specified in IAS 24 ''Related Party Disclosures''.
Short term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
Termination benefits were in respect of former Directors Mr A Bullock and Mr B Poynter.
Transactions with associated company:
Group
52 weeks
30 March
2013
£000
1,107
149
298
—
1,554
52 weeks
31 March
2012
£000
1,513
211
—
47
1,771
Group
Company
52 weeks
30 March
2013
£000
654
30 March
2013
£000
106
52 weeks
31 March
2012
£000
321
31 March
2012
£000
166
52 weeks
30 March
2013
£000
—
30 March
2013
£000
—
Sale of goods
Amounts due from associated undertakings
Transactions with subsidiary undertakings:
Dividend income — The Victoria Carpet Company Pty Limited
Rental income — Victoria Carpets Limited
Amounts due from subsidiary undertakings
Amounts due to subsidiary undertakings
Company
52 weeks
30 March
2013
£000
842
80
30 March
2013
£000
4,213
32
52 weeks
31 March
2012
£000
—
31 March
2012
£000
76
52 weeks
31 March
2012
£000
825
658
31 March
2012
£000
4,735
886
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Five Year Record
52 weeks
30 March
2013
£000
52 weeks
31 March
2012
£000
52 weeks
2 April
2011
£000
52 weeks
3 April
2010
£000
53 weeks
4 April
2009
£000
70,909
2,331
(2,752)
(421)
(465)
(886)
(2,634)
(3,520)
738
77,126
5,642
(2,974)
2,668
(461)
2,207
(660)
1,547
(461)
70,503
5,358
(2,962)
2,396
(472)
1,924
—
1,924
(715)
(2,782)
1,086
1,209
563
729
625
24,206
23,155
(1,380)
45,981
2,587
35,886
38,473
7,508
45,981
(0.92)
(9.15)
(39.6)
(11.0)
8.0
n.a
n.a
26,458
24,144
(2,535)
48,067
2,565
37,755
40,320
7,747
48,067
5.55
3.84
15.6
23.7
10.5
1.49
2.26
27,593
21,668
(3,268)
45,993
2,565
37,197
39,762
6,231
45,993
5.21
4.84
17.4
18.3
9.0
1.93
2.04
62,973
4,406
(2,753)
1,653
(565)
1,088
—
1,088
(460)
628
556
28,636
19,366
(3,556)
44,446
2,565
34,690
37,255
7,191
44,446
3.72
2.92
9.0
9.0
8.0
1.13
1.13
62,150
4,641
(2,411)
2,230
(768)
1,462
—
1,462
(1,073)
389
556
27,699
19,464
(3,129)
44,034
2,565
30,001
32,566
11,468
44,034
5.06
4.49
5.6
15.0
8.0
0.70
1.87
%
%
p
p
p
times
times
Results of continuing
operations
Revenue
EBITDA (note a)
Depreciation and amortisation
Operating (loss)/profit (pre
exceptional items)
Finance costs
(Loss)/profit before tax and
exceptional items
Exceptional items
(Loss)/profit before tax
Tax
(Loss)/profit attributable to
shareholders
Dividend attributable to the
period
ASSETS EMPLOYED
Operating assets
Non-current assets
Net current assets (note b)
Non-current liabilities
Financed by
Share capital and premium
Retained reserves
Shareholders' funds
Net debt
ANALYSIS
Return on operating assets
Return on shareholders' funds
(Loss)/earnings per share
(basic)
(Loss)/earnings per share
(basic adjusted)
Dividend per share
attributable to the period
Dividend cover (basic)
Dividend cover (adjusted)
Notes
(a) Earnings before interest, tax, depreciation, amortisation and exceptional items.
(b) Excluding net debt, but including fair value of financial instruments where applicable.
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Shareholder Information
Corporate website
The Annual Report, Company announcements and other information are available at www.victoriaplc.com.
Shareholder queries
If you have any queries relating to Victoria PLC shares, please contact the Company’s Registrars whose details are as
follows: Capita Registrars,The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.
Telephone: 0871 664 0300 Overseas: +44 20 8639 3399 website: www.capitaregistrars.com
Financial calendar
Results
Preliminary results
Annual General Meeting
Half year results
Dividend
Final dividend
— ex dividend
— payable
Wednesday, 31 July 2013
Tuesday, 24 September 2013
November 2013
Wednesday, 4 September 2013
Thursday, 3 October 2013
Dividend payments
Our Registrars have the facility to pay shareholders’ dividends directly into their bank accounts, instead of receiving
the dividend payment by cheque. They are also able to convert dividend payments into local currency and send the
funds by currency draft or, again, if preferred, pay them straight into a bank account.
More information on the above services can be obtained from Capita Registrars or downloaded from the Group’s
website: www.victoriaplc.com/victoriaplc/investors/downloads/
Unsolicited mail
The Company is required by law to make its share register available on request to the public and organisations which
may use it as a mailing list resulting in shareholders receiving unsolicited mail. Shareholders wishing to limit such mail
should write to the Mailing Preference Service, DMA House, 70 Margaret Street, London, W1W 8SS or register online
at www.mpsonline.org.uk
Victoria PLC Registered office
Worcester Road
Kidderminster
Worcestershire, DY10 1JR
Company Registered No. (England & Wales)
282204
Advisors
Auditor: Nexia Smith & Williamson – 25 Moorgate, London, EC2R 6AY
Banker: Barclays Bank PLC – PO Box 3333, One Snow Hill, Snow Hill Queensway, Birmingham, B3 2WN
Registrar: Capita Registrars Ltd – The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU
Solicitor: Brown Rudnick LLP – 8 Clifford Street, London, WS1 2LQ
Stockbroker: Cantor Fitzgerald Europe – 1 America Square, 17 Crosswall, London, EC3N 2LB
Public Relations: MHP Communications – 60 Great Portland Street, London, W1W 7RT
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Glossary
CFD
EBIT
EBITDA
Contract for Difference
Earnings before interest and tax
Earnings before interest, tax, depreciation, amortisation and exceptional items
Exceptional Items
Non-recurring transactions which are material by virtue of their size or incidence
IAS
IFRS
LTIP
LVT
KPIs
PBT
PSP
VLF
International Accounting Standards
International Financial Reporting Standards
Long Term Incentive Plan
Luxury Vinyl Tile
Key Performance Indicators used to assess business performance
Profit before taxation
Performance Share Plan
VictoriaTM Luxury Flooring Division
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Shareholder Notes
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Principal Subsidiaries and their Directors
Associated Undertaking
Colin Campbell & Sons Limited
Distribution of carpets and rugs
Vancouver, Canada
Chris Dragan (President)
Ken Metrick
Jamie Metrick
Geoff Wilding
Victoria Carpets Limited
Manufacture, distribution and sale of carpets
Kidderminster, UK
Terry Danks
Shaun Lewis
Neil Glover
The Victoria Carpet Company Pty Limited
Manufacture and sale of carpets
Dandenong, Australia
Michael Oakley (Non-executive Chairman)
Phil Smith (Managing)
Anne Seymour
Michael Davies (Non-executive)
Warwick Whyte (Non-executive)
Westwood Yarns Limited
Manufacture and sale of carpet yarns
Holmfirth, UK
Trevor Chippendale (Managing)
Terry Danks
Financial Calendar
Financial Statements
Preliminary results announcement
31 July 2013
AGM
Half year results
24 September 2013
November 2013
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Victoria PLC
Worcester Road
Kidderminster
Worcestershire
DY10 1JR
Tel: +44 (0)1562 749300
Fax: +44 (0)1562 749649
www.victoriaplc.com
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