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be, last re-elected as a Director by a resolution of the Company in General Meeting passed at any time prior to the annual general meeting of the Company that took place two years previously; but (ii) is not required to retire from office by this Article 121(A), shall also retire from office." By Order of the Board B R Hartog, Company Secretary Date q Registered Office: The Crystal Building Langston Road Loughton Essex IG10 3TH Notes 1. A shareholder entitled to attend and vote at the meeting is entitled to appoint a proxy and/or alternate proxies (who need not be a member of the Company) to attend and, on a poll, vote in his/her place. 2. To be valid, Forms of Proxy, duly signed, together with the power of attorney or authority (if any) under which they are signed (or a certified copy of such power or authority) must be lodged with the Company's Registrar, IRG Plc, Balfour House, 390-398 High Road, Ilford, Essex IG1 1NQ by not later than 10.30 a.m. on 1 June 1999. Completion of a Form of Proxy will not affect the right of a member to attend and vote at the meeting. 3. Pursuant to regulation 34 of the Uncertified Securities Regulations 1995 the Company gives notice that only those shareholders entered on the register of members of the Company at 6.00 p.m. on 1 June 1999 will be entitled to attend or vote at the aforesaid general meeting in respect of the number of shares registered in their name at that time. If the meeting is adjourned, the time by which a person must be entered in the register of members in order to have the right to attend or vote at the adjourned meeting is 6.00 p.m. on the day preceding the date fixed for the adjourned meeting. Changes to entries in the register after the relevant time will be disregarded in determining the rights of any person to attend or vote at any meeting. 4. The Register of Directors' Interests in Shares will, together with the Directors' Service Agreements, be available for inspection during usual business hours on any weekday at the registered office from this date until the date of the Annual General Meeting and at the place of meeting for fifteen minutes prior to and until the termination of the meeting. - 28 -
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such expiry, enter into a contract of purchase under which such purchase may be completed or executed wholly or partly after the expiration of this authority. 9. That, pursuant to section 9 of the Companies Act 1985, the Articles of Association of the Company be altered by deleting the present Article 121 and substituting the following new Article 121 therefore: "121. (A) the Directors to retire by rotation shall be those who have been longest in office since their last election; as between persons who became or were last elected Directors on the same day, those to retire by rotation shall (unless they otherwise agree among themselves) be determined by lot. The Directors to retire (both as to number and as to identity) shall be determined by the composition of the Board at the date of the notice convening the annual general meeting, and no Director shall be required to retire or be relieved from retiring by reason of any change in the number or identity of the Directors or the appointment of him or any of them to be an executive Director after the date of such notice but before the close of the meeting. (B) At any annual general meeting of the Company, any Director who: (i) was elected or, as the case may be, last re-elected as a Director by a resolution of the Company in General Meeting passed at any time prior to the annual general meeting of the Company that took place two years previously; but (ii) is not required to retire from office by this Article 121(A), shall also retire from office." By Order of the Board B R Hartog, Company Secretary Date q Registered Office: The Crystal Building Langston Road Loughton Essex IG10 3TH Notes 1. A shareholder entitled to attend and vote at the meeting is entitled to appoint a proxy and/or alternate proxies (who need not be a member of the Company) to attend and, on a poll, vote in his/her place. 2. To be valid, Forms of Proxy, duly signed, together with the power of attorney or authority (if any) under which they are signed (or a certified copy of such power or authority) must be lodged with the Company's Registrar, IRG Plc, Balfour House, 390-398 High Road, Ilford, Essex IG1 1NQ by not later than 10.30 a.m. on 1 June 1999. Completion of a Form
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TESCO PLC ANNUAL REPORT A N D F I N A N C I A L S TAT E M E N T S 19 9 9 Tesco is a growth business In the UK, Tesco is the leading food retailer with 639 stores. We aim to increase food sales while developing our non-food business, offering the convenience of one-stop shopping to our customers. Outside the UK, we currently have 182 stores. In the last financial year, we acquired the largest food retailing business in Ireland and we are expanding our hypermarket businesses in Central Europe and Asia. By understanding customer needs better than anyone, we aim to increase value for customers, earning their lifetime loyalty and to enhance returns to shareholders. This publication includes the operating and financial review, the Directors' report, the corporate governance statement, the accounts and the auditors' report for the 52 weeks ended 27 February 1999. The Chairman's statement and review of the business are contained in a separate statement entitled Annual Review and Summary Financial Statement 1999. These Annual Accounts together with the Annual Review and Summary Financial Statement 1999 comprise the full Annual Report and Accounts of Tesco PLC for 1999, in accordance with the Companies Act 1985. Copies may be obtained, free of charge, by writing to the Company Secretary, Tesco House, Delamare Road, Cheshunt, Hertfordshire EN8 9SL. Telephone 01992 632222. 1 Financial highlights 2 Operating and financial review 7 Directors' report 9 Corporate governance 12 Report of the Directors on Remuneration 17 Statement of Directors' responsibilities 17 Auditors' report 18 Group profit and loss account 19 Statement of total recognised gains and losses 19 Reconciliation of movements in shareholders' funds 20 Balance sheets 21 Group cash flow statement 22 Accounting policies 24 Notes to the financial statements 41 Five year record Financial highlights TESCO PLC ANNUAL REPORT 1999 1 Group sales* up 6.3% ··Group operating profit* up 7.8% Earnings per share * up 7.7% ··Dividend per share* up 6.5% Group sales (including value added tax) Group operating profit (prior to integration costs and goodwill amortisation) Profit on ordinary activities before tax Group enterprise value (market capitalisation plus net debt) Earnings per share Dividend per share 1999 52 weeks £m 18,
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of charge, by writing to the Company Secretary, Tesco House, Delamare Road, Cheshunt, Hertfordshire EN8 9SL. Telephone 01992 632222. 1 Financial highlights 2 Operating and financial review 7 Directors' report 9 Corporate governance 12 Report of the Directors on Remuneration 17 Statement of Directors' responsibilities 17 Auditors' report 18 Group profit and loss account 19 Statement of total recognised gains and losses 19 Reconciliation of movements in shareholders' funds 20 Balance sheets 21 Group cash flow statement 22 Accounting policies 24 Notes to the financial statements 41 Five year record Financial highlights TESCO PLC ANNUAL REPORT 1999 1 Group sales* up 6.3% ··Group operating profit* up 7.8% Earnings per share * up 7.7% ··Dividend per share* up 6.5% Group sales (including value added tax) Group operating profit (prior to integration costs and goodwill amortisation) Profit on ordinary activities before tax Group enterprise value (market capitalisation plus net debt) Earnings per share Dividend per share 1999 52 weeks £m 18,546 965 881 13,528 9.37p 4.12p 1998* 52 weeks (proforma) £m 17,447 895 817 12,556 8.70p 3.87p 1998 53 weeks (restated) £m 17,779 912 832 12,556 8.84p 3.87p Number of stores Retail selling area (000 sq ft) 821 21,353 781 18,254 781 18,254 Adjusted diluted Excluding net loss on disposal of fixed assets, net loss on disposal of discontinued operations, integration costs and goodwill amortisation * 1998/99 was a 52 week year compared to 53 weeks for 1997/98. A proforma 52 week profit and loss account for 1998 has been used for comparison 1997 52 weeks £m 14,984 774 750 8,121 7.83p 3.45p 758 16,747 617 724 774 895* 965 10,877 13,028 14,984 17,447* 18,546 Group sales
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546 965 881 13,528 9.37p 4.12p 1998* 52 weeks (proforma) £m 17,447 895 817 12,556 8.70p 3.87p 1998 53 weeks (restated) £m 17,779 912 832 12,556 8.84p 3.87p Number of stores Retail selling area (000 sq ft) 821 21,353 781 18,254 781 18,254 Adjusted diluted Excluding net loss on disposal of fixed assets, net loss on disposal of discontinued operations, integration costs and goodwill amortisation * 1998/99 was a 52 week year compared to 53 weeks for 1997/98. A proforma 52 week profit and loss account for 1998 has been used for comparison 1997 52 weeks £m 14,984 774 750 8,121 7.83p 3.45p 758 16,747 617 724 774 895* 965 10,877 13,028 14,984 17,447* 18,546 Group sales *52 weeks proforma £m 99 98 97 96 95 6.70 7.30 7.83 8.70* 9.37 Earnings per share (adjusted diluted) *52 weeks proforma pence 99 98 97 96 95 Group operating prof it (before integration costs and goodwill amortisation) *52 weeks proforma £m 99 98 97 96 95 1,321 1,156 1, 219 Operating cash flow Capital expenditure 1,067 1,0 46 666 872 Operating cash flow and capital expenditure £m 770 758 841 99 98 97 96 95 2 TESCO PLC ANNUAL REPORT 1999 Operating and financial review This operating and financial review analyses the performance of Tesco in the financial period ended 27 February 1999. It also explains certain other aspects of the Group's results and operations including taxation and treasury management. Group summary Group sales (including value added tax) 1999 £m 1998* Change £m
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*52 weeks proforma £m 99 98 97 96 95 6.70 7.30 7.83 8.70* 9.37 Earnings per share (adjusted diluted) *52 weeks proforma pence 99 98 97 96 95 Group operating prof it (before integration costs and goodwill amortisation) *52 weeks proforma £m 99 98 97 96 95 1,321 1,156 1, 219 Operating cash flow Capital expenditure 1,067 1,0 46 666 872 Operating cash flow and capital expenditure £m 770 758 841 99 98 97 96 95 2 TESCO PLC ANNUAL REPORT 1999 Operating and financial review This operating and financial review analyses the performance of Tesco in the financial period ended 27 February 1999. It also explains certain other aspects of the Group's results and operations including taxation and treasury management. Group summary Group sales (including value added tax) 1999 £m 1998* Change £m % 18,546 17,447 6.3 Group operating profit (prior to integration costs and goodwill amortisation) 965 895 7.8 Profit on ordinary activities before tax 881 817 7.8 Adjusted diluted earnings per share 9.37p 8.70p 7.7 Dividend per share 4.12p 3.87p 6.5 * 52 weeks proforma Excluding net loss on disposal of fixed assets and discontinued operations, integration costs and goodwill amortisation The financial period to 28 February 1998 was a 53 week trading year compared to a 52 week trading period this financial year. All comparisons in this operating and financial review are based on a 52 week proforma profit and loss account for 1998. Group performance Group sales including VAT increased by 6.3% to £18,546m (1998 ­ £17,447m). Group sales from continuing businesses increased by 10.1% (1998 ­ £16,847m). 18,546 17,447* 14,984 Group sales UK retail sales
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c Sucha Beskidzka (2) Szczawno Ustron´ Wadowice (2) Walbrzych (3) W. roc­law Zywiec (2) Czech Republic (8) Brno (2) Hradec Králové Liberec Pardubice Prague (2) Plzen Slovakia (7) Branska Bystrica Bratislava Kosice Nitra Presov Stara Turá Zilina Thailand (14) Bangkok (5) Chiang Mai Khon Kaen Mahachai Nakhonsri Pattaya Phitsanulok Saraburi Suphanburi Suratthani Group opening programme Stores opened in 1998/99 Sales area Extras (sq ft) 91,000 Cardiff 86,000 Peterborough Sales area (sq ft) 33,500 33,500 33,500 31,500 Superstores Kensington Oldham Ramsgate Sevenoaks Sales area Compact (sq ft) stores 16,500 16,500 17,000 13,000 21,000 20,500 24,000 21,000 20,500 16,500 21,000 Abertillery Axminster Bishop's Cleeve Brigg Chard Chepstow Dungannon (NI) Enfield Hackney Milford Haven Musselburgh Sales area (sq ft) 26,500 16,000 16,000 22,000 21,000 Sales area (sq ft) 12,000 Compact stores cont'd Port Talbot Tring Uttoxeter Woodford Green Woolton Metro Bishopsgate Sales area (sq ft) 2,500 2,500 Sales area (sq ft) 64,500 110,000 87,500 Express Leicester Selly Oak Hungary Kaposvár Szeged Székesfehérvár Sales area (sq ft) 107,000 Poland Wroc­law Sales area (sq ft) 106,000 107,000 Czech Republic Brno Prague Tesco PLC,Tesco House, Delamare Road, Cheshunt, Hertfordshire EN8 9SL Front cover: Customer assistant Irene Collins helping customers at our store in Sevenoaks
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inaside Bray (2) Calbridge Carlow Cavan Clonmel Cork (3) Drogheda Dublin (25) Dun Laoghaire (2) Dundalk (2) Edenderry Ennis Galway Gorey Greystones Killarney Letterkenny Limerick (3) Longford Lucan Mallow Maynooth Midleton Monaghan Mullingar Naas Nauan Newbridge Portlaoise Roscrea Shannon Sligo Thurles Tralee Tullamore Waterford (2) Wexford Wicklow France (1) Calais Tesco Vin-Plus Hungary (44) Budapest (2) Gy´o´r (18) Kaposvár Levél Mosonmagyaróvár (6) Sopron (13) Szeged Székesfehérvár Szombathely Poland (32) Andrychów (2) Bielsko-Bia­la (4) Glogow (3) Kety ( Kudowa Zdrój (2) Legnica Lubin Oswiecim (3) Nowa Ruda Skoczów S­l upiec Sucha Beskidzka (2) Szczawno Ustron´ Wadowice (2) Walbrzych (3) W. roc­law Zywiec (2) Czech Republic (8) Brno (2) Hradec Králové Liberec Pardubice Prague (2) Plzen Slovakia (7) Branska Bystrica Bratislava Kosice Nitra Presov Stara Turá Zilina Thailand (14) Bangkok (5) Chiang Mai Khon Kaen Mahachai Nakhonsri Pattaya Phitsanulok Saraburi Suphanburi Suratthani Group opening programme Stores opened in 1998/99 Sales area Extras (sq ft) 91,000 Cardiff 86,000 Peterborough Sales area (sq ft) 33,500 33,500 33,500 31,500 Superstores Kensington Oldham Ramsgate Sevenoaks Sales area Compact (sq ft) stores 16,500 16,500 17,000 13,000 21,000 20,500 24,000 21,000 20
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Report and Accounts 1 Corporate Statement 2 Group Financial Highlights 3 The Group at a Glance 4 Group Ten Year Financial Summary 5 Governor's Statement 10 Board of Directors 12 Members of the Management Board 14 Operating and Financial Review 42 Report by the Board of Directors to the Proprietors 50 Corporate Governance Statement 53 Report of the Auditors to the Proprietors 54 Accounting Policies 56 Consolidated Profit and Loss Account 57 Consolidated Statement of Total Recognised Gains and Losses 57 Historical Cost Profits 58 Consolidated Balance Sheet 60 Bank of Scotland Balance Sheet 62 Consolidated Cash Flow Statement 63 Notes on the Accounts 90 Other Financial Information 94 Principal Offices 96 Subsidiary Company Boards 97 Other Boards 98 Analyses of Proprietors' Holdings of Ordinary Stock 99 Ordinary Dividend Stock Alternative Scheme 99 Registrars 100 Calendar of Events 100 Base Price for Capital Gains Tax Bank of Scotland Report and Accounts 1999 Corporate Statement The Bank of Scotland Group aims: To meet its customers' needs by providing friendly, prompt, professional and imaginative service. To deliver a range of distinctive financial products and services throughout the United Kingdom and internationally. To train, develop, inform, encourage and respect staff so that they can perform an effective and fulfilling role. To maintain its reputation for integrity and stability. To make a particular contribution to the cultural and economic prosperity in the local communities in which it operates. The achievement of these aims will result in long term growth in profits and dividends for the benefit of its Proprietors. 1 Bank of Scotland Report and Accounts 1999 Group Financial Highlights Profits Operating profit before provisions (1998 ­ and before write-down of leases) Profit before tax (1998 ­ and before write-down of leases): Bank of Scotland (including Treasury Services) Capital Bank British Linen Bank Bank of Wales Bank of Western Australia Countrywide Banking Corporation Profit before tax (1998 ­ after write-down of leases) Profit attributable to Proprietors 1999 £ million 1,096.6 730.9 166.1 23.3 10.1 71.2 10.3# 1,011.9* 1,011.9* 556.8 1998 £ million 953.8 513.0 147.7 18.1 8.2 62.2 29.9 779.1* 742.0* 510.7 Balance
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effective and fulfilling role. To maintain its reputation for integrity and stability. To make a particular contribution to the cultural and economic prosperity in the local communities in which it operates. The achievement of these aims will result in long term growth in profits and dividends for the benefit of its Proprietors. 1 Bank of Scotland Report and Accounts 1999 Group Financial Highlights Profits Operating profit before provisions (1998 ­ and before write-down of leases) Profit before tax (1998 ­ and before write-down of leases): Bank of Scotland (including Treasury Services) Capital Bank British Linen Bank Bank of Wales Bank of Western Australia Countrywide Banking Corporation Profit before tax (1998 ­ after write-down of leases) Profit attributable to Proprietors 1999 £ million 1,096.6 730.9 166.1 23.3 10.1 71.2 10.3# 1,011.9* 1,011.9* 556.8 1998 £ million 953.8 513.0 147.7 18.1 8.2 62.2 29.9 779.1* 742.0* 510.7 Balance Sheet Total capital resources Total assets 4,874 59,796 4,438 54,697 Per Ordinary Stock unit of 25p Earnings (basic) Dividends Net asset value Market price at period end pence 42.1 11.60 207.4 902.0 pence 38.9 9.86 173.4 692.5 Ratios Pre-tax return on average total assets ** Pre-tax return on average equity ** Post-tax return on average equity Cost:Income ** Capital adequacy (1999 ­ estimated) ­ Total capital ­ Tier 1 capital % 1.5 32.4 22.1 49.1 11.1 6.8 % 1.5 33.9 24.3 50.7 11.7 6.8 # Results for the period to disposal on 11th September 1998. * Including non-recurring gains on sale of £162.4 million (1998 ­ £26.4 million) arising from discontinued operations. ** Excluding gains on sale arising from discontinued operations. Before write-down of leases of £37.1 million. 2 Bank of
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Sheet Total capital resources Total assets 4,874 59,796 4,438 54,697 Per Ordinary Stock unit of 25p Earnings (basic) Dividends Net asset value Market price at period end pence 42.1 11.60 207.4 902.0 pence 38.9 9.86 173.4 692.5 Ratios Pre-tax return on average total assets ** Pre-tax return on average equity ** Post-tax return on average equity Cost:Income ** Capital adequacy (1999 ­ estimated) ­ Total capital ­ Tier 1 capital % 1.5 32.4 22.1 49.1 11.1 6.8 % 1.5 33.9 24.3 50.7 11.7 6.8 # Results for the period to disposal on 11th September 1998. * Including non-recurring gains on sale of £162.4 million (1998 ­ £26.4 million) arising from discontinued operations. ** Excluding gains on sale arising from discontinued operations. Before write-down of leases of £37.1 million. 2 Bank of Scotland Report and Accounts 1999 The Group at a Glance Bank of Scotland Clearing Bank Pre-tax profit £679.9m, up 42% in year Customer lending £28.6bn Year's highlights Launch of Bank of Scotland Investors Club Continued mortgage growth Launch of Cashflow Finance Growth in North America Substantial PFI business More senior debt deals in UK MBO market than any other bank UNITED KINGDOM Branch Banking Banking Direct Corporate Banking International Division Bank of Scotland Treasury Services PLC Pre-tax profit £51.0m, up 44% in year Year's highlights Full service in Euros across product range Active in London money markets Continued to access US and Euro markets Customer Services (including Group funding and liquidity) Capital Bank plc Finance House Pre-tax profit £166.1m, up 12% in year Customer lending £11.5bn Year's highlights Market share gains, especially in personal business Improved cost:income ratio Record value of new business in all sectors Launch of several new joint ventures Personal Finance Business Finance Corporate Finance International Operations The British Linen Bank Limited Merchant Bank Pre-tax profit £
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Scotland Report and Accounts 1999 The Group at a Glance Bank of Scotland Clearing Bank Pre-tax profit £679.9m, up 42% in year Customer lending £28.6bn Year's highlights Launch of Bank of Scotland Investors Club Continued mortgage growth Launch of Cashflow Finance Growth in North America Substantial PFI business More senior debt deals in UK MBO market than any other bank UNITED KINGDOM Branch Banking Banking Direct Corporate Banking International Division Bank of Scotland Treasury Services PLC Pre-tax profit £51.0m, up 44% in year Year's highlights Full service in Euros across product range Active in London money markets Continued to access US and Euro markets Customer Services (including Group funding and liquidity) Capital Bank plc Finance House Pre-tax profit £166.1m, up 12% in year Customer lending £11.5bn Year's highlights Market share gains, especially in personal business Improved cost:income ratio Record value of new business in all sectors Launch of several new joint ventures Personal Finance Business Finance Corporate Finance International Operations The British Linen Bank Limited Merchant Bank Pre-tax profit £23.3m, up 29% in year Customer lending £881m Year's highlights Growth in healthcare-related PFI projects Corporate Advisory PFI Advisory Asset Finance Specialist Lending Development Capital Bank of Wales PLC Pre-tax profit £10.1m, up 23% in year Customer lending £395m Year's highlights New high interest deposit account launched Bank of Wales Direct Business Banking Venture Capital OVERSEAS Bank of Western Australia Ltd Pre-tax profit A$183.7m, up 12% in year Customer lending A$13.4bn Year's highlights Continued expansion of interstate business Joint venture with Pharmacy Guild of Australia Personal Banking Business Banking Corporate Banking 3 Personal Banking Branch and centralised banking for the personal sector Business Banking Banking for the small to medium business sectors Corporate Banking Banking for the large corporate sector and Structured Banking Bank of Scotland Report and Accounts 1999 Group Ten Year Financial Summary Year ended 28th/29th February 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
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end Team, Lloyds TSB Registrars, The Causeway, Worthing, West Sussex BN99 6DA, telephone 01903 502541. 99 Bank of Scotland Report and Accounts 1999 Calendar of Events 1999 Tuesday 4th May Friday 28th May Tuesday 15th June Friday 25th June Wednesday 29th September Monday 11th October Tuesday 30th November 2000 Tuesday 29th February Wednesday 31st May Tuesday 13th June Ex-dividend date for final dividend on the Ordinary Stock. Payment of dividends on the Preference Stocks for the half-year ended 28th February 1999. Annual General Meeting. Payment of final dividend on the Ordinary Stock for the year ended 28th February 1999. Announcement of results (unaudited) for the half-year ended 31st August 1999. Ex-dividend date for interim dividend on the Ordinary Stock. Payment of interim dividend on the Ordinary Stock and dividends on the Preference Stocks for the half-year ended 31st August 1999. Year-end. Payment of dividends on the Preference Stocks for the half-year ended 29th February 2000. Annual General Meeting. Base Price for Capital Gains Tax Sale of Bank Stock by a UK Proprietor may give rise to a Capital Gains Tax liability. The market value for Capital Gains Tax purposes at 31st March 1982 was £4.255 per £1 Capital Stock. This requires to be adjusted to take account of the capitalisation issues in 1984, 1988 and 1991, the rights issues in 1984, 1985 and 1991, and the stock split in December 1988. Allowing for those factors, the adjusted market value at 31st March 1982 for Proprietors who subscribed for their full entitlements under the rights issues is £0.4302564 per 25p Ordinary Stock unit. This value will require to be further adjusted to take account of indexation allowance and the effect of any election to accept new Ordinary Stock as an alternative to a cash dividend. Proprietors are recommended to consult their professional adviser if detailed Capital Gains Tax calculations require to be made. 100 Designed and produced by Tayburn Corporate Printed by Pillans & Wilson Greenaway, Edinburgh Bank of Scotland The Mound Edinburgh EH1 1YZ Tel: 0131 442 7777 www.bankofscotland.co.uk
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to be credited with new Ordinary Stock and first day of dealings in new Ordinary Stock. Proprietors who wish to be advised of the Reference Price and/or the basis of allotment of the new Ordinary Stock which will be calculated on 12th May 1999 should contact the Bank's Registrars as noted below. Proprietors may have accumulated a number of Ordinary Stock certificates, perhaps as a result of participation in the Ordinary Dividend Stock Alternative Scheme. Proprietors who wish to consolidate their Ordinary Stock certificates into one Ordinary Stock certificate may send them (a minimum of four certificates) at their own risk to the Bank's Registrars in Edinburgh at the address noted below. A single Ordinary Stock certificate will be returned in due course. There will be no charge for this service. Registrars The Bank's stock ledgers are maintained by Lloyds TSB Registrars Scotland, 117 Dundas Street, Edinburgh EH3 5ED. For general enquiries they may be contacted by telephone on 0870 6015366 (national call rate). For enquiries relating to the Ordinary Dividend Stock Alternative Scheme the contact details are: The Share Dividend Team, Lloyds TSB Registrars, The Causeway, Worthing, West Sussex BN99 6DA, telephone 01903 502541. 99 Bank of Scotland Report and Accounts 1999 Calendar of Events 1999 Tuesday 4th May Friday 28th May Tuesday 15th June Friday 25th June Wednesday 29th September Monday 11th October Tuesday 30th November 2000 Tuesday 29th February Wednesday 31st May Tuesday 13th June Ex-dividend date for final dividend on the Ordinary Stock. Payment of dividends on the Preference Stocks for the half-year ended 28th February 1999. Annual General Meeting. Payment of final dividend on the Ordinary Stock for the year ended 28th February 1999. Announcement of results (unaudited) for the half-year ended 31st August 1999. Ex-dividend date for interim dividend on the Ordinary Stock. Payment of interim dividend on the Ordinary Stock and dividends on the Preference Stocks for the half-year ended 31st August 1999. Year-end. Payment of dividends on the Preference Stocks for the half-year ended 29th February 2000. Annual General Meeting. Base Price for Capital
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CHIME COMMUNICATIONS PLC Communications Advertising Research Annual report and accounts 1998 Contents 1 Financial highlights 2 Chairman's statement 8 Company activities 23 Directors, professional advisers and registered office 24 Directors' biographies 26 Directors' statement on corporate governance 28 Report of the board to the shareholders on directors' remuneration 29 Directors' report 31 Statement of directors' responsibilities 32 Auditors' report 33 Consolidated profit and loss account 34 Consolidated balance sheet 35 Company balance sheet 36 Consolidated cash flow statement 37 Statement of total recognised gains and losses 37 Reconciliation of movements in shareholders' funds 38 Notes to the accounts 55 Notice of meeting The financial calendar is on the inside back cover Chime Communications PLC Annual Report and Accounts 1998 1 Financial highlights · Operating profit up 113% to £7.8 million (1997 ­ £3.7m) · Operating income up 73% to £48.8 million (1997 ­ £28.3m) · Dividend per share up 17% · Earnings per share up 21% · Operating profit margin up to 16% from 13% · Continued cash generation ­ cash balances of £6.5 million · Acquisitions deliver outstanding performance · Underlying business still growing at a healthy rate · More blue chip companies added to client list £7.8m · Continued involvement of Group companies in high profile activities £48.8m 16% 21% 17% £6.5m 2 Annual Report and Accounts 1998 Chime Communications PLC Chairman's statement "1998 has been our most successful year so far..." · Operating income grew by 73% · Profit before tax grew by 118% Operating Income £m 50 40 30 20 10 0 1994 1995 Profit before Tax £m 10.0 8.0 6.0 4.0 2.0 0 1994 1995 1996 1996 1997 1997 1998 1998 · Earnings per share grew by 21% Earnings Per Share Pence per share 5.0 4.0 3.0 2.0 1.0 0 1994 1995 1996 1997 1998 ·
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isitions deliver outstanding performance · Underlying business still growing at a healthy rate · More blue chip companies added to client list £7.8m · Continued involvement of Group companies in high profile activities £48.8m 16% 21% 17% £6.5m 2 Annual Report and Accounts 1998 Chime Communications PLC Chairman's statement "1998 has been our most successful year so far..." · Operating income grew by 73% · Profit before tax grew by 118% Operating Income £m 50 40 30 20 10 0 1994 1995 Profit before Tax £m 10.0 8.0 6.0 4.0 2.0 0 1994 1995 1996 1996 1997 1997 1998 1998 · Earnings per share grew by 21% Earnings Per Share Pence per share 5.0 4.0 3.0 2.0 1.0 0 1994 1995 1996 1997 1998 · Dividend per share grew by 17% Dividend Per Share Pence per share 2.50 2.00 1.50 1.00 0.50 0.00 1994 1995 1996 1997 1998 Chime Communications PLC Annual Report and Accounts 1998 3 The merger with the HHCL Group and our acquisitions of Opinion Leader Research and AMD have made a major contribution to these record results. All achieved profits well ahead of our expectations at the time of acquisition. Our public relations business changed its name from Lowe Bell Communications to Bell Pottinger Communications at the beginning of 1998 and had another very successful year. The Group acted for 795 clients in 1998 compared to 675 in 1997 and 579 in 1996. 61% (1997 ­ 58%) of our operating income comes from retained clients. No client represented more than 5% of total operating income. 147 (1997 ­ 124) of our clients used more than one of our companies and 54 clients used more than two of our companies. We said at the end of 1997 that we would focus on improving our operating profit margin. It has increased to 16% (1997 ­ 13%). Our publicly quoted
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Dividend per share grew by 17% Dividend Per Share Pence per share 2.50 2.00 1.50 1.00 0.50 0.00 1994 1995 1996 1997 1998 Chime Communications PLC Annual Report and Accounts 1998 3 The merger with the HHCL Group and our acquisitions of Opinion Leader Research and AMD have made a major contribution to these record results. All achieved profits well ahead of our expectations at the time of acquisition. Our public relations business changed its name from Lowe Bell Communications to Bell Pottinger Communications at the beginning of 1998 and had another very successful year. The Group acted for 795 clients in 1998 compared to 675 in 1997 and 579 in 1996. 61% (1997 ­ 58%) of our operating income comes from retained clients. No client represented more than 5% of total operating income. 147 (1997 ­ 124) of our clients used more than one of our companies and 54 clients used more than two of our companies. We said at the end of 1997 that we would focus on improving our operating profit margin. It has increased to 16% (1997 ­ 13%). Our publicly quoted competitors have reported a range of margin levels between 8.6% and 17.1%. We believe there is scope for further improvement but we are at the top level of achievement in the industry. Overview 1998 was a very good year. The merger with HHCL has been completed and the agency is now in the Top 20 in the UK. Opinion Leader Research and AMD, our most recent acquisitions, have already proven very successful. They have achieved their deferred payment targets well ahead of schedule. We are seeing an increase in the number of clients who use more than one of our companies, which is an important trend because it helps to improve our margin and strengthen our relationships. Importantly we have won public relations contracts from existing advertising clients and we have won a number of new research contracts from existing public relations and advertising clients. Major new clients won include Cornwall County Council, Prudential Banking (launch of Egg), the RAC, Swiss Re, Asda Property Holdings, BP Amoco, the Thoroughbred Breeders' Association, the CBI, COI/Welsh Assembly, the World Trade Centre, Fairview New Homes, Annington Homes (Purchaser of the MOD's UK residential property portfolio), Giorgio Armani and
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competitors have reported a range of margin levels between 8.6% and 17.1%. We believe there is scope for further improvement but we are at the top level of achievement in the industry. Overview 1998 was a very good year. The merger with HHCL has been completed and the agency is now in the Top 20 in the UK. Opinion Leader Research and AMD, our most recent acquisitions, have already proven very successful. They have achieved their deferred payment targets well ahead of schedule. We are seeing an increase in the number of clients who use more than one of our companies, which is an important trend because it helps to improve our margin and strengthen our relationships. Importantly we have won public relations contracts from existing advertising clients and we have won a number of new research contracts from existing public relations and advertising clients. Major new clients won include Cornwall County Council, Prudential Banking (launch of Egg), the RAC, Swiss Re, Asda Property Holdings, BP Amoco, the Thoroughbred Breeders' Association, the CBI, COI/Welsh Assembly, the World Trade Centre, Fairview New Homes, Annington Homes (Purchaser of the MOD's UK residential property portfolio), Giorgio Armani and Cacharel Fragrances, Friends Provident, the England & Wales Cricket Board, Hays DX, Unisys, ITV, Birds Eye Ready Meals, Thomson Holidays, Iceland Frozen Foods, Bass Taverns, BAA, SmithKline Beecham, Enterprise Oil and The Prince's Trust. Some of the high profile events on which we advised included the merger of Daimler Benz and Chrysler which was, at the time, the world's largest industrial merger. We also advised on the merger of General Accident and Commercial Union, the BSkyB bid for Manchester United, the disposal of Polygram Film Entertainment, the sale of Rothmans to BAT, the launch of Sky Digital, the launch of Tesco's SchoolNet 2000 (the largest educational web site in the world), WHSmith's acquisition of the John Menzies high street retail chain, TV Licensing on the launch of their new detection technology, and the campaign for ENIC which successfully reversed a UEFA decision regarding multi-club ownership in football. We successfully launched GO for British Airways and Egg for Prudential. We relaunched ITV, Pearl Assurance and Thomson Holidays and helped to achieve an all time record membership high for the Automobile Association.
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is to allow the Board to allot shares in the Company for cash other than to existing shareholders in proportion to their holdings. Allotments under this authority may be up to a maximum aggregate nominal amount of £1,523,983 which is equivalent to five per cent of the issued ordinary share capital of the Company as at 29 March 1999. This authority will last until the conclusion of the next Annual General Meeting. Purchase of own shares (Resolution 13) Resolution 13 will allow the Company to make market purchases of up to 12,217,728 of its own ordinary shares (ten per cent of the issued ordinary share capital of the Company as at 29 March 1999) at prices not less than 25p per ordinary share and not more than five per cent above the average of the middle market quotations as derived from the London Stock Exchange Daily Official List for the five business days before each purcahse. The Board has no current intention of exercising this authority and will only purchase shares if the effect will be to increase earnings per share and such purchase is in the best interests of shareholders as a whole. Any shares purchased in this way will be cancelled and the number of shares in issue will be reduced. This authority will last until the conclusion of the next Annual General Meeting or, if earlier, 10 September 2000. No purchases were made pursuant to the equivalent authority granted to the Board at the 1998 Annual General Meeting. Both Resolutions 11 and 12 are consistent with the recommendations of the Investment Committees of the National Association of Pension Funds and the Association of British Insurers. Financial calendar 12 April 1999 Ex-dividend date for 1998 final dividend 16 April 1999 Record date for 1998 final dividend 10 June 1999 Annual General Meeting 24 June 1999 Payment date for 1998 final dividend September 1999 Announcement of 1999 interim results November 1999 Payment of half-yearly dividend based on interim results March 2000 Announcement of preliminary results for 1999 Designed and Produced by Smithfield Design. Typeset by Graphiti Ltd. ...and finally, our telephone number 0171 495 4044 Tim Bell ­ Chairman Bertie Way ­ New Business Director Mark Smith ­ Finance Director CHIME COMMUNICATIONS PLC 46 HERTFORD STREET LONDON W1Y 8AX TELEPHONE 0171-495 4044 E-MAIL enquiries@chime-plc.co.uk
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General Notes A Member entitled to attend and vote at the Meeting is entitled to appoint one or more proxies to attend and, on a poll, to vote instead of him/her. A proxy need not be a Member of the Company. A form of proxy is enclosed. The register of Directors' shareholdings and copies of Directors' Service Contracts are available for inspection at the registered office of the Company during usual business hours on any weekday and will be available at the Meeting from 15 minutes prior to the commencement of the Meeting until its conclusion. 56 Annual Report and Accounts 1998 Chime Communications PLC Explanation of Special Business Renewal of Board's authority to allot securities (Resolution 11) Resolution 11 will allow the Board to allot securities in the Company. The Board's authority will last until the conclusion of the next Annual General Meeting. The maximum aggregate nominal amount of securities that can be allotted under this authority is £10,181,440 which is equivalent to 33.3 per cent of the issued ordinary share capital of the Company as at 29 March 1999. The Board has no current intention of exercising this authority. Disapplication of pre-emption rights (Resolution 12) The effect of Resolution 12 is to allow the Board to allot shares in the Company for cash other than to existing shareholders in proportion to their holdings. Allotments under this authority may be up to a maximum aggregate nominal amount of £1,523,983 which is equivalent to five per cent of the issued ordinary share capital of the Company as at 29 March 1999. This authority will last until the conclusion of the next Annual General Meeting. Purchase of own shares (Resolution 13) Resolution 13 will allow the Company to make market purchases of up to 12,217,728 of its own ordinary shares (ten per cent of the issued ordinary share capital of the Company as at 29 March 1999) at prices not less than 25p per ordinary share and not more than five per cent above the average of the middle market quotations as derived from the London Stock Exchange Daily Official List for the five business days before each purcahse. The Board has no current intention of exercising this authority and will only purchase shares if the effect will be to increase earnings per share and such purchase is in the best interests of shareholders as a whole. Any shares purchased in this way will be cancelled and the number of shares in issue will be reduced. This authority will last until the conclusion of the next Annual
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Annual report and accounts 1998 ah Anderson Trevor Anderson William Anderson Sylvia And-I-Nwanze Paul Andow Fabien André George Andreson Bernard Andrews Craig Andrews Neil Andrews Sarah Angove Kwame Anim James Anker Marc Ano Delphine Anselmo Graham Anthony Jean Antolini in Armstrong Clive Arnold Jon Arnold Matthias Arnold Monika Arnold Willi Arnold Daniel Aromire Angus Arpino Omer Arslan Nadège Artero Julie Arthur Llyr Arthur Paul Arthur Sylvester Asenguah Amir Asgari Aziz Asghar Sulayman Asghar Nicola Ashby Philip Derek Ashby vinder Atwal Nicola Atwell Gilles Auclair Christel Audran Uwe Auer Eric Auffret Darren Auguste Adam Austin Robin Austyn Patrick Avenia Jonathan Avens Christelle Averland Arnaud Averty Yasmin Awan Simon Axcell Segun Ayeni Christopher Ayers Natalie Aylward sey Bailey Mark Bailey Maxine Bailey Patricia Bailey Steven Bailey Laurence Bailly Brett Bainbridge Timothy Bainbridge Gurdip Bains Kathy Baird Carl Bairstow Arnaud Bais Helen Baker Jean Baker Simon Baker Sophie Baker Julia Baldwin Rhys Baldwin Nenad Balint rk Barcroft Frederick Bardwell Paul Bardwell David Barker Donald Barker Michael Barker Simon Barker Steven Barker Wendy Barker Joe William Barlow Roger Barlow Ian Barnes Emma Barnett Peter Baron Matthew Barr Geneviève Barr/Charnet Annette Barratt n Bashford Karim Bashir Sunjit Basra Andrew Bassett David Bassoopun Axel Bastert Beate Bastian Edward Batchelor Maureen Batchelor Felicity Bate Anthony Bates Carl Bates Chris Bates Graham Bates William Bates James Bathmaker David Batty Frank Baucher phane Beaubaton Nicola Beaver Robin Beavis Simon Beck Desmond Beckford Paul Beckley Olivier Becret Stéphane Bécue Cheryl Beddall Louise Beddow Nigel Bedford Gavin Bee Adrian Beecroft Richard Beer Daniel Begg Dilshad Begum Ralf Behrens Isabelle Beinze di Bennett Andrew Bennett Jonathan Bennett Jonathan Bennett Mark Bennett Neal Bennett Neill Bennett Didier Benoit Joseph Bensley Catherine Benson Houria Benyoub Michael Beral Henni Beresford Mitchell Bruno Berger Henry Berger Ian Bernard Tony Bernard minder Bhangle Rahoul Bhansali Anoli Bhatt Ejaaz Bhatti Tahir Bhatti Mark Bicknell Ramdane Bidjou
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Barcroft Frederick Bardwell Paul Bardwell David Barker Donald Barker Michael Barker Simon Barker Steven Barker Wendy Barker Joe William Barlow Roger Barlow Ian Barnes Emma Barnett Peter Baron Matthew Barr Geneviève Barr/Charnet Annette Barratt n Bashford Karim Bashir Sunjit Basra Andrew Bassett David Bassoopun Axel Bastert Beate Bastian Edward Batchelor Maureen Batchelor Felicity Bate Anthony Bates Carl Bates Chris Bates Graham Bates William Bates James Bathmaker David Batty Frank Baucher phane Beaubaton Nicola Beaver Robin Beavis Simon Beck Desmond Beckford Paul Beckley Olivier Becret Stéphane Bécue Cheryl Beddall Louise Beddow Nigel Bedford Gavin Bee Adrian Beecroft Richard Beer Daniel Begg Dilshad Begum Ralf Behrens Isabelle Beinze di Bennett Andrew Bennett Jonathan Bennett Jonathan Bennett Mark Bennett Neal Bennett Neill Bennett Didier Benoit Joseph Bensley Catherine Benson Houria Benyoub Michael Beral Henni Beresford Mitchell Bruno Berger Henry Berger Ian Bernard Tony Bernard minder Bhangle Rahoul Bhansali Anoli Bhatt Ejaaz Bhatti Tahir Bhatti Mark Bicknell Ramdane Bidjou Katja Bielefeld Carol Biggs Anne-Cécile Billard Alan Billingham Mark Billingham Hazel Binding Gillian Bingham Adam Binns Rebecca Ann Binns Sterling Binns nçoise Blanchard Joanne Blanchard Daniel Blanchfield John Bland Jane Blandford Scott Blanks Carl Blenkinsop Philippe Bleu Michael Blizzard Barry Bloomfield Duncan Blowers Gavin Bloxham Jeffrey Blunsdon Andrea Blunt Paul Gregory Board Edward Boatswain istophe Bonnan Andrew Boon John Booth Kevin Booth Nigel Boothe Rebecca Borde Pietro Borrelli Marion Boscher Jason Botley Lee Bottomley Jacques Bouchot Catherine Bouhier Frédéric Boulard Stéphane Bourcy Catherine Bourdin Michael Bourgoine Bernard Bourgois am Boyd Nicholas Boyes Patrick Boyes Coner Boyle Sarah Boyle Stephen Bradbury Charles Bradford Colin Bradford Thomas P G Brading Paul Bradley Sarah Bradley Peter Bradshaw Ronald Bradshaw Sarah Bradshaw Colm Brady Fay Brady Susan Brady Maryann Brailsford Brian Stephen Briant Simon Brickett Nicholas Bridgen Mike Brien Julian Briggs Vincent Briggs Julia Brisbane Norma Bristol Amanda Bristow Christopher Bristow Ian Bristow Martin Bristow Adam Broadbent Wendy Broadbent Michelle
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Katja Bielefeld Carol Biggs Anne-Cécile Billard Alan Billingham Mark Billingham Hazel Binding Gillian Bingham Adam Binns Rebecca Ann Binns Sterling Binns nçoise Blanchard Joanne Blanchard Daniel Blanchfield John Bland Jane Blandford Scott Blanks Carl Blenkinsop Philippe Bleu Michael Blizzard Barry Bloomfield Duncan Blowers Gavin Bloxham Jeffrey Blunsdon Andrea Blunt Paul Gregory Board Edward Boatswain istophe Bonnan Andrew Boon John Booth Kevin Booth Nigel Boothe Rebecca Borde Pietro Borrelli Marion Boscher Jason Botley Lee Bottomley Jacques Bouchot Catherine Bouhier Frédéric Boulard Stéphane Bourcy Catherine Bourdin Michael Bourgoine Bernard Bourgois am Boyd Nicholas Boyes Patrick Boyes Coner Boyle Sarah Boyle Stephen Bradbury Charles Bradford Colin Bradford Thomas P G Brading Paul Bradley Sarah Bradley Peter Bradshaw Ronald Bradshaw Sarah Bradshaw Colm Brady Fay Brady Susan Brady Maryann Brailsford Brian Stephen Briant Simon Brickett Nicholas Bridgen Mike Brien Julian Briggs Vincent Briggs Julia Brisbane Norma Bristol Amanda Bristow Christopher Bristow Ian Bristow Martin Bristow Adam Broadbent Wendy Broadbent Michelle Broadhurst Andy Broadway eric Brown Anthony Brown Audley Brown Charles Brown Christopher Brown Claire Brown Colin Brown Curtis Brown David Stephen Brown James Brown Jason Brown Kenneth Brown Lance Brown Lewis Brown Marie Brown Maxine Brown Nicholas Brown Nicola Brown hard Brydie James Bryson Darrell Buchanan Neil Buchanan Stuart Buchanan Nigel Buck Frank Buckle Kenneth Buckley Miriam Buckley Simon Buckley Michael Buddell Jeff Buffenbarger Frédérick Buffnoir Anne Bugnon Gwendoline Builder Anh-Tan Bui-Van Adrian Bull bert Burns Peter Burrett Mark Burridge Graeme Burt Marcus Burton Mark Burton Timothy Bury Lisa Busby Beverley Buss Gary Buss Nick Butcher Rian Butcher Stuart Butcher Joanna Butler Vaughan Butler Feisal Butt Joanna Butt Nadeem Butt Shaisa Bux Philip Buxton istopher Camacho Catherine Camelot Nathanael Camelot Tania Cameron Fabien Camossaro Kieran Campany Antonietta Campbell Carol Campbell Colin Campbell David Campbell Lucy Campbell Sonia Campbell Tony Campbell Michelle Campion Richard Camps Can Cancicek phen Carlisle Kellie Carlton Marc Carney Rachel Carnie Amanda Carpenter Ian Carpenter Paul Carpenter Andrew Carr Marc Carrey Lindy Carrington David Carroll James Carroll Gail Carruthers Joanne Carruthers Leslie Carson Anne
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Broadhurst Andy Broadway eric Brown Anthony Brown Audley Brown Charles Brown Christopher Brown Claire Brown Colin Brown Curtis Brown David Stephen Brown James Brown Jason Brown Kenneth Brown Lance Brown Lewis Brown Marie Brown Maxine Brown Nicholas Brown Nicola Brown hard Brydie James Bryson Darrell Buchanan Neil Buchanan Stuart Buchanan Nigel Buck Frank Buckle Kenneth Buckley Miriam Buckley Simon Buckley Michael Buddell Jeff Buffenbarger Frédérick Buffnoir Anne Bugnon Gwendoline Builder Anh-Tan Bui-Van Adrian Bull bert Burns Peter Burrett Mark Burridge Graeme Burt Marcus Burton Mark Burton Timothy Bury Lisa Busby Beverley Buss Gary Buss Nick Butcher Rian Butcher Stuart Butcher Joanna Butler Vaughan Butler Feisal Butt Joanna Butt Nadeem Butt Shaisa Bux Philip Buxton istopher Camacho Catherine Camelot Nathanael Camelot Tania Cameron Fabien Camossaro Kieran Campany Antonietta Campbell Carol Campbell Colin Campbell David Campbell Lucy Campbell Sonia Campbell Tony Campbell Michelle Campion Richard Camps Can Cancicek phen Carlisle Kellie Carlton Marc Carney Rachel Carnie Amanda Carpenter Ian Carpenter Paul Carpenter Andrew Carr Marc Carrey Lindy Carrington David Carroll James Carroll Gail Carruthers Joanne Carruthers Leslie Carson Anne Carter David Carter David Carter na Catmull Steven Caunce Stephen John Causon Robert Cave James Caves Lisa Cella Brian Cenac Stephanie Cerretelli Bobby Chadha Bruce Chadwick John Chadwick Nicholas Chadwick Robert Chambers Wendy Chan Harvinder Chana Roland Chana Aaron Chandiram ti Chauhan Ranjit Singh Chauhan Eric Chaves Ahmed Chebili Andrew Checkley Augustus Chennis Matthew Cherri David Cheung Marc Cheval Isabelle Chevalot Philippe Chevillard François Chevillotte Angela Chick Neil Chillingworth Michael Chinniah Siegfried Chmielorz chel Ciaburro Jean-Louis Cissé Diane Clair Barbara Clargo Danuel Claricoats Wayne Claridge Christopher Clark Dave Clark Gordon Clark Howell Clark Jonathon Clark Keith Dudley Clark Oliver Clark Russell Clark Sally Anne Clark Scott Clark Adam Clarke Carl Clarke ne Cleaver Owen Clement Nigel Clements Simon Clifford Nigel Clinch Stuart Cline Rachel Clint John Clothier David Cloud Philip Clough Bruno Cluizel Janice Clulow Sharon Clutterbuck Brigitte Cluzeau Dean Coates Sandra Coates Tara Coates Andrew Cochrane James Cocker mes Coleman Claire Coles Rupert Coles Colin Colgrove Marie-Ange Coll Olivier Colla
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Land buildings £'000 Group Operating leases which expire: Within one year 822 Between two and five years 3,141 Over five years 4,137 8,100 1998 Other £'000 1997 Land buildings £'000 1,291 2,662 20 3,973 164 1,267 3,127 4,558 1997 Other £'000 935 5,157 211 6,303 26. Capital commitments At 31 December 1998 future Group capital expenditure contracted for, but not provided for, amounted to £28,752,000 (1997: £315,000). This commitment is in respect of the Group's new logistics facility in Hatfield. 27. Contingent liabilities The Group has given a VAT deferred import duty guarantee of £50,000 (1997: £50,000). Computacenter (UK) Limited has given a guarantee in the normal course of business to a supplier of a subsidiary undertaking for an amount not exceeding FFR10,000,000 (1997: FFR10,000,000). 28. Related party transactions Group Computasoft Limited, a related party, provides the Computacenter customer system used by approximately 300 major customers. An annual fee has been agreed on a commercial basis for the use of the software for each installation. Total fees paid in the year amounted to £1,114,726 (1997: £1,279,134). Both P J Ogden and P W Hulme are Directors of and have a material interest in Computasoft Limited. In addition, the Group supplied goods to Computasoft in the normal course of business totalling £461,000 (1997: £547,000). At 31 December 1998 Computasoft owed the Group £50,000 (1997: £74,000 owed by the Group). 48 Computacenter plc annual report and accounts 1998 Notes to the accounts Designed and produced by Radley Yeldar (London) Photography by Chris Steele-Perkins, and John Edwards. Printed by CTD Computacenter plc, Computacenter House, 93/101 Blackfriars Road, London SE1 8HW Telephone 0171 620 2222, Fax 0171 261 0510, www.computacenter.com
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756) 50,115 (2,533) (224) ­ (1,500) 45,858 217 (1,934) (434) 56 ­ (2,095) 47 Computacenter plc annual report and accounts 1998 Notes to the accounts 24. Analysis of changes in debt Cash at bank and in hand Debt due within one year Debt due after one year Finance leases Total At 1 January 1998 £'000 13,829 (3,394) (42,725) (399) (32,689) Cash flows in year £'000 49,772 3,394 639 224 54,029 Other non-cash changes £'000 At 31 December 1998 £'000 ­ 63,601 (1,500) (1,500) 1,286 (40,800) ­ (175) (214) 21,126 25. Other financial commitments Annual commitments under non-cancellable operating leases are as follows: 1998 Land buildings £'000 Group Operating leases which expire: Within one year 822 Between two and five years 3,141 Over five years 4,137 8,100 1998 Other £'000 1997 Land buildings £'000 1,291 2,662 20 3,973 164 1,267 3,127 4,558 1997 Other £'000 935 5,157 211 6,303 26. Capital commitments At 31 December 1998 future Group capital expenditure contracted for, but not provided for, amounted to £28,752,000 (1997: £315,000). This commitment is in respect of the Group's new logistics facility in Hatfield. 27. Contingent liabilities The Group has given a VAT deferred import duty guarantee of £50,000 (1997: £50,000). Computacenter (UK) Limited has given a guarantee in the normal course of business to a supplier of a subsidiary undertaking for an amount not exceeding FFR10,000,000 (1997: FFR10,000,000). 28. Related party transactions Group Comput
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Antofagasta Holdings P.L.C. ANNUAL REPORT 1998 Antofagasta Holdings P.L.C. 1 CONTENTS q Directors and Advisors 2 q Notice of Meeting 3 q Financial Highlights 5 q Chairman's Review 6 q Financial Review 20 q Report of the Directors 25 q Corporate Governance 28 q Report on Remuneration and Related Matters 31 q Report of the Auditors to the Members 33 q Consolidated Profit and Loss Account 34 q Consolidated Statement of Total Recognised Gains and Losses 35 q Consolidated Balance Sheet 36 q Parent Company Balance Sheet 37 q Consolidated Cash Flow Statement 38 q Notes to the Financial Statements 39 q Five Year Summary 60 2 Antofagasta Holdings P.L.C. DIRECTORS AND ADVISORS Directors A A Luksic Chairman P J Adeane Managing Director C H Bailey M A Cariola OBE resigned on 1 March 1998 J-P Luksic G S Menendez V P Radic Company Secretary Jordan Company Secretaries Limited, 20-22 Bedford Row, London WC1R 4JS Auditors PricewaterhouseCoopers Solicitors Clifford Chance Stockbroker Merrill Lynch International Financial Advisor HSBC Investment Bank plc Bankers The Royal Bank of Scotland plc J P Morgan (Suisse) S.A. Banco Santiago S.A. Registrars and Transfer Office Computershare Services plc PO Box 82, Caxton House, Redcliffe Way, Bristol BS99 7NH Registered Office Park House, 16 Finsbury Circus, London EC2M 7AH Registered Number 1627889 Antofagasta Holdings P.L.C. 3 NOTICE OF MEETING Notes 1) A member entitled to attend and vote at the above meeting may appoint one person to attend and on a poll to vote in his place. A proxy need not be a member of the Company. 2) To be valid, the form of proxy and the Power of Attorney or other authority, if any, under which it is signed or a notarially certified copy thereof,
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1 March 1998 J-P Luksic G S Menendez V P Radic Company Secretary Jordan Company Secretaries Limited, 20-22 Bedford Row, London WC1R 4JS Auditors PricewaterhouseCoopers Solicitors Clifford Chance Stockbroker Merrill Lynch International Financial Advisor HSBC Investment Bank plc Bankers The Royal Bank of Scotland plc J P Morgan (Suisse) S.A. Banco Santiago S.A. Registrars and Transfer Office Computershare Services plc PO Box 82, Caxton House, Redcliffe Way, Bristol BS99 7NH Registered Office Park House, 16 Finsbury Circus, London EC2M 7AH Registered Number 1627889 Antofagasta Holdings P.L.C. 3 NOTICE OF MEETING Notes 1) A member entitled to attend and vote at the above meeting may appoint one person to attend and on a poll to vote in his place. A proxy need not be a member of the Company. 2) To be valid, the form of proxy and the Power of Attorney or other authority, if any, under which it is signed or a notarially certified copy thereof, must be lodged with the Registrars of the Company, Computershare Services plc, PO Box 82, Caxton House, Redcliffe Way, Bristol BS99 7NH, no less than 48 hours before the time fixed for the meeting. 3) There are no Directors' service contracts of more than one year's duration and therefore no such contracts are to be made available for inspection in accordance with the rules of the London Stock Exchange. 4) Copies of the Memorandum and Articles of Association with the proposed amendments will be available for inspection at the Registered Office of the Company during business hours on any weekday (Saturdays and public holidays excepted) from the date of this document up to and including the date of the Annual General Meeting and at the place of the meeting from 10.15am until its conclusion. NOTICE IS HEREBY GIVEN that the Seventeenth Annual General Meeting of the Company will be held at the Armourers' Hall, 81 Coleman Street, London EC2 on 9 June 1999 at 10.30 am for the following purposes: Ordinary business To consider, and if thought fit, pass the following resolutions. Special Notice has been given in respect of Resolution 4 pursuant to sections 388 and 379 of the Companies
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must be lodged with the Registrars of the Company, Computershare Services plc, PO Box 82, Caxton House, Redcliffe Way, Bristol BS99 7NH, no less than 48 hours before the time fixed for the meeting. 3) There are no Directors' service contracts of more than one year's duration and therefore no such contracts are to be made available for inspection in accordance with the rules of the London Stock Exchange. 4) Copies of the Memorandum and Articles of Association with the proposed amendments will be available for inspection at the Registered Office of the Company during business hours on any weekday (Saturdays and public holidays excepted) from the date of this document up to and including the date of the Annual General Meeting and at the place of the meeting from 10.15am until its conclusion. NOTICE IS HEREBY GIVEN that the Seventeenth Annual General Meeting of the Company will be held at the Armourers' Hall, 81 Coleman Street, London EC2 on 9 June 1999 at 10.30 am for the following purposes: Ordinary business To consider, and if thought fit, pass the following resolutions. Special Notice has been given in respect of Resolution 4 pursuant to sections 388 and 379 of the Companies Act 1985 (`the Act'). 1 to receive and adopt the Reports of the Directors and Auditors and the Financial Statements for the year ended 31 December 1998; 2 to declare a final dividend; 3 to re-elect Mr V P Radic as a Director; and 4 to re-appoint PricewaterhouseCoopers as auditors of the Company (having been previously appointed by the Board to fill the casual vacancy arising by reason of the resignation of Price Waterhouse on 20 July 1998) to hold office until the conclusion of the next general meeting at which the accounts are laid before the Company and to authorise the Directors to fix their remuneration. Special business To consider, and if thought fit, pass the following resolutions. Resolution 5 will be proposed as an ordinary resolution and resolutions 6, 7 and 8 as special resolutions. Ordinary resolution 5 THAT the Directors be generally and unconditionally authorised pursuant to section 80 of the Act to exercise all the powers of the Company to allot relevant securities (within the meaning of that section) up to an aggregate nominal amount of £1,218,433 for a period expiring (unless previously renewed, varied or revoked by the Company in general meeting) 5 years from the date
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Act 1985 (`the Act'). 1 to receive and adopt the Reports of the Directors and Auditors and the Financial Statements for the year ended 31 December 1998; 2 to declare a final dividend; 3 to re-elect Mr V P Radic as a Director; and 4 to re-appoint PricewaterhouseCoopers as auditors of the Company (having been previously appointed by the Board to fill the casual vacancy arising by reason of the resignation of Price Waterhouse on 20 July 1998) to hold office until the conclusion of the next general meeting at which the accounts are laid before the Company and to authorise the Directors to fix their remuneration. Special business To consider, and if thought fit, pass the following resolutions. Resolution 5 will be proposed as an ordinary resolution and resolutions 6, 7 and 8 as special resolutions. Ordinary resolution 5 THAT the Directors be generally and unconditionally authorised pursuant to section 80 of the Act to exercise all the powers of the Company to allot relevant securities (within the meaning of that section) up to an aggregate nominal amount of £1,218,433 for a period expiring (unless previously renewed, varied or revoked by the Company in general meeting) 5 years from the date of the passing of this resolution, provided that the Company may make an offer or agreement which would or might require relevant securities to be allotted after expiry of this authority and the Directors may allot relevant securities in pursuance of that offer or agreement. Special resolutions 6 THAT, subject to the passing of resolution 5, the Directors be generally empowered pursuant to section 95 of the Act to allot equity securities (within the meaning of section 94(2) of the Act) pursuant to the authority conferred by resolution 5 as if section 89(1) of the Act did not apply to the allotment. This power: a) expires 15 months after the date of the passing of this resolution or at the conclusion of the next annual general meeting of the Company following the passing of this resolution, whichever occurs first, provided that the Company may make an offer or agreement which would or might require equity securities to be allotted after expiry of this authority 4 Antofagasta Holdings P.L.C. Notice of Meeting and the Directors may allot equity securities in pursuance of that offer or agreement and; b) is limited to: I. allotments of equity securities where such securities have been offered (whether by way of rights
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fit on ordinary activities before tax Tax Minority interests 36.8 (2.7) 0.1 Profit on ordinary activities after tax and minority interests 34.2 Earnings per 5p ordinary share excluding exceptional items Earnings per 5p ordinary share Dividends per 5p ordinary share 18.8p 17.9p 7.25p 1997 £'m 223.7 121.3 306.4 (41.8) 609.6 (39.7) 569.9 11.5 146.6 351.1 60.7 569.9 152.8 28.5 117.5 146.0 (3.2) (1.9) 140.9 12.3p 85.1p 7.0p 1996 £'m 204.2 123.1 64.9 (55.9) 336.3 (51.0) 285.3 10.0 28.4 222.7 24.2 285.3 180.4 40.5 0.6 41.1 (6.1) (5.7) 29.3 17.9p 18.2p 6.5p 1995 £'m 201.3 88.2 91.1 (57.4) 323.2 (43.1) 280.1 10.0 28.4 214.6 27.1 280.1 178.3 67.4 10.8 78.2 (11.2) (10.1) 56.9 28.8p 35.3p 6.5p 1994 £'m 173.7 52.4 90.3 (31.7) 284.7 (40.5) 244.2 10.0 28.4 166.3 39.5 244.2 90.6 21.9 16.4 38.3 (2.9) (1.8) 33.6 10.8p 21.2p 5.0p Comparatives have been restated for the reclassification of Quiñenco S.A. from "associated undertakings" to "other investments" following the introduction of FRS 9 "Associates and Joint Ventures".
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agasta Holdings P.L.C. 59 Notes to the Financial Statements For the year ended 31 December 1998 24 Ultimate holding company The ultimate holding company is Dolberg Finance Corporation, a company incorporated in Liechtenstein which holds investments and assets in trust for the benefit of the Chairman, Mr. A A Luksic, and his family. The company does not produce group accounts. 60 Antofagasta Holdings P.L.C. FIVE YEAR SUMMARY CONSOLIDATED BALANCE SHEET Tangible fixed assets Investments Current assets Current liabilities Total assets less current liabilities Long term liabilities 1998 £'m 575.1 121.4 306.8 (73.9) 929.4 (307.9) 621.5 Share capital Share premium Reserves Minority interests 11.5 146.6 366.5 96.9 621.5 CONSOLIDATED PROFIT AND LOSS ACCOUNT Turnover 111.4 Profit on ordinary activites before tax excluding exceptional items Exceptional items 39.3 (2.5) Profit on ordinary activities before tax Tax Minority interests 36.8 (2.7) 0.1 Profit on ordinary activities after tax and minority interests 34.2 Earnings per 5p ordinary share excluding exceptional items Earnings per 5p ordinary share Dividends per 5p ordinary share 18.8p 17.9p 7.25p 1997 £'m 223.7 121.3 306.4 (41.8) 609.6 (39.7) 569.9 11.5 146.6 351.1 60.7 569.9 152.8 28.5 117.5 146.0 (3.2) (1.9) 140.9 12.3p 85.1p 7.0p 1996 £'m 204.2 123.1 64.9 (55.9) 336.3 (51.0) 285.3 10.0 28.4 222.7 24.2 285.3 180.4 40.5 0.6 41.1 (6.1) (5.7) 29.
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UNDERWRITING PLC 1998 Annual Report for the 2 months ended 31 December 1998 Atrium Underwriting plc was formed in December 1998, following the merger of Atrium Cockell Group Limited with Lomond Underwriting PLC. The merger has combined one of the highest quality managing agencies at Lloyd's with one of its best performing quoted capital providers. Our two managed syndicates have a track record of delivering returns well above the Lloyd's average, an achievement built around independent and disciplined underwriting from highly experienced and well respected teams. Our "spread" portfolio, which for the 1996 year of account was one of the best performing in the Lloyd's market, has delivered a similar record of outperformance. Our strategy is to deliver value to shareholders by progressively growing our income base while maintaining a strong focus on return on capital. It is our priority to continue producing excellent results that will shape a great future for all of our stakeholders. A Record of Outperformance Syndicates 570 & 609 (combined) vs Lloyd's market £m % 140 30 120 20 100 10 80 0 60 -10 40 -20 20 -30 0 -40 Year of account 88 89 90 91 92 93 94 95 96 97 98 99 Actual managed capacity Managed syndicates' return as a % of capacity Estimated managed syndicates' return as a % of capacity Lloyd's market return as a % of capacity Estimated Lloyd's market return as a % of capacity Notes 1. Results are expressed after personal expenses. 2. The 1993 Year of Account result for the managed syndicates removes the effect of the Equitas settlement. Syndicate 609 vs Lloyd's marine market £m 70 60 50 40 30 20 10 0 Year of account 88 89 90 91 92 93 94 Syndicate 609 capacity Syndicate 609 return as a % of capacity Estimated Syndicate 609 return as a % of capacity % 25 20 15 10 5 0 -
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-10 40 -20 20 -30 0 -40 Year of account 88 89 90 91 92 93 94 95 96 97 98 99 Actual managed capacity Managed syndicates' return as a % of capacity Estimated managed syndicates' return as a % of capacity Lloyd's market return as a % of capacity Estimated Lloyd's market return as a % of capacity Notes 1. Results are expressed after personal expenses. 2. The 1993 Year of Account result for the managed syndicates removes the effect of the Equitas settlement. Syndicate 609 vs Lloyd's marine market £m 70 60 50 40 30 20 10 0 Year of account 88 89 90 91 92 93 94 Syndicate 609 capacity Syndicate 609 return as a % of capacity Estimated Syndicate 609 return as a % of capacity % 25 20 15 10 5 0 -5 -10 -15 -20 -25 -30 -35 95 96 97 98 99 Lloyd's marine market median return as a % of capacity Estimated Lloyd's marine market median return as a % of capacity Notes 1. Results are expressed after personal expenses. 2. The 1993 Year of Account result for the managed syndicates removes the effect of the Equitas settlement. Syndicate 570 vs Lloyd's non-marine market £m % 60 10 50 5 40 0 30 20 -5 10 -10 0 -15 Year of account 88 89 90 91 92 93 94 95 96 97 98 99 Syndicate 570 capacity Syndicate 570 return as a % of capacity Estimated Syndicate 570 return as a % of capacity Lloyd's non-marine market median return as a % of capacity Estimated Lloyd's non-marine market median return as a % of capacity Notes 1. Results are expressed after personal expenses. 2. The
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5 -10 -15 -20 -25 -30 -35 95 96 97 98 99 Lloyd's marine market median return as a % of capacity Estimated Lloyd's marine market median return as a % of capacity Notes 1. Results are expressed after personal expenses. 2. The 1993 Year of Account result for the managed syndicates removes the effect of the Equitas settlement. Syndicate 570 vs Lloyd's non-marine market £m % 60 10 50 5 40 0 30 20 -5 10 -10 0 -15 Year of account 88 89 90 91 92 93 94 95 96 97 98 99 Syndicate 570 capacity Syndicate 570 return as a % of capacity Estimated Syndicate 570 return as a % of capacity Lloyd's non-marine market median return as a % of capacity Estimated Lloyd's non-marine market median return as a % of capacity Notes 1. Results are expressed after personal expenses. 2. The 1993 Year of Account result for the managed syndicates removes the effect of the Equitas settlement. Atrium/Lomond "spread" capacity vs Lloyd's market % 14 12 10 8 6 4 2 0 Year of account 94 95 96 Atrium/Lomond return as a % of capacity Lloyd's market return as a % of capacity Managing agency record Fee income Expenses net of recharges Retained profit commission Other income net of related expenses Profit before tax Profit after tax 1996 £'000 263 1,217 4,412 1997 £'000 816 430 1,873 1998 £'000 804 647 3,216 49 3,507 2,386 74 2,333 1,591 70 3,443 2,429 1 Summary For the two month period ended 31 December 1998 Atrium Underwriting plc was formed from the merger of Lomond Underwriting plc and Atrium Cockell Group Limited on 2 December 1998 manages Lloyd's syndicates 570 and 609, with a combined capacity of £116 million for the 1999 year
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1993 Year of Account result for the managed syndicates removes the effect of the Equitas settlement. Atrium/Lomond "spread" capacity vs Lloyd's market % 14 12 10 8 6 4 2 0 Year of account 94 95 96 Atrium/Lomond return as a % of capacity Lloyd's market return as a % of capacity Managing agency record Fee income Expenses net of recharges Retained profit commission Other income net of related expenses Profit before tax Profit after tax 1996 £'000 263 1,217 4,412 1997 £'000 816 430 1,873 1998 £'000 804 647 3,216 49 3,507 2,386 74 2,333 1,591 70 3,443 2,429 1 Summary For the two month period ended 31 December 1998 Atrium Underwriting plc was formed from the merger of Lomond Underwriting plc and Atrium Cockell Group Limited on 2 December 1998 manages Lloyd's syndicates 570 and 609, with a combined capacity of £116 million for the 1999 year of account participates on £16 million of managed capacity for the 1999 year of account participates on £63 million of capacity managed by other Lloyd's managing agencies for the 1999 year of account Financial highlights Balance on technical account Profit/(loss) before tax Total earnings per share Dividend per share Net tangible assets at period end Net tangible assets value per share 2 months ended 31 December 1998 £'000 4,119 3,550 6.5p 5p 46,450 103p 7 months ended 31 October 1998 £'000 (3,482) (2,159) (7.7p) 3p 44,687 135p Net tangible assets represent equity shareholders' funds after deducting intangible assets. This Annual Report can be found on the Internet at http://www.atrium­underwriting.co.uk Contents 2 Chairman's statement 5 Operating and financial review 9 Syndicate participations 12 Directors 13 Committees & Advisers 14 Directors' report 17 Statement of corporate governance 20 Report of the remuneration committee 22 Statement of directors' responsibilities 23 Report of the auditors 24 Accounting policies 26 Consolidated profit and loss account
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are hereby empowered to allot up to 2,257,420 ordinary shares pursuant to the authority contained in paragraph (a) above for cash as if section 89(1) of the Act did not apply during the period of such authority. By order of the Board Murray Johnstone Limited Secretary P M Barnes Authorised Signatory 7 West Nile Street, Glasgow G1 2PX 10 May 1999 The company, pursuant to Regulation 34 of the Uncertified Securities Regulations 1995, has specified that only those shareholders registered on the Register of Members of the company as at 2.30pm on 30 June 1999 shall be entitled to attend or vote at the aforesaid General Meeting in respect of the number of shares registered in their name at that time. Changes to entries on the relevant Register of Members after 2.30pm on 30 June 1999 shall be disregarded when determining the rights of any person to attend or vote at the meeting. A member entitled to attend and vote is entitled to appoint a proxy or proxies to attend and on a poll to vote instead of him/her. A proxy need not be a member. Appointment of a proxy need not preclude a member from attending and voting at the meeting should he/she subsequently decide to do so. A reply-paid form of proxy for your use is enclosed. Registered in England and Wales ­ Company Number 2860390. 48 Shareholder information Annual General Meeting The Annual General Meeting will be held at 2.30 pm on 2 July 1999 in the Old Library, Lloyd's Lime Street, London EC3M 7DQ. Every ordinary shareholder is entitled to attend and vote at the meeting. Dividend payment Final and "special" dividend payment date is 6 July 1999 Interim results The interim results for the period ended 30 June 1999 will be announced to the London Stock Exchange and advertised in the national press. Shareholder enquiries All shareholder enquiries should be addressed to the Company at its registered office. Registered office Room 790, Lloyd's Lime Street, London EC3M 7DQ. Telephone: +44 (0) 171 327 4877 Atrium on the internet Visit our web page on http://www.atrium-underwriting.co.uk Published by Black Sun plc +44 (0)171 736 0011 Atrium Underwriting plc Room 790 Lloyd's Lime Street London EC3M 7DQ Tel 0171 327 4877 Fax 0171 327 4878
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for an ordinary share as derived from the Stock Exchange Daily Official List for the five business days immediately preceding the date on which the ordinary shares are purchased; and (d) unless previously renewed, varied or revoked, the authority hereby conferred shall expire at the conclusion of the next Annual General Meeting of the company or, if earlier, on the expiry of 15 months from the passing of this resolution, save that the company may before such expiry enter into a contract to purchase ordinary shares which will or may be completed wholly or partly after such expiry. 17. THAT; (a) the directors be and are hereby generally and unconditionally authorised for the purposes of section 80 of the Companies Act 1985 to exercise all the powers of the company to allot up to 2,257,420 ordinary shares of £1 each in the capital of the company, provided that the authority hereby conferred shall expire either at the conclusion of the next Annual General Meeting of the company or the expiry of 15 months from the passing of this resolution, whichever is the first to occur, save that the company may make offers or agreements before such expiry which would or might require ordinary shares to be allotted after the expiry of such power; and (b) the directors be and are hereby empowered to allot up to 2,257,420 ordinary shares pursuant to the authority contained in paragraph (a) above for cash as if section 89(1) of the Act did not apply during the period of such authority. By order of the Board Murray Johnstone Limited Secretary P M Barnes Authorised Signatory 7 West Nile Street, Glasgow G1 2PX 10 May 1999 The company, pursuant to Regulation 34 of the Uncertified Securities Regulations 1995, has specified that only those shareholders registered on the Register of Members of the company as at 2.30pm on 30 June 1999 shall be entitled to attend or vote at the aforesaid General Meeting in respect of the number of shares registered in their name at that time. Changes to entries on the relevant Register of Members after 2.30pm on 30 June 1999 shall be disregarded when determining the rights of any person to attend or vote at the meeting. A member entitled to attend and vote is entitled to appoint a proxy or proxies to attend and on a poll to vote instead of him/her. A proxy need not be a member. Appointment of a proxy need not preclude a member from attending and voting at the meeting should he/she subsequently decide to do so. A reply-
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SOLITAIRE GROUP PLC ANNUAL REPORT 1998 Chairman's Statement I am pleased to report that during the year to 31 December 1998 the company experienced strong demand for its services, which is reflected in increased turnover and profitability. In addition, the company acquired Pembertons Residential Limited, a central London property management business, in August 1998, and, in late 1998, launched Property Investment Portfolio Services Limited, a company which provides a `one stop shop'for those investors interested in the `buy to let' market for residential property. Turnover for the year ended 31 December 1998 was up by £1,173,000 to £2,792,000 (1997: £1,619,000) and pre-tax profit was £1,074,000 (1997: £558,000), an increase of £516,000 on 1997. Earnings per share rose to 15.7p from 13,8p. The board is recommending the payment of a final dividend of 4.8p (1997: 1.3p) per share, making a total for the year of 7.2p (1997: 1.3p). This final dividend will be paid on 26 May 1999 to shareholders on the register on 10 May 1999. Commercial operations started in January this year and the board is encouraged by the level of interest shown by private investors and by Independent Financial Advisors. The number of applications received to date is in line with our expectations. We are confident that this business will grow into a significant contributor to the group's profits in future years. Due to the time it will take to build this business, your board has decided to capitalise the set-up costs of £144,000 and amortise these over the next three years. This business currently manages approximately 1,300 prestigious units in central London and will form the basis for our drive for increased business at the middle and high end of the London market. This acquisition was completed in August of last year, and the ongoing costs and the costs of rationalisation absorbed the income earned in the year. The board expects to see a positive contribution from this business during the current year. We have successfully completed the installation of our new computer system, which is working entirely satisfactorily. We have been informed by our principal supplier that this system is year 2000 compliant. On 12 May 1999 the group announced that it is acquiring a serviced apartment business carried on at Nell Gwyn
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shareholders on the register on 10 May 1999. Commercial operations started in January this year and the board is encouraged by the level of interest shown by private investors and by Independent Financial Advisors. The number of applications received to date is in line with our expectations. We are confident that this business will grow into a significant contributor to the group's profits in future years. Due to the time it will take to build this business, your board has decided to capitalise the set-up costs of £144,000 and amortise these over the next three years. This business currently manages approximately 1,300 prestigious units in central London and will form the basis for our drive for increased business at the middle and high end of the London market. This acquisition was completed in August of last year, and the ongoing costs and the costs of rationalisation absorbed the income earned in the year. The board expects to see a positive contribution from this business during the current year. We have successfully completed the installation of our new computer system, which is working entirely satisfactorily. We have been informed by our principal supplier that this system is year 2000 compliant. On 12 May 1999 the group announced that it is acquiring a serviced apartment business carried on at Nell Gwynn House in Sloane Avenue, Chelsea, London for £23.8 million. This was dealt with fully in the circular recently sent to shareholders. This acquisition moves the company into the area of serviced apartments and I look forward to this acquisition becoming a key part of our group. The company continues to look for suitable acquisitions while the new build housing market in the United Kingdom remains buoyant, with our developer clients bringing forward a range of new schemes. Accordingly, not only has trading in the first three months of this year been entirely satisfactory but your board looks forward to a successful 1999 in all areas of our business. We look to the future with confidence. George Brutton, FRICS Chairman 26 April 1999 1 Directors George Brutton FRICS, Non-Executive Chairman George Brutton, aged 49, is a Chartered Surveyor and a partner in Weatherall Green & Smith, which he joined in 1971, where he has been continuously involved in the investment valuation section. He became a partner in 1988. He joined the Solitaire group on 29 September 1997. Harvey Shulman LLM, Joint Managing Director Harvey Shulman, aged 52, a solicitor and partner in Graham Harvey, Solicitors since 1972, has
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n House in Sloane Avenue, Chelsea, London for £23.8 million. This was dealt with fully in the circular recently sent to shareholders. This acquisition moves the company into the area of serviced apartments and I look forward to this acquisition becoming a key part of our group. The company continues to look for suitable acquisitions while the new build housing market in the United Kingdom remains buoyant, with our developer clients bringing forward a range of new schemes. Accordingly, not only has trading in the first three months of this year been entirely satisfactory but your board looks forward to a successful 1999 in all areas of our business. We look to the future with confidence. George Brutton, FRICS Chairman 26 April 1999 1 Directors George Brutton FRICS, Non-Executive Chairman George Brutton, aged 49, is a Chartered Surveyor and a partner in Weatherall Green & Smith, which he joined in 1971, where he has been continuously involved in the investment valuation section. He became a partner in 1988. He joined the Solitaire group on 29 September 1997. Harvey Shulman LLM, Joint Managing Director Harvey Shulman, aged 52, a solicitor and partner in Graham Harvey, Solicitors since 1972, has been involved in property management for over 16 years. He has been associated with the management of property portfolios for Business Expansion Scheme companies since the inception of the scheme. He joined the group on 5 September 1997. Graham Shapiro LLB, Joint Managing Director Graham Shapiro, aged 53, a solicitor, and partner in Graham Harvey, Solicitors since 1972, has specialised in the management of property and mortgage portfolios for over 11 years. He joined the group on 5 September 1997. Christopher Burton FCCA, Finance Director Christopher Burton, aged 54, held financial positions in the food and motor industries from 1962 to 1975. In 1975 he joined Sedgwick Group plc and from 1984 to 1988 served as Group Financial Controller. In 1988 he joined Rattner Mackenzie Limited as Finance Director and in 1992 he joined Windsor PLC as Group Finance Director. He joined the board on 29 Septemnber 1997. Thomas Quinn, Non-Executive Director Thomas Quinn, aged 59, has been involved in stockbroking all his working life. He has been a partner in W. Greenwell & Co and a director of Samuel Montagu Limited, Barclays de Zoete Wedd Securities Limited and Hambros Bank Limited. He joined the board on 29 September 1997. Report of the
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been involved in property management for over 16 years. He has been associated with the management of property portfolios for Business Expansion Scheme companies since the inception of the scheme. He joined the group on 5 September 1997. Graham Shapiro LLB, Joint Managing Director Graham Shapiro, aged 53, a solicitor, and partner in Graham Harvey, Solicitors since 1972, has specialised in the management of property and mortgage portfolios for over 11 years. He joined the group on 5 September 1997. Christopher Burton FCCA, Finance Director Christopher Burton, aged 54, held financial positions in the food and motor industries from 1962 to 1975. In 1975 he joined Sedgwick Group plc and from 1984 to 1988 served as Group Financial Controller. In 1988 he joined Rattner Mackenzie Limited as Finance Director and in 1992 he joined Windsor PLC as Group Finance Director. He joined the board on 29 Septemnber 1997. Thomas Quinn, Non-Executive Director Thomas Quinn, aged 59, has been involved in stockbroking all his working life. He has been a partner in W. Greenwell & Co and a director of Samuel Montagu Limited, Barclays de Zoete Wedd Securities Limited and Hambros Bank Limited. He joined the board on 29 September 1997. Report of the directors The directors submit their report and the financial statements of Solitaire Group Plc for the year ended 31 December 1998. Solitaire Group Plc is the parent company of a group of companies whose main activities are the ownership, administration and management of flats and housing estates, including the management of maintenance and reserve funds, and the administration and management of mortgage portfolios. The developments affecting the group during the year and its prospects for the future are reviewed in the chairman's statement on page 1. On 14 August 1998, the company acquired ownership of Pembertons Residential Limited for a total consideration of £301,000, including costs of £1,000. On 5 August 1998, the company formed a 70% owned subsidiary, Property Investment Portfolio Services Limited (PIPS). The expenditure on the formation of the company, the production of the corporate literature and legal and accounting and associated costs amounted to £144,000. These development costs have been capitalised and will be written off over the next three years. During 1998, the company converted part of its property in Barnet, in use as a garage, into usable office space. The capitalised cost of this conversion in the year ended 31 December 1998 was £39,000. Further costs of £35
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on 8 June 1999, and at any adjournment thereof. Please indicate by writing an `X'in the appropriate space the manner in which the proxy is to vote. For Against 1. To receive and adopt the report of the directors and audited financial statements for the year ended 31 December 1998 2. To declare a final dividend of 4.8p (net) per ordinary share 3. To re-elect Mr G R Brutton as a director 4. To re-appoint BDO Stoy Hayward as auditors of the company Notes: see overleaf Dated 1999 Signature(s) 23 Form of proxy Solitaire Group Plc 1. A member may appoint a proxy of his/her own choice. If such an appointment is made, insert the name and address of the person appointed proxy in the space provided. If such proxy fails to attend the meeting, the chairman of the meeting will be entitled to vote in place of the proxy. If you do not wish to appoint your own proxy, leave the space blank and the chairman will be appointed your proxy. 2. If the appointer is a corporation, this form of proxy must be executed under its common seal or under the bond of some officer of attorney duly authorised in that behalf in writing. 3. In the case of joint holders, the signature of the senior who tenders a vote shall be accepted to the exclusion of votes of the other joint holders, and for this purpose seniority shall be determined by order in which the names stand in the register of members in respect of the shares. 4. If this form of proxy is returned without any indication of how the person appointed proxy shall vote he / she will exercise his / her discretion as to how he / she votes or whether he / she abstains from voting. 5. To be valid, this form of proxy must be completed and deposited, together with the power of attorney or other written statutory authority under which it is signed or a notarially certified copy thereof if approriate, at the registrars of the company, IRG plc, Bourne House, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, not less than 48 hours before the time appointed for holding the meeting or day of adjournment thereof. 6. Any alteration of this form of proxy should be initialled. 24 1 2
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within one year, are available for inspection at the registered office of the company during the usual business hours on any weekday (Saturday and public holidays excluded) from the date of this notice until the annual general meeting and will be available for inspection at the place of the annual general meeting for at least 15 minutes prior to and during the meeting. 3. The company, pursuant to regulation 34 of the Uncertified Securities Regulations 1995, specifies that only those shareholders registered in the register of members of the company at close of business on 6 June 1999 shall be entitled to attend or vote at the aforesaid general meeting in respect of the number of shares registered in their name at that time. Any changes to the register of members after such time shall be disregarded in determining the rights of any person to attend or vote at the meeting. 22 Form of proxy Solitaire Group Plc 1/ We (block capitals please) the undersigned of being member(s) of the above-named company, hereby appoint of or failing him/her the chairman of the meeting as my/our proxy to vote for me / us on my / our behalf as indicated below at the Annual General Meeting of the company to be held at 9.45 am on 8 June 1999, and at any adjournment thereof. Please indicate by writing an `X'in the appropriate space the manner in which the proxy is to vote. For Against 1. To receive and adopt the report of the directors and audited financial statements for the year ended 31 December 1998 2. To declare a final dividend of 4.8p (net) per ordinary share 3. To re-elect Mr G R Brutton as a director 4. To re-appoint BDO Stoy Hayward as auditors of the company Notes: see overleaf Dated 1999 Signature(s) 23 Form of proxy Solitaire Group Plc 1. A member may appoint a proxy of his/her own choice. If such an appointment is made, insert the name and address of the person appointed proxy in the space provided. If such proxy fails to attend the meeting, the chairman of the meeting will be entitled to vote in place of the proxy. If you do not wish to appoint your own proxy, leave the space blank and the chairman will be appointed your proxy. 2. If the appointer is a corporation, this form of proxy must be executed under
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Incepta Group plc Annual Report 1999 International marketing & communications Our creativity, enthusiasm and expertise are dedicated to the total needs of our growing international client base. Contents 1 Financial highlights 2 Incepta Group at a glance 3 Chairman's statement 4 Chief Executive's review 8 One voice around the world 10 Advertising 12 Public Relations 14 Marketing Communications 16 Design & Publishing 18 Financial review 20 Board of directors 21 Directors' report 23 Report of the auditors 24 Consolidated profit and loss account 25 Consolidated balance sheet 26 Company balance sheet 27 Consolidated cash flow statement 28 Statement of total recognised gains and losses 28 Reconciliation of movement in shareholders' funds 29 Notes to the financial statements 50 Corporate governance 52 Remuneration report 54 Directors' remuneration and interests 58 Five year financial information 59 Notice of Annual General Meeting 62 Shareholder information 62 Financial calendar 64 Directory of Incepta Companies Incepta Group plc Financial highlights Year ended Year ended 28 February 1999 28 February 1998 Turnover £113.8m £88.2m up 29% Gross profit £50.1m £33.9m up 48% Total operating profit* £8.3m £5.8m up 43% Profit before tax* £7.7m £5.6m up 38% Diluted earnings per share* 2.06p 1.75p up 18% Dividend per share 0.42p *before exceptional items of £1.5m for the year ended 28 February 1999 0.35p up 20% · Strong revenue growth across all four divisions; Advertising, Public Relations, Marketing Communications and Design & Publishing · Successful acquisition and integration of Dewe Rogerson Group · Diluted earnings per share before exceptional items up 18% · Strong underlying organic growth - group operating profit before exceptional items from continuing operations up 12% · Operating margins over 16% · Strong cash generation maintained · Excellent start to current financial year Incepta Group plc 1 Incepta Group at a glance Advertising Financial, financial services, corporate, consumer and business-to-business advertising Brand development and communications Direct marketing Marketing Communications International presentation organisation Sales promotion and direct marketing Product
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£8.3m £5.8m up 43% Profit before tax* £7.7m £5.6m up 38% Diluted earnings per share* 2.06p 1.75p up 18% Dividend per share 0.42p *before exceptional items of £1.5m for the year ended 28 February 1999 0.35p up 20% · Strong revenue growth across all four divisions; Advertising, Public Relations, Marketing Communications and Design & Publishing · Successful acquisition and integration of Dewe Rogerson Group · Diluted earnings per share before exceptional items up 18% · Strong underlying organic growth - group operating profit before exceptional items from continuing operations up 12% · Operating margins over 16% · Strong cash generation maintained · Excellent start to current financial year Incepta Group plc 1 Incepta Group at a glance Advertising Financial, financial services, corporate, consumer and business-to-business advertising Brand development and communications Direct marketing Marketing Communications International presentation organisation Sales promotion and direct marketing Product launch Film and video Public Relations Design & Publishing Financial, corporate and business public relations Investor relations Market research Public affairs Corporate and brand identity Corporate literature and annual reports Interior, environment and signing design Corporate magazines and newspapers · · · · · ·· · ··············· ···· ·· · · · · · ·· · ·· ·· ·· ·· · ·· · · 2 Incepta Group plc · Offices London New York Hong Kong Singapore San Francisco Los Angeles Chicago Johannesburg Durban Cape Town Tokyo Miami Sao Paulo Mumbai Brussels Dusseldorf Warsaw Budapest Frankfurt Birmingham Leeds Northampton Edinburgh Glasgow Belfast · Partners Australia Belgium Brazil Czech Republic Finland France Germany Hungary India Indonesia Ireland Italy Japan Korea Malaysia Norway Philippines Portugal Singapore Spain Sweden Switzerland Taiwan Thailand Turkey Vietnam Incepta Group plc Operating profit* (£m) 8.3 5.8 1.6 0.8 (0.4) 95 96 97 98 99 Years to February *before exceptional items Incepta Group plc Diluted
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launch Film and video Public Relations Design & Publishing Financial, corporate and business public relations Investor relations Market research Public affairs Corporate and brand identity Corporate literature and annual reports Interior, environment and signing design Corporate magazines and newspapers · · · · · ·· · ··············· ···· ·· · · · · · ·· · ·· ·· ·· ·· · ·· · · 2 Incepta Group plc · Offices London New York Hong Kong Singapore San Francisco Los Angeles Chicago Johannesburg Durban Cape Town Tokyo Miami Sao Paulo Mumbai Brussels Dusseldorf Warsaw Budapest Frankfurt Birmingham Leeds Northampton Edinburgh Glasgow Belfast · Partners Australia Belgium Brazil Czech Republic Finland France Germany Hungary India Indonesia Ireland Italy Japan Korea Malaysia Norway Philippines Portugal Singapore Spain Sweden Switzerland Taiwan Thailand Turkey Vietnam Incepta Group plc Operating profit* (£m) 8.3 5.8 1.6 0.8 (0.4) 95 96 97 98 99 Years to February *before exceptional items Incepta Group plc Diluted earnings per share* (p) 2.06 1.75 1.13 0.90 (5.66) 95 96 97 98 99 Years to February *before exceptional items and as restated according to FRS14 Chairman's statement An increasingly powerful and respected voice in our sector These excellent results are a further step in our ambition to build a powerful and dynamic business across each of our core disciplines. Turnover has increased by 29% to £113.8 million, gross profit by 48% to £50.1 million and profit before tax and exceptional items by 38% to £7.7 million. The exceptional items principally relate to the costs of integration and reorganisation following the acquisition of Dewe Rogerson, which has been incorporated for 41/2 months of the year under review. Diluted earnings per share before exceptional items grew by 18% to 2.06p per share. This continues to represent the most appropriate measure of shareholder value given the influence of deferred consideration shares in acquisitions made by the Group. The board is recommending a 20% increase in the final dividend to 0.42p per share. We continue to demonstrate strong growth in revenues across all operating divisions. Our UK and continental European
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earnings per share* (p) 2.06 1.75 1.13 0.90 (5.66) 95 96 97 98 99 Years to February *before exceptional items and as restated according to FRS14 Chairman's statement An increasingly powerful and respected voice in our sector These excellent results are a further step in our ambition to build a powerful and dynamic business across each of our core disciplines. Turnover has increased by 29% to £113.8 million, gross profit by 48% to £50.1 million and profit before tax and exceptional items by 38% to £7.7 million. The exceptional items principally relate to the costs of integration and reorganisation following the acquisition of Dewe Rogerson, which has been incorporated for 41/2 months of the year under review. Diluted earnings per share before exceptional items grew by 18% to 2.06p per share. This continues to represent the most appropriate measure of shareholder value given the influence of deferred consideration shares in acquisitions made by the Group. The board is recommending a 20% increase in the final dividend to 0.42p per share. We continue to demonstrate strong growth in revenues across all operating divisions. Our UK and continental European businesses continued to secure significant client wins and occupy increasingly powerful positions within their respective marketplaces. The advertising, public relations and marketing communications divisions all delivered healthy increases in profitability, offset in part by the disappointment of our design operations, where the necessary action has been taken. We have increased the scale of our US operations and our businesses in New York have enjoyed a strong year. In the Asia Pacific region our public relations division was affected by the general economic uncertainty, but is well positioned to benefit from any upturn. Our advertising and design businesses in the region continued to grow and remained profitable. Our strategic approach will continue to be to develop the Group through a combination of organic growth and carefully targeted acquisitions. The acquisition of Dewe Rogerson in October 1998 and its integration has positioned Citigate Dewe Rogerson as one of the leading international financial public relations brands. It has the resource, experience and expertise to provide strategic advice and execution to companies across the world. The acquisition of the Alexander Demuth agency in Frankfurt in January was a further step towards our objective of securing a substantial presence in each of the major economies in Europe. The acquisition of Team Marketing Communications and its integration with LGM has strengthened our existing sales promotion and direct marketing operation. During the year Anthony Carlisle
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York Contact: Jim Sansevero Telephone: +1 212 508 3400 San Francisco Contact: John Quartararo Telephone: +1 415 274 7570 Hong Kong Contact: Mark Amdur Telephone: +852 2827 2411 Citigate Dewe Rogerson Advertising & Branding London Contact: Ghilly Raku Telephone: + 44 171 282 8000 Alexander Demuth Frankfurt Contact: Alexander Demuth Telephone: +49 69 1700 710 Citigate Westminster London Contact: Public Affairs ­ Warwick Smith Public Relations ­ Adrian Roxan Telephone: +44 171 838 4800 Brussels Contact: Thierry Lebeaux Telephone: +322 736 8135 Newbridge Partnership London Contact: Chris Austin Telephone: +44 171 838 4898 Citigate Scotland Edinburgh/Glasgow Contact: Flora Martin Telephone: +44 141 400 1770 Citigate Technology London/Northampton Contact: Suzy Frith Telephone: +44 171 638 9571 Hong Kong Contact: Mike Dunn Telephone: +852 2521 0633 Citigate Lloyd Northover London Contact: Jim Northover Telephone: +44 171 430 1100 Hong Kong Contact: Jo Clarke Telephone: +852 2521 0633 Singapore Contact: Cheong Lam Wong Telephone: +65 336 6577 Citigate Bass Yager Los Angeles Contact: Myles Dacre Telephone: +1 323 866 3400 Citigate Publishing London Contact: Barbara Burrows Telephone: +44 171 490 4747 Citigate South Africa Johannesburg Contact: Adrian Horner Telephone: +27 11 804 4900 Durban Contact: Janet Wilson Telephone: +27 31 224 074 Cape Town Contact: Neels de Coning Telephone: +27 21 418 7747 Citigate Northern Ireland Belfast Contact: Alan Burnside Telephone: +44 1232 428 232 SEA Dewe Rogerson Dusseldorf Contact: Bernhard Meising Telephone: +49 211 577 5900 NBS Spolka Warsaw Contact: Anna Krajewska Telephone: +48 22 826 6441 Capital Communications Budapest Contact: Gabor Hegyi Telephone: +3611 382334 International network of affiliates and partners Australia Belgium Brazil Czech Republic Finland France Germany Hungary India Indonesia Ireland Italy Japan Korea Malaysia Norway Philippines Portugal Singapore Spain Sweden Switzerland Taiwan Thailand Turkey Vietnam 64 Incepta Group plc
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­ Cary Martin/Kevin Soady Financial Services ­ Malcolm Nash Telephone: +44 171 638 9571 New York Contact: IR ­ Richard Simonelli M&A ­ Owen Blicksilver Corporate PR ­ Mark Berman Telephone: +1 212 688 6840 Hong Kong Contact: Financial PR ­ Felix Miao Corporate PR ­ Jonathan Zeal Telephone: +852 2521 0633 Tokyo Contact: Kazuko Matsui Telephone: +81 335 04771 San Francisco Contact: Maria Stokes Telephone: +1 415 274 7570 Chicago Contact: Deborah Gordon Telephone: +1 312 372 0771 Miami Contact: Seth Gordon Telephone: +1 305 381 6500 Mumbai Contact: Rosanagh Catherwood Telephone: + 91 22 284 2728 Birmingham Contact: Ian Hunter Telephone: +44 121 631 2299 Leeds Contact: Sally Burrows Telephone: +44 113 297 9899 TEAM LGM London Contact: Tony Simpson/Susie Vivian Telephone: +44 171 535 9800 Park Avenue London Contact: Tony Cadman Telephone: +44 181 964 0678 Citigate Albert Frank London Contact: Philip Gregory Telephone: +44 171 282 8000 New York Contact: Jim Sansevero Telephone: +1 212 508 3400 San Francisco Contact: John Quartararo Telephone: +1 415 274 7570 Hong Kong Contact: Mark Amdur Telephone: +852 2827 2411 Citigate Dewe Rogerson Advertising & Branding London Contact: Ghilly Raku Telephone: + 44 171 282 8000 Alexander Demuth Frankfurt Contact: Alexander Demuth Telephone: +49 69 1700 710 Citigate Westminster London Contact: Public Affairs ­ Warwick Smith Public Relations ­ Adrian Roxan Telephone: +44 171 838 4800 Brussels Contact: Thierry Lebeaux Telephone: +322 736 8135 Newbridge Partnership London Contact: Chris Austin Telephone: +44 171 838 4898 Citigate Scotland Edinburgh/Glasgow Contact: Flora Martin Telephone: +44 141 400 1770 Citigate Technology London/Northampton Contact: Suzy Frith Telephone: +44 171 638 9571 Hong Kong Contact: Mike Dunn Telephone: +852 2521 0633 Citigate Lloyd Northover London Contact: Jim Northover Telephone: +44 171 430 1100 Hong Kong Contact: Jo Clarke Telephone: +
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Adding Value in Marketing and Distribution DCC plc Annual Report 1999 Corporate Profile DCC is an Irish based value adding marketing and distribution group with a strong growth record and a focused approach to the management and development of its four divisions: is a rapidly developing international division which provides distribution and manufacturing services to the high growth computer sector. is building on its strong market position in the cash generative liquified petroleum gas distribution business in Ireland and Britain and is the fastest growing oil distribution business in Ireland. is growing its business in the marketing and distribution of its own branded and third party branded products for higher growth segments of the Irish food trade. is expanding its hospital supply business in Ireland and Britain, expanding internationally in the growing mobility and rehab market and building a vibrant health supplements business in Britain. DCC was founded in 1976 by Jim Flavin, Chief Executive/Deputy Chairman. The Company's shares are listed on the Irish Stock Exchange and the London Stock Exchange. DCC's market capitalisation at 7 May 1999 was I762 million (US$823 million). The Group employs approximately 2,700 people. Contents Financial Highlights 1 The Group at a Glance 2 Financial Summary and Key Ratios 1992 - 1999 4 Directors 5 Chairman's Statement 6 Chief Executive / Deputy Chairman's Review 8 Divisional Reviews 12 Financial Review 20 Corporate Information 25 Corporate Governance 26 Report of the Directors 28 Report on Directors' Remuneration 30 Statement of Directors' Responsibilities 34 Report of the Auditors 35 Accounting Policies 37 Financial Statements 40 Notes to the Financial Statements 45 Group Directory 73 Shareholder Information 77 Index 79 DCC plc Annual Report and Accounts 1999 Financial Highlights for the year ended 31 March 1999 1999 Turnover R1,059.3m Profit before goodwill amortisation and tax R59.2m Operating cash flow R65.5m Adjusted earnings per share* R57.19c Dividend per share R
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Financial Summary and Key Ratios 1992 - 1999 4 Directors 5 Chairman's Statement 6 Chief Executive / Deputy Chairman's Review 8 Divisional Reviews 12 Financial Review 20 Corporate Information 25 Corporate Governance 26 Report of the Directors 28 Report on Directors' Remuneration 30 Statement of Directors' Responsibilities 34 Report of the Auditors 35 Accounting Policies 37 Financial Statements 40 Notes to the Financial Statements 45 Group Directory 73 Shareholder Information 77 Index 79 DCC plc Annual Report and Accounts 1999 Financial Highlights for the year ended 31 March 1999 1999 Turnover R1,059.3m Profit before goodwill amortisation and tax R59.2m Operating cash flow R65.5m Adjusted earnings per share* R57.19c Dividend per share R14.66c Dividend cover (times) 3.9 Acquisition and development expenditure R93.4m Return on capital employed - excluding goodwill - including goodwill 36.3% 21.2% Group net (debt)/cash (R20.3m) Debt ratio 10.4% * adjusted to exclude the effect of goodwill amortisation 1998 R892.3m R46.6m R50.8m R45.41c R12.19c 3.7 R33.4m 33.6% 20.0% R7.0m n/a % change +18.7% +27.0% +28.9% +25.9% +20.3% Operating Profit by Division DCC SerCom DCC Energy DCC Foods DCC Healthcare Other Interests RÕm % change 18.3 +18.2% 18.2 +37.8% DCC SerCom 15.0 +16
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14.66c Dividend cover (times) 3.9 Acquisition and development expenditure R93.4m Return on capital employed - excluding goodwill - including goodwill 36.3% 21.2% Group net (debt)/cash (R20.3m) Debt ratio 10.4% * adjusted to exclude the effect of goodwill amortisation 1998 R892.3m R46.6m R50.8m R45.41c R12.19c 3.7 R33.4m 33.6% 20.0% R7.0m n/a % change +18.7% +27.0% +28.9% +25.9% +20.3% Operating Profit by Division DCC SerCom DCC Energy DCC Foods DCC Healthcare Other Interests RÕm % change 18.3 +18.2% 18.2 +37.8% DCC SerCom 15.0 +16.1% 9.8 +36.1% 2.4 +5.2% 63.7 +24.7% DCC Healthcare Other Interests DCC Foods DCC Energy DCC plc Annual Report and Accounts 1999 1 The Group at a Glance DCC SerCom (services to the computer industry) provides distribution and manufacturing services, including localisation, to the international computer industry. Micro P and Gem in Britain and Sharptext in Ireland market and distribute a broad range of computer hardware and software products to large multiple retailers, computer dealers, value added resellers, computer superstores, mail order catalogues and a variety of other outlets. SerCom Solutions provides extensive services for the supply chain and manufacturing requirements of computer software and hardware companies including the procurement of components, warehousing, sub-assembly and delivery of product directly to its customers' production lines on a "just-in-time" basis. Its subsidiary ITP translates and adapts software, documentation and on-line help for international computer companies to enable their products to conform to the language and cultures of local markets. 1999
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.1% 9.8 +36.1% 2.4 +5.2% 63.7 +24.7% DCC Healthcare Other Interests DCC Foods DCC Energy DCC plc Annual Report and Accounts 1999 1 The Group at a Glance DCC SerCom (services to the computer industry) provides distribution and manufacturing services, including localisation, to the international computer industry. Micro P and Gem in Britain and Sharptext in Ireland market and distribute a broad range of computer hardware and software products to large multiple retailers, computer dealers, value added resellers, computer superstores, mail order catalogues and a variety of other outlets. SerCom Solutions provides extensive services for the supply chain and manufacturing requirements of computer software and hardware companies including the procurement of components, warehousing, sub-assembly and delivery of product directly to its customers' production lines on a "just-in-time" basis. Its subsidiary ITP translates and adapts software, documentation and on-line help for international computer companies to enable their products to conform to the language and cultures of local markets. 1999 1998 Turnover I416.5m R336.9m +23.6% Profit I18.3m R15.5m +18.2% Margin 4.4% 4.6% ROCE 42.8% 47.6% Employees 1,239 1,144 DCC Energy is a leading importer, distributor and marketer of liquefied petroleum gas (LPG) and oil products in the Republic of Ireland and Northern Ireland and is a leading independent marketer and distributor of LPG in Britain. In Ireland, Flogas has marine LPG terminals in Drogheda, Cork and Belfast, while in Britain it operates from terminals in Leicester, Glasgow, Newcastle, Leeds, Newport and London. Emo Oil has marine oil import terminals in Dublin, New Ross and Belfast and supplies all grades of distillates (heating oils and diesel), fuel oils and petrol for transport, domestic, commercial and industrial uses. Turnover Profit Margin ROCE Employees 1999 I193.3m 1998 R160.9m
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53 2 73 Health and Safety 29 Interest Payable & Similar Charges (notes 7 & 8) 49,21 Interest Rate Risk Management 24 Internal Financial Controls 27 Investor Relations 77 DCC plc Annual Report and Accounts 1999 79 Index Page Minority Interests (note 11) 51 Net Cash/Debt (note 41) 71 Net Debt/Equity Ratio 23 Nomination Committee Members 25 Notes to the Financial Statements 45 Operating Assets Operating Cash Flow Operating Lease Commitments (note 43) Operating Profit by Division 22 23,70 71 1 Pensions and Similar Obligations (note 31) 65 Pensions - Directors 30 Provisions for Liabilities and Charges (note 29) 64 Reconciliation of Movements in Equity Shareholders' Funds (note 35) 67 Reconciliation of Net Cash Flow to Movement in Net (Debt) / Cash 44 Registrars 77 Related Party Transactions (note 47) 72 Remuneration Committee 30 Reporting Currency (note 45) 72 Reserves (note 34) 67 Return on Capital Employed (ROCE) 1,21 Segmental Information (note 1) 45 Service Agreements 31 Share Capital (note 32) 66 Share Premium (note 33) 66 Share Price Data 77 Shareholder Information 77 Shareholders' Funds 22,67 Statement of Directors' Responsibilities 34 Statement of Total Recognised Gains and Losses 41 Stocks (note 19) 57 Subsidiary Undertakings (note 18) Substantial Shareholdings Swaps - currency Swaps - interest rates Taxation (note 10) Treasury Policy and Management Turnover Segmental Analysis Web Site Working Capital Year 2000 Page 57 28 62 62 50 24 45,47 77 22 7,24 80 DCC plc Annual Report and Accounts 1999
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) Deferred Taxation (note 30) Depreciation Derivative Financial Instruments (note 28) Directors' and Company Secretary's Interests Directors' Interests in Contracts Directors of the Company Directors' Remuneration (Report on) 58 64,50 53,50 61,24 32 31 5 30 Directors' Report Directors' Share Options Dividend Cover Dividends (note 13) Divisional Reviews DCC SerCom DCC Energy DCC Foods DCC Healthcare Page 28 33 22 51,78,28 12 14 16 18 Earnings Per Share (note 14) Employee Information (note 4) Employee Share Schemes Euro 52,22,1 48 30 6 Finance Leases (note 27) 61 Financial Assets (note 17) 54 Financial Calendar 78 Financial Highlights 1 Financial Strength 23 Financial Review 20 Financial Summary and Key Ratios 1992 - 1999 4 Fixed Assets (note 16) 53 Forward Contracts - currency 63 Going Concern Goodwill Group at a Glance Group Directory 27 20,53 2 73 Health and Safety 29 Interest Payable & Similar Charges (notes 7 & 8) 49,21 Interest Rate Risk Management 24 Internal Financial Controls 27 Investor Relations 77 DCC plc Annual Report and Accounts 1999 79 Index Page Minority Interests (note 11) 51 Net Cash/Debt (note 41) 71 Net Debt/Equity Ratio 23 Nomination Committee Members 25 Notes to the Financial Statements 45 Operating Assets Operating Cash Flow Operating Lease Commitments (note 43) Operating Profit by Division 22 23,70 71 1 Pensions and Similar Obligations (note 31) 65 Pensions - Directors 30 Provisions for Liabilities and Charges (note 29) 64 Reconciliation of Movements in Equity Shareholders' Funds (note 35) 67 Reconciliation of Net Cash Flow to Movement in Net (Debt) / Cash 44 Registr
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N Brown Group plc Report and Accounts 1999 Financial highlights For the 52 weeks ended 27th February 1999 Summary of results - continuing operations 1999 1998 Change(%) Turnover Operating profit Profit before taxation Profit after taxation Earnings per share Dividends per share Net assets Net asset value per share Gearing £324.3m £310.8m 4.3 £46.7m £43.4m 7.8 £43.2m £40.2m 7.4 £29.7m £27.4m 8.3 20.67p 19.17p 7.8 8.20p 7.50p 9.3 £148.5m £128.2m 15.8 102p 88p 29% 41% Contents 2 ­3 4 ­ 12 13 14 ­ 16 14 ­ 16 18 ­ 20 21 ­ 22 23 ­ 27 28 29 30 31 32 ­ 33 34 34 34 35 ­ 46 47 48 Chairman's statement Chief Executive's review Directors and officers Five year review Financial review Directors' report Corporate governance statement Remuneration report Statement of directors' responsibilities Auditors' report to the shareholders of N Brown Group plc Group profit and loss account Balance sheets Group cash flow statement Statement of total recognised gains and losses Note of historical cost profits and losses Reconciliation of movements in shareholders' funds Notes to the accounts Shareholder information Notice of annual general meeting 1998 was a challenging year for the home shopping sector. N Brown, however, has continued to show its strength by reporting another record result in tough retail trading conditions. The results highlighted opposite are due to many factors, not least our continuing drive to improve customer targeting, product offer, operational efficiency and quality of service, and to build closer relationships with our customers. Behind all of these factors, the foundation for our success is our people, some of whom are featured in this report, who have tirelessly looked for ways to sustain business growth and add value for our customers and shareholders. Our catalogues are grouped into three lifestyles: Young (30-50): Fashion World, Classic Combination, Simply Be. Midlife (45-65): JD Williams, Ambrose Wilson, Oxendales, Heather Valley, Fifty Plus
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man's statement Chief Executive's review Directors and officers Five year review Financial review Directors' report Corporate governance statement Remuneration report Statement of directors' responsibilities Auditors' report to the shareholders of N Brown Group plc Group profit and loss account Balance sheets Group cash flow statement Statement of total recognised gains and losses Note of historical cost profits and losses Reconciliation of movements in shareholders' funds Notes to the accounts Shareholder information Notice of annual general meeting 1998 was a challenging year for the home shopping sector. N Brown, however, has continued to show its strength by reporting another record result in tough retail trading conditions. The results highlighted opposite are due to many factors, not least our continuing drive to improve customer targeting, product offer, operational efficiency and quality of service, and to build closer relationships with our customers. Behind all of these factors, the foundation for our success is our people, some of whom are featured in this report, who have tirelessly looked for ways to sustain business growth and add value for our customers and shareholders. Our catalogues are grouped into three lifestyles: Young (30-50): Fashion World, Classic Combination, Simply Be. Midlife (45-65): JD Williams, Ambrose Wilson, Oxendales, Heather Valley, Fifty Plus, Shoe Tailor, Sander & Kay. Elderly (60+): Sartor, Whitfords, Bury Boot & Shoe, Special Collection. N Brown Group plc 1 Chairman's statement The group has once again produced an excellent performance in a tough retail climate, with profit before tax up by 7.4% to £43.2m and earnings per share up by 7.8% to 20.67p from continuing activities. A recommended final dividend of 5.8p, up from 5.25p last year, raises the total dividend for the year by 9.3% to 8.2p. We are now wholly focused on home shopping, having disposed of our property and financial services operations. The proceeds from these disposals added over £3m to net assets, which are up by 15.8% to £149m. A net cash inflow of £10m helped to reduce gearing from 41% to 29%. Turnover from continuing operations rose by 5.7% to £167m in the second half, to give an increase for the year of 4.3% to £324m which was largely due to higher average spending from 1.9 million established
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, Shoe Tailor, Sander & Kay. Elderly (60+): Sartor, Whitfords, Bury Boot & Shoe, Special Collection. N Brown Group plc 1 Chairman's statement The group has once again produced an excellent performance in a tough retail climate, with profit before tax up by 7.4% to £43.2m and earnings per share up by 7.8% to 20.67p from continuing activities. A recommended final dividend of 5.8p, up from 5.25p last year, raises the total dividend for the year by 9.3% to 8.2p. We are now wholly focused on home shopping, having disposed of our property and financial services operations. The proceeds from these disposals added over £3m to net assets, which are up by 15.8% to £149m. A net cash inflow of £10m helped to reduce gearing from 41% to 29%. Turnover from continuing operations rose by 5.7% to £167m in the second half, to give an increase for the year of 4.3% to £324m which was largely due to higher average spending from 1.9 million established customers. Favourable results from customer recruitment campaigns in the second half brought the total number of new customers added to the database during the year up to the record level achieved in the previous year. Gross margin increased by 1.4%, helped by an 11% reduction in stock levels and better terms negotiated throughout the supply chain. Clothing and footwear sales rose by over 3% which further increased our market share in a sector showing an overall decline. Household and electrical products recorded an 8% increase in sales to £76m, now representing 24% of total turnover. Sales from catalogues targeted at middle aged and older customers rose by 4% to £255m. Catalogues aimed at the 30+ market increased their sales by 6% to £58m, bolstered by a wider choice of younger, more fashionable merchandise. Turnover from House of Stirling, our direct selling operation, was held at last year's level until systems to support a larger sales force are introduced later in 1999. The group continues to invest heavily in the infrastructure of the business, with capital expenditure of £12m for the year. This includes the completion of the new high bay warehouse storage facility, which is now operating successfully, as well as the development of an enhanced
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customers. Favourable results from customer recruitment campaigns in the second half brought the total number of new customers added to the database during the year up to the record level achieved in the previous year. Gross margin increased by 1.4%, helped by an 11% reduction in stock levels and better terms negotiated throughout the supply chain. Clothing and footwear sales rose by over 3% which further increased our market share in a sector showing an overall decline. Household and electrical products recorded an 8% increase in sales to £76m, now representing 24% of total turnover. Sales from catalogues targeted at middle aged and older customers rose by 4% to £255m. Catalogues aimed at the 30+ market increased their sales by 6% to £58m, bolstered by a wider choice of younger, more fashionable merchandise. Turnover from House of Stirling, our direct selling operation, was held at last year's level until systems to support a larger sales force are introduced later in 1999. The group continues to invest heavily in the infrastructure of the business, with capital expenditure of £12m for the year. This includes the completion of the new high bay warehouse storage facility, which is now operating successfully, as well as the development of an enhanced stock forecasting system and an enterprise wide intranet. Following the successful resolution of a number of outstanding VAT issues, we have been able to release the remaining VAT provision of £3.6m. This benefit was partly offset, however, by the £3.0m exceptional revenue costs incurred on work to make our systems Year 2000 compliant, which is largely complete. Strategic stakes in two businesses have been acquired which share many of the core values of our home shopping business and which will give strong mutual benefit. The cost to date of these investments, including working capital facilities, is £7m. Teleview Direct rents higher priced electrical goods to consumers, operating from a centralised call centre and five regional depots but without the need for retail outlets. Since the year end we have increased our investment in the company and it has now become a subsidiary of the group with a current annual rate of turnover of £2m. We shall seek to exploit cross selling opportunities between our respective customer databases, in addition to providing funds to expand the business geographically. 2 N Brown Group plc Synectics Solutions, also currently generating £2m turnover annually, is a leading exponent of database management software and skills, specialising in the
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of him/her. The proxy need not be a member of the company. 3 To be effective, the instrument appointing a proxy and any authority under which it is executed (or a notarially certified copy of such authority) must be deposited at or sent by facsimile to the company's registrars not less than 48 hours before the time for holding the meeting. Any instrument appointing a proxy which is sent by facsimile shall not be treated as valid unless the original of such instrument is deposited at the registrar's office prior to the time of holding the meeting. 4 A form of proxy is enclosed with this notice. Completion and return of the form of proxy will not preclude a member from attending and voting in person at the meeting. 5 Copies of directors' service contracts will be available for inspection at the registered office during normal working hours and at the place of the annual general meeting for at least 15 minutes prior to and throughout the meeting. 48 N Brown Group plc Our people Merchandising: Gerry Cook, Derek Finch, Adrienne Gallagher, Helen Germain-Anderson, Ann Hewitt, Darren Lloyd, Janet Russell Customer Services: Keith Basnett, Karolyn Brogan, Guy Butler, David Copperthwaite, Jenny Cosgrove, Nick D'adamo, Steve Davies, Andy Dunn, Andrea Emeny, Margaret Gannon, Jane Griffiths, Michelle Hulme, Jason Leach, Paul Mason, Gwen Matthews, Nicola Proctor, Laura Williams Distribution: Iain Beveridge, Elaine Halliday, Angela Henthorn, Claire Johnson, Janet Kenyon, Val Kilburn, Sabina Mackie, Andy Spencer, Steve Whitmore Finance: Pat Dolan, Peter Johnson, Simon Kershaw, Martyn Pass, Amanda Vare, Jane Wilkin IT: Graham Green, Wendy Derbyshire, Sharon Gibbs, Darryll Grant, Neil Kelly, Craig Millican, Laurie Niland, Dave O'Brien Marketing: Nigel Green, Sam Carter, Louise McNab, David Pattison, Andrea Sage, Simon Weigh Human Resources: Bob Anderson, Marie Brennan, Bryn Davies, Gill Dixon, Angela Livesey, Helen Pomfret, Lesley Prestbury Design and Production: Elmwood, Photography: David Townend, Print: Polestar Corporate Print N Brown Group plc 53 Dale Street Manchester M60 6ES
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be paid for an ordinary share is 10p (exclusive of tax and expenses); (c) the maximum price which may be paid for an ordinary share is not more than 5% above the average of the middle market quotations for an ordinary share as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which that ordinary share is purchased (exclusive of tax and expenses); (d) the authority hereby granted shall expire on the earlier of 15 months from the date of this resolution or the conclusion of the next annual general meeting of the company to be held in the year 2000, provided that a contract of purchase may be made before such expiry which will or may be executed wholly or partly after the expiry of this authority and the purchase of ordinary shares may be made in pursuance of any such contract. Registered Office 53 Dale Street Manchester M60 6ES By order of the board Paul Grundy FCA Secretary 26th May 1999 Notes 1 The biographies of those directors seeking reappointment appear on page 13 of the annual report and accounts. 2 A member entitled to attend and vote at the meeting is also entitled to appoint one or more proxies to attend and, on a poll, vote instead of him/her. The proxy need not be a member of the company. 3 To be effective, the instrument appointing a proxy and any authority under which it is executed (or a notarially certified copy of such authority) must be deposited at or sent by facsimile to the company's registrars not less than 48 hours before the time for holding the meeting. Any instrument appointing a proxy which is sent by facsimile shall not be treated as valid unless the original of such instrument is deposited at the registrar's office prior to the time of holding the meeting. 4 A form of proxy is enclosed with this notice. Completion and return of the form of proxy will not preclude a member from attending and voting in person at the meeting. 5 Copies of directors' service contracts will be available for inspection at the registered office during normal working hours and at the place of the annual general meeting for at least 15 minutes prior to and throughout the meeting. 48 N Brown Group plc Our people Merchandising: Gerry Cook, Derek Finch, Adrienne Gallagher, Helen Germain-Anderson, Ann Hewitt, Darren Lloyd, Janet Russell Customer Services: Keith Basnett, Karolyn Brogan
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HITACHI CREDIT (UK) PLC REPORT & ACCOUNTS Year Ended 31 March 1999 CONTENTS Five Year Summary 1 Company Balance Sheet 16 Chairman's Statement 2 Consolidated Cash Flow Statement 17 Operating and Financial Review 4 Notes to the Accounts 18 Directors' Report 10 Notice of Annual General Meeting 29 Auditors' Report 13 Form of Proxy 31 Consolidated Profit and Loss Account 14 Company Information 33 Consolidated Balance Sheet 15 Our Business Principles are the Foundation of Our Success q Long term relationships with quality customers q Long term investment in high quality people q Development of a clear market focus identifying sectors where we can gain a substantial presence q Financial products designed solely to support the specific purchases of goods and services q Financial integrity built on the strength of the Hitachi Group q High ethical and moral standards, carrying out our business in a responsible manner. Our Role To cater for the requirements of high quality business and personal customers by providing asset-based financial and related products and services. Our Commitment to Quality We operate a quality system to ensure that customer service is maintained at a consistently high level. Everyone within the organisation has the authority to take appropriate actions within their area of responsibility to ensure that the quality system is an effective and efficient control mechanism. FINANCIAL HIGHLIGHTS Volume of Business £'000 446,271 364,385 282,177 222,004 204,891 '95 '96 '97 '98 '99 Gross Profit £'000 27,278 20,341 16,418 12,792 10,986 '95 '96 '97 '98 '99 Total Assets £'000 596,696 478,153 377,009 300,574 241,928 '95 '96 '97 '98 '99 Profit before Taxation £'000 9.305 7.805 5.610 3.692 2.745 '95 '96 '97 '98 '99 HITACHI CREDIT (UK) PLC 1 CHAIRMAN 'S STATEMENT as at 31st March 1999
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and related products and services. Our Commitment to Quality We operate a quality system to ensure that customer service is maintained at a consistently high level. Everyone within the organisation has the authority to take appropriate actions within their area of responsibility to ensure that the quality system is an effective and efficient control mechanism. FINANCIAL HIGHLIGHTS Volume of Business £'000 446,271 364,385 282,177 222,004 204,891 '95 '96 '97 '98 '99 Gross Profit £'000 27,278 20,341 16,418 12,792 10,986 '95 '96 '97 '98 '99 Total Assets £'000 596,696 478,153 377,009 300,574 241,928 '95 '96 '97 '98 '99 Profit before Taxation £'000 9.305 7.805 5.610 3.692 2.745 '95 '96 '97 '98 '99 HITACHI CREDIT (UK) PLC 1 CHAIRMAN 'S STATEMENT as at 31st March 1999 Results I am pleased to report our 17th consecutive year of growth in both profit and business volumes. For the year to 31 March 1999, volume of business increased by 22% to £446 million; gross profit by 34% to £27.3 million; profit before tax by 19% to £9.3 million; and profit after tax by 24% to £6.9 million. Earnings per share rose by 12% to 16.3p. This excellent performance is particularly pleasing since it was achieved in the face of less favourable trading conditions. The world economic environment was uncertain for much of the year, with problems in the Far East, Russia and elsewhere threatening to destabilise international capital markets. Inevitably, this had an impact on the UK domestic economy. This background has made it more difficult to maintain asset quality. Nevertheless our arrears and bad debts have continued at levels well below industry averages, whilst Fleetlease has not experienced the losses on vehicle disposals suffered by some of its competitors, partly as a result of its prudent management of residual values. The directors are recommending a final dividend of 4.3p per share, which, together with the interim dividend of 1.9p per share paid in December 1998
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Results I am pleased to report our 17th consecutive year of growth in both profit and business volumes. For the year to 31 March 1999, volume of business increased by 22% to £446 million; gross profit by 34% to £27.3 million; profit before tax by 19% to £9.3 million; and profit after tax by 24% to £6.9 million. Earnings per share rose by 12% to 16.3p. This excellent performance is particularly pleasing since it was achieved in the face of less favourable trading conditions. The world economic environment was uncertain for much of the year, with problems in the Far East, Russia and elsewhere threatening to destabilise international capital markets. Inevitably, this had an impact on the UK domestic economy. This background has made it more difficult to maintain asset quality. Nevertheless our arrears and bad debts have continued at levels well below industry averages, whilst Fleetlease has not experienced the losses on vehicle disposals suffered by some of its competitors, partly as a result of its prudent management of residual values. The directors are recommending a final dividend of 4.3p per share, which, together with the interim dividend of 1.9p per share paid in December 1998, gives a total dividend for the year of 6.2p per share. Retail Finance NOVA Retail Finance grew particularly strongly, with volume of business up by 57% to £240 million and gross profit up by 58% to £11 million. Consumer spending patterns have been changing recently. Spending on personal computers has increased substantially which has adversely affected sales in some more traditional retail sectors. We have been well placed to take advantage of the shift in spending patterns, but have not neglected other sectors, and in recent months we have established new relationships with several household names in the furniture and electrical goods sectors. Business Finance There is an imbalance at present between risk and reward in the business asset finance market. This could create difficulties for lenders in the event of an economic downturn. NOVA Business Finance has therefore been focused very strongly on improving margins whilst maintaining the quality of its business, and has avoided lending where we believe the return does not cover the risk. This is reflected in the division's trading results: volume of business reduced by 7% to £136 million but gross profit increased by 22% to £6.9 million. Contract Hire and Fleet Management Fleetlease (UK) Ltd increased gross profit by 22% to £8.7 million on
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, gives a total dividend for the year of 6.2p per share. Retail Finance NOVA Retail Finance grew particularly strongly, with volume of business up by 57% to £240 million and gross profit up by 58% to £11 million. Consumer spending patterns have been changing recently. Spending on personal computers has increased substantially which has adversely affected sales in some more traditional retail sectors. We have been well placed to take advantage of the shift in spending patterns, but have not neglected other sectors, and in recent months we have established new relationships with several household names in the furniture and electrical goods sectors. Business Finance There is an imbalance at present between risk and reward in the business asset finance market. This could create difficulties for lenders in the event of an economic downturn. NOVA Business Finance has therefore been focused very strongly on improving margins whilst maintaining the quality of its business, and has avoided lending where we believe the return does not cover the risk. This is reflected in the division's trading results: volume of business reduced by 7% to £136 million but gross profit increased by 22% to £6.9 million. Contract Hire and Fleet Management Fleetlease (UK) Ltd increased gross profit by 22% to £8.7 million on a volume increase of 6% to £66 million. It also increased its fleet size by 26% to 17,000 vehicles with growth in contract hire and fleet management, in particular. This result was achieved in difficult market conditions: both the new and used car markets declined in the second half of 1998, although there has been some improvement since then. Fleetlease has been successful in developing its personal leasing and personal contract purchase business, directed at the consumer market and, in particular, at employees of client companies. We expect rapid growth in this business, especially if Government policy turns against the company car. Insurance Hitachi Credit Insurance Corporation is still small, but we have strong expectations for its future development and it is growing rapidly. It increased its volume of business by 64% to £4 million, and gross profit by 24% to £755,000. Building for the Future Our business base is broadening constantly in our chosen market areas. Each business unit supports every other, and enables us to deliver a wide and innovative range of products to our customers. Our markets are dynamic and changing and we must invest constantly to serve them well. Last year, we made significant investments in our infrastructure. This investment will allow us to continue our development,
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serves as a member of several credit and finance councils in Japan. aged 61, appointed non-executive Vice-Chairman in April 1997 and also serves as Chairman of the Audit Committee. He has held various senior positions within the financial sector and currently holds non-executive directorships including Countryside Properties plc (Deputy Chairman) and First National Bank Ltd. aged 56, joined HCUK as a non-executive director in 1996. He has held various senior positions within the financial sector and has served as a member of various committees including Chairman of the Finance & Leasing Association in 1995-6. He currently holds directorships with Halifax Asset Finance Ltd and Lex Vehicle Leasing (Holdings) Ltd. Executive Directors Nobuyuki Sakamoto David Anthony Paul Bridgman Managing Director & Chief Executive Officer, aged 63 joined Hitachi Credit Corporation in 1960 where he held various overseas posts. He joined Hitachi Credit (UK) PLC on its establishment in 1982 as Managing Director. Managing Director, aged 52 joined HCUK on its establishment in 1982 as General Manager and joined the Board in July 1986. A graduate of Modern History from St. Catherine's College, Oxford he qualified as a Chartered Accountant and subsequently moved into the finance industry. Finance Director, aged 37 joined HCUK in 1991. He graduated in accountancy from Exeter University, before joining KPMG where he qualified as a Chartered Accountant. Secretary P.G. Bridgman Registered Office and Head office Wallbrook Business Centre Green Lane Hounslow Middlesex TW4 6NW Telephone: 0181 572 7554 Company Registration Number 1630491 Financial Advisers & Stockbrokers Charterhouse Securities Ltd 1 Paternoster Row St Paul's London EC4M 7DH Auditors KPMG Audit PLC 8 Salisbury Square London EC4 78BB Registrar Lloyds Bank Registrars The Causeway Worthing West Sussex BN99 5DP H I TAC H I C R E D I T ( U K ) P L C 33 Hitachi Credit (UK) PLC Wallbrook Business Centre, Green Lane, Hounslow, Middlesex TW4 6NW Te l : 0 1 8 1 5 7 2 7 5 5 4 F a x : 0 1 8 1 5 7 7 7 7 7 5 Web: http://www.hitachicredit.co.uk
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attorney or duly authorised officer of the corporation. In the case of joint holders, the holder who votes and whose name appears first in the register of members in respect of the joint holding shall be accepted to the exclusion of the other joint holders. Returning the Form The form must be returned to the Company's registered office no later than 10.00am on 23rd June 1999. If you are a registered ordinary stockholder and you subsequently decide to attend the meeting you may do so. H I TAC H I C R E D I T ( U K ) P L C 31 BUSINESS REPLY SERVICE Licence No. SEA 0864 SECOND FOLD 1 The Company Secretary Hitachi Credit (UK) PLC Wallbrook Business Centre Green Lane Hounslow Middlesex TW4 6BR FIRST FOLD THIRD FOLD COMPANY INFORMATION continued Non-Executive Directors Masayoshi Hanabusa David Thornham Tony Jukes Chairman, aged 64 joined Hitachi Sales Corporation in 1957. He transferred to Hitachi Credit Corporation in 1977, becoming President in 1991. He became Chairman of HCUK in 1995. Mr Hanabusa serves as a member of several credit and finance councils in Japan. aged 61, appointed non-executive Vice-Chairman in April 1997 and also serves as Chairman of the Audit Committee. He has held various senior positions within the financial sector and currently holds non-executive directorships including Countryside Properties plc (Deputy Chairman) and First National Bank Ltd. aged 56, joined HCUK as a non-executive director in 1996. He has held various senior positions within the financial sector and has served as a member of various committees including Chairman of the Finance & Leasing Association in 1995-6. He currently holds directorships with Halifax Asset Finance Ltd and Lex Vehicle Leasing (Holdings) Ltd. Executive Directors Nobuyuki Sakamoto David Anthony Paul Bridgman Managing Director & Chief Executive Officer, aged 63 joined Hitachi Credit Corporation in 1960 where he held various overseas posts. He joined Hitachi Credit (UK) PLC on its establishment in 1982 as Managing Director. Managing Director, aged 52 joined HCUK on its establishment in 1982 as General Manager and joined the Board in July 1986. A graduate of Modern History from St. Catherine's College, Oxford he qualified as a Chartered Accountant
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Multi Equipment Rental PLC Report & Accounts 1998 Contents Page 2 Corporate information 3 Chairman's statement 4 Report of the directors 9 Remuneration report 12 Report of the auditors 13 Profit and loss account 14 Reconciliation of movements in shareholders' funds 15 Balance sheet 16 Cash flow statement 17 Notes forming part of the financial statements 25 Five Year Statement 26 Notice of Annual General Meeting Report & Accounts 1998 Corporate information Directors K F Payne, non-executive chairman F R Bracegirdle, managing director K J Ferguson, operations director A E Brundle, finance director R A Bryan, non-executive director O C Cooke non-executive director Secretary and registered office A E Brundle Sir Christopher Wren Yard 117 High Street Croydon CR0 1QG Registrars Connaught St Michaels Limited PO Box 30 Victoria Street Luton Bedfordshire LU1 2PZ Brokers Seymour Pierce Limited 29/30 Cornhill London EC3V 3NF Bankers Barclays Bank plc Soho Square Business Centre 27 Soho Square London W1A 4WA Solicitors Memery Crystal 31 Southampton Road London WC1B 5HT Financial advisor Corporate Synergy PLC Piercy House 7/9 Copthall Avenue London EC2R 7NJ Company number 2641313 Auditors BDO Stoy Hayward Fitzalan House 70 High Street Ewell Epsom Surrey KT17 1RQ 2 Multi Equipment Rental PLC Chairman's Statement I am delighted to be able to report excellent results for the year ended 31 December 1998; the first reported results for Multi as a publicly quoted company. Financials Profits before tax rose by 127% to £709,000 (1997: £312,000) on turnover which increased 46% to £4.7 million (1997: £3.2 million). Earnings per share grew by 92% to 2.00p, an increase from 1.04p in 1997. Following our flotation in May of last year, and as a result of strong trading and positive cashflow, we have a strong balance sheet with net assets of £2 million and net gearing of approximately 17% at the year-end. The directors are
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c Soho Square Business Centre 27 Soho Square London W1A 4WA Solicitors Memery Crystal 31 Southampton Road London WC1B 5HT Financial advisor Corporate Synergy PLC Piercy House 7/9 Copthall Avenue London EC2R 7NJ Company number 2641313 Auditors BDO Stoy Hayward Fitzalan House 70 High Street Ewell Epsom Surrey KT17 1RQ 2 Multi Equipment Rental PLC Chairman's Statement I am delighted to be able to report excellent results for the year ended 31 December 1998; the first reported results for Multi as a publicly quoted company. Financials Profits before tax rose by 127% to £709,000 (1997: £312,000) on turnover which increased 46% to £4.7 million (1997: £3.2 million). Earnings per share grew by 92% to 2.00p, an increase from 1.04p in 1997. Following our flotation in May of last year, and as a result of strong trading and positive cashflow, we have a strong balance sheet with net assets of £2 million and net gearing of approximately 17% at the year-end. The directors are recommending a final dividend of 0.17p per ordinary share, which will be paid on 23 July 1999 to shareholders on the register on 30 April 1999. This brings the total dividend to the year to 0.30p. Rights Issue The company is proposing a rights issue to raise £1.6 million. The proceeds of the rights issue will be used to develop our non-mechanical hire activity into a new dedicated division and generally to assist in the expansion of the business and to further strengthen the balance sheet. Full details are set out in the circular, which has been despatched together with these reports and accounts. Review of the year 1998 was a significant year in Multi's development. The key event was undoubtedly our flotation on the London Stock Exchange and enabled 3i Plc to realise its investment in the company and gave us the capital to grow the business. Over the year, we successfully increased the number of companies with which we traded and continued to improve our service to those customers. Customer service is the key element of our product offering and it is this, which gives us a definite competitive edge. In February 1999 we announced our appointment as sole supplier of small tools to Total Pipeline Solutions, a division of Thames Water. To enable us to
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recommending a final dividend of 0.17p per ordinary share, which will be paid on 23 July 1999 to shareholders on the register on 30 April 1999. This brings the total dividend to the year to 0.30p. Rights Issue The company is proposing a rights issue to raise £1.6 million. The proceeds of the rights issue will be used to develop our non-mechanical hire activity into a new dedicated division and generally to assist in the expansion of the business and to further strengthen the balance sheet. Full details are set out in the circular, which has been despatched together with these reports and accounts. Review of the year 1998 was a significant year in Multi's development. The key event was undoubtedly our flotation on the London Stock Exchange and enabled 3i Plc to realise its investment in the company and gave us the capital to grow the business. Over the year, we successfully increased the number of companies with which we traded and continued to improve our service to those customers. Customer service is the key element of our product offering and it is this, which gives us a definite competitive edge. In February 1999 we announced our appointment as sole supplier of small tools to Total Pipeline Solutions, a division of Thames Water. To enable us to service this customer, we opened a new dedicated depot at Edmonton in North London. We continue to strengthen our market position within the M25, our target geographical area, which enables us to offer a fast delivery service to our customers. Prospects Sales in the early part of the New Year have been significantly ahead of the comparable period last year and the Board views the future with confidence. I would like to take this opportunity to express my appreciation and thanks for the efforts of my colleagues on the Board and all of our people for their efforts which has made 1998 such a successful year for the company. Keith F Payne Chairman 24 May 1999 Report & Accounts 1998 3 Report of the Directors for the year ended 31 December 1998 The directors present their report together with the audited financial statements for the year ended 31 December 1998. Results and dividends The profit and loss account is set out on page 13 and shows the profit for the year. The directors recommend a final ordinary dividend for the year of £48,450 which together with the interim dividend of £37,050 amounted to a total dividend for the year of 0.3 pence per share. During the year the company also paid a dividend on its preference shares of £14
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service this customer, we opened a new dedicated depot at Edmonton in North London. We continue to strengthen our market position within the M25, our target geographical area, which enables us to offer a fast delivery service to our customers. Prospects Sales in the early part of the New Year have been significantly ahead of the comparable period last year and the Board views the future with confidence. I would like to take this opportunity to express my appreciation and thanks for the efforts of my colleagues on the Board and all of our people for their efforts which has made 1998 such a successful year for the company. Keith F Payne Chairman 24 May 1999 Report & Accounts 1998 3 Report of the Directors for the year ended 31 December 1998 The directors present their report together with the audited financial statements for the year ended 31 December 1998. Results and dividends The profit and loss account is set out on page 13 and shows the profit for the year. The directors recommend a final ordinary dividend for the year of £48,450 which together with the interim dividend of £37,050 amounted to a total dividend for the year of 0.3 pence per share. During the year the company also paid a dividend on its preference shares of £14,000 and on the ``A'' ordinary shares of £7,000 to its then institutional shareholder in accordance with the terms of an agreement with that shareholder. Principal activities, trading review and future developments The principal activity of the company is the hire of small tools to the construction industry. The directors are pleased with the level of profitability during the year and look forward to the new year with confidence. Directors The directors of the company during the year and their respective beneficial interests in the issued share capital of the company are set out in the remuneration report on pages 9 to 11: Share option scheme The company's executive directors and certain other senior management hold options over shares. Full details of the share option scheme are set out in the remuneration report on pages 9 to 11 and note 16 to the financial statements. Share capital During the year the company's share capital was reorganised. Full details of the changes in the share capital during the year are set out and explained in note 16 to the financial statements. Corporate Governance statement There is commitment to high standards of corporate governance throughout the company. The board confirms that the company has complied with the provisions set out in Section 1 of the Combined Code, which was issued on 25 June 1998
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held at the Institute of Directors, 116 Pall Mall, London SW1Y 5ED on 17 June 1999 at 10 am for the following purposes: ORDINARY BUSINESS Adoption of financial statements 1. To receive, consider and adopt the audited financial statements for the period ended 31 December 1998 and the Directors' and Auditors' reports thereon. Re-appointment and re-election of Directors 2. To re-appoint Keith Frederick Payne, who was appointed since the last Annual General Meeting, as a Director. 3. To re-appoint Andrew Edward Brundle, who was appointed since the last Annual General Meeting, as a Director. 4. To re-elect Francis Russell Bracegirdle, who retires by rotation, as a Director. 5. To re-elect Keith James Ferguson, who retires by rotation, as a Director. Dividend 6. To declare a final dividend of 0.17p per ordinary share. Auditors 7. To appoint BDO Stoy Hayward as auditors of the Company and to authorise the Directors to determine their remuneration. By order of the board A E Brundle Secretary Registered Office Sir Christopher Wren Yard 117 High Street Croydon Surrey CR0 1QG 25 May 1999 Notes: 1. A member entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend and, on a poll, vote on his or her behalf. A proxy need not be a member of the Company. 2. To be valid, the form of proxy, together with the power of attorney or other authority under which it is executed or a notarially certified copy of such power or authority, must be lodged at the Company's registrars, Connaught St Michaels Limited of P O Box 30, Victoria Street, Luton, Bedfordshire, LU1 2PZ not later than 48 hours before the time of the Meeting or any adjournment thereof. 3. The completion and return of a form of proxy will not prevent a member from attending and voting in person at the Meeting if he or she so wishes. 26 Multi Equipment Rental PLC Hyway Pennington Financial London & Edinburgh 3974 Multi Equipment Rental PLC. Sir Christopher Wren Yard. 117 High Street. Croydon. Surrey CR0 1QG
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Operating profit 746 Profit on ordinary activities before taxation 709 Year ended 31 December 1997 £'000 3,230 2,020 372 312 Year ended 31 December 1996 £'000 2,267 1,400 164 102 Year ended 31 December 1995 £'000 2,245 1,521 163 102 Year ended 31 December 1994 £'000 2,053 1,343 141 101 Earnings per ordinary share pence 2.00 pence 1.04 pence 0.23 pence 0.50 pence 0.48 Net assets Net assets attributable to equity shareholders »'000 £'000 £'000 £'000 £'000 1,972 645 556 508 481 Report & Accounts 1998 25 Notice of Annual General Meeting NOTICE IS HEREBY GIVEN that the ANNUAL GENERAL MEETING of Multi Equipment Rental Plc will be held at the Institute of Directors, 116 Pall Mall, London SW1Y 5ED on 17 June 1999 at 10 am for the following purposes: ORDINARY BUSINESS Adoption of financial statements 1. To receive, consider and adopt the audited financial statements for the period ended 31 December 1998 and the Directors' and Auditors' reports thereon. Re-appointment and re-election of Directors 2. To re-appoint Keith Frederick Payne, who was appointed since the last Annual General Meeting, as a Director. 3. To re-appoint Andrew Edward Brundle, who was appointed since the last Annual General Meeting, as a Director. 4. To re-elect Francis Russell Bracegirdle, who retires by rotation, as a Director. 5. To re-elect Keith James Ferguson, who retires by rotation, as a Director. Dividend 6. To declare a final dividend of 0.17p per ordinary share. Auditors 7. To appoint BDO Stoy Hayward as auditors of the Company and to authorise the Directors to determine their remuneration. By order of the board A E Brundle Secretary
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Contents 2 ampo Highlight 1998 3 ampo Group Key Information 4 hief Executive Officer's Review Financial Statements and Notes 6 Board of Direcror'Report 17 onsolidated Profit and Loss Account 20 on olidated Balance heer 22 Parent Company Profit and Loss Account 24 Parent Company Balance heet 26 Working Capital Flow tatement Notes ro rhe Accounts 27 Accounting Principles 32 Calculation Methods for the Key Figures 34 Sampo Group Key Figures 36 Analyses 70 Auditors' Report 70 tatement by the Supervisory Board 71 upervisory Board 72 Boa rd of Directors 74 Auditor The Sampo Group 76 Private Client erYJces 78 Corporate Client Services 80 Majo r Accounts Service 84 Foreign Reinsurance Run-Off 86 Sampo Life Insurance 92 Investments 96 Sampo Personnel 98 ampo and the Environmem 100 Year 2000 and Euro The Sampo-Varma Group I0 I The ampo-Varma Group's Principal Shareholdings I 02 Varma-Sampo 104 ampo Group Management Board I05 hareholder Info rmation 106 ampo-Varma Group Offices I08 lnve tment Analy es Page 17-69 contain the fin ancial statemems pre ented in full thou ands of Fi nntsh markka. The offi cial fi nancial statemems ca n be inspected at the followin g ampo office : - Aleksanterinkatu 11, Helsinki ( ampo Group's Legal AfTai rs) Puolalankaru 5, Turku (Financial Administration) The year 1999 marks the 125th anniversary of Kaleva Mutual Insurance Company and, with it, Finnish life insurance in general. For Sompo Insurance Company, this year will be the company's 90th onniversory. To celebrate these jubilees, Sompo has published an ort book entitled "Ars Assicurato - Sompo Art from the Golden Age to the Present Day" exhibiting the company's extensive ort collection. The illustrations in this annual report originate from this book. Cover Timo Sarpaneva, 1926Fiercy glance, 1998 Timo Sorponeva, o great master of the Finnish glass sculpture, very often creates the basic form of his works by combining o circle, a square and an oval. The subject matter regularly springs from Finnish folklore. "We have to
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ancial statemems pre ented in full thou ands of Fi nntsh markka. The offi cial fi nancial statemems ca n be inspected at the followin g ampo office : - Aleksanterinkatu 11, Helsinki ( ampo Group's Legal AfTai rs) Puolalankaru 5, Turku (Financial Administration) The year 1999 marks the 125th anniversary of Kaleva Mutual Insurance Company and, with it, Finnish life insurance in general. For Sompo Insurance Company, this year will be the company's 90th onniversory. To celebrate these jubilees, Sompo has published an ort book entitled "Ars Assicurato - Sompo Art from the Golden Age to the Present Day" exhibiting the company's extensive ort collection. The illustrations in this annual report originate from this book. Cover Timo Sarpaneva, 1926Fiercy glance, 1998 Timo Sorponeva, o great master of the Finnish glass sculpture, very often creates the basic form of his works by combining o circle, a square and an oval. The subject matter regularly springs from Finnish folklore. "We have to achieve self-fulfilment as Finns, not by imitating others. Only thus will we be able to keep our ploce in the foce of fierce international competition", os the artist himself puts it. Among the stimuli behind this work one finds features of icon pointing: the expressively effective colour scale and the divine eye over· looking and protecting our earthly journey. a ~ 2 w "~'z z <( 2 ~ V) SAMPO HIGHLIGHTS 1998 11 ~ w ;";"( =zz> < February ampo made the promotion of safety for young people and families with children its theme for the year and initiated cooperation with the Mannerheim League for hild Welfare. ampo subsidiary, Ri k Managemenr Lrd, donated 4,500 aresam car seat ro the League. March ampo published its accounts for 1997. ampo roup operating profit increased to FTM 921 million and earning per share doubled to FIM 8.32. Merira Plc announced Merita Group holdings of Sampo Insurance ompany plc voting share (Sampo "A") had fallen
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achieve self-fulfilment as Finns, not by imitating others. Only thus will we be able to keep our ploce in the foce of fierce international competition", os the artist himself puts it. Among the stimuli behind this work one finds features of icon pointing: the expressively effective colour scale and the divine eye over· looking and protecting our earthly journey. a ~ 2 w "~'z z <( 2 ~ V) SAMPO HIGHLIGHTS 1998 11 ~ w ;";"( =zz> < February ampo made the promotion of safety for young people and families with children its theme for the year and initiated cooperation with the Mannerheim League for hild Welfare. ampo subsidiary, Ri k Managemenr Lrd, donated 4,500 aresam car seat ro the League. March ampo published its accounts for 1997. ampo roup operating profit increased to FTM 921 million and earning per share doubled to FIM 8.32. Merira Plc announced Merita Group holdings of Sampo Insurance ompany plc voting share (Sampo "A") had fallen from I 0.26 ro 0.07 per cent. April The meeting of Sampo Supervisory Board appointed Mr. Jyrki Juusela (Ourokumpu Oyj) its new Chairman. The FIM 100,000 ampo Safety Award was conferred on Nuorisopalvelu Yojalka ry, an association from Vihri in southern Finland, which has for years focused on improving young people's control over their own life, and achieved excellent results. The theme of the 1998 afety Award was young people and the use of intOxicants. · Unsa Ltd announced its holding of Sampo Insurance Company plc voting shares (Sampo "A") exceeded 15 per cent. Unsa Ltd shareholders - PensionVarma, Sampo, Industrial Insurance, and Kaleva - concluded a shareholder agreement on, among other things, the company's administration and pre-emptive rights pertaining to Unsa share. ampo announced it had investigated co-operation po sibilities with PV Group, but that discussions had ended without result. · ampo's Annual General Meeting approved the bond with warrants that was to be offered to permanent personnel at Sampo Group and Kaleva, as proposed by
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from I 0.26 ro 0.07 per cent. April The meeting of Sampo Supervisory Board appointed Mr. Jyrki Juusela (Ourokumpu Oyj) its new Chairman. The FIM 100,000 ampo Safety Award was conferred on Nuorisopalvelu Yojalka ry, an association from Vihri in southern Finland, which has for years focused on improving young people's control over their own life, and achieved excellent results. The theme of the 1998 afety Award was young people and the use of intOxicants. · Unsa Ltd announced its holding of Sampo Insurance Company plc voting shares (Sampo "A") exceeded 15 per cent. Unsa Ltd shareholders - PensionVarma, Sampo, Industrial Insurance, and Kaleva - concluded a shareholder agreement on, among other things, the company's administration and pre-emptive rights pertaining to Unsa share. ampo announced it had investigated co-operation po sibilities with PV Group, but that discussions had ended without result. · ampo's Annual General Meeting approved the bond with warrants that was to be offered to permanent personnel at Sampo Group and Kaleva, as proposed by the Board of Directors. The A M decided on a dividend ofFlM 3 to be paid on each hare, in accordance with rhe Board proposal. A proposal ro make ampo Ltd a public limited insurance company on July 1 t, 1998 was also accepted. The company's new name wi ll be ampo Insurance ompany plc. ampo Enterprise subsidiary AA ampo Larvija commenced operations. May The bond with warrants offered ro ampo roup and Kaleva personnel was over ubscribed. ubscriprions were con equendy reduced by around one in four. ampo arranged a physical exercise theme day for its entire personnel. Jun e ampo announced ir would handle loss surveys on motor vehicle and boat losses itselffrom rhe stan of 1999, and srop using rhe services of Finnish Loss urvey Ltd. July Varma- ampo Murual Pension Insur- ance Company commenced operations. As a result of the pension companies' structural reorganisation, some 70 per cent of Pension-Varma's insurance portfolio was transferred to Sampo Pension, which became Varma-Sampo. August Sampo published its Interim Report for the
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es in Germany Rennbahnstras e 72 -60528 Frankfurt a.M. ermany Tel. +49 69 967 8050 ax +49 69 670 1441 Roding markt 16 -20459 Hamburg rmany Tel. +49 40 61 010 Fax +494036130125 ngland A nited Kingdom Tel. + 4 17 1 208 8400 Fax + 17 1 208 8 02 INVESTMENT ANALYSES These stockbroker and inve tmenr analyst as e ed ampo a an exciting investment opportun ity in I998. ampo does not answer for the a sessments presented in the analy e. Telephone nos. AB ecurities Alfred Berg Finland Oy Ab Arcros ecurities Lrd Aros ecuririe arnegte Deutsche Morgan Grenfel l Enski lda ecurities Evli Securities Fox- Pitt, Kelron Gold man achs International tD Handelsban ken JP Morgan CO o- 2,_: Merita Secu rities Ltd 2"" Merrill Lynch w "<:zz::"> Morgan Stanley NarWest Securities < 2 Opstock ~ Schroders V) Anders Brege Ronny Ruohomaa Bengt ahlstrom Jesper kriver Frandsen Martin Gottlob Miguel Lainz Mika Koskinen hristian Kock Bob Yates William Hawkins Giovanni Govi Mars Ander on Angus Runciman Elina Timonen Andrew J Mitchell Espen Nordhus Mark Carhcart Ari Lampinen Richard Urwick Roberto Cervesi +44 171 905 5634 +44 171 786 0811 +358 954993315 +45 3333 1509 +45 32 88 03 35 +44 171 545 1054 +358 961628727 +358 9 4766 9202 +44 171 377 8929 +44 171 774 2526 +46 8 701 4149 +44 171 325 9174 +358 9 1234 0320 +44 171 772 2385 +44 171 513 6612 +44 1713756355 +358 9 404 4494 +44 171 658 3033 +44 171 658 3137
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Tel. +7 095 937 4375 Fax +3 1 I 0 452 4403 Fax +372 6 130 131 Fax +7 095 937 4376 lavi Laido, Ja nis Abasins, Manager Branch Office in Holland Managing Director Po tal addre : P.. Box 8524 AA Sampo Larvija N -3009 AM Rotterdam Merkela treet I (5th floor) T he etherlands Riga, LV-I 050 ~ 2 Visiting addre s: K.P. van der Mandelelaan 90 3062 MB Rotterdam Larvia Tel. +371 750 3333 Fax +371 750 3555 w :";(' zz::::> <( The Neth rlands Janis Tereri, 2 Tel. +3 1 10 212 1000 Managing Di rector ~ Fax +31 10 2 12 0850 V) Branch Offi es in Germany Rennbahnstras e 72 -60528 Frankfurt a.M. ermany Tel. +49 69 967 8050 ax +49 69 670 1441 Roding markt 16 -20459 Hamburg rmany Tel. +49 40 61 010 Fax +494036130125 ngland A nited Kingdom Tel. + 4 17 1 208 8400 Fax + 17 1 208 8 02 INVESTMENT ANALYSES These stockbroker and inve tmenr analyst as e ed ampo a an exciting investment opportun ity in I998. ampo does not answer for the a sessments presented in the analy e. Telephone nos. AB ecurities Alfred Berg Finland Oy Ab Arcros ecurities Lrd Aros ecuririe arnegte Deutsche Morgan Grenfel l Enski lda ecurities Evli Securities Fox- Pitt, Kelron Gold man achs International tD Handelsban ken JP Morgan CO o- 2,_: Merita Secu rities Ltd 2"" Merr
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Peptide Therapeutics Group plc Report and accounts1998 Contents 2 Chief Executive's review 4 Review of our collaborations and product portfolio 14 Board of Directors 16 Senior management 17 Financial review 18 Directors' Report 19 Corporate Governance 21 Report of the Remuneration Committee 25 Auditors' Report 26 Consolidated Profit and Loss Account 27 Consolidated Balance Sheet 28 Company Balance Sheet 29 Consolidated Cash Flow Statement 29 Reconciliation of Net Cash Flow to Movement in Net Funds 30 Notes to Consolidated Financial Statements 38 Notice of Annual General Meeting 39 Form of Proxy IBC Company Information and Advisers Realising "Following the recent completion of the acquisition of OraVax, Peptide has moved into a new phase of growth and development and, coupled with my other business interests, I feel I can no longer devote sufficient time to the Company as Chairman. My principal interest is in starting up and growing companies in the early stage of their development. Peptide has become a strong force within the biopharmaceutical sector and I consider it to have one of the strongest management teams. I have every confidence in the Company's ability to deliver sustainable value for its shareholders. I would personally like to thank all the people at Peptide for helping to build the Company into what it is today." Statement from Alan Goodman, founder of Peptide, who stood down as Chairman on 20 May 1999. 1 Peptide Therapeutics Group plc Report and accounts 1998 The recent merger between OraVax, the biopharmaceutical company in Cambridge, Massachusetts, and Peptide Therapeutics, a biopharmaceutical development company in Cambridge, United Kingdom, creates a formidable force in vaccine development. Both companies have proprietary platform technologies to develop single dose oral vaccines against several travel-related diseases with large market potentials. Consequently, the new company is in a perfect position to benefit from its large product portfolio of "ideal vaccines". "World Regional Travel Vaccine Market" ­ Frost & Sullivan, May 1999 our potential... The last year has been one of significant progress for Peptide. The highlights were: Six new collaborations; we now have partnerships with five of the world's top ten pharmaceutical companies. We acquired OraVax Inc. This, coupled with our existing projects, gives us one of the largest and broadest product pipelines in the emerging biopharmaceutical sector. We completed a successful rights issue to raise over £20m in difficult market conditions. Progress was made
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the Company into what it is today." Statement from Alan Goodman, founder of Peptide, who stood down as Chairman on 20 May 1999. 1 Peptide Therapeutics Group plc Report and accounts 1998 The recent merger between OraVax, the biopharmaceutical company in Cambridge, Massachusetts, and Peptide Therapeutics, a biopharmaceutical development company in Cambridge, United Kingdom, creates a formidable force in vaccine development. Both companies have proprietary platform technologies to develop single dose oral vaccines against several travel-related diseases with large market potentials. Consequently, the new company is in a perfect position to benefit from its large product portfolio of "ideal vaccines". "World Regional Travel Vaccine Market" ­ Frost & Sullivan, May 1999 our potential... The last year has been one of significant progress for Peptide. The highlights were: Six new collaborations; we now have partnerships with five of the world's top ten pharmaceutical companies. We acquired OraVax Inc. This, coupled with our existing projects, gives us one of the largest and broadest product pipelines in the emerging biopharmaceutical sector. We completed a successful rights issue to raise over £20m in difficult market conditions. Progress was made across the pipeline with several clinical trials completing. We now have eight products in clinical trials with a further two scheduled to enter the clinic before the end of 1999. We moved to our new premises. The building was completed on time and under budget. 2 Peptide Therapeutics Group plc Report and accounts 1998 Dr John Brown, Chief Executive Chief Executive's review with a year of significant Research and development programmes We were delighted to announce in January 1999 the successful completion of Phase II trials for both our Oral Typhoid Vaccine and our Tolerising Peptide to prevent hay fever. Both trial results provided the basis for further development of the products. During the year we discontinued two programmes that did not meet our stringent development criteria. These have been replaced in the clinical programme by our Oral ETEC Vaccine to prevent travellers' diarrhoea which entered Phase I trials in October 1998 and our Veterinary Allergy Vaccine which commenced a proof-of-principle trial in allergic dogs in March 1999. With the acquisition of OraVax we now have a total of eight products in clinical trials and a further two scheduled to enter the clinic before the end of 1999. In addition we will have five enabling technologies
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across the pipeline with several clinical trials completing. We now have eight products in clinical trials with a further two scheduled to enter the clinic before the end of 1999. We moved to our new premises. The building was completed on time and under budget. 2 Peptide Therapeutics Group plc Report and accounts 1998 Dr John Brown, Chief Executive Chief Executive's review with a year of significant Research and development programmes We were delighted to announce in January 1999 the successful completion of Phase II trials for both our Oral Typhoid Vaccine and our Tolerising Peptide to prevent hay fever. Both trial results provided the basis for further development of the products. During the year we discontinued two programmes that did not meet our stringent development criteria. These have been replaced in the clinical programme by our Oral ETEC Vaccine to prevent travellers' diarrhoea which entered Phase I trials in October 1998 and our Veterinary Allergy Vaccine which commenced a proof-of-principle trial in allergic dogs in March 1999. With the acquisition of OraVax we now have a total of eight products in clinical trials and a further two scheduled to enter the clinic before the end of 1999. In addition we will have five enabling technologies which provide the platform for the clinical product opportunities of the future. Together, we believe that this represents one of the broadest product pipelines of any emerging company in the biopharmaceutical sector. Further information on our product pipeline and collaborators is set out on pages 4 to 13. Collaborations Peptide has collaborations with five of the world's top ten pharmaceutical companies Company 1997 R&D spend ($bn) Aventis (Hoechst/RPR) 2.4 Glaxo Wellcome 1.9 AstraZeneca 1.9 Novartis 1.8 Roche 1.8 Pfizer 1.7 Merck 1.7 Eli Lilly 1.4 Johnson & Johnson 1.3 SmithKline Beecham 1.3 In 1998 we were delighted to announce six new collaborations. These included two relating to the exploitation of our RAPiD protease inhibitor development technology with Eli Lilly and Novartis. These provide excellent third party endorsements for the technology and should provide the
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which provide the platform for the clinical product opportunities of the future. Together, we believe that this represents one of the broadest product pipelines of any emerging company in the biopharmaceutical sector. Further information on our product pipeline and collaborators is set out on pages 4 to 13. Collaborations Peptide has collaborations with five of the world's top ten pharmaceutical companies Company 1997 R&D spend ($bn) Aventis (Hoechst/RPR) 2.4 Glaxo Wellcome 1.9 AstraZeneca 1.9 Novartis 1.8 Roche 1.8 Pfizer 1.7 Merck 1.7 Eli Lilly 1.4 Johnson & Johnson 1.3 SmithKline Beecham 1.3 In 1998 we were delighted to announce six new collaborations. These included two relating to the exploitation of our RAPiD protease inhibitor development technology with Eli Lilly and Novartis. These provide excellent third party endorsements for the technology and should provide the basis for further collaborations in the area. We also entered into a substantial collaboration with Pasteur Mérieux Connaught to develop a vaccine against Dengue fever using our proprietary ChimeriVaxTM technology. This collaboration was expanded in January 1999 to include vaccines against Japanese encephalitis, Tick-borne encephalitis and Hepatitis C and could result in Peptide receiving up to $60m in milestone payments as well as royalties. As part of this collaboration, Pasteur Mérieux Connaught subscribed for $3m (£1.8m) in new Peptide shares. Each of these collaborations is in line with our strategy to exploit technology platforms in partnership with other companies. They also provide substantial research and development funding and enable us to pursue a larger range of product opportunities. OraVax In November 1998 we announced the acquisition of OraVax Inc., a Cambridge, Massachusetts-based biotechnology company with a complementary vaccine product portfolio. The consideration for the acquisition was $20m and, following the approval by both Peptide's and OraVax's shareholders, completed on 11 May 1999. 3 Peptide Therapeutics Group plc Report and accounts 1998 Group structure
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Corporate advisers Financial advisers and stockbrokers BT Alex. Brown International 135 Bishopsgate London EC2M 3XT Solicitors Weil, Gotshal & Manges One South Place London EC2M 2WG Palmer & Dodge 1 Beacon Street Boston MA 02108-3190 USA Patent agents Reddie & Grose Daedalus House Station Road Cambridge CB1 2RE Auditors Arthur Andersen Betjeman House 104 Hills Road Cambridge CB2 1LH Bankers Barclays Bank PLC Cambridge Business Centre PO Box 326 Cambridge CB4 3UT Registrars IRG plc Balfour House 390/398 High Road Ilford Essex IG1 1NQ Tel: 0181 639 2000 Analysis of share register at 30 April 1999 Shareholding range 1 ­ 1,000 1,001 ­ 5,000 5,001 ­ 25,000 25,001 ­ 100,000 100,001 ­ 500,000 500,001 ­ 1,000,000 1,000,001 and over Number of holders 1,010 997 263 63 41 21 17 2,412 Percentage of total holders Number of shares 41.9 599,746 41.3 2,377,297 10.9 2,626,111 2.6 3,133,871 1.7 10,390,913 0.9 14,958,845 0.7 31,758,237 100.0 65,845,020 Percentage of ordinary share capital 0.9 3.6 4.0 4.8 15.8 22.7 48.2 100.0 The above analysis excludes the 10,141,617 shares which were issued to OraVax shareholders following completion of the acquisition on 11 May 1999 and the 2,359,603 shares subscribed for by Pasteur Mérieux Connaught on the same date. Designed and produced by Radley Yeldar (London) Peptide Therapeutics Group plc Peterhouse Technology Park, 100 Fulbourn Road, Cambridge CB1 9PT United Kingdom Telephone: +44 (0) 1223 275300 Facsimile: +44 (0) 1223 416300 E-mail: peptide@peptide.co.uk Web site: www.peptide.co.uk
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purpose seniority is determined by the order in which the names stand in the register of members in respect of the joint holding. 5 The completion and return of this form shall not preclude a member from attending and voting in person. ¢ FOLD 1 FOLD 2 BUSINESS REPLY SERVICE Licence No. IY 592 FOLD 3 2 Independent Registrars Group Limited Balfour House 390/398 High Road Ilford Essex IG1 1BR FOLD 4 TUCK IN Company Information and Advisers Shareholder information The share price is obtainable as follows: Financial Times Daily Telegraph The Times The Independent The Evening Standard The Daily Mail Cambridge Evening News Channel 4 Teletext service Peptide's web site at www.peptide.co.uk London Stock Exchange mnemonic ­ PTE Reuters reference ­ PTE.L Market makers Apax Partners Bankers Trust International CSFB Equities HSBC Securities Winterflood Securities Announcements Interim results ­ September Final results ­ March Company Secretary and registered office Gordon Cameron MA ACA Peterhouse Technology Park 100 Fulbourn Road Cambridge CB1 9PT Registered number 2863682 Corporate advisers Financial advisers and stockbrokers BT Alex. Brown International 135 Bishopsgate London EC2M 3XT Solicitors Weil, Gotshal & Manges One South Place London EC2M 2WG Palmer & Dodge 1 Beacon Street Boston MA 02108-3190 USA Patent agents Reddie & Grose Daedalus House Station Road Cambridge CB1 2RE Auditors Arthur Andersen Betjeman House 104 Hills Road Cambridge CB2 1LH Bankers Barclays Bank PLC Cambridge Business Centre PO Box 326 Cambridge CB4 3UT Registrars IRG plc Balfour House 390/398 High Road Ilford Essex IG1 1NQ Tel: 0181 639 2000 Analysis of share register at 30 April 1999 Shareholding range 1 ­ 1,000 1,001 ­ 5,000 5,001 ­ 25,000 25,001 ­ 100,000 100,001 ­ 500,000 500,001 ­ 1,000,000 1,000,001 and over Number of holders 1,010 997 263 63 41 21 17 2,412 Percentage of total holders Number of shares 41
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Beiersdorf at a Glance Group sales (in million DEM) 6,288 6,547 5,778 1996 1997 1998 Group profit for the year (in million DEM) 320 2752) 234 2451) 140 1996 1997 1998 1)Disregarding the extraordinary restructuring costs for tesa 2)Disregarding release of tesa provisions and sale of operations (Unless otherwise stated) Sales mill. Change from previous year % of which: cosmed mill. medical mill. tesa mill. Operating result mill. Profit for the year mill. Return on sales % Earnings per share* Total dividend mill. Dividend per share** Gross cash flow mill. Capital investment mill. Expenditure on research and development mill. % of sales Employees (average) number 1997 in DEM 6,288 8.8 1998 in DEM 6,547 4.1 1998 in 3,347 4.1 3,425 1,474 1,390 484 140 2.2 2.56 84 1.00 430 281 3,873 1,438 1,236 586 320 4.9 3.43 101 1.20 633 271 1,980 735 632 300 164 4.9 1.75 52 0.61 324 138 189 3.0 16,447 203 3.1 16,933 104 3.1 16,933 * In accordance with new DVFA/SG definition ** Plus corporation tax credit 1998: 0.51 DEM/0.26 (1997: 0.43 DEM) Important dates Annual Accounts Press Conference 1999 Annual General Meeting 1999 Dividend payment 1999 Letter to Shareholders January ­ June 1999 Letter to Shareholders January ­ September 1999 Letter to Shareholders January ­ December 1999 Annual Accounts Press Conference 2000 Annual General Meeting 2000 20.05.1999 22. 06.1999 23. 06.1999 early August 1999 early November 1999 mid March 2000 early April 2000 20. 06.2000 Beiersdorf Annual Report `98
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1998 in 3,347 4.1 3,425 1,474 1,390 484 140 2.2 2.56 84 1.00 430 281 3,873 1,438 1,236 586 320 4.9 3.43 101 1.20 633 271 1,980 735 632 300 164 4.9 1.75 52 0.61 324 138 189 3.0 16,447 203 3.1 16,933 104 3.1 16,933 * In accordance with new DVFA/SG definition ** Plus corporation tax credit 1998: 0.51 DEM/0.26 (1997: 0.43 DEM) Important dates Annual Accounts Press Conference 1999 Annual General Meeting 1999 Dividend payment 1999 Letter to Shareholders January ­ June 1999 Letter to Shareholders January ­ September 1999 Letter to Shareholders January ­ December 1999 Annual Accounts Press Conference 2000 Annual General Meeting 2000 20.05.1999 22. 06.1999 23. 06.1999 early August 1999 early November 1999 mid March 2000 early April 2000 20. 06.2000 Beiersdorf Annual Report `98 Contents Beiersdorf Group Report on the Financial Year 1998 Beiersdorf at a glance, Important dates 2 Supervisory Board and Executive Board 5 Report by the Supervisory Board 6 Foreword by the Executive Board 8 Divisional overview 10 Developments in the first three months of 1999 12 Stop press 13 Strategic orientation We are strong in Europe 15 We learn in Europe 17 We are growing in Europe 19 Worldwide growth is our goal 21 Our future lies in strategic growth 23 Further information Personnel 24 Environmental protection and safety 25 Risk management system 26 Beiersdorf share 27 Management report Business context 28 Development of turnover 29 Development of earnings 31 Capital investment 32 Research and development 33 Further prospects/Forecast 34 Financial statements Pro
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Contents Beiersdorf Group Report on the Financial Year 1998 Beiersdorf at a glance, Important dates 2 Supervisory Board and Executive Board 5 Report by the Supervisory Board 6 Foreword by the Executive Board 8 Divisional overview 10 Developments in the first three months of 1999 12 Stop press 13 Strategic orientation We are strong in Europe 15 We learn in Europe 17 We are growing in Europe 19 Worldwide growth is our goal 21 Our future lies in strategic growth 23 Further information Personnel 24 Environmental protection and safety 25 Risk management system 26 Beiersdorf share 27 Management report Business context 28 Development of turnover 29 Development of earnings 31 Capital investment 32 Research and development 33 Further prospects/Forecast 34 Financial statements Profit-and-loss account 35 Balance sheet 36 Notes Cash flow statement 37 Segment reporting, Value added statement 38 Notes on consolidation and valuation 39 Notes on the profit-and-loss account 43 Notes on the balance sheet 46 Miscellaneous information 55 Major group companies 58 Ten-year overview Beiersdorf Group 59 Imprint Published by: Beiersdorf AG, Corporate Identity Unnastrasse 48, D-20245 Hamburg, Phone +49-40-4909-0, Fax +49-40-4909-3434 Additional information: Press/PR: Phone +49-40-4909-2332. Investor Relations: Phone +49-40-4909-2739 e-mail: info@hamburg.beiersdorf.com Beiersdorf on the Internet: http://www.beiersdorf.com This Annual Report is printed on chlorine-free-bleached paper. It is also available in German. The annual accounts of Beiersdorf AG are
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fit-and-loss account 35 Balance sheet 36 Notes Cash flow statement 37 Segment reporting, Value added statement 38 Notes on consolidation and valuation 39 Notes on the profit-and-loss account 43 Notes on the balance sheet 46 Miscellaneous information 55 Major group companies 58 Ten-year overview Beiersdorf Group 59 Imprint Published by: Beiersdorf AG, Corporate Identity Unnastrasse 48, D-20245 Hamburg, Phone +49-40-4909-0, Fax +49-40-4909-3434 Additional information: Press/PR: Phone +49-40-4909-2332. Investor Relations: Phone +49-40-4909-2739 e-mail: info@hamburg.beiersdorf.com Beiersdorf on the Internet: http://www.beiersdorf.com This Annual Report is printed on chlorine-free-bleached paper. It is also available in German. The annual accounts of Beiersdorf AG are available on request from: Beiersdorf Corporate Communication, Unnastrasse 48, 20245 Hamburg, Germany Cover picture: Beiersdorf Group Head Office in Hamburg W9/1771/2GB Beiersdorf Annual Report `98 3 Supervisory Board and Executive Board Honorary Chairman Georg W. Claussen Supervisory Board Dr. Hans Meinhardt Chairman Günther Käding* Deputy Chairman Günter Herz Deputy Chairman Wilfried Boysen Dr. Diethart Breipohl Margret Buhse* Detlef Fahlbusch* Jürgen Krause* Dr. Hans Stracke Kurt Ungerath* Dr. Detlef Wiswe* Hans-Otto Wöbcke * Elected employee representatives Executive Board Dr. Rolf Kunisch Chairman Hans H. Meyer-Burgdorf Dr. Werner Opgenoorth Dr. Peter Schäfer Dieter W. Steinmeyer Uwe Wölfer Beiersdorf Annual Report `98 5 Report by the Supervisory Board Report by the
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Balance sheet structure Fixed assets 1,184 1,213 1,236 1,357 1,381 1,452 1,526 1,479 1,468 1,452 Current assets2) 1,371 1,626 1,728 1,618 1,716 1,833 2,000 2,166 2,451 2,831 (of which: Liquid funds) (107) (235) (209) (135) (188) (333) (351) (410) (683) (867) Shareholders' equity 959 1,053 1,077 1,168 1,305 1,439 1,513 1,667 1,715 1,974 Provisions 704 804 842 847 917 960 1,081 1,131 1,302 1,336 Financial liabilities 417 506 526 459 335 270 255 179 157 121 Other liabilities 475 476 519 501 540 616 677 668 745 852 Equity ratio (in %) 37.5 37.1 36.3 39.3 42.1 43.8 42.9 45.7 43.8 46.1 Return on equity (in %) 11.0 11.7 13.8 14.1 14.5 15.1 15.4 14.7 8.3 17.3 Return on total capital (in %) 3.7 3.8 4.4 4.6 4.9 4.9 5.2 4.7 2.9 5.6 Capital investment 264 483 344 343 257 307 398 240 281 271 Expenditure on research and development 115 125 138 130 146 162 175 185 189 203 in % of sales 3.0 3.2 3.1 2.9 3.1 3.1 3.3 3.2 3.0 3.1 Employees Number (average for the year) 17,644 17,842 18,521 17,599 16,880 16,886 17,040 17,385 16,447 16,933 1) From 1997 in accordance with new DVFA/SG definition 2) Including accruals and deferrals
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,446 1,566 1,652 1,763 1,886 1,918 Personnel costs 1,076 1,111 1,247 1,267 1,248 1,294 1,267 1,317 1,401 1,432 Depreciation 170 179 214 200 199 203 229 260 261 306 Operating result 272 287 355 367 403 415 470 460 484 586 Profit for the year 102 118 147 159 179 208 227 234 140 320 Return on sales (in %) 2.7 3.0 3.3 3.5 3.8 4.0 4.2 4.0 2.2 4.9 Earnings per share1) (in DEM) 1.27 1.42 1.79 1.85 2.11 2.40 2.54 2.63 2.56 3.43 Total dividend 39 50 54 54 61 67 71 84 84 101 Dividend per share (in DEM) 0.55 0.60 0.65 0.65 0.73 0.80 0.85 1.00 1.00 1.20 Balance sheet structure Fixed assets 1,184 1,213 1,236 1,357 1,381 1,452 1,526 1,479 1,468 1,452 Current assets2) 1,371 1,626 1,728 1,618 1,716 1,833 2,000 2,166 2,451 2,831 (of which: Liquid funds) (107) (235) (209) (135) (188) (333) (351) (410) (683) (867) Shareholders' equity 959 1,053 1,077 1,168 1,305 1,439 1,513 1,667 1,715 1,974 Provisions 704 804 842 847 917 960 1,081 1,131 1,302 1,336 Financial liabilities 417 506 526 459 335 270 255 179 157 121 Other liabilities 475 476 519 501 540 616 677 668 745 852 Equity ratio (in %) 37.5 37.1 36.3
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ANNUAL REPORT 1998 Controlling the production and flow of business knowledge is similar to the management of water: high quality, immediate availability and crystal clarity in a cost effective manner must be ensured. CONTENTS POLYDOC PLC ANNUAL REPORT 1998 Company Profile 3 Chairman's Statement 4 Market and Business Update 6 Product Development 10 Summary 11 PolyDoc's Business Values 12 Financial Report 13 Directors and Advisers 14 Financial Highlights 16 Directors' Report 16 Report on Directors' Remuneration 22 Statement of Directors' Responsibilities 24 Group Profit and Loss Account 25 Group Statement of Total Recognised Gains and Losses 26 Group Balance Sheet 27 Company Balance Sheet 28 Group Statement of Cash Flows 29 Notes to the Accounts 30 Auditors' Report to the Shareholders of PolyDoc Plc 42 2 COMPANY PROFILE PolyDoc is an internationally orientated company specialising in the development and provision of business solutions in the rapidly emerging field of Knowledge Management with specific focus on the health care, manufacturing and defence sectors. PolyDoc's business solutions significantly enhance productivity and quality in text-based knowledge production areas as well as enabling the re-use of knowledge throughout the customer organisation. The major element of each solution is one or more of PolyDoc's computer software products, enhanced and customised for each individual customer, integrating into their existing or planned Intranet, Internet and general Web-based environment. The company's software assets include a number of leading edge core components and toolkits that are used to create customised software application products. PolyDoc's development centres are based in The Netherlands (Amsterdam and Maastricht). It has direct sales operations in the United Kingdom, The Netherlands and the United States, and is also establishing indirect sales and marketing activities through business partners in each of these territories. Other European countries and the Pacific Rim will follow thereafter. PolyDoc Plc is registered in London, United Kingdom and has its central office in Amsterdam, The Netherlands. The ordinary shares of PolyDoc Plc are publicly traded on the Alternative Investment Market (`AIM') of The London Stock Exchange, and on the
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ated company specialising in the development and provision of business solutions in the rapidly emerging field of Knowledge Management with specific focus on the health care, manufacturing and defence sectors. PolyDoc's business solutions significantly enhance productivity and quality in text-based knowledge production areas as well as enabling the re-use of knowledge throughout the customer organisation. The major element of each solution is one or more of PolyDoc's computer software products, enhanced and customised for each individual customer, integrating into their existing or planned Intranet, Internet and general Web-based environment. The company's software assets include a number of leading edge core components and toolkits that are used to create customised software application products. PolyDoc's development centres are based in The Netherlands (Amsterdam and Maastricht). It has direct sales operations in the United Kingdom, The Netherlands and the United States, and is also establishing indirect sales and marketing activities through business partners in each of these territories. Other European countries and the Pacific Rim will follow thereafter. PolyDoc Plc is registered in London, United Kingdom and has its central office in Amsterdam, The Netherlands. The ordinary shares of PolyDoc Plc are publicly traded on the Alternative Investment Market (`AIM') of The London Stock Exchange, and on the New Market of the Amsterdam Exchanges (`NMAX'). 3 CHAIRMAN'S STATEMENT Our objective is to be a company with a unique group of software products based on linguistic approaches and methodologies and language management technologies so that we may be at the leading edge of the Knowledge Management market. I believe that 1998 has been a very successful year in our development in that we have established a more substantial customer base with an installed range of products, which will provide a platform for us to build upon in the next important stage of the company's growth. The Knowledge Management market is a relatively new market where I think PolyDoc is a pioneer in what is undoubtedly one of the most rapidly growing markets in the world of modern technology. The massive growth in Internet and Intranet usage is fuelling the critical need to manage knowledge and information in a structured and comprehensive manner. I have indicated previously that generally the difficulties in forecasting in such a new area were more a matter of timing than quality or pricing and 1998 has continued to show this to be the case. FINANCIAL RESULTS Revenue from business based on QualiFlow, our health care industry product, has started to build, contributing to an increase in total turnover of more than
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New Market of the Amsterdam Exchanges (`NMAX'). 3 CHAIRMAN'S STATEMENT Our objective is to be a company with a unique group of software products based on linguistic approaches and methodologies and language management technologies so that we may be at the leading edge of the Knowledge Management market. I believe that 1998 has been a very successful year in our development in that we have established a more substantial customer base with an installed range of products, which will provide a platform for us to build upon in the next important stage of the company's growth. The Knowledge Management market is a relatively new market where I think PolyDoc is a pioneer in what is undoubtedly one of the most rapidly growing markets in the world of modern technology. The massive growth in Internet and Intranet usage is fuelling the critical need to manage knowledge and information in a structured and comprehensive manner. I have indicated previously that generally the difficulties in forecasting in such a new area were more a matter of timing than quality or pricing and 1998 has continued to show this to be the case. FINANCIAL RESULTS Revenue from business based on QualiFlow, our health care industry product, has started to build, contributing to an increase in total turnover of more than 300% compared to the previous year. With operating costs running at a similar level also compared to the previous year this has resulted in an important reduction in pre-tax losses to £981,000. These improvements are mainly due to the development of the revenue stream contracted early in the year in the health care industry and the continuing pilot work in the defence industry coupled with well-controlled operating costs. We would have hoped to see an even greater reduction in these losses. However as I have previously stated, the early adopters of our products have taken longer to establish than anticipated. OUTLOOK FOR 1999 AND 2000 The recognition and emphasis on the implementation of Knowledge Management approaches and solutions as a major contributor to the bottom line of most organisations continues to increase and appears to have entered an essential phase. Many businesses have now allocated significant specific budgets for helping to deal with the problems of information overload and the additional competitive pressures on their business where valuable knowledge (intellectual capital) can truly be leveraged. We expect to see an important shift in the market now as many companies move from a planning to an implementation mode, from `talking' to `buying' as far as PolyDoc's solutions are concerned. Pro-GRAM BV a joint venture company,
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300% compared to the previous year. With operating costs running at a similar level also compared to the previous year this has resulted in an important reduction in pre-tax losses to £981,000. These improvements are mainly due to the development of the revenue stream contracted early in the year in the health care industry and the continuing pilot work in the defence industry coupled with well-controlled operating costs. We would have hoped to see an even greater reduction in these losses. However as I have previously stated, the early adopters of our products have taken longer to establish than anticipated. OUTLOOK FOR 1999 AND 2000 The recognition and emphasis on the implementation of Knowledge Management approaches and solutions as a major contributor to the bottom line of most organisations continues to increase and appears to have entered an essential phase. Many businesses have now allocated significant specific budgets for helping to deal with the problems of information overload and the additional competitive pressures on their business where valuable knowledge (intellectual capital) can truly be leveraged. We expect to see an important shift in the market now as many companies move from a planning to an implementation mode, from `talking' to `buying' as far as PolyDoc's solutions are concerned. Pro-GRAM BV a joint venture company, has been formed by three academic/ teaching hospitals in The Netherlands to market, together with PolyDoc, the QualiFlow software and the knowledge created using the software to a broad range of organisations in the Dutch health care industry. PolyDoc has accepted an invitation to become a shareholder in this company. With our health care solution implementations now rapidly leading us to having 4 referenceable customers, joint marketing activities commenced at the beginning of 1999. These developments have already received some enthusiastic press coverage in The Netherlands during March 1999. This joint venture company is ideally placed to accelerate our QualiFlow and Lessenger sales in the Benelux. With more than one hundred potential prospects for these solutions coupled with the backing and credibility of the top leading hospitals, we are confident of achieving good sales success in 1999 and beyond. In the UK, The Netherlands and the USA the further partnerships now being established, together with the several others under discussion, also give us great confidence of achieving important customer and revenue developments in these territories. This combined with the increased marketing of our NormFlow manufacturing solution and the firm position we expect to establish in the UK defence industry should make 1999 another year of significant revenue growth. It is also expected to firmly place us in each of our target geographies with
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pective responsibilities of directors and auditors The directors are responsible for preparing the Annual Report including, as described on page 24, the accounts. Our responsibilities, as independent auditors, are established by statute, the Auditing Practices Board and by our profession's ethical guidance. We report to you our opinion as to whether the accounts give a true and fair view and are properly prepared in accordance with the Companies Act. We also report to you if, in our opinion, the directors' report is not consistent with the accounts, if the group has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if the information specified by law regarding directors' remuneration and transactions with the company is not disclosed. We read the other information contained in the Annual Report and consider whether it is consistent with the audited accounts. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the accounts. Basis of audit opinion We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the accounts. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the accounts, and of whether the accounting policies are appropriate to the group's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the accounts are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the accounts. Opinion In our opinion the accounts give a true and fair view of the state of affairs of the company and of the group as at 31 December 1998 and of the loss of the group for the year then ended and have been properly prepared in accordance with the Companies Act 1985. Ernst & Young Registered Auditor Reading 27 May 1999 45 POLYDOC PLC Address: `De Gelder' A.J. Ernststraat 595 - G 1082 LD Amsterdam Telephone: (+31) 20 - 301 39 00 Telefax: (+31) 20 - 301 39 99 General E-mail address: info@polydoc.com Internet: http://www.polydoc.com 46
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the Trade Register in The Netherlands. As a consequence PolyDoc NV need not file its accounts at the Trade Register. 20. Post Balance Sheet Events On 20 January 1999, a further 5.000 ordinary shares were allotted for cash to a holder of share options at 20p each. On 12 March 1999, a further 340.000 ordinary shares were issued for £ 499.800 in cash giving a share premium of £431.800. On 12 April 1999, the repayment or conversion of the £ 1.570.920 Convertible Loan Stock held by the Company's three largest ordinary shareholders, was extended from its original date of 31 July 1999 to 31 July 2000. This amount has been included in amounts falling due within one year at 31 December 1998. Further details of the change in the redemption and conversion date can be found in the Directors' Report. On 19 February 1999 Lessenger Associates BV changed its name to Lessenger BV. 44 AUDITORS' REPORT TO THE SHAREHOLDERS OF POLYDOC PLC We have audited the accounts on pages 25 to 41 which have been prepared under the historical cost convention and on the basis of the accounting policies set out on pages 30 and 31. Respective responsibilities of directors and auditors The directors are responsible for preparing the Annual Report including, as described on page 24, the accounts. Our responsibilities, as independent auditors, are established by statute, the Auditing Practices Board and by our profession's ethical guidance. We report to you our opinion as to whether the accounts give a true and fair view and are properly prepared in accordance with the Companies Act. We also report to you if, in our opinion, the directors' report is not consistent with the accounts, if the group has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if the information specified by law regarding directors' remuneration and transactions with the company is not disclosed. We read the other information contained in the Annual Report and consider whether it is consistent with the audited accounts. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the accounts. Basis of audit opinion We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the accounts. It also includes an assessment of the significant estimates
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Sibir Energy plc Annual report and accounts for the 18 month period ended 31 December 1998 1 H i g h l i g h t s 2 Chairman's statement 4 Chief Executive's strategic, financial and operations review 1 0 Directors and advisers 1 1 A c c o u n t s Highlights during and after period under review · Oil and gas reserves increased following: Acquisition of 20% stake in Ugraneft Acquisition of 100% of Pentex Energy PLC · Four strategic developments: Acquisition of 20% stake in Ugraneft Acquisition of Pentex Announcement of recommended offer for EuroSov Energy PLC (78% acceptances as at 20 May 1999) Announcement of talks with MNK · Management strengthened following: Acquisition of Pentex Offer for EuroSov. Chairman's statement Having been a shareholder from the incorporation of the Company and having served on the Board for some time I was delighted to accept my appointment as your Chairman earlier this year and it gives me pleasure to report to you. On 15 December 1998, my predecessor and your Chief Executive reported to you against the background of the Russian financial crisis and an oil sector reeling from an extremely low oil price. They felt it proper to spell out the risks of investing in an oil company with a large proportion of its assets located in Russia. The market had already recognised this and the share price of the Company attributed little or no value to our Russian assets. More important in my opinion was their belief that the risks were exaggerated and their optimism that they were making progress in key areas where they were exerting their fullest efforts. Since then the sector has seen tremendous restructuring and I am pleased to report that your management has been working assiduously to strengthen their position in Russia where of course the Company's greatest potential lies. They are fully focused on the creation of shareholder value. They have always believed that the quickest way to achieve this is to be an influential part of a well connected Russian entity which in turn would seek an international listing in due course. The recommended offer to take over EuroSov Energy PLC and the discussions with Moscow Oil Company ("MNK") are substantial steps in the direction of achieving their aim. The EuroSov merger will bring together human skills, increased oil production, economies of scale and rationalisation of head office arrangements. Upon completion the enlarged Sibir
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of the Russian financial crisis and an oil sector reeling from an extremely low oil price. They felt it proper to spell out the risks of investing in an oil company with a large proportion of its assets located in Russia. The market had already recognised this and the share price of the Company attributed little or no value to our Russian assets. More important in my opinion was their belief that the risks were exaggerated and their optimism that they were making progress in key areas where they were exerting their fullest efforts. Since then the sector has seen tremendous restructuring and I am pleased to report that your management has been working assiduously to strengthen their position in Russia where of course the Company's greatest potential lies. They are fully focused on the creation of shareholder value. They have always believed that the quickest way to achieve this is to be an influential part of a well connected Russian entity which in turn would seek an international listing in due course. The recommended offer to take over EuroSov Energy PLC and the discussions with Moscow Oil Company ("MNK") are substantial steps in the direction of achieving their aim. The EuroSov merger will bring together human skills, increased oil production, economies of scale and rationalisation of head office arrangements. Upon completion the enlarged Sibir will be producing in excess of 10,000 barrels of oil per day and I would expect this figure to rise steadily in the months ahead. The combination of the Sibir and EuroSov management teams will facilitate the conclusion of the discussions with MNK. The real prospect of participating in this integrated up and down-stream venture with its access to a huge and under-developed market is extremely attractive and exciting. In addition to the aforementioned strategic developments the period under review has also seen the successful acquisition and integration of the Pentex Group. We put the Pentex UK assets up for sale on the understanding that they would be sold if the free proceeds were sufficient to make a material impact on our cash resources. In the event while the assets were in demand the offers received fell short of our expectations and therefore we did not sell. There seems little doubt that the offers received reflected the growing fear at that time that the low oil price was here to stay. In production terms the average production during the period under review was the highest on record for the Pentex Group. The oil sector was beset during the period of the review by an extremely low oil price with consequential impairment to the expected contribution to our overall running costs from the Pentex Group. Despite the low