Adoption of IFRS
13 Septembre 2005 - 9:00AM
UK Regulatory
RNS Number:1567R
Chelford Group PLC
13 September 2005
FOR IMMEDIATE RELEASE 13 September 2005
Chelford Group plc
PREPARATIONS COMPLETED FOR ADOPTION OF IFRS
Chelford Group plc, ("Chelford"), the IT supply chain software/services and SAP
solutions group has taken the option for early adoption of IFRS for the
financial year ended 31 December 2005.
Chelford has finalised its preparations to adopt International Financial
Reporting Standards (IFRS) and announces the impact of IFRS on the reported
results of the Group.
Key points
* 2004 basic and fully diluted earnings per share increased by 10.96p,
from 3.72p reported under UK GAAP, to 14.68p under IFRS.
* Shareholders' funds at 31 December 2004 increased to #8,401,000, from
#7,675,000 as previously reported. This has arisen from the application of
IFRS 3 'Business combinations' and also the concession under IFRS 1 'First
time adoption' with regards to goodwill amortisation.
* No effect on the Group's trading cash flows.
* No effect on the Group's management of its businesses.
To date, Chelford has prepared its financial statements in compliance with UK
Generally Accepted Accounting Principles (UK GAAP). European Union (EU)
regulations allow the Group to adopt IFRS (which include International
Accounting Standards (IAS)) in its financial statements from 2005, the first set
of such accounts being for the year ending 31 December 2005. Such adoption
requires the results for the year to 31 December 2004 to be restated so as to
provide an appropriate comparative set of results.
A summarised analysis of the main aspects of IFRS that impact on the financial
statements of the Group is set out on pages 2 to 3. In addition a set of
restated 2004 financial statements, excluding detailed notes, are set out on
pages 4 to 6 of this release, together with a summarised re-statement of
accounting policies under IFRS in Appendix 1.
Restatements of the Group's 2004 results are unaudited, but the Group's
auditors, KPMG Audit Plc, have agreed the principles that have been adopted by
the Group.
About Chelford
Chelford Group plc is based in Basingstoke, Hampshire, and its shares are quoted
on AIM (stock code: CHR). Chelford now has three principal operating divisions.
SSI is a developer and vendor of supply chain solutions based on its TROPOS
product suite which is sold mainly to mid-sized corporate customers. Chelford
SAP Solutions is a SAP solutions provider to the mid-market. Agility Systems is
a supplier of supply chain execution and RFID solutions to the consumer products
and transport and logistics markets.
For further information, please contact:
Martin Anderson, Finance Director 01256-685400
Steve Liebmann or Susan Scott at Bankside 020-7367-8888
PRINCIPAL AREAS THAT AFFECT THE FINANCIAL STATEMENTS OF THE GROUP
1. Amortisation of purchased goodwill
UK GAAP: Goodwill was amortised over a period of 10 years and was subject to
testing for impairment when circumstances indicated that the carrying value may
not be recoverable.
IFRS (as required by IFRS 3 and also by concession under IFRS 1): Goodwill is
not amortised but is tested annually for impairment. This applies to all
goodwill arising on acquisitions after 1 January 2004. IFRS 1 'First time
adoption of IFRS' permits goodwill on acquisitions made before this date to be
brought on to the balance sheet at 1 January 2004 at its carrying value under UK
GAAP.
Accounting impact in 2004:
* Income statement: Profit before tax increased by #726,000 in 2004,
being the amount amortised in 2004 under UK GAAP.
* Balance sheet: an increase to shareholders' funds of #726,000, as
purchased goodwill remains at its 1 January 2004 carrying value.
2. Other adjustments
Small adjustments have also been made to reflect certain IFRS reclassifications
in the income statement and balance sheet.
SUMMARISED RECONCILIATIONS FROM UK GAAP TO IFRS
1. 2004 income statement
Profit after tax under UK GAAP #246,000
Goodwill amortisation #726,000
--------
Profit for the period under IFRS #972,000
--------
2. 2004 net assets
Net assets at 31 December 2004 #7,675,000
Goodwill amortisation #726,000
----------
Net assets under IFRS #8,401,000
----------
3. 2003 net assets
The 2003 net assets under UK GAAP are the same as the net assets under IFRS of
#7,429,000. There are no IFRS adjustments that impact the 2003 net assets as
reported under UK GAAP.
Basis of preparation
The financial information has been prepared in accordance with IFRS expected to
be adopted by the EU at 31 December 2005. These standards are still subject to
change. The accounting policies applied are set out in Appendix 1.
Transitional arrangements
The rules for first time adoption of IFRS are set out in IFRS 1. In general a
company is required to determine its IFRS accounting policies and apply these
retrospectively to determine its opening balance sheet under IFRS. IFRS 1 allows
a number of exceptions to this general requirement. The accounting for goodwill
has already been noted above.
Presentation of Financial Statements
The Group's financial statements have been presented in accordance with IAS 1
Presentation of financial statements. The format of the balance sheet has been
amended to include items required by IAS 1 to be presented on the face of the
balance sheet. Appendix 2 includes reconciliations from UK GAAP formats to IFRS
format. The IFRS adjustment referred to above is then applied to these revised
formats.
Interim results
Chelford will report its interim results for the six months to 30 June 2005
under IFRS on 20 September 2005.
Consolidated Income Statement
for the year ended 31 December 2004
2004
#000
Revenue 11,852
Cost of sales (6,491)
-------
Gross Profit 5,361
Administrative expenses (4,402)
Operating profit before financing income 959
------
Interest receivable and similar income 49
------
Profit before tax 1,008
Income tax charge (36)
------
Profit for the period 972
======
Basic and Fully Diluted Earnings per share 14.68p
======
Consolidated Balance Sheet
At 31 December 2004
2004 2003
#000 #000 #000 #000
Non-current assets
Intangible assets 5,207 5,207
Property, plant and equipment 431 472
-------- -------
5,638 5,679
Current assets
Trade and other receivables 3,849 3,842
Cash at bank and in hand 2,078 1,352
------- -------
5,927 5,194
Current liabilities
Trade and other payables (3,138) (3,444)
Income tax payable (26) -
------- -------
Net current assets 2,763 1,750
-------- -------
Net assets 8,401 7,429
======== =======
Capital and reserves
Called up share capital 6,622 6,622
Share premium 2,612 10,879
Profit and loss account (833) (10,072)
-------- -------
Shareholders' funds - equity 8,401 7,429
======== =======
Consolidated statement of cash flow under indirect method
For the year ended 31 December 2004
2004
#000 #000
Reconciliation of profit for the period to net cash flow
from operating activities
Profit for the period 972
Depreciation 165
Movement in trade and other receivables (12)
Movement in trade and other payables (308)
Income tax 36
Interest income (49)
------
Net cash inflow from operating activities 804
Cash flow from financing activities
Interested received 46
------
Net cash from financing activities 46
Cash flow from investing activities
Purchase of fixed assets (124)
------
Net cash from investing activities (124)
------
Increase in cash and equivalents 726
======
Appendix 1 - Accounting Policies
This appendix provides a summary of Chelford's accounting policies under IFRS.
Basis of accounting
The restated financial information for the transition to IFRS at 1 January 2004,
the six months ended 30 June 2004 and the year ended 31 December 2004 has been
prepared in accordance with International Accounting Standards (IAS) and
International Financial Reporting Standards (IFRS) issued by the International
Accounting Standards Board and expected to be endorsed by the EU and effective
at 31 December 2005.
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets, liabilities, income and
expenses. The estimates and assumptions are based on historical experience and
other factors considered reasonable at the time, but actual results may differ
from these estimates. Revisions to these estimates are made in the period in
which they are recognised.
Basis of consolidation
The consolidated financial statements include the financial statements of the
company and its subsidiary undertakings. The acquisition method of accounting
has been adopted. Under this method, the results of subsidiary undertakings
acquired or disposed of in the year are included in the consolidated income
statement from the date of acquisition or up to the date of disposal.
A subsidiary is a company in controlled directly or indirectly by the Group.
Control is the power to govern the financial and operating policies of the
company so as to obtain benefits from its activities.
Intra-group balances arising from intra-group transactions are eliminated in
preparing the consolidated financial statements.
In the company's financial statements, investments in subsidiary undertakings
are stated at cost less provision for impairment.
Business combinations and goodwill
Goodwill represents the excess of the fair value of the purchase consideration
for the interests in subsidiary and joint venture undertakings over the fair
value to the Group of the net assets and any contingent liabilities acquired.
Goodwill arising on acquisitions is capitalised and subject to impairment
review, both annually and when there are indications that the carrying value may
not be recoverable.
Prior to 1 January 1998 goodwill was written off to reserves in the year of
acquisition.
Goodwill arising since 1 January 1998 until 31 December 2003 was amortised over
its estimated useful life. In addition, annual impairment test were performed.
Under IFRS such amortisation ceased on 31 December 2003. From 1 January 2004, it
will be subject to impairment reviews as above.
Revenue
The group recognises revenue generated from the development, delivery and
support of Supply Chain and Collaborative Commerce solutions to contractually
bound third party customers.
Revenue attributable to the supply of software licenses and the delivery of the
system is recognised upon delivery of the software to the buyer.
Consultancy income is recognised based on the terms of the contract, which means
when the company has fulfilled its obligations under the contract and earned the
right to receive consideration.
Revenue attributable to the maintenance and support of the system is invoiced in
accordance with the contract terms and recognised on a straight-line basis over
the support period.
No revenue is recognised if there are significant uncertainties regarding
recovery of the consideration due, associated costs or the possible return of
goods and services and also continuing management involvement with the goods and
services.
Research and development
Research and development and related product development costs are charged to
the income statement in the year in which they are incurred unless they are
specifically chargeable to and recoverable from customers under agreed contract
terms or the expenditure meets the criteria for capitalisation.
Where the expenditure meets the criteria for capitalisation set out in IAS 38
'Intangible assets', development costs are capitalised and amortised over their
useful economic lives, to a maximum of five years. Such intangible assets are
assessed for impairment annually and any impairment is charged to the income
statement.
Share-based payments
The fair value of employee share options plans is calculated using an
option-pricing model. The resulting cost is charged to the income statement over
the vesting period of the plans.
In accordance with IFRS 2 Share-based payments, for any plans with non-market
based performance criteria, the value of the charge is adjusted to reflect
expected and actual levels of options vesting.
Post-retirement benefits
The Group accounts for pensions and post-retirement benefits under IAS 19
Employee benefits.
The Group operates a defined contribution pension scheme. The assets of the
scheme are held separately from those of the group in an independently
administered fund. The amount charged against profits represents the
contributions payable to the scheme in respect of the accounting period.
Foreign currencies
Transactions in foreign currencies are recorded using the rate of exchange
ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated using the exchange rate ruling
at the balance sheet date and the gains or losses on translation are included in
the profit and loss account.
Interest
Interest receivable is recognised in the income statement using the effective
interest method as defined in IAS 39 Financial instruments: recognition and
measurement.
Taxation
Provision for taxation is made at the current rate and for deferred taxation at
the tax rate expected to apply on all temporary differences between the
treatment of certain items for taxation and for accounting purposes.
Leases
Assets held under finance leases are capitalised and included in property, plant
and equipment at fair value. Depreciation is provided in accordance with the
Group's depreciation policy. The capital elements of obligations under finance
leases are recorded as liabilities. The interest elements of the rental
obligation are allocated to accounting periods over the lease term to give a
constant periodic rate of interest on the outstanding liability.
Rentals payable under operating leases are charged to the income statement on an
accruals basis.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and any provision for impairments in value.
Depreciation is provided to write off cost less the estimated residual value of
property, plant and equipment by equal instalments over their estimated useful
economic lives as follows:
Computer equipment 3-6 years
Plant and machinery 3-6 years
Motor vehicles 4 years
Leasehold improvements 15 years
Office furniture 5 years
The directors regularly consider the carrying value of property, plant and
equipment for impairment. Any reduction in value arising from the impairment of
the property, plant and equipment is charged to the income statement for the
year.
IFRS transitional arrangements
When preparing the Group's IFRS balance sheet at 1 January 2004, the date of
transition, the following optional exemptions, provided by IFRS 1 First-time
adoption of International Financial Reporting Standards from full retrospective
application of IFRS accounting policies, have been adopted:
* Business combinations - the provisions of IFRS 3 have been
applied from 1 January 2004. The net carrying value of goodwill at 31 December
2003 under the previous accounting policies has been deemed to be the cost at 1
January 2004;
* Share based payments - the provisions of IFRS 2 have not been
applied to equity instruments that were granted after 7 November 2002 and vested
before 1 January 2005.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCILFFEASIFLIE
Chelford (LSE:CHR)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
Chelford (LSE:CHR)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024
