William Ransom & Son plc   |   Annual Report 2009 Business Overview
Performance at a Glance  1
Ransom at a Glance / Facts / Highlights  2
Turnaround Strategy  3
Market at a Glance and Drivers  4
Consumer Health Division  6
Ransom’s Natural Products Division and Pharmaceuticals Division  7
Business Review
Chairman’s Statement  8
Chief Executive’s Review 10
Operating and Financial Review 12
Corporate Social Responsibility  16
Board of Directors  19 
Financial Statements
Financial Statement Contents  20
Directors’ Report  21
Corporate Governance  26
Directors’ Remuneration Report  28
Statement of Directors’ Responsibilities 
for the Financial Statements  31
Independent Auditors’ Report to the Members  
of William Ransom & Son plc  32
Consolidated Group Income Statement  34
Statement of Recognised Income and Expense  35
Consolidated Group Balance Sheet  36
Consolidated Group Cash Flow Statement  37
Notes to the Financial Statements  38
Company Accounts  54
Company Balance Sheet  58
Notes to the Company Financial Statements  59
Directors, Officers and Advisors 64
Who We Are
William Ransom & Son plc is a diverse natural 
health products and pharmaceutical company 
with revenues of £34m, generated from three 
divisions – natural consumer health products, 
contract manufacturing of pharmaceutical 
licensed liquids and creams, and contract 
manufacturing of natural extracts. 
 Based in Hitchin since 1846, the company 
sells its consumer health products 
and extracts to customers in the UK 
predominantly but also to numerous 
export markets from the Middle East to 
Thailand and the USA.
The focus of the business is in branded 
natural health products based on  
natural science.
Our Vision 
William Ransom has a clear vision for the 
business that aids management decision 
making on strategic issues. 
Our aim is to become the leading, clearly 
branded, natural health products company 
with effective products sourced from  
around the world to maintain a healthy  
body and mind. 
We will be education led, and dedicated to 
sales and marketing excellence in all the 
channels through which we operate.
Contents
Helping people to help themselves
by offering natural products from around the world
that are based on natural science
to maintain a healthy body and mind Performance at a Glance 
The Need for a Turnaround
Revenue Net working capital
1
 
 2007 £36.5m 2007 £9.6m
 2008 £35.1m 2008 £8.7m
 2009 £33.6m 2009 £5.5m
Underlying operating profit/(loss)
2
  Operating profit/(loss) 
 2007 £4.1m 2007 £3.9m
 2008 £0.4m 2008 £(7.7m)
 2009 £(1.9m) 2009 £(1.7m)
Underlying earnings/(loss) per share
3
  Earnings/(loss) per share
 2007 3.28p 2007 3.05p
 2008 (0.39p) 2008 (8.72p)
 2009 (2.80p) 2009 (2.51p)
Business Overview
1
 Net working capital is calculated as the sum of inventory and trade and other receivables less trade and other payables. 
2
 Underlying operating loss is calculated as the operating profit/(loss) before exceptional costs.
3
 Underlying earnings/loss per share represents the earnings/loss per share from continuing operations.
William Ransom & Son plc   |   Annual Report 2009 1 Ransom at a Glance 
Group facts
•	 	Head office based in Hitchin since 1846
•	 	Natural extracts facility in Hitchin, Hertfordshire
•	 	Licensed pharmaceutical facility in Witham, Essex
•	 	Distribution centre in Bradford, Yorkshire
•	 	51 million tablets and 24 million units of liquids and creams sold annually
•	 	Servicing 71 markets worldwide
Highlights in 2008/9
•	 Appointed Ivor Harrison as Chief Executive in May 2008
•	 Defined new vision and strategy for the business in June 2008
•	 Secured long term financing with the company’s lending bank in February 2009
•	 Reduced gross stock by almost 45% from a high of £9.5m in May 2008 to £5.4m in March 2009
•	 Suspension of shares lifted after 7 months in January 2009
•	 Established new executive structure and team and new management at loss making manufacturing site in Witham, Essex
•	 Reduced Consumer Health Division product lines from 1,700 to 270
•	 Exited Glucosamine prescription-only product (Alateris) in August 2008
•	 Conducted market research into positioning of new umbrella brand
•	 Grew underlying Consumer Health Division exports by 10% (excluding Radian B revenue) 
Business Overview The Turnaround Strategy
The company strategy is to  
focus on products that maintain 
a healthy body and mind, build 
brand equity that leverages 
the distinguished heritage of 
Ransom, and consequently 
exit pharmaceutical contract 
manufacturing.
The first stage:
Financial restructuring 
•	 Divestment of non-strategic assets in August 
and December 2008 for a total of £3.1m
•	 Working capital improvements realising £3.2m 
in the year ended March 2009
•	 Reduction of bank debt from £7.6m at March 2008 
to £3.8m at March 2009 
The second stage:
Driving operational improvements
•	 Simplifying operations (fewer offices; 
reduction in product lines from 1,700 to 270;  
focus on 7 core brands)
•	 Exiting or turning around loss making activities 
(exited Alateris; stopped loss making promotions; 
stemmed losses at Witham)
•	 Building a management team to deliver the 
company turnaround (new executive directors for 
finance, sales and operations, as well as senior 
management in purchasing and procurement and 
site management at Witham)
The third stage: 
Focusing on 5 growth drivers
1. Brand development and communication
2. Products and packaging
3. UK channel development
4. Export channel development
5. Sourcing and supply chain savings
  
William Ransom & Son plc   |   Annual Report 2009 3 Healthy growth
William Ransom operates in  
many sectors within the ‘health 
and beauty’ market - all of which 
are growing
•  The health and beauty market in the UK was estimated 
to be worth £23.8bn in 2007 by Mintel
•  The market for minor ailment remedies in the UK was 
valued at £698 million in 2008, and grew by 24% 
between 2003 and 2008 and is forecast to grow by  
13% between 2008 and 2013
•  The market for vitamins and supplements in the UK 
was valued at £383m in 2008, and grew 7% between 
2004 and 2008 and is forecast to grow by 14% between  
2008 and 2014
•  The market for natural personal care products in the UK 
was valued at £180m in 2008, and grew 52% between  
2005 and 2008 and is forecast to grow by 83% between 
2008 and 2015 
Business Overview
Sales of Vitamins & Supplements, UK, £m
Source: Mintel May 2008
500 
450 
400 
350 
300 
250 
200 
150 
100 
50 
0
2004  2005  2006  2007  2008  2009e  2010e  2011e  2012e  2013e  2014e
Natural Personal Care Products, UK, Eur
Source: Organic monitor 2009
350
300
250
200
150
100
50
0
2005  2006  2007  2008  2009e  2010e  2011e  2012e  2013e  2014e  2015e
Sales of Minor Ailment Remedies, UK, £m
Source: Mintel August 2008
900
800
700
600
500
400
300
200
100
0
2003  2004  2005  2006  2007  2008e  2009e  2010e  2011e  2012e  2013e
The Market at a Glance  General increasing health consciousness
• Consumers are less willing to cut back spending 
even in a recession when it comes to health
•  Need to be in control of oneself and desire 
to self medicate
• Convenience of OTC medicines as no time 
to see the doctor 
• Concerns about what goes into the body: 
E numbers, pesticides, build up of toxins 
•  High cost of powerful prescription medicines 
and fear of side effects/long term effects 
Further growth
• New brands entering the market with a focus on 
natural ingredients
•  Awareness of efficacy will grow following BBC2’s 
programme Grow Your Own Drugs
• Large pharmaceutical companies have renewed “interest 
in developing new drugs derived from naturally occurring 
compounds” (Financial Times, 7 May 2008)
Barriers to growth 
• General lack of awareness of natural alternatives
• Lack of understanding and confusion among consumers
• Some concerns over safety and efficacy
•  In part addressed by manufacturers and retailers 
educating consumers, and legislation ensuring clear 
labelling and introducing greater regulations  
within the sector
New product development (NPD)
• Natural is a key part of NPD 
• Three main themes
1.  speed of response 
2.  prevention rather than treatment of ailments
3.  use of natural ingredients 
• NPD is likely to feature experimentation with different 
product formats and use of natural ingredients could blur 
the boundaries with complementary medicine
Market Drivers 
William Ransom & Son plc   |   Annual Report 2009 5 Consumer Health 
Division
Business Overview
Ransom’s Consumer Health Division (CHD) was founded to meet 
growing consumer demand for science-backed natural health 
products manufactured to pharmaceutical standards. Since its 
establishment in 2000, CHD has used the company’s unique 
combination of botanical and pharmaceutical expertise to 
grow rapidly, both organically and by acquisition.
In 2002, the company acquired a portfolio of branded medicines 
from Roche Products, which included Metanium. In 2004 the 
company took over Health Perception with its market-leading 
brand Glucosamine, and in 2005 Optima Health & Nutrition also 
became part of the Ransom Group bringing a significant number 
of additional natural products.
Ransom’s consumer health products are exported world-wide 
through an extensive network of agents and distributors. Today 
we have products in seven main areas of healthcare:
Joint care, digestive care, mental health, oral care, skin care, 
baby care and general well-being.
The company recently unveiled a new corporate logo which will 
be rolled out across all consumer packaging and will begin to 
establish Ransom as a recognised leading provider of natural 
health products.
The company will launch its new umbrella brand at the end of 
2009 for mainstream distribution, while its current brands will be 
developed in the independent trade.
Ransom also has license agreements for Medibee, a  
leading brand of manuka honey and Kordel’s, a leading  
brand in the independents of VMS (vitamins, minerals,  
and supplements) products. Pharmaceuticals 
Division
Natural Products 
Division
This is where Ransom’s skills and reputation began. 160 years on 
from those early days of cultivating and processing herbs for local 
pharmacies, we now supply exclusive natural botanical extracts to 
the pharmaceutical, food and drinks industries worldwide.
Today, botanicals remain a key source of compounds in drug 
discovery and development, with some 25% of prescription drugs 
and 60% of over-the-counter remedies relying on naturally-
occurring active components derived from plants. Indeed, even the 
most famous headache remedy in the world, aspirin, was originally 
extracted from willow bark.
In an information rich world, consumers, too, are increasingly 
aware of the benefits of science-backed, natural alternatives, 
manufactured to pharmaceutical standards.
With over half of our pharmaceutical extracts now exported and 
as one of the UK’s leading soft extract suppliers, we continue to 
strive to develop and improve our already extensive range to help 
with new discoveries.
Ransom’s third division specialises in the contract manufacturing 
of licensed pharmaceutical liquids and creams, with a small 
powder filling capability. This is an area where strategic 
partnerships with clients are vital. They need reliable, high 
quality supplies to help them maintain a place in today’s 
highly competitive market. Ransom’s practical experience and 
technical capabilities have led to many of the world’s leading 
pharmaceutical names entrusting the company with the 
manufacture of some of their key products. 
Based in Witham, Essex, the site is licensed by the MHRA 
(Medicines and Healthcare products Regulatory Agency). 
High volume liquid production has also grown, with batch sizes 
from 1,000 to 8,000 litres and associated high speed packaging. 
The facility can handle flammable and hazardous solvents, and 
other complex liquid and cream products, especially those where 
there is a botanical component, with all of the associated stability, 
regulatory and formulation difficulties involved. 
However this is a licensed pharmaceutical contract manufacturing 
division which does not form part of the core strategy in the long 
term. It is therefore the intention to divest this division.
William Ransom & Son plc   |   Annual Report 2009 7 Chairman’s Statement
Results
Revenue for the year was £33.6m, £1.5m lower than the prior 
year revenue of £35.1m. The company made an operating loss 
before exceptional items of £1.9m (2008: operating profit of 
£0.4m) and an overall operating loss of £1.7m (2008: loss of 
£7.7m). Exceptional costs totalled £1.1m (2008: £7.7m) and were 
principally associated with the financial restructuring and the 
execution of the turnaround plan. These items were offset by 
£1.3m gained from brand disposals. Financing charges for the 
year totalled £0.7m (2008: £0.7m).
The adjusted loss per share was 2.80p (2008: 0.39p). Basic loss 
per share was 2.51p (2008: 8.72p).
Net debt at the end of the year was £3.8m (2008: £6.6m).  
A major component of the reduction in debt was improved 
working capital management. Stock levels were reduced during 
the year to £4.9m (2008: £6.7m), trade and other receivables were 
£0.5m lower and trade and other payables increased by £0.9m. This 
resulted in a £3.2m improvement in the company’s working capital 
position versus the year ended March 2008.
Dividend
The company will not pay a dividend this year as the turnaround 
is not complete. It remains the board’s intention to return to a 
progressive dividend policy as soon as the financial position of 
the group has stabilised and market conditions improved.
Relisting of shares
Due to the uncertainties surrounding the company’s longer term 
financing at the time, trading in Ransom’s shares was suspended 
in June 2008. 
Following the reduction of the company’s borrowing facilities 
through the disposal of Radian B, and the good progress made 
on implementing the turnaround plan, a letter of support was 
provided by the company’s lending bank in December 2008.  
This led to the publication of the annual report and accounts  
for the year ended March 2008 as well as the interims for the 
period of six months ended September 2008, and subsequently  
a lifting of the suspension of the trading of the company’s  
shares on AIM on 9 January 2009.
General meeting
On 26 November 2008, former directors of the company, together 
accounting for 28% of the company’s shares, exercised their right 
as shareholders to convene a general meeting of the company 
to consider and, if thought fit, pass resolutions to remove the 
board. The general meeting was held on 13 January 2009 and all 
resolutions were voted against. 88% of independent shareholders 
voted to support the current board. 
In the first half of 2008 the board initiated a widespread  
re-structuring of the business and I am pleased that good progress 
has been made to return the company onto a firmer footing. 
However, high exceptional costs were incurred as a result of 
re-financing, other major portfolio and management changes 
and, of course, consumer markets remain tough.
Business Review People
The past year has seen significant changes at Ransom at director 
and executive level. Ivor Harrison was appointed Chief Executive 
on 6 May 2008. Ian Miscampbell stepped down as Finance Director 
and left the company on 24 October 2008 and was replaced by 
Ran Oren as Interim Finance Director. 
Ivor Harrison has also appointed a new Sales Director and 
Operations Director, as well as a new management team at the 
company’s pharmaceutical contract manufacturing business at 
Witham, Essex.
The challenges of the last twelve months have been exceptional for 
all staff and I thank them for their resilience and continued support 
to improve the company’s prospects and performance, as well as 
their willingness to build a more professional organisation.
Outlook
The new management team led by Ivor Harrison has developed a 
clear turnaround plan and has made good progress in implementing 
many of the key initiatives. The team has also defined a clear vision 
for the business – to focus on building a strongly branded, natural 
consumer health products company providing targeted consumers 
with high performing products that help them maintain a healthy 
body and mind.
To this effect the Consumer Health division has been restructured 
and focused on fewer brands in specific market segments.
The Natural Products division continues to build effectively on the 
William Ransom heritage and has won new business in both the 
UK and export markets. 
It remains the intention of management to divest the company’s 
Pharmaceuticals division as it does not fit the new strategy.  
In the meantime, good progress is being made to return this 
division to profitability.
The market for natural consumer health products continues to 
grow and Ransom is well positioned to take advantage of the 
opportunity that this presents. The company has a distinguished 
heritage in natural extracts as well as quality products in a wider 
range of categories than almost any other company in the sector.
The economic climate has made trading and forecasting 
increasingly difficult but I believe the new management team 
is showing that it has the requisite insight and skills to turn the 
business around and improve its overall financial performance. 
First quarter results for the current financial year are on plan, but 
trading conditions seem to be increasingly tough and the impact 
on consumer spending continues to be difficult to forecast for the 
remainder of the year.
David Suddens  Non-Executive Chairman
27 July 2009
William Ransom & Son plc   |   Annual Report 2009 9 Chief Executive’s Review 
Over the 12 months of the period under review, the company’s 
new management team has been implementing the strategy  
to transform Ransom into a focused provider of natural consumer 
health products to help maintain a healthy body and mind.
At the beginning of last year, the company’s survival was in doubt 
as it entered into discussions to renew its banking facilities. It was 
evident that management needed to address both short–term 
performance and cash generation at the same time as defining a 
clear vision and developing the business plan to return the 
company to growth.
During the year, greater financial stability has been achieved, and 
we have made considerable operational improvements in order to 
turn the business around. Despite these achievements there remains 
much still to do in the business while operating in an economic 
climate that remains very tough. 
Initial requirements – financial restructuring 
In order to secure long term support from the company’s lending 
bank, debt and working capital needed to be reduced. This was 
achieved by the divestment of Radian B and Pavacol D and the 
reduction in gross stock levels by almost 45% from a high of 
£9.5m in July 2008 to £5.4m as at 31 March 2009. The bank’s 
support directly led to the lifting of the company’s share 
suspension and a resumption of trading in January 2009. 
Net borrowing at the end of the year was £3.8m (2008: £6.6m); 
net stock holding was £4.9m; receivables were £0.5m lower and 
payables higher by £0.9m, resulting in a £3.2m improvement in the 
company’s working capital position compared with the year ended 
31 March 2008.
Short term – operational improvements 
Three key drivers to improve the business were identified: the 
need to simplify operations, the exit or turnaround of loss making 
activities and the building of a management team with the skills to 
deliver the turnaround.
Simplification was achieved in many ways. An executive 
management structure was created with clear roles and 
responsibilities, the number of offices was reduced by closing 
Cardiff and Sandhurst and the Gatehouse property in Hitchin was 
sold in April 2009. The number of product lines (or stock keeping 
units – SKUs) was reduced from 1,700 to 270. Seven core brands 
were selected (from over 30) to focus on – Aloe Dent, Aloe Pura, 
Allergenics, Australian Tea Tree, Manuka Gold, Health Perception, 
and Metanium; and active interest will be maintained in  
Kordel’s and Medibee which are sold under licence agreements. 
More recently, complex pricing structures have been simplified  
and aligned.
Loss making activities were terminated in a number of areas. 
In August 2008, the costly contract with Navamedic to sell 
Alateris, the prescription-only glucosamine product, was ended. 
Loss making promotions and discounts were stopped, and price 
increases were implemented to cover significant commodity cost 
inflation. The operating losses at the contract manufacturing 
pharmaceutical site at Witham were reduced from £0.9m for 
the six months ended September 2008 to £0.6m in the second 
half of the year (including £0.25m of exceptional costs). Further 
improvements to performance have since been achieved and are 
expected to continue from the execution of the recovery plan 
which is focused on pricing, operational efficiencies and changes 
to working practices.
Management at Ransom has changed considerably in the last 
12 months. New finance (interim), sales and operations directors 
have been appointed and new management has been recruited 
in marketing, sales, planning and procurement and across all 
functions at the pharmaceutical contract manufacturing site  
at Witham. The board believes that the company now has a  
strong team in place that can deliver the required results and 
improve performance.
Business Review Longer term – vision and drivers 
The market for natural health products continues to grow despite 
the recession. Independent research indicates that consumers 
are less willing to cut back on products for their health and 
“natural” is a motivator for purchase. Ransom should be well 
placed to benefit from such positive indicators given its heritage 
and the range of products it sells. It will be able to capitalise on 
this by building brand equity that is reassuring and credible and 
by bringing products to market that are relevant and sufficiently 
differentiated. In parallel to the financial restructuring and 
operational improvements, progress has been made in laying the 
foundations for revitalised marketing initiatives.
In June 2008 a vision was defined to become a recognised leader 
in natural consumer health products focused on developing the 
business with higher margin brands. The two greatest drivers to 
achieve this and to improve business performance at Ransom are 
to increase distribution of our products in mainstream channels 
and to gain significant savings via economies of scale generated 
through improved purchasing practices. Progress has been made 
on both but the beneficial effects are still to be fully realised.
New distribution has been gained in many channels, including 
some Multiples such as Tesco and Sainsbury, but the main intention 
is to launch a range of our core products under a single ‘umbrella’ 
brand that can be supported by targeted marketing investment, 
while maintaining the current core brands in the Independents. 
In November 2008, in depth quantitative and qualitative research 
was conducted that gives management a clear understanding of 
the needs and motivations of consumers towards natural products 
and a brand from Ransom. Development of that brand is already 
advanced and is expected to be launched at the end of 2009. 
Although there is significant consumer interest in natural products 
there is also widespread confusion and limited understanding 
about the products. The opportunity for Ransom is clear, with its 
long and distinguished heritage in natural extracts it can capitalise 
on this market dynamic and bring greater clarity to the sector 
under one accessible brand. 
Economies of scale can be achieved in the supply chain and a 
detailed review of the size of the opportunity has been undertaken. 
This has been quantified and some of the benefits will be achieved 
in this financial year.
Export market development continues well and on plan, while the 
initiative to expand availability through on-line sales has started 
slowly. Through a joint-venture with MDY Healthcare PLC, Trust 
William Limited was set up in 2007 and trustwilliam.com was 
launched in September 2008. 
Prospects
Despite the obvious difficulties created by the economic downturn, 
the recession and currency fluctuations many of the financial 
and operational issues have been addressed and management has 
started to stabilise the business, retain customers and consumers, 
and develop relationships with key suppliers. The turnaround is by 
no means complete and the current financial year has its risks 
as more fully disclosed in Note 2 to the financial statements. 
However, I believe the actions that are being taken will improve 
Ransom’s performance and create shareholder value. 
 
Ivor Harrison Chief Executive
27 July 2009
William Ransom & Son plc   |   Annual Report 2009 11 Operating and Financial Review
Overview
The company’s results for the year have been impacted by the 
implementation of the turnaround plan following the uncertainty 
that arose in relation to the long term support of the company’s 
lending bank. The results for the year therefore include £1.1m of 
reorganisation costs associated with the financial restructuring and 
the execution of the turnaround plan, which were offset by £1.3m 
gained through brand disposals. As part of the turnaround plan and 
in order to reduce the company’s bank debt, Pavacol D and Radian B 
were divested in August 2008 and December 2008 respectively for a 
combined value of £3.1m. These proceeds and £3.2m generated from 
working capital improvements enabled the company to reduce its 
bank debt to £3.8m (2008: £6.6m) and subsequently to restructure 
the company’s banking facilities on 26 February 2009. 
The Consumer Health division improved its underlying performance 
despite challenging market conditions, the impact of the 
divestment of the above brands and the rationalisation of product 
lines. This has been achieved by focusing on the profitable parts of the 
division by controlling costs and cutting out loss making activities. 
The company’s Pharmaceuticals division has regained customers’ 
confidence following the manufacturing licence suspension and 
has increased its revenues over the previous year. The division 
has been going through a period of significant change in order 
to return to a breakeven position in the current year, with further 
improvements expected.
The Natural Products division gained new customers in the 
functional food and drink sector, which offset the loss of a major 
contract for dandelion coffee at the start of the year.
The performance of each business unit is discussed in more detail 
in the relevant section below. Key performance indicators, treasury 
policy and the going concern statement are all disclosed in the 
director’s report.
Consumer health division
UK
As part of the company’s restructuring plan, the management has 
identified and addressed loss making activities. This included a 
reduction of the division’s product lines which generated limited 
contribution and the termination of the Alateris contract.
In September 2007, the company launched Alateris, the first 
licensed glucosamine product for the treatment of osteoarthritis 
in the UK market. This product was licensed from Navamedic 
ASA (Oslo: NAVA). Following the product’s launch, the National 
Institute for Health and Clinical Excellence issued guidance which 
did not support the prescription of glucosamine. As a result of 
the slower than expected uptake of the product, and in line with 
the company’s revised strategy to focus on the natural ‘over the 
counter’ product sector, the board negotiated an exit from this 
arrangement in August 2008, thereby avoiding the need to acquire 
significant additional amounts of stock during the year.  
UK revenue declined by £4.2m to £15.6m (2008: £19.8m) as  
a result of several factors: the rationalisation of product lines,  
the decision to stop supporting loss making activities, the impact 
of the disposal of Pavacol D and Radian B in August 2008 and 
December 2008 respectively, the decision to reduce the size of  
the division’s sales force and the general unfavourable  
economic climate. 
Export
Underlying exports of consumer health products increased by 
10% compared to last year excluding the impact of the disposal of 
Radian B in December 2008.
Business Review Operating and Financial Review
Total
The division’s operating profit for the year was £3.1m (2008: 
operating loss of £3.6m including £4.4m goodwill impairment) 
despite the decline in UK revenue. This was supported by reduced 
selling costs following the exit from the Alateris contract, lower 
marketing costs from more focused brand support and a general 
reduction in overheads.
Pharmaceuticals division
Ransom Pharmaceuticals manufactures the company’s own 
MHRA-licensed products as well as pharmaceuticals and over-
the-counter products for third parties. Sales to third parties 
increased during the year by 64% to £7.7m (2008:£4.7m), mainly 
as a result of the successful implementation of an agreement with 
Forest Laboratories UK Limited for the supply of Infacol to the 
European market, but also due to the division’s ability to improve 
its operational efficiencies. 
During the second part of the year, the division has gone  
through an extensive restructuring programme which has  
focused on three areas:
1. Price increases to customers to reflect material cost changes
2. Operational improvements and cost reduction 
3. Improved manufacturing standards
As a result, the division’s operating loss was reduced from  
£0.9m in the first six months of the year to £0.6m in the second 
part of the year (including £0.25m of non-recurring costs 
incurred as part of the restructuring programme), with further 
improvements to be made.
The board is, nonetheless, still of the opinion that the 
pharmaceutical contract manufacturing division is a non-strategic 
asset and will be divested at the right time. 
Natural products division 
Ransom Natural Products division principally manufactures 
botanical extracts for sale to third parties and for use in finished 
products made by Ransom Pharmaceuticals. These extracts  
are typically used as active pharmaceutical ingredients by 
pharmaceutical companies or as nutraceutical ingredients by  
food and drink manufacturers. Sales to third parties were £3.0m 
(2008: £3.0m). Export sales rose by 20% to £1.8m (2008: £1.5m) 
compensating for the loss of a single contract for dandelion coffee. 
The business plan envisages integrating the division’s know-how 
into the Consumer Health division in order to make the Ransom 
heritage in our consumer products more apparent and effective.
William Ransom & Son plc   |   Annual Report 2009 13 Lifting of share suspension 
In June 2008 following a breach of the company’s banking 
covenants and lack of certainty in relation to the long term 
support from the company’s lending bank and in consultation with 
the London Stock Exchange, the company concluded that it was 
appropriate to request a suspension of dealings in the company’s 
shares on AIM.
In December 2008 following the disposal of Radian B and the 
reduction of the company’s bank debt by £2m the company’s 
lending bank provided a letter of support which enabled the 
company to publish its annual accounts for the year ended 
March 2008 and interim accounts for the six months ended  
30 September 2008.
As a direct result of this, the company reached an agreement with 
the London Stock Exchange that the suspension of the trading of 
the company’s shares on AIM would be lifted. The suspension of the 
company’s shares was lifted on 9 January 2009.
Financial 
The financial performance of the group has been adversely 
impacted by net one-off restructuring costs of £1.1m (2008: 
£7.7m), relating mainly to the implementation of the turnaround 
plan and the financial restructuring offset by £1.3m gained 
through brand disposals.
Revenue for the year was £33.6m (2008: £35.1m). The loss before 
interest, tax and one-off costs for the year increased to £1.9m 
(2008: profit £0.4m). The overall operating loss of £1.7m included 
£1.1m of one-off nonrecurring costs (2008: loss of £7.7m). Finance 
costs for the year were £0.7m (2008: £0.7m). Operating loss for the 
year included £0.4m gained from the disposal of Pavacol D  
in August 2008 and £0.9m as a result of Radian B disposal.
Exports accounted for 28% of revenue (2008: 27%) as a result  
of the reduction in UK sales and the increase in RNP exports.  
UK revenue fell by 6% to £24.1m. Underlying gross margin also fell 
in the year to 31.0% (2008: 39.6%), driven by the losses in the 
pharmaceutical contract manufacturing division and reduced 
profitability of the RNP division.
Pre exceptional operating expenses were reduced by 9% to £12.3m 
(2008: £13.5m). This decrease was the result of a more targeted 
sales and marketing spend and the exit of the Alateris contract. 
Overall operating expenses, including exceptional costs, reduced 
by 38% to £13.4m (2008: £21.5m), mainly as a result of the £4.4m 
goodwill impairment and reduced level of exceptional costs.
The group recorded an overall loss before tax in the year of £2.3m 
(2008: £8.4m). The adjusted basic loss per share, excluding the 
impact of exceptional and restructuring costs, was 2.80p (2008: 
0.39p). The overall loss per share was 2.51p (2008: 8.72p).
Net debt at the end of the year was £3.8m (2008: £6.6m). The 
reduction in bank debt was possible following the disposal of 
Radian B in December 2008 for a total of £2.5m, £2.0m of which 
was used to reduce the company’s bank debt. As a result of £3.2m 
Business Review
Operating and Financial Review Contd. realised from working capital improvements (2008: £0.8m), the 
company was able to repay its lending bank an additional £1.1m 
(in January and February 2009) and reduce its long term loan to 
£2.6m as at 31 March 2009 from £5.75m at March 2008.
Following the above repayments, the company reached a long 
term agreement with its lending bank on 26 February 2009. 
As part of the agreement the company’s UK bank debt was 
restructured as follows:
•  £2.6m term loan to be paid in quarterly instalments 
until March 2013
• Up to £4m invoice discount facility based on the company 
accounts receivables position and other terms and conditions 
agreed with the lending bank
• £0.1m overdraft facility
Tax credit for the year was £0.2m (2008: £1.0m) including a 
reversal of tax on industrial building allowance of £0.4m. In 
addition to tax losses on which a deferred tax asset of £0.4m has 
been recognised the group also has a potential deferred tax asset 
of £0.8m (2008: £0.3m) in respect of tax losses carried forward 
at the balance sheet date. These losses are not recognised as the 
group does not expect to recover these in the foreseeable future. 
Stock levels have been reduced during the year to £4.9m  
(2008: £6.7m), and stock management remains a priority. Trade 
and other receivables were £0.5m lower and trade and other payables 
increased by £0.9m resulting in an improvement in the working capital 
position of £3.2m compared with the year ended 31 March 2008.
Net cash inflow from operating activities was £0.1m (2008: 
outflow £0.8m) mainly as a result of £3.2m cash inflow from 
working capital (2008: £0.8m). 
Capital management 
Currently, the primary objective of the group’s capital management 
strategy is to ensure that it maintains adequate banking facilities 
in order to support the business and to deliver the turnaround 
plan. The group intends to reinstate the payment of dividends to 
shareholders as soon as circumstances allow.
Operating and Financial Review Contd.
William Ransom & Son plc   |   Annual Report 2009 15 Corporate Social Responsibility 
The board is committed to 
managing the company in a 
socially responsible manner, and 
takes into account the company’s 
many stakeholders, including its 
investors, employees, customers, 
suppliers and business partners.
Consumers and customers
The company will keep the consumer at the centre of the business 
and is committed to offering natural products that maintain 
a healthy body and mind. It operates in a market in which 
consumers are confused and lack knowledge and believes it is 
important to help them make the right choices to address their 
needs. As a result, in 2008 new, clear and informative websites 
were developed for our core brands (Aloe Pura, Aloe Dent, 
Australian Tea Tree, Love your Joints, Manuka Gold and Metanium).
When marketing its products the company ensures it complies 
with advertising standards and product labelling regulations. To be 
sure the right standards are met in communication, management 
works closely with the HFMA (Health Food Manufacturer’s 
Association) of which Ransom is a member and is represented on 
the Council, and also works with the PAGB (Proprietary Association 
of Great Britain) which represents the manufacturers of over-the-
counter medicines and food supplements in the United Kingdom.
Health & safety
Ransom is committed to operating high standards of Health 
& Safety that are designed to minimise the risk of injury to 
employees, contractors, visitors and others who come into contact 
with the business. Health & Safety is of paramount importance in 
the business and there is a formal Steering Committee made up of 
elected safety representatives from  each of the company’s sites 
which meets quarterly. Monthly meetings are also held at each site 
by local Health & Safety committees to review standards, issues 
and actions to constantly improve. 
Ongoing health and safety training is undertaken to maintain 
awareness of health and safety issues. Preventative care for  
staff working in areas of potential risk is maintained through 
out-sourced Occupational Health services, and First-Aider training 
is actively encouraged. The number of First Aiders working at our 
various sites exceeds the recommended minimum.
The company has a good record on the Reporting of Injuries, 
Diseases and Dangerous Occurrences Regulations (RIDDOR) 
metric per 100,000 man hours worked. It was below 0.01% at 
just 2 reporting in the year ended March 2009 (2008: 1). Against 
the more stringent Total Accident and Incident Frequency Rate 
(TAIFR) the company achieved 20.7 per 100,000 man hours 
worked (2008: 20.0).  
The business was independently audited by the British Safety 
Council in February 2009 with no critical issues and clear follow 
up actions are being carried out. Independent external audits will 
continue to be undertaken on an annual basis. 
Business Review Employees
The company recognises that its employees are one of its most 
important assets and in addition to ensuring compliance with  
its statutory obligations, the company endeavours to embrace  
the spirit of developing employment legislation and its duty 
of care to all its employees. To this end, policies on equal 
opportunities, discrimination, bullying, stress management,  
drug and alcohol abuse, internet and email use and disputes 
resolution have been implemented. 
The company understands the need to adapt working 
arrangements to accommodate the personal commitments  
of its employees and to help them achieve a healthy work-life 
balance. A flexible approach has been adopted by the company 
and sympathetic consideration is given to individual requests 
for flexible working from which a number of employees benefit. 
Remote access now allows employees to log on to company 
networks and systems.
The company is committed to the personal and professional 
development of its employees and supported by a formal appraisal 
process and training policy. On going training needs are met 
through both in house and external programmes for staff working 
at every level. During the year ended March 2009 a total of 118 
staff participated in external training programmes. The company 
also currently operates a development programme for laboratory 
staff enabling junior staff to achieve a degree qualification 
through  a day release university study programme. 
The company’s commitment to the well-being of all staff is 
rewarded by low absenteeism. In the year ended March 2009 
average absence was 2.1%, considerably below the national 
industry average of 3.9% (2008 CIPD annual survey). Furthermore, 
the staff turnover rate in the year ended March 2009 was 9.5% 
(including restructuring changes) remains below the national 
average of 13.5% (2008 IDS annual survey), and a significant 
number of Ransom employees have more than 10 years’ service 
with the company. 
William Ransom & Son plc   |   Annual Report 2009 17 Environment 
Ransom is committed to sourcing and manufacturing products in 
an environmentally-conscientious manner. None of its products is 
tested on animals. 
In all activities the aim of the company is to: 
•  Comply with statutory requirements and ensure compliance 
with any relevant national and local legislation and to remain 
aware of draft, impending or proposed legislation regarding  
the care of the environment. 
• Protect the environment by striving to minimise our 
contribution to the pollution of land, air and water. 
• Use resources effectively and reduce the impact of our 
waste on the environment. 
• Seek to minimise inefficiencies in energy consumption. 
• Review periodically its objectives and plans for continuous 
improvement, as part of the Environmental Management System. 
• Maintain adequate records and measurements for 
inspection and analysis. 
• Provide managers and employees with the knowledge and 
training with which to carry out the objectives. 
The Chief Executive and his management team have responsibility 
for environmental care. Managers and supervisors are responsible 
for ensuring rules and procedures are complied with. At the same 
time, it is the responsibility of each employee and of any third 
party to prevent and or reduce all forms of environmental damage. 
The company is currently undertaking a full review of all packaging 
materials and packaging formats to identify opportunities to 
reduce excess packaging.
Ransom acknowledges the Waste Electrical and Electronic 
Equipment Directive (WEEE Directive) which aims to encourage 
everyone to reuse, recycle and recover. To this end staff reuse and 
recover IT and electrical equipment where feasibly possible. 
Corporate Social Responsibility Contd. 
Business Review Board of Directors
Executive director
Ivor Harrison (44)
Chief Executive
Ivor became Chief Executive and was appointed to the board in May 2008. Between 2004 and 2007, 
he was Managing Director of Maximuscle Limited, the UK’s leading sports nutrition company that was 
private equity backed. Prior to that he was Group Marketing Director at Premier Foods and on the 
board of Cott Beverages Ltd. He was a management consultant at Gemini Consulting and started his 
career at Unilever. He has a degree from Cambridge University and an MBA from INSEAD.
Non-executive directors
David Suddens (61)
Non-executive Chairman
David was appointed to the board in March 2007 and Non-executive Chairman in October 2007. He 
has extensive experience in both international marketing and manufacturing organisations. He is 
currently Chief Executive of Griggs Group Limited, licensees of the Doctor Martens footwear brand. He 
is a member of the Society of Turnaround Professionals and has an MBA from INSEAD. He is Chairman 
of the audit and nomination committees and is a member of the remuneration committee.
Tim Bridge (60)
Senior Independent Non-executive Director
Tim was appointed to the board in April 2006. He was Chief Executive of Greene King plc from  
1994 to 2005 and has been Chairman since then. He is also a Non-executive Director of  
Weatherbys Ventures Ltd. He is Chairman of the remuneration committee and is a member  
of the audit and nomination committees.
William Ransom & Son plc   |   Annual Report 2009 19 Financial Statements Contents
Directors’ Report  21
Corporate Governance  26
Directors’ Remuneration Report  28
Statement of Director’s Responsibilities 
for the Financial Statements  31
Independent Auditors’ Report to the Members  
of William Ransom & Son plc  32
Consolidated Group Income Statement  34
Statement of Recognised Income and Expense  35
Consolidated Group Balance Sheet  36
Consolidated Group Cash Flow Statement  37
Notes to the Financial Statements  38
Company Accounts  54
Company Balance Sheet  58
Notes to the Company Financial Statements  59
Directors, Officers and Advisors 64 Directors Report
The directors submit herewith the 
ninety-sixth annual report and the 
audited financial statements for 
the year ended 31 March 2009. 
Principal activities
The group’s principal activity is the supply of branded natural 
health products, vitamins and food supplements, the manufacture 
of pharmaceutical products and the extraction of plant material 
for the pharmaceutical, food and beverage industries. 
During the year the company operated through three divisions, 
covering its natural plant extract business, pharmaceutical 
contract manufacturing and its consumer health products sales 
and marketing business. A commentary on the performance of 
each of these divisions is contained in the Operating and  
Financial Review. 
Key performance indicators (KPIs)
Note 2009 2008
Year on year revenue growth % 1 (4.4)% (3.8)%
Gross margin % 2 31.0% 39.6%
Net Working Capital 4 £5.5m £8.7m
Notes to KPIs
1. Year-on-year revenue growth is calculated as the percentage 
increase in revenue from continuing operations compared to 
that achieved in the previous year. Source data is taken from 
the audited financial statements. This measure is designed to 
highlight success in delivering the company’s growth strategy.
2. Gross margin is calculated as the gross profit achieved in the 
year as a percentage of revenue from continuing operations. 
Source data is taken from the audited financial statements. 
This measure is designed to highlight the group’s ability to 
maximise its return generated from revenues, a key driver in 
maximising operating profit.
3. Net working capital is calculated as the sum of inventory and 
trade and other receivables less trade and other payables. 
Source data is taken from the audited financial statements. 
The indicator is designed to measure the company’s ability to 
manage its working capital position.
The above KPIs have been calculated on the underlying operations 
of the business, excluding the exceptional costs arising from the 
implementation of the company’s turnaround plan and  
debt restructure.
21 William Ransom & Son plc  |  Annual Report 2009 44
Financial Statements
Directors Report Contd.
Business review and future developments
A review of the development of the group’s business during the 
year ended 31 March 2009 and of its future prospects is contained 
in the Operating and Financial Review on pages 12 to 15. 
Results for the year
The group loss before and after taxation is set out in the  
table below.
2009 2008
£000 £000
Loss before tax and non-recurring costs (2,412) (248)
Exceptional items 96 (8,125)
Loss before tax (2,316) (8,373)
Loss after tax before non-recurring costs (2,363) (332)
Exceptional items 96 (8,125)
Tax impact of non-recurring costs 148 1,093
Loss after tax (2,119) (7,364)
Total retained losses carried forward at 31 March 2009 amounted 
to £2,732,000 (2008: loss £673,000).
Dividends 
The directors do not recommend payment of a final dividend in 
respect of the year ended 31 March 2009.
Principal risks and uncertainties  
facing the group
As reported elsewhere, the group has put in place a substantial 
restructuring of its operations and management during the year, 
designed to better address the current challenges faced by the 
business, particularly within its Consumer Health Division and 
Pharmaceutical Division. Following the breach of its banking 
covenants in June 2008, the company has developed a turnaround 
plan for the business which has been agreed with its lending bank. 
A key part of this plan is to return the Pharmaceutical Division’s 
facility at Witham to a breakeven position and meet the Consumer 
Health Division’s revenue target post the disposal of Pavacol D and 
Radian B on 15 August 2008 and 4 December 2008 respectively. 
During the year the company has taken various steps in order 
to reduce its bank debt and improve its working capital position. 
£3.1m gross disposal proceeds from the disposal of the above 
brands coupled with £3.2m realised out of working capital 
improvements enabled the company to reduce and restructure its 
banking facilities debt and reach a long term agreement with its 
lending bank on 26 February 2009.
In October 2008 the company initiated a recovery plan for its 
Witham manufacturing facility in order to improve the site 
performance and reach a breakeven position in the short term and 
a profitable position in the long term. To date the site has reached 
a breakeven position and it is the intention of the board to 
achieve profitability in line with the site recovery plan. However its 
performance is dependent on several factors and its ability to meet 
the budgeted targets is difficult to predict. As previously reported, 
the company is looking to dispose of this facility in due course.
The group’s sales of its own consumer health products and those it 
manufactures for third parties are exposed to general retail market 
conditions. The continued development of export markets has 
reduced reliance on UK retail sales growth. Within the UK market 
the group remains exposed to the declining independent health  food trade and to a small number of major multiple and grocery 
outlets, where changes to the basis of trade and decisions to list 
or de-list products can have a significant impact on the revenues 
of the business, its profitability and its cash flow generation. The 
group is seeking to minimise these risks by continuing to grow 
its export business by establishing new channels to market in 
the UK, by increasing its product distribution and by managing 
its relationships with retail chains more effectively. It is also 
continuing to invest in both the development of its consumer 
brands and in supporting products in store.
The company sources the majority of its consumer health products 
from third party manufacturers. Following the establishment of 
a central procurement and planning function this year steps are 
being taken to formalise these third party relationships. Strategic 
supply agreements are being put in place in order to provide 
protection against unforeseen interruptions to the supply chain, 
protect the company from exchange rate fluctuations and provide 
a framework within which to better manage working capital.
Financial instruments
The company’s financial instruments comprise borrowings, cash 
and various items of a working capital nature, such as trade 
debtors and creditors that arise directly from its operations. The 
main purpose of these financial instruments is to provide finance 
for the group’s operations. It is, and has been throughout the year, 
the company’s policy that no trading in financial instruments shall 
be undertaken.
The main risks arising from the company’s financial instruments 
are price risk, foreign currency risk, credit risk, liquidity risk 
and interest rate risk. The board reviews and agrees policies for 
managing each risk and they are summarised below. 
Price risk
The main price risk arises from the purchasing of active 
pharmaceutical ingredients (APIs) and other prime materials. 
The company enters into fixed price contracts with most of 
its suppliers to hedge against unfavourable price changes. The 
company has no significant exposure to securities price risk as it 
holds no listed equity investments.
Foreign currency risk
Currency risk is managed by utilisation of a mixture of currency 
balances in line with the group’s trading profile. Approximately 
14% of revenue is in US dollars or in Euros. Currency exposure on 
these sales is reduced through purchasing materials in Euros and 
US dollars. The group does not undertake speculative transactions.
Credit risk
The group’s principal financial assets are bank balances, cash and 
trade debtors, which represent the group’s maximum exposure to 
credit risk in relation to financial assets.
The group’s credit risk is primarily attributable to its trade debtors. 
Credit risk is managed by monitoring the aggregate amount 
and duration of exposure to any one customer depending upon 
their credit rating. Where export customers are granted credit 
terms, credit insurance of some, or all of the balances is generally 
sought. The amounts presented in the balance sheet are net of 
allowances for doubtful debts, estimated by management based 
on prior experience and their assessment of the current economic 
environment.
The group has no significant concentration of credit risk  
with exposure spread over a large number of counterparties  
and customers.
23 William Ransom & Son plc  |  Annual Report 2009 46
Financial Statements
Directors Report Contd.
Liquidity risk 
The group’s policy has been to ensure continuity of funding 
through acquiring an element of the group’s fixed assets under 
finance leases, and arranging funding for operations via medium-
term loans and additional revolving credit facilities to aid short-
term flexibility. During the year the company has taken various 
actions to improve its working capital position to align with its 
revolving credit facilities headroom.
Cash flow interest rate risk
The interest rate on the bank overdraft, invoice discount facilities 
and term loan is at market rate and the company policy is to keep 
the overdraft within defined limits such that a significant change 
in interest rates would not have a material impact on cash flows. 
In the prior year the company entered into an interest rate swap 
designed to fix the interest rate exposure on a portion of the term 
loan. The exposure to the interest rate swap is further disclosed  
in note 21.
Charitable and political contributions
Charitable and political contributions for the year amounted  
to £2,175 (2008: £nil). 
Substantial shareholdings
At 20 May 2009, the company had been informed of the following 
interests amounting to 3% or more in the ordinary share capital of 
the company:
Number of Shares Percentage
S Quinn 11,806,929 14.0%
F Whitcomb 11,806,929 14.0%
Aviva investors 11,493,713 13.6%
I Harrison 4,300,000 5.1%
T Dye 3,479,140 4.1%
Charles Stanley, stockbrokers 2,696,236 3.2%
Research and development
The group has a continuing commitment to the improvement of 
its existing product range and to the development of new products 
and during the year research and development costs amounted to 
£22,000 (2008:£8,000).
Payment of creditors
The group’s policy for the year to 31 March 2009 and for the next 
financial year is to use its best endeavours to settle with suppliers 
in accordance with agreed payment terms. The average number of 
credit days taken from trade creditors at 31 March 2009 was 62 
(2008: 75 days).
Directors
The directors who held office during the year are listed below:
D Suddens
T Bridge
I Harrison (appointed 6 May 2008)
I Miscampbell (resigned 24 October 2008) On 6 May 2008, I Harrison was appointed Chief Executive. Ian 
Miscampbell stepped down from the board and left the company 
on 24 October 2008.
Biographies for each of the current directors are given on page 19. 
In accordance with the articles, David Suddens will retire by 
rotation and will offer himself for re-election to the board.
The chief executive has a service contract, which is subject to a 
maximum of one year’s notice of termination. 
Annual General Meeting
The AGM will be held in Hitchin on 2 October 2009 at 2.00pm. 
Details of the AGM are set out in the notice of the meeting which 
has been sent to all shareholders with this report.
Disclosure of information to auditors
At the date of making this report each of the current directors, as 
set out above, confirm the following:
1. so far as each director is aware, there is no relevant 
information needed by the company’s auditors in connection 
with preparing their report of which the company’s auditors 
are unaware, and
2. each director has taken all the steps that he ought to have 
taken as a director in order to make himself aware of any 
relevant information needed by the company’s auditors in 
connection with preparing their report and to establish that 
the company’s auditors are aware of that information.
Going concern
The financial statements have been prepared on a going concern 
basis. As reported in Note 2 to the accounts, the company is in the 
process of implementing a turnaround plan with the support of its 
lending bank, Barclays Bank plc. On 26 February 2009 the company 
reached an agreement with its lending bank to restructure its 
banking facilities and secured the lending bank’s long term 
support as described in the operating and financial review.
The directors have also prepared forecasts for the business for the 
period to September 2010 on the basis of the long term agreement 
with the company’s lending bank. These forecasts reflect the best 
estimates which the company can make concerning the impact 
of the current economic climate on consumer spending and in 
particular on consumer health products, as well as the company’s 
exposure to different sales channels across the business.
In the light of the above and the actions described elsewhere in 
the operating and financial review and note 2 to the financial 
statements, the directors consider it appropriate to adopt a  
going concern basis in preparing the accounts.
Auditors
A resolution to re-appoint Ernst & Young LLP as auditors  
of the group will be proposed at the forthcoming annual  
general meeting.
By order of the board
Ivor Harrison Secretary
27 July 2009
25 William Ransom & Son plc  |  Annual Report 2009 48
Financial Statements
Compliance
As an AIM-listed company, William Ransom & Son plc is not 
required to comply with the corporate governance principles 
contained in the Combined Code. However the company has 
regard to these principles and its activities in the area of corporate 
governance are discussed in the board’s report on corporate 
governance below.
The board
Biographical details of all directors are set out on page 19. The 
board considers David Suddens and Tim Bridge to be independent 
non-executive directors. On 6 May 2008 Ivor Harrison was 
appointed as chief executive and as a director. 
The chief executive is responsible for day-to-day operational 
matters and for implementing the strategy set by the board. The 
senior management team and the chief executive meet every two 
weeks in a board-style format. The functions of these meetings 
include setting the group’s annual budget and monitoring 
performance against it, proposing initiatives to the board designed 
to meet the company’s strategic objectives and formulation of 
remuneration policy for approval by the remuneration committee, 
corporate risks are identified and reviewed on a regular basis.
The board’s principal task is to set the corporate strategy, which 
is devised to deliver optimum value for shareholders, and to 
ensure that adequate resources are in place to deliver the strategy. 
Other matters reserved for decision by the full board include the 
approval of the annual report and accounts, authorisation of all 
business acquisitions and disposals, approval of the annual budget, 
sanction of all major capital expenditure, the raising of equity or 
debt finance, investor relations and environmental policy. A pack 
of information, including the up-to-date financial position of 
the group, is distributed to all directors in advance of all board 
meetings, which are held at least ten times per year. The board has 
approved delegated authority limits for executive directors and 
the senior management team, designed to provide the appropriate 
levels of control over expenditure within the business.
Procedures are in place to enable directors to take appropriate 
independent professional advice at the company’s expense if that 
is necessary for the furtherance of their duties, and they have 
access to the advice and services of the company secretary. The 
board is committed to putting a process in place for training new 
directors in their legal and fiduciary duties if and when  
it is required. 
The Articles of Association require one third of the board to  
retire by rotation each year and for those directors appointed 
during the year to stand for re-election at the following annual 
general meeting.
Nomination committee
The nomination committee consists of the non-executive directors, 
David Suddens (Chairman) and Tim Bridge. The committee is 
responsible for the identification and nomination of suitable 
candidates to fill vacancies on the board. It also has a remit to 
review and manage the succession process for executive directors.
Remuneration committee
The remuneration committee consists of the non-executive 
directors, Tim Bridge (Chairman) and David Suddens. The 
committee is responsible for establishing and monitoring policy 
regarding senior management remuneration and incentivisation. 
In determining the policy for executive directors, the committee 
has given due consideration to the Combined Code. Remuneration 
packages are designed to attract, retain and motivate executive 
directors of the required calibre. The committee reviews the 
appropriateness of all aspects of directors’ pay and benefits by 
taking into account remuneration packages of similar-sized 
companies and having access to relevant remuneration surveys.
Corporate Governance Audit committee
The audit committee consists of the non-executive directors David 
Suddens (Chairman) and Tim Bridge. Its purpose is to consider any 
matters raised by the external auditors in connection with their 
work and findings, to review the scope and cost effectiveness of 
the audit and the independence and objectivity of the external 
auditors. During the year under review the committee met on two 
occasions and all members of the committee, as constituted at the 
date of the meeting, were present.
Internal control
The directors are responsible for the company’s system of internal 
control and for reviewing its effectiveness whilst the role of 
management is to implement board policies on risk management 
and control. It should be recognised that the company’s system of 
internal control is designed to manage rather than eliminate the 
risk of failure to achieve the company’s business objectives and 
can only provide reasonable, and not absolute, assurance against 
material misstatement or loss.
There is an on-going process for identifying, evaluating and 
managing the significant risks faced by the company which has 
been in place during the year and up to the date of the approval of 
the annual report. This process is regularly reviewed by the senior 
management team and by the board and accords with the internal 
control guidance prepared for directors by the Turnbull Committee. 
The company operates a series of controls and the key procedures, 
which are designed to provide effective internal control, are  
as follows:
•		A clearly-defined organisational structure with the appropriate 
delegation of authority to operational management.
•		A comprehensive annual planning and budgeting 
process undertaken by senior management and requiring  
board approval.
•		Management information systems to monitor financial 
performance and other operating statistics, with a monthly 
review of actual against budgeted performance across  
all divisions.
All aspects of internal control are considered and monitored by 
the board. The group does not have an internal audit function. The 
board periodically reviews the need for such a function but has 
currently concluded that it is not necessary, given the current scale 
of activities. 
The board has reviewed the effectiveness of the system of internal 
control in operation during the year and up to the date of this 
report. This process will continue annually. 
Shareholder relationships
The objective of the board is to create increased shareholder 
value by growing the business in a way that delivers sustainable 
improvement in earnings over the medium and long term.
The board regards the annual general meeting as an important 
opportunity to communicate with private investors in particular. 
Directors make themselves available to shareholders both before 
and after the annual general meeting and on an ad hoc basis 
subject to normal disclosure rules.
27 William Ransom & Son plc  |  Annual Report 2009 50
Financial Statements
As an AIM-listed company, 
William Ransom & Son plc 
is not required to produce a 
Directors’ Remuneration Report 
in accordance with part 15 of the 
Companies Act 1985 (Accounts 
and Reports). Set out below 
are disclosures relating to the 
remuneration of the directors.
Remuneration committee
As reported elsewhere, the committee consists of:
T Bridge (Chairman)
D Suddens
The committee advises the board on the setting of directors’ 
remuneration and uses comparative remuneration surveys for 
companies of a similar size to arrive at its recommendations.
Remuneration policy
Executive directors’ remuneration packages are contained within 
their service agreements with the company. They are designed to 
attract and retain directors capable of managing the company’s 
growth plans. Each service agreement is for an indefinite period 
and is subject to a maximum notice period of 12 months. The 
remuneration of the non-executive directors is determined by the 
board after comparable research. No director participates in any 
decision concerning his or her remuneration package.
The main components of remuneration are as follows:
Basic salary
The salary for an executive director is based on both individual 
performance and on information from comparative surveys. The 
annual salary review takes place in May each year.
Directors’ Remuneration Report Annual bonus payments
Executive directors participate in an annual bonus scheme and 
bonus payments are only awarded to directors who serve for 
the full year. Bonuses are awarded for above-budget corporate 
performance and for the achievement of clearly measurable 
personal objectives. In order for any bonus payments to be earned, 
the group is required to achieve a level of profitability in excess 
of market expectations. In light of the underperformance of the 
business and the resultant re-structuring, no bonus was awarded 
in the year ended 31 March 2009.
A revised scheme has been approved for the year to incentivise the 
executive directors. Bonuses will be awarded solely on the basis 
of the delivery of a level of profitability in the year in excess of a 
threshold set by the committee and are subject to an upper limit 
established in each director’s service agreement.
Share interests and share options
Executive directors may interests in the shares of the company 
through a combination of direct shareholdings and share options. 
The share options include a performance element related to total 
shareholder return or growth in earnings per share. 
The board believes that the combination of bonuses and 
share options linked to both annual results and medium term 
shareholder returns properly aligns the interests of shareholders 
and executive directors. It is the board’s intention to award 
additional grants of share options to executive directors on 
approval of changes to the current option scheme rules. 
Long term incentive plan (LTIP)
The company has an LTIP which provides for a conditional and 
deferred gift of shares, subject to the achievement of performance 
conditions related to total shareholder returns and growth in 
earnings per share over a three year period from the date of the 
grant. It is the board’s intention to award additional grants of 
shares under the LTIP scheme to executive directors.
Pensions
The executive director’s scheme will provide for contributions to a 
maximum of 20% of pensionable remuneration to be paid by the 
company provided that the executive director has paid at least 
10% of pensionable remuneration into the scheme.
The chart above shows the performance of the company’s share 
price since April 2007 compared to the FTSE AIM All Share index. 
The company believes that this is the most appropriate index 
against which to benchmark its performance and that the period 
since April 2007 is an appropriate period over which to assess long 
term performance, given the changes in the structure of the group 
which have occurred in that time.
The share price at 31 March 2009 was 4.25p and during the year 
the high and low prices were 11p and 4.25p.
50
40
30
20
10
Jul–2007 Jan–2008 Jul–2008 Jan–2009
Share Price (p)
Ransom (William) & Son PLC    FTSE AIM All Share (rebased)
29 William Ransom & Son plc  |  Annual Report 2009 52
Financial Statements
Non-executive directors
The non-executive directors have each been appointed for 
an initial period of three years under a fixed term contract, 
incorporating a notice period of six months. Their remuneration 
is determined by the board as a whole and is based on surveys of 
fees paid to non-executive directors of similar companies.  
Directors’ remuneration
  
Basic 
Salary 
£000
Bonus 
£000
Benefits  
in kind 
£000
Comp. for 
loss of office 
£000
2009 
£000
2008 
£000
D Suddens 45 - - - 45 29
T Bridge 25 - - - 25 21
I Harrison 191    - - - 191 -
I Miscampbell 103 - 17 212 332 163
C Clark - - - - - 15
T Dye - - - - - 340
S Quinn - - - - - 121
F Whitcomb - - - - - 121
D Wilkie - - - - - 216
Total remuneration 364 - 17 212 593 1,026
The executive directors participate in the company bonus scheme. 
No bonuses were payable for the year ended 31 March 2009 
(2008: £nil) because the performance criteria for the scheme  
were not met.
Share options
Share options are granted to executive directors to reward 
performance and to align more closely their rewards with the 
interests of the shareholders. Details of the options in issue to 
directors are as follows:
Approved executive share option scheme
2008
Lapsed   
during year 2009
Exercise 
price
Date  
from which 
exercisable
Expiry 
date
I Miscampbell 238,095 (238,095) - 40.0p 15/03/10 14/03/17
The options held by I Miscampbell lapsed on his departure from 
the company on 24 October 2008.
Unapproved share option scheme
2008
Lapsed   
during year 2009
Exercise 
price
Date  
from which 
exercisable
Expiry 
date
I Miscampbell 61,905 (61,905) - 40.0p 15/03/10 14/03/17
The options held by I Miscampbell lapsed on his departure from 
the company on 24 October 2008.
Long term incentive plan
2008
Lapsed  
during year 2009 Performance 
Holding 
period
I Miscampbell 70,000 (70,000) - 3 years to 
31/03/10
3 years to 
31/03/13
The grant of LTIP shares to I Miscampbell lapsed on 24 October 
2008 on his departure from the company.
Approval
This report was approved by the board on 27 July 2009 and signed 
on its behalf by:
Ivor Harrison Secretary
Directors’ Remuneration Report Contd. 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 as adopted by the 
European Union. 
The directors are required to prepare group financial statements 
for each financial year which present fairly the financial position 
of the group and the financial performance and cash flows of the 
group for that year. In preparing those 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 IFRSs is insufficient to enable users 
to understand the impact of particular transactions, other 
events and conditions on the group’s financial position and 
performance; and
•		state that the group has complied with IFRSs, subject to 
any material departures disclosed and explained in the  
financial statements.
The directors are responsible for keeping proper accounting 
records which 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 1985. 
They are also responsible for safeguarding the assets of the group 
and hence for taking reasonable steps for the prevention and 
detection of fraud and other irregularities.
Company website
The annual report is available on the company’s website.  
The directors are responsible for the maintenance and integrity  
of the corporate and financial information on the company’s 
website. Legislation in the United Kingdom governing the 
preparation and dissemination of the financial statements and 
other information included in annual reports may differ from 
legislation in other jurisdictions.
Statement of Directors’ Responsibilities 
for the Financial Statements
31 William Ransom & Son plc  |  Annual Report 2009 54
Financial Statements
We have audited the group 
financial statements of William 
Ransom & Son plc for the year 
ended 31 March 2009 which 
comprise the Group Income 
Statement, the Group Statement 
of Recognised Income and 
Expense, the Group Balance Sheet, 
the Group Cash Flow Statement, 
and the related notes. These group 
financial statements have been 
prepared under the accounting 
policies set out therein.
We have reported separately on the parent company financial 
statements of William Ransom & Son plc for the year ended  
31 March 2009.
This report is made solely to the company’s members, as a body, 
in accordance with Section 235 of the Companies Act 1985. 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 auditors
The directors’ responsibilities for preparing the Annual Report 
and the group financial statements in accordance with applicable 
United Kingdom law and International Financial Reporting 
Standards (IFRSs) as adopted by the European Union are set 
out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the group financial statements in 
accordance with relevant legal and regulatory requirements and 
International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the group financial 
statements give a true and fair view and whether the group 
financial statements have been properly prepared in accordance 
with the Companies Act 1985. We also report to you whether 
in our opinion the information given in the directors’ report is 
consistent with the financial statements. The information given in 
the directors’ report includes that specific information presented 
in the Operating and Financial Review that is cross referred from 
the Business Review section of the directors’ report. 
In addition we report to you if, in our opinion, we have not 
received all the information and explanations we require for 
our audit, or if information specified by law regarding directors’ 
remuneration and other transactions is not disclosed.
We read other information contained in the Annual Report and 
consider whether it is consistent with the audited group financial 
statements. The other information comprises only the Directors’ 
Report, the Directors’ Remuneration Report, the Chairman’s 
Statement, the Operating and Financial Review and the Corporate 
Governance Statement. We consider the implications for our 
report if we become aware of any apparent misstatements or 
material inconsistencies with the group financial statements. 
Our responsibilities do not extend to any other information.
Independent Auditor’s Report 
to the Members of  
William Ransom & Son Plc Basis of audit opinion
We conducted our audit in accordance with International 
Standards on Auditing (UK and Ireland) issued by the Auditing 
Practices Board. An audit includes examination, on a test basis, 
of evidence relevant to the amounts and disclosures in the 
group financial statements. It also includes an assessment of the 
significant estimates and judgments made by the directors in the 
preparation of the group financial statements, and of whether the 
accounting policies are appropriate to the group’s circumstances, 
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the 
information and explanations which we considered necessary in 
order to provide us with sufficient evidence to give reasonable 
assurance that the group financial statements are free from 
material misstatement, whether caused by fraud or other 
irregularity or error. In forming our opinion we also evaluated the 
overall adequacy of the presentation of information in the group 
financial statements.
Opinion
In our opinion:
•	 the group financial statements give a true and fair view, in 
accordance with IFRSs as adopted by the European Union, of 
the state of the group’s affairs as at 31 March 2009 and of its 
loss for the year then ended; 
•	 the group financial statements have been properly prepared in 
accordance with the Companies Act 1985; and
•	 the information given in the directors’ report is consistent with 
the group financial statements.
Emphasis of matter – going concern
In forming our opinion on the financial statements, which is not 
qualified, we have considered the adequacy of the disclosures 
made in note 2 concerning the company’s ability to continue 
as a going concern. These conditions indicate the existence of a 
material uncertainty which may cast significant doubt about the 
ability to continue as a going concern. The financial statements do 
not include the adjustments that would result if the company was 
unable to continue as a going concern. 
Ernst & Young LLP Registered auditor   
Luton | 27 July 2009
Notes:
1. The maintenance and integrity of the William Ransom & Son 
plc web site is the responsibility of the directors; the work 
carried out by the auditors does not involve consideration 
of these matters and, accordingly, the auditors accept no 
responsibility for any changes that may have occurred to the 
financial statements since they were initially presented on the 
web site.
2. Legislation in the United Kingdom governing the preparation 
and dissemination of financial statements may differ from 
legislation in other jurisdictions.
33 William Ransom & Son plc  |  Annual Report 2009 56
Financial Statements
Notes
2009
Before 
exceptional 
items
£’000
2009
exceptional 
items
£’000
 2009
Total
£’000
2008
Before 
exceptional 
items
£’000
2008
exceptional 
items
£’000
 2008
Total
£’000
Revenue 4 33,580 - 33,580 35,124 - 35,124
Cost of sales (23,194) - (23,194) (21,210) (140) (21,350)
Gross profit 10,386 - 10,386 13,914 (140) 13,774
Selling and 
distribution costs
(8,633) - (8,633) (9,743) (237) (9,980)
Other administrative expenses (3,642) - (3,642) (3,764) (4,650) (8,414)
Reorganisation expenses - (1,120) (1,120) - (3,098) (3,098)
Total administrative expenses (3,642) (1,120) (4,762) (3,764) (7,748) (11,512)
Gain on disposal of intangible assets - 1,341 1,341 - - -
Operating (loss)/profit 4,5 (1,889) 221 (1,668) 407 (8,125) (7,718)
Finance revenue 8 4 - 4 14 - 14
Finance costs 9 (527) (125) (652) (669) - (669)
Loss before taxation (2,412) 96 (2,316) (248) (8,125) (8,373)
Taxation (expense)/credit 10 49 148 197 (84) 1,093 1,009
Loss attributable to equity 
holders of the parent
(2,363) 244 (2,119) (332) (7,032) (7,364)
Loss earnings per share:
Basic earnings per share 11 (2.80p) (2.51p) (0.39p) (8.72p)
Diluted earnings per share 11 (2.80p) (2.51p) (0.39p) (8.72p)
Consolidated Group Income Statement
For the year ended 31 March 2009
The exceptional items are described more fully in note 6. 2009
£’000
 2008
£’000
Loss from continuing operations attributable to equity holders of the parent (2,119) (7,364)
Revaluation gain on tangible fixed assets - 185
Deferred tax on revaluation gain - (52) 
Exchange adjustment on foreign currency retranslation (43) 36
Net (loss)/gain not recognised in the income statement (43) 169
Total recognised income and expense for the year (2,162) (7,195)
Statement of Recognised Income and Expense
For the year ended 31 March 2009
35 William Ransom & Son plc  |  Annual Report 2009 58
Financial Statements
Consolidated Group Balance Sheet
At 31 March 2009
Notes
2009
£’000
 2008
£’000
Non-current assets
Property, plant and equipment 13 4,978 5,457
Investment property 14 125 185
Investment in associates 16 - -
Intangible assets:
Software 15 30 14
Goodwill 15 22,193 22,193
Other acquired intangible assets 15 1,241 2,993
28,567 30,842
Current assets
Inventories 17 4,931 6,736
Trade and other receivables 18 6,070 6,593
Cash and cash equivalents 19 44 1,024
11,045 14,353
Total assets 4 39,612 45,195
Current liabilities
Trade and other payables 20 6,638 5,759
Current tax liabilities - 246
Obligations under finance leases 21 66 51
Bank overdraft and loans 21 686 2,704
Invoice discount facility 21 1,241 -
Provisions 24 605 876
9,236 9,636
Net current assets 1,809 4,717
Non-current liabilities
Bank loans 21 1,911 4,929
Deferred tax liabilities 22 324 492
Obligations under finance leases 21 175 65
Interest rate swap 21 113 53
2,523 5,539
Total liabilities 4 11,759 15,175
Net assets 27,853 30,020
Equity
Share capital 27 8,443 8,443
Share premium reserve 29 22,013 22,013
Revaluation reserve 29 125 185
Share based payment reserve 29 2 7
Translation reserve 29 2 45
Retained losses 29 (2,732) (673)
Equity attributable to equity holders of the parent 27,853 30,020 Consolidated Group Cash Flow Statement
For the year ended 31 March 2009
Notes
2009
£’000
 2008
£’000
Loss for the year (2,119) (7,364)
Adjustments for:
Depreciation on property, plant and equipment 13 981 952
Loss from disposal of tangible assets 3 -
Gain on disposal of intangible assets 15 (1,341) -
Share-based payment expense (5) -
Amortisation of intangible assets 15 10 50
Impairment of goodwill and intangible asset 15 - 5,013
(Decrease)/increase in provisions (271) 856
Impairment of investment property 60 -
Taxation income 10 (197) (1,009)
Net finance costs 648 655
Operating cash flows before movements in working capital (2,231) (847)
Decrease in inventories 1,805 239
Decrease in receivables 523 1,076
Increase/(decrease) in trade and other payables 878 (544)
Net movement in working capital 3,206 771
Generated by operations/cash (consumed) 975 (76)
Taxation paid (289) (196)
Interest paid (595) (513)
Interest element of finance lease rental payments (16) (7)
Interest received 4 14
Net cash from operating activities 79 (778)
Investing activities
Purchase of property, plant and equipment (528) (443)
Disposal of property, plant and equipment 29 28
Purchase of intangible assets (26) (35)
Disposal of intangible assets 15 3,093 -
Net cash from investing activities 2,568 (450)
Financing activities
Proceeds from bank loans - 1,000
Repayment of bank loans 21 (3,159) (500)
Dividends paid 12 - (929)
Proceeds from issue of shares - 45
Capital element of finance lease rental payments 125 3
Net cash from financing activities (3,034) (381)
Net decrease in cash and cash equivalents (387) (1,609)
Net foreign exchange difference 43 (36)
(344) (1,645)
Cash and cash equivalents at the beginning of the year (947) 698
Cash and cash equivalents at the end of the year 19 (1,291) (947)
37 William Ransom & Son plc  |  Annual Report 2009 60
Financial Statements Financial Statements
Notes to the Financial 
Statements for the Year 
Ended 31 March 2009
1. Corporate information
The consolidated financial statements of William Ransom & Son plc (“the company”) 
for the year ended 31 March 2009 were authorised for issue in accordance with 
a resolution passed by the directors on 24 July 2009 at the registered office of 
William Ransom & Son plc, Alexander House, 40A Wilbury Way, Hitchin SG4 0AP. 
William Ransom & Son plc is a limited company incorporated and domiciled in 
England and Wales. The company’s ordinary shares are traded on the Alternative 
Investment Market (AIM), part of the London Stock Exchange.
The principal activity of the group is the supply of branded medicines, vitamins 
and food supplements, the manufacture of pharmaceutical products and the 
extraction of plant material for the healthcare, food and beverage industries.
2. Basis of preparation
The consolidated financial statements have been prepared on the historical cost 
basis, except for investment properties and derivative financial instruments which 
have been measured at fair value. The preparation of the financial statements 
requires the directors to make judgments, accounting estimates and assumptions 
that affect the application of policies and the reported amount of assets and 
liabilities, income and expenses. 
The group financial statements are presented in sterling and all values are rounded 
to the nearest thousand pounds (£’000) except when otherwise indicated. 
Fundamental uncertainty
As a result of the downturn in trading levels, the temporary suspension of the 
company’s manufacturer’s licence, which has since been reinstated, and the 
significant costs incurred in restructuring the business, the company breached 
its banking covenants in June 2008. Since then the company has been working 
closely with its lenders, Barclays Bank plc, and has agreed and is implementing a 
turnaround plan developed after the completion of a strategic review by the Chief 
Executive, Ivor Harrison.
On 26 February 2009 the company reached an agreement with its lending bank to 
restructure its banking facilities and secured the lending bank’s long term support. 
The company’s banking facilities were restructured as follows:
• £2.6m term loan bearing an interest rate of LIBOR plus 3.75% repayable in 
quarterly installments commencing June 2009 through to March 2013
• Up to £4m invoice discount facility based on the company’s trade receivables 
position bearing an interest rate of base plus 3.25%
• £0.1m overdraft facility 
As part of the above agreement the company has revised its banking covenants in 
line with its turnaround plan and has performed accordingly to date.
The directors have also prepared forecasts for the business for the period to 
September 2010 on the basis of this long term agreement with the company’s 
lending bank. These forecasts reflect the company’s best estimates concerning the 
impact of the following on its ability to meet its banking covenants:
• current recession
• the company’s exposure to different sales channels across the business
• the company’s ability to meet its sales forecast, operating margin and required 
cash generation
• the introduction of an increased number of products in more points of 
distribution with existing and new customers in order to meet the consumer 
healthcare division’s sales assumptions
The company has met its sales target for the first quarter of the new financial year 
and its sales plan is performing in line with the company’s turnaround plan to date. 
In the event that the company is not able to materially achieve its forecast the 
company will not be able to meet the covenants agreed with its lending bank. The 
stability and the retention of key personnel is fundamental to the implementation 
of the plan and to the company's recovery.
The directors have therefore identified and considered whether the company will 
be able to achieve its turnaround plan and banking covenants as agreed with 
its lending bank under various scenarios. The directors have also considered the 
performance of the pharmaceutical division that was loss making last year, the 
underlying sales assumptions required to meet the consumer health division’s 
sales targets post brand disposals in the current difficult retail economic climate, 
and the uncertainty of achieving the sales targets in time to meet the turnaround 
plan and as a result its banking covenants.
The above factors give rise to a material uncertainty which may cast significant 
doubt upon the ability of the company to meet its banking covenants and continue 
as a going concern.
Having carefully considered these uncertainties the directors are satisfied that the 
cash flow forecasts have been properly prepared and demonstrate that the company 
can meet its liabilities as they fall due in line with the agreed debt structure for 
the foreseeable future. On this basis they believe that it is appropriate to prepare 
the financial statements on a going concern basis. The financial statements do not 
include any adjustments to the balance sheet intangible or tangible fixed assets, 
the reclassification of long term liabilities or provision for further liabilities that 
may be required should the company be unable to agree new facilities with its 
bankers. If this were the case then the going concern basis of accounting may not 
be appropriate. Statement of compliance
The annual report and accounts have been prepared using accounting policies 
consistent with International Financial Reporting Standards (‘IFRS’), as adopted 
by the European Union. They have also been prepared in accordance with those 
parts of the Companies Act 1985 that apply to companies reporting under IFRS.
Basis of consolidation
All entities for which the group has the power to govern the financial and operating 
policies are considered to be subsidiaries. Subsidiaries are fully consolidated from 
the date on which control is established by the group. All intra-group transactions, 
balances, income and expenses are eliminated on consolidation. Minority interests 
represent the portion of profit or loss and net assets in subsidiaries that is not 
held by the Group and is presented separately within equity in the consolidated 
balance sheet, separately from parent 'shareholders' equity.
Entities for which the group does not have the power to govern the financial and 
operating policies, but where the group does exercise significant influence, are 
considered to be associates. Associates are accounted for in accordance with IAS 
28 Investments in Associates using the equity method. The financial statements 
recognise the group’s share of the net assets of the associate and its share of the 
profits generated by the associate. Where the associate sustains losses and the 
group’s proportion of those losses is higher than its original investment, such 
excess losses are held in a memorandum account rather than being charged to 
the income statement.
Changes in accounting policy and disclosure
The accounting policies adopted are consistent with those of the previous year.
During the year the International Accounting Standards Board (‘IASB’) and the 
International Financial Reporting Interpretations Committee (‘IFRIC’) have issued 
the following standards and interpretations, which are relevant to the group’s 
financial statements, with an effective date relating to the accounting periods 
starting on or after the effective dates referred to below:
Effective date
IFRS 1 and IAS27 Cost of an investment in Subsidiary, jointly 
controlled entity of associate 
1 January 2009
IFRS 2 Amendment to IFRS 2 – Vesting conditions 
and cancellations
1 January 2009
IFRS 3 Business Combinations (revised 
January 2008) 
1 July 2009
IFRS 8
IAS 1 
IAS 23
IAS 27
Operating segments
Presentation of Financial Statements  
(revised December 2007)
Borrowing costs (revised March 2007)
Consolidate and Separate 
Financial Statements  
(revised January 2008)
1 January 2009 
1 January 2009 
1 January 2009
1 July 2009
IAS 32 and  
IAS 1
IAS 39
Financial instruments puttable at fair value  
and obligations arising on liquidation.
Eligible hedged items
Improvement to IFRS
1 January 2009 
1 January 2009
Various effective 
dates
The directors do not anticipate that the adoption of these standards and 
interpretations will have a material impact on the group’s financial statements in 
the period of initial adoption.
Judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make judgements, 
estimates and assumptions that affect the amounts reported for assets and 
liabilities as at the balance sheet date and the amounts reported for revenues and 
expenses during the year. However, the nature of estimation means that actual 
outcomes could differ from those estimates.
In process of applying the group’s accounting policies, management has made the 
following judgements, apart from those involving estimations, which have the 
most significant effect on the amounts recognised in the financial statements:
Operating lease commitments
The group has entered into commercial property leases as a lessee and it obtains 
the use of property, plant and equipment. The classification of such leases  
as operating or finance lease requires the group to determine, based on an 
evaluation of the terms and conditions of the arrangements, whether it retains 
or acquires the significant risk and rewards of ownership of these assets and 
accordingly whether the lease requires an asset and liability to be recognised in 
the balance sheet.
Taxation
The Company and its subsidiaries are subject to routine tax audits and also a 
process whereby tax computations are discussed and agreed with the appropriate 
authorities. Whilst the ultimate outcome of such tax audits and discussions 
cannot be determined with certainty, management estimates the level of 
provisions required for both current and deferred tax on the basis of professional 
advice and the nature of current discussions with the tax authority concerned. Tax 
computations for all periods ending before 31 March 2008 have been agreed with 
the relevant tax authorities.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation 
uncertainly at the balance sheet date, that 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.
a. Impairment of non-financial assets
 The group assesses whether there are any indicators of impairment for all 
non-financial assets at each reporting date. Goodwill and other indefinite life 
intangibles are tested for impairment annually and at other times when such 
indicators exist. Other non-financial assets are tested for impairment when 
there are indications that the carrying amounts may not be recoverable. 
b. Provisions
 The group measures the cost of corporate restructuring using third party 
estimates of future liabilities. Due to the uncertainty of these liabilities such 
estimates are subject to significant uncertainty. The corporate restructuring 
liability at 31 March 2009 is £523,000 (2008: £525,000). The assessment was 
based on observable market data.
c. Interest Rate Swap
 The group measures the cost interest rate swap using third party estimates of future 
liabilities. Due to the uncertainty of these liabilities such estimates are subject to 
significant uncertainty. The interest rate swap liability at 31 March 2009 is £113,000 
(2008: £53,000). The assessment was based on observable market data.
Note 2 continued: Basis of preparation
39 William Ransom & Son plc  |  Annual Report 2009 62
Financial Statements Financial Statements
3. Accounting policies
Foreign currencies
Transactions in foreign currencies are initially recorded in the functional currency 
by applying the spot exchange rate ruling at the date of the transaction. Monetary 
assets and liabilities denominated in foreign currencies are retranslated at 
the functional currency rate of exchange ruling at the balance sheet date. All 
differences are taken to that income statement, except when hedge accounting 
is applied and for differences on monetary assets and liabilities that form part 
of the group’s net investment in a foreign operation. These are taken directly to 
equity until the disposal of the net investment, at which time they are recognised 
in profit or loss.
The assets and liabilities of foreign operations are translated into sterling at 
the rate of exchange ruling at the balance sheet date. Income and expenses are 
translated at weighted average exchange rates for the year. The resulting exchange 
differences are taken directly to a separate component of equity. On disposal of 
a foreign entity, the deferred cumulative amount recognized in equity relating to 
that particular foreign operation is recognised in the income statement.
Non-monetary items that are measured in terms of historical cost in a foreign 
currency are translated using the exchange rates as at the dates of the initial 
transactions. Non-monetary items measured at fair value in a foreign currency 
are translated using the exchange rates at the date when the fair value was 
determined.
The principle exchange rates used were as follows:
US$ Euro
Average for the year ended 31 March 2008 1.998 1.434
Closing rate at 31 March 2008 1.987 1.254
Average for the year ended 31 March 2009 1.729 1.213
Closing rate at 31 March 2009 1.397 1.080
Investment in an associate
The group’s investment in its associate is accounted for using the equity method of 
accounting. An associate is an entity in which the group has significant influence 
and which is neither a subsidiary nor a joint venture.
Under the equity method, the investment in the associate is carried in the balance 
sheet at cost plus post acquisition changes in the group share of net assets of the 
associate. Profits and losses resulting from transactions between the group and 
the associate are eliminated to the extent of the interest in the associate.
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of 
the net identifiable assets of the acquired subsidiary at the date of acquisition. 
Goodwill arising on acquisition of subsidiaries is included in intangible assets. 
Goodwill is tested annually for impairment and carried at cost less accumulated 
impairment losses.
For the purpose of impairment testing, goodwill is allocated to the related  
cash-generating units monitored by management, usually at business segment 
level. Where the recoverable amount of the cash-generating unit is less than 
its carrying amount, including goodwill, an impairment loss is recognised in the 
income statement.
The group has taken advantage of the transition provisions of IFRS 3 Business 
Combinations. Goodwill arising on acquisitions prior to 1 April 2006 was amortised 
in previous periods and was carried in the balance sheet at cost less accumulated 
amortisation. Such goodwill is now carried in the balance sheet at the amortised 
value less any subsequent provision for impairment.
Intangible assets - finite useful life
Patents, licences, and trademarks are accounted for at cost. Where such items 
have a finite useful life they are carried at cost less accumulated amortisation. 
Website development costs are capitalised as an intangible asset when all the 
following conditions are met:
• the website will generate future economic benefits
• the group has the ability to reliably measure the expenditure attributable to the 
website during its development
Other intangible assets are carried at cost less accumulated amortisation and 
accumulated impairment losses. 
Amortisation begins when an asset is available for use and is calculated on a 
straight line basis to allocate the cost of assets over their estimated useful lives 
as follows:
Computer software 3-5 years
Website cost 3 years
Intangible assets - indefinite useful life
Intangible assets that have an indefinite useful life, including trademarks are not 
subject to amortisation and are tested annually for impairment and whenever 
events or circumstances indicate that the carrying amount may not be recoverable. 
Assets that are subject to amortisation are tested for impairment when events or a 
change in circumstance indicates that the carrying amount may not be recoverable. 
An impairment loss is recognised for the amount by which the carrying amount 
exceeds its recoverable amount. The recoverable amount is determined as the 
higher of the asset’s fair value less costs incurred on disposal, and the value of the 
asset in use. For the purpose of assessing impairments, assets are grouped at the 
lowest levels for which there are identifiable cash flows (cash generating units).
The cost of intangible assets acquired in a business combination is the fair value 
of the assets at the date of acquisition. Research and development
Research and development expenditure is recognised as an expense in the period 
in which it is incurred unless it meets the criteria for capitalisation under IAS 38 
Intangible Assets.
Investment property
Investment property, which is property held to earn rentals and/or for capital 
appreciation, is stated at its fair value at the balance sheet date. Gains or losses 
arising from changes in the fair value of investment property are included in the 
income statement for the period in which they arise.
Property plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and 
accumulated impairment losses. Cost comprises the aggregate amount paid and 
the fair value of any other consideration to acquire the asset and includes costs 
directly attributable to making the asset capable of operating as intended. 
Properties are recognised initially at cost and thereafter carried at fair value less 
depreciation and impairment charged subsequent to the date of the revaluation. 
Fair value is based on periodic valuations by an external independent valuer and 
is determined from market-based evidence by appraisal. Valuations are performed 
frequently enough to ensure that the fair value of the revalued asset does not 
differ materially from its carrying amount.
Any revaluation surplus is credited to the revaluation reserve in equity except 
to the extent that it reverses a decrease in the carrying value of the same asset 
previously recognised in the profit or loss, in which case the increase is recognised 
in profit or loss. A revaluation deficit is recognised in profit or loss, except to the 
extent of any existing surplus in respect of that asset in the revaluation reserve.
A transfer is made from the revaluation reserve to retained earnings for the 
difference between depreciation based on the carrying amount of the assets and 
that based on the assets’ original cost. Additionally, accumulated depreciation 
as at the revaluation date is eliminated against the gross carrying amount of 
the asset and the net amount is restated to the revalued amount of the asset. 
Upon disposal any revaluation reserve relating to the particular asset being sold is 
transferred to retained earnings. 
Depreciation is provided on all property, plant and equipment, other than land, on 
a straight-line basis over its expected useful life as follows:
Buildings 25 years
Plant and machinery 3 to 20 years
Motor vehicles 3 to 5 years
Leases
The determination of whether an arrangement is, or contains a lease is based 
on the substance of the arrangement at the inception date, of whether the 
fulfilment of the arrangement is dependant on the use of a specific asset or 
assets, or the arrangement conveys a right to use the asset.
Assets held under finance leases, which transfer to the group substantially all of 
the risks and benefits of ownership are depreciated over their expected useful lives 
on the same basis as owned assets. Lease payments are apportioned between the 
reduction of the lease liability and finance charges in the income statement so 
as to achieve a constant rate of interest on the remaining balance of the liability. 
Finance charges are charged directly through the income statement as borrowing 
costs. Leases where the lessor retains a significant proportion of the risks and 
benefits of ownership of the asset are classified as operating leases and rentals 
payable are charged in the income statement on a straight line basis over the 
lease term.
Inventories
Inventories are stated at the lower of cost and estimated net realisable value. The 
cost of raw materials, consumables and goods for resale is determined on a first-
in first-out basis. The cost of work in progress and finished goods comprises raw 
material purchase cost, direct labour and manufacturing overheads and packing 
material costs, recovered using the group’s standard costing model, based on a 
normal level of activity, excluding borrowing costs. Net realisable value is based 
on the expected sales price less all estimated costs to completion and disposal.
Trade and other receivables
Trade and other receivables are stated at their amortised cost less a provision for 
irrecoverable amounts. Provision is made when there is evidence that the group 
will not be able to recover balances in full. Balances are written off when the 
probability of recovery is assessed as being remote.
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at banks and in 
hand. For the purposes of the consolidated cash flow statement, cash and cash 
equivalents consist of cash and short-term deposits as defined above, net of 
outstanding bank overdrafts.
Taxation
Current tax assets and liabilities are measured at the amount expected to be 
recovered from or paid to the taxation authorities, based on tax rates and laws 
that are enacted or substantively enacted by the balance sheet date. The actual 
tax paid on profits is determined based on tax laws and regulations that differ 
across the jurisdictions in which the group operates. Assumptions are made in 
applying the laws to the taxable profits in any given period. Where the eventual 
tax paid or reclaimed is different to the amounts originally estimated, the 
difference will be charged or credited to the income statement in the period in 
which it is determined.
Note 3 continued: Accounting policies
41 William Ransom & Son plc  |  Annual Report 2009 64
Financial Statements Financial Statements
Full provision is made for deferred tax on temporary differences resulting from 
the carrying value of an asset or liability and its tax base. Deferred tax assets are 
recognised to the extent that it is probable that the deferred tax asset will be 
recovered in the future. 
Assumptions are made as to the recoverability of tax assets especially as to 
whether there will be sufficient future taxable profits in the same jurisdictions to 
fully utilise losses in future years.
Derivative financial instruments
The group uses derivative financial instruments such as forward currency contracts 
and interest rate swaps to hedge its risks associated with foreign currency and 
interest rate fluctuations. Derivatives are carried as assets when the fair value is 
positive and as liabilities when the fair value is negative. While these are economic 
hedges, hedge accounting is not applied.
Trade and other payables
Trade and other payables are stated at amortised cost.
Vacations, holidays and other short term compensated absences
Accumulating compensated absences are those that are carried forward and 
can be used in future periods if the current period’s entitlement is not used in 
full. The group has measured the expected cost of providing for accumulating 
compensated absences at the amount that it expects to pay as a result of the 
unused entitlement that has accumulated at the balance sheet date. The same 
principle has been applied at all reporting dates.
Advertising and promotional activities
The group recognises such expenditure for advertising and promotional activities 
as an asset up to the point at which it has the right to assess to the goods 
purchased or receives the services.
Pension obligations
The group operates defined contribution pension schemes which cover the 
majority of employees. The group has no further payment obligations once the 
contribution has been made. Contributions are accounted for as an employee 
benefit and charged to the income statement when they are contractually due. The 
assets of the scheme are held separately from those of the group in independently 
administered funds.
Provisions
Provisions are recognised when the group has a present obligation (legal 
or constructive) as a result of a past event, it is probable that an outflow of 
resources embodying economic benefits will be required to settle the obligation 
and a reliable estimate can be made of the amount of the obligation. Where the 
group expects some or all of a provision to be reimbursed, for example under an 
insurance contract, the reimbursement is recognised as a separate asset but only 
when the reimbursement is virtually certain. The expense relating to any provision 
is presented in the income statement net of any reimbursement. If the effect of 
the time value of money is material, provisions are discounted using a current pre-
tax rate that reflects, 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 a finance cost.
Share based payments
Share based incentive arrangements are provided to management and certain 
employees. The cost of equity-settled transactions with employees is measured by 
reference to the fair value at the date at which they are granted or the effective 
date of adoption of IFRS 2 Share-based Payments. The cost is recognised as an 
expense over the vesting period, which ends on the date on which the relevant 
employee becomes fully entitled to the award. Fair value is determined using the 
Black-Scholes pricing model. In valuing equity-settled transactions, no account is 
taken of any vesting conditions, other than conditions linked to the price of the 
shares of the Company (market conditions).
No expense is recognised for awards that do not ultimately vest, except for awards 
where vesting is conditional upon a market condition, which are treated as vesting 
irrespective of whether or not the market condition is satisfied, provided that all 
other performance 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, management’s 
best estimate of the achievement or otherwise of non-market conditions, and 
the number of equity instruments that will ultimately vest or in the case of an 
instrument subject to a market 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. 
Where an equity-settled award is cancelled, it is treated as if it had vested on the 
date of cancellation, and any cost not yet recognised in the income statement for 
the award is expensed immediately. Any compensation paid up to the fair value of 
the award at the date of cancellation or settlement is deducted from equity, with 
any excess over fair value being treated as an expense in the income statement.
Revenue recognition
Revenue comprises amounts invoiced for the sale of goods to customers outside 
the group less an appropriate deduction for actual and expected returns and 
discounts and is stated net of Value Added Tax and other sales taxes or duty. 
Revenue comprises sales to third parties at invoiced amounts, with the majority 
of sales being priced ‘ex-works’ . Amounts billed to customers for shipping and 
handling is classed as revenue where the group is responsible for carriage, 
insurance and freight. All shipping and handling costs incurred by the group are 
recognised as operating costs.
Revenue is recognised on individual sales where persuasive evidence exists 
indicating that all of the following criteria have been met:
• the significant risks and rewards of ownership of the product have been 
transferred to the buyer
• neither continuing managerial involvement to the degree usually associated 
with ownership, nor effective control over the goods has been retained
• the amount of revenue can be measured reliably
• it is probable that the economic benefits associated with the sale will flow to 
the group
• the costs incurred or to be incurred regarding the sale can be measured reliably.
Note 3 continued: Accounting policies These conditions are satisfied when title passes to the customer. Where the group 
delivers on a cost, insurance and freight basis, revenue is recognised when the 
product is delivered to the destination specified by the customer, which is typically 
the destination port or the customer’s premises.
Government grants
Government grants are recognised when it is reasonable to expect that the 
grants will be received and when all related conditions have been met, usually on 
submission of a valid claim for payment. Government grants of a revenue nature 
are credited to the income statement so as to match them with the expenditure 
to which they relate.
Finance costs
Borrowings are recognised at fair value less directly attributable transaction costs. 
After initial recognition, interest bearing liabilities are subsequently remeasured 
at amortised cost using the effective interest rate.
Exceptional items
The group presents as exceptional items on the face of the income statement, those 
material items of income and expense which, because of the nature and expected 
infrequency of the events giving rise to them, merit separate presentation to allow 
shareholders to understand better the elements of financial performance in the 
year, to facilitate comparison with prior periods and a better understanding of 
trends in financial performance.
Financial risk management
The group holds financial instruments to finance its operations and to manage the 
currency and interest rate risks that arise from these operations. It is the group’s 
policy that no speculative trading in financial instruments shall be undertaken. 
The group finances its operations through a combination of equity, and debt. The 
main risks arising from the group’s financial instruments are liquidity risk, foreign 
currency risk, interest rate risk, credit and price risk. The group’s approach to 
managing these risks is set out in the Directors’ Report on pages 22 to 25.
Interest bearing loans and borrowings
Obligations for loans, invoice discount facility, overdraft and other borrowings 
are recognised when the group becomes party to the related contracts and 
are measured initially at the fair value of consideration received, less directly 
attributable transaction costs. After initial recognition, interest bearing loans 
and borrowings are subsequently measured at amortised cost using the effective 
interest method. Gains and losses arising on the repurchase, settlement or 
otherwise cancellation of liabilities are recognised respectively in finance revenue 
and finance cost.
4. Segmental information 
For management purposes the group is currently organised into three operating 
divisions and a corporate head office. The three operating divisions are:
 Primary segment
Consumer health Operations located in UK,  
Ireland and Italy
Sale of consumer branded health 
products.
Pharmaceutical Operations located in the UK Manufacture of the group’s own 
MHRA licensed products and licensed 
pharmaceutical and over-the-
counter products for third parties.
Natural products Operations located in the UK Manufacture of botanical extracts 
used as ingredients by the 
pharmaceutical division and sold 
to third parties. Such extracts are 
used both as active pharmaceutical 
ingredients and as nutraceuticals.
These divisions reflect the group’s management and internal reporting structure 
during the year under review.
Year ended
31 March 2009
Consumer 
health
£’000
Pharma-
ceutical
£’000
Natural 
products
£’000
Adjustment &  
eliminations
£’000
Consolidated
£’000
Revenue
Sales to external 
Customer
22,842 7,727 3,011 - 33,580
Inter-segment sales - 1,948 306 (2,254) -
Segment revenue 22,842 9,675 3,317 (2,254) 33,580
Operating results
Segment results 3,060 (1,564) (275) - 1,221
Unallocated expenses (2,889)
Group operating loss (1,668)
Net finance costs (648)
Loss before taxation (2,316)
Tax credit 197
Loss for the year (2,119)
Assets and liabilities
Segment assets 30,915 4,761 3,700 - 39,376
Unallocated assets 236
Total assets 39,612
Segment liabilities 3,190 732 1,522 - 5,444
Unallocated 
liabilities
6,315
11,759
Other segment 
information
Capital expenditure:
Property, plant  
and equipment
21 489 11 7 528
Intangible assets 23 - - - 23
Depreciation and 
amortisation
134 508 281 58 981
Intangibles assets 8 - - 2 10
Amortisation:                  
Write down of  
investment properties 
- - - 60 60
Share based  
payment expense
- - - (5) (5)
Write-off of 
inventories
- 460 190 - 650
Note 3 continued: Accounting policies
43 William Ransom & Son plc  |  Annual Report 2009 66
Financial Statements Financial Statements
Year ended
31 March 2008
Consumer 
health
£’000
Pharma-
ceutical
£’000
Natural 
products
£’000
Adjustment &  
eliminations
£’000
Consolidated
£’000
Revenue
External customer 27,371 4,705 3,048 - 35,124
Inter-segment sales - 2,107 455 (2,562) -
Segment revenue 27,371 6,812 3,503 (2,562) 35,124
Operating results
Segment results (3,584) (1,283) 202 - (4,665)
Unallocated expenses (3,053)
Group operating loss (7,718)
Net finance costs (655)
Loss before taxation (8,373)
Tax credit 1,009
Loss for the year (7,364)
Assets and liabilities
Segment assets 35,738 4,750 4,247 - 44,735
Unallocated assets 460
Total assets 45,195
Segment liabilities 3,774 983 552 - 5,309
Unallocated liabilities 9,866
Total liabilities 15,175
Other segment 
information
Capital expenditure:
Property, plant and 
equipment
110 316 10 7 443
Depreciation and 
amortisation
156 408 286 102 952
Intangibles assets - - - 35 35
Amortisation 38 - - 12 50
Impairment loss 
recognised in profit 
or loss
5,013 - - - 5,013
Write-off of inventories 718 502 65 - 1,285
Impairment of 
receivables
118 21 - - 139
Secondary segment
2009
£’000
2008
£’000
Revenue
United Kingdom 24,052 25,693
Europe, excluding United Kingdom 4,316 4,232
Asia and Middle East 3,838 3,888
Africa 707 96
Australasia 142 483
The Americas 525 732
Group revenue 33,580 35,124
The revenue information above is based on the location of the customer.
2009
£’000
2008
£’000
Non-current assets
United Kingdom 28,557 30,791
Europe excluding United Kingdom 10 51
Group non-current assets 28,567 30,842
The group does not actively manage its business on a geographical basis and 
accordingly does not analyse operating profit on that basis. 
5. Operating loss and auditor’s remuneration
5a. Operating loss
2009
£’000
2008
£’000
Operating loss is state after charging / (crediting):
Depreciation of property, plant and equipment 981 952
Amortisation of intangible assets 10 50
Impairment of intangible assets - 4,445
Research and development costs expensed in the year 22 8
Operating leases – plant & machinery 191 172
Operating leases – land & buildings 626 667
Foreign exchange (220) (91)
Decrease in fair value of investment property 60 -
Cost of inventories recognised as an expense  
(included in cost of sales) including
18,228 18,214
Write-down of inventories to net realisable value 650 1,285
5b. Auditors’ remuneration
The group paid the following amounts to its auditors in respect of the audit of the 
financial statements and for other services provided to the group.
2009
£’000
2008
£’000
Group: audit of the financial statements 91 40
Company: audit of the financial statements 20 20
111 60
Other fees to auditors
Taxation services 62 34
Other assurance services 50 25
223 119
6. Exceptional items
The group has incurred exceptional costs in the year associated with the 
fundamental restructuring of the business and the group financial restructure. 
These costs are analysed as follows:
2009
£’000
2008
£’000
Recognised in loss attributable to  
equity holders of the parent:
Licence impairment – Alateris - 568
Inventory provisions - 1,088
Restructuring – closure of sites - 254
Goodwill impairment - 4,445
Corporate and other restructuring 1,120 1,433
Manufacturing licence loss - 337
Gain on disposal of intangible asset (1,341) -
Finance costs 125 -
Tax impact of exceptional items (148) (1,093)
(244) 7,032
Note 4 continued: Segmental information Corporate and other restructuring
As part of the fundamental restructuring of the business, costs have been incurred 
in restructuring the board, in the provision of interim management resource and 
in recruiting the new management team. 
Gain on disposal of intangible assets
On 15 August 2008 and on 4 December 2008 the company disposed of Pavacol D 
and Radian B for a total of £593,000 and £2,500,000 respectively realising a gain 
on disposal of £1,341,000.
Licence impairment
As part of the strategic review undertaken by the group in June 2008, the 
board negotiated an exit from the contract to distribute Alateris in the United 
Kingdom in August 2008. As a consequence, these financial statements reflect the 
impairment of the licence and the write off of stock.
Inventory provisions
Having concluded the strategic review of product lines, the directors implemented 
a policy of reducing the number of products sold by the consumer healthcare 
division in order to focus the efforts and resources of the group on its core 
profitable stock lines. A specific provision has been established against individual 
stock lines which have been discontinued, to write those lines down to their 
estimated realisable value and to provide for the Alateris stock following the 
decision to discontinue distribution of the product.
Restructuring – closure of sites
The group closed its Sandhurst warehouse and office in December 2007 and 
announced the closure of its Cardiff office in March 2008. This has allowed the 
group to simplify its operation and to develop a centralised organisation based at 
its Hitchin head office. Costs associated with the closures relate to redundancy of 
personnel and termination of the premises leases.
Goodwill impairment
After carefully estimating the carrying value of the goodwill at the balance sheet 
date, the book value was identified as being impaired. Consequently the book 
value of the goodwill was reduced by £4.4m in the year ended March 2008 to 
reflect the carrying value as at the balance sheet date as more fully disclosed in 
note 15.
Manufacturing licence loss
The group has incurred specific costs in relation to the loss of the manufacturer’s 
licence at Witham. These costs include the costs of disposing of inventory, legal 
and consultancy costs incurred in dealing with the MHRA and provision for the 
costs of the product recall incurred by a customer. 
Finance costs
Finance costs in relation to the restructuring of the company and its financing.
7. Staff costs and directors’ emoluments
Staff costs for the group were as follows:
2009
No.
2008
No.
Wages and salaries 5,895 5,890
Social security costs 627 621
Pension costs – defined contribution 178 147
Compensation for loss of office 204 280
6,904 6,938
The average monthly number of employees was as follows:
2009
£’000
2008
£’000
Administration 98 113
Production 106 105
204 218
Directors’ remuneration is disclosed in the Directors’ Remuneration Report on 
pages 28 to 30. 
8. Finance revenue
2009
£’000
2008
£’000
Bank interest receivable 4 14
9. Finance costs
2009
£’000
2008
£’000
Bank loans and overdrafts 429 601
Amortisation of loan cost 22 8
Hire purchase interest payable 16 7
Unrealised loss on interest rate swap 60 53
Cost of refinancing loan 125
Total finance costs 652 669
Note 6 continued: Exceptional items
45 William Ransom & Son plc  |  Annual Report 2009 68
Financial Statements Financial Statements
10. Taxation
The major components of taxation income / (expense) are:
2009
£’000
2008
£’000
Current taxation:
UK corporation tax credit 14 831
Foreign tax - (30)
Current taxation credit 14 801
Adjustments in respect of current taxation of previous year 16 86
Deferred tax:
Relating to origination and reversal of temporary differences 542 122
Charges relating to the change in the tax law (375)
Taxation credit reported in the income statement 197 1,009
Deferred taxation related to items charged  
or credited directly to equity:
Net loss on retranslation of overseas assets - 22
Net gain on revaluation of land and buildings - (52)
Taxation credit reported in equity - (30)
10a. Total taxation reconciliation:
The taxation expense in the income statement for the year is different from the 
standard rate of corporation tax in the United Kingdom of 28% (2008: 30%). The 
differences are reconciled below:
2009
£’000
2008
£’000
Accounting loss before income tax (2,316) (8,373)
The UK statutory income tax rate of 28% (2008:30%) (648) (2,512)
Expenses not deductible for tax purposes (135) 1,410
Adjustments for differences on overseas earnings - (29)
Unrecognised tax losses 590 147
Tax overprovided in previous years (16) (86)
Impact of reduction in future tax rate - (32)
Tax loss on disposal on intangibles assets (355) -
Reversal of tax on industrial buildings allowances 375 -
Prior year adjustment to deferred tax (8) 96
Other differences - (3)
Total tax income reported in the  
consolidated income statement
(197) (1,009)
10b. Unrecognised tax losses 
In addition to tax losses on which a deferred tax asset of £363,000 has been 
recognised the group also has a potential deferred tax asset of £766,000 (2008: 
£342,000) in respect of tax losses carried forward at the balance sheet date. These 
losses are not recognised as the group does not expect to recover these in the 
foreseeable future. 
Within the unrecognised tax losses the group has tax losses which arising in the 
UK of trading losses £1,208,000 (2008: £8,000), non trading losses, £1,269,000 
(2008: £527,000) and capital losses £1,267,000 (2008: Nil). These tax losses 
maybe carried forward indefinitely for offset against future taxable profits. 
10c. Temporary differences associated with group investments 
There are no temporary differences associated with subsidiaries or associates for 
which a deferred tax liability has not been recognised.
11. Earnings per share 
The calculation of earnings per share is based on the profit on ordinary activities 
after taxation and the weighted average number of ordinary shares of the 
company.
2009
No.
2008
No.
Weighted average number of shares:
For basic earnings per share 84,410,207 84,410,207
Outstanding share options - -
For diluted earnings per share 84,410,207 84,410,207
£’000 £’000
Loss attributable to equity holders before exceptional items (2,363) (332)
Exceptional items 244 (7,032)
(2,119) (7,364)
P P
Earnings per share
Basic loss per share (2.51) (8.72)
Diluted loss per share (2.51) (8.72)
Adjusted earnings per share
Basic loss per share (2.80) (0.39)
Diluted loss per share (2.80) (0.39)
The above table shows overall loss per share, and the loss per share adjusted to 
exclude the impact of exceptional costs in the year under review.
12. Dividends
2009
£’000
2008
£’000
Equity dividends on ordinary shares declared  
and paid during the year:
Final dividend paid nil (2008: 1.1p) - 929
The board have indicated that there will be no dividend paid for the year ending 
March 2009. 13. Property, plant and equipment
Land and  
Buildings
£’000
Plant and  
Equipment
£’000
Total
£’000
Cost or Valuation:
At 31 March 2007 and 1 April 2007 - 10,090 10,090
Additions - 443 443 
Revaluation 185 - 185
Disposals - (313) (313)
Transfer to investment property (185) - (185)
At 31 March 2008 and 1 April 2008 - 10,220 10,220
Additions - 528 528
Disposals - (188) (188)
At 31 March 2009 - 10,560 10,560
Depreciation and impairment:
At 1 April 2007 - (4,096) (4,096)
Provided in the year - (952) (952)
Eliminated on disposals - 285 285
At 31 March 2008 and 1 April 2008 - (4,763) (4,763)
Provided in the year - (981) (981)
Eliminated on disposals - 162 162
At 31 March 2009 - (5,582) (5,582)
Net book value:
At 31 March 2009 - 4,978 4,978
At 31 March 2008 - 5,457 5,457
At 1 April 2007 - 5,994 5,994
The carrying value of plant and equipment held under finance leases and hire 
purchase contracts at 31 March 2009 was £493,000 (2008: £122,000). Leased 
assets and assets under hire purchase contracts are pledged as security for the 
related finance lease and hire purchase liabilities.
14. Investment property
2009
£’000
2008
£’000
Fair value 125 185
As a result of the closure of a retail unit on 31 July 2007, the company has 
reviewed the treatment adopted in respect of the unit and has concluded that it 
should be classified as an investment property.
On 6th April 2009 the unit was sold for a total of £125,000 to a third party, 
accordingly the group reflected the fair value of the investment property by 
impairing it to its fair value in the financial year ending 31 March 2009.
15. Intangible assets
Development 
costs
£’000
Patents &  
licences
£’000
Goodwill
£’000
Software
£’000
Total
£’000
Cost:
At 1 April 2007 36 4,382 28,610 179 33,207
Additions - 35 - - 35
At 31 March 2007 and  
1 April 2008
36 4,417 28,610 179 33,242
Additions - - - 26 26
Disposals - (2,214) - - (2,214)
At 31 March 2009 36 2,203 28,610 205 31,054
Depreciation and impairment:
At 31 March 2007 and  
1 April 2007
(36) (824) (1,972) (147) (2,979)
Amortisation during the year - (32) - (18) (50)
Impairment during the year - (568) (4,445) - (5,013)
At 31 March 2008 and  
1 April 2008
(36) (1,424) (6,417) (165) (8,042)
Amortisation during the year - - - (10) (10)
Disposals - 462 - - 462
At 31 March 2009 (36) (962) (6,417) (175) (7,590)
Net book value:
At 31 March 2009 - 1,241 22,193 30 23,464
At 31 March 2008 - 2,993 22,193 14 25,200
At 31 March 2007 - 3,558 26,638 32 30,228
On 15 August 2008 and on 4 December 2008 the company disposed of Pavacol D 
and Radian B for a total of £593,000 and £2,500,000 respectively realising a gain 
on disposal of £1,341,000. 
Patents and licences consist of intangible assets acquired through business 
combinations. These assets have indefinite useful lives, as they relate to the group’s 
marketed brands. Licences have been granted for a minimum of 10 years with the 
option of renewal based on whether the group meets performance targets during 
the initial term. Because similar licences have been successfully renewed in the 
past, the group has concluded that these assets have an indefinite useful life. The 
full cost of the Alateris licence has been provided for in the financial statements 
for the year ended 31 March 08 as a result of the decision to terminate the licence 
agreement taken shortly after 31 March 08. The Alateris contract was terminated 
on 5 August 2008.
After carefully estimating the carrying value of the goodwill at the balance sheet 
date, the book value was identified as representing the carrying value as at the 
balance sheet date. The directors have re-evaluated the financial assumptions 
used and the present value of the cash flow of the cash generating unit.
With effect from 1 April 2006, the date of transition to IFRS, goodwill was no 
longer amortised but is now subject to annual impairment testing. Value in use 
is calculated as the net present value of the projected risk-adjusted cash flows of 
the cash generating unit to which goodwill is allocated. The cash flow projections 
are based on business plans approved by management which cover a period of 
10 years. The discount rate applied may vary depending on the risk profile of the 
asset being valued but is 11% (2008: 12%) which is the group’s average pre-tax 
discount rate derived from a capital asset pricing model.
The directors are of the view that the business plan should reflect a  
10 year forecast due to the fact that the business model is based on a 10 year  
licence period.
47 William Ransom & Son plc  |  Annual Report 2009 70
Financial Statements Financial Statements
The key assumptions for the value in use calculations are those regarding the 
launch dates of products employing these technologies, their long term growth 
rates, the discount rate used and the period over which the cash flows are 
projected. The assumptions made reflect past experience, market research and 
expectations of future market trends. 
Impairment of goodwill and intangibles with indefinite lives
Goodwill acquired through business combinations and patents and licences have 
been allocated for impairment testing purposes to the consumer healthcare cash 
generating unit, which is also a reportable segment. This represents the lowest 
level in the group at which goodwill is monitored for internal management 
purposes. 
The recoverable amount of the consumer healthcare unit has been determined 
based on a value in use calculation using cash flow projections over a period of 
ten years based on the financial forecast approved by the board for the initial 
twelve months period. The discount rate applied to cash flow projections is 11% 
(2008: 12%) and cash flows beyond the two-year forecast are extrapolated using 
a declining growth rate from 5% to 1% (2008: 5% to 1%).
15a. Key assumptions used in value in use calculations
The calculation of value in use for the healthcare division unit is most sensitive to 
the following assumptions:
• Gross margin
• Discount rates
• Growth rate used to extrapolate cash flows beyond the forecast period.
Gross margins are based on average values achieved in the two years preceding 
the start of the budget period. These are increased during the long term forecast 
period as a result of efficiencies achieved during the forecast period.
Discount rates reflect management’s estimate of which is the group’s average  
pre-tax discount rate derived from a capital asset pricing model adjusted to 
current market conditions.
Growth rate estimates are based on published industry research and management 
expectation that the consumer healthcare division will increase its market share 
within the natural health care market as a result of increased penetration with its 
existing and new customers. 
15b. Sensitivity to changes in assumptions
There are reasonable possible changes in key assumptions which could cause the 
carrying value of the unit to exceed its recoverable amount. These are discussed 
below. 
• Gross margin assumptions – a 1.55% reduction in the projected gross margin 
during the forecast period would give a value in use equal to the carrying 
amount.
• Discount rates – a 1.85% increase of the assumed discount rate during the 
projections period would give a value in use equal to the carrying amount.
• Growth rate assumptions – 1.0% reduction in the forecasted growth rate 
during the projection period would give a give a value in use equal to the 
carrying amount.
16. Investments
The table below provides details of all group undertakings.
Directly and indirectly owned:
Name of Company Holding
Proportion of  
voting rights  
and shares held Nature of Business
Health Perception (UK) Limited Ordinary shares 100% Non-trading
Optima Health (Ireland) Limited Ordinary shares 100% Non-trading
Optima Italia s.r.l. Ordinary shares 98% Distribution of 
healthcare products
Optima Healthcare Limited Ordinary shares 100% Non-trading
Optima Health and Nutrition 
Limited
Ordinary shares 100% Non-trading
Arheumacare Limited Ordinary shares 100% Non-trading
Amerigo Limited Ordinary shares 100% Non-trading
Menolife Limited Ordinary shares 100% Non-trading
Kordel Limited Ordinary shares 100% Non-trading
Associate:
Name of Company Holding
Proportion of  
voting rights  
and shares held Nature of Business
Trust William Limited Ordinary shares 50% voting rights 
and 20% shares 
held
Distribution of 
healthcare products
All of the above are incorporated in the United Kingdom, with the exception of 
Optima Health (Ireland) Limited, which is incorporated in Ireland and Optima Italia 
s.r.l, which is incorporated in Italy. Optima Health (Ireland) Limited ceased to trade 
on the 31st March 2008 and its operation were included in that of William Ransom 
& Son plc. Minority interests in view of current year and prior year performance 
are stated at nil value.
During the year ended 31 March 2009 the group’s associate company made a loss 
of £783,000 (2008: £310,000) of which the group’s share was £156,000 (2008: 
£62,000). The group has therefore provided in full for its cost of investment 
in the associate company of £200. The balance of the losses attributable to  
the group are held in a memorandum account and are not reflected in these 
financial statements.
The directors believe that the above investment should be reflected as an 
investment in associate company due to the fact that the directors are not 
involved in the management of the company. As of the date of the accounts, the 
company is in a minority position as there is only one board member representing 
the company. 
17. Inventories
2009
£’000
2008
£’000
Raw materials 2,140 2,894
Finished goods and goods for resale 2,791 3,842
4,931 6,736
Note 15 continued: Intangible assets 18. Trade and other receivables
2009
£’000
2008
£’000
Trade receivables 5,435 6,127
Corporation tax 14 -
Prepayments and accrued income 518 383
Other debtors 103 83
6,070 6,593
Trade receivables are non-interest bearing and are generally on 30-90 day terms.
At 31 March 2009 £3,750,000 (2008: nil) of the company receivables were 
financed by the company UK invoice discount facility.
At 31 March 2009, trade receivables with a nominal value of £315,000 (2008: 
£142,000) were impaired and were fully provided for. The maximum exposure to 
credit risk is the carrying amount.
All provisions for impairment were specific in the year under review. Movements 
in the provision for impairment of receivables were as follows:
Individually impaired:
2009
£’000
2008
£’000
At 1 April 142 127
Charge for the year 201 11
Amounts written off - 139
Unused amounts reversed (28) (135)
At 31 March 315 142
Trade receivables excluding impaired balances are analysed as follows:
Total
£’000
Not  
yet due
£’000
<30  
days
£’000
30-60
days
£’000
Overdue 
60-90  
days
£’000
90–120 
days
£’000
>120 
days
£’000
2009 5,750 4,433 216 366 21 209 505
2008 6,269 4,303 852 305 79 413 317
19. Cash and short-term deposits
2009
£’000
2008
£’000
Cash at bank and in hand 44 1,024
At 31 March 2009, the group had available £1,437,000 (2008: £971,000) of 
undrawn committed borrowing facilities in respect of which all conditions 
precedent had been met. The company banks with Barclays Bank plc, which has a 
‘AA’ counterparty credit risk rating.
For the purpose of the consolidated cash flow statement, cash and cash equivalents 
comprise the following:
2009
£’000
2008
£’000
Cash at bank and in hand 44 1,024
Bank overdraft and invoice discount facility (1,335) (1,971)
(1,291) (947)
20. Trade and other payables (current)
2009
£’000
2008
£’000
Trade payables 4,775 4,132
Other payables 1,848 1,549
Interest payable 15 78
6,638 5,759
Trade payables are non-interest bearing and are settled on an average 60 day 
terms. Other payables are non-interest bearing and have an average term of six 
months. Term loan interest payable is, normally settled quarterly throughout the 
financial year.
21. Financial liabilities
2009
£’000
2008
£’000
Current:
Bank overdraft 94 1,971
Invoice discount facility 1,241 -
Current obligations under finance leases and hire purchase 
contracts
66 51
Current instalments due on bank loans 592 733
1,993 2,755
Non-Current:
Non-current obligations under finance leases and hire purchase 
contracts
175 65
Interest rate swap 113 53
Non-current instalments due on bank loans 1,911 4,929
2,199 5,047
Bank loans:
Bank Loan 2,503 5,662
The bank overdraft is secured by a floating charge over the group’s assets. 
On 26 February 2009 the group restructured its UK banking facilities and replaced 
the majority of its overdraft with an invoice discount facility based on the 
company’s outstanding trade receivables. The UK facility is secured by a fix charge 
over the company's trade receivables and interest is charged at 3.25% above  
base rate. 
The term loan is repayable by installments with the final payment falling due on 
31 March 2013. Interest is charged at 3.75% above 3 month LIBOR. The initial 
costs of establishing the loan facility are being amortised over term of the loan. 
The bank loan balance of £2,625,000 (2008: £5,750,000) is stated net of £123,000 
(2008: £88,000) in this regard. 
In June 2007 the group has taken a £2,000,000 LIBOR interest swap bearing 6.19% 
fixed rate to hedge the group interest rate exposure against its term loan expiring 
in June 2010. As at 31 March 2009 the group provided £113,000 (2008: £53,000) 
for the interest swap liability.
The bank term loan is secured by a cross debenture and guarantee between the 
company, Health Perception (UK) Limited, Optima Healthcare Limited and Optima 
Health (Ireland ) Limited and by a debenture granting fixed and floating security 
over all assets of the company and selected trademarks as agreed with the 
company's lending bank.
49 William Ransom & Son plc  |  Annual Report 2009 72
Financial Statements Financial Statements
72
22. Deferred income tax
The deferred tax included in the financial statements is as follows:
Consolidated balance 
sheet
Consolidated income 
statement
2009
£’000
2008
£’000
2009
£’000
2008
£’000
Deferred income tax:
Accelerated depreciation for tax 
purposes
822 682 140 (32)
Revaluations of investment 
properties to fair value
35 52 (17) -
Tax losses (363) - (363) -
Other short term temporary 
differences
(170) (220) 50 (90)
Exchange reserve movement on 
revaluation of overseas losses
- (22) 22 -
Deferred income tax 324 492 (168) (122)
The increase in the deferred tax liability in respect of accelerated capital 
allowances arises as a result of a reduction in the tax basis of assets following 
the abolition of industrial buildings allowances enacted by the Finance Act 2008. 
23. Commitments and contingencies
Leases:
The group has entered into commercial leases on certain properties, motor vehicles 
and items of machinery. Only the property lease agreements contain an option for 
renewal, with such options being exercisable three to six months before the expiry 
of the lease term at rentals based on market prices at the time of exercise. There 
are no restrictions placed upon the lessee by entering into these leases.
Future minimum rentals payable under non-cancellable operating leases at 31 
March are as follows:
2009
£’000
2008
£’000
Not later than one year 780 534
After one year but not more than five years 2,667 1,771
After five years 3,818 3,572
7,265 5,877
Net obligations under finance leases and hire purchase contracts are secured by a 
fixed charge on the specific asset to which the agreement relates.
Capital commitments
At 31 March 2009, the group had commitments of £33,000 (2008: £216,000) 
principally relating to the acquisition of new machinery.
Guarantee
The company has provided Optima Italia’s lending bank with a letter of support 
up to the value of euro 250,000. The commitment will materialise in the event 
that Optima Italia will not be able to repay its debt to its lending bank and the 
subsidiary lending bank will not be able to collect the outstanding balance of the 
facility from the subsidiary outstanding trade receivables balance.
24. Provisions
Onerous 
leases
£’000
Provision for  
tax penalties
£’000
Corporate 
restructuring 
£’000
Provision  
for claim in 
respect of 
product recall
£’000
Total
£’000
At 1 April 2008 60 100 525 191 876
Arising during the 
year
- - 1,120 - 1,120
Utilised (45) - (1,122) (124) (1,291)
Unused amounts 
reversed
- (100) - - (100)
At 31 March 2009 15 - 523 67 605
At 31 March 2009 15 - 523 67 605
At 31 March 2008 60 100 525 191 876
Onerous leases on closure of sites
The provision reflects the amounts outstanding to the next break point on the 
lease or the expiry date of the lease.
Tax penalties
No tax penalties were levied against the company by HM Revenue and Customs 
following the successful conclusion of tax returns for prior years. 
Corporate restructuring
This provision reflects the cost of residual restructuring of the business committed 
to before 31 March 2009.
Product recall
The company received a claim from a customer in the year ended March 2008 for 
the cost of recalling product as a result of the suspension of the Manufacturer’s 
totalling £230,000. Subsequent to the year ending 2008 the group agreed to settle 
this claim in full £67,000 reflects the amount owed to the claimant at year ending 
2009, and this was fully settled by the end of June 2009. 51 William Ransom & Son plc | Annual Report 2009
25. Financial instruments
An explanation of the group’s financial instrument risk management objectives, 
policies and strategies are set out in the discussion of treasury policies and 
strategies on pages 22-24.
Interest rate maturity profile of financial assets and liabilities
The following table sets out the carrying amount, by maturity of the group’s 
financial instruments that are exposed to interest rate risk.
31 March
2009
<1  
year
£’000
1-2  
years
£’000
2-3  
years
£’000
3-4  
years
£’000
4-5 
years
£’000
>5  
years
£’000 
Total
£’000
Fixed rate:
Obligations under 
finance leases and hire 
purchase contracts
(66) (56) (34) (34) (51) - (241)
Interest rate swap - (113) - - - - (113)
(66) (169) (34) (34) (51) - (354)
Floating rate:
Cash 44 - - - - - 44
Bank overdraft (94) - - - - - (94)
Invoice discount 
facility
(1,241) - - - - - (1,241)
Bank loan (625) (600) (600) (800) - - (2,625)
(1,916) (600) (600) (800) - - (3,916)
31 March
2008
<1  
year
£’000
1-2  
years
£’000
2-3 
years
£’000
3-4 
years
£’000
4-5 
years
£’000
>5  
years
£’000 
Total
£’000
Fixed rate:
Obligations under 
finance leases and hire 
purchase contracts
(51) (42) (23) - - - (116)
Interest rate swap - - (53) - - - (53)
(51) (42) (76) - - - (169)
Floating rate:
Cash 1,024 - - - - - 1,024
Bank overdraft (1,971) - - - - - (1,971)
Bank loan (750) (1,000) (1,000) (1,000) (1,000) (1,000) (5,750)
Bank loan (625) (600) (600) (800) - - (2,625)
(1,697) (1,000) (1,000) (1,000) (1,000) (1,000) (6,697)
Interest on financial instruments, which are classified as floating rate, is re-priced 
at intervals of less than one year. Interest on financial instruments, which are 
classified as fixed rate, is fixed until maturity of the instrument.
Interest rate risk
The group borrows at fixed and floating rates of interest as set out above. For each 
1% increase in interest rates the group would incur an additional £58,000 (2008: 
£161,000) of interest expense over the life of the term loan.
Foreign currency risk
Currency risk is managed by utilisation of a mixture of currency balances in line 
with the group’s trading profile. Approximately 15% of revenue is in US dollars 
or in Euros. Currency exposure on these sales is reduced through purchasing 
materials in Euros. The group does not undertake speculative transactions.
Liquidity risk
The table below summarises the maturity profile of the group’s financial liabilities 
based on contractual undiscounted payments.
On demand
£’000
< 3 
months
£’000
3-12 
months
£’000
1-5 
years
£’000
>5 
years
£’000 
Total
£’000
31 March 2009:
Bank overdraft - - 94 - - 94
Invoice discount facility 212 1,029 1,241
Interest bearing loan - 291 480 2,216 - 2,987
Interest rate swap - - - 113 - 113
Trade and other payables 1,362 4,887 328 52 9 6,638
1,574 5,178 1,931 2,381 9 11,073
31 March 2008:
Bank overdraft 1,713 - - - - 1,971
Interest bearing loan - - 1,084 4,750 1,037 6,871
Interest rate swap - - - 53 - 53
Trade and other payables 2,581 3,171 7 - - 5,759
4,552 3,171 1,091 4,803 1,037 14,654
26. Fair value of financial assets and financial liabilities
Book Value Fair Value
2009
£’000
2008
£’000
2009
£’000
2008
£’000
Financial Assets:
Cash 44 1,024 44 1,024
Financial Liabilities:
Bank overdraft 94 1,971 94 1,971
Invoice discount facility 1,241 - 1,241 -
Bank loan 2,625 5,750 2,625 5,750
Interest rate swap 113 53 113 53
Obligations under finance leases  
and hire purchase contracts
241 116 241 116
27. Authorised and issued share capital
2009
£’000
2008
£’000
Authorised:
112,250,000 ordinary shares of 10p each 11,225 11,225
Allotted and fully paid:
84,435,207 (2008: 84,435,207) ordinary shares of 10p each 8,443 8,443
An explanation of the group’s capital management process and objectives is set 
out in the discussion of capital management on page 16 in the group Operation 
and Financial Review. 74
Financial Statements Financial Statements
28. Share based payments
Share Options Scheme
The company operates a number of share option schemes. Options are granted 
with a fixed exercise price equal to the market price at the date of grant. The 
contractual life of options granted under the schemes is typically 10 years. Granted 
options become exercisable on the third anniversary of the date of grant, subject 
to performance criteria. For options issued prior to March 2008, the performance 
criterion was for growth in total shareholder return to have exceeded the rate of 
inflation plus 3% per annum on a compound basis at the time of exercise. For 
options granted since March 2008, the performance criterion was for growth in 
earnings per share to exceed 5% per annum on a compound basis over the vesting 
period. Exercise of an option is subject to continued employment unless specific 
dispensation is given by the remuneration committee.
Options were valued using the Black-Scholes option pricing model amended to 
account for dividend yield. No performance conditions were included in the fair 
value calculations. The fair value per option granted and the assumptions used in 
the calculations were as follows:
Vesting period 3 years
Expected volatility 7.6%
Option life 10 years
Expected life 7 years
Risk free rate 5.0%
Expected dividends expressed as a dividend yield 3.5%
The above assumptions apply to grants made in previous periods. The expected 
volatility is based on the historic volatility of the company’s share price for the 
year ended 31 March 2007. The expected life is the average expected period to 
exercise. The risk-free rate of return is the yield on ten year UK government gilts 
applicable at the time of option grant. There were no new grants of options in 
the year ended 31 March 2009. Fair values derived using these assumptions are 
as follows:
Grant date
Share price 
at grant date Exercise price
No. of shares  
under option
Fair value  
per option
December 2003 41.5p 41.5p 15,000 4.4p
April 2004 45.0p 45.0p 135,000 4.8p
A reconciliation of option movements over the year to 31 March 2009 is 
given below:
2009 2008
No.
Weighted 
average 
price 
p No.
Weighted 
average  
price 
p
Outstanding at 1 April 451,284 48.4 1,116,284 49.4
Exercised - - (100,000) 45.0
Lapsed (300,000) 40.0 (565,000) 51.1
Outstanding at 31 March 151,284 65.1 451,284 48.4
Exercisable at 31 March 151,284 65.1 151,284 65.1
Long Term Incentive Plan (“LTIP”)
The LTIP allows for awards of ordinary shares to be made to selected employees 
subject to the satisfaction of a performance condition. In order for the shares to 
vest fully at the end of the performance period the percentage growth in total 
shareholder return must equal or exceed the compound percentage growth in RPI 
plus 7% p.a. over a three year period. 
A reconciliation of LTIP movements over the year to 31 March 2009 is given below:
2009
No.
2008
No.
Outstanding at 1 April 70,000 140,000
Lapsed (70,000) (70,000)
Outstanding at 31 March - 70,000
Exercisable at 31 March - -
The William Ransom Share Incentive Plan (“SIP”)
The SIP is an all employee plan approved by the HMRC. The plan allows for 
employees to purchase the company shares at the end of the fiscal year based 
on the average share price during the last five business days prior to the end of 
the fiscal year. In the event that the shares are purchased at a higher price the 
company will pay for the incremental increase in share price. 
29. Reconciliation of movements in equity
Share  
Capital
£’000
Share 
Premium
£’000
Re- 
valuation 
Reserve 
£’000
Share 
based 
payment 
reserve 
£’000
Translation 
reserve
£’000
Retained 
earnings
£’000
Total
£’000
Balance at  
31 March 2007
8,433 21,978 - 7 9 7,672 38,099
Total recognised 
income and 
expense for the 
year ended  
31 March 2008
- - 185 - 36 (7,416) (7,195)
Dividends - - - - - (929) (929)
Proceeds on 
issue of share 
capital
10 35 - - - - 45
Balance at  
31 March 2008
8,443 22,013 185 7 45 (673) 30,020
Total recognised 
income and 
expense for the 
year ended  
31 March 2009
- - - - (43) (2,119) (2,162)
Property 
revaluation
- - (60) - - 60 -
Share based 
payments
- - - (5) - - (5)
Balance at 31 
March 2009
8,443 22,013 125 2 2 (2,732) 27,853 Revaluation reserve
The asset revaluation reserve is used to record increases in the fair value of land 
and buildings and decreases to the extent that they relate to an increase on the 
same asset previously recognised in equity.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences 
arising from the translation of the financial statements of foreign subsidiaries.
30. Analysis of net debt
1 April 
2008
£’000
Cash 
flow 
£’000
Exchange 
differences
£’000
Non-cash 
movements
£’000
31 March 
2009
£’000
Cash and cash equivalents 1,024 (980) - - 44
Loans (5,662) 3,125 - 34 (2,503)
Invoice discount facility - (1,241) - - (1,241)
Bank overdrafts (1,971) 1,886 (9) - (94)
Finance leases (116) (125) - - (241)
Net debt (6,725) 2,665 (9) 34 (4,035)
1 April 
2007
£’000
Cash 
flow 
£’000
Exchange 
differences
£’000
Non-cash 
movements
£’000
31 March 
2008
£’000
Cash and cash equivalents 1,104 (110) 30 - 1,024
Loans (5,179) (500) - 17 (5,662)
Invoice discount facility - - - - -
Bank overdrafts (406) (1,524) (41) - (1,971)
Finance leases (124) (42) - 50 (116)
Net debt (4,605) (2,176) (11) 67 (6,725)
The initial costs of establishing the loan facility are being amortised over term of 
the loan. The bank loan balance of £2,625,000 (2008: £5,750,000) is stated net of 
£123,000 (2008: £88,000) in this regard. 
31. Pensions and other post-retirement benefits
The group operates a number of defined contribution pension schemes. The total 
contributions for the year were £178,000 (2008: £147,000) of which £17,000 
(2008: £5,000) was outstanding at 31 March 2009.
32. Subsequent events
On 5th April 2009, the group sold an investment property for £125,000 to a third 
party. The property is a non strategic asset which was not generating any revenue 
or profits, and was last used as a shop.
On 18th May 2009 the group signed that agreement to dispose of a non core 
asset, the Dara machine, for a total cash consideration of £100,000. The machine, 
which is at the Witham facility, was recently used for the production of the Radian 
B brand which was divested in December 2008.
33. Other related party transactions
Other than inter-company transactions with subsidiaries and the remuneration 
of directors, which is disclosed in the Directors’ Remuneration Report, there were 
no significant transactions with related parties, including associated companies 
during the year.
34. Compensation of key management personnel (including directors)
2009
£’000
2008
£’000
Short-term employee benefits 956 680
Termination benefits 212 280
1,168 960
Note 29 continued: Reconciliation of movements in equity
53 William Ransom & Son plc | Annual Report 2009 Company Accounts
For the year ended 31 March 2009
Prepared in accordance with UK GAAP
76 Statement of Directors' 
Responsibilities in Relation 
to the Parent Company 
Financial Statements
The directors are responsible for 
preparing the Annual Report 
and the financial statements in 
accordance with applicable law 
and regulations.
Company law requires the directors to prepare financial 
statements for each financial year. Under that law the directors 
have elected to prepare the financial statements in accordance 
with United Kingdom Generally Accepted Accounting Practice 
(United Kingdom Accounting Standards and applicable law). The 
financial statements are required by law to 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 these financial 
statements, the directors are required to: 
•	 select suitable accounting policies and then apply them 
consistently;
•	 make judgments 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;
•	 prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the company will 
continue in business.
The directors are responsible for keeping proper accounting 
records that disclose with reasonable accuracy at any time the 
financial position of the company and to enable them to ensure 
that the financial statements comply with the Companies Act 
1985. They are also responsible for safeguarding the assets of the 
company and hence for taking reasonable steps for the prevention 
and detection of fraud and other irregularities.
The directors' are responsible for the maintenance and integrity 
of the corporate and financial information included on the 
company's website. Legislation in the United Kingdom governing 
the preparation and dissemination of financial statements may 
differ from legislation in other jurisdictions.
55 William Ransom & Son plc | Annual Report 2009 78
Financial Statements
Independent Auditor's 
Report to the Members of 
William Ransom & Son Plc
We have audited the parent company financial statements of 
William Ransom & Son plc for the year ended 31 March 2009 
which comprise the Balance Sheet and the related notes. These 
parent company financial statements have been prepared under 
the accounting policies set out therein. 
We have reported separately on the group financial statements of 
William Ransom & Son plc for the year ended 31 March 2009.
This report is made solely to the company's members, as a body, 
in accordance with Section 235 of the Companies Act 1985. 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 auditors
The directors’ responsibilities for preparing the Annual Report 
and the parent company financial statements in accordance with 
applicable United Kingdom law and Accounting Standards (United 
Kingdom Generally Accepted Accounting Practice) are set out in 
the Statement of Directors’ Responsibilities.
Our responsibility is to audit the parent company financial statements 
in accordance with relevant legal and regulatory requirements and 
International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the parent company 
financial statements give a true and fair view and whether 
the parent company financial statements have been properly 
prepared in accordance with the Companies Act 1985. We also 
report to you whether in our opinion the information given in the 
parent company directors' report is consistent with the financial 
statements. The information given in the directors' report includes 
that specific information presented in the Operating and Financial 
Review that is cross referred from the Business Review section of 
the directors' report. 
In addition we report to you if, in our opinion, the company has 
not kept proper accounting records, if we have not received all 
the information and explanations we require for our audit, or if 
information specified by law regarding directors’ remuneration 
and other transactions is not disclosed.
We read other information contained in the Annual Report and 
consider whether it is consistent with the audited parent company 
financial statements. The other information comprises only 
the Directors’ Report, the Director’s Remuneration Report, the 
Chairman’s Statement, the Operating and Financial Review and  
the Corporate Governance Statement. We consider the 
implications for our report if we become aware of any apparent 
misstatements or material inconsistencies with the parent 
company financial statements. Our responsibilities do not extend 
to any other information. Basis of audit opinion
We conducted our audit in accordance with International 
Standards on Auditing (UK and Ireland) issued by the Auditing 
Practices Board. An audit includes examination, on a test basis,  
of evidence relevant to the amounts and disclosures in the parent 
company financial statements. It also includes an assessment  
of the significant estimates and judgments made by the directors 
in the preparation of the parent company financial statements, 
and of whether the accounting policies are appropriate to  
the company’s circumstances, consistently applied and  
adequately disclosed.
We planned and performed our audit so as to obtain all the 
information and explanations which we considered necessary in 
order to provide us with sufficient evidence to give reasonable 
assurance that the parent company financial statements are free 
from material misstatement, whether caused by fraud or other 
irregularity or error. In forming our opinion we also evaluated the 
overall adequacy of the presentation of information in the parent 
company financial statements.
Opinion
In our opinion:
•	 the parent company financial statements give a true and fair 
view, in accordance with United Kingdom Generally Accepted 
Accounting Practice, of the state of the company's affairs as 
at 31 March 2009; and
•	 the parent company financial statements have been properly 
prepared in accordance with the Companies Act 1985; and
•	 the information given in the directors' report is consistent with 
the parent company financial statements.
Emphasis of matter – going concern
In forming our opinion on the financial statements, which is not 
qualified, we have considered the adequacy of the disclosures 
made in note 2 concerning the company's ability to continue 
as a going concern. These conditions indicate the existence of a 
material uncertainty which may cast significant doubt about the 
ability to continue as a going concern. The financial statements do 
not include the adjustments that would result if the company was 
unable to continue as a going concern.
Ernst & Young LLP Registered auditor
Luton | 27 July 2009
Notes:
1. The maintenance and integrity of the William Ransom & Son plc 
web site is the responsibility of the directors; the work carried 
out by the auditors does not involve consideration of these 
matters and, accordingly, the auditors accept no responsibility 
for any changes that may have occurred to the financial 
statements since they were initially presented on the web site.
2. Legislation in the United Kingdom governing the preparation 
and dissemination of financial statements may differ from 
legislation in other jurisdictions.
Independent Auditor's 
Report to the Members of 
William Ransom & Son Plc Contd. 
57 William Ransom & Son plc | Annual Report 2009 80
Financial Statements
Notes
2009
£’000
2008
£’000
Fixed assets
Intangible assets 3 23,210 26,362
Tangible assets 4 4,998 5,413
Investments 5 5,101 5,101
Investment property 6 125 185
33,434 37,061
Current assets
Stocks 7 4,313 6,246
Debtors 8 5,464 6,735
Cash at bank and in hand 44 693
9,821 13,674
Creditors: amounts falling due within one year 9 (13,771) (13,835)
Net liabilities (3,950) (161)
Total assets less current liabilities 29,484 36,900
Creditors: amounts falling due after more than one year 10 (2,199) (4,974)
Provision for liabilities and charges 13 (165) (534)
Net assets 27,120 31,392
Capital and reserves
Called up share capital 14 8,443 8,443
Share premium account 16 22,013 22,013
Profit and loss account 16 (3,463) 744
Revaluation reserve 16 125 185
Share based payment reserve 16 2 7
Equity shareholders’ funds 27,120 31,392
Company Balance Sheet
At 31 March 2009 Notes to the Company 
Financial Statements for 
the Year Ended 31 March 
2009
1. Accounting policies
Basis of preparation
Unless otherwise stated, the financial statements of the parent company are 
prepared under the historical cost convention modified to include the revaluation 
of investment properties and are prepared in accordance with applicable 
accounting standards. 
No profit and loss account is presented by the company as permitted by Section 
230 of the Companies Act 1985 and the company has taken advantage of the 
exemption provided in FRS 1 Cash Flow Statements not to present a cash flow 
statement.
The company has also 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 Instrument Disclosures.
Goodwill
Positive goodwill is the excess of the cost of an acquired entity over the aggregate 
fair values of that entity’s identifiable assets and liabilities. Positive goodwill is 
shown on the balance sheet as an asset and is amortised evenly over its estimated 
useful economic life, up to a presumed maximum of 20 years. In addition to 
systematic amortisation, the book value is written down to recoverable amounts 
when any impairment is identified.
Investment properties
Investment properties are accounted for in accordance with SSAP19 Investment 
Properties. The investment property is revalued annually. The surplus or deficit 
on revaluation is transferred to the revaluation reserve unless a deficit below 
original cost, or its reversal, on an individual investment property is expected to 
be permanent, in which case it is recognised in the profit and loss account for 
the year.
Tangible fixed assets and depreciation
Depreciation is provided evenly on the cost of tangible assets, to write them down 
to their estimated residual values over their expected useful lives. Where there 
is evidence of impairment, fixed assets are written down to their recoverable 
amounts. The principal annual rates of depreciation used are:
Plant and machinery 5% to 33%
Motor vehicles 25%
Websites 33%
Stocks
Stocks are valued at the lower of cost and estimated net realisable value. Cost 
is determined on a first-in first-out basis. The cost of finished goods comprises 
raw material purchase cost, direct labour and manufacturing overheads and 
packing material costs, recovered using the company’s standard costing model. 
Net realisable value is based on the estimated sales price after allowing for all 
further costs of completion and disposal.
Research and development
Development expenditure is written off in the year in which it is incurred.
Patents, licenses, trademarks and know-how
Expenditure on ‘patents, licenses, trademarks and know-how’ is capitalised when 
recoverability can be foreseen with reasonable certainty, and is amortised evenly 
over its estimated useful economic life of a maximum of 20 years. In addition to 
systematic amortisation, the book value is written down to its recoverable amount 
when any impairment is identified.
When healthcare brands are acquired, the company capitalises an appropriate 
amount into ‘patents, licenses, trademarks and know-how’, to the extent that the 
value can be measured reliably on initial recognition. The amount so capitalised 
is based upon the amounts set out as relating to ‘patents, licenses, trademarks 
and know-how’, in the sale and purchase agreement signed with the vendor. The 
remaining amount not relating to tangible assets (such as fixed assets and stock) 
is included within goodwill.
Investment in subsidiaries and associates 
Investment in subsidiaries and associates are accounted for at the lower of cost 
and net realisable value.
Provisions for liabilities
A provision is recognised when the company has a 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.
Provisions for the expected costs of maintenance under guarantees are charged 
against profits when products have been invoiced. The effect of the time value of 
money is not material and therefore the provisions are not discounted.
Derivative financial instruments and hedging
The company uses derivative financial instruments such as interest rate swaps 
to hedge its risks associated with interest rate fluctuations. Such derivative 
financial instruments are initially recognised at fair value on the date on which a 
derivative contract is entered into and are subsequently re-measured at fair value. 
Derivatives are carried as assets when the fair value is positive and as liabilities 
when the fair value is negative.
The fair value of interest rate swap contracts is determined by reference to market 
values for similar instruments.
Contributions to pension funds
The company operates defined contribution pension schemes which cover the 
majority of employees. The assets of the schemes are held separately from those of 
the company in independently administered funds and contributions are charged 
to the profit and loss account when payable.
Deferred taxation
The payment of taxation is deferred or accelerated because of timing differences 
between the treatment of certain items for accounting and taxation purposes. 
Full provision for deferred taxation is made under the liability method, without 
discounting, on all timing differences that have arisen, but not reversed by the 
balance sheet date, unless such provision is not permitted by FRS 19 Deferred 
Taxation. Deferred tax assets are recognised to the extent that it is regarded as 
more likely than not they will be recovered.
59 William Ransom & Son plc | Annual Report 2009 82
Financial Statements Financial Statements
In accordance with FRS 19 deferred tax is not provided for in respect of:
• gains on the sale of non-monetary assets, where on the basis of all available 
evidence it is more likely than not that the taxable gain will be rolled over into 
replacement assets;
• fair value adjustment gains to fixed assets and stock to uplift prices to those 
ruling when an acquisition is made.
Foreign currencies
Transactions in foreign currencies are translated into sterling at the rate of 
exchange ruling at the date of the transaction and monetary assets and liabilities 
denominated in foreign currency are translated at the rate of exchange ruling at 
31 March. All currency differences are taken to the profit and loss account.
Trade and other receivables
Trade receivables, which generally have 30-90 day terms, are recognised and 
carried at the lower of their original invoiced value and the recoverable amount. 
Where the time value of money is material, receivables are carried at amortised 
cost. Provision is made when there is objective evidence that the company will not 
be able to recover balances in full. Balances are written off when the probability 
of recovery is assessed as being remote.
Leased assets
Assets obtained under finance leases and hire purchase contracts are capitalised 
in the balance sheet and are depreciated over their useful lives. The interest 
element of rental obligations is charged to the profit and loss account over the 
period of the lease.
Rentals paid under operating leases are charged to income on a straight line basis 
over the term of the lease.
Incentives, including rent-free periods provided to the company to induce it to 
enter into leasing arrangements, are carried forward and written off in the profit 
and loss account over the life of the relevant lease.
Loan arrangement fees
Costs associated with the arrangement of term loan facilities are carried forward 
and are written off in the profit and loss account over the term of the relevant 
loan.
Share based payments
The company operates a number of share option schemes. The remuneration 
committee can grant either approved or unapproved options over shares in the 
company. Options are granted with a fixed exercise price equal to the market price 
at the date of grant. The contractual life of options granted under the scheme is 
typically 10 years. Options become exercisable on the third anniversary of the date 
of grant, subject to the achievement of performance criteria. Exercise of an option 
is subject to continued employment unless specific dispensation is given by the 
remuneration committee.
2. Staff costs
2009
£’000
2008
£’000
Wages and salaries 5,830 5,795
Social security costs 605 601
Pension costs – defined contribution 178 147
Compensation for loss of office 212 280
6,825 6,823
The average monthly number of employees was as follows:
2009
No.
2008
No.
Administration 96 110
Production 106 102
202 212
3. Intangible assets
Development 
Costs
£’000
Patents and 
licences
£’000
Goodwill
£’000
Total
£’000
Cost:
At 1 April 2008 36 4,417 28,562 33,015
Disposals - (2,214) - (2,214)
At 31 March 2009 36 2,203 28,562 30,801
Depreciation and impairment:
At 1 April 2008 (36) (1,792) (4,825) (6,653)
Amortisation during the year - (155) (1,546) (1,701)
Disposals - 763 - 763
At 31 March 2009 (36) (1,184) (6,371) (7,591)
Net book value:
At 31 March 2009 - 1,019 22,191 23,210
At 31 March 2008 - 2,625 23,737 26,362
4. Tangible assets
Motor 
Vehicles
£’000
Plant and 
Machinery
£’000
Total
£’000
Cost:
At 31 March 2008 57 10,267 10,324
Additions 40 542 582
Disposals (18) (170) (188)
At 31 March 2009 79 10,639 10,718
Depreciation:
At 31 March 2008 (32) (4,879) (4,911)
Provided in the year (24) (946) (970)
Eliminated on disposals 1 160 161
At 31 March 2009 (55) (5,665) (5,720)
Net book value at 31 March 2009 24 4,974 4,998
Net book value at 31 March 2008 25 5,388 5,413
Note 1 continued: Accounting policies 5. Investments 
Shares in subsidiary 
undertakings
£’000
Cost and Net book value as At 31 March 2008 and 31 March 2009 5,101
This includes an investment of £200 in an associate company Trust William Limited. 
The shares in the group undertakings, which are held directly by the company comprise:
Directly owned:
Name of Company Holding
Proportion of  
voting rights  
and shares held Nature of Business
Health Perception (UK) 
Limited
Ordinary shares 100% Non-trading
Optima Health (Ireland) 
Limited
Ordinary shares 100% Non-trading
Optima Italia s.r.l. Ordinary shares 98% Distribution of 
healthcare products
Optima Healthcare 
Limited
Ordinary shares 100% Non-trading
Arheumacare Limited Ordinary shares 100% Non-trading
Kordel Limited Ordinary shares 100% Non-trading
Associate:
Name of Company Holding
Proportion of  
voting rights  
and shares held Nature of Business
Trust William Limited Ordinary shares 50% voting rights and 
20% shares held
Distribution of 
healthcare products
All of the above are incorporated in the United Kingdom, with the exception of 
Optima Health (Ireland) Limited, which is incorporated in Ireland and Optima Italia 
s.r.l, which is incorporated in Italy. On 31st March 2008 the business operations 
of Optima Health (Ireland) Limited were merged into that of William Ransom & 
Son plc.
During the year ended 31 March 2008 the group’s associate company made a loss 
of £783,000 (2008:£310,000) of which the group’s share was £156,000 (2008: 
£62,000). The group has therefore provided in full for its cost of investment in 
the associate company of £200. The balance of the losses attributable to the 
group are held in a memorandum account and are not reflected in these financial 
statements.
6. Investment property
2009
£’000
2008
£’000
Fair value 125 185
As a result of the closure of a retail unit on 31 July 2007, the company has 
reviewed the treatment adopted in respect of the unit and has concluded that it 
should be classified as an investment property
The unit was sold for a value of £125,000 to a third party in May 2009, according 
the group the reflected the market value of the property by devaluing it by £60,000 
in the financial year ending 2009.
7. Stock
2009
£’000
2008
£’000
Raw materials 2,101 2,894
Finished goods and goods for resale 2,212 3,352
4,313 6,246
8. Trade and other receivables
2009
£’000
2008
£’000
Trade receivables 4,705 5,212
Amounts owed by group undertakings 115 1,123
Corporation tax 14 -
Other debtors 74 34
Prepayments and accrued income 556 366
5,464 6,735
Trade receivables are non-interest bearing and are generally on 30-90 day terms. 
At 31 March 2009, trade receivables, with a nominal value of £215,000 (2008: 
£116,000) were impaired and fully provided for.
For the Italy undertaking, which is loss making, the company has provided for the 
trading balances, as it is unlikely in the near future, that subsidiary will be able 
to settle these balances. 
9. Creditors: amounts falling due within one year
2009
£’000
2008
£’000
Bank overdraft 94 1,712
Invoice discount facility 1,029 -
Current instalment due on loans 592 733
Obligations under finance leases and hire purchase contracts 66 37
Trade creditors 4,161 3,985
Amounts owed to group undertakings 5,450 4,955
Corporation tax - 197
Other taxes and social security costs 463 316
Accruals 1,916 1,900
13,771 13,835
10. Creditors amounts falling due after more than one year
2009
£’000
2008
£’000
Loans 1,911 4,876
Interest Swap 113 53
Obligations under finance leases and hire purchase contracts 175 45
2,199 4,974
61 William Ransom & Son plc | Annual Report 2009 84
Financial Statements Financial Statements
11. Loans
Included within creditors are loans which are repayable as follows: 
2009
£’000
2008
£’000
Wholly repayable within five years 2,502 4,664
Not wholly repayable within five years - 998
2,502 5,662
The bank overdraft is secured by a floating charge over the group’s assets. On  
26 February 2009 the company restructured its banking facilities and replaced the 
majority of its overdraft with an invoice discount facility based on the company’s 
outstanding trade receivables. The facility is secured by a fix charge over the 
company's trade receivables and interest is charged at 3.25% above base rate. 
The term loan is repayable by installments with the final payment falling due on  
31 March 2013. Interest is charged at 3.75% above 3 month LIBOR. 
In June 2007 the company has taken a £2m LIBOR interest swap bearing 6.19% 
fixed rate to hedge the group interest rate exposure against its term loan expiring 
in June 2010. As at 31 March 2009 the group £113,000 (2008: £53,000) for the 
interest swap liability.
The initial costs of establishing the loan facility are being amortised over term of 
the loan. The bank loan balance of £2,625,000 (2008: £5,750,000) is stated net of 
£123,000 (2008: £88,000) in this regard. 
The bank term loan is secured by a cross debenture and guarantee between the 
company, Health Perception (UK) Limited, Optima Healthcare Limited and Optima 
Health Limited and by a debenture granting fixed and floating security over all 
assets of the company and selected trademarks as agreed with the company's 
lending bank.
12. Obligations under leases and hire purchase contracts
The annual lease commitments under operating leases are analysed according to 
the period in which each lease expires as follows:
2009
£’000
2008
£’000
Property
Amounts payable:
Leases expiring in one year 23 29
Leases expiring between one and two years - 23
Leases expiring between two and three years - -
Leases expiring after 5 years 642 577
665 629
Motor vehicles, plant and equipment
Amounts payable:
Leases expiring in one year 74 19
Leases expiring between one and two years 21 58
Leases expiring between two and three years 39 29
Leases expiring between three and four years 7 14
Leases expiring between four and five years 7 -
Leases expiring after 5 years - 4
148 124
Net obligations under finance leases and hire purchase contracts are secured by a 
fixed charge on the specific asset to which the agreement relates.
13. Provision for liabilities 
Deferred taxation
2009
£’000
2008
£’000
At 1 April 534 712
Transfer to the profit and loss account (369) (178)
At 31 March 165 534
The amount of provided and unprovided deferred tax is as follows: 
Amounts provided Amounts unprovided
2009
£’000
2008
£’000
2009
£’000
2008
£’000
Accelerated capital allowances 618 681 - -
Losses (363) - 675 (148)
Revaluation of Gatehouse 35 - - -
Other timing differences (125) (147) -
165 534 675 (148)
In addition to tax losses on which a deferred tax asset of £363,000 has been 
recognised the company also has a potential deferred tax asset of £675,000 
(2008:£148,000) in respect of tax losses carried forward at the balance sheet 
date. These losses are not recognised as the company does not expect to recover 
these in the foreseeable future. 
14. Share capital
2009
£’000
2008
£’000
Authorised:
112,250,000 ordinary shares of 10p each 11,225 11,225
Allotted called up and fully paid:
84,435,207 (2008: 84,435,207) ordinary shares of 10p each 8,443 8,443
15. Share based payments
The company operates a number of share option schemes. Options are granted 
with a fixed exercise price equal to the market price at the date of grant. The 
contractual life of options granted under the schemes is typically 10 years. Granted 
options become exercisable on the third anniversary of the date of grant, subject 
to performance criteria. For options issued prior to March 2008, the performance 
criterion was for growth in total shareholder return to have exceeded the rate of 
inflation plus 3% per annum on a compound basis at the time of exercise. For 
options granted since March 2008, the performance criterion was for growth in 
earnings per share to exceed 5% per annum on a compound basis over the vesting 
period. Exercise of an option is subject to continued employment unless specific 
dispensation is given by the remuneration committee.
Options were valued using the Black-Scholes option pricing model amended to 
account for dividend yield. No performance conditions were included in the fair 
value calculations. The fair value per option granted and the assumptions used in 
the calculations were as follows:  Vesting period 3 years
Expected volatility 7.6%
Option life 10 years
Expected life 7 years
Risk free rate 5.0%
Expected dividends expressed as a 
dividend yield
3.5%
The above assumptions apply to grants made in previous periods. The expected 
volatility is based on the historic volatility of the company’s share price for the 
year ended 31 March 2008. The expected life is the average expected period to 
exercise. The risk-free rate of return is the yield on ten year UK government gilts 
applicable at the time of option grant. There were no new grants of options in 
the year ended 31 March 2009. Fair values derived using these assumptions are 
as follows:
Grant date
Share price 
at grant date Exercise price
No. of shares 
under option
Fair value per 
option
December 2003 41.5p 41.5p 15,000 4.4p
April 2004 45.0p 45.0p 135,000 4.8p
A reconciliation of option movements over the year to 31 March 2009 is given below: 
2009 2008
No.
Weighted 
average 
price 
p No.
Weighted 
average  
price 
p
Outstanding at 1 April 451,284 48.4 1,116,284 49.4
Exercised - - (100,000) 45.0
Lapsed (300,000) 40.0 (565,000) 51.1
Outstanding at 31 March 151,284 65.1 451,284 48.4
Exercisable at 31 March 151,284 65.1 151,284 65.1
Long Term Incentive Plan (“LTIP”)
The LTIP allows for awards of ordinary shares to be made to selected employees 
subject to the satisfaction of a performance condition. In order for the shares to 
vest fully at the end of the performance period the percentage growth in total 
shareholder return must equal or exceed the compound percentage growth in RPI 
plus 7% p.a. over a three year period. 
A reconciliation of LTIP movements over the year to 31 March 2009 is given below:
2009
No. No.
Outstanding at 1 April 70,000 140,000
Lapsed (70,000) (70,000)
Outstanding at 31 March - 70,000
Exercisable at 31 March - -
The William Ransom Share Incentive Plan (“SIP”)
The SIP is an all employee plan approved by the HMRC. The plan allows for 
employees to purchase the company shares at the end of the fiscal year based 
on the average share price during the last five business days prior to the end of 
the fiscal year. In the event that the shares are purchased at a higher price the 
company will pay for the incremental increase in share price.  
16. Reserves
Share 
Capital
£’000
Share 
Premium
£’000
Reval’n 
Reserve 
£’000
Share 
based 
payment 
reserve 
£’000
Retained 
earnings
£’000 
Total
£’000
At 1 April 2007 8,433 21,978 - 7 6,165 36,583
Retained loss for the year ended 
31 March 2008
- - - - (4,492) (4,492) 
Dividends - - - - (929) (929)
Property revaluation - - 185 - - 185
Proceeds on issue of share 
capital
10 35 - - - 45
Balance at 31 March and 1 
April 2008
8,443 22,013 185 7 744 31,392
Property revaluation - - (60) - 60 -
Retained loss for the year ended 
31 March 2009 
- - - (5) (4,267) (4,272)
Balance at 31 March 2009 8,443 22,013 125 2 (3,463) 27,120
17. Reconciliation of movements in shareholders’ funds
2009
£’000
2008
£’000
Loss for the financial year (4,267) (4,492)
Dividends - (929)
Net proceeds of share issue - 45
Revaluation Reserve - 185
Share-based payment (5) -
Decrease in shareholders’ funds (4,272) (5,191)
Opening shareholders’ funds 31,392 36,583
Closing shareholders’ fund 27,120 31,392
18. Commitments and contingencies
At 31 March 2009, the company had commitments of £33,000 (2008: £216,000) 
principally relating to the acquisition of new machinery. 
The company has provided Optima Italia’s lending bank with a letter of support 
up to the value of euro 250,000. The commitment will materialise in the event 
that Optima Italia will not be able to repay its debt to its lending bank and the 
subsidiary lending bank will not be able to collect the outstanding balance of the 
facility from the subsidiary outstanding trade receivables balance.
19. Auditors’ remuneration
The company paid £20,000 (2008: £20,000) in respect of the audit of the 
financial statements of the company.
20. Loss attributable to members of the parent company
The losses dealt with in the financial statements of the parent company are 
£4,267,000 (2008: £4,492,000).
Note 15 continued: Share based payments
63 William Ransom & Son plc | Annual Report 2009 86
Directors, Officers and Advisors
Directors D Suddens    Non-executive Chairman
 I Harrison     Chief Executive 
 T Bridge    Senior Independent Non-executive Director
Secretary    I Harrison
Registered office Alexander House
 40a Wilbury Way 
 Hitchin 
 Hertfordshire 
 SG4 0AP
Registered number    126138
Telephone    +44 (0)1462 437615
Fax    +44 (0)1462 420528
E Mail   info@williamransom.com
Web site   www.williamransom.com
Auditors    Ernst & Young LLP
Bankers    Barclays Bank plc
Stockbroker and Nominated Advisor     Numis Securities Limited
Public Relations      Buchanan Communications Limited
Registrars and Transfer Office Capita Registrars Limited
 Northern House 
 Woodsome Park 
 Fenay Bridge 
 Huddersfield 
 West Yorkshire 
 HD8 0LA  William Ransom & Son plc
Alexander House, 40A Wilbury Way, Hitchin, Hertfordshire SG4 0AP, UK
T +44 (0)1462 437615  F +44 (0)1462 420528  E info@williamransom.com  www.williamransom.com
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