Reabold Resources Regulatory News (RBD)

19 Aug 2005 10:48

Adventis Group PLC19 August 2005 19 August 2005 ADVENTIS GROUP PLC EARLY ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) Adventis Group plc ("Adventis" or "the Group"), the specialist multi-mediamarketing and advertising agency, announces that from 1 January 2005, the Groupwill "early adopt" and prepare its consolidated financial statements inaccordance with International Financial Reporting Standards ("IFRS"), as adoptedby the European Union ("EU") and applicable to all AIM quoted companies forfinancial reporting periods beginning on or after 1 January 2007. The Group's first results to be published under IFRS will be for the six monthsto 30 June 2005. The comparative information in those financial statements mustbe restated to IFRS. This report is to inform shareholders of the impact on theGroup's financial position and results for 2004 due to the change from reportingunder UK General Accepted Accounting Principles (UK GAAP) to IFRS. The information presented in this document sets out the adjustments between theaudited UK GAAP prepared financial statements for 2004 and unaudited restatedIFRS results for the same period. The IFRS standards that principally affect adjustments between UK GAAP and IFRSare: * IFRS 2 Share Based Payment * IAS 38 Intangible Assets * IAS 12 Income Taxes * IAS 10 Events After the Balance Sheet Date - covering dividends Highlights, unaudited restated IFRS numbers * 2004 Group turnover unchanged * 2004 Group profit before tax £0.564m (UK GAAP - £0.559m) * Earnings per share unchanged * Net assets of the Group £5.849m (UK GAAP - £5.790m) Enquiries: Charles Phillpot, Chief Executive John DepasqualeAllan Collins, Financial Director Seymour Pierce LimitedAdventis Group plc Tel: 0207 107 8010Tel: 020 7034 4750 Sarah Gestetner / Justin GriffithsCitigate Dewe RogersonTel: 020 7638 9571 1. Basis of Preparation The numbers set out under IFRS in this document have been prepared on the basisof current interpretation and application of IFRS Standards as at July 2005,subject to the exemptions set out below. However, if the InternationalAccounting Standards Board make changes to the standards and interpretationsbefore 31 December 2005, then the figures will be amended in the first full IFRSaccounts to be published in March 2006. IFRS 1, First Time Adoption of International Financial Reporting Standards,outlines how to apply IFRS to the consolidated financial statements for thefirst time. The Group's transition date is 1 January 2004 and the standardpermits certain exemptions from the full requirements of IFRS as at that date. The Group has taken the following key exemptions or options as at transition: a) Business combinationsIFRS 3, Business Combinations: The Group has taken the option not to restate anybusiness combinations that were recorded by the Group before the date oftransition. b) Fair value or revaluation at deemed costThe Group has decided that property, plant and equipment are to remain recordedat their historical cost and has not restated these items at their fair value. 2. Transition Explanations Following the decision to take the exemptions noted above there are noadjustments required to Shareholders Funds on transition to IFRS as at 1 January2004. 3.1 Effect of the change to IFRS on the Income Statement for the year ended 31December 2004 (unaudited) ------- ----- ------- UK GAAP IFRS3 IFRS3 IFRS 2 Total IFRS 12 IAS 21 Negative Share impact 12 months based months to Goodwill Goodwill payment of to 31.12.04 IFRS 31.12.04 Notes '000 '000 '000 '000 '000 '000------------------ ----- ------- ------- ------- ------- ------ ------- Revenue 12,087 12,087 ------- ------- ------- ------- ------ -------Total revenue 12,087 12,087------------------ ----- ======= ======= ======= ======= ====== ======= Staff costs (2,432) (2,432)Depreciationexpense (61) (61)AmortisationofGoodwill/Intangibles 3.3a (17) 17 17 0Amortisationof NegativeGoodwill 3.3a 3 (3) (3) 0Other expenses 3.3b (8,955) (13) (13) (8,968) ------- ------- ------- ------- ------ -------Total expenses (11,462) 17 (3) (13) 1 (11,461) ------- ------- ------- ------- ------ -------Operatingprofit 625 17 (3) (13) 1 626 Finance costs- net 148 148Profit beforetax 773 17 (3) (13) 1 774Income taxexpense (214) 4 4 (210) ------- ------- ------- ------- ------ -------Profit for theperiod 559 17 (3) (9) 5 564 ------- ------- ------- ------- ------ ------- 3.2 Effect of the change to IFRS on the Balance Sheet as at 31 December 2004(unaudited) ------- ----- ------- IFRS 2 UK IFRS3 IFRS3 Share Total GAAP IAS21 Negative based IAS10 impact IFRS 31.12.2004 Goodwill Goodwill payment Dividend of 31.12.2004 IFRS Note '000 '000 '000 '000 '000 '000 '000---------------- ---- ------- ------ ------ ------ ------ ----- -------ASSETSNon-currentassetsProperty,plant andequipment 184 184Goodwill 3.3a 200 17 42 59 259 ------- ------ ------ ------ ------ ----- ------- 384 17 42 59 443 ------- ------ ------ ------ ------ ----- -------Current assetsWork inprogress 5 5Trade andotherreceivables 2,218 2,218Cash and cashequivalents 3,183 3,183 ------- ------ ------ ------ ------ ----- ------- 5,406 5,406 ------- ------ ------ ------ ------ ----- -------Total assets 5,790 17 42 59 5,849 ------- ------ ------ ------ ------ ----- -------EQUITYCapital &reservesattributableto equityholders of theparent Share capital 79 79Other reserves 2,783 2,783Retainedearnings 3.3a 1,034 17 42 (9) 130 180 1,214 ------- ------ ------ ------ ------ ----- ------- 3,896 17 42 (9) 130 180 4,076Minorityinterest 1 1 ------- ------ ------ ------ ------ ----- -------Total equity 3,897 17 42 (9) 130 180 4,077---------------- ----- ======= ====== ====== ====== ====== ===== =======LIABILITIESNon-currentliabilitiesCreditors dueafter one year 10 10Provisions forliabilitiesand charges 5 5 ------- ------ ------ ------ ------ ----- ------- 15 15 ------- ------ ------ ------ ------ ----- -------CurrentLiabilitiesPayables/creditors due < 1year 3.3d 1,712 (130) (130) 1,582Current incometaxliabilities 157 (4) (4) 153Borrowings 9 9Provisions forliabilitiesand charges 3.3b 0 13 13 13 -------- ------- ------- ------- ------- ------ -------- 1,878 9 (130) (121) 1,757 -------- ------- ------- ------- ------- ------ --------Totalliabilities 1,893 9 (130) (121) 1,772 ======== ======= ======= ======= ======= ====== ======== -------- ------- ------- ------- ------- ------ --------Total equityandliabilities 5,790 17 42 0 0 59 5,849-------------- -------- ------- ------- ------- ------- ------ -------- 3.3 Explanation of Adjustments for the year ended December 2004 a) IAS 38 Intangible Assets IAS 38 requires an intangible asset with a finite useful life to be amortisedover its expected life and tested for impairment whenever there is an indicationthat the intangible asset may be impaired (such as if losses are made). Goodwillrepresents the remaining unidentifiable intangible assets of an acquisitionafter deducting the identifiable intangibles. Goodwill is not amortised fromtransition and is subject to annual impairment testing. Goodwill amortisation under UK GAAP of £14,000, which includes a charge of£17,000 and a release of £3,000 (against negative goodwill), for the year hasbeen reversed. This increases the profit before and after tax by £14,000. Underthe transitional arrangements the total value of negative Goodwill as at 1January 2004, £45,000, has been written back to reserves. b) IFRS 2 Share Based Payment The following adjustments have been made for the year to 31 December 2004: UK GAAP IFRS 2 Total adjustmentShare Option Schemes - (13,000) (13,000) Impact on profit before tax - (13,000) (13,000)Tax - 4,000 4,000Impact on profit after tax - (9,000) (9,000) This adjustment decreases profit after tax by £9,000. c) IAS 12 Deferred Tax The deferred tax liability on undistributed reserves remain unchanged for theyear. d) IAS 10 Events After the Balance Sheet Date The final dividend in respect of 2004 of £130,000 is not recognised at thebalance sheet date under IFRS. 4. Earnings Per Share Due to the small scale of the adjustment the basic and diluted earnings pershare as at 31 December 2004 remain unchanged. 5. Accounting Policies to be adopted from 1 January 2005 Basis of AccountingThe Group accounts have been prepared in accordance with International FinancialReporting Standards (IFRS) as adopted by the European Union and with those partsof the Companies Act 1985 applicable to companies reporting under IFRS. The 2005 financial statements will be the Group's first consolidated financialstatements prepared under IFRS, with a transition date of 1 January 2004.Consequently, the comparative figures for 2004 and the Group's balance sheet asat 1 January 2004 have been restated to comply with IFRS. In addition, IFRS1,First time adoption of International Financial Reporting Standards allowscertain exemptions from retrospective application of IFRS in the opening balancesheet for 2004 and where these have been used they are explained in theaccounting policies below. The preparation of financial statements in conformity with generally acceptedaccounting principles requires the use of estimates and assumptions that affectthe reported amounts of assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting period. Although these estimates are based on management's bestknowledge of the amount, event or actions, actual results ultimately may differfrom those estimates. The financial statements have been prepared under the historical costconvention, as modified to include the revaluation of investment properties andfinancial assets. ConsolidationThe consolidated Accounts include the Accounts of the Company and its subsidiaryundertakings, together with the Group's share of results of its associates andjoint ventures. A subsidiary is an entity controlled by the Group, where control is the power togovern the financial and operating policies of the entity, so as to obtainbenefit from its activities. The results of subsidiary undertakings acquired during the period are includedfrom the date of acquisition of a controlling interest at which date, for thepurpose of consolidation, the purchase consideration is allocated between theunderlying net assets acquired, including intangible assets other than goodwill,on the basis of their fair value. The results of the subsidiary undertakings that have been sold during the yearare included up to date of disposal. The profit or loss is calculated byreference to the net asset value at the date of disposal, adjusted for purchasedgoodwill previously included on the balance sheet.F.Wray@numiscorp.com Inter company balances and transactions, and any unrealised gains arising frominter company transactions, are eliminated in preparing the consolidatedfinancial statements. AssociatesAssociates comprise investments in undertakings, which are not subsidiaryundertakings, where the Group's interest in the equity capital is long term andover whose operating and financial policies the Group exercises a significantinfluence. They are accounted using the equity method. Joint VenturesA joint venture is a contractual arrangement whereby two or more partiesundertake an economic activity that is subject to joint control, which existsonly when the strategic financial and operating decisions relating to theactivity require the unanimous consent of the venturer's. The Group's jointventures are accounted for using the equity method. GoodwillGoodwill arising on acquisition is capitalised and subject to annual impairmentreviews. Goodwill represents the excess of the cost of acquisition of asubsidiary or associate over the Group's share of the fair value of identifiablenet assets acquired. Goodwill is stated at cost less accumulated impairmentlosses. Goodwill acquired from 1 May 1998 to 31 December 2003 was capitalised andamortised over its useful economic life. As permitted under IFRS1, in respect ofacquisitions prior to 1 January 2004, the classification and accountingtreatment of business combinations has not been amended on transition to IFRS.Goodwill previously written off direct to reserves under UK GAAP is not recycledto the income statement on the disposal of the subsidiary or associate to whichit relates. Goodwill in respect of subsidiaries is included in intangible assets. In respectof associates, goodwill is included in the carrying value of the investment inthe associated company. TurnoverTurnover represents commissions and fees receivable excluding VAT. Share-Based PaymentsThe fair value determined at the grant date of the equity-settled share-basedpayments is expensed on a straight-line basis over the vesting period, based onthe Group's estimate of shares that will eventually vest. For cash-settledshare-based payments, which have not vested at 1 January 2005, a liability equalto the portion of the service received is recognised at the current fair valuedetermined at each balance sheet date. The fair value of equity-settled share based payments is measured by the use ofActuarial Binomial option pricing model. The fair value of cash-settled sharebased payments is measured using the method considered to be most appropriate.Property, Plant and EquipmentProperty, plant and equipment is stated at historical cost less accumulateddepreciation and impairment. Provision for depreciation is made at ratescalculated on a straight-line basis to write-off the assets over their estimateduseful lives as follows: YearsLeasehold property (less than 50 years) over unexpired term of leaseFurniture & office equipment 15% reducing balanceComputer equipment 33% reducing balance Intangible Assets other than GoodwillIntangible assets acquired as part of business combinations are valued at fairvalue on acquisition and amortised over the useful life. The useful lives ofthese assets are determined on a case by case basis. The useful life of suchintangible assets currently ranges from 5 to 10 years. Amortisation charges arespread over the period of the assets useful life. Computer software is carried at cost less accumulated amortisation and isamortised on a straight-line basis over a period ranging from three to fiveyears. Accounting for LeasesAssets financed by leasing agreements which give rights approximating toownership (finance leases) are capitalised in property, plant and equipment.Finance lease assets are initially recognised at an amount equal to the lower oftheir fair value and the present value of the minimum lease payments atinception of the lease, then depreciated over their estimated useful lives. Thecapital elements of future obligations under finance leases are included asliabilities in the balance sheet. Leasing payments comprise capital and financeelements and the finance element is charged to the income statement. The annual payments under all other lease agreements, known as operating leases,are charged to the income statement on a straight line basis over the leaseterm. Work in ProgressWork in progress is stated at the lower of cost and net realisable value. Costincludes an appropriate proportion of overheads. TaxationTaxation is that chargeable on the profits for the period, together withdeferred taxation. Deferred taxation is provided in full on temporary differences between thecarrying amount of assets and liabilities for financial reporting purposes andthe amount used for taxation purposes. Deferred tax is provided on temporarydifferences arising on investments in subsidiaries and associates, except wherethe timing of the reversal of the temporary difference is controlled by theGroup and it is probable that it will not reverse in the foreseeable future. Adeferred tax asset is recognised only to the extent that is probable that futuretaxable profits will be available against which the asset can be utilised.Deferred tax assets and liabilities are not discounted. Deferred tax is determined using the tax rates that have been enacted orsubstantially enacted by the balance sheet date and are expected to apply whenthe related deferred tax asset is realised or deferred tax liability is settled. Tax is recognised in the income statement except to the extent that it relatesto items recognised directly in equity, in which case it is recognised inequity. Impairment of AssetsAssets that have indefinite useful lives are tested annually for impairment,while assets that are subject to amortisation are reviewed for impairmentwhenever events indicate that the carrying amount may not be recoverable. Animpairments loss is recognised to the extent that the carrying value exceeds thehigher of the asset's fair value less cost to sell and its value in use. Pension CostsThe Group operates a defined contribution individual pension plans.Contributions in respect of defined contribution pension schemes are charged tothe income statement when they are payable. Foreign Currency TranslationForeign currency transactions are initially recorded at the exchange rate rulingat the date of the transaction. Foreign exchange gains and losses resulting fromthe settlement of such transactions and from the translation at year-end ratesof exchange are recognised in the income statement. DividendsFinal dividend distributions to the Company's shareholders are recognised as aliability in the Group's financial statements in the period in which thedividends are approved by the Company's shareholders, while interim dividenddistributions are recognised in the period in which the dividends are declared. Segmental AnalysisA business segment is a group of assets and operations engaged in providingproducts or services that are subject to risks and returns that are differentfrom those of other business segments. A geographical segment is engaged inproviding products or services within a particular economic environment that issubject to risks and returns that are different from those of segments operatingin other economic environments. Repurchase of Share CapitalWhen share capital is repurchased, the amount of consideration paid, includingdirectly attributable costs, is recognised as a charge to equity. Repurchasedshares which are not cancelled are classified as treasury shares and presentedas a deduction from total equity. This information is provided by RNS The company news service from the London Stock Exchange