Annual report and  
financial statements 2013 Welcome to 
International 
Greetings 
We are one of the world’s leading 
designers, manufacturers, importers  
and distributors of gift packaging  
and greetings, stationery and  
creative play products. 
Our mission
To succeed by design in all that we 
do, to drive profitable growth through 
exceptional customer service, industry 
leading innovation and great value.
Overview
1  Financial highlights
1 Operational highlights
2  Our year at a glance
4  Delivering on strategy
6  Chairman’s statement
Business review
8  Chief Executive Officer’s review
10  Financial review
14 Risk management
Governance
16  Board of Directors
17  Advisers
18 Corporate governance statement
20  Directors’ report
24  Directors’ remuneration report
27  Directors’ responsibilities
Financials – Group
28  Independent auditor’s report
29  Consolidated income statement
30  Consolidated statement  
of comprehensive income
31  Consolidated statement  
of changes in equity
32  Consolidated balance sheet
33  Consolidated cash flow statement
34  Notes to the financial statements
Financials – Company
72  Statement of 
Directors’ responsibilities 
73  Independent auditor’s report
74  Company balance sheet
75  Notes to the Company 
financial statements
Contents    International Greetings plc Annual report and financial statements 2013 1
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Financial highlights
Operational highlights
•	 Contin ued	double	 digit 	gr o wth 	 in	ear nings 	per	 shar e
•	 Str ong 	gr o wth	in	 sales 	and	pr ofits 	in	 USA	–	 y et 	 ag ain
•	 Gift	 pac kaging 	and	gr eetings	pr oduct	 sales	exceeded	 £150	 million
•	 Major	 £6	million	ca pital	in v es tment 	pr ogramme 	commenced 	in	UK	
to	 suppor t 	 futur e	gr o wth
Sales 	 (£m)
+2% on 2012
Under lying 	diluted	ear nings	per	 shar e* 	(pence)
+16% on 2012
* Underlying earnings per share is stated before 
exceptional items and normalised to remove a 
one‑off taxation credit in 2011
◊ Net debt stated at constant exchange rates 
was £0.6 million lower
Opera ting	pr ofit 	(£m)
+34% on 2012
Net 	 debt	(£m)
+£0.2 million on 2012
225
7.8
9.1
42.1
◊
221
6.7
6.8
41.9
217
4.8
7.2
44.6
198
4.0
5.4
48.9
2013
2013
2013
2013
2012
2012
2012
2012
2011
2011
2011
2011
2010
2010
2010
2010 2 International Greetings plc Annual report and financial statements 2013
Our year at a glance
2013 year end is a wrap
USA
•	 Another year of double digit sales 
and profit growth
•	 Commencement of business with 
750 new customers
•	 Award of ‘Partner of Excellence’ from 
Target Corporation
•	 Record levels of gift wrap production 
volumes leads to ’go ahead’ for investment 
in new fast speed wrap packing facilities
•	 Trading commences with Canada’s 
leading $1 retail chain
UK
•	 Sales of Everyday Single Cards grew by over 25% and new  
two year supply deal with the UK’s largest £1 only retailer secured
•	 Major project commenced and capital investment secured  
for high speed, high definition printing facilities in Wales
•	 Record volume of gift wrap produced in our plant in Wales 
•	 A co‑ordinated approach, with UK sales and marketing and 
China manufacturing, to our Christmas cracker business in 
2012/13, has provided the opportunity to secure cracker orders 
from all four of the UK’s leading blue chip grocers for 2013/14
•	 Full operational integration of our two stationery and creative 
play trading divisions completed on time and on budget
Group
•	 Record sales levels
•	 Rich Eckman and Lance Burn appointed as 
Executive Directors
•	 Phil Dutton appointed as Non‑Executive Director
•	 Group results ‘trigger’ two interest rate reductions 
whilst overall facilities secured at lower cost and 
improved terms
•	 Head office relocation completed with resultant 
ongoing cost benefit
•	 Group trading now extends to over 80 countries with 
product distributed in more than 100,000 stores worldwide  International Greetings plc Annual report and financial statements 2013 3
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
China
•	 Completion of first season in  
newly located factory, producing 
in excess of 65 million crackers
•	 Factory accreditation achieved 
and audit approved status 
confirmed with world’s 
leading retailers
Australia
•	 Upgraded logistics facilities installed  
including semi‑automated systems to  
facilitate efficient order picking
•	 Focus on new market opportunities to 
replace impact of reduced revenue resulting 
from voluntary insolvency of a large discount 
retail chain
Mainland Europe
•	 Completed installation and 
commenced production 
with new state‑of‑the‑art high 
definition printing in Holland, 
leading to a notable increase in 
orders confirmed for 2013/14
•	 Collaborative production and 
marketing approach with the UK 
and USA to optimise gift wrap 
capacity planning and efficiency 4 International Greetings plc Annual report and financial statements 2013
Delivering on strategy
Our strategy is core to our success
Our 	 k e y 	 f ocus 	 points 	 driv e 	 the 	 Compan y 	 f orw ar d 	 and 	 k eep 	 us 	 r eaching	 	
f or 	 the 	 high 	 standar ds 	 and 	 tar gets 	 w e 	 set 	 ourselv es.
We strive to give our people 
knowledge, tools and inspiration 
to create value for the Company 
and help them pursue their careers 
and goals.
We continually nurture the deep 
and mutually valuable relationships 
we enjoy with our customers by 
delivering great design, innovative 
product solutions and outstanding 
customer service.
We have created a toolbox of 
marketing, design, product and 
brand category expertise which 
is exploited in every market 
through local entrepreneurial 
management.
We are constantly enhancing 
our capabilities in buying, 
innovation, sourcing and 
manufacturing so we can 
leverage these to provide best 
quality, value and service.
1 
 N ur t ur i n g 
valuable 
relationships
2
  C re a t i n g 
a toolbox 
of expertise
3
  P r o vi d i ng b e s t  
quality, value  
and service
4
  G i vi ng o u r 
people the 
knowledge 
they need
5
  B al an c i n g 
our business
We continue to balance our business 
across different geographic regions, 
seasons, product categories and 
brands, thereby improving margins 
and the profile of our profitability.  International Greetings plc Annual report and financial statements 2013 5
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Revenue
Gr ea t 	 design, 	 inno v a tiv e 	 pr oduct 	 solutions along 	 with	 	
outstanding 	 v alue 	 and 	 customer 	 ser vice. 	
Tha t’ s 	 wha t 	 w e 	 f ocus 	 on. 	 Then 	 w e 	 aim 	 to 	 balance 	 our 	 b usiness.
By	season	
By 	 cus tomer	 des tina tion	
By 	 brand	
By	pr oduct 	ca tegor y 	
	 UK:	£87.0m, 	40%
2012: £84.6m, 39% 
2011: £89.9m, 41%
	 USA: 	£59.0m, 	26% 
 2012: £58.4m, 26% 
 2011: £53.1m, 25%
	 Eur ope:	£39.4m, 	17% 
 2012: £39.8m, 18% 
 2011: £43.7m, 20%
	 A us tralia 	and 	Ne w		
	 Zealand	£27.8m, 	12%
2012: £29.6m, 13% 
2011: £25.6m, 12%
	 Res t	of	the	w or ld		
	 £12.0m, 	 5%
2012: £8.4m, 4% 
2011: £4.6m, 2%
	 Chr is tmas	
	 £120.4m, 	 53%	
2012: £111.7m, 51% 
2011: £115.6m, 53%
	 Ev er day
	 £104.8m, 	 47%	
2012: £109.1m, 49% 
2011: £101.3m, 47%
	 Gift	pac kaging		
	 and	gr eetings 	
	 £154.9m, 	 69%
2012: £148.6m, 67% 
2011: £142.5m, 66%
	 Sta tioner y	and	 	
	 cr ea tiv e	 play
	 £70.3m, 	31%	
2012: £72.2, 33% 
2011: £74.4m, 34%
	 Cus tomer	o wn	brand
	 £99.2m, 	 44%
2012: £101.6m, 46%  
2011: £104.0m, 48%
	 T rade/gener ic
	 £126.0m, 	 56%
2012: £119.2m, 54% 
2011: £112.9m, 52% 6 International Greetings plc Annual report and financial statements 2013
Key achievements
•	 Revenue from continued operations 
increased by 2% to £225.2 million
•	 Operating profit, after exceptional 
items increased by 34%
•	 Profits, after exceptional items and 
post‑tax, increased by 188% to 
£4.1 million
I am pleased to report that Fiscal 2013 has been a year 
of continued effective reorganisation of our Group, as 
we strengthen our foundations and commit to further 
capital expenditure and investment. These measures 
will assist us in achieving increased manufacturing 
efficiencies and improved profitability going forward.
Revenues for the year ended 31 March 2013 rose by 2% 
to £225 million from continuing operations. Operating 
profit after exceptional items was up 34% to £9.1 million, 
whilst profit after exceptional items and tax increased 
from £1.4 million for the year ended 31 March 2012 to 
£4.1 million, in the year under review.
In my statement last year, I reported that an important 
part of our strategy was to focus on improving our 
operating and manufacturing efficiencies, in order to 
increase our profits going forward. To this end, during 
the year we completed the relocation of our factory 
in China, which will improve our efficiency and cost 
effectiveness during 2014 and thereafter. 
Chairman’s statement
A year of continued 
reorganisation and 
alignment, as we 
strengthen our foundations 
for profitable growth.
John Charlton
Chairman  International Greetings plc Annual report and financial statements 2013 7
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
The investment we made to install state‑of‑the‑art 
printing equipment in our gift wrap manufacturing 
facility in Holland is delivering the benefits we 
anticipated and providing confidence going forward. 
As a consequence, in April 2013 we placed the order 
to install identical printing presses in our UK gift wrap 
manufacturing plant, which will deliver significant 
improvements in efficiency for the future. The markets 
in which we operate throughout the world continue to 
be very competitive and challenging. In this respect, 
we shall continue to look at ways to reduce costs and 
unnecessary expense, whilst doing all that we can to 
increase revenues.
During the year we strengthened our Board with the 
appointment of Phil Dutton as a Non‑Executive Director 
in May 2012. Phil is also Chair of our Audit Committee 
and a member of our Remuneration Committee. 
We also appointed Lance Burn and Rich Eckman to 
our Main Board. Lance is Managing Director of our 
largest subsidiary in Europe – IGUK and also Managing 
Director of our recently relocated facility in China. 
Rich is Managing Director of IGUSA – our subsidiary in 
the USA. IGUK and IGUSA have significantly improved 
profitability under Lance and Rich’s management. 
These appointments, working together with our existing 
Board members, now give us a better balance and 
composition of the Board. I wish Phil, Lance and Rich 
every success and fulfilment within their responsibilities 
and I look forward to working with them. I should like 
to thank all my colleagues on the Board for their hard 
work, commitment, loyalty and support to our Group, 
but also to me personally. I also wish to place on record 
our thanks and appreciation to all our employees 
within the Group. It is through their efforts and support 
that our Group continues to make progress and we are 
grateful for their loyalty.
Finally, I thank our shareholders, bankers, customers, 
suppliers and advisers for their loyalty and contributions 
to all our businesses throughout the world. We never 
forget that this group of persons always have a choice 
and we remain very mindful of their support, which we 
value greatly.
John Charlton
Chairman 8 International Greetings plc Annual report and financial statements 2013
Key achievements
•	 Operating profit up 34% to £9.1 million 
after exceptional items
•	 Double digit growth in earnings per share
•	 Continued double digit profit growth 
in sales and profits in the USA
•	 Completion of China factory relocation
•	 Gift packaging and greetings product 
sales exceed £150 million
•	 Order placed in April 2013 for major 
£6 million gift wrap capital investment 
project in the UK
I am pleased to report a year of progress on many 
fronts resulting in the achievement of our key objective 
of double digit earnings per share growth, with 
operating profit after exceptional items of £9.1 million, 
up 34%.
Sales revenue at £225 million was achieved through a 
continuing focus on offering exceptional value to our 
customers and consumers across the globe.
Our manufacturing businesses continued to produce 
record volumes of product. The year saw the 
completion of the relocation of our gift bags, greetings 
cards and Christmas cracker manufacturing plant in 
China and the first season of production in Holland 
using our new high speed, high definition printing 
facility. This initial phase of investments into enhanced 
environmentally friendly gift wrap production has now 
been followed by a second phase in the UK where 
our project to install identical technology has now 
commenced, allowing us to compete whilst providing 
market leading service and value.
Geographical highlights
UK	and	 Asia
The UK and Asia business accounted for 53% (2012: 54%) 
of the Group’s revenue for the year. The collaborative 
efforts of our UK businesses and China based 
manufacturing and sourcing facilities has resulted in 
securing, for the first time, significant commitments 
from all of the UK major blue‑chip grocers for products 
designed for the forthcoming 2013 Christmas season.
Additionally we are delighted to have continued 
recent years’ growth in the everyday greeting 
cards category and our credibility in this area is 
demonstrated by a two year commitment received 
for everyday cards from the UK’s largest £1 only 
multiple retailer.
Chief Executive Officer’s review
Growing today and 
investing for the future.
Paul Fineman
CEO  International Greetings plc Annual report and financial statements 2013 9
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Whilst we continue to enjoy a major share of the UK’s 
gift wrap market, we have also secured significant 
incremental business for the supply of everyday gift 
wrap to one of the world’s largest home furnishings 
retailers.
Mainland	 Eur ope
Mainland Europe continues to be the most challenging 
of our key markets with revenue at 13% of Group sales 
(2012: 13%).
Nevertheless, an encouraging initial year of production 
utilising new state‑of‑the‑art machinery in Holland has 
resulted in the award of significant incremental business 
for 2013/14 when volumes are expected to increase 
despite market conditions.
USA
Our ambitious plans for sales and profit growth were 
achieved in the USA with revenue exceeding 22% 
of Group sales (2012: 20%). Once again, growth was 
delivered across all market segments, including over 
750 new ‘upscale’ customers as well as further growth 
with the $1 specialist retail sector.
The businesses outstanding innovation and customer 
service was recognised by the world’s third largest 
retailer, Target Corporation, with a Vendor Partner 
Award, demonstrating that we continue to grow whilst 
focusing on delivering customer needs. The ongoing 
growth in demand for gift wrap manufactured within 
our operations based in Savannah, Georgia, will be 
further supported by a £0.5m fast pay back capital 
investment programme during 2013.
A us tralia
Artwrap in Australia accounted for 12% (2012: 13%) of 
the Group’s revenue for the year. Sales volumes were 
impacted by the voluntary insolvency of a material 
customer which gave rise to an exceptional charge in 
the year. However, a speedy response to this setback 
and a focus on other market opportunities bodes well 
for the future.
Customers and licences
More than 500 million units of our products are 
now sold in over 100,000 retail outlets and in over 
80 countries worldwide.
Our generic brands have grown in popularity and now 
represent 56% of our sales. Licenced brands remain 
an important and successful area in our portfolio with 
2013 once again seeing growth in sales of Peppa Pig 
products and a very strong performance of Hello Kitty 
and Moshi Monster product categories.
Whilst new customers are continually introduced 
across all markets, we are enjoying the benefits of 
close relationships with long‑term, well established and 
growing customers.
Our team
We embrace the changing dynamics across global 
markets and benefit from the passion and commitment 
of our teams across all businesses. I thank them, 
once again, for their ingenuity and enthusiasm as we 
continue to grow and strive to ‘raise the bar’ across all 
aspects of our business.
Our strategy
The focal points of our strategy remain as relevant 
today as ever. Our targets are to dominate the gift 
packaging and value stationery markets in which we 
operate by:
•	 nurturing the mutually valuable relationships we 
enjoy with our customers, suppliers and stakeholders;
•	 creating a toolbox of marketing, design, product 
and brand category expertise;
•	 providing best quality, value and service through 
optimum product development, manufacturing, 
sourcing and supply;
•	 giving our teams across the world the knowledge 
and tools needed to achieve their goals; and
•	 balancing our business, through sustainable and 
growing sales across geographic regions, seasons, 
product categories and brands.
The future
We are at an exciting stage of our Group’s 
development and have begun a compelling 
programme of investment in manufacturing in Europe, 
the USA and the UK and have completed a major 
factory relocation in China. This has been achieved 
whilst securing increased funding on improved terms.
Our new three year plan is on track to deliver double 
digit cumulative average growth in earnings per share, 
whilst remaining committed to debt reduction and 
leverage below two times debt/EBITDA.
We have identified new opportunities for incremental 
growth and shall continue to deploy our resources and 
energy in accelerating and enhancing this process.
Paul Fineman
CEO 10 International Greetings plc Annual report and financial statements 2013
Financial review
Key achievements
•	 Sales up 2% to £225.2 million
•	 Pressure on margins fully mitigated 
through effective cost control
•	 Operating profit after exceptional items 
up 34% to £9.1 million (2012: £6.8 million)
•	 Fully diluted earnings per share before 
exceptional items increased 16% to 7.8p 
(2012: 6.7p)
•	 Cash generated from operations of 
£7.5 million (2012: £11.5 million) after 
significant investment in working capital 
to support new everyday contracts
•	 Extended banking facilities on improved 
terms to fund future investment in growth
Group performance
Our constant focus on margins, operating profits and 
cash management has underpinned and supported 
steady improvement to the financial position of the 
business despite the insolvency of a material customer 
in Australia. The Company has demonstrated its 
ability to withstand such events, execute significant 
operational change (in China and Europe) and still 
deliver double digit growth in underlying earnings per 
share. Furthermore, with improved financial leverage 
and more cost effective funding facilities in the UK, the 
Company now has the flexibility to take advantage of 
operationally compelling low season manufacturing 
and to invest in selected future growth opportunities 
such as that now under way at our site in Wales. 
Continuing operations
Reven ue s from continuing operations for the year to 
31 March 2013 were up slightly by 2% to £225.2 million 
(2012: £220.8 million). Sales from the UK, Europe and 
Australia all fell slightly, the latter due to the insolvency 
of a major customer but continued strong double digit 
growth in North America more than outweighed these.
Driving growth  
in earnings
Anthony Lawrinson
CFO  International Greetings plc Annual report and financial statements 2013 11
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
G ro s s 	p ro fi t 	m a r g i n 	b e f o r e 	 e x c e p t i o n a l 	 i t e m s has 
fallen back slightly to 18.3% (2012: 19.3%) reflecting the 
mix effect of lower sales in our Australian joint venture 
(0.7%) where margins have historically been better, but 
also higher freight costs to Europe/UK during the year 
(0.4%), a risk that was identified in last year’s report. 
However, this margin level is still well ahead of the 2011 
level of 17.4%. The Company aims to improve margins 
by increasing the balance of own brand products 
and non Christmas business. Success in the former 
goal, together with innovative design engineering to 
price points have helped us to otherwise successfully 
combat deflationary pressure on selling prices and 
inflationary pressure on raw materials and goods 
sourced from the Far East. 
An important dynamic to margin is also the level of FOB 
business delivered directly to major customers to ports 
in China. This increased by half during the year. This 
typically attracts lower gross margins but also avoids 
other costs and risks associated with domestic delivery 
and tends to slightly enhance net margins and returns 
on capital.
Ov erheads 	 pr e 	 e x ceptionals have decreased 
year‑on‑year by a net of £1.0 million, reflecting tight cost 
control and substantially mitigating the margin effect 
identified above. Cost savings were greater in the UK 
while modest investment occurred in our growing US 
market. Cost control remains tight and opportunities to 
remove or reduce costs are constantly sought out and 
new costs are only incurred where actual or prospective 
value can be demonstrated.
O p e r a t i n g 	p ro fi t 	b e f o r e 	 e x c e p t i o n a l 	i t e m s was flat at 
£10.7 million due to the net effect of the above items. 
However, after exceptional items, operating profit was 
up 34% to £9.1 million (2012: £6.8 million).
E xc ep t ion a l	i tem s during the year amounted to 
£1.6 million before tax (2012: £3.9 million). As previously 
announced these relate to:
•	 a bad debt of £0.5 million in Australia after a major 
customer went into voluntary administration;
•	 costs of £0.9 million associated with disruption to 
operations in China; and
•	 management restructuring in our UK businesses 
(£0.2 million) which is expected to result in a 
payback of less than one year.
The administration process of the major customer 
in Australia has been resolved; prompt terms of 
trade and a formal charge over goods supplied 
provided significant mitigation. The customer has 
now restructured and our business still trades with the 
successor entity with similar protections, though at a 
much reduced level of activity. 
Following the relocation of our factory in China and 
senior management changes, significant disruption 
occurred and additional cost was incurred late in 
the season to ensure that customer service was 
maintained, underpinning strong 2013 season orders.
F i n a n c e 	e x p e n s e s	in the year were lower at £3.5 million 
(2012: £3.6 million) despite the full year effect of bank 
charges for longer dated facilities. This reflected the 
effect of strong cash control throughout the year but 
in particular two reductions in margin during the year 
as key leverage targets were achieved. Notes 8 and 17 
to the financial statements provide further information.
P ro fi t 	b e f o r e 	e x c e p t i o n a l	i t e m s	a n d	t a x was up 3% to 
£7.3 million (2012: £7.1 million). 
P ro fi t 	b e f o r e 	t a x 	f ro m 	 c o n t i n u i n g 	o p e r a t i o n s was up 
79% to £5.7 million (2012: £3.2 million) after charging 
exceptional items of £1.6 million (2012: £3.9 million). 
Taxation
The headline taxation charge of £1.6 million 
(2012: £1.8 million) or 28.2% arises because of the 
exceptional costs associated with the disruption to 
operations in China, where no taxation relief has been 
recognised as the prospect of this crystallising is low. 
The effective underlying tax charge on profits before 
exceptional items is lower at 26% (2012: 27.5%). Actual 
taxation paid in cash during the year amounted 
to £0.9 million (2012: £1.1 million) and arose entirely 
in Australia.
The current geographical profile of Group profits before 
exceptional items at current local rates of tax would 
result in an underlying blended tax rate of just under 
30%. However, there are still tax losses in the USA with 
a current tax value of £2.2 million and in the UK with a 
current tax value of £0.9 million, not yet recognised in 
the balance sheet. The opportunity to recognise and 
utilise these as profitability is sustained and improves, 
will suppress the actual tax rate for some time to come. 12 International Greetings plc Annual report and financial statements 2013
Financial review continued
Profit for the year
Profit for the year was up 188% to £4.1 million 
(2012: £1.4 million). This was after charging £1.3 million 
(2012: £3.7 million) in respect of exceptional items. 
Earnings per share and dividends
Basic earnings per share were 6.0p (2012: 0.3p). After 
removing the effect of exceptional items, the adjusted 
earnings per share increased to 8.1p (2012: 7.2p) 
representing an increase of 12.5%. 
Employee share options of 3.0 million had vested but 
not yet been exercised as at 31 March 2013. As these 
are exercised, earnings per share will trend towards 
the fully diluted level and the Company targets growth 
in this fully diluted metric as a primary goal. Fully 
diluted earnings per share (stated before exceptional 
items) were 7.8p, up a pleasing 16% on the prior year 
(2012: 6.7p).
No dividend was paid during the year (2012: £nil) and 
the Board does not propose a final dividend for the 
year. The other primary focus remains the reduction 
of leverage from the current level of 2.8 times EBITDA 
to below 2.0 times EBITDA. At this point, the Board will 
consider whether it is appropriate to resume dividends. 
Balance sheet and cash flow
Net debt at 31 March 2013 was steady at £42.1 million 
(2012: £41.9 million) and leverage steady at 2.8 times 
despite the effect of exchange rates and investment in 
working capital towards year end to fund operationally 
compelling manufacturing opportunities and new 
contracts. Notes 17 and 26 to the financial statements 
provide further information. 
Year‑end net debt included amounts denominated 
in US dollars of $22.6 million (2012: $20.7 million) and in 
euros of €12.4 million (2012: €11.0 million). The year‑end 
exchange rates were $1.52 (2012: $1.60) and €1.19 
(2012: €1.20). Allowing for this, debt stated at constant 
exchange rates would have been £0.8 million lower.
Working capital management continues to be a 
priority. Outstanding debtors are monitored closely, 
both to maximise cash but also to reduce our credit 
risk. Trade debtors increased to £18.8 million (2012: £17.1 
million) at the year end. This increase related partly to a 
change in payment terms to one major customer in the 
USA but also to sales made pursuant to a material new 
contract in the UK (see also below relating to stock). 
The charge for bad and doubtful debts in the year 
was £0.3 million or just 0.1% of turnover, excluding the 
exceptional bad debt in Australia. 
Gross stock levels increased by 13.5% from £47.3 million 
to £53.8 million including £1 million relating to the effect 
of exchange rates. The underlying increase reflected 
further success in obtaining early firm customer orders, 
which allowed more factory production to begin for 
the coming season ahead of the traditional summer 
peak. This allowed more efficient use of resources 
throughout the year, reducing costs. However, of 
even greater impact was the effect of a material 
new everyday contract which required that product 
be manufactured and bought in during Q4 to meet 
customer demand early in the new financial year.
Older stock (measured as over 15 months since last 
purchase) remained stable at £5.5 million (2012: £5.2 
million). Our businesses have consistently achieved in 
excess of 100% recovery against written down values of 
old stock, indicating adequate provisioning levels.
G ro u p	 c a s h	 g e n e r a t e d 	 f ro m 	 o p e r a t i o n s 	was £7.5 million 
(2012: £11.5 million) which as noted above reflects 
an increase in trading working capital employed by 
£5.7 million (2012: decrease £0.2 million) as a result of 
higher stock and debtor balances at year end. This 
related to new everyday contracts, required to meet 
customer demand in late Q4 and early Q1 of the new 
financial year, and to manufacturing opportunities 
during the ‘low’ season January to March.
Net investment in capital expenditure was just 
£1.7 million (2012: £4.3 million), well below depreciation 
and the prior year, which reflected the investment in 
a new state‑of‑the‑art printing press at our gift wrap 
manufacturing operation in Europe. Investments 
approved for the financial year 2013/14 include £6 
million (net of grants) for our manufacturing site in 
Wales to mirror the technology installed in 2012/13 in 
Europe and a further £0.5 million investment in our 
fast growing US business. Both investments will provide 
efficiencies and enhance our ability to provide market 
leading service and value, with the benefits arising 
after commissioning in the 2014 calendar season 
and beyond.
The UK investment will also result in a consolidation of 
our operations, freeing up one site for potential sale. 
The market value of this site is estimated to be in excess 
of £1 million. In addition the Company has granted 
a five‑year option to purchase part of another under 
utilised site (net book value c. £1 million) to a power 
company at a price of £2.4 million and generating 
premium income of £0.5 million over the option period.
Equity attributable to shareholders has increased to 
£51.9 million from £47.8 million predominantly reflecting 
profits generated in the year.  International Greetings plc Annual report and financial statements 2013 13
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Risks and key performance indicators
Our areas of primary focus are:
•	 improved earnings attributable to shareholders, 
which we aim to achieve through top line growth in 
selected markets and channels together with strong 
cost and gross margin management; and
•	 lower leverage measured as the ratio of net debt to 
pre‑exceptional EBITDA, which we aim to achieve 
through improved profitability together with close 
management of our working capital.
Operationally we are increasing the spread of our 
revenue base and enhancing our margins by seeking 
to balance our business across: 
•	 different territories – revenue to “rest of world” 
destinations has increased materially in recent years 
(see note 4);
•	 different products – although stationery and creative 
play products have dropped to 31% of turnover 
following particular strength in the gift packaging 
and greetings segment this year (see note 4);
•	 more everyday products across the year – everyday 
product reverted to 47% of sales in the year after 
an increase last year to 49% but a material new 
everyday contract will impact in 2013/14; and
•	 brands – the profile of IG brands and licensed 
products continues to grow with sales in this 
category now representing 56% of our revenue up 
from 54% last year.
Treasury operations
In August 2011 the principal bank of the Group 
provided extended and longer dated facilities, 
providing a sound capital foundation with a maturity 
profile to suit the Group’s needs. In April 2013 the bank 
agreed to further extend those facilities as follows:
•	 an additional £5 million term loan, repayable over 
three years, with a final repayment coterminous with 
the main facility;
•	 an extension to August 2015 of the asset backed 
loan facility secured on the stock and debtors of the 
two largest UK businesses;
•	 a one year renewal of the revolving multi‑currency 
credit facility of up to £28.9 million and the 
multi‑currency overdraft facility of up to £5 million; 
and
•	 credit approval to provide an additional £3.25 
million hire purchase facility repayable over seven 
years to fund new printing equipment in our site in 
Wales, once delivered to site.
These facilities provided the Group with improved terms 
and operational headroom but more importantly, the 
capability to fund a material new investment at our 
manufacturing site in Wales. The like‑ for‑ like blended 
interest rate on the existing term facilities improved by 
1% during the year as a result of achieving specified 
leverage targets. Margins and fees on other existing 
and new facilities with the principal bank were also 
improved to match.
There are financial covenants attached to our facilities 
and the Group comfortably complied with these 
throughout the year. These covenants include:
•	 debt service, being the ratio of cash flow available 
to finance costs on a rolling twelve month basis; 
•	 interest cover, being the ratio of earnings before 
interest, depreciation and amortisation to interest on 
a rolling twelve month basis;
•	 leverage being the ratio of debt to pre‑exceptional 
EBITDA on a rolling twelve month basis; and
•	 in the individual businesses which have asset 
backed loans, covenants of pre‑exceptional 
EBITDA before interest, depreciation on a rolling 
twelve month basis compared with the forecast, 
and the dilution of credit notes as a percentage of 
invoices issued.
The Group has various interest rate swaps denominated 
in US dollars, sterling and euros to improve certainty 
over interest charges. The Group adopts hedge 
accounting for these instruments. No new interest rate 
contracts were entered into during the year. 
Note 26 to the financial statements provides further 
information in respect of treasury matters. 
Overall a solid year with strong development in net 
profits and earnings per share, providing a strong 
platform for new investment and growth.
Anthony Lawrinson
CFO 14 International Greetings plc Annual report and financial statements 2013
Risk management
Ca tegor y Descr iption	of 	r isk Mitig a tion
Curr enc y	
exposur e
The Group is exposed to currency risk, which 
impacts in three principal ways:
i. translation of the results of our overseas 
businesses, which account for nearly half of 
the Group’s sales and three‑quarters of profit 
before tax: the businesses are seasonal and 
this can mean that fluctuations in periodic 
results can be exacerbated by exchange 
movements in that period;
ii. purchase prices are subject to currency 
fluctuations against the local currency sales 
price: in particular approximately half of the 
Group’s sales are of items which are bought 
in or manufactured in Asia and are paid for 
using US dollars or Chinese renminbi; and
iii. the Group is funded in a mixture of 
currencies, tailored where possible to 
match the needs of each business and to 
reduce the effect of currency fluctuations 
on the Group’s financial results. However, 
the main banking facility is denominated 
in sterling with some balances drawn in 
US dollars: hence should exchange rates 
move adversely this has implications on the 
available headroom.
The Directors mitigate these risks using a mixture 
of natural hedges and, where appropriate, spot 
purchases, forward contracts and occasionally 
other similar instruments. Translation risks are only 
hedged selectively.
A v aila bility 	of	
liquidity
The Group’s operations are highly seasonal 
and significant flexible working capital funding 
is required during the course of the annual 
trading cycle. The Group is dependent on 
the continuing support of its bankers for these 
working capital facilities. A reduction in the 
availability of these facilities would materially 
impact the Group’s ability to fulfil its obligations 
as they fall due.
The Group budgets carefully and cautiously 
and operates regular forecasting and cash 
monitoring processes against facilities available. 
Based on budgeted requirements, the Group 
maintains borrowing lines with a range of 
counterparties and maturities, estimated to be 
sufficient to cover funding requirements. These 
borrowing lines range from short‑term facilities 
of one year to long‑term debt of up to 20 years 
(15 years remaining). Significant tranches of 
funding were refinanced in August 2011 for 
four and five years respectively and refreshed 
in April 2013. See note 17 to the financial 
statements.
In v entor y	
obsolescence
The Group’s business remains highly seasonal 
and fashions in some products change from 
year to year. Poor sell‑through where the Group 
carries inventory risk can result in the value 
realised falling below cost.
The Group maintains a blend of business 
between customer brands and its own 
brands. Purchasing and production decisions 
are carefully controlled at local level and 
KPIs including inventory turn and ageing are 
monitored by the Board. Each business aims 
to minimise its inventory holdings relative to 
economic return and provides appropriately to 
ensure inventory is held at the lower of cost and 
net realisable value.
Identifying and managing risks and uncertainties.
Any commercial opportunities bring a degree of risk.  International Greetings plc Annual report and financial statements 2013 15
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Ca tegor y Descr iption	 of	r isk Mitig a tion
Supply 	chain The Group uses a large number of external 
suppliers, with bought‑in goods for resale 
purchased mainly from Asia. Issues with the 
quality or integrity of supply chain, particularly 
at peak season, could result in contractual 
penalties or adversely impact the Group’s ability 
to maintain supply to its customers.
The Group manufactures, where expedient 
to do so, more of its own goods in China and 
other locations throughout the world. Suppliers 
are carefully selected and their performance 
monitored by our businesses and locally from 
our sourcing office in Hong Kong through 
means such as clear contractual terms of 
business, robust quality control and on‑site visits. 
Alternative routes of supply are maintained 
wherever possible to ensure keen pricing and 
continuity of supply.
Economic 	
clima te
Given the relatively low value product within 
our market, with an average retail price of less 
than £2, the Directors believe that aggregate 
end customer demand remains relatively 
unaffected by the current economic climate. 
However, while fewer customers have gone 
into administration relative to recent years, 
risks associated with the current economic 
circumstances remain prominent. These manifest 
through loss of sales if customers stop trading 
or we elect not to do business with them, 
pressure to margins, particularly in the more 
commoditised products, and bad debts arising.
The Group maintains tight credit control 
procedures, regularly reviews credit limits and 
avoids concentrating on any one geographic 
location or placing over reliance on any one 
customer. The largest single customer accounts 
for approximately 8% of overall sales. Amounts 
presented in the balance sheet are net of 
allowances for doubtful receivables, which 
are made both for identified loss events which 
evidence a reduction in the recoverability of the 
cash, and to provide against the probability of a 
number of as yet unidentified loss events based 
on the age of overdue debts.
Management 	
r isk
The Group operates subsidiaries and a joint 
venture in a number of geographical locations 
across four continents with tight margins 
requiring close attention to detail both in supply 
and sale. A number of our businesses benefit 
from close local entrepreneurial management 
from skilled management teams particularly in 
this challenging economic climate. Loss of key 
management personnel could adversely impact 
the results of one or more of those businesses.
The Group’s activities in Asia are particularly 
integral to the supply chain for our UK 
operations. The China factory benefits from 
carefully selected local management but is also 
monitored by the UK management team by 
way of on‑site reviews and regular monitoring 
of key performance indicators. The Group 
considers succession planning and seeks to 
develop strong teams around key individuals to 
reduce the impact of potential loss.
Opera tional	
disr uption
The Group operates four major factories plus 
several trading sites across the world including 
China, UK, USA, Australia and mainland Europe. 
The Group’s business is dependent on the 
ongoing operation of these facilities, particularly 
at peak season. A significant operational 
disruption could adversely affect its ability to 
make and supply products to customers on a 
timely basis.
The Group has implemented policies and 
procedures to efficiently and safely manage its 
operations and to maintain continuity of supply. 
The factories operate to quality standards and 
are subject to regular customer, internal, health, 
safety and environmental audits. The Group 
insures against a range of known operational 
risks and maintains an actively managed 
programme with its insurers and advisers to 
manage both operational risks and insurance 
premiums. 16 International Greetings plc Annual report and financial statements 2013
Board of directors
John Charlton
N o n ‑ E xec u t i ve	C ha i r ma n
John joined the Board in April 2010 
and was appointed Chairman of 
the Board on 7 September 2011. 
John chairs the Remuneration 
Committee and is a member of 
the Audit Committee. John is also 
Chairman of South Africa Greetings 
Corporation (PTY) Ltd. He was 
previously Senior Vice President 
International of American Greetings 
Corporation and Chief Executive of 
UK Greetings Ltd.
Anders Hedlund
F o u n d e r 	a n d 	N o n ‑ E x e c u t i v e 	
D e p u t y	C h a i r m a n
Anders founded the Group in 1979 
and was joint Chief Executive 
Officer of International Greetings 
until December 2007, when he 
was appointed Non‑Executive 
Deputy Chairman.
Paul Fineman
C h i e f	 E x e c u t i v e	O f fi c e r
Paul joined the Board in May 
2005 as Chief Executive Officer of 
Anker International PLC. He was 
appointed Group Managing 
Director in January 2008 and 
then appointed Group CEO in 
January 2009. 
Elaine Bond
N o n ‑ E xec u t i ve	D i rec t or
Elaine joined the Board as a 
Non‑Executive Director on 
1 February 2012. Elaine is a member 
of the Remuneration Committee 
and the Audit Committee. She 
is a Non‑Executive Director of 
Yorkshire Ambulance Service and 
was previously Group Operations 
Director of UK Greetings Ltd, the UK 
subsidiary of American Greetings.
Anthony Lawrinson
C h i e f 	 F i n a n c i a l 	O f fi c e r 	
a n d	 C o m p a n y 	 S e c r e t a r y
Anthony joined the Board in 
October 2011 as Chief Financial 
Officer and Company Secretary. 
Anthony’s former roles include 
Group Finance Director of Reliance 
Security Group, Chief Financial 
Officer at O2 Airwave and Group 
Treasurer at O2 PLC & Hickson 
International PLC. Anthony is a 
member of the ICAEW and the 
Association of Corporate Treasurers.
Phil Dutton
N o n ‑ E xec u t i ve	D i rec t or
Phil Dutton joined the Board 
on 28 May 2012. Phil’s former 
roles include Group Finance 
Director of Punch Taverns, and 
Finance Director of Matalan. 
He is Chairman of the Audit 
Committee and a member of 
the Remuneration Committee.  International Greetings plc Annual report and financial statements 2013 17
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Advisers
Lance Burn
M a n a g i n g 	D i r e c t o r
Lance joined the Board in October 
2012 and has been Managing 
Director of International Greetings 
UK Limited since 2009 and 
International Greetings China since 
2011. Lance’s previous roles include 
directing businesses for Rank 
Hovis McDougal plc, Saint Gobian 
Solaglas UK and also international 
overseas based roles for Pepsico 
International in Africa and India. 
Lance has been a member of the 
Institute of Directors since 1998.
Richard Eckman
C E O	o f 	I n t e r n a t i o n a l	G r e e t i n g s 	 U S A
Rich joined the Board in October 
2012. He joined International 
Greetings in 2001 and has served as 
CEO of International Greetings USA 
since 2011. His early management 
career included operational and 
financial positions with Amer 
Sports Group, Electrolux USA and 
General Electric.
Financial and nominated adviser and broker
C e n k o s 	S e c u r i t i e s	P l c
6, 7, 8, Tokenhouse Yard 
London EC2R 7AS
Auditors
E r n s t	 &	Y o u n g 	L L P
400 Capability Green 
Luton LU1 3LU
Registered office
N o	 7 ,	W a t e r	 E n d 	 B a r n s
Water End 
Eversholt MK17 9EA
Share registrar
C api ta	Re gi s t rar s
The Registry 
34 Beckenham Road 
Beckenham BR3 4TU
Tel UK: 0871 664 0300 
(Calls cost 10p per minute plus network extras.  
Lines are open from 8.30am to 5.30pm,  
Monday to Friday.) 
Tel overseas: +44 (0)20 8639 3399
Email: shareholder.services@capitaregistrars.com 18 International Greetings plc Annual report and financial statements 2013
Corporate governance statement
Corporate governance
The UK Corporate Governance Code (formerly the Combined Code) sets out standards of good practice in 
relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders. 
It is mandatory for fully listed companies. Whilst there is no obligation for AIM listed companies to comply with this 
Code, the Directors endorse the principles of effective corporate governance and are committed to maintaining 
the highest standards of ethics, integrity and professional competence. The Directors do not consider full 
compliance with the Code is appropriate for the Group at this stage of its development but will keep the matter 
under review and continue to develop procedures as the Group grows.
Board of Directors
The principal duty of the Board is to represent and protect the interests of the Company’s shareholders by 
ensuring that the Company is well‑managed and operated in a way that is in the interests of all shareholders. The 
Board is responsible for oversight of the formulation and implementation of the strategy of the Company and also 
for oversight of the Company’s operations. 
Division of responsibilities
There is a distinct and defined division of responsibilities between the Chairman and the Chief Executive 
Officer (CEO). The Chairman is primarily responsible for the effective working of the Board and the CEO for the 
operational management of the business and for the implementation of the agreed strategy.
Composition of the Board
During the accounting period, there were a number of changes to the Board. 
R Eckman and L Burn were appointed to the Board as Executive Directors with effect from 17 October 2012. 
P Dutton was also appointed as a Non‑Executive Director on 24 May 2012 and replaced C Howell as Chair of 
the Audit Committee after C Howell stepped down at the end of March 2012. 
S A Hedlund also holds the position of Non‑Executive Director on the Board. S A Hedlund is presumed not 
independent because, as founder, he has served on the Board since the Company’s inception, he holds 
significant interests in the shareholding of the Company and also fulfils a consultancy role within one of the 
Group’s businesses.
As at the date of this report, all of the other Non‑ Executive Directors are considered independent under the UK 
Corporate Governance Code.
Role of Non‑Executive Directors
The Company’s Non‑Executive Directors provide input to the business by contributing to the oversight function 
of the Board and to the development of the Company’s strategy. Non‑Executive Directors are required to 
be satisfied that the financial information is accurate and that internal control procedures governing risk 
management are effective and appropriate.
Board process and information
The Board met nine times during the year, including an extended review of 2012/13 budgets with senior 
management over three days. The Board aims to meet at least six times a year for formal Board meetings and 
up to five further times in between for informal business reviews, to review budgets and to focus on strategy. 
Dialogue occurs regularly between Directors outside of scheduled meetings.
Meeting agendas include review and approval of minutes recorded, matters arising, a review of material 
operational matters relating to our businesses and other special items for discussion or consideration. Board 
papers are usually circulated at least three business days in advance to allow Directors adequate time 
to prepare. 
The Board receives operational and financial information and reports from the CEO/CFO to assist in monitoring 
and assessing the ongoing performance of the business on a monthly basis.  International Greetings plc Annual report and financial statements 2013 19
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Accountability and audit
All Directors have accepted a duty of care and accountability to act in the interests of the Company. 
The Group Audit Committee oversees how the Board monitors risk and reviews the adequacy of the risk 
management framework. During the year the Audit Committee comprised the three independent Non‑ Executive 
Directors (J Charlton, E Bond and P Dutton) with P Dutton as Chairman. 
The Committee meets as required during the year and at least twice with the Group’s external auditor. Its role 
is to review the interim and final financial statements for approval by the Board, to ensure that operational and 
financial controls are functioning properly, and to provide the forum through which the Group’s external auditor 
reports to the Board.
Risk management
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk 
management framework. The Group’s risk management systems, policies and procedures are established to 
identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor the 
risks and adherence to limits. Such a system is designed to manage rather than eliminate the risk of failure to 
achieve business objectives, and can only provide a reasonable and not absolute assurance against material 
misstatement or loss. 
Risk management processes are reviewed regularly by the Audit Committee to reflect changes in market 
conditions and the Group’s activities. The Board’s oversight covers all controls, including financial, operational 
and compliance controls and general risk management. It is based principally on reviewing reports from 
management to consider whether significant risks are identified, evaluated, managed and controlled and 
whether any significant weaknesses are promptly remedied and indicate the need for more extensive monitoring. 20 International Greetings plc Annual report and financial statements 2013
The Directors present their annual report and the audited financial statements for the year ended 31 March 2013.
Principal activities
The principal activity of the Group is the design, manufacture and distribution of gift packaging and greetings, 
stationery and creative play products.
The subsidiaries and associated undertakings principally affecting the profits or net assets of the Group in the year 
are listed in note 4 to the Company financial statements.
Business review
Full details of the results for the year are set out in the attached financial statements.
A review of the performance of the business during the year and an indication of its future developments can be 
found in the Chairman’s Statement on pages 6 and 7 and Chief Executive Officer’s Review on pages 8 and 9.
A summary of the financial impact of major events during the year and the financial position at 31 March 2013 
can be found in the Financial Review on pages 10 to 13. Information about the use of financial instruments by the 
Company and its subsidiaries is given in note 26 to the financial statements.
Dividends
No interim dividend was paid (2012: £nil). The Directors do not recommend a final dividend (2012: £nil).
Capital structure
Details of the issued share capital, together with details of movements in the Company’s issued share capital 
during the year are shown in note 22. The Company has one class of ordinary shares which carry no right to fixed 
income. Each share carries the right to one vote at general meetings of the Company. There are no specific 
restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general 
provisions of the Articles of Association and prevailing legislation.
Details on share‑based payments are set out in note 25 to the financial statements and the Directors’ Remuneration 
Report. No person has any special rights or control over the Company’s share capital and all issued shares are 
fully paid.
Directors and Directors’ interests
The Directors who held office during the year were as follows:
E Bond  
L Burn (appointed 17 October 2012)  
J Charlton  
P Dutton (appointed 28 May 2012)  
R Eckman (appointed 17 October 2012)  
P Fineman  
S A Hedlund  
A Lawrinson
In accordance with the Company’s Articles of Association, L Burn and R Eckman will stand for election and 
J Charlton and S A Hedlund will stand for re‑ election at the forthcoming Annual General Meeting.
Directors’ report  International Greetings plc Annual report and financial statements 2013 21
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
The Directors who held office during the year had the following direct interests in the ordinary shares of 
the Company:
 Interest at Interest at   
 end of year beginning of year*
 
     Ordinary  Ordinary  
    shares Options shares Options
E Bond    10,000 — — —
L Burn    — 22,400 — 22,400
J Charlton 
(a)
    25,000 — — — 
P Dutton    — — — —
R Eckman    — 200,000 — 200,000
P Fineman 
(b)
    3,400,978 1,052,556 2,188,534 2,265,000 
S A Hedlund 
(c)
    448 — 448 —
A Lawrinson    35,000 — — —
* Or date of appointment, if later.
In addition to the above holdings:
(a) 57,500 (2012: 57,500) shares are held by the wife of J Charlton.
(b) P Fineman owns a non‑beneficial interest in 1,025,708 (2012: 1,025,708) ordinary shares of 5p each.
(c)  19,097,956 (2012: 20,310,400) and 2,819,800 (2012: 2,819,800) ordinary shares of 5p each are respectively registered in the names of AC Artistic 
Limited (“Artistic”) and Malios Limited, companies incorporated in the British Virgin Islands, and under the ultimate control of the Hedlund 
Family. Artistic has a further beneficial interest in 500,000 (2012: 500,000) ordinary shares of 5p each. In addition to the Hedlund Family’s 
beneficial interest set out above, the Hedlund Family is also interested in a further 1,150,790 ordinary shares, representing a further 2.03% of the 
current issued share capital of the Company. These ordinary shares are held by West Coast Trust, a trust for the benefit of S A Hedlund’s adult 
children, which holds 900,790 ordinary shares and Claes Hedlund, S A Hedlund’s brother, who owns 250,000 ordinary shares. In total the Hedlund 
Family is interested in 23,568,994 ordinary shares, representing 41.52% of the current issued share capital of Company.
Details of Directors’ share options are provided in the Directors’ Remuneration Report on pages 24 to 26.
No shares were purchased by Directors between 31 March 2013 and the date of this annual report.
Employees
The Group recognises the benefits of keeping employees informed on matters affecting them as employees and 
on the various factors affecting the performance of the Group. This is achieved through employee briefings that 
are held in most businesses at least twice a year and regular team briefings.
The Group conforms to current employment laws on the employment of disabled persons and, where we 
are informed of any employee disability, management makes all reasonable efforts to accommodate that 
employee’s requirements.
In order to recognise the efforts of UK employees the Group operates an All Employee Share Option Plan (AESOP) 
but due to the need to drive down debt, no shares have been purchased in either this or the previous year. Due 
to the restriction on the number of shares available for employee option schemes, given the number of employee 
options in issue and exercised over the previous ten years, no further allotments are available. Due to UK tax 
legislation it is not possible to offer this scheme to employees working outside the UK.
Health and safety
The Group is committed to maintaining high standards of health and safety in every area of the business. 
It is the aim of the Group to exceed the requirements of health and safety legislation and we have established a 
Group Board level health and safety co‑ordinator to ensure continuous improvement of health and safety across 
the Group. 22 International Greetings plc Annual report and financial statements 2013
Directors’ report continued
Creditor payment policy
It is the Group’s policy to settle terms of payment with suppliers when agreeing the terms of each transaction, 
to ensure that suppliers are made aware of the terms of payment and to settle supplier accounts in accordance 
with their individual terms of business. The number of days’ purchases outstanding at the year end in respect of 
the Company were equivalent to 45 (2012: 42), based on the average daily amount invoiced by suppliers during 
the year.
Political and charitable contributions
The Group made no charitable or political contributions in either year.
Risk management
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk 
management framework. The Group’s risk management systems, policies and procedures are established to 
identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor 
the risks and adherence to limits. Such a system is designed to manage rather than eliminate the risk of failure 
to achieve business objectives, and can only provide a reasonable and not absolute assurance against 
material misstatement or loss. Risk management processes are reviewed regularly by the Audit Committee 
to reflect changes in market conditions and the Group’s activities. The Board’s oversight covers all controls, 
including financial, operational and compliance controls and general risk management. For full details see 
pages 14 and 15.
Corporate governance
For full details see pages 18 and 19.
Going concern
The Group’s business activities, together with the factors likely to affect its future development, its performance 
and position are set out in the Chief Executive Officer’s Review. The financial position of the Group, its cash flows, 
liquidity position and its management of both working capital and capital expenditure are set out in the Financial 
Review. Details of bank loans and borrowings are given in note 17 to the financial statements and liquidity risks are 
given in note 26 to the financial statements.
The Group relies on its banks for financial support and is confident that the facilities in place are sufficient to meet 
its needs for the foreseeable future (see note 1 to the financial statements). Accordingly the Directors continue to 
adopt the going concern basis in preparing the financial statements.
Purchase of own shares
The Directors are authorised to make market purchases of the Company’s own shares under an authority granted 
at the last Annual General Meeting. The Directors will seek renewal of this authority at the forthcoming Annual 
General Meeting. During the year the Company did not buy back any of its shares. If passed, the resolution 
would give the Company authority to purchase in the market up to 5,676,723 ordinary shares (representing 
approximately 10% of the Company’s issued share capital).
Any shares purchased under this authority would either be treated as cancelled (and the number of shares 
in issue reduced accordingly) or held in treasury, available for re‑sale by the Company or transferred to an 
employees’ share scheme.
This general authority, if approved, would expire on the date of the Company’s 2014 Annual General Meeting 
or, if earlier, 15 months from the date the resolution is passed. The Directors presently intend that a resolution to 
renew this authority will be proposed at next year’s Annual General Meeting and at each succeeding Annual 
General Meeting.  International Greetings plc Annual report and financial statements 2013 23
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Treasury policy
Details of our loans, borrowings and capital management can be found in notes 17 and 26 to the 
financial statements.
Auditor
The Directors who held office at the date of approval of this annual report confirm that, so far as they are each 
aware, there is no relevant audit information of which the Company’s auditor is unaware and, each Director 
has taken all the steps that ought to have been taken as a Director to make himself aware of any relevant audit 
information and to establish that the Company’s auditor is aware of that information. This confirmation is given 
and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006.
By order of the Board
A Lawrinson No 7, Water End Barns
Director Eversholt MK17 9EA
26 June 2013 Company number 1401155 24 International Greetings plc Annual report and financial statements 2013
Directors’ remuneration report
Remuneration Committee
The Remuneration Committee was established by the Board and operates under terms of reference agreed by 
the Board on 29 September 2008.
The Remuneration Committee consists of J Charlton (Chairman), P Dutton (Non‑Executive Director) and E Bond 
(Non‑Executive Director). 
The Committee meets as required. The Committee determines the service contract terms, the remuneration and 
benefits, including bonuses of the Executive Directors and senior management. It is also responsible for granting 
long‑term incentive arrangements.
Remuneration policy
The Group’s remuneration policy is to ensure that the remuneration of Executive Directors is sufficiently 
competitive to enable the Group to retain and motivate existing Directors and attract high‑ quality performers 
in the future. The Group aims to incentivise and reward its Executive Directors in a way that is consistent with 
the Group’s commercial objectives and to align the interests of the Directors with those of the shareholders. To 
achieve this, the Executive Directors’ total remuneration comprises both fixed remuneration and variable reward, 
the latter reflecting Company performance. The main elements of remuneration for Executive Directors are set 
out below. Only the basic salary is pensionable.
The Group’s remuneration policy in respect of Non‑Executive Directors is to pay annual fees which reflect the 
responsibilities and duties placed upon them, whilst also having regard to market practice.
The remuneration of the Non‑Executive Directors is set by the Board.
Service contracts
The Executive Directors have service contracts which can be terminated by either side on no greater than 
one year’s notice. Non‑Executive Directors do not have service contracts and their appointments may be 
terminated without compensation at any time. All Non‑Executive Directors have letters of appointment and their 
appointment and subsequent re‑appointment is subject to approval by shareholders.
Bonuses
Bonus objectives for Executive Directors and senior management during the last year were based on Group profit 
and net debt achievement, as long as personal performance is at the level required. The level of the bonuses 
is approved by the Remuneration Committee who retain discretion over the level of payout depending on the 
quality of the financial performance in achieving the result. The bonus scheme for the coming year for Executive 
Directors and other senior management also includes objectives relating to both profit and net debt.
Executive share options
No options were exercised by Directors in their time in office, in the current year or prior year other than those 
noted below by P Fineman relating to options granted by a third party.
In September 2008, the Board approved an HMRC approved employee share options scheme to assist in the 
motivation of Executive Directors and senior managers. Some Directors and managers received shares that 
were in addition to the HMRC approved amounts (which was 214,285 options each) and these are denoted 
as “unapproved”.
Executive share awards were awarded at the prevailing market rate on the date of the grant. Options 
are normally exercisable between three and ten years after grant and upon the achievement of stated 
performance criteria.
The first options issued in December 2008 were not subject to performance criteria (other than continued 
employment), except for unapproved options issued to Executive Directors. Holders of options of the previous 
share option scheme had already met their performance criteria, but had waived their options. These options 
may be exercised between 17 December 2011 and 17 December 2018.  International Greetings plc Annual report and financial statements 2013 25
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Directors currently holding share options are: 
       Options
L Burn
 (1)
       22,400
R Eckman
 (2)
       200,000
P Fineman
 (2)
       1,052,556
(1) The exercise price of these share options is 50p and they may be exercised between 23 September 2012 and 23 September 2019.
(2) The exercise price of these share options is 14p and they may be exercised between 17 December 2011 and 17 December 2018.
On 11 July 2012 P Fineman exercised options over 1,212,444 ordinary shares of 5p each in the Company. The 
options exercised by P Fineman were granted to him on 17 December 2008 by AC Artistic, a company under the 
control of the Hedlund family. The exercise price per ordinary share was 14p.
There have been no grants or lapses during the year.
The mid‑market price of the Company’s shares on 31 March 2013 was 51.0p per share; the highest and lowest 
mid‑market prices of the Company’s shares during the year were 67.0p and 44.0p respectively.
Directors’ remuneration
The summary of Directors’ remuneration is as follows:
 Aggregate for all Directors Highest paid Director
 
    2013 2012 2013 2012 
     £000 £000 £000 £000
Remuneration    946 1,054 312 350
Compensation for loss of office    — 558 — —
Pension contribution    59 173 — —
Total remuneration    1,005 1,785 312 350
The remuneration of the Directors by individual is as follows:
     Subtotal Pension Total  
  Salary/fees Bonus Benefits* 2013 2013 2013
Executive Directors
L Burn  81,165 — 964 82,129 10,299 92,428
R Eckman  88,122 — 10,529 98,651 4,342 102,993
P Fineman  299,500 — 12,433 311,933 — 311,933
A Lawrinson  178,763 50,000 5,571 234,334 44,125 278,459
Total Executive  647,550 50,000 29,497 727,047 58,766 785,813
Non‑Executive Directors
E Bond  30,000 — 1,240 31,240 — 31,240
J Charlton  70,000 — 3,057 73,057 — 73,057
P Dutton  26,824 — — 26,824 — 26,824
A Hedlund  85,000 — 2,827 87,827 — 87,827
Total Non‑Executive  211,824 — 7,124 218,948 — 218,948
Total Directors  859,374 50,000 36,621 945,995 58,766 1,004,761
* The benefits relate primarily to private health benefits. 26 International Greetings plc Annual report and financial statements 2013
Directors’ remuneration report continued
Directors’ remuneration continued
The following Directors were appointed during the year: 
P Dutton (appointed 24 May 2012)  
L Burn (appointed 16 October 2012)  
R Eckman (appointed 16 October 2012)
There were no gains on share options by Directors during their term of office.
    Compensation  
    for loss of Subtotal Pension Total  
 Salary/fees Bonus Benefits* office 2012 2012 2012
Executive Directors
P Fineman 299,500 37,500 12,854 — 349,854 — 349,854
M Hornung 88,739 — 108,819 204,459 402,017 26,404 428,421 
A Lawrinson 86,428 — 935 — 87,363 19,500 106,863
S Tye 83,125 22,500 802 170,700 277,127 67,768 344,895 
C Uwakaname 70,833 26,250 3,569 182,500 283,152 59,417 342,569
Total Executive 628,625 86,250 126,979 557,659 1,399,513 173,089 1,572,602
Non‑Executive Directors    
E Bond 5,000 — — — 5,000 — 5,000
J Charlton 52,654 — 1,781 — 54,435 — 54,435
A Hedlund 85,000 — 2,717 — 87,717 — 87,715
C Howell 30,000 — 2,085 — 32,085 — 32,085
K James 30,513 — 2,672 — 33,185 — 33,185
Total Non‑Executive 203,167 — 9,255 — 212,422 — 212,422
Total Directors 831,792 86,250 136,234 557,659 1,611,935 173,089 1,785,024
* The benefits relate primarily to private health benefits and to M Hornung for overseas housing benefits.
The highest paid Director is P Fineman (2012: P Fineman).
The Group operated a Group personal pension plan to which the Group contributed for three Directors 
(2012: four). The Group also provides death in service life assurance to the value of between two and six times 
pensionable salary.
John Charlton
Chairman of the Remuneration Committee  International Greetings plc Annual report and financial statements 2013 27
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Directors’ responsibilities
The Directors are responsible for preparing the annual report and the Group financial statements in accordance 
with applicable United Kingdom law and those International Financial Reporting Standards (IFRS) as adopted by 
the European Union (EU).
Under Company law the Directors must not approve the Group financial statements unless they are satisfied that 
they present fairly the financial position, financial performance and cash flows of the Group for that period. In 
preparing the Group financial statements the Directors are required to:
•	 select suitable accounting policies in accordance with IAS 8: Accounting Policies, Changes in Accounting 
Estimates and Errors and then apply them consistently;
•	 present information, including accounting policies, in a manner that provides relevant, reliable, comparable 
and understandable information;
•	 provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable 
users to understand the impact of particular transactions, other events and conditions on the Group’s financial 
position and financial performance;
•	 state that the Group has complied with IFRS as adopted by the EU, subject to any material departures 
disclosed and explained in the financial statements; and
•	 make judgements and estimates that are reasonable and prudent.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain 
the Group’s transactions and disclose with reasonable accuracy at any time the financial position of the Group 
and enable them to ensure that the Group financial statements comply with the Companies Act 2006. 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.
The Directors are responsible for the maintenance and integrity of the corporate and financial information 
included on the Company’s website. 28 International Greetings plc Annual report and financial statements 2013
Independent auditor’s report
to the members of International Greetings plc
We have audited the Group financial statements of International Greetings plc for the year ended 31 March 2013 
which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, 
the Consolidated Statement of Changes in Equity, the Consolidated Balance Sheet and the Consolidated Cash 
Flow Statement and the related notes 1 to 29. The financial reporting framework that has been applied in their 
preparation is applicable law and International Financial Reporting Standards (IFRS) as adopted by the EU.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the 
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members 
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest 
extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the 
Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditor
As explained more fully in the Directors’ Responsibilities Statement as set out on page 27 the Directors are 
responsible for the preparation of the Group financial statements and for being satisfied that they give a true and 
fair view. Our responsibility is to audit and express an opinion on the Group financial statements in accordance 
with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to 
comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the annual report and financial 
statements sufficient to give reasonable assurance that the financial statements are free from material 
misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies 
are appropriate to the Group’s circumstances and have been consistently applied and adequately disclosed; 
the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of 
the financial statements. In addition, we read all the financial and non‑financial information in the Report and 
Financial Statements to identify material inconsistencies with the audited financial statements. If we become 
aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the Group financial statements:
•	 give a true and fair view of the state of the Group’s affairs as at 31 March 2013 and of its profit for the year 
then ended;
•	 have been properly prepared in accordance with IFRS as adopted by the EU; and 
•	 have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial year for which the Group financial 
statements are prepared is consistent with the Group financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report 
to you if, in our opinion:
•	 certain disclosures of Directors’ remuneration specified by law are not made; or
•	 we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the Parent Company financial statements of International Greetings plc for the 
year ended 31 March 2013.
Andy Clewer (Senior Statutory Auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
Luton 27 June 2013  International Greetings plc Annual report and financial statements 2013 29
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Consolidated income statement
year ended 31 March 2013
   2013   2012 
   
  Before Exceptional  Before Exceptional  
   exceptional items  exceptional items  
  items (note 10) Total items (note 10) Total  
 Notes £000 £000 £000 £000 £000 £000
Continuing operations
Revenue 4 225,211  — 225,211  220,755  — 220,755 
Cost of sales  (183,941) (953) (184,894) (178,190) — (178,190)
Gross profit  41,270  (953) 40,317  42,565  — 42,565 
  18.3%  17.9% 19.3%  19.3%
Selling expenses  (12,790) (455) (13,245) (13,003) — (13,003)
Administration expenses  (18,789) (195) (18,984) (19,580) (3,635) (23,215)
Other operating income 7 803  — 803  678  — 678 
Profit/(loss) on disposal of property,  
plant and equipment  252  — 252  63  (283) (220)
Operating profit/(loss) 5 10,746  (1,603) 9,143  10,723  (3,918) 6,805 
Finance expenses 8 (3,466) — (3,466) (3,635) —  (3,635)
Profit/(loss) before tax  7,280  (1,603) 5,677  7,088  (3,918) 3,170 
Income tax (charge)/credit 9 (1,890) 289  (1,601) (1,948) 195  (1,753)
Profit/(loss) from continuing  
operations for the period  5,390  (1,314) 4,076  5,140  (3,723) 1,417 
Attributable to:   
Owners of the Parent Company    3,401    177 
Non‑ controlling interests    675    1,240 
Earnings per ordinary share
 2013 2012
   
   Notes Diluted Basic Diluted Basic
Adjusted earnings per share excluding exceptional items 23 7.8p 8.1p 6.7p 7.2p
Loss per share on exceptional items   23 (2.0p) (2.1p) (6.4p) (6.9p)
Earnings per share from continuing operations  23 5.8p 6.0p 0.3p 0.3p
Earnings per share   23 5.8p 6.0p 0.3p 0.3p 30 International Greetings plc Annual report and financial statements 2013
Consolidated statement of comprehensive income
year ended 31 March 2013
      2013 2012 
       £000 £000
Profit for the year      4,076 1,417 
Other comprehensive income:
Exchange difference on translation of foreign operations    633 (88)
Net loss on cash flow hedges (net of tax)      (5) (322)
Other comprehensive income for period, net of tax     628  (410)
Total comprehensive income for the period, net of tax     4,704  1,007 
Attributable to:
Owners of the Parent Company      3,796  (475)
Non‑controlling interests      908  1,482 
      4,704  1,007   International Greetings plc Annual report and financial statements 2013 31
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Consolidated statement of changes in equity
year ended 31 March 2013
  Share    
  premium   
  and capital      Non‑   
 Share  redemption Merger Hedging Translation Retained Shareholder controlling   
 capital reserve reserve reserve reserve earnings equity interest Total  
 £000 £000 £000 £000 £000 £000 £000 £000 £000
At 1 April 2011  2,698   4,386   17,164   (124)  776   23,190   48,090   4,220   52,310 
Profit for the year  —   —   —   —   —   177   177   1,240   1,417 
Other comprehensive income  —   —   —   (322)  (330)  —   (652)  242   (410)
Total comprehensive income  
for the year  —   —   —   (322)  (330)  177   (475)  1,482   1,007 
Equity‑ settled share‑ based 
payment (note 25)  —   —   —   —   —   43   43   —   43 
Options exercised (note 22)  52   94   —   —   —   —   146   —   146 
Equity dividends paid  —   —   —   —   —   —   —   (958)  (958)
At 31 March 2012  2,750   4,480   17,164   (446)  446   23,410   47,804   4,744   52,548 
Profit for the year  —   —   —   —   —  3,401   3,401   675   4,076 
Other comprehensive income  —   —   —   (5)  400   —   395   233   628 
Total comprehensive income  
for the year  —   —   —   (5)  400  3,401   3,796   908   4,704 
Equity‑ settled share‑ based 
payment (note 25)  —   —   —   —   —   22   22   —   22 
Options exercised (note 22)  88   178   —   —   —   —   266   —   266 
Equity dividends paid  —   —   —   —   —   —   —   (968)  (968)
At 31 March 2013  2,838   4,658   17,164   (451)  846   26,833   51,888   4,684   56,572 
Merger reserve
The merger reserve comprises premium on shares issued in relation to business combinations. 
Capital redemption reserve
The capital redemption reserve comprises amounts transferred from retained earnings in relation to the 
redemption of preference shares. For ease of presentation, the amount of £1.34 million relating to the capital 
redemption reserve has been included within the column of share premium and capital redemption reserve in 
the balances at both the beginning and end of each year, with no movements.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow 
hedging instruments related to hedged transactions that have not yet occurred.
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial 
statements of foreign operations.
Shareholders’ equity
Shareholders’ equity represents total equity attributable to owners of the Parent Company. 32 International Greetings plc Annual report and financial statements 2013
Consolidated balance sheet
as at 31 March 2013
      As at As at  
      31 March 31 March  
      2013 2012  
     Notes £000 £000
Non‑current assets
Property, plant and equipment     11 29,993  31,533 
Intangible assets     12 32,795  32,916 
Deferred tax assets     13 4,250  4,640 
Total non‑current assets      67,038  69,089 
Current assets   
Inventory     14 50,114  42,628 
Trade and other receivables     15 23,285  20,942 
Cash and cash equivalents     16 2,301  3,168 
Total current assets      75,700  66,738 
Total assets      142,738  135,827 
Equity   
Share capital     22 2,838  2,750 
Share premium      3,318  3,140 
Reserves      18,899  18,504 
Retained earnings      26,833  23,410 
Equity attributable to owners of the Parent Company     51,888  47,804 
Non‑controlling interests      4,684  4,744 
Total equity      56,572  52,548 
Non‑current liabilities   
Loans and borrowings     17 29,479  33,622 
Deferred income     18 1,329  1,879 
Provisions     19 862  1,003 
Other financial liabilities     20 1,803  447 
Total non‑current liabilities      33,473  36,951 
Current liabilities   
Bank overdraft     16 336  1,945 
Loans and borrowings     17 12,847  9,329 
Deferred income     18 550  550 
Provisions     19 107  317 
Income tax payable      904  855 
Trade and other payables     21 28,995  23,133 
Other financial liabilities     20 8,954  10,199 
Total current liabilities      52,693  46,328 
Total liabilities      86,166  83,279 
Total equity and liabilities      142,738  135,827
These financial statements were approved by the Board of Directors on 26 June 2013 and were signed on its behalf by:
P Fineman A Lawrinson Company number
Director Director 1401155
The notes on pages 34 to 71 form part of the financial statements.  International Greetings plc Annual report and financial statements 2013 33
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Consolidated cash flow statement
year ended 31 March 2013
      2013 2012  
     Notes £000 £000
Cash flows from operating activities
Profit for the year      4,076  1,417 
Adjustments for:
Depreciation      11 3,807  3,753 
Amortisation of intangible assets     12 494  534 
Finance expenses – continuing operations    8 3,466  3,635 
Income tax charge – continuing operations    9 1,601  1,753 
(Profit)/loss on sales of property, plant and equipment   5 (252) 220 
Loss on external sale of intangible fixed assets     — 4 
Profit on disposal of assets held for resale      — (8)
Equity‑settled share‑based payment     25 22  43 
Operating profit after adjustments for non‑cash items     13,214  11,351 
Change in trade and other receivables      (1,965) 224 
Change in inventory      (7,171) 2,840 
Change in trade and other payables      4,356  (1,799)
Change in provisions and deferred income     (901) (1,102)
Cash generated from operations      7,533  11,514 
Tax paid      (937) (1,131)
Interest and similar charges paid      (3,285) (3,491)
Receipts from sales of property for resale      — 528 
Net cash inflow from operating activities      3,311  7,420 
Cash flow from investing activities
Proceeds from sale of property plant and equipment     421  122 
Acquisition of intangible assets     12 (242) (399)
Acquisition of property, plant and equipment     (1,884) (4,015)
Net cash outflow from investing activities      (1,705) (4,292)
Cash flows from financing activities
Proceeds from issue of share capital      266  146 
Repayment of secured borrowings      (4,060) (1,473)
Net movement in credit facilities      2,748  (27,785)
Payment of finance lease liabilities      (115) (49)
New bank loans raised      — 30,170 
New finance leases
 (a)
      1,764  —
Loan arrangement fees      (444) (370)
Payment of deferred consideration      — (111)
Dividends paid to non‑controlling interests     (968) (918)
Net cash outflow from financing activities      (809) (390)
Net increase in cash and cash equivalents     797  2,738 
Cash and cash equivalents at beginning of period     1,223  (1,735)
Effect of exchange rate fluctuations on cash held     (55) 220 
Cash and cash equivalents at 31 March     16 1,965  1,223
(a) In the prior year fixed assets of £1,764,000 shown as acquisition of property, plant and equipment were purchased, cash inflow from new 
finance leases represents proceeds received in respect of these assets which are now held by the Group under finance leases. 34 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements
year ended 31 March 2013
1 Accounting policies
International Greetings plc is a public limited company, incorporated and domiciled in England and Wales. 
The Company’s ordinary shares are listed on AIM. 
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the 
“Group”). The Company financial statements present information about the Company as a separate entity and 
not about its Group.
The Group financial statements have been prepared and approved by the Directors in accordance with 
EU adopted International Financial Reporting Standards. The Company has elected to prepare its Company 
financial statements in accordance with UK GAAP; these are presented on pages 72 to 80. 
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods 
presented in these Group financial statements. 
Judgements made by the Directors in the application of these accounting policies that have significant effect on 
the financial statements and estimates with a significant risk of material adjustment in the next year are discussed 
in the policies below.
Going concern basis
The financial statements have been prepared on the going concern basis. 
The borrowing requirement of the Group increases steadily over the period from July and peaks in September and 
October, due to the seasonality of the business, as the sales of wrap and crackers are mainly for the Christmas 
market, before then reducing.
As with any company placing reliance on external entities for financial support, the Directors acknowledge that 
there can be no certainty that this support will continue although, at the date of approval of this report, they 
have no reason to believe that it will not do so.
After making enquiries, the Directors have a reasonable expectation that the Company and the Group have 
adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt 
the going concern basis of accounting in preparing the financial statements. 
Measurement convention
The financial statements are prepared on the historical cost basis except that financial instruments used for 
hedging are stated at their fair value.
Changes in accounting policies
The accounting policies adopted in the preparation of the financial statements are consistent with those followed 
in the preparation of the Group’s annual financial statements for the year ended 31 March 2012, except for the 
adoption of new standards and interpretations as of 1 April 2012.
Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or 
indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. 
In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. 
The financial statements of subsidiaries are included in the consolidated financial statements from the date that 
control commences until the date that control ceases.  International Greetings plc Annual report and financial statements 2013 35
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Foreign currency translation
The consolidated financial statements are presented in pounds sterling, which is the Company’s functional 
currency and the Group’s presentational currency.
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. 
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the 
foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in 
the income statement. 
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on 
consolidation, are translated at foreign exchange rates ruling at the balance sheet date. The revenues and 
expenses of foreign operations are translated at an average rate for the period where this rate approximates 
to the foreign exchange rates ruling at the dates of the transactions. Exchange differences arising from this 
translation of foreign operations, and of related qualifying hedges, are taken directly to the translation reserve. 
They are released into the income statement upon disposal.
Exchange differences arising from a monetary item receivable from or payable to a foreign operation, the 
settlement of which is neither planned nor likely in the foreseeable future, are considered to form part of a 
net investment in a foreign operation and are recognised in other comprehensive income in the translation 
reserve. The cumulative translation differences previously recognised in other comprehensive income (or where 
the foreign operation is part of a subsidiary, the parent’s interest in the cumulative translation differences) are 
released into the income statement upon disposal of the foreign operation or on loss of control of the subsidiary 
that includes the foreign operation. 
Classification of financial instruments issued by the Group
Financial instruments issued by the Group are treated as equity (i.e. forming part of shareholders’ funds) only to 
the extent that they meet the following two conditions: 
a)  they include no contractual obligations upon the Group to deliver cash or other financial assets or to 
exchange financial assets or financial liabilities with another party under conditions that are potentially 
unfavourable to the Group; and 
b)  where the instrument will or may be settled in the Company’s own equity instruments, it is either a 
non‑derivative that includes no obligation to deliver a variable number of the Company’s own equity 
instruments or is a derivative that will be settled by the Company’s exchanging a fixed amount of cash or other 
financial assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where 
the instrument so classified takes the legal form of the Company’s own shares, the amounts presented in these 
financial statements for called up share capital and share premium exclude amounts in relation to those shares.
Trade and other receivables
Where it is likely to be materially different from the nominal value, trade and other receivables are recognised 
initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective 
interest method, less any impairment losses.
Trade and other payables
Where it is likely to be materially different from the nominal value, trade and other payables are recognised 
initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective 
interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on 
demand and form an integral part of the Group’s cash management are included as a component of cash and 
cash equivalents for the purposes of the cash flow statement.
Interest‑bearing borrowings
Interest‑bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to 
initial recognition, interest‑bearing borrowings are stated at amortised cost using the effective interest method. 36 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
1 Accounting policies continued
Derivative financial instruments and hedging
Derivative financial instruments
Derivative financial instruments are recognised at fair value. The gain or loss on re‑measurement to fair value is 
recognised immediately in the income statement. However, where derivatives qualify for hedge accounting, 
recognition of any resultant gain or loss depends on the nature of the item being hedged.
Cash flow hedges
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised 
asset or liability, or a highly probable forecast transaction, the effective part of any gain or loss on the derivative 
financial instrument is recognised as other comprehensive income in the hedging reserve. Any ineffective portion 
of the hedge is recognised immediately in the income statement.
Amounts previously recognised in other comprehensive income are transferred to the income statement in the 
periods when the hedged item affects profit or loss (for instance when the forecast sale that is hedged takes 
place). The gain or loss relating to the effective portion of forward foreign exchange contract hedging export 
sales is recognised in the income statement within “sales”. However, when the forecast transaction that is hedged 
results in the recognition of a non‑financial asset (for example, inventory), the gains or losses previously recognised 
in other comprehensive income are transferred from other comprehensive income and included in the initial 
measurement of the cost of the asset. The deferred amounts are ultimately recognised in cost of goods sold 
(in case of inventory).
When a hedging instrument expires or is sold, terminated or exercised, or the entity revokes designation of the 
hedge relationship but the hedged forecast transaction is still expected to occur, the cumulative gain or loss at 
that point remains in other comprehensive income and is recognised in accordance with the above policy when 
the transaction occurs. If the hedged transaction is no longer expected to take place, the cumulative unrealised 
gain or loss recognised in other comprehensive income is recognised in the income statement immediately.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as 
separate items of property, plant and equipment.
Leases in which the Group assumes substantially all the risks and rewards of ownership of the leased asset are 
classified as finance leases. Where land and buildings are held under finance leases the accounting treatment of 
the land is considered separately from that of the buildings. Leased assets acquired by way of a finance lease are 
stated at an amount equal to the lower of their fair value and the present value of the minimum lease payments 
at inception of the lease, less accumulated depreciation and impairment losses. Lease payments are accounted 
for as described below.
Depreciation is charged to the income statement on a straight‑line basis over the estimated useful lives of each 
part of an item of property, plant and equipment. The estimated useful lives are as follows:
•	 freehold buildings  25–30 years
•	 leasehold land and buildings life of lease
•	 plant and equipment  four–25 years
•	 fixtures and fittings  three–five years
•	 motor vehicles  four years
No depreciation is provided on freehold land.
Included within plant and machinery are assets with a range of depreciation rates. These rates are tailored to the 
nature of the assets to reflect their estimated useful lives.
Depreciation methods, useful lives and residual values are reviewed at each balance sheet date.  International Greetings plc Annual report and financial statements 2013 37
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Intangible assets and goodwill
Subject to the transitional relief in IFRS 1, all business combinations are accounted for by applying the purchase 
method. Goodwill represents amounts arising on acquisition of subsidiaries. In respect of business acquisitions that 
have occurred since 1 April 2006, goodwill represents the difference between the cost of the acquisition and the 
fair value of the net identifiable assets acquired. Identifiable intangibles are those which can be sold separately 
or which arise from legal rights regardless of whether those rights are separable.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash‑generating units 
and is not amortised but is tested annually for impairment. 
In respect of acquisitions prior to 1 April 2006, goodwill is included on the basis of its deemed cost, which 
represents the amount recorded under UK GAAP which was broadly comparable save that only separable 
intangibles were recognised and goodwill was amortised. Goodwill written off to reserves under UK GAAP prior 
to 1998 has not been reinstated. 
If the cost of an acquisition is less than the fair value of the Group’s share of the net assets of the subsidiary 
acquired, the difference is recognised directly in the income statement.
Other intangible assets
Expenditure on internally generated goodwill and brands is recognised in the income statement as an expense 
as incurred.
Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and 
impairment losses.
The main classes of intangible assets are computer software and publishing imprints. 
Amortisation
Amortisation is charged to the income statement on a straight‑line basis over the estimated useful lives of 
intangible assets unless such lives are indefinite. The estimated useful life of computer software ranges between 
three and five years. Other intangible assets are amortised from the date they are available for use. The 
estimated useful lives are three to five years.
Amortisation charges are included under “administrative expenses” in the income statement.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on a combination of weighted 
average and the first‑in first‑out principle and includes expenditure incurred in acquiring the inventories and 
bringing them to their existing location and condition. In the case of manufactured inventories and work in 
progress, cost includes an appropriate share of overheads based on normal operating capacity.
Impairment
The carrying amounts of the Group’s assets other than inventories and deferred tax assets are reviewed at each 
balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the 
asset’s recoverable amount is estimated.
For goodwill, the recoverable amount is estimated at each balance sheet date.
An impairment loss is recognised whenever the carrying amount of an asset or its cash‑generating unit exceeds 
its recoverable amount. Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of cash‑generating units are allocated first to reduce the carrying 
amount of any goodwill allocated to cash‑generating units and then to reduce the carrying amount of the 
other assets in the unit on a pro rata basis. A cash‑generating unit is the smallest identifiable group of assets that 
generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
The recoverable amount of the Group’s assets is the greater of their fair value less costs to sell and value in use. 
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre‑tax 
discount rate that reflects current market assessments of the time, value of money and the risks specific to 
the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is 
determined for the cash‑generating unit to which the asset belongs. 38 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
1 Accounting policies continued
Impairment continued
An impairment in respect of goodwill is not reversed. In respect of other assets, an impairment is reversed when 
there is an indication that the impairment may no longer exist and there has been a change in the estimates 
used to determine the recoverable amount. An impairment is reversed only to the extent that the asset’s carrying 
amount does not exceed the carrying amount that would have been determined, net of depreciation or 
amortisation, if no impairment had been recognised.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation 
as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the 
obligation. A provision for restructuring is recognised when the Group has approved a detailed and formal 
restructuring plan and announced its main provisions. If the effect is material, provisions are determined by 
discounting the expected future cash flows at a pre‑tax rate that reflects current market assessments of the time 
value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase 
in the provision due to the passage of time is recognised as borrowing costs.
Deferred consideration
Where considered material, the Group calculates deferred consideration by discounting it to its fair value. 
This fair value is used to calculate the total purchase consideration and hence the goodwill figure. As the 
discount unwinds it is charged as a finance expense within the income statement and added to the deferred 
consideration creditor.
Revenue recognition
Revenue represents the amounts, net of discounts, allowances for volume and promotional rebates and other 
payments to customers (excluding value added tax) derived from the provision of goods and services to 
customers during the year. Sales of goods are recognised when a Group entity has despatched products to the 
customer, legal title has passed and the collectability of the related receivable is reasonably assured.
Exceptional items
Exceptional items are those items of financial performance which, because of size or incidence, require separate 
disclosure to enable underlying performance to be assessed.
Discontinued operations
A discontinued operation is a component of the Group’s business that represents a separate major line of 
business or geographical area that has been disposed of or is held for sale, or is a subsidiary acquired exclusively 
with a view to resale. Classification as discontinued operation occurs upon disposal or when the operation meets 
the criteria to be classified as held for sale, if earlier.
When an operation is classified as a discontinued operation, the comparative income statement is represented 
as if the operation had been discontinued from the start of the comparative period.
Government grants
Capital‑based government grants are included within other financial liabilities in the balance sheet and credited 
to operating profit over the estimated useful economic lives of the assets to which they relate.
Expenses
Operating lease payments
Payments made under operating leases are recognised in the income statement on a straight‑line basis over the 
term of the lease. Lease incentives received are recognised in the income statement as an integral part of the 
total lease expense.
Finance lease payments
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding 
liability. The finance charge is allocated to each period during the lease term so as to produce a constant 
periodic rate of interest on the remaining balance of the liability.  International Greetings plc Annual report and financial statements 2013 39
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Finance income and expenses
Finance expenses comprise interest payable, finance charges on finance leases and unwinding of the discount 
on provisions and deferred consideration. Finance income comprises interest receivable on funds invested and 
dividend income.
Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest 
method. Dividend income is recognised in the income statement on the date the entity’s right to receive 
payments is established. Foreign currency gains and losses are reported on a net basis.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement 
except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in 
which case it is recognised in other comprehensive income or equity respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or 
substantively enacted at the balance sheet date and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for 
financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are 
not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither 
accounting nor taxable profit other than in a business combination; and differences relating to investments in 
subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred 
tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and 
liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available 
against which the asset can be utilised. 
Dividend distribution
Final dividends to shareholders of International Greetings plc are recognised as a liability in the period that they 
are approved by shareholders.
Employee benefits
Pensions
The Group operates a defined contribution personal pension scheme. The assets of this scheme are held 
separately from those of the Group in an independently administered fund. The pension charge represents 
contributions payable by the Group to the fund.
The Netherlands subsidiary operates an industrial defined benefit fund, based on average wages, that has 
an agreed maximum contribution. The pension fund is a multi‑employer fund and there is no contractual or 
constructive obligation for charging the net defined benefit cost of the plan to participating entities other than 
an agreed maximum contribution for the period, that is shared between employer (4/7) and employees (3/7). The 
Dutch Government is not planning to make employers fund any deficits in industrial pension funds; accordingly 
the Group treats the scheme as a defined contribution scheme for disclosure purposes. The Group recognises a 
cost equal to its contributions payable for the period.
Share‑based payment transactions
The cost of equity‑settled transactions with employees is measured by reference to the fair value at the date on 
which they are granted and is recognised as an expense over the vesting period, which ends on the date on 
which the relevant employees become fully entitled to the award. Fair value is determined by an external valuer 
using an appropriate pricing model. In valuing equity‑settled transactions, no account is taken of any service 
and performance (vesting conditions), other than performance conditions linked to the price of the shares of 
the Company (market conditions). Any other conditions which are required to be met in order for an employee 
to become fully entitled to an award are considered to be non‑vesting conditions. Like market performance 
conditions, non‑vesting conditions are taken into account in determining the grant date fair value. 40 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
1 Accounting policies continued
Employee benefits continued
Share‑based payment transactions continued
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional 
upon a market vesting condition or a non‑vesting condition, which are treated as vesting irrespective of whether 
or not the market vesting condition or non‑vesting condition is satisfied, provided that all other non‑market vesting 
conditions are satisfied.
At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to 
which the vesting period has expired and management’s best estimate of the achievement or otherwise of 
non‑market vesting conditions and of the number of equity instruments that will ultimately vest or, in the case 
of an instrument subject to a market condition or a non‑vesting condition, be treated as vesting as described 
above. The movement in cumulative expense since the previous balance sheet date is recognised in the income 
statement, with a corresponding entry in equity.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily 
takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of 
the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of 
interest and other costs that an entity incurs in connection with the borrowing of funds.
New standards and interpretations not applied
The following standards and interpretations issued by the IASB have an effective date after the date of these 
financial statements:
IFRS 9 Financial Instruments: Classification and Measurement
IFRS 9 as issued reflects the first phase of the IASB’s work on the replacement of IAS 39 and applies to classification 
and measurement of financial assets and liabilities as defined in IAS 39. In subsequent phases, the IASB will 
address impairments, hedge accounting and de‑recognition. The Group will quantify the effect in conjunction 
with the other phases, when issued, to present a comprehensive picture.
IFRS 12 Disclosure of Interests in Other Entities
IFRS 12 includes all the disclosure requirements for subsidiaries, joint ventures, associates and “structured entities”.
Other new standards
Management continually reviews the impact of newly published standards and amendments and considers, 
where applicable, disclosure of their impact on the Group.
The following standards, interpretations and amendments have been issued by the IASB and IFRIC (but in some 
cases have not yet been adopted by the EU). They become effective after the current year (subject to having 
been endorsed for use in the EU via the EU endorsement mechanism) and have not been early adopted by 
the Group.  International Greetings plc Annual report and financial statements 2013 41
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
   To be adopted 
   by the Group  
   during years 
International Financial Reporting Standards (IFRS) Effective date commencing
IFRS 9 Financial Instruments – Classification and Measurement* 01.01.2015 01.04.2015
IFRS 10 Consolidated Financial Statements 01.01.2014 01.04.2014
IFRS 11 Joint Arrangements* 01.01.2014 01.04.2014
IFRS 12 Disclosure of Interests in Other Entities 01.01.2017 01.04.2017
IFRS 13 Fair Value Measurements 01.01.2014 01.04.2014
IAS 1 Presentation of Items of Other Comprehensive Income 01.07.2012 01.04.2013
IAS 16 Property, Plant and Equipment* 01.01.2013 01.04.2014
IAS 19 Employee Benefits 01.01.2013 01.04.2013
IAS 27 Separate Financial Statements 01.01.2014 01.04.2014
IAS 28 Investments in Associates and Joint Ventures 01.01.2014 01.04.2014
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine 01.01.2013 01.04.2013
IFRS 1 Government Loans* 01.01.2013 01.04.2013
IFRS 7 Disclosures – Offsetting Financial Assets and Financial Liabilities 01.01.2013 01.04.2013
IAS 32 Offsetting Financial Assets and Financial Liabilities 01.01.2014 01.04.2014
IAS 34 Interim Financial Reporting* 01.01.2013 01.04.2013
Improvements to IFRS 2012* 01.01.2013 01.04.2013
*Not yet endorsed by the EU.
None of the above standards are anticipated to significantly impact the Group’s results or assets and liabilities 
and are not expected to require significant disclosure. 
2 Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described in note 1, the Directors are required 
to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are 
not readily apparent from other sources. The estimates and associated assumptions are based on historical 
experience and other factors, including expectations of future events that are believed to be reasonable under 
the circumstances. Actual results may differ from these estimates. 
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates 
are recognised in the period in which the estimate is revised if the revision only affects that period or in the period 
of revision and future periods if the revision affects both current and future periods.
In addition to the forward operating profit and cash flow projections, the estimates and assumptions that have had a 
significant bearing on the financial statements in the current year or could have a significant risk of causing a material 
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
Critical judgements in applying the Group’s accounting policies
The following are the critical judgements, apart from those involving estimations (which are dealt with separately 
below), that the Directors have made in the process of applying the Group’s accounting policies and that have 
the most significant effect on the amounts recognised in the financial statements.
Exceptional items
The Directors have chosen to separate certain items of financial performance which they believe, because of size 
or incidence, require separate disclosure to enable underlying performance to be assessed. These items are fully 
described in note 10. 42 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
2 Critical accounting judgements and key sources of estimation uncertainty continued
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet 
date, that have significant risk of causing a material adjustment to the carrying amount of assets and liabilities 
within the next financial year, are discussed in the Directors’ Report and below.
Impairment of goodwill and property, plant and equipment
Determining whether goodwill and property, plant and equipment are impaired requires an estimation of the 
value in use of the cash‑generating units to which goodwill has been allocated or to which property, plant and 
equipment belong. The value in use calculation requires the entity to estimate the future cash flows expected to 
arise from the cash‑generating unit and a suitable discount rate in order to calculate present value. The carrying 
amount of goodwill at the balance sheet date was £31.5 million (2012: £31.4 million). No impairment (2012: £nil) 
was required. The carrying amount of property, plant and equipment was £30.0 million (2012: £31.5 million). 
No impairment loss (2012: £nil) was required.
Provision for slow moving inventory
The Group has guidelines for providing for inventory which may be sold below cost due to its age or condition. 
Directors assess the inventory at each location and in some cases decide that there are specific reasons to 
provide more than the guideline levels, or less if there are specific action plans in place which mean the guideline 
provision level is not required. Determining the level of inventory provision requires an estimation of likely future 
realisable value of the inventory in various time frames and comparing with the cost of holding stock for those 
time frames. Regular monitoring of stock levels, the ageing of stock and the level of the provision is carried out by 
the Directors. Details of inventory carrying values are provided in note 14. At the year end, stock purchased more 
than 15 months previously had increased from £5.3 million to £5.5 million (at March 2013 exchange rates) and the 
Group has provisions of £3.7 million (2012: £4.8 million) over the total inventory value.
Share‑based payments
The Directors are required to estimate the fair value of services received in return for share options granted 
to employees that are measured by reference to the fair value of share options granted. The estimate of the 
fair value of the services received is based on a Black‑Scholes model (with the contractual life of the option 
and expectations of early exercise incorporated into the model). Details of the key assumptions made in the 
measurement of share‑based payments are provided in note 25.
Taxation
There are many transactions and calculations for which the ultimate tax determination is uncertain. Significant 
judgement is required in determining the Group’s tax assets and liabilities. Deferred tax assets have been 
recognised to the extent they are recoverable based on profit projections for future years. Income tax liabilities 
for anticipated issues have been recognised based on estimates of whether additional tax will be due. 
Notwithstanding the above, the Group believes that it will recover tax assets and has adequate provision to cover 
all risks across all business operations. See note 13 for more details.
3 Financial risk management
Risk management is discussed in the Directors’ Report and a discussion of risks and uncertainties can be found on 
pages 14 and 15, along with the Group’s key risks. See note 26 for additional information about the Group’s exposure 
to each of these risks and the ways in which they are managed. Below are key financial risk management areas:
•	 currency risk is mitigated by a mixture of forward contracts, spot currency purchases and natural hedges;
•	 liquidity risk is managed by monitoring daily cash balances, weekly cash flow forecasts, regular reforecasting 
of monthly working capital and regular dialogue with the Group’s banks; and
•	 credit risk is managed by constant review of key debtors and banking with reputable banks.  International Greetings plc Annual report and financial statements 2013 43
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
4 Segmental information
The Group has one material business activity being the design, manufacture and distribution of gift packaging 
and greetings, stationery and creative play products.
For management purposes the Group is organised into four geographic business units.
The results below are allocated based on the region in which the businesses are located; this reflects the Group’s 
management and internal reporting structure. The decision was made during 2011 to focus Asia as a service 
provider of manufacturing and procurement operations, whose main customers are our UK businesses. Both the 
China factory and the majority of the Hong Kong procurement operations are now overseen by our UK operational 
management team and we therefore continue to include Asia within the internal reporting of the UK operations, 
such that UK and Asia comprise an operating segment. The Chief Operating Decision Maker is the Board.
Intra‑segment pricing is determined on an arm’s length basis. Segment results include items directly attributable 
to a segment as well as those that can be allocated on a reasonable basis.
Financial performance of each segment is measured on operating profit. Interest expense or revenue and tax are 
managed on a Group basis and not split between reportable segments.
Segment assets are all non‑current and current assets, excluding deferred tax and income tax receivable. Where cash 
is shown in one segment, which nets under the Group’s banking facilities, against overdrafts in other segments, the 
elimination is shown in the eliminations column. Similarly inter‑segment receivables and payables are eliminated.
  UK and Asia Europe USA Australia Eliminations Group 
   £000 £000 £000 £000 £000 £000
Year ended 31 March 2013
Continuing operations
Revenue – external   118,765   28,499   50,104   27,843   —   225,211 
 – inter segment   1,433   143   —   —   (1,576)  — 
Total segment revenue   120,198   28,642   50,104   27,843   (1,576)  225,211 
Segment result before exceptional items    3,974   1,151   3,796   2,431   —   11,352 
Exceptional items   (1,084)  —   (64)  (455)  —   (1,603)
Segment result   2,890   1,151   3,732   1,976   —   9,749 
Central administration costs        (606)
Net finance expenses        (3,466)
Income tax        (1,601)
Profit from continuing operations  
for the year ended 31 March 2013        4,076 
Balances at 31 March 2013 
Continuing operations
Segment assets  100,336  17,605  11,170  9,852  3,775  142,738 
Segment liabilities   (41,297)  (14,025)  (27,286)  (3,129)  (429) (86,166)
Capital expenditure
 – property, plant and equipment  795   153   230   706   —  1,884 
 – intangible   159   11   40   32   —  242 
Depreciation   2,237   716   644   210   —   3,807 
Amortisation   310   57   39   88   —   494  44 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
4 Segmental information continued
  UK and Asia Europe USA Australia Eliminations Group 
   £000 £000 £000 £000 £000 £000
Year ended 31 March 2012
Continuing operations
Revenue – external   117,007   29,147   45,044   29,557   —   220,755 
 – inter segment   4,746   1,009   —   —   (5,755)  — 
Total segment revenue   121,753   30,156   45,044   29,557   (5,755)  220,755 
Segment result before exceptional items    4,089   1,712   3,248   3,613   —   12,662 
Exceptional items   (3,068)  —   —   —   —   (3,068)
Segment result   1,021   1,712   3,248   3,613   —   9,594 
Central administration costs        (1,939)
Central administration exceptional items        (850)
Net finance expenses        (3,635)
Income tax        (1,753)
Profit from continuing operations  
year ended 31 March 2012        1,417 
Balances at 31 March 2012 
Continuing operations
Segment assets   97,100   16,885   6,224   11,317   4,301   135,827 
Segment liabilities   (40,562)  (13,950)  (25,029)  (3,222)  (516)  (83,279)
Capital expenditure
 – property, plant and equipment  1,185   2,437   331   62   —   4,015 
 – intangible   263   30   87   19   —   399 
Depreciation   2,135   742   696   180   —   3,753 
Amortisation   368   57   24   85   —   534
(a) Capital expenditure consists of additions of property, plant and equipment, intangible assets and goodwill.
(b) No single customer accounts for over 10% of total sales.
(c)  The assets and liabilities that have not been allocated to segments consist of deferred tax assets £4,250,000 (2012: £4,640,000) and income tax 
payable of £904,000 (2012: £855,000). In addition, the assets and liabilities have been grossed up for VAT of £475,000 (2012: £399,000) to reflect 
the net position of the Group.
(d) No operating segment has been aggregated in determining reportable segments.
(e)  Central recharges are included within the result of the segment that takes the recharge. The balance of the central costs are not allocated to segments.
Geographical information
The Group’s information about its segmental assets (non‑current assets excluding deferred tax assets and other 
financial assets) and turnover by customer destination and product are detailed below:
 Non‑current assets
      2013 2012  
      £000 £000
UK and Asia       39,276   40,889 
USA       6,492   6,589 
Europe       14,483   15,008 
Australia and New Zealand       2,537   1,963 
       62,788   64,449   International Greetings plc Annual report and financial statements 2013 45
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Turnover by customer destination
 Turnover
    2013 2012 2013 2012 
     £000 £000 % %
UK    87,050 84,648 39 39
USA    58,976 58,389 27 26
Europe    39,362 39,797 17 18
Australia and New Zealand    27,843 29,557 12 13
Rest of the world    11,980 8,364 5 4
    225,211 220,755 100 100
Turnover by product
    2013 2012 2013 2012  
    £000 £000 % %
Gift packaging and greetings     154,947   148,531  69 67
Stationery and creative play products     70,264   72,224  31 33
Total     225,211   220,755  100 100
5 Expenses and auditor’s remuneration
Included in profit/loss are the following charges/(credits):
      2013 2012 
      Notes £000 £000
Depreciation      11  3,807  3,753 
(Profit)/loss on sales of property, plant and equipment    (252) 220 
Release of deferred grant income     7  (550) (550)
Amortisation of intangible assets      12  494  534 
Operating lease payment – minimum lease payment    27  3,887  4,057 
Sub‑ lease rental income      7  (191) (70)
Write down of inventories to net realisable value    14  2,931  2,326 
Reversal of previous write downs on inventory    14  (1,116) (619)
Loss/(gain) on foreign exchange      34  (1)
Auditor’s remuneration:
      2013 2012 
       £000 £000
Amounts receivable by the auditor and its associates in respect of:
Audit of these financial statements      44 57 
Audit of financial statements of subsidiaries pursuant to legislation
– overseas subsidiaries      135 154 
– UK subsidiaries      66 77 
Other services relating to taxation      2 174 46 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
6 Staff numbers and costs
This note includes staff numbers and costs from continuing operations.
The average number of persons employed by the Group (including Directors) during the year, analysed by 
category, was as follows:
 Number of employees
      2013 2012
Selling and administration      397  441 
Production and distribution      1,411  1,619 
      1,808  2,060 
The aggregate payroll costs of these persons were as follows:
     Note £000 £000
Wages and salaries      36,512  37,331 
Share‑ based payments      25  22  43 
Social security costs      2,911  3,165 
Other pension costs      2,057  2,055 
      41,502  42,594
For information on Directors’ remuneration please refer to the sections titled “Executive share options” and 
“Directors’ remuneration” within the Directors’ Remuneration Report.
7 Other operating income
      2013 2012 
       £000 £000
Grant income received      550  550 
Sub‑ lease rentals credited to the income statement     191  70 
Other      62  58 
      803  678 
8 Finance expenses
      2013 2012 
       £000 £000
Interest payable on bank loans and overdrafts     2,676  2,756 
Other similar charges      719  699 
Finance charges in respect of finance leases     57  3 
Unwinding of fair value discounts      57  —
Interest payable under the effective interest method     3,509  3,458 
Derivative financial instruments at fair value through income statement   (43) 177 
      3,466  3,635   International Greetings plc Annual report and financial statements 2013 47
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
9 Taxation
Recognised in the income statement
      2013 2012 
       £000 £000
Current tax expenses
Current year – UK corporation tax      — —
Current year – foreign tax      516 991 
Adjustments for prior years       482 798 
      998  1,789 
Deferred tax expense    
Original and reversal of temporary differences     887  (473)
Adjustments in respect of previous periods     (284) 437 
      603  (36)
Total tax in income statement      1,601  1,753 
Reconciliation of effective tax rate
      2013 2012  
      £000 £000
Profit before tax      5,677  3,170 
Profit before tax multiplied by the standard rate of corporation tax rate of 24% in the UK (2012: 26%) 1,362 824 
Effects of:
Expenses not deductible for tax purposes     38 27 
Unrecognised tax losses      684 1,016 
Benefit of unrecognised deferred tax on losses and temporary differences   (1,220)  (1,826)
Deferred tax effect on tax rate changes      35 92 
Differences between UK and overseas tax rates     396  349 
Other items      108 36 
Adjustments in respect of prior years      198  1,235 
Total tax in income statement      1,601 1,753 48 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
10 Exceptional items
    Cost of  Selling Admin  
     sales  expenses expenses Total  
2013 continuing operations    £’000 £’000 £’000 £’000
Restructuring of operational activities     
– bad debt
 (a)
    — 455  — 455 
– China factory disruptions
 (b)
    953  — — 953 
– management restructuring
 (c)
    — — 195  195 
Total restructuring costs    953  455  195  1,603 
Income tax credit       (289) 
        1,314 
    Cost of  Selling Admin  
     sales  expenses expenses Total  
2012 continuing operations    £’000 £’000 £’000 £’000
Restructuring of operational activities
– redundancies
 (d)
    — —  1,201   1,201 
– loss on disposal of leasehold land and buildings in China
 (e)
  —  —  283   283 
– China factory move
 (f)
    — — 2,434   2,434 
Total restructuring costs    — — 3,918  3,918 
Income tax credit        (195)
        3,723
(a) Bad debt arising from major customer entering administration.
(b) Costs associated with disruption caused by a strike in the China factory.
(c) Redundancy costs arising from restructuring of management at a UK subsidiary.
(d)  Redundancies relating to the termination costs of key executives who left the business following a review of Board responsibilities and as a result 
of business re‑ organisation in the UK subsidiaries.
(e) Loss on disposal of leasehold land and buildings in China as a result of the decision to relocate the China factory.
(f) Costs associated with moving the China factory.  International Greetings plc Annual report and financial statements 2013 49
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
11 Property, plant and equipment
  Land and buildings 
Plant and Fixtures and Motor 
  Freehold Leasehold equipment fittings vehicles Total 
   £000 £000 £000 £000 £000 £000
Cost
Balance at 1 April 2011  22,315  6,971  45,895  2,023  853  78,057 
Additions  141  723  2,832  194  125  4,015 
Disposals  — (721) (658) (947) (263) (2,589)
Effect of movements in foreign exchange (483) 226  277  52  7  79 
Balance at 1 April 2012  21,973  7,199  48,346  1,322  722  79,562 
Additions  47  220  1,288  257  72  1,884 
Disposals  (302) (66) (559) (437) (134) (1,498)
Transfers between categories   — — (103) 103  — —
Effect of movements in foreign exchange 85  396  831  94  23 1,429 
Balance at 31 March 2013  21,803  7,749  49,803  1,339  683  81,377 
Depreciation and impairment
Balance as at 1 April 2011  (8,123) (1,968) (35,010) (843) (595) (46,539)
Depreciation charge for the year  (930) (333) (1,848) (546) (96) (3,753)
Disposals  — 528  653  859  207  2,247 
Effect of movements in foreign exchange 89  (51) (16) (16) 10  16 
Balance at 1 April 2012  (8,964) (1,824) (36,221) (546) (474) (48,029)
Depreciation charge for the year  (921) (415) (1,893) (499) (79) (3,807)
Disposals  149  66  546  435  133  1,329 
Transfers between categories  — — 91  (91) — —
Effect of movements in foreign exchange (34) (128) (617) (86) (12) (877)
Balance at 31 March 2013  (9,770) (2,301) (38,094) (787) (432) (51,384)
Net book value
At 31 March 2013  12,033  5,448  11,709  552  251  29,993 
At 31 March 2012  13,009  5,375  12,125  776  248  31,533
Depreciation is charged to either cost of sales, selling costs or administration costs within the income statement 
depending on the department to which the assets relate.
Leased plant and machinery
The net book value of property, plant and equipment included an amount of £1,850,000 (2012: £160,000) in 
respect of assets held under finance leases.
Security
All freehold properties are subject to a fixed charge. 50 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
12 Intangible assets
     Computer Other 
     Goodwill software intangibles Total  
    £000 £000 £000 £000
Cost
Balance at 1 April 2011    40,585  2,916  495  43,996 
Additions    — 399  — 399 
Disposals    — (356) — (356)
Effect of movements in foreign exchange   (290) 4  — (286)
Balance at 1 April 2012    40,295  2,963  495  43,753 
Additions    — 242  — 242 
Disposals    — (48) — (48)
Effect of movements in foreign exchange   405  68  3  476 
Balance at 31 March 2013    40,700  3,225  498  44,423 
Amortisation and impairment
Balance at 1 April 2011    (8,822) (1,596) (193) (10,611)
Amortisation for the year    — (486) (48) (534)
Disposals    — 352  — 352 
Effect of movements in foreign exchange   (39) (5) — (44)
Balance at 1 April 2012    (8,861) (1,735) (241) (10,837)
Amortisation for the year    — (447) (47) (494)
Disposals    — 48  — 48 
Effect of movements in foreign exchange   (296) (48) (1) (345)
Balance at 31 March 2013    (9,157) (2,182) (289) (11,628)
Net book value
At 31 March 2013    31,543  1,043  209  32,795 
At 31 March 2012    31,434  1,228  254  32,916 
The aggregate carrying amounts of goodwill allocated to each geographical segment are as follows:
      2013 2012  
      £000 £000
UK and Asia      25,600  25,600 
Europe       4,541  4,505 
USA      — —
Australia       1,402  1,329 
Total      31,543  31,434   International Greetings plc Annual report and financial statements 2013 51
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Impairment
The Group tests goodwill each half year for impairment, or more frequently if there are indications that goodwill 
might be impaired.
For the purposes of impairment testing, goodwill considered significant in comparison to the Group’s total 
carrying amount of such assets has been allocated to the business unit, or group of business units, that are 
expected to benefit from the synergies of the combination (see table on page 50), which represents the lowest 
level within the Group at which the goodwill is monitored for internal management purposes, and is referred to 
below as a cash‑generating unit. During the last few years the businesses have begun to work more closely with 
each other, exploiting the synergies that arise. The recoverable amounts of cash‑generating units are determined 
from the higher of value in use and fair value less costs to sell. 
The Group prepares cash flow forecasts for each cash‑generating unit derived from the most recent financial 
budgets for the following three years which are approved by the Board. The key assumptions in those budgets are 
sales, margins achievable and overhead costs. The Group then extrapolates cash flows for the following seven 
years based on a conservative estimate of market growth of 2% (2012: 2%). 
The cash‑generating units used the following pre‑tax discount rate which are derived from an estimate of the 
Group’s future average weighted cost of capital adjusted to reflect the market assessment of the risks specific to 
the current estimated cash flows over the same period.
Pre‑tax discount rates used were:
      2013 2012 
       £000 £000
UK and Asia      12.7% 13.2%
Europe       15.3% 15.4%
USA      16.7% 16.7%
Australia      14.3% 14.3%
All of the cash‑generating units’ values in use were determined to be higher than fair value less costs to sell, thus 
this was used as the recoverable amount. In all businesses the carrying value of the goodwill was supported by 
the recoverable amount and there are currently no reasonably foreseeable changes to assumptions that would 
give rise to an impairment of the carrying value.
The Directors do not believe a reasonably possible change to the assumptions would give rise to an impairment. 
The Directors have considered a 3% movement in the discount rate and a flat budget growth rate assumption in 
their assessment.
13 Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
 Assets Liabilities Net
   
  2013 2012 2013 2012 2013 2012  
  £000 £000 £000 £000 £000 £000
Property, plant and equipment   1,204  409  (884) (1,875) 320  (1,466)
Capital gains deferred   —  —   (472) (494) (472) (494)
Tax loss carried forward   3,278  3,817  (1) —   3,277  3,817 
Other timing differences  1,125  2,783  —   —   1,125  2,783 
Net tax assets/(liabilities)  5,607  7,009  (1,357) (2,369) 4,250  4,640   52 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
13 Deferred tax assets and liabilities continued
Recognised deferred tax assets and liabilities continued
The deferred tax asset in respect of tax losses carried forward at 31 March 2013 of £2,819,000 (2012: £3,817,000) is 
comprised of UK tax losses of £29,000 (2012: £1,943,000) and US losses of £2,790,000 (2012: £1,874,000). US tax losses 
carried forward will become irrecoverable in March 2027. UK tax losses may be carried forward indefinitely. The 
deferred tax assets have been recognised where the Board considers there is sufficient evidence that taxable 
profits will be available against which the tax losses can be utilised. The Board expects that the tax losses will 
be recoverable against future profits but given the level of tax losses brought forward, recoverability has been 
assessed on the basis of expected profits currently forecast. Deferred tax assets in respect of taxable losses that 
are expected to be recovered outside this forecast period have not been recognised. This includes unrecognised 
deferred tax assets in respect of brought forward UK losses of £858,000 (2012: £444,000) and £2,153,000 
(2012: £4,421,000) in respect of brought forward US tax losses.
No deferred tax is recognised on unremitted earnings of overseas subsidiaries. Overseas reserves can now be 
repatriated to the UK with no tax cost. If all overseas earnings were repatriated with immediate effect, no tax 
charge (2012: £nil) would be payable.
At the balance sheet date the UK government enacted a 2% reduction in the main rate of UK corporation tax 
from 26% to 24% effective from 1 April 2012. The rate is 23% from 1 April 2013 and the government has also proposed 
reducing the UK corporation tax rate by a further 3% per annum to 20% by 1 April 2015. However, these further 
rate changes had not been substantively enacted at the balance sheet date and their effects are not, therefore, 
included in these financial statements. The enactment of these changes would reduce the deferred tax balance of 
the Group by £0.1 million.
There are no deferred tax balances with respect to cash flow hedges.
Movement in deferred tax during the year
    1 April Recognised  Recognised 31 March 
    2012 in income in equity 2013 
    £000 £000 £000 £000
Property, plant and equipment    (1,466) 1,778  8  320 
Capital gains deferred    (494) 22  —   (472)
Tax loss carried forward    3,817  (671) 131  3,277 
Other timing differences    2,783  (1,732) 74  1,125 
Net tax assets    4,640  (603) 213  4,250  
Movement in deferred tax during the prior year
    1 April  Recognised Recognised 31 March 
     2011 in income in equity 2012  
    £000 £000 £000 £000
Property, plant and equipment    (564) (925) 23  (1,466)
Capital gains deferred    (563) 69  — (494)
Tax loss carried forward    2,406  1,436  (25) 3,817 
Other timing differences    3,337  (544)  (10)  2,783 
Net tax assets    4,616  36  (12) 4,640  International Greetings plc Annual report and financial statements 2013 53
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
14 Inventory
      2013 2012 
       £000 £000
Raw materials and consumables      5,488  5,696 
Work in progress      9,100  9,375 
Finished goods      35,526  27,557 
      50,114  42,628 
Of the £50,114,000 (2012: £42,628,000) stock value £44,074,000 (2012: £34,234,000) is held at cost and £6,040,000 
(2012: £8,394,000) is held at net realisable value. The write down of inventories to net realisable value amounted 
to £2,931,000 (2012: £2,326,000). The reversal of previous write downs amounted to £1,116,000 (2012: £619,000). The 
reversal is due to the inventory being either used or sold.
Materials, consumables, changes in finished goods and work in progress recognised as a cost of sale amounted 
to £159,525,000 (2012: £150,991,000).
Part of the Group’s funding is via asset backed loans from our bankers. These loans are secured on the inventory 
and trade receivables of the larger UK and European businesses. The amount of the inventory that is used to 
secure an asset backed loan is £31,544,000 (2012: £25,462,000). In addition bank loans to Hoomark and IGUSA are 
secured on a freehold property and contents, including inventory, therein.
Refer to note 17 for outstanding balance on asset backed loans and details of the secured bank loans.
15 Trade and other receivables
      2013 2012 
       £000 £000
Trade receivables      18,799  17,066 
Prepayments and accrued income      1,486  1,584 
Other receivables      2,012  2,060 
VAT receivable      988  232 
      23,285  20,942 
Part of the Group’s funding is via asset backed loans from our bankers. These loans are secured on the inventory 
and trade receivables of the larger UK and European businesses. The amount of the trade receivables that is used 
to secure an asset backed loan is £9,684,000 (2012: £7,629,000).
Refer to note 17 for outstanding balance on asset backed loans.
There are no trade receivables in the current year (2012: £nil) expected to be recovered in more than 
twelve months.
The Group’s exposure to credit and currency risks and impairment losses related to trade and other receivables 
is disclosed in note 26. 54 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
16 Cash and cash equivalents/bank overdrafts
      2013 2012 
       £000 £000
Cash and cash equivalents      2,301  3,168 
Bank overdrafts      (336) (1,945)
Cash and cash equivalents per cash flow statement     1,965  1,223 
Net debt
      2013 2012 
      Note £000 £000
Cash and cash equivalents      2,301  3,168 
Bank loans and overdrafts     17 (43,215) (45,266)
Loan arrangement fees      553  370 
Finance leases      (1,777) (126)
Net debt as used in the Financial Review      (42,138) (41,854)
The Group’s exposure to interest rate risk and sensitivity analysis for financial assets and liabilities are disclosed in 
note 26.
The bank overdrafts are secured by a fixed charge on certain of the Group’s land and buildings, a fixed charge 
on certain of the Group’s book debts and a floating charge on certain of the Group’s other assets.
17 Loans and borrowings
This note provides information about the contractual terms of the Group’s interest‑bearing loans and borrowings. 
For more information about the Group’s exposure to interest rate and foreign currency risk, see note 26.
      2013 2012  
      £000 £000
Non‑current liabilities
Secured bank loans (see page 55)      29,775  33,880 
Loan arrangement fees      (296) (258)
      29,479  33,622 
Current liabilities
Asset backed loan      7,683  5,467 
Revolving credit facilities      658  —
Current portion of secured bank loans (see page 55)     4,763  3,974 
Bank loans and borrowings (see page 55)     13,104  9,441 
Loan arrangement fees      (257) (112)
      12,847  9,329 
The asset backed loans are secured on the inventory and receivables of the larger business units within the UK, 
USA and European business segments.
The revolving credit facilities are secured on the assets of the Group, in the same way as the bank overdraft 
above. The interest rate is 3.2% over LIBOR. The facilities are drawn for periods from one day up to six months.
Following the negotiations of new banking facilities in July 2011, the Group accrued arrangement fees which are 
being spread over the life of the facility.  International Greetings plc Annual report and financial statements 2013 55
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Terms and debt repayment schedule
      2013 2012  
Repayment analysis of bank loans and overdrafts    Note £000 £000
Due within one year:
Bank loans and borrowings (see below)      13,104  9,441 
Bank overdrafts     16 336  1,945 
Due between one and two years:
Secured bank loans (see below)      4,725  4,666 
Due between two and five years:
Secured bank loans (see below)      20,984  24,807 
Due after more than five years:
Secured bank loans (see below)      4,066  4,407 
      43,215  45,266 
Secured bank loans
Loan 1
The principal of £487,000 (2012: £588,000) is repayable monthly on a reducing balance basis over a 15 year 
period, ending in March 2016. The loan is secured over the freehold land and buildings and the contents therein 
of International Greetings USA, Inc. and is subject to a variable rate of interest linked to the US Federal Funds Rate 
(US FFR). The currency of denomination of the loan is US dollars.
Loan 2
The principal of £470,000 (2012: £582,000) is repayable monthly on a reducing balance basis over a nine year 
period ending in March 2016. The loan is secured over the freehold land and buildings and the content therein of 
International Greetings USA, Inc. and is subject to a variable rate of interest linked to the US FFR. The currency of 
denomination of the loan is US dollars.
Loan 3
The principal of £5,956,000 (2012: £6,281,000) is repayable quarterly over a 20 year period ending in July 2028. 
The loan is secured over the freehold land and buildings and the content therein of Hoomark B.V. and is subject 
to a variable rate of interest linked to EURIBOR, that has been swapped to a fixed rate for a notional amount of 
£5,882,000 (2012: £5,833,000) over a period of three years ending in January 2017. The currency of denomination 
of the loan is euros.
Loan 4
The principal of £218,000 (2012: £510,000) is repayable monthly over a five year period ending November 2013. 
The loan is secured over the plant and machinery of International Greetings UK Ltd and is subject to a variable 
rate interest linked to the UK base rate. The currency of denomination of the loan is sterling. 56 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
17 Loans and borrowings continued
Secured bank loans continued
Loan 5
The principal of £15,208,000 (2012: £14,904,000) is repayable over a five year period with a bullet repayment in 
May 2016. £9,100,000 is denominated in sterling and £6,108,000 is denominated in US dollars. They are subject to 
a variable interest rate linked to LIBOR except for the element that has been swapped. At 31 March 2013 the Group 
had an interest rate cap on a notional amount of £8 million, and a notional amount of $8 million, whereby interest 
payable has been capped at 1.5% on both notional amounts. The terms of the hedge have been negotiated to 
match the terms of the commitments.
Loan 6
The principal of £12,199,000 (2012: £14,988,000) is repayable and amortised over a four year period to May 2015. 
£7,000,000 is denominated in sterling and £5,199,000 is denominated in US dollars. They are subject to a variable 
interest rate linked to LIBOR except for the elements that have been swapped. At 31 March 2013, the Group had 
an interest rate swap in place with a notional amount of £5.1 million whereby it receives a floating rate of interest 
based on LIBOR and pays a fixed rate of interest at 0.92% on the notional amount. The terms of the hedge have 
been negotiated to match the terms of the commitments.
At 31 March 2013, the Group had an interest rate swap in place with a notional amount of $7.9 million whereby 
it receives a floating rate of interest based on LIBOR and pays a fixed rate of interest at 0.77% on the notional 
amount. The terms of the hedge have been negotiated to match the terms of commitment.
18 Deferred income     
      2013 2012 
       £000 £000
Included within non‑current liabilities
Deferred grant income      1,329  1,879 
Included within current liabilities
Deferred grant income      550  550 
The deferred grant income is in respect of a government grant relating to a print plant. All conditions have 
now been met and there is no requirement to repay. It is being amortised in line with the depreciation on the 
print plant.
19 Provisions
       Property 
        £000
Balance at 1 April 2012       1,320 
Provisions released during the year       (165)
Unwinding of fair value discounts       57 
Provisions utilised during the year       (243)
Balance at 31 March 2013       969 
      2013 2012  
      £000 £000
Non‑current      862  1,003 
Current      107  317 
      969  1,320 
The provision represents the estimated reinstatement cost of two of the Group’s leasehold properties under fully 
repairing leases and provision for an onerous lease for one of those properties. A professional valuation was 
performed during the prior year for one of the leasehold properties and the provision was reassessed and is stated 
after discounting.  International Greetings plc Annual report and financial statements 2013 57
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
20 Other financial liabilities
      2013 2012 
       £000 £000
Included within non‑current liabilities
Finance lease      1,540  57 
Other creditors and accruals      263  390 
      1,803  447 
Included within current liabilities
Finance lease       237  69 
Other creditors and accruals      8,212  9,587 
Interest rate swaps and forward foreign currency contracts carried at fair value  
through the income statement      54 97 
Interest rate swaps and forward foreign exchange contracts carried at fair value  
through the hedging reserve      451  446 
      8,954  10,199
Finance lease liabilities
Finance lease liabilities are payable as follows:
  Minimum   Minimum   
   lease   lease    
  payments Interest Principal payments Interest Principal  
  2013 2013 2013 2012 2012 2012  
  £000 £000 £000 £000 £000 £000
Less than one year  314 (77) 237 78 (9) 69
Between one and five years  1,717 (177) 1,540 61 (4) 57
  2,031 (254) 1,777 139 (13) 126
21 Trade and other payables
      2013 2012  
      £000 £000
Trade payables       28,291  22,396 
Other payables including income taxes and social security    704  737 
      28,995  23,133  58 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
22 Share capital 
Authorised share capital at 31 March 2013 and 2012 was £6,047,443 divided into 120,948,860 ordinary shares of 
5p each.
 Ordinary shares
In thousands of shares      2013 2012
In issue at 1 April      55,007 53,967
Options exercised during the year      1,761  1,040
In issue at 31 March – fully paid      56,768 55,007
      2013 2012 
       £000 £000
Allotted, called up and fully paid
Ordinary shares of £0.05 each      2,838 2,750
Share options exercised during the year amounted to 1,760,600 (2012: 1,040,000) which generated cash proceeds 
of £266,000 (2012: £146,000). 
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to 
one vote per share at meetings of the Company.
23 Earnings per share
 2013 2012
   
    Diluted Basic Diluted Basic
Adjusted earnings per share excluding exceptional items  
and discontinued operations    7.8p 8.1p 6.7p 7.2p
Loss per share on exceptional items    (2.0p) (2.1p) (6.4p) (6.9p)
Earnings per share from continuing operations   5.8p 6.0p 0.3p 0.3p
Earnings per share    5.8p 6.0p 0.3p 0.3p
The basic earnings per share is based on the profit attributable to equity holders of the Company of £3,401,000 
(2012: £177,000) and the weighted average number of ordinary shares in issue of 56,245,000 (2012: 54,206,000) 
calculated as follows:
Weighted average number of shares in thousands of shares     2013 2012
Issued ordinary shares at 1 April      55,007 53,967
Shares issued in respect of exercising of share options      1,238  239
Weighted average number of shares at 31 March     56,245 54,206
Adjusted basic earnings per share excludes exceptional items charged of £1,376,000 (2012: £3,918,000) and the tax 
relief attributable to those items of £221,000 (2012: £195,000), to give adjusted profit of £4,556,000 (2012: £3,900,000).
Diluted earnings per share
The average number of share options outstanding in the year is 3,664,232 (2012: 5,787,000), at an average exercise 
price of 19.6p (2012: 16.9p). The diluted earnings per share is calculated assuming all these options were exercised. 
At 31 March the diluted number of shares was 58,794,617 (2012: 58,486,612).
24 Dividends
No dividends were paid in the year (2012: £nil). The Directors do not propose a final dividend for 2013.  International Greetings plc Annual report and financial statements 2013 59
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
25 Share‑based payments
Options
Options to subscribe for ordinary shares have been granted, pursuant to the Company’s approved and 
unapproved Employee Share Option Schemes, which are exercisable at dates ranging up to January 2021. 
At 31 March 2013, outstanding options were as follows:
 Number of  Exercise 
 ordinary shares price (p) Exercise dates
Approved: 1,952,140 14 December 201 1 – December 2018
 10,000 23.5 April 2012 – April 2019
 38,000 31.25 July 2012 – July 2019
 35,500 50 September 2012 – September 2019
 96,774 62 January 2014 – January 2021
Unapproved: 945,416 14 December 201 1 – December 2018
 10,900 50 September 2012 – September 2019
 53,226 62 January 2014 – January 2021
 3,141,956
All share‑based payments are equity‑settled.
There were no performance or profitability conditions attached to the approved options (other than continued 
employment), except for 48,387 shares issued at 62p, which relate to specific performance targets related to sales 
of new product areas in the US. Conditions related to profitability for the two years to March 2011 are attached to 
the unapproved options awarded to Executive Directors and these conditions have now been fully met.
For the share options outstanding at 31 March 2013, the weighted average remaining contract life was 5.8 years 
(2012: 6.8 years).
The numbers and weighted average exercise prices of share options are as follows:
 2013 2012
   
    Weighted   Weighted  
    average   average    
    exercise Number of exercise Number of  
    price options price options
Outstanding at the beginning of the period   18p 5,002,556  16p 6,047,556 
Approved options granted during the period   0p — 0p —
Unapproved options granted in the period   0p — 0p —
Lapsed during the year    0p (100,000) 0p (5,000)
Exercised during the period    15p (1,760,600) 14p (1,040,000)
Outstanding at the end of the period    17p 3,141,956 18p 5,002,556
Exercisable at the end of the period    14p  2,991,956  14p  4,542,566
The weighted average share price at the date of exercise of share options exercised during the period was 54.9p 
(2012: 56.6p).
No share options were granted during the year or the previous year.
The total expenses recognised for the period arising from share‑based payments are as follows:
      2013 2012  
      £000 £000
Equity‑settled share‑based payments      22 43 60 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
26 Financial instruments
a) Fair values of financial instruments
The carrying values for each class of financial assets and financial liabilities in the balance sheet, which are given 
below, are not considered to be materially different to their fair values.
As at 31 March 2013, the Group had derivative contracts, which were measured at Level 2 fair value subsequent 
to initial recognition, to the value of a liability of £505,000 (2012: liability of £543,000).
Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at 
the market rate of interest at the balance sheet date if the effect is material. Doubtful receivable provisions are 
established based upon the difference between the receivable value and the estimated net collectible amount.
Trade and other payables
The fair value of trade and other payables is estimated as the present value of future cash flows, discounted at 
the market rate of interest at the balance sheet date if the effect is material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated as its carrying amount where the cash is repayable on 
demand. Where it is not repayable on demand then the fair value is estimated at the present value of future cash 
flows, discounted at the market rate of interest at the balance sheet date.
Interest‑bearing borrowings
Fair value, which after initial recognition is determined for disclosure purposes only, is calculated based on the 
present value of future principal and interest cash flows, discounted at the market rate of interest at the balance 
sheet date. For finance leases the market rate of interest is determined by reference to similar lease agreements.
Derivative financial instruments
The fair value of forward exchange contracts is based on their market price.
Fair value hierarchy
Financial instruments which are recognised at fair value subsequent to initial recognition are grouped into Levels 1 
to 3 based on the degree to which the fair value is observable. The three levels are defined as follows:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2:  other techniques for which all inputs which have a significant effect on the recorded fair value are 
observable, either directly or indirectly; and
Level 3:  techniques which use inputs which have a significant effect on the recorded fair value that are not based 
on observable market data.  International Greetings plc Annual report and financial statements 2013 61
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
    Carrying Fair  Carrying Fair  
    amount value amount value  
    2013 2013 2012 2012  
   Notes £000 £000 £000 £000
Cash and cash equivalents    16  2,301   2,301   3,168   3,168 
Trade receivables    15  18,799   18,799   17,066   17,066 
Other receivables    15  2,012   2,012   2,060   2,060 
Total financial assets     23,112   23,112   22,294   22,294 
Bank loans and overdrafts    16  43,215   43,215   45,266   45,266 
Finance lease liability    20  1,777   1,777   126   126 
Other financial liabilities    20  8,475   8,475   9,977   9,977 
Trade payables    21  28,291   28,291   22,396   22,396 
Other payables    21  704   704   737   737 
Total financial liabilities measured at amortised cost    82,462   82,462   78,502   78,502 
Financial liabilities at fair value through profit or loss   20  54   54   97   97 
Financial liabilities at fair value through hedging reserve  20  451   451   446   446 
Total financial liabilities at fair value     505  505   543   543 
Total financial liabilities     82,967   82,967   79,045   79,045 
Net financial liabilities     59,855   59,855   56,751   56,751 
b) Credit risk
Financial risk management
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails 
to meet its contractual obligations and arises principally from the Group’s receivables from customers and 
investment securities.
The Group’s exposure to credit risk is managed by dealing only with banks and financial institutions with strong 
credit ratings. The Group’s financial credit risk is primarily attributable to its trade receivables.
The Group has no significant concentration of credit risk exposure as revenues are split across a large number of 
customers in different geographical areas. The main customers of the Group are large and mid‑sized retailers, 
other manufacturers and wholesalers of greetings products, service merchandisers and trading companies. The 
Group has established procedures to minimise the risk of default of trade receivables including detailed credit 
checks undertaken before new customers are accepted and rigorous credit control procedures after sale. These 
processes have proved effective in minimising the level of impairments required.
The amounts presented in the balance sheet are net of allowances for doubtful receivables estimated by the 
Group’s management, based on prior experience and their assessment of the current economic environment. 
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. Therefore, the maximum 
exposure to credit risk at the balance sheet date was £23,122,000 (2012: £22,294,000) being the total of the 
carrying amount of financial assets, excluding equity investments, shown in the table above. 62 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
26 Financial instruments continued
b) Credit risk continued
Exposure to credit risk continued
The maximum exposure to credit risk for trade receivables at the balance sheet date by geographic region was:
      2013 2012  
      £000 £000
UK and Asia      7,357 7,558
USA      4,796 2,856
Europe      2,709 2,419
Australia      3,937 4,233
      18,799 17,066
Credit quality of financial assets and impairment losses
The ageing of trade receivables at the balance sheet date was:
    Gross Impairment Gross Impairment  
    2013 2013 2012 2012  
    £000 £000 £000 £000
Not past due     12,616   (43)  13,132   (16)
Past due 0‑ 90 days     5,790   (94)  3,679   (59)
More than 90 days     857   (327)  820   (490)
     19,263   (464)  17,631   (565)
There were no unimpaired balances outstanding at 31 March 2013 (2012: £nil) where the Group had renegotiated 
the terms of the trade receivable.
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
        
      2013 2012 
       £000 £000
Balance at 1 April       565 876 
Charge for year      964 361
Unused amounts reversed      (262)  (324) 
Amounts written off      (813) (342)
Effects of movement in foreign exchange     10  (6)
Balance at 31 March      464 565
The allowance account for trade receivables is used to record impairment losses unless the Group is satisfied that 
no recovery of the amount owing is possible; at that point the amounts considered irrecoverable are written off 
against the trade receivables directly.
c) Liquidity risk
Financial risk management
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group 
has facilities with its principal bank, split between US dollars and sterling comprising a five year loan of £15.2 million 
with a bullet repayment in May 2016, a four year amortising loan to May 2015 of £14.8 million, a one year revolving 
multi‑currency credit facility of up to £28.9 million and a one year rolling multi‑currency overdraft facility of up to 
£5 million, plus an asset back loan facility secured on the UK business inventory and debtors.
We also have an asset backed loan facility of up to £25 million with a US bank to assist in the funding of the 
US business and to mitigate the currency effect on our facility headroom. See “Treasury operations” in the 
Financial Review for further details.  International Greetings plc Annual report and financial statements 2013 63
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
The Group’s policy with regard to liquidity ensures adequate access to funds by maintaining an appropriate 
mix of short‑term and longer‑term facilities, which are reviewed on a regular basis. The maturity profile of debt 
outstanding at 31 March 2013 is set out in note 17.
The following are the contractual maturities of financial liabilities, including estimated interest payments:
   Nominal       More  
   interest  Carrying Contractual One year One to  Two to than five  
   rate amount cash flows or less two years five years years  
31 March 2013  Notes % £000 £000 £000 £000 £000 £000
Non‑ derivative financial liabilities
Secured bank loans – sterling   3.5‑ 3.9 16,318  (17,709) (2,448) (2,396) (12,865) —
Secured bank loans – US dollar   3.2‑ 3.6 12,264  (13,203) (2,001) (2,133) (9,069) —
Secured bank loans – euros   3.8 5,956  (7,739) (597) (583) (1,662) (4,897)
Total secured bank loans  17  34,538  (38,651) (5,046) (5,112) (23,596) (4,897)
Finance leases  20
– sterling leases   5.5 34  (35) (33) (2) — —
– euro leases   4.8 1,719  (1,969) (262) (262) (1,445) —
– other leases   6.0 24  (27) (19) (7) (1) —
Other financial liabilities    8,475  (8,475) (8,212) (263) — —
Trade payables   21  28,291  (28,291) (28,291) — — —
Other payables   21  704  (704) (704) — — —
Asset backed loans   2.3–3.5 7,683  (7,683) (7,683) — — —
Revolving credit facilities   3.5–3.7 658  (658) (658) — — —
Bank overdraft    1.5–4.5 336  (336) (336) — — —
Derivative financial liabilities
Financial liabilities at fair value through  
the income statement – interest rate swaps 
(a)
   54  — — — — —
Financial liabilities carried at fair value through  
the hedging reserve – interest rate swaps 
(a)
   546  — — — — —
Forward foreign exchange contracts carried  
at fair value through the hedging reserve   (95) (12,925) (12,925) — — —
    82,967  (99,754) (64,169) (5,646) (25,042) (4,897)
(a) The interest rate swaps with fair values of £54,000 and £546,000 mature over a period ending January 2017. 64 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
26 Financial instruments continued
c) Liquidity risk continued
Financial risk management continued
   Nominal       More 
    interest  Carrying Contractual One year One to Two to than five  
   rate amount cash flows or less two years five years years  
31 March 2012  Notes % £000 £000 £000 £000 £000 £000
Non‑ derivative financial liabilities
Secured bank loans – sterling   4.3 18,410  (21,405) (2,204) (2,973) (16,228) —
Secured bank loans – US dollar   2.8 13,162  (22,104) (2,028) (4,074) (16,002) —
Secured bank loans – euros   3.5 6,282  (8,523) (388) (402) (1,283) (6,450)
Total secured bank loans  17  37,854  (52,032) (4,620) (7,449) (33,513) (6,450)
Finance leases  20
– sterling leases   5.5 87  (95) (60) (33) (2) —
– other leases   6.0 39  (44) (18) (19) (7) —
Other financial liabilities    9,977  (9,977) (9,587) (390) — —
Trade payables   21  22,396  (22,396) (22,396) — — —
Other payables   21  737  (737) (737) — — —
Asset backed loans   2.3–3.5 5,467  (5,467) (5,467) — — —
Bank overdraft    1.5–4.5 1,945  (1,945) (1,945) — — —
Derivative financial liabilities
Financial liabilities at fair value through  
the income statement – interest rate swaps 
(b)
   97  — — — — —
Financial liabilities carried at fair value through  
the hedging reserve – interest rate swaps 
(b)
   354  — — — — —
Forward foreign exchange contracts carried  
at fair value through the hedging reserve   92  (14,008) (14,008) — — —
    79,045  (106,701) (58,838) (7,891) (33,522) (6,450)
(b) The interest rate swaps with fair values of £97,000 and £354,000 mature over a period ending January 2017.  International Greetings plc Annual report and financial statements 2013 65
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
The following shows the facilities for bank loans, overdrafts, asset backed loans and revolving credit facilities:
 31 March 2013 31 March 2012
 
  Facility    Facility  
  used    used   
 Carrying contractual Facility Total Carrying contractual Facility Total  
 amount cash flows unused facility amount cash flows unused Facility  
 £000 £000 £000 £000 £000 £000 £000 £000
Secured bank loans 
(see above) 34,538  (38,651) — (38,651) 37,854  (52,032) — (52,032)
Asset backed loans  7,683  (7,683) (4,900) (12,583) 5,467  (5,467) (7,200) (12,667)
Revolving credit facilities 658  (658) (2,242) (2,900) — — — —
Bank overdraft  336  (336) (4,137) (4,473) 1,945  (1,945) (5,221) (7,166)
 43,215  (47,328) (11,279) (58,607) 45,266  (59,444) (12,421) (71,865)
The asset backed loan facilities are dependent upon the levels of the relevant inventory and receivables. 
 The major bank facilities vary in the year depending on forecast debt requirements. The maximum limit across 
all facilities with the major bank was £75 million (2012: £75 million). At 31 March 2013 the facility amounted to 
£35.8 million (2012: £38.8 million).
 Additional facilities were available at other banks of £18.7 million (2012: £19.5 million), including asset backed loans 
according to the level of receivables and inventory.
 The short term overdraft, RCF and the asset backed loan elements of those facilities was renewed on improved 
terms in May 2013, which will slightly lower the blended rate in the forthcoming year and provide significant 
additional headroom.
The asset backed loan facilities are to be renewed on:
•	 UK – August 2015;
•	 USA – July 2014; and
•	 Europe – July 2014.
d) Cash flow hedges
The following table indicates the periods in which the cash flows associated with cash flow hedging instruments 
are expected to occur:
     Carrying Contractual One year  
     amount cash flows or less  
31 March 2013     £000 £000 £000
Interest rate swaps:
Liabilities     546   —   — 
Forward exchange contracts:
Liabilities     (95)  (12,925)  (12,925)
     Carrying Contractual One year  
     amount cash flows or less 
31 March 2012     £000 £000 £000
Interest rate swaps:
Liabilities     354   —   — 
Forward exchange contracts:
Liabilities     92   (14,008)  (14,008) 
At 31 March 2013, the Group had an interest rate swap in place with a notional amount of £5.1 million, whereby it 
receives a floating rate of interest based on LIBOR and pays a fixed rate of interest at 0.92% on the notional amount. 
The swap is to hedge the exposure to changes in the interest rate. The terms of the hedge have been negotiated to 
match the terms and commitments. The fair value of the swap at the balance sheet date was a liability of £31,000. 66 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
26 Financial instruments continued
d) Cash flow hedges continued
At 31 March 2013, the Group had an interest rate swap in place with a notional amount of $7.9 million (£5.2 million), 
whereby it receives a floating rate of interest based on LIBOR and pays a fixed rate of interest at 0.77% on the 
notional amount. The swap is to hedge the exposure to changes in the interest rate. The terms of the hedge have 
been negotiated to match the terms of the commitments. The fair value of the swap at the balance sheet date 
was a liability of £20,000.
At 31 March 2013 the Group had an interest rate swap in place with a notional amount of €7 million (£5.9 million), 
whereby it receives a floating rate of interest based on EURIBOR and pays a fixed rate of interest at 2.29% on the 
notional amount. This swap is to hedge the exposure to changes in the interest rate. The terms of the hedge have 
been negotiated to match the terms of the commitments. The fair value of the swap at the balance sheet date 
was a liability of £319,000.
At 31 March 2013, the Group had an interest rate cap on a notional amount of £8 million, and a notional amount 
of $8 million (£5.3 million), whereby interest payable has been capped at 1.5% on both notional amounts. The 
terms of the hedge have been negotiated to match the terms of the commitments. The fair value of the caps at 
the balance sheet date were liabilities of £176,000.
The Group has forward currency hedging contracts outstanding at 31 March 2013 designated as hedges of 
expected future purchases in US dollars and Chinese renminbi for which the Group has firm commitments. 
The forward currency contracts are being used to hedge the foreign currency risk of the firm commitments.
The terms of the forward currency hedging contracts have been negotiated to match the terms of the 
commitments.
The cash flow hedges of the expected future purchases in 2013/14 were assessed to be highly effective and as 
at 31 March 2013 a net unrealised gain of £95,000 with related deferred tax credit of £nil was included in other 
comprehensive income in respect of these hedging contracts.
e) Market risk
Financial risk management 
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity 
prices, will affect the Group’s income or the value of its holdings of financial instruments.
The Group hedges a proportion, as deemed appropriate by management, of its UK subsidiaries’ sales and 
purchases of inventory denominated in foreign currency by entering into foreign exchange contracts. Such 
foreign exchange contracts typically have maturities of less than one year. 
The Group rarely hedges profit translation exposure, since such hedges provide only a temporary deferral of the 
effects of movement in foreign exchange rates. Similarly, the Group does not hedge its long‑term investments in 
overseas assets.
However, the Group holds loans that are denominated in the functional currency of certain overseas entities.
The Group’s exposure to foreign currency risk is as follows. This is based on the carrying amount for monetary 
financial instruments except derivatives when it is based on notional amounts.  International Greetings plc Annual report and financial statements 2013 67
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
   Sterling Euro US dollar Other Total  
31 March 2013  Notes £000 £000 £000 £000 £000
Cash and cash equivalents  16 (158) 423  1,604  432  2,301 
Trade receivables  15 5,989  2,736  6,068  4,006  18,799 
Other receivables   1,484  35  174  202  1,895 
Secured bank loans  17 (16,318) (5,956) (12,264) — (34,538)
Loan arrangement fees  17 403  — 150  — 553 
Finance leases  20 (34) (1,719) (24) — (1,777)
Asset backed loans  17 (3,125) (3,219) (1,339) — (7,683)
Revolving credit facilities  17 — — (658) — (658)
Bank overdrafts  16 1,416  18  (2,193) 423  (336)
Trade payables  21 (10,809) (3,352) (10,578) (3,552) (28,291)
Other payables  21 (584) (120) — — (704)
Financial liabilities at fair value  
through hedging reserve  20 (451) — — — (451)
Balance sheet exposure   (22,187) (11,154) (19,060) 1,511  (50,890)
   Sterling Euro US dollar Other Total  
31 March 2012  Notes £000 £000 £000 £000 £000
Cash and cash equivalents  16 2  1  176  2,989  3,168 
Trade receivables  15 5,528  2,463  4,716  4,359  17,066 
Other receivables    1,031  90  275  301  1,697 
Secured bank loans  17 (18,410) (6,282) (13,162) — (37,854)
Loan arrangement fees  17 122  — 248  — 370 
Finance leases  20 (87) — (39) — (126)
Asset backed loans  17 (3,853) (1,585) (29) — (5,467)
Bank overdrafts  16 (659) (1,319) (177) 210  (1,945)
Trade payables  21 (8,739) (2,017) (6,739) (4,881) (22,376)
Other payables  21 (537) (200) — — (737)
Financial liabilities at fair value  
through hedging reserve  20 (446) — — — (446)
Balance sheet exposure   (26,048) (8,849) (14,731) 2,978  (46,650)
The following significant exchange rates applied during the year:
  Reporting date  
 Average rate spot rate
  
    2013 2012 2013 2012
Euro      1.23  1.16   1.19  1.20 
US dollar      1.58   1.60  1.52   1.60  68 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
26 Financial instruments continued
e) Market risk continued
Sensitivity analysis
A 10% weakening of the following currencies against sterling at 31 March 2013 would have increased equity and 
profit or loss by the amounts shown below. This calculation assumes that the change occurred at the balance 
sheet date and had been applied to risk exposures existing at that date. This is translational exposure.
This analysis assumes that all other variables, in particular other exchange rates and interest rates, remain 
constant. The analysis is performed on the same basis for 31 March 2012.
 Equity Profit/(loss)
  
    2013 2012 2013 2012 
     £000 £000 £000 £000
Euro     180   89   29   17 
US dollar     1,733   1,339   (238)  (560)
On the basis of the same assumptions, a 10% strengthening of the above currencies against sterling at 
31 March 2013 would have decreased equity and profit or loss by the following amounts:
 Equity Profit/(loss)
  
    2013 2012 2013 2012 
     £000 £000 £000 £000
Euro     (220)  (109)  (35)  (20)
US dollar     (2,118)  (1,637)  291   684 
Interest rate risk
Profile
At the balance sheet date the interest rate profile of the Group’s interest‑bearing financial instruments was:
      2013 2012 
      Note £000 £000
Fixed rate instruments
Financial liabilities      (29,442) (31,921)
Variable rate instruments
Financial assets      2,301  3,168 
Financial liabilities       (13,773) (13,345)
Loan arrangement fees      553  370 
Finance leases      (1,777) (126)
Net debt     16 (42,138) (41,854)
The fixed rate borrowings above are shown after taking account of an interest rate swap (see note 17 for details).  International Greetings plc Annual report and financial statements 2013 69
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
A change of 50 basis points (0.5%) in interest rates at the balance sheet date would have decreased equity and 
profit or loss by the amounts shown below. This calculation assumes that the change occurred at the balance 
sheet date and had been applied to risk exposures existing at that date. 
This analysis assumes that all other variables, in particular foreign currency rates, remain constant and considers 
the effect on financial instruments with variable interest rates, financial instruments at fair value through profit or 
loss. The analysis is performed on the same basis for 31 March 2012. 
      2013 2012  
Sensitivity analysis      £000 £000
Equity
Increase      — —
Decrease      38 51
Profit or loss
Increase      — —
Decrease      38 51
f) Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence 
and to sustain future development of the business. The Group is dependent on the continuing support 
of its bankers for working capital facilities and so the Board’s major objective is to keep borrowings within 
these facilities.
The Board manages as capital its trading capital, which it defines as its net assets plus net debt. Net debt is 
calculated as total debt (bank overdrafts, loans and borrowing as shown in the balance sheet), less cash and 
cash equivalents. The banking facilities with our principal bank have covenants relating to interest cover, cash 
flow cover and leverage, and our articles currently permit borrowings (including letter of credit facilities) to a 
maximum of four times equity.
 Equity
      2013 2012 
      Note £000 £000
Net assets attributable to owners of the parent company     51,888   47,804 
Net debt     16  42,138 41,854
Trading capital       94,026   89,658 
The main areas of capital management revolve around the management of the components of working capital 
including monitoring inventory turn, and months’ production or cost of sales outstanding, age of inventory, age 
of trade receivables, balance sheet reforecasting, monthly profit and loss, weekly cash flow forecasts and daily 
cash balances. Major investment decisions are based on reviewing the expected future cash flows and all major 
capital expenditure requires sign off by the Group Chief Executive Officer. There were no major changes in the 
Group’s approach to capital management during the year. A particular focus of the Group is leverage measured 
as the ratio of net debt to pre‑exceptional EBITDA which is measured on a monthly basis. 70 International Greetings plc Annual report and financial statements 2013
Notes to the financial statements continued
year ended 31 March 2013
27 Operating leases
Non‑cancellable operating lease rentals are payable as follows:
      2013 2012 
       £000 £000
Less than one year      4,340  3,596 
Between one and five years      9,844  11,749 
More than five years      10,163  12,942 
      24,347  28,287
The Group leases a number of warehouse and factory facilities as well as vehicles and office equipment under 
operating leases. The leases of warehouse and factory facilities typically have an option to renew at the end of 
the lease term and lease payments are subject to five‑yearly rent reviews.
One of the leased properties has been sublet by the Group. The Sub‑ lease has a period to run of more than five 
years. Sub‑ lease payments of £303,000 (2012: £70,000) are expected to be received during the financial year.
During the year, £3,887,000 was recognised as an expense in the income statement in respect of operating leases 
(2012: £4,057,000).
28 Capital commitments
At 31 March 2013, the Group had outstanding authorised capital commitments to purchase plant and equipment 
for £94,000 (2012: £655,000).  International Greetings plc Annual report and financial statements 2013 71
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
29 Related parties
      2013 2012 
       £000 £000
Sale of goods:     
AB Alrick – Hedlund      394  404 
Hedlunds Pappers Industri AB      35  81 
Festive Productions Ltd      56  72 
Hedlund Import AB      7,915  4,645 
      8,400  5,202 
Purchase of goods:     
AB Alrick – Hedlund      — 7 
Festive Productions Ltd      31  —
Hedlund Import AB      2,455  —
      2,486  7 
Receivables     
AB Alrick – Hedlund      — 57 
Hedlunds Pappers Industri AB      17  7 
Festive Productions Ltd      36  —
Balance as at 31 March 2013      53  64 
Payables     
Hedlund Import AB      (475) —
Balance as at 31 March 2013      (475)  — 
Identity of related parties and trading
Hedlund Import AB and AB Alrick – Hedlund are under the ultimate control of the Hedlund family. S A Hedlund 
is a Director of Hedlunds Pappers Industri AB which is under the ultimate control of the Hedlund family. Festive 
Productions Ltd is a subsidiary undertaking of Malios AG, a company under the ultimate control of the 
Hedlund family.
P Dutton, Non‑ Executive Director, is married to Judith McKenna who was Chief Operating Officer of Asda UK and 
is now Executive Vice President of Strategy and International Development at Walmart. Asda and Walmart are 
significant customers of the Group.
The above trading takes place in the ordinary course of business and on normal commercial terms.
Other related party transactions
Directors of the Company and their immediate relatives have an interest in 50% (2012: 49%) of the voting shares of 
the Company. The shareholdings of Directors are shown in the Directors’ Report on pages 20 to 23. No other shares 
were issued to Directors during the year (2012: nil). 
Directors’ remuneration
      2013 2012 
       £000 £000
Remuneration      946 1,054 
Compensation for loss of office      — 558 
Pension contributions      59 173 
Employer national insurance contributions on the above remuneration   130 137 
      1,135 1,922 72 International Greetings plc Annual report and financial statements 2013
Statement of Directors’ responsibilities 
for the parent company financial statements
The Directors are responsible for preparing the Directors’ Report and the financial statements in accordance with 
applicable law and regulations. 
Company law requires the Directors to prepare financial statements for each financial year. Under that law 
the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally 
Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under Company 
law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair 
view of the state of affairs of the Company and of the profit or loss of the Company 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 UK 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 adequate accounting records that are sufficient to show and explain 
the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the 
Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They 
are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities.  International Greetings plc Annual report and financial statements 2013 73
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Independent auditor’s report
to the members of International Greetings plc
We have audited the Parent Company financial statements of International Greetings plc for the year ended 
31 March 2013 which comprise the Company Balance Sheet and the related notes 1 to 12. The financial reporting 
framework that has been applied in their preparation is applicable law and United Kingdom Accounting 
Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the 
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members 
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest 
extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the 
Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. 
Respective responsibilities of Directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 72, the Directors are 
responsible for the preparation of the Parent Company financial statements and for being satisfied that they 
give a true and fair view. Our responsibility is to audit and express an opinion on the Parent Company financial 
statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those 
standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the annual report and financial 
statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, 
whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate 
to the Parent Company’s circumstances and have been consistently applied and adequately disclosed; the 
reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the 
financial statements. In addition, we read all the financial and non‑ financial information in the Report and Financial 
Statements to identify material inconsistencies with the audited financial statements. If we become aware of any 
apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the Parent Company financial statements:
•	 give a true and fair view of the state of the Company’s affairs as at 31 March 2013;
•	 have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
•	 have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
•	 the information given in the Directors’ Report for the financial year for which the financial statements are 
prepared is consistent with the Parent Company financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report 
to you if, in our opinion:
•	 adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit 
have not been received from branches not visited by us; or
•	 the Parent Company financial statements are not in agreement with the accounting records and returns; or
•	 certain disclosures of Directors’ remuneration specified by law are not made; or
•	 we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the Group financial statements of International Greetings plc for the year ended 
31 March 2013.
Andy Clewer (Senior Statutory Auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
Luton 27 June 2013 74 International Greetings plc Annual report and financial statements 2013
Company balance sheet
as at 31 March 2013
      2013 2012  
     Notes £000 £000
Fixed assets   
Tangible assets     3 79  11 
Investments     4 20,770  61,109 
Total non‑ current assets      20,849  61,120 
Current assets   
Debtors     5 48,376  3,528 
Cash at bank and in hand      5,722  8,544 
      54,098 12,072
Creditors: amounts falling due within one year    7 (6,762) (6,641)
Net current assets      47,336  5,431 
Creditors: amounts falling due after more than one year   8 (23,304) (26,842)
Net assets      44,881  39,709 
Capital and reserves   
Called up share capital     9 2,838 2,750 
Share premium account     10 3,318  3,140 
Capital redemption reserve     10 1,340  1,340 
Merger reserve     10 17,164  17,164 
Profit and loss account     10 20,221  15,315 
Equity shareholders’ funds      44,811  39,709 
International Greetings plc is registered in England and Wales, number 1401155.
These financial statements were approved by the Board of Directors on 26 June 2013 and were signed on its 
behalf by:
P Fineman A Lawrinson
Director Director
The notes on pages 75 to 80 form part of these financial statements.  International Greetings plc Annual report and financial statements 2013 75
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
Notes to the Company financial statements
year ended 31 March 2013
1 Accounting policies – Company
Basis of preparation
The financial statements have been prepared in accordance with applicable accounting standards 
(UK Generally Accepted Accounting Practice) and under the historical cost accounting rules. The following 
accounting policies have been applied consistently in dealing with matters which are considered material 
in relation to the financial statements.
Under Section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its own 
profit and loss account and under FRS 1 the Company is exempt from the requirement to prepare a cash flow 
statement on the grounds that a parent undertaking includes the Company in its own published consolidated 
financial statements.
The Company has taken advantage of the exemption in FRS 8 not to disclose transactions with its wholly 
owned subsidiaries.
The Company has taken advantage of the exemption in paragraph 2d of FRS 29 Financial Instruments: 
Disclosures and has not disclosed information required by that standard as the Group’s consolidated financial 
statements, in which the Company is included, provide equivalent disclosures for the Group under IFRS 7 Financial 
Instruments: Disclosures.
Investment in subsidiary undertakings
The Company’s investment in subsidiary undertakings is stated at cost less any provision for impairment.
Property, plant and equipment and depreciation
Depreciation is provided by the Company to write off the cost less the estimated residual value of tangible 
property, plant and equipment by equal instalments over their estimated useful economic lives as follows:
•	 leasehold land and buildings life of lease
•	 office equipment three to five years
•	 motor vehicles four years
Foreign currencies
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. 
Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling 
at the balance sheet date and the gains or losses on translation are included in the profit and loss account.
Leases
Where the Company enters into a lease which entails taking substantially all the risks and rewards of ownership 
of an asset, the lease is treated as a “finance lease”. The asset is recorded in the balance sheet as a tangible 
fixed asset and is depreciated over its estimated useful life or the term of the lease, whichever is shorter. Future 
instalments under such leases, net of finance charges, are included within creditors. Rentals payable are 
apportioned between the finance element, which is charged to the profit and loss account on a straight‑ line 
basis over the life of the lease, and the capital element which reduces the outstanding obligation for future 
instalments.
All other leases are accounted for as “operating leases” and the rentals payable are charged to the profit and 
loss account on a straight‑ line basis over the life of the lease.
Share‑ based payments
The cost of equity‑ settled transactions with employees is measured by reference to the fair value at the date on 
which they are granted and is recognised as an expense over the vesting period, which ends on the date on 
which the relevant employees become fully entitled to the award. Fair value is determined by an external valuer 
using an appropriate pricing model. In valuing equity‑ settled transactions, no account is taken of any service 
and performance (vesting conditions), other than performance conditions linked to the price of the shares of 
the Company (market conditions). Any other conditions which are required to be met in order for an employee 
to become fully entitled to an award are considered to be non‑ vesting conditions. Like market performance 
conditions, non‑ vesting conditions are taken into account in determining the grant date fair value. 76 International Greetings plc Annual report and financial statements 2013
Notes to the Company financial statements continued
year ended 31 March 2013
1 Accounting policies – Company continued
Share‑ based payments continued
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional 
upon a market vesting condition or a non‑ vesting condition, which are treated as vesting irrespective of whether 
or not the market vesting condition or non‑ vesting condition is satisfied, provided that all other non‑ market vesting 
conditions are satisfied.
At each balance sheet date before vesting, the cumulative expense is calculated; representing the extent to 
which the vesting period has expired and management’s best estimate of the number of equity instruments that 
will ultimately vest. The movement in cumulative expense since the previous balance sheet date is recognised in 
the income statement, with a corresponding entry in equity.
Where the Company grants options over its own shares to the employees of its subsidiaries, it recognises an 
increase in the cost of investment in its subsidiaries equivalent to the equity‑ settled share‑ based payment charge 
recognised in its subsidiaries’ financial statements with the corresponding credit being recognised directly in 
equity. Amounts recharged to the subsidiary are recognised as a reduction in the cost of investment in subsidiary. 
If the amount recharged exceeds the increase in the cost of investment, the excess is recognised as a dividend to 
the extent that it reflects post‑ acquisition profits of the subsidiary. 
Dividends on shares presented within shareholders’ funds
Dividends unpaid at the balance sheet date are only recognised as a liability at that date to the extent that they 
are appropriately authorised and are no longer at the discretion of the Company. Unpaid dividends that do not 
meet these criteria are disclosed in the notes to the financial statements.
Deferred tax
The Company takes into account taxation deferred because of timing differences between the treatment of 
certain items for taxation and accounting purposes.
Full provision without discounting is made for all timing differences which have arisen but not been reversed at the 
balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available 
against which the asset can be utilised.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods 
in which the timing differences reverse, based on tax rates and laws enacted or substantively enacted at the 
balance sheet date.
Employee benefits
Pensions
The Company operates a defined contribution personal pension scheme. The assets of this scheme are held 
separately from those of the Company in an independently administered fund. The pension charge represents 
contributions payable by the Company to the fund.
2 Dividends
There were no dividends paid in the year (2012: £nil).  International Greetings plc Annual report and financial statements 2013 77
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
3 Tangible assets
     Fixtures and 
     fittings Software Total 
      £000 £000 £000
Cost   
Balance at 1 April 2012     202  10  212 
Additions     88  — 88
Disposals     (165) —  (165)
Balance at 31 March 2013     125  10  135 
Depreciation and impairment   
Balance as at 1 April 2012     (195) (6) (201)
Depreciation charge for the year     (17) (3) (20)
Disposals     165  —  165 
Balance at 31 March 2013     (47) (9) (56)
Net book value
At 31 March 2013     78  1  79 
At 31 March 2012     7  4  11
4 Investments
       Net book 
      Cost Impairment value  
Shares in subsidiary undertakings     £000 £000 £000
At 1 April 2012     63,769  (2,660) 61,109 
Disposal to other group undertakings     (41,559) 1,211 (40,348)
Share options charge relating to subsidiary employees   9  — 9 
Balance at 31 March 2013     22,219  (1,449) 20,770 78 International Greetings plc Annual report and financial statements 2013
Notes to the Company financial statements continued
year ended 31 March 2013
4 Investments continued
As part of a Group re‑ organisation on 31 March 2013 the Company sold its investments in Anker International PLC, 
Alligator Books Ltd and Scoop Designs Ltd for their net book values to International Greetings (UK) Ltd.
The main trading subsidiaries and associate undertakings of the Company are as follows:
   Percentage 
  Country of  of ordinary  
Company incorporation Principal activity shares held
Subsidiary   
International Greetings  Great Britain Manufacture of gift wrapping paper, bows 100  
(UK) Limited  distribution of photo albums, frames,  
  and ribbons, stationery and Christmas  
  related products, children’s book publisher  
  and packaged gifts 
International Greetings USA, Inc. US Manufacture of gift wrapping paper, bows  100 
   and ribbons 
International Greetings  Hong Kong Trading company 100  
Asia Limited  
The Shenzhen Gift International China Manufacture of Christmas crackers 100 (indirect holding)  
Greetings Company Limited 
The Huizhou Gift International  China Manufacture of Christmas crackers 100 (indirect holding)  
Greetings Company Limited
Hoomark B.V. Netherlands Manufacture of gift wrapping paper 100 (indirect holding)
Anchor International BV Netherlands Distribution of photo albums, frames,  100 (indirect holding)  
  stationery and Christmas related   
  products 
Artwrap Pty Ltd Australia Design and distribution of gift wrap  50 
   and greetings products 
Artwrap Pty Ltd has been accounted for as a subsidiary from 1 August 2009. The Group exercises significant 
influence over the strategic decision making within Artwrap by way of a shareholder agreement. At the current 
time the Group also holds an option to purchase the remaining 50% share.
5 Debtors
      2013 2012 
      Note £000 £000
Trade debtors      2  2 
Amounts owed by Group undertakings      47,661  1,802 
Other debtors      203  545 
Prepayments      303  384 
Deferred tax assets     6 207  795 
      48,376  3,528 
Included within debtors is £34,849,000 (2012: £nil) expected to be recovered in more than twelve months.
The deferred tax asset in the Company is recoverable after more than one year.  International Greetings plc Annual report and financial statements 2013 79
Overview 1 to 7 Business review 8 to 1 5 Governance 16 to 27 Financials 28 to 80
6 Deferred tax asset
      2013 2012 
       £000 £000
Difference between accumulated depreciation and capital allowance   86  67 
Tax loss carried forward      —  495 
Other timing differences      121  233 
      207  795 
7 Creditors: amounts falling due within one year
      2013 2012 
       £000 £000
Bank loans, overdrafts and revolving credit facility     3,845  3,050 
Loan arrangement fees      (145) (122)
Trade creditors      330  495 
Amounts owed to undertakings      1,326 1,463
Other taxes and social security      111 —
Other creditors      361  840 
Accruals      934  915 
      6,762  6,641 
Refer to note 17 of the Group’s financial statements for more details of the terms of the bank borrowings.
8 Creditors: amounts falling due after more than one year
      2013 2012  
      £000 £000
Bank loans      23,562  26,842 
Loan arrangement fees      (258) —
Bank loans      23,304  26,842 
9 Share capital
      2013 2012  
      £000 £000
Allotted, called up and fully paid  
56,767,225 (2012: 55,006,625) ordinary shares of 5p each    2,838  2,750 
Refer to note 22 of the Group’s financial statements for details of movements and note 25 for details of share options. 80 International Greetings plc Annual report and financial statements 2013
Notes to the Company financial statements continued
year ended 31 March 2013
10 Reconciliation of movements in shareholders’ funds
   Share Capital   Equity  
  Share premium redemption Merger Profit and shareholders’  
  capital account reserve reserve loss account funds  
  £000 £000 £000 £000 £000 £000
At 1 April 2011   2,698  3,046  1,340  17,164  17,819  42,067 
Loss for the year  — — — — (2,547) (2,547)
Options exercised  52  94  — — — 146 
Share‑based payments  — — — — 18  18 
Share options charge relating  
to subsidiary employees  — — — — 25 25
At 1 April 2012  2,750  3,140  1,340  17,164  15,315  39,709 
Profit for the year  — — — — 4,884 4,884
Options exercised  88  178  — — — 266 
Share‑based payments  — — — — 13  13 
Share options charge relating  
to subsidiary employees  — — — — 9 9
At 31 March 2013  2,838  3,318  1,340  17,164  20,221  44,881 
Within the profit and loss account is a cumulative amount of £161,000 (2012: £152,000) which is unrealised in 
respect of share options granted to subsidiary employees.
11 Share‑ based payments
Please see note 25 of the Group’s financial statements for details of share‑ based payments.
12 Contingencies
The Company has given, together with certain of its subsidiary undertakings, an unlimited composite joint 
and several guarantee in respect of the bank loans and overdrafts of itself and its subsidiaries. The total of this 
guarantee at the year end, in relation to the Company only, was £11,926,000 (2012: £13,827,000) in excess of the 
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