Report and Financial Statements
Year Ended 31 March 2007
     WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Annual report and financial statements for the year ended 31 March 2007
Financial highlights 4
Chairman’s statement 5
Corporate highlights 6
Chief Executive’s report 7
Financial review 8
Report of the directors 9
Statement of directors’ 11
responsibilities
Report of the independent auditors 12
Consolidated profit and loss account 14
Consolidated statement of total 15
recognised gains and losses and
reconciliation of movements in
shareholders' funds
Consolidated balance sheet 16
Company balance sheet 16
Consolidated cash flow statement 17
Notes forming part of the 18
financial statements
Directors
M W Lawrence
S J Steel
T Hutchinson
P F Dicks
D C Rogers
Secretary and Registered Office
S J Steel,
Jenna House,
North Crawley Road,
Newport Pagnell.
MK16 9TG
Company number
04625594
Auditors
BDO Stoy Hayward LLP,
66 Broomfield Road,
Chelmsford, Essex.
CM1 1SW
Contents COOLECTRIC LTD 4 4 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Financial highlights for the year ended 31 March 2007
Financial Highlights
The Board of Waterline Group Plc (“Waterline” or the “Group”) one of
the larger suppliers to the fitted kitchen industry in the UK,
announces its results for the twelve month period to 31 March 2007,
where it reports turnover, profit before tax, basic EPS and net assets
per share.
• Turnover up to £83.7m
• Profit before tax down 35.3 per cent to £0.87m
• Basic EPS down 56 per cent to 2.54p
• Net assets per share down by 0.5 per cent to 56.0p
• Net debt reduced from £4.2m to £4.1m
• No proposed dividend payment for the year
• Current trading remains challenging 5 5
Chairman’s statement for the year ended 31 March 2007
I am pleased to report the Group’s results for the year
ending 31 March 2007. This has been a year of continued
integration and consolidation from the Waterline team
against a backdrop of a continually challenging
refurbishment sector. The Group has continued to grow its
turnover focusing its efforts at the mid to high end of the
independent kitchen retailer channel. The sector’s principal
growth area continues to be at the high end price points.
During the year considerable efforts were made with the
aims to:
• Consolidate the Group as a
one-stop trade supplier
• Complete the integration of the
Coolectric ‘Liebherr’ operation
• Expand UK presence through the purchase
of Brian Donaldson Distribution Limited
• Continue our successful UK
Roadshow programme
• Develop our furniture portfolio with the
introduction of ‘Sigma’
I am pleased to report good progress was made on all the
above targets, maintaining the Group’s position as a key
player in the sector.
Overall turnover for the Group has increased by 11.9% to
£83.7m from £74.8m in the previous year. The gross margin
has increased to 24.8% in line with expectations.
The Group’s operating profit decreased by 15.4% to £1.62m
compared with £1.98m in the previous year. Profit before
tax decreased by 35.3% to £0.87m whilst basic earnings per
share fell by 56% from 5.05p to 2.54p. These results are
lower than those forecast at the time of the IPO due in part
to the increased logistical spend in the Coolectric business.
During the year there have been one-off costs for the
compensation for loss of office for two former operational
board directors, a stock adjustment within Coolectric,
excess IT costs relating to the completion of certain projects
and excess logistical costs related to the Coolectric
business. Due to the decrease in profitability and the
continuing requirement for investment the Board of
Directors do not propose a dividend this year.
Cash flow again continued to be strong with £3.2m
generated from trading operations. The Group’s net debt
position decreased slightly from £4.2 million to £4.1 million
although interest costs showed an increase as a result of
higher interest rates during the year. The acquisition of
Brian Donaldson Distribution Limited was financed from
internal resources.
The Board is confident that the investments made during
the year combined with management changes and the
acquisition of Brian Donaldson Distribution Limited provide
a platform for future growth notwithstanding somewhat
less buoyant trading conditions experienced during the
early part of the current year.
I would like to thank all our customers and suppliers
together with our own dedicated teams for their support,
commitment and enthusiasm during what has been a
challenging year.
Peter Dicks
Chairman
3 July 2007
Chairman’s Statement 6 6 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Corporate highlights for the year ended 31 March 2007
Corporate Highlights
Waterline provides a one-stop shop for top high street kitchen
brands, supplying retailers and builders merchants. Additional
services that Waterline provides to its customers - such as training,
product advice, stock management and logistics - sets the Group
apart from the more conventional distributors in the market.
• Successful integration of Coolectric now completed
• Acquisition of Brian Donaldson Distribution on 1 October 2006
• Substantial investment in logistics operation
• Completion of the re-structuring of the Operating Board
• “Blue Book 14”, the industry reference book, to be launched in
July 2007 7 7
Chief Executive’s report for the year ended 31 March 2007
I am pleased to report that the Group has continued to
increase market share despite the year being dominated by
a challenging market place. The details relating to our
financial performance are highlighted in the financial
review, following this report.
The Group remain one of the UK’s largest suppliers to the
fitted kitchen sector supplying products to over 8,000
retailers. No single customer represents more than 2% of
the Group’s total turnover putting the Group in a very
healthy position as risk is spread right across the sector.
It is important that our customers view us as a “One Stop”
shop able to provide a highly efficient delivery service of all
the best brands in our industry and integral to their
business. The Group seeks to manage the risk of losing
customers to competitors by ensuring local representation
and maintaining strong progressive relationships with
them.
Acquisition of BDD Limited
During the year, the Group purchased BDD Limited, a
competitor in the fitted kitchen sector and supplier to
contractors in Scotland. The acquisition strengthened
Waterline’s market share in Scotland and has proven to be
a wholly complementary addition to the Group.
BDD Limited has now been integrated into the Waterline
premises in Cumbernauld, whilst we are currently
refurbishing a neighbouring unit which will be a showroom
for both BDD and Waterline and give us additional storage
space.
Logistics Updates
During the year, the Group re-branded its fleet under the
“Hydra Logistics” name. Hydra delivers all Group products
maximising Waterline’s delivery capabilities; be it a trade,
site or home delivery.
Whilst the 2005 Coolectric acquisition went smoothly, there
was not the level of expertise given to understanding the
products wholly, which resulted in an overspend in our
logistics budget. Mistakes that were made resulted in
changes in personnel, with the appointment of a new
Logistics Director, together with new managers in transport
and warehousing. The logistics operation is now run more
efficiently and provides the platform for the acquisition of
further companies in our sector in due course.
UK Roadshow Programme
The Group’s successful Roadshow programme continued in
April and May 2007 where, once again, over 2,000 trade
customers attended over six weeks in six stimulating and
well situated locations throughout the UK. The Roadshows
gave the Group a much needed boost at a time when
trading has become less buoyant due to prevailing
economic conditions.
Outlook
Waterline’s manufacturers have continued to update their
product ranges and the Group shall be releasing the latest
edition of its Blue Book – the industry Bible - on 1 July 2007.
The Blue Book 14 will continue to be the main reference
book in our sector and will ensure that Waterline is at the
forefront of our customers’ attention.
Continuing price changes, due to raw material increases
against a backdrop of interest rate hikes, have meant that
the New Year has been slower than expected. Whilst
business continues to flourish at the very top end of our
sector, the middle market, due to these influences has
partially eroded. Whilst the Group is not dependent on new
house builds, it is important that refurbishment continues
to grow and whilst consumers still enjoy considerable
equity in their properties, we do not envisage a slow down
in kitchen refurbishment.
Our customers recognise the level of service that all our
Group companies achieve and, more importantly, the
quality of products offered. We are an important cog in
their supply chain and we continually aspire to offer a more
efficient and “best in class” service than they would expect
from our competitors. As a consequence the Group is also
ensuring that the individual businesses focus resources to
assist in improving and adapting the current business
continuity procedures and program. This will help to
mitigate the risk from any external factors that can lead to a
business interruption.
The Board continues to recognise the importance of our
teams in all our Group companies. Staff have remained
energetic and enthusiastic in delivering an exemplary level
of service, and the Group looks forward to maintaining our
position as the premier supplier in the independent kitchen
retail sector.
Michael Lawrence
Chief Executive
3 July 2007
Chief Executive’s Report 8 8 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Financial review for the year ended 31 March 2007
Trading performance
The underlying turnover of the existing Group amounted to
£82.9m, significantly above the £74.8m recorded in the year
ending 31 March 2006. In a very challenging and
competitive market place, this represents an excellent
performance and has led to an increase in market share for
the existing Group based on a static sector.
The acquisition and integration of the Coolectric business
has brought with it a number of challenges during the year.
Primarily this has been the need to re-assess and
restructure the logistics and warehousing function in order
to improve effectiveness and efficiency for the future
growth of the “Liebherr” brand. The increase in the
turnover for the Coolectric business to £10.9m (2006:
£5.5m) primarily relates to an additional five months
turnover compared to 2006.
The overall turnover for the Group in comparison to 2006
has increased from £74.8m to £83.7m, representing an
increase of 11.9 per cent. The acquisition of Brian
Donaldson Distribution Limited on 1 October 2006 has
contributed approximately £0.8m of the overall total.
Against a background of increased competition and rising
costs, the Group has achieved a gross margin of 24.8 per
cent which is in line with the expected performance for
2006.
The profit before tax for the Group of £0.87m includes the
exceptional costs outlined below. The Group has incurred
significant non recurring one-off costs during the year. The
most significant of these are the compensation for loss of
office for two former directors and a stock adjustment
within Coolectric in total amounting to £390,000. In
addition, the Group has also suffered excess IT costs
relating to the completion of certain projects and leases
amounting to £66,000. Finally there have also been
additional costs in the year relating to Health and Safety
improvements, customer promotions, legislative interest
penalties and the share based payment charge of £75,000.
As a result of the reduced profitability of the Group, basic
earnings per share decreased by 56 per cent to 2.54p per
share. The Group Board is therefore unable to recommend
the payment of a final dividend for the year ended 31
March 2007.
Balance sheet
The Group’s US based investments have been revalued
during 2007. Consequently the book value of the foreign
investments has increased by £23,000 to £39,000.
Cash flow for the Group has again continued to be strong
with £3.2m generated from trading operations. The cost of
servicing the finance required by the Group has increased
as a consequence of the increase in interest rates during
the year. Even in the light of this and higher tax payments,
than in previous years, the strong cash flow has allowed the
Group to pay a maiden dividend of 2.75p, while also
acquiring Brian Donaldson Distribution Limited for £0.5m.
In addition to the above, the Group has also marginally
decreased its net debt position from £4.2m to £4.1m at 31
March 2007. Net assets per share have marginally
decreased to 56.0p (2006 : 56.5p).
Treasury
Any surplus cash is held in deposit accounts which have
variable interest rates. Where the money market deposits
offer better returns, the Treasury Supervisor seeks to
maximise these opportunities.
Steven Steel FCCA
Chief Financial Officer
3 July 2007
Financial Review 9 9
Report of the directors for the year ended 31 March 2007
Report Of The Directors
The directors present their report together with the audited financial statements for the year ended 31 March 2007.
Results and dividends
The profit and loss account is set out on page 14 and shows the profit for the year. The directors do not propose the
payment of a final ordinary dividend (2006 - 2.75p).
Principal activities, review of business and future developments
The principal activity of the group continues to be that of the supply of kitchen equipment, appliances and other related
products. 
An extended business review and details of future developments are included within the Chairman’s statement, the Chief
Executive’s report and the Financial Review on pages 5 to 8.
Directors
The directors of the company during the year and their interests in the ordinary share capital of the company were:
Ordinary shares of
Options and similar interests £0.005 each £0.005 each
31 March 2007 31 March 2006 31 March 2007 31 March 2006
M W Lawrence -- 7 7, ,7 76 62 2, ,0 05 52 2 7,823,552
S J Steel 1 13 39 9, ,8 86 60 0 - 3 30 00 0, ,0 00 00 0 283,000
T Hutchinson 2 22 20 0, ,2 23 38 8 220,238 2 20 00 0, ,0 00 00 0 235,000
D C Rogers 2 23 3, ,8 80 09 9 23,809 9 90 0, ,9 95 53 3 90,953
P F Dicks 1 11 19 9, ,0 04 47 7 119,047 1 10 00 0, ,0 00 00 0 100,000
Employment of disabled persons
The company is committed to a policy of recruitment and promotion based on aptitude and ability without discrimination
of any kind. Management actively pursues both the employment of disabled persons when a suitable vacancy arises and
the continued employment and retraining of employees who become disabled whilst employed by the company.
Employee information
The Waterline Group places considerable emphasis on the involvement of its employees and ensures that they are kept
informed of matters affecting them as employees. The Group details elements of the performance of the Group in
departmental news bulletins, staff appraisals and team briefings.
Creditor payment policy and practice
The company’s policy for the year to 31 March 2008 for all suppliers is to fix terms of payment when agreeing the terms of
transactions and of ensuring that suppliers are made aware of them. 1 10 0 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Report of the directors for the year ended 31 March 2007 (continued)
Report Of The Directors (continued)
The number of average days purchases in the company and group represented by trade creditors at 31 March 2007 was nil
and 53 days respectively (2006: nil and 56 days respectively).
Treasury policy
The group has adopted formal treasury policies to control its financial instruments. It is a group treasury policy not to
undertake transactions of a speculative nature. The company utilises a mix of short term group overdraft facilities and
longer term floating rate borrowings to enable it to manage its liquidity risk. Group cash flows are therefore managed
centrally and surplus cash is invested in short term financial instruments. The group manages its interest rate risk by
regularly monitoring its mix of fixed and floating rate borrowings.
Business is wherever possible undertaken in the operational currency of the company undertaking the transaction. The
Group pays for approximately one tenth of its purchases in Euros. The Group has a policy of using foreign exchange
forward options set between agreed exchange rate bands. This allows the Group to minimise the risk of fluctuating
exchange rates. The hedging policy normally covers less than sixty per cent of next year’s purchases.
Compliance with these policies is regularly monitored by the board. The group has taken advantage of the exemption
permitting it not to treat short term debtors and creditors as financial instruments for disclosure purposes.
Auditors
All of the current directors have taken all the steps that they ought to have taken to make themselves aware of any
information needed by the company’s auditors for the purposes of their audit and to establish that the auditors are aware
of that information. The directors are not aware of any relevant audit information of which the auditors are unaware.
BDO Stoy Hayward LLP have expressed their willingness to continue in office and a resolution to reappoint them will be
proposed at the annual general meeting.
By order of the Board
M W Lawrence
Director
3 July 2007 1 11 1
Statement of directors’ responsibilities
Statement Of Directors’ Responsibilities
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable
law and United Kingdom Generally Accepted Accounting Practice.
Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of
the state of affairs of the group and company and of the profit or loss of the group for that period. In preparing those
financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed, subject to any material departures disclosed
and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time
the financial position of the company and to enable them to ensure that the financial statements comply with the
Companies Act 1985. They are also responsible for safeguarding the assets of the group and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities. 1 12 2 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Report of the independent auditors
Report Of The Independent Auditors
To the shareholders of Waterline Group PLC
We have audited the group and parent company financial statements (“the financial statements”) of Waterline Group PLC
for the year ended 31 March 2007 which comprise the consolidated profit and loss account, the consolidated and company
balance sheets, the consolidated cash flow statement, the consolidated statement of total recognised gains and losses,
reconciliation of movement in shareholders’ funds and the related notes. These financial statements have been prepared
under the accounting policies set out therein.
Respective responsibilities of directors and auditors
The directors' responsibilities for preparing the financial statements in accordance with applicable law and United Kingdom
Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of directors'
responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and
International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and have been properly
prepared in accordance with the Companies Act 1985 and whether the information given in the Directors’ Report is
consistent with those financial statements. We also report to you if, in our opinion, the company has not kept proper
accounting records, if we have not received all the information and explanations we require for our audit, or if information
specified by law regarding directors' remuneration and other transactions is not disclosed.
We read other information contained in the Annual Report and consider whether it is consistent with the audited financial
statements. The other information comprises only Directors' Report, Chairman’s Statement, Chief Executive’s Report and
Financial Review. We consider the implications for our report if we become aware of any apparent misstatements or
material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.
Our report has been prepared pursuant to the requirements of the Companies Act 1985 and for no other purpose. No
person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for
the purpose of the Companies Act 1985 or has been expressly authorised to do so by our prior written consent. Save as
above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly
disclaim any and all such liability.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing
Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the
financial statements. It also includes an assessment of the significant estimates and judgments made by the directors in the
preparation of the financial statements, and of whether the accounting policies are appropriate to the group’s and
company'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 financial statements 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 financial statements. 1 13 3
Report of the independent auditors (continued)
Report Of The Independent Auditors (continued)
Opinion
In our opinion:
• the group financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted
Accounting Practice, of the state of the group's affairs as at 31 March 2007 and of its profit for the year then ended;
• the parent company financial statements give a true and fair view, in accordance with United Kingdom Generally
Accepted Accounting Practice, of the state of the parent company's affairs as at 31 March 2007;
• the financial statements have been properly prepared in accordance with the Companies Act 1985; and
• the information given in the Directors’ Report is consistent with the financial statements.
BDO STOY HAYWARD LLP
Chartered Accountants
and Registered Auditors,
Chelmsford.
4 July 2007. 1 14 4 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Consolidated profit and loss account for the year ended 31 March 2007
Consolidated Profit And Loss Account
Continuing Operations{
Acquisitions{ Total{ Total{
Note 2007{ 2007{ 2007{ 2006{
£{ £{ £{ £{
T Tu ur rn no ov ve er r 2 8 82 2, ,9 90 09 9, ,9 92 26 6{ 8 82 28 8, ,1 17 72 2{ 8 83 3, ,7 73 38 8, ,0 09 98 8{ 74,805,533{
Cost of sales 6 62 2, ,4 40 02 2, ,0 01 18 8{ 5 58 81 1, ,1 17 71 1{ 6 62 2, ,9 98 83 3, ,1 18 89 9{ 57,221,026{
G Gr ro os ss s p pr ro of fi it t 2 20 0, ,5 50 07 7, ,9 90 08 8{ 2 24 47 7, ,0 00 01 1{ 2 20 0, ,7 75 54 4, ,9 90 09 9{ 17,584,507{
Distribution costs 6 6, ,6 67 76 6, ,8 86 69 9{ 6 68 8, ,4 44 42 2{ 6 6, ,7 74 45 5, ,3 31 11 1{ 4,881,113{
Administrative expenses 1 12 2, ,2 23 38 8, ,5 57 73 3{ 1 14 49 9, ,3 35 53 3{ 1 12 2, ,3 38 87 7, ,9 92 26 6{ 10,716,013{
O Op pe er ra at ti in ng g p pr ro of fi it t 5 1 1, ,5 59 92 2, ,4 46 66 6{ 2 29 9, ,2 20 06 6{ 1 1, ,6 62 21 1, ,6 67 72 2{ 1,987,381{
Other interest receivable and similar income 6 1 11 1, ,1 17 78 8{ 32,048{
Interest payable and similar charges 7 (7 76 61 1, ,7 70 01 1) (673,168)
P Pr ro of fi it t o on n o or rd di in na ar ry y a ac ct ti iv vi it ti ie es s b be ef fo or re e t ta ax xa at ti io on n 8 87 71 1, ,1 14 49 9{ 1,346,261{
Taxation on profit on ordinary activities 8 5 53 38 8, ,1 10 09 9{ 714,663{
P Pr ro of fi it t f fo or r t th he e f fi in na an nc ci ia al l y ye ea ar r 22 3 33 33 3, ,0 04 40 0{ 631,598{
E Ea ar rn ni in ng gs s p pe er r s sh ha ar re e
Basic (pence per share) 11 2 2. .5 54 4{ 5.05{
Diluted (pence per share) 11 2 2. .5 51 1{ 4.99{
All amounts relate to continuing activities.
The notes on pages 18 to 38 form part of these financial statements. 1 15 5
Consolidated statement of total recognised gains and losses and reconciliation of movements in shareholders’ funds for the year ended 31 March 2007
Statement Of Total Recognised Gains And Losses
2007{ 2006{
£{ £{
Profit for the financial year 3 33 33 3, ,0 04 40 0{ 631,598{
Unrealised surplus on revaluation 
of investments/properties 2 23 3, ,1 10 00 0{ 405,670{
Currency translation differences 
on foreign currency net investments (1 14 40 0, ,7 78 86 6) 92,519{
Total recognised gains and 
losses for the year 2 21 15 5, ,3 35 54 4{ 1,129,787{
Reconciliation Of Movements In Shareholders' Funds
Group{ Group{ Company{ Company{
2007{ 2006{ 2007{ 2006{
£{ £{ £{ £{
Profit/(loss) for the year 3 33 33 3, ,0 04 40 0{ 631,598{ 1 1, ,3 31 16 6, ,4 42 23 3{ (413,154)
Dividend (3 36 60 0, ,6 62 28 8) -{ (3 36 60 0, ,6 62 28 8) -{
Issue of shares -{ 2,000,000{ -{ 2,000,000{
Cost of share issue -{ (192,044) -{ (192,044)
Share-based payment 7 75 5, ,7 74 43 3{ 183,774{ 7 75 5, ,7 74 43 3{ 183,774{
Other net recognised gains and losses (1 11 17 7, ,6 68 86 6) 498,189{ -{ -{
(6 69 9, ,5 53 31 1) 3,121,517{ 1 1, ,0 03 31 1, ,5 53 38 8{ 1,578,576{
Opening shareholders' funds 7 7, ,4 41 13 3, ,2 21 17 7{ 4,291,700{ 1 1, ,5 58 82 2, ,7 70 04 4{ 4,128{
Closing shareholders' funds 7 7, ,3 34 43 3, ,6 68 86 6{ 7,413,217{ 2 2, ,6 61 14 4, ,2 24 42 2{ 1,582,704{
The notes on pages 18 to 38 form part of these financial statements. 1 16 6 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Consolidated and company balance sheet at 31 March 2007
Balance Sheets
Group Company
Note 2007{ 2006{ 2007{ 2006{
£{ £{ £{ £{
F Fi ix xe ed d a as ss se et ts s
Intangible assets 12 1 1, ,4 48 89 9, ,3 33 38 8{ 1,157,519{ -{ -{
Tangible assets 13 6 6, ,8 83 33 3, ,4 44 43 3{ 6,955,359{ -{ -{
Investments 14 3 38 8, ,9 93 30 0{ 18,707{ 1 1, ,1 18 89 9, ,5 54 41 1{ 1,189,541{
8 8, ,3 36 61 1, ,7 71 11 1{ 8,131,585{
C Cu ur rr re en nt t a as ss se et ts s
Stocks 15 1 10 0, ,5 52 26 6, ,1 19 99 9{ 9,541,907{ -{ -{
Debtors 16 1 12 2, ,9 91 19 9, ,0 03 33 3{ 13,246,264{ 1 1, ,4 42 29 9, ,2 22 28 8{ 308,063{
Cash at bank and in hand 3 36 68 8, ,9 90 03 3{ 405,637{ 8 8, ,6 66 60 0{ 96,994{
2 23 3, ,8 81 14 4, ,1 13 35 5{ 23,193,808{ 1 1, ,4 43 37 7, ,8 88 88 8{ 405,057{
Creditors: amounts falling due within one year 17 (2 22 2, ,7 79 99 9, ,3 33 30 0) (21,249,959) (1 13 3, ,1 18 87 7) (11,894)
N Ne et t c cu ur rr re en nt t a as ss se et ts s 1 1, ,0 01 14 4, ,8 80 05 5{ 1,943,849{ 1 1, ,4 42 24 4, ,7 70 01 1{ 393,163{
T To ot ta al l a as ss se et ts s l le es ss s c cu ur rr re en nt t l li ia ab bi il li it ti ie es s 9 9, ,3 37 76 6, ,5 51 16 6{ 10,075,434{ 2 2, ,6 61 14 4, ,2 24 42 2{ 1,582,704{
C Cr re ed di it to or rs s: : a am mo ou un nt ts s f fa al ll li in ng g d du ue e
a af ft te er r m mo or re e t th ha an n o on ne e y ye ea ar r 18 (1 1, ,7 79 98 8, ,7 73 37 7) (2,413,706) -{ -{
P Pr ro ov vi is si io on n f fo or r l li ia ab bi il li it ti ie es s a an nd d c ch ha ar rg ge es s 20 (2 23 34 4, ,0 09 93 3) (248,511) - -
7 7, ,3 34 43 3, ,6 68 86 6{ 7,413,217{ 2 2, ,6 61 14 4, ,2 24 42 2{ 1,582,704{
C Ca ap pi it ta al l a an nd d r re es se er rv ve es s
Called up share capital 21 6 65 5, ,5 56 68 8{ 65,568{ 6 65 5, ,5 56 68 8{ 65,568{
Share premium account 22 1 1, ,7 79 96 6, ,0 05 52 2{ 1,796,052{ 1 1, ,7 79 96 6, ,0 05 52 2{ 1,796,052{
Share option reserve 22 2 25 59 9, ,5 51 17 7{ 183,774{ 2 25 59 9, ,5 51 17 7{ 183,774{
Revaluation reserve 22 5 50 09 9, ,2 21 13 3{ 495,926{ - -{ -{
Merger reserve 22 5 55 5, ,9 92 26 6{ 55,926{ - -{ -{
Profit and loss account 22 4 4, ,6 65 57 7, ,4 41 10 0{ 4,815,971{ 4 49 93 3, ,1 10 05 5{ (462,690)
S Sh ha ar re eh ho ol ld de er rs s' ' f fu un nd ds s 7 7, ,3 34 43 3, ,6 68 86 6{ 7,413,217{ 2 2, ,6 61 14 4, ,2 24 42 2{ 1,582,704{
The financial statements were approved and authorised for issue by the Board on 3 July 2007
M W Lawrence S J Steel
Director Director
The notes on pages 18 to 38 form part of these financial statements. Consolidated Cash Flow Statement
Note 2007{ 2007 2006{ 2006
£{ £{ £{ £{
N Ne et t c ca as sh h i in nf fl lo ow w f fr ro om m o op pe er ra at ti in ng g a ac ct ti iv vi it ti ie es s 28 3 3, ,1 15 59 9, ,0 02 27 7{ 3,023,878{
R Re et tu ur rn ns s o on n i in nv ve es st tm me en nt ts s a an nd d s se er rv vi ic ci in ng g o of f f fi in na an nc ce e
Interest received 1 11 1, ,1 17 78 8{ 32,048{
Interest paid (7 70 07 7, ,8 84 40 0) (626,681)
Interest element of finance lease
rental payments (5 53 3, ,8 86 61 1) (46,487)
N Ne et t c ca as sh h o ou ut tf fl lo ow w f fr ro om m r re et tu ur rn ns s o on n i in nv ve es st tm me en nt ts s 
a an nd d s se er rv vi ic ci in ng g o of f f fi in na an nc ce e (7 75 50 0, ,5 52 23 3) (641,120)
T Ta ax xa at ti io on n
UK corporation tax paid (8 80 06 6, ,8 86 62 2) (512,677)
Overseas tax refunded/(paid) (9 95 5, ,3 39 94 4) 18,378{
(9 90 02 2, ,2 25 56 6) (494,299)
C Ca ap pi it ta al l e ex xp pe en nd di it tu ur re e a an nd d f fi in na an nc ci ia al l i in nv ve es st tm me en nt t
Purchase of tangible fixed assets (5 51 15 5, ,1 17 77 7) (540,478)
Sale of tangible fixed assets 1 16 65 5, ,5 57 77 7{ 146,601{
(3 34 49 9, ,6 60 00 0) (393,877)
A Ac cq qu ui is si it ti io on ns s a an nd d d di is sp po os sa al ls s
Acquisition of subsidiary (2 22 21 1, ,1 10 00 0) (1,185,412)
Cash acquired with subsidiary (5 50 0, ,9 96 60 0) 443,737{
(2 27 72 2, ,0 06 60 0) (741,675)
D Di iv vi id de en nd ds s p pa ai id d (3 36 60 0, ,6 62 28 8)-{
C Ca as sh h i in nf fl lo ow w b be ef fo or re e u us se e o of f f fi in na an nc ci in ng g 5 52 23 3, ,9 96 60 0{ 752,907{
F Fi in na an nc ci in ng g
Issue of ordinary shares (net of issue costs) - 1,807,902{
Bank loan repayments 29 (2 22 25 5, ,7 71 10 0) (758,022)
Capital element of finance lease rental payments 29 (5 58 80 0, ,4 47 76 6) (510,203)
(8 80 06 6, ,1 18 86 6) 539,677{
(Decrease)/increase in cash 29,30 (2 28 82 2, ,2 22 26 6) 1,292,584{
The notes on pages 18 to 38 form part of these financial statements.
1 17 7
Consolidated cash flow statement for the year ended 31 March 2007 1 18 8 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Notes forming part of the financial statements for the year ended 31 March 2007
1. Accounting Policies
The financial statements have been prepared under the historical cost convention, as modified by the revaluation of land
and buildings and fixed asset investments, and in accordance with applicable accounting standards.
The following principal accounting policies have been applied:
Basis of Consolidation
The consolidated financial statements incorporate the results of Waterline Group PLC and all of its subsidiary undertakings
as at 31 March 2007 using the acquisition or merger method of accounting as required. Where the acquisition method is
used, the results of the subsidiary undertakings are included from the date of acquisition.
Turnover
Turnover represents sales to external customers at invoiced amounts less value added tax or local taxes on sales. Turnover
is recognised when the risks and rewards of owning the goods has passed to the customer which is generally on delivery.
Goodwill
Goodwill arising on an acquisition of a subsidiary undertaking is the difference between the fair value of the consideration
paid and the fair value of the assets and liabilities acquired. Positive goodwill is capitalised and amortised through the
profit and loss account over the directors' estimate of its useful economic life which ranges from 15 to 20 years. Impairment
tests on the carrying value of goodwill are undertaken:
• at the end of the first full financial year following acquisition; and
• in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable.
The profit or loss on disposal of a business includes any attributable goodwill arising on acquisitions which was previously
eliminated against reserves under the former group policy, for acquisitions made before 1 January 1998.
Development Costs
Development costs are charged to the profit and loss account in the year of expenditure, unless individual projects satisfy
all of the following criteria:
• the project is clearly defined and related expenditure is separately identifiable;
• the project is technically feasible and commercially viable;
• current and future costs are expected to be exceeded by future sales; and
• adequate resources exist for the project to be completed. 1 19 9
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
1. Accounting Policies (continued)
Development Costs (continued)
In such circumstances the costs are carried forward and amortised over a period not exceeding three years commencing in
the year the group starts to benefit from the expenditure.
Land and Buildings
FRS 15 requires fixed assets which are carried at revalued amounts to be shown at their current value at the balance sheet
date. To achieve this land and buildings are subject to a full valuation every five years with an interim valuation carried out
in the third year of this cycle.
The profit or loss on disposal of revalued properties is calculated by reference to net book value and any realised
revaluation surplus is transferred to the profit and loss account through reserves.
Tangible Fixed Assets and Depreciation
Tangible fixed assets, with the exception of land and buildings are carried at depreciated cost.
Depreciation is provided to write off the cost or valuation, less estimated residual values of all fixed assets, except freehold
land, over their expected useful lives. It is calculated at the following rates:
Land and buildings - 2% straight line or over the life of the lease
Fixtures, fittings, plant and equipment - 15% - 25% reducing balance or 25% straight line
Motor vehicles - 25% reducing balance or 33.3% straight line
Leased Assets
Where assets are financed by leasing agreements that give rights approximating to ownership ('finance leases'), the assets
are treated as if they had been purchased outright. The amount capitalised is the present value of the minimum lease
payments payable during the lease term. The corresponding leasing commitments are shown as amounts payable to the
lessor. Depreciation on the relevant assets is charged to the profit and loss account.
Lease payments are analysed between capital and interest components so that the interest element of the payment is
charged to the profit and loss account over the period of the lease and represents a constant proportion of the balance of
capital repayments outstanding. The capital part reduces the amounts payable to the lessor. All other leases are treated as
operating leases. Their annual rentals are charged to the profit and loss account on a straight-line basis over the term of the
lease.
Investments
Fixed asset investments in subsidiary companies are stated at cost less any provision for permanent diminution in value.
Fixed asset investments in marketable securities are stated at market value.
Stock
Stock is stated at the lower of cost and net realisable value. Cost includes all direct costs incurred in bringing the stocks to
their present location and condition.
Net realisable value is based on estimated selling price less additional costs to completion and disposal. 2 20 0 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
1. Accounting Policies (continued)
Pensions
Contributions to the company’s defined contribution pension scheme and the group personal pension plan are charged to
the profit and loss account in the year in which they become payable.
Deferred Taxation
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the
balance sheet date except that:
• deferred tax is not recognised on timing differences arising on revalued properties unless the company has
entered into a binding sale agreement and is not proposing to take advantage of rollover relief; and
• the recognition of deferred tax assets is limited to the extent that the company anticipates making sufficient
taxable profits in the future to absorb the reversal of the underlying timing differences.
Deferred tax balances are not discounted.
Share-Based Payments
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the income
statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of
equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over
the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the
fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of
whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market
vesting condition.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options,
measured immediately before and after the modification, is also charged to the income statement over the remaining
vesting period.
Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid.
Final equity dividends are recognised when approved by the shareholders at an annual general meeting. 2 21 1
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
1. Accounting Policies (continued)
Foreign Currency
Foreign currency transactions of individual companies are translated at the rates ruling when they occurred. Foreign
currency monetary assets and liabilities are translated at the rates ruling at the balance sheet dates. Any differences are
taken to the profit and loss account.
The results of overseas operations are translated at the average rates of exchange during the year and their balance sheets
translated into sterling at the rates of exchange ruling on the balance sheet date. Exchange differences which arise from
translation of the opening net assets and results of foreign subsidiary undertakings are taken to reserves.
All other differences are taken to the profit and loss account.
Financial Instruments
In relation to the disclosures made in note 19;
• Short term debtors and creditors are not treated as financial assets or financial liabilities except
for the currency disclosures.
• The group does not hold or issue derivative financial instruments for trading purposes.
2. Segmental Analysis
Turnover Profit before tax Net assets
2007 2006 2007 2006 2007 2006
££££££
Analysis of group’s principal
activity by geographical market:
Turnover by origin and destination
United Kingdom 7 78 8, ,5 53 30 0, ,8 83 37 7 69,010,726 5 55 53 3, ,5 52 21 1 1,030,834 5 5, ,5 56 62 2, ,6 67 70 0 5,671,537
United States of America 5 5, ,2 20 07 7, ,2 26 61 1 5,794,807 3 31 17 7, ,6 62 28 8 315,427 1 1, ,7 78 81 1, ,0 01 16 6 1,741,680
8 83 3, ,7 73 38 8, ,0 09 98 8 74,805,533 8 87 71 1, ,1 14 49 9 1,346,261 7 7, ,3 34 43 3, ,6 68 86 6 7,413,217 2 22 2 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
3. Employees
The average number of employees of the group during the year, including executive directors, was as follows:
Group Group Company Company
2007 2006 2007 2006
Number Number Number Number
Administration 1 10 03 3 89 5 5 5
Distribution 1 14 45 5 144 - - -
Sales 1 10 05 5 79 - - -
3 35 53 3 312 5 5 5
Group Group Company Company
2007 2006 2007 2006
£ £££
Staff costs (including directors) consist of:
Wages and salaries 8 8, ,2 24 40 0, ,2 22 29 9 7,165,147 - 269,149
Social security costs 8 84 45 5, ,6 60 02 2 732,498 - 12,841
Other pension costs 2 28 82 2, ,6 63 34 4 257,008 --
9 9, ,3 36 68 8, ,4 46 65 5 8,154,653 - 281,990
4. Directors
2007 2006
£ £
Directors’ emoluments consist of:
Fees and remuneration for management services 4 48 83 3, ,2 27 70 0 481,067
Compensation for loss of office - 84,975
Payments to defined contribution pension scheme 5 5, ,3 30 00 0 49,060
Amounts paid to third parties in respect of directors’ services 1 17 7, ,8 81 12 2 23,059
5 50 06 6, ,3 38 82 2 638,161
Highest paid director
Remuneration 2 22 26 6, ,9 96 64 4 228,760
Amounts paid to the company's defined contribution
pension scheme 2 2, ,0 00 00 0 24,000
There was 1 (2006 - 2) director in the company’s defined contribution pension scheme during the year and 1 (2006 - 3)
director in a personal pension plan during the year. 2 23 3
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
5. Operating Profit
2007{ 2006{
This has been arrived at after charging/(crediting): £{ £{
Amortisation 7 76 6, ,2 29 98 8{ 61,520{
Depreciation 9 91 17 7, ,7 76 69 9{ 765,243{
Hire of plant and machinery - operating leases 3 39 91 1, ,6 63 37 7{ 325,525{
Hire of other assets - operating leases 9 92 22 2, ,1 18 88 8{ 686,902{
Auditors’ remuneration
Statutory audit 6 60 0, ,5 59 93 3{ 57,683{
Compliance tax services 3 36 6, ,2 20 00 0{ 15,370{
Tax advisory services 5 5, ,0 00 00 0{ 1,995{
Transaction related services 2 20 0, ,3 33 33 3{ 178,027{
Other services 7 7, ,0 00 00 0{ 500{
Associate fee
Review services 6 6, ,6 60 00 0{ -{
Tax compliance services 2 2, ,6 64 40 0{ -{
Loss on sale of fixed assets 6 63 3, ,1 10 07 7{ 92,438{
Foreign exchange loss/(profit) 4 4, ,2 25 58 8{ (49,625)
Listing costs -{ 290,281{
Share-based payment charge – equity settled 7 75 5, ,7 74 43 3{ 183,774{
Included within the amount shown above for group audit services is an amount of £10,000 (2006 - £10,000) in respect of
the company.
6. Other Interest Receivable And Similar Income
2007{ 2006{
£{ £{
Bank interest 1 11 1, ,1 17 78 8{ 32,048{
7. Interest Payable And Similar Charges
2007{ 2006{
£{ £{
Bank loans and overdrafts 1 12 28 8, ,2 29 94 4{ 183,320{
Finance leases and hire purchase contracts 5 53 3, ,8 86 61 1{ 46,488{
Other interest 5 57 79 9, ,5 54 46 6{ 443,360{
7 76 61 1, ,7 70 01 1{ 673,168{
8. Taxation On Profit From Ordinary Activities
2007{ 2006{
£{ £{
UK corporation tax
UK corporation tax on profits of the year 4 42 22 2, ,9 99 94 4{ 607,203{
Adjustments in respect of previous periods -{ 5,521{
4 42 22 2, ,9 99 94 4{ 612,724{
Foreign tax
Current tax on foreign income for the year 1 14 42 2, ,5 58 86 6{ 86,624{
Total current tax 5 56 65 5, ,5 58 80 0{ 699,348{ 2 24 4 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
8. Taxation On Profit From Ordinary Activities (continued)
2007{ 2006{
£{ £{
Total current tax b/fwd 5 56 65 5, ,5 58 80 0{ 699,348{
Deferred tax
Origination and reversal of timing differences (2 27 7, ,4 47 71 1) 15,315{
Taxation on profit on ordinary activities 5 53 38 8, ,1 10 09 9{ 714,663{
The tax assessed for the period is higher than the standard rate of corporation tax in the UK. The differences are explained
below:
2007{ 2006{
£{ £{
Profit on ordinary activities before taxation 8 87 71 1, ,1 14 49 9{ 1,346,261{
Profit on ordinary activities at the standard rate of corporation tax
in the UK 30% (2006 – 30%) 2 26 61 1, ,3 34 44 4{ 403,878{
Effects of:
Expenses not deductible for tax purposes 2 22 20 0, ,9 95 59 9{ 238,729{
Excess of depreciation for the period over capital allowances 2 28 8, ,8 87 72 2{ 14,278{
Goodwill amortisation 2 22 2, ,7 73 34 4{ 18,291{
Higher tax rates on overseas earnings 3 39 9, ,5 55 50 0{ 18,651{
Lower tax rates on UK earnings (8 87 73 3)-{
Adjustment re tax charge in respect of prior period -{ 5,521{
Utilisation of tax losses brought forward (7 7, ,0 00 06 6) -{
5 56 65 5, ,5 58 80 0{ 699,348{
9. Profit For The Financial Year
As permitted by section 230 of the Companies Act 1985 the profit and loss account of the company has not been
presented in these financial statements. The consolidated profit after tax for the financial year includes a profit of
£1,316,423 (2006 loss - £413,154) which has been dealt with in the financial statements of the company.
10. Dividends
The final dividend paid of 2.75p per ordinary shares, in respect of the year ended 31 March 2006, amounted to £360,628. No
dividend has been proposed for the year ended 31 March 2007. 2 25 5
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
11. Earnings Per Share
2007{ 2006{
£{ £{
Numerator
Earnings used for calculation of basic and diluted EPS 3 33 33 3, ,0 04 40 0{ 631,598{
Number{ Number{
Denominator
Weighted average number of shares used in basic EPS 1 13 3, ,1 11 13 3, ,7 75 52 2{ 12,518,514{
Weighted average number of share options 1 18 81 1, ,0 09 94 4{ 145,131{
Weighted average number of shares used in diluted EPS 1 13 3, ,2 29 94 4, ,8 84 46 6{ 12,663,645{
The weighted average number of shares used in the diluted earnings per share calculation assumes the conversion of all
dilutive potential ordinary shares, being certain outstanding share options. There were 563,677 anti-dilutive options held at
31 March 2007.
12. Intangible Fixed Assets
Development costs{ Goodwill{ Franchise fee{ Total{
£{ £{ £{ £{
G Gr ro ou up p
Cost
At 1 April 2006 8,474{ 1,311,365{ 50,000{ 1,369,839{
Additions -{ 408,518{ -{ 408,518{
Exchange adjustment (979) -{ -{ (979)
At 31 March 2007 7 7, ,4 49 95 5{ 1 1, ,7 71 19 9, ,8 88 83 3{ 5 50 0, ,0 00 00 0{ 1 1, ,7 77 77 7, ,3 37 78 8{
Amortisation
At 1 April 2006 4,849{ 207,471{ -{ 212,320{
Charge for year 517{ 75,781{ -{ 76,298{
Exchange adjustment (578) -{ -{ (578)
At 31 March 2007 4 4, ,7 78 88 8{ 2 28 83 3, ,2 25 52 2{ - -{ 2 28 88 8, ,0 04 40 0{
Net book value
At 31 March 2007 2 2, ,7 70 07 7{ 1 1, ,4 43 36 6, ,6 63 31 1{ 5 50 0, ,0 00 00 0{ 1 1, ,4 48 89 9, ,3 33 38 8{
At 31 March 2006 3,625{ 1,103,894{ 50,000{ 1,157,519{
The franchise fee represents an amount paid to secure certain distribution rights within the United Kingdom. These rights
are for an indefinite period. In the event that the agreement is terminated by the other party, the amount recognised above
is repayable in full. Therefore the directors consider that it is inappropriate to provide amortisation on the above amount, in
any event any charge would be immaterial to the accounts. 2 26 6 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
13. Tangible Fixed Assets
G Gr ro ou up p Fixtures, fittings,{
plant &{
Land & buildings{ equipment{ Motor vehicles{ Total{
£{ £{ £{ £{
Cost or valuation
At 1 April 2006 4,730,736{ 1,815,432{ 2,707,352{ 9,253,520{
Additions 69,251{ 226,505{ 712,863{ 1,008,619{
Acquisition of subsidiary -{ 12,228{ 21,523{ 33,751{
Disposals -{ (12,169) (572,388) (584,557)
Exchange adjustment (3,159) (22,505) (11,810) (37,474)
At 31 March 2007 4 4, ,7 79 96 6, ,8 82 28 8{ 2 2, ,0 01 19 9, ,4 49 91 1{ 2 2, ,8 85 57 7, ,5 54 40 0{ 9 9, ,6 67 73 3, ,8 85 59 9{
Depreciation
At 1 April 2006 185,820{ 1,069,007{ 1,043,334{ 2,298,161{
On disposals -{ -{ (355,872) (355,872)
Charge for the year 146,624{ 200,229{ 570,916{ 917,769
Exchange adjustment (160) (14,888) (4,594) (19,642)
At 31 March 2007 3 33 32 2, ,2 28 84 4{ 1 1, ,2 25 54 4, ,3 34 48 8{ 1 1, ,2 25 53 3, ,7 78 84 4{ 2 2, ,8 84 40 0, ,4 41 16 6{
Net book value
At 31 March 2007 4 4, ,4 46 64 4, ,5 54 44 4{ 7 76 65 5, ,1 14 43 3{ 1 1, ,6 60 03 3, ,7 75 56 6{ 6 6, ,8 83 33 3, ,4 44 43 3{
At 31 March 2006 4,544,916{ 746,425{ 1,664,018{ 6,955,359{
The net book value of land and buildings comprises:
2007{ 2006{
£{ £{
Freeholds 4 4, ,2 21 13 3, ,4 48 88 8{ 4,300,000{
Short leaseholds (under 50 years) 2 25 51 1, ,0 05 56 6{ 244,916{
4 4, ,4 46 64 4, ,5 54 44 4{ 4,544,916{
Analysis of cost or valuation of land and buildings:
Valuation – November 2005 4 4, ,3 30 00 0, ,0 00 00 0{ 4,300,000{
Cost 4 49 96 6, ,8 82 28 8{ 430,736{
4 4, ,7 79 96 6, ,8 82 28 8{ 4,730,736{ 2 27 7
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
13. Tangible Fixed Assets (continued)
Comparable historical cost for the land and buildings included at valuation:
Group{ Group{
2007{ 2006{
£{ £{
Cost 4 4, ,1 17 75 5, ,4 40 03 3{ 4,175,403{
Accumulated depreciation based on cost 3 31 12 2, ,3 33 35 5{ 256,923{
Historical cost net book value 3 3, ,8 86 63 3, ,0 06 68 8{ 3,918,480{
The group’s freehold building, acquired in two stages, was revalued on 9 November 2005 by Lambert Smith Hampton on
an existing use basis. The valuation was undertaken in accordance with the Royal Institution of Chartered Surveyors
Appraisal and Valuation Manual. The surplus arising over net book value of £405,670 has been credited to the revaluation
reserve.
The next full valuation will be performed during the year ending 31 March 2011.
All other tangible fixed assets are stated at cost.
The net book value of motor vehicles includes an amount of £1,524,693 (2006 - £1,641,797) in respect of assets held under
finance leases or hire purchase contracts. The related depreciation charge for the period was £526,388 (2006 - £436,378). 2 28 8 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
14. Fixed Asset Investments
G Gr ro ou up p Marketable{
securities{
£{
Valuation
At 1 April 2006 18,707{
Revaluation 23,100{
Exchange adjustment (2,877)
At 31 March 2007 3 38 8, ,9 93 30 0{
C Co om mp pa an ny y Shares in{
subsidiary{
undertakings{
£{
Cost
At 1 April 2006 and 31 March 2007 1 1, ,1 18 89 9, ,5 54 41 1{
S Su ub bs si id di ia ar ry y u un nd de er rt ta ak ki in ng gs s
The following were subsidiary undertakings at the end of the year and have been included in the consolidated financial
statements.
Country of 
registration or
Subsidiary undertakings incorporation Class % Principal activity
Waterline Limited England Ordinary 100 Supply of kitchen equipment
Boston Basins Inc USA Common Stock* 100 Supply of kitchen equipment
MPC Holdings Limited England Ordinary* 100 Holding company
Mike Walker Distribution Limited England Ordinary* 100 Supply of kitchen equipment
Brian Donaldson Distribution Limited Scotland Ordinary* 100 Supply of kitchen equipment
Brian Donaldson Manufacturing Limited Scotland Ordinary* 100 Dormant
The Kitchen Republic Limited England Ordinary 100 Dormant
Coolectric Limited England Ordinary 100 Supply of refrigeration equipment
* Indirect holding
15. Stocks
Group{ Group{
2007{ 2006{
£{ £{
Goods held for resale 1 10 0, ,5 52 26 6, ,1 19 99 9{ 9,541,907{
There is no material difference between the replacement cost of stocks and the amounts stated above. 2 29 9
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
16. Debtors
Group Group Company Company
2007 2006 2007 2006
£ £££
Trade debtors 1 12 2, ,2 25 53 3, ,4 41 14 4 12,144,625 - -
Amounts owed by Group undertakings - - 1 1, ,3 39 95 5, ,5 57 71 1 278,843
Other debtors 1 18 87 7, ,3 35 55 5 442,236 2 25 5, ,6 65 57 7 23,023
Prepayments and accrued income 4 47 78 8, ,2 26 64 4 659,403 8 8, ,0 00 00 0 6,197
1 12 2, ,9 91 19 9, ,0 03 33 3 13,246,264 1 1, ,4 42 29 9, ,2 22 28 8 308,063
All amounts shown under debtors fall due for payment within one year except for 2006 - £35,211, which is included within
other debtors for the group.
17. Creditors: Amounts Falling Due Within One Year
Group Group Company Company
2007 2006 2007 2006
££££
Bank overdrafts (secured) 1 1, ,7 71 16 6, ,8 83 30 0 1,471,338 --
Bank loan (secured) 2 20 09 9, ,3 39 91 1 209,391 - -
Trade creditors 1 10 0, ,2 24 46 6, ,7 73 34 4 10,387,760 1 11 1, ,7 71 12 2 -
Taxation and social security 1 1, ,4 45 58 8, ,8 81 15 5 1,222,980 - -
Corporation tax 1 19 94 4, ,8 81 14 4 558,962 - -
Obligations under finance leases and hire
purchase contracts 3 39 92 2, ,2 25 54 4 410,242 - -
Other creditors 7 7, ,2 21 11 1, ,7 75 52 2 6,305,562 - 1
Other loans (secured) 4 40 07 7, ,7 79 95 5 75,000 - -
Accruals and deferred income 9 96 60 0, ,9 94 45 5 608,724 1 1, ,4 47 75 5 11,893
2 22 2, ,7 79 99 9, ,3 33 30 0 21,249,959 1 13 3, ,1 18 87 7 11,894
The bank loans and overdrafts are secured by a first charge over the property and a fixed and floating charge over book
debts and all other assets of the group and company.
Other loans are secured by a fixed and floating charge over the assets including book debts of the group and company.
18. Creditors: Amounts Falling Due After More Than One Year
Group Group Company Company
2007 2006 2007 2006
££££
Bank loan (secured) 1 1, ,5 59 92 2, ,1 17 78 8 1,742,751 - -
Obligations under finance leases and hire
purchase contracts 2 20 06 6, ,5 55 59 9 263,024 - -
Other loans (secured) - 407,931 - -
1 1, ,7 79 98 8, ,7 73 37 7 2,413,706 -- 3 30 0 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
18. Creditors: Amounts Falling Due After More Than One Year
(continued)
G Gr ro ou up p 2007 2007 2006 2006
Loans Finance leases Loans Finance leases
£ £££
In more than one year but not more than two years 2 20 09 9, ,3 39 91 1 2 20 06 6, ,5 55 59 9 284,390 263,024
In more than two years but not more than five years 6 62 28 8, ,1 17 72 2 - 853,172 -
In more than five years 7 75 54 4, ,6 61 15 5 - 1,013,120 -
1 1, ,5 59 92 2, ,1 17 78 8 2 20 06 6, ,5 55 59 9 2,150,682 263,024
At 31 March 2007 the group has the following loans outstanding, part of which falls due after more than five years:
• £916,667 repayable at £8,334 per month with interest charged at 1.75% above base.
• £884,902 repayable at £9,116 per month with interest charged at 1.75% above base.
19. Financial Instruments
a) Interest rate and currency borrowings
The currency and interest rate exposure of the group’s borrowings is shown below:
Floating rate Fixed rate
Total financial liabilities financial liabilities
2007 2006 2007 2006 2007 2006
£ £ £ £ £ £
Sterling 5 5, ,0 01 19 9, ,1 16 68 8 4,572,394 4 4, ,4 42 29 9, ,1 16 65 5 3,906,411 5 59 90 0, ,0 00 03 3 665,983
US Dollars 8 8, ,8 81 10 0 7,283 - - 8 8, ,8 81 10 0 7,283
5 5, ,0 02 27 7, ,9 97 78 8 4,579,677 4 4, ,4 42 29 9, ,1 16 65 5 3,906,411 5 59 98 8, ,8 81 13 3 673,266
The Sterling floating rate borrowings comprise bank loans and other borrowings based upon base rates (at 31 March 2007
5.25%) plus lenders margin of 1.75%. Interest on the bank overdrafts borrowings are based upon varying margins above
their base rate depending on the level of overdraft used. 3 31 1
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
19. Financial Instruments (continued)
b) Interest rate and currency of financial assets
Floating rate financial assets of £407,833 (2006 - £424,344) comprise substantially of Sterling and US Dollars cash balances.
There are no fixed rate financial assets.
c) Currency exposure
The group’s overseas subsidiary operates in US Dollars its local currency.
All material monetary assets and liabilities of the group are denominated in the functional currency of the operating unit.
d) Fair values of financial instruments
The directors believe that for short term financial instruments, such as short term debt and current portion of long term
debt, historical cost approximates to fair value due to the short term period between origination and realisation. This also
applies to long term floating rate borrowings since the interest rate payments are reset to market values at frequent
intervals.
e) Undrawn bank facilities
The group has no undrawn committed bank borrowing facilities available (2006 - nil).
The group has an overdraft facility of £1,000,000 which it utilises to manage its liquidity risk. The group overdraft facility is
due for renewal on 10 July 2007 and the directors believe that the facilities will continue to be made available in order to
meet the group’s appropriate funding requirements. 
Further details in respect of the group treasury policy are given in the directors’ report on page 7.
20. Provision For Liabilities And Charges
G Gr ro ou up p Warranty{ Deferred{
reserve{ taxation{ Total{
£{ £{ £{
At 1 April 2006 128,319{ 120,192{ 248,511{
Transfer from profit and loss account 16,774{ (28,566) (11,792)
Exchange adjustment -{ (2,626) (2,626)
At 31 March 2007 1 14 45 5, ,0 09 93 3{ 8 89 9, ,0 00 00 0{ 2 23 34 4, ,0 09 93 3{
Included in other debtors is a deferred tax asset of £13,567 (2006 - £35,877).
The warranty reserve relates to potential warranty claims in respect of goods sold prior to the year end. The eventual
liability depends on the failure rate and the timing of the failure.
D De ef fe er rr re ed d t ta ax xa at ti io on n
Group Provided{ Group Provided{
2007{ 2006{
£{ £{
Accelerated capital allowances 8 89 9, ,0 00 00 0{ 120,192{ 3 32 2 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
21. Share Capital
Authorised
2007 2006 2007 2006
Number Number £ £
Ordinary shares of £0.005 each 2 20 0, ,0 00 00 0, ,0 00 00 0 20,000,000 1 10 00 0, ,0 00 00 0 100,000
Allotted, called up and fully paid
2007 2006 2007 2006
Number Number £ £
Ordinary shares of £0.005 each 1 13 3, ,1 11 13 3, ,7 75 52 2 13,113,752 6 65 5, ,5 56 68 8 65,568
At 31 March 2007 the following share options were outstanding in respect of the ordinary shares.
Date of grant Number of shares Period of option Price per share
20 July 2005 160,715 July 2006 – July 2015 42p
20 July 2005 119,047 July 2006 – July 2015 84p
20 July 2005 206,539 July 2006 – July 2015 42p
20 July 2005 152,965 July 2008 – July 2015 84p
9 August 2005 291,666 August 2008 – August 2015 84p
7 August 2006 139,860 August 2009 – August 2016 71.5p 3 33 3
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
22. Reserves
G Gr ro ou up p Share premium{ Share option{ Revaluation{ Merger{ Profit & loss{
account{ reserve{ reserve{ reserve{ account{
£{ £{ £{ £{ £{
At 1 April 2006 1,796,052{ 183,774{ 495,926{ 55,926{ 4,815,971{
Retained profit for the year -{ -{ -{ -{ 333,040{
Dividends -{ -{ -{ -{ (360,628)
Transfer of historical depreciation -{ -{ (9,813) -{ 9,813{
Share-based payment -{ 75,743{ -{ -{ -{
Revaluation of foreign investments -{ -{ 23,100{ -{ -{
Translation differences on foreign currency
net investments in subsidiary undertakings -{ -{ -{ -{ (140,786)
At 31 March 2007 1 1, ,7 79 96 6, ,0 05 52 2{ 2 25 59 9, ,5 51 17 7{ 5 50 09 9, ,2 21 13 3{ 5 55 5, ,9 92 26 6{ 4 4, ,6 65 57 7, ,4 41 10 0{
C Co om mp pa an ny y
Share premium{ Share option{ Profit & loss{
account{ reserve{ account{
£{ £{ £{
At 1 April 2006 1,796,052{ 183,774{ (462,690)
Retained profit the period -{ -{ 1,316,423{
Share-based payment -{ 75,743{ -{
Dividend -{ -{ (360,628)
At 31 March 2007 1 1, ,7 79 96 6, ,0 05 52 2{ 2 25 59 9, ,5 51 17 7{ 4 49 93 3, ,1 10 05 5{ 3 34 4 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
23. Acquisitions
Acquisition of Brian Donaldson Distribution Limited
On 1 October 2006 the group acquired Brian Donaldson Distribution Limited for £502,500 paid by cash.
In calculating the goodwill arising on acquisition, the fair value of net assets of Brian Donaldson Distribution Limited has
been assessed and no adjustments from book value were made. The net assets of Brian Donaldson Distribution Limited at 1
October 2006 are set out below:
£{
F Fi ix xe ed d A As ss se et ts s
Tangibles 33,851{
C Cu ur rr re en nt t A As ss se et ts s
Stock 183,597{
Debtors 280,806{
Cash 2,872{
T To ot ta al l a as ss se et ts s 501,126{
C Cr re ed di it to or rs s 407,144{
N Ne et t A As ss se et ts s 93,982{
£{
Cash consideration 221,100{
Deferred consideration 281,400{
Net assets acquired (93,982)
Goodwill arising on acquisition (note 12) 408,518{ 3 35 5
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
23. Acquisitions (continued)
The results of Brian Donaldson Distribution Limited prior to its acquisition were as follows:
P Pr ro of fi it t a an nd d l lo os ss s a ac cc co ou un nt t
1 January 2006 to{ Year ended{
30 September 2006{ 31 December 2005{
£{ £{
Turnover 1,389,599{ 1,683,871{
Operating profit 68,477{ 45,274{
Net interest (11,413) (14,451)
Profit on ordinary activities before taxation 57,064{ 30,823{
Taxation on profit from ordinary activities -{ -{
Profit for the period 57,064{ 30,823{
C Ca as sh h f fl lo ow ws s
£{
Cash consideration as above 221,100{
Cash acquired (50,960)
Net outflow of cash 272,060{
24. Pensions
The company operates both a defined contribution pension scheme and a group personal pension plan. The assets of the
schemes are held separately from those of the company in independently administered funds. The pension cost charge
represents contributions payable by the company to the defined contribution fund of £2,000 (2006 - £48,000) and the
group personal pension plan of £280,634 (2006 - £209,008).
25. Share-Based Payment
Waterline Group PLC operates three equity-settled share based remuneration schemes for employees; an enterprise
management incentive scheme and approved and an unapproved schemes for executive directors and certain senior
management. The only vesting condition being that the individual remains an employee of the group over the option
period. 3 36 6 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
25. Share-Based Payment (continued)
2007 2007 2006 2006
Weighted average Weighted average
exercise price exercise price
(pence) Number (pence) Number
Outstanding at the beginning of the year 6 67 7. .0 0 1 1, ,0 09 97 7, ,5 59 98 8 - -
Granted during the year 7 71 1. .5 5 1 13 39 9, ,8 86 60 0 67.0 1,097,598
Forfeited during the year 8 84 4. .0 0 8 83 3, ,3 33 32 2 - -
Lapsed the year 4 42 2. .0 0 8 83 3, ,3 33 34 4 - -
Outstanding at the end of the year 6 68 8. .2 2 1 1, ,0 07 70 0, ,7 79 92 2 67.0 1,097,598
The exercise price of options outstanding at the end of the year ranged between 42p and 84p and their weighted average
contractual life was 10 years.
Of the total number of options outstanding at the end of the year, 486,303 had vested and were exercisable at the end of
the year. The weighted average fair value of each option granted during the year was 29.3p (2006 - 32.6p).
The following information is relevant in the determination of the fair value of options granted during the year under the
equity and cash-settled share based remuneration schemes operated by the group.
2007 2006
E Eq qu ui it ty y- -s se et tt tl le ed d
Option pricing model used B Bl la ac ck k- -S Sc ch ho ol le es s Black-Scholes
Weighted average share price at grant date (pence) 8 81 1. .9 9 83.5
Exercise price (pence) 6 68 8. .0 0 67.0
Weighted average contractual life (days) 3 3, ,6 65 50 0 3,650
E Eq qu ui it ty y- -s se et tt tl le ed d
Expected volatility 3 36 6% % 35%
Expected dividend growth rate 4 4% % 4%
Risk-free interest rate 4 4. .2 2% % 4.2%
The volatility assumption, measured at the standard deviation of expected share price returns, is based on a statistical
analysis of daily share prices of similar companies over the last three years.
The share-based remuneration expense (note 5) comprises:
2007 2006
££
Equity-settled schemes 7 75 5, ,7 74 43 3 183,774
The group did not enter into any share-based payment transactions with parties other than employees during the current
or previous period. 3 37 7
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
26. Commitments Under Operating Leases
As at 31 March 2007, the group had annual commitments under non-cancellable operating leases as set out below:
2007{ 2007{ 2006{ 2006{
Land & buildings{ Other{ Land & buildings{ Other{
£{ £{ £{ £{
Operating leases which expire:
Within one year - -{ 5 5, ,4 45 55 5{ -{ 38,645{
In two to five years 4 45 56 6, ,0 07 79 9{ 3 30 03 3, ,1 16 63 3{ 460,454{ 255,111{
In more than five years 3 37 75 5, ,8 86 67 7{ - -{ 375,867{ -{
8 83 31 1, ,9 94 46 6{ 3 30 08 8, ,6 61 18 8{ 863,321{ 293,756{
27. Related Party Transactions
Included in the group other debtors are the following balances with directors:
Amount outstanding Maximum in year
2007{ 2006{ 2007{ 2006{
£{ £{ £{ £{
M W Lawrence -{ -{ -{ 221,771{
T Hutchinson -{ -{ -{ 3,294{
During the year the group paid premises rentals to The Jenna Pension Fund of £286,973 (2006 - £291,961) Mr M W
Lawrence was the sole member of this pension scheme during the year.
28. Reconciliation Of Operating Profit To Net Cash Inflow
From Operating Activities
2007{ 2006{
£{ £{
Operating profit 1 1, ,6 62 21 1, ,6 67 72 2{ 1,987,381{
Depreciation 9 91 17 7, ,7 76 69 9{ 765,243{
Amortisation 7 76 6, ,2 29 98 8{ 61,520{
Loss on sale of fixed assets 6 63 3, ,1 10 08 8{ 92,438{
Currency translation differences (1 11 17 7, ,9 91 11 1) 77,525{
(Increase) in stocks (8 80 00 0, ,6 69 94 4) (298,613)
Decrease/(increase) in debtors 6 60 06 6, ,2 27 72 2{ (39,284)
Increase in creditors 7 71 16 6, ,7 77 70 0{ 193,894{
3 3, ,0 08 83 3, ,2 28 84 4{ 2,840,104{
Share-based payment charges 7 75 5, ,7 74 43 3{ 183,774{
Net cash inflow from operating activities 3 3, ,1 15 59 9, ,0 02 27 7{ 3,023,878{ 3 38 8 WATERLINE GROUP PLC Annual Report and Financial Statements Year Ended 31 March 2007
Notes forming part of the financial statements for the year ended 31 March 2007 (continued)
29. Reconciliation Of Net Cash Inflow To Movement In 
Net Debt
2007{ 2006{
£{ £{
Decrease/(increase) in cash in the year (2 28 82 2, ,2 22 26 6) 1,292,584{
Cash movements relating to debt 2 22 25 5, ,7 71 10 0{ 758,022{
Capital element of hire purchase and finance lease rentals 5 58 80 0, ,4 47 76 6{ 510,203{
Change in net debt resulting from cash flows 5 52 23 3, ,9 96 60 0{ 2,560,809{
New finance leases (5 50 06 6, ,0 02 23 3) (732,423)
Movement in net debt in the year 1 17 7, ,9 93 37 7{ 1,828,386{
Opening net debt (4 4, ,1 17 74 4, ,0 04 41 1) (6,002,427)
Closing net debt (4 4, ,1 15 56 6, ,1 10 04 4) (4,174,041)
30. Analysis Of Net Debt
At 1 April{ Cash{ Other non-cash{ At 31 March{
2006{ flow{ changes{ 2007{
£{ £{ £{ £{
Cash in hand and at bank 405,637{ (36,734) -{ 3 36 68 8, ,9 90 03 3{
Bank overdrafts (1,471,338) (245,492) -{ (1 1, ,7 71 16 6, ,8 83 30 0)
(1,065,701) (282,226) -{ (1 1, ,3 34 47 7, ,9 92 27 7)
Debt due within one year (284,391) 225,710{ (558,505) (6 61 17 7, ,1 18 86 6)
Debt due after one year (2,150,683) -{ 558,505 (1 1, ,5 59 92 2, ,1 17 78 8)
Obligations under finance leases (673,266) 580,476{ (506,023) (5 59 98 8, ,8 81 13 3)
Total (4 4, ,1 17 74 4, ,0 04 41 1) 5 52 23 3, ,9 96 60 0{ (5 50 06 6, ,0 02 23 3) (4 4, ,1 15 56 6, ,1 10 04 4) 3 39 9 Report and Financial Statements
Year Ended 31 March 2007
WATERLINE GROUP PLC
Annual report and financial statements for the year ended 31 March 2007