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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report: January 24, 1995
(Date of earliest event reported)
BROWNING-FERRIS INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
Commission file number 1-6805
Delaware 74-1673682
(State of Incorporation) (I.R.S. Employer Identification No.)
757 N. Eldridge
Houston, Texas 77079
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (713) 870-8100
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Item 2. Acquisition or Disposition of Assets.
On September 20, 1994, BFI Acquisitions plc ("BFI (UK)"), a
company incorporated in England and an indirect wholly-owned
subsidiary of Browning-Ferris Industries, Inc, a Delaware
corporation (the "Registrant"), announced that it would make a
tender offer to purchase all of the outstanding ordinary shares,
par value 5 pence per share ("Ordinary Shares"), including
Ordinary Shares represented by American Depositary Receipts
("ADRs"), of Attwoods plc, a public limited company incorporated
in England ("Attwoods"), and all of the outstanding 8.5 pence
guaranteed redeemable convertible preference shares, par value 5
pence per share ("Preference Shares"), of Attwoods (Finance)
N.V., a finance subsidiary of Attwoods. BFI (UK) also announced
that it had entered into agreements with Laidlaw Inc.("Laidlaw"),
which included an option to purchase 84,270,906 Ordinary Shares
(representing approximately 29.8% of the outstanding Ordinary
Shares) for 109 pence per share and 47,856,351 Preference Shares
(representing approximately 72.9% of the outstanding Preference
Shares) for 85 pence per share. The offers were made on October
3, 1994, and subsequently revised on November 17, 1994. The
final offer ("Ordinary Offer") for the Ordinary Shares (including
ADRs) consisted of 116.75 pence per Ordinary Share (583.75 pence
per ADR) plus a pro rata entitlement to 80% of the Net Proceeds
(as defined) in excess of $56.8 million arising from the sale of
the portable sanitation and accommodation business of Attwoods in
continental Europe, primarily Germany. In addition, holders of
Ordinary Shares (including Ordinary Shares represented by ADRs)
were entitled to receive the final dividend of 3.25 pence per
share paid on February 1, 1995. The final offer ("Preference
Offer") for the Preference Shares was 92 pence per share. The
offers were subject to satisfaction of various conditions,
including acceptance of the offers by the holders of at least 50%
of the Ordinary Shares and 50% of the Preference Shares.
On December 2, 1994, BFI (UK) announced that all conditions to
the offers had been satisfied and that holders of 160,015,096
Ordinary Shares (representing approximately 56.55% of the
outstanding Ordinary Shares) and 53,031,507 Preference Shares
(representing approximately 80.77% of the outstanding Preference
Shares) had accepted the offers. BFI (UK) purchased such shares
and extended the offers. The Preference Offer was terminated on
January 11, 1995, at which time BFI (UK) had purchased 54,693,403
Preference Shares (approximately 83.3% of the outstanding
Preference Shares). The Ordinary Offer has been extended to
March 23, 1995.
On January 24, 1995, BFI (UK) initiated the compulsory
acquisition process under the Companies Act 1985 of the U.K.,
pursuant to which BFI (UK) can compel the holders of the
outstanding Ordinary Shares to sell such shares to BFI (UK)
pursuant to the terms of the Ordinary Offer. On February 1,
1995, BFI (UK) caused Attwoods (Finance) N.V. to give notice of
the redemption of the remaining outstanding Preference Shares as
of March 1, 1995. As of January 25, 1995, BFI (UK) had acquired
277,818,994 Ordinary Shares (approximately 98.06% of the
outstanding Ordinary Shares) and 54,693,403 Preference Shares
(approximately 83.3% of the outstanding Preference Shares). Upon
completion of the compulsory acquisition of the remaining
outstanding Ordinary Shares and the redemption of the remaining
outstanding Preference Shares, the aggregate acquisition price
will be approximately $612 million (including purchases in pounds
converted at exchange rates prevailing on December 31, 1994 of $1.565 dollars
per pound), not including any expenses incurred in connection with
the offers.
Financing for the purchase of the Ordinary Shares and the
Preference Shares has been provided by a consortium of banks
pursuant to a credit agreement with BFI (UK), the Registrant, and
other subsidiaries of the Registrant. Credit Suisse has acted as
the Arranging Bank for the banks under the Credit Agreement.
Attwoods is a provider of waste management services in the United
States, the United Kingdom and Europe, including collection,
transportation, recycling, and disposal of commercial, municipal
and residential solid waste. In addition, Attwoods has mineral
extraction operations in the United Kingdom.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Following are the consolidated financial statements of Attwoods plc,
including the related notes and other information, derived from its
1994 Annual Report to Shareholders.
Index of Financial Information
FOR INFORMATION ONLY
Consolidated Profit and Loss Account stated in US dollars
Consolidated Balance Sheet stated in US dollars
STATUTORY INFORMATION
Extract from the Report of the Directors
Report of the Auditors
Consolidated Profit and Loss Account
Consolidated Statement of Total Recognised Gains and Losses
Consolidated Statement of Movements in Equity Shareholders' Fund
Consolidated Balance Sheet
Company Balance Sheet
Consolidated Cash Flow Statement
Statement of Accounting Policies
Notes to the Accounts
Five Year Financial Record
Consolidated Profit and Loss Account
For the year ended 31 July 1994
STATED IN US DOLLARS
Discon-
Continuing tinued
operations operations
31 July 31 July 31 July 31 July 31 July
1994 1994 1994 1993 1992
$'000 $'000 $'000 $'000 $'000
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Revenues 546,031 28,458 574,489 652,418 608,236
Direct expenses (410,873) (30,940) (441,813) (513,788) (462,892)
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Gross income/(loss) 135,158 (2,482) 132,676 138,630 145,344
Exceptional items (18,585) 4,633 (13,952) (3,200) (9,457)
Other SG & A expenses (88,112) (2,151) (90,263) (88,710) (80,153)
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Operating income 28,461 --- 28,461 46,720 55,734
Other income/(expense) 340 (1,531) (1,191) 13,305 1,005
Loss on sale of business --- (127,315) (127,315) --- ---
Release of provision/ --- 130,977 130,977 (134,992) ---
(provision for loss
on sale of business)
(Loss)/income on disposal (842) (827) (1,669) 4,071 2,542
of fixed assets
Loss from interests in (2,161) (17) (2,178) (2,387) (944)
associated undertakings
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Income/(loss) on ordinary 25,798 1,287 27,085 (73,283) 58,337
activities before interest
Guaranteed redeemable (7,643) --- (7,643) (8,146) (9,211)
convertible preference
stock interest
Other net interest (4,446) (789) (5,235) (7,709) (4,343)
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Income/(loss) on ordinary 13,709 498 14,207 (89,138) 44,783
activities before taxes
Taxes on income/(loss) (5,161) --- (5,161) (13,710) (13,952)
on ordinary activities
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Income/(loss) on ordinary 8,548 498 9,046 (102,848) 30,831
activities after taxes
Minority equity interests (913) --- (913) (573) 9
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Net income/(loss) 7,635 498 8,133 (103,421) 30,840
Ordinary dividends paid (21,243) --- (21,243) (22,477) (25,173)
and proposed
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Retained (loss)/income (13,608) 498 (13,110) (125,898) 5,667
for the financial year
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Basic earnings/(loss) $0.13 $0.14 $(1.83) $0.61
per ADS
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Normalised earnings per
ADS from continuing $0.39 $0.65 $0.84
operations
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Each American Depositary Share (ADS) represents five ordinary shares.
ADSs are evidenced by American Deposity Receipts (ADRs).
The above represents the Group consolidated profit and loss accounts as set
out in the Consolidated Profit and Loss Account stated in Pounds, prepared
using UK GAAP.
The continuing operations have been translated at the average rate for the
year of $1.4995 (1993 - $1.5914, 1992 - $1.7844).
The discontinued operations have been translated at the average rate up
and until disposal of $1.4898 (1993 - $1.5914, except for the disposal
provision which was translated at the 1993 year and rate of $1.4830).
Consolidated Balance Sheet
At 31 July 1994
STATED IN US DOLLARS 31 July 31 July 31 July
1994 1993 1992
$'000 $'000 $'000
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Fixed assets
Tangible assets 368,090 421,945 446,402
Investments 46,795 47,312 55,039
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414,885 469,257 501,441
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Current assets
Inventory 10,099 101,109 88,315
Receivables 117,209 117,600 114,640
Investments 57 55 69
Cash at bank and in hand 4,471 18,259 64,749
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131,836 237,023 267,773
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Payables (amounts falling due
within one year)
Debt finance (12,435) (40,683) (39,982)
Trade and other payables (113,618) (120,179) (127,000)
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(126,053) (160,862) (166,982)
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Net current assets 5,783 76,161 100,791
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Total assets less current 420,668 545,418 602,232
liabilities
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Payables (amounts falling due
after more than one year)
Debt finance (145,743) (162,670) (169,745)
Guaranteed redeemable convertible
preference stock (110,794) (107,633) (140,602)
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(256,537) (270,303) (310,347)
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Provisions for liabilities
and charges
Deferred tax (16,453) (22,429) (29,733)
Other provisions -- (90,785) --
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(16,453) (113,214) (29,733)
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147,678 161,901 262,152
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Equity stockholders' funds - gross 426,016 426,236 658,646
Goodwill written off (279,634) (265,640) (398,221)
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Equity stockholders' funds - net 146,382 160,596 260,425
Minority equity interests 1,296 1,305 1,727
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147,678 161,901 262,152
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The above represents the Group consolidated balance sheet as
set out in the Consolidated Balance Sheet stated in Pounds translated at the
year-end rate of $1.5366
(1993 - $1.4830, 1992 - $1.9250).
Extract from the Report of the Directors
For the year ended 31 July 1994
PRINCIPAL ACTIVITIES AND GROUP STRUCTURE
The principal activities of the Group comprise waste management services in
the United Kingdom, the United States of America, the Caribbean, Latin
America, the Middle East and Mainland Europe and mineral extraction in the
United Kingdom. Until 29 October 1993 the Group was also engaged in
recyclables processing in the United States. This business was discontinued
from that date. The principal subsidiary companies are set out in note 8 of
the Notes to the Accounts.
POST BALANCE SHEET EVENTS
On 20 September 1994, Browning-Ferris Industries Inc. announced its intention
to make an offer to the ordinary and preference shareholders of Attwoods plc
and Attwoods (Finance) NV, respectively. Your Board believes that this offer
is not in the best interests of the Company or its shareholders.
SHARE CAPITAL
The authorised share capital of the Company is 19,000,000 Pounds.
Movements in the issued share capital of the Company since 1 August 1991
are set out in note 20 of the Notes to the Accounts.
ACQUISITIONS AND DISPOSALS
Details of the Group's acquisitions and disposals during the course of the
year are set out in note 23 of the Notes to the Accounts.
DIVIDENDS
The Directors have paid or recommended payment of the following ordinary
dividends:
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
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Additional dividends relating to
the years ended 31 July 1993,
31 July 1992 and 31 July 1991 20 22 45
Interim of 1.75p (1993 and
1992 - 1.75p) net per share
- - paid on 1 August 1994 4,951 4,935 4,920
Final of 3.25p (1993 and
1992 - 3.25p) net per share
calculated on the shares in
issue at 31 July 1994 -
proposed and, if approved,
payable 1 February 1995 9,196 9,167 9,142
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If the recommended dividend is approved, a retained loss of 8,741,000 Pounds
will be deducted from Group reserves.
MOVEMENT IN TANGIBLE FIXED ASSETS
The movements in tangible fixed assets during the year are set out in note 7
of the Notes to the Accounts.
RESPONSIBILITY
The Directors of Attwoods, excluding the representatives of Laidlaw Inc.
(Messrs Cairns, Bullock and Haworth) accept responsibility for the
information contained in this document. To the best of the knowledge and
belief of those Directors, who have taken all reasonable care to ensure that
such is the case, the information contained in this document is in accordance
with the facts and does not omit anything likely to affect the import of such
information.
DIRECTORS' INTERESTS IN SHARES
The interests, as defined by the Companies Act 1985, of the Directors in the
shares of the Company and in the guaranteed redeemable convertible preference
shares of Attwoods (Finance) NV are as follows:
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1 August 1993
31 July 1994 (*or date of appointment)
Attwoods Attwoods
(Finance) (Finance)
The Company NV The Company NV
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Guaranteed Guaranteed
redeemable redeemable
convertible convertible
Ordinary preference Ordinary preference
shares shares shares shares
The Lord Lane of Horsell 10,000 --- 10,000 ---
M K Foreman 780,536 --- 780,536 ---
E D Johnson 14,450 --- 14,450 ---
T J Penfold 158,450 10,000 158,450 10,000
M H J Radcliffe 2,000 --- ---* ---*
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In addition Messrs J R Bullock, I R Cairns and L W Haworth had a
non-beneficial interest in 84,270,906 ordinary shares of the Company and
47,856,351 guaranteed redeemable convertible preference shares of Attwoods
(Finance) NV at both of the above dates by virtue of them being officers of
Laidlaw Inc.
Other than the above, the Directors had no non-beneficial interests in the
shares of any company in the Group.
During the period 1 August 1994 to 14 October 1994 there have been no changes
in the interests of Directors in the share capital of any company in the
Group.
DIRECTORS' INTERESTS IN SHARE OPTIONS
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Number of options
Date from
Directors At During the year At Exercise which Expiry
names 1.8.93 Granted Exercised 31.7.94 price exercisable date
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M K 233,348 233,348 197.087p 22.12.92 22.12.99
Foreman 100,000 100,000 112.000p 27.4.97 27.4.04
E D 100,000 100,000 117.000p 28.4.95 28.4.99
Johnson 75,000 75,000 112.000p 27.4.97 27.4.01
T J 33,355 33,355 96.238p 25.11.90 25.11.97
Penfold 93,340 93,340 197.087p 22.12.92 22.12.99
80,000 80,000 117.000p 28.4.95 28.4.02
75,000 75,000 112.000p 27.4.97 27.4.04
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No options lapsed during the year. The market price of the shares at 31 July
1994 was 118p and the range during the financial year was 103p to 164p with
an average price over the period of 129.03p.
SUBSTANTIAL SHAREHOLDERS
Pursuant to section 198 of the Companies Act 1985, the Directors have been
notified of the following interests amounting to 3% or more of the issued
ordinary share capital of the Company at 14 October 1994:
Number of % of issued ordinary
ordinary shares share capital
Laidlaw Inc 84,270,906 29.78
Templeton International 39,567,480 13.98
FMR Corp 34,356,900 12.14
Under an option agreement between BFI Acquisitions plc, a subsidiary of
Browning-Ferris Industries Inc., and Laidlaw Inc., Browning-Ferris Industries
Inc. and BFI Acquisitions plc have also notified the Company of their
interest in the 84,270,906 ordinary shares held by and on behalf of Laidlaw
Inc.
DIRECTORS' INTERESTS IN CONTRACTS
None of the Directors had any material interest in any contract to which the
Company or any subsidiary was a party during the year, except as disclosed in
note 2(b) of the Notes to the Accounts.
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
During the year the Company purchased insurance cover on behalf of its
Directors and certain officers against certain liabilities that may arise in
respect of the Group's activities.
EMPLOYEES
The Group has employed disabled staff and currently has registered disabled
people in its service. Within the limitations of the work available and the
extent of the disability, the Group will continue to recruit disabled
persons.
The Group is committed to maintaining the co-operation and involvement of its
employees in the future of the business.
This is achieved through regular consultation with employees at the
appropriate levels.
Share option schemes have been established following approval by the
shareholders of the Company.
CLOSE COMPANY STATUS
The Directors consider that, on the information available, the Company is not
a close company, as defined in the Income and Corporation Taxes Act 1988.
DONATIONS
During the year the Group made donations for charitable purposes in the
United Kingdom amounting to 13,000 Pounds (1993 - 17,000 Pounds) and made no
political contributions (1993 - Pounds Nil).
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Company law requires the Directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
Company and the Group and of the profit or loss of the Group for that period.
In preparing those financial statements, the Directors are required to:
- - select suitable accounting policies and apply them consistently;
- - make judgements and estimates that are reasonable and prudent;
- - state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the
financial statements; and
- - prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and 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 taking reasonable steps for the prevention and
detection of fraud and other irregularities.
CORPORATE GOVERNANCE
The Company has, throughout the year, complied with the Code of Best Practice
published in December 1992 by the Committee on the Financial Aspects of
Corporate Governance, except in respect of the two matters where guidance for
companies has not yet been issued and with which the Committee recognises
that companies are, as yet, unable to comply.
SPECIAL BUSINESS AT FORTHCOMING ANNUAL GENERAL MEETING
The special business is that transacted each year to renew Directors'
allotment authorities which would otherwise expire. The amount of share
capital to which such authorities (if approved) apply is not materially
different from that of last year, but is increased by reference to the amount
of share capital issued during the year and referred to in note 20 of the
Notes to the Accounts.
Resolution 8 - General Power to Allot. This resolution (if passed) will give
the Board authority until the next Annual General Meeting to issue share
capital up to an amount equal to one third of the current issued share
capital of the Company. The duration of this authority extends beyond the
next Annual General Meeting in respect of any agreement that the Company
enters into prior to the next Annual General Meeting, pursuant to which it
may allot shares in the Company.
Resolution 9 - Disapplication of Pre-emption Rights. This resolution (if
passed) will empower the Directors to allot ordinary shares in the Company
for cash without first offering them to existing shareholders on a pro rata
basis. The authority sought is limited to the following issues of equity
securities:
(a) any amount pursuant to a rights issue to holders of equity securities
(except shareholders with a registered address outside the United
Kingdom where it would be impracticable or unlawful) in proportion to
their respective entitlements to such securities (excluding fractional
entitlements);
(b) any amount required to be allotted on the redemption of guaranteed
redeemable convertible preference shares of Attwoods (Finance) NV;
(c) (otherwise than pursuant to (a) or (b) above) any amount not exceeding
in nominal value 707,376.80 Pounds representing 5% of the current issued
ordinary share capital of the Company.
AUDITORS
On 1 October 1994 our auditors, BDO Binder Hamlyn, joined the Arthur Andersen
worldwide organisation and now practice in the name, Binder Hamlyn. They have
signed their audit report in their new name. In accordance with Section 385
of the Companies Act 1985, a resolution proposing that Binder Hamlyn be
re-appointed as auditors of the Company will be put to the Annual General
Meeting.
APPROVAL OF THE EXTRACT FROM THE REPORT OF THE DIRECTORS
The Extract from the Report of the Directors was approved by the Directors on
14 October 1994.
By order of the Board
Robert A Searby
Company Secretary
14 October 1994
Report of the Auditors
INTRODUCTION
Binder Hamlyn's unqualified audit report on the financial statements is set
out below. In response to Attwoods' decision to provide, in one document,
financial statements prepared in accordance with UK generally accepted
accounting principles but incorporating all UK and US required disclosures
and including a summary of differences between UK and US generally accepted
accounting principles, the Binder Hamlyn audit report encompasses the
differing requirements of UK and US regulations.
AUDITORS' REPORT TO THE MEMBERS OF ATTWOODS plc
We have audited the Consolidated Profit and Loss Account (stated in Pounds),
Consolidated Statement of Total Recognised Gains and Losses, Consolidated
Statement of Movements in Equity Shareholders' Funds, Consolidated Balance
Sheet (stated in Pounds), Company Balance Sheet, Consolidated Cash Flow
Statement, Statement of Accounting Policies and the Notes to the Accounts,
which have been prepared on the basis of the accounting policies set out in
the Statement of Accounting Policies, and which include the summary of
differences between UK and US generally accepted accounting principles in
notes 31, 32, 33, 34 and 35 of the Notes to the Accounts.
Respective responsibilities of directors and auditors
As described in the Extract of the Report of the Directors the Company's
Directors are responsible for the preparation of financial statements. It is
our responsibility to form an independent opinion, based on our audit, on
those statements and to report our opinion to you.
Basis of opinion
We conducted our audit in accordance with Auditing Standards issued by the UK
Auditing Practices Board and with auditing standards generally accepted in
the United States. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements.
It also includes an assessment of the significant estimates and judgements
made by the Directors in the preparation of the 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 financial
statements are free from material misstatement, whether caused by fraud or
other irregularity or error. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the financial
statements.
United Kingdom opinion
In our opinion the financial statements give a true and fair view of the
state of affairs of the Company and the Group at 31 July 1994 and of the
profit of the Group for the year then ended and have been properly prepared
in accordance with the Companies Act 1985.
United States opinion
In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Group at 31 July 1994, 1993 and 1992
and the results of its operations and cash flows for each of the three years
in the period ended 31 July 1994 in conformity with accounting principles
generally accepted in the United Kingdom.
Accounting principles generally accepted in the United Kingdom vary in
certain significant respects from accounting principles generally accepted in
the United States. The application of the latter would have affected the
determination of consolidated net income for each of the three years in the
period ended 31 July 1994 and consolidated shareholders' equity at 31 July
1994, 1993 and 1992 as shown in the summary of differences between UK and US
generally accepted accounting principles.
Binder Hamlyn 20 Old Bailey, London EC4M 7BH
Chartered Accountants, Registered Auditors 24 October 1994
AUDITORS' REPORT TO THE DIRECTORS OF ATTWOODS plc
Report on the Directors' Statement of Compliance with the Code of Best
Practice
We have reviewed the statement by the Company's Directors set out in the
Extract of the Report of the Directors concerning the Company's compliance
with the Code of Best Practice published in December 1992 by the Committee on
the Financial Aspects of Corporate Governance, insofar as it relates to the
paragraphs of the Code which the London Stock Exchange has specified for our
review.
The purpose of the Directors' statement is to give readers information which
assists them in forming their own views regarding the governance of the
Company. It is our responsibility to review the statement, insofar as it
relates to the specified paragraphs, and to draw attention to any aspects of
the Company's non-compliance with the Code which the Directors may not have
properly disclosed.
Our review was carried out having regard to the Bulletin "Disclosures
relating to corporate governance" issued by the Auditing Practices Board. Our
review consisted of making enquiries of certain Directors and officers of the
Company and examination of relevant documentation.
Based on our review, we are satisfied that the Directors' statement
appropriately reflects the Company's compliance with the specified paragraphs
of the Code.
Binder Hamlyn 20 Old Bailey, London EC4M 7BH
Chartered Accountants, Registered Auditors 24 October 1994
Consolidated Profit and Loss Account
For the year ended 31 July 1994
Discon-
Continuing tinued
operations operations Total
31 July 31 July 31 July 31 July 31 July
1994 1994 1994 1993 1992
Pounds Pounds Pounds Pounds Pounds
Notes '000 '000 '000 '000 '000
- ----------------------------------------------------------------------------
Turnover 1 364,142 19,102 383,244 409,965 340,863
Cost of sales (274,007) (20,768) (294,775) (322,853) (259,410)
- -----------------------------------------------------------------------------
Gross profit/ 1 90,135 (1,666) 88,469 87,112 81,453
(loss)
Exceptional items 1,2e (12,394) 3,110 (9,284) (2,011) (5,300)
Other administra- (58,761) (1,444) (60,205) (55,743) (44,919)
tive expenses
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Operating profit 1 18,980 --- 18,980 29,358 31,234
Other income/ 1,2d 227 (1,028) (801) 8,360 563
(expense)
Loss on sale of --- (85,458) (85,458) --- ---
business
Release of --- 87,916 87,916 (91,026) ---
provision/(pro-
vision for loss
on sale of
business)
(Loss)/profit on (561) (555) (1,116) 2,558 1,425
disposal of fixed
assets
Loss from interests (1,441) (11) (1,452) (1,500) (529)
in associated
undertakings
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Profit/(loss) on 1 17,205 864 18,069 (52,250) 32,693
ordinary activities
before interest
Guaranteed redeem- (5,097) --- (5,097) (5,119) (5,162)
able convertible
preference share
interest
Other net interest 2f (2,965) (530) (3,495) (4,844) (2,433)
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Profit/(loss) on 2 9,143 334 9,477 (62,213) 25,098
ordinary activities
before taxation
Tax on profit/ 3 (3,442) --- (3,442) (8,615) (7,819)
(loss) on ordinary
activities
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Profit/(loss) on 5,701 334 6,035 (70,828) 17,279
ordinary activities
after taxation
Minority equity (609) --- (609) (360) 5
interests
- -----------------------------------------------------------------------------
Profit/(loss) for 4 5,092 334 5,426 (71,188) 17,284
the financial year
Ordinary dividends 5 (14,167) --- (14,167) (14,124) (14,107)
paid and proposed
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Retained (loss)/ 21 (9,075) 334 (8,741) (85,312) 3,177
profit for the
financial year
- -----------------------------------------------------------------------------
Basic earnings/ 6 1.80p 0.12p 1.92p (25.25)p 6.84p
(loss) per share
- -----------------------------------------------------------------------------
Normalised earnings 6
per share from 5.21p 8.11p 9.36p
continuing
operations
- -----------------------------------------------------------------------------
Consolidated Statement of Total Recognised Gains and Losses
For the year ended 31 July 1994
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- -----------------------------------------------------------------------------
Profit/(loss) for the financial 5,426 (71,188) 17,284
year
Exchange adjustments on foreign
currency net investments (2,465) 29,728 (11,489)
- -----------------------------------------------------------------------------
Total recognised gain/(loss) for 2,961 (41,460) 5,795
the financial year
- -----------------------------------------------------------------------------
Consolidated Statement of Movements in Equity Shareholders' Funds
For the year ended 31 July 1994
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- -----------------------------------------------------------------------------
Total recognised gain/(loss) 2,961 (41,460) 5,795
for the financial year
Ordinary dividends (14,167) (14,124) (14,107)
Shares issued during the year 1,037 845 88,588
Purchased goodwill written off (2,858) (2,065) (14,287)
Goodwill written off through --- 29,809 ---
profit and loss account
- -----------------------------------------------------------------------------
Net (reduction)/additions to (13,027) (26,995) 65,989
equity shareholders' funds
Opening equity shareholders' 108,291 135,286 69,297
funds
- -----------------------------------------------------------------------------
Closing equity shareholders' 95,264 108,291 135,286
funds
- -----------------------------------------------------------------------------
Consolidated Balance Sheet
At 31 July 1994
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
Notes '000 '000 '000
- -----------------------------------------------------------------------------
Fixed assets
Tangible assets 7 239,548 284,521 231,897
Investments 8 30,454 31,903 28,592
- -----------------------------------------------------------------------------
270,002 316,424 260,489
- -----------------------------------------------------------------------------
Current assets
Stocks 9 6,572 68,179 45,878
Debtors 10 76,278 79,299 59,553
Investments 11 37 37 36
Cash at bank and in hand 2,910 12,312 33,636
- -----------------------------------------------------------------------------
85,797 159,827 139,103
- -----------------------------------------------------------------------------
Creditors (amounts falling
due within one year)
Debt finance 12 (8,093) (27,433) (20,770)
Trade and other creditors 17 (73,941) (81,038) (65,974)
- -----------------------------------------------------------------------------
(82,034) (108,471) (86,744)
- -----------------------------------------------------------------------------
Net current assets 3,763 51,356 52,359
- -----------------------------------------------------------------------------
Total assets less current 273,765 367,780 312,848
liabilities
- -----------------------------------------------------------------------------
Creditors (amounts falling
due after more than one year)
Debt finance 12 (94,847) (109,690) (88,179)
Guaranteed redeemable 18,26 (72,104) (72,578) (73,040)
convertible preference
shares
- -----------------------------------------------------------------------------
(166,951) (182,268) (161,219)
- -----------------------------------------------------------------------------
Provisions for liabilities
and charges
Deferred tax 19 (10,707) (15,124) (15,446)
Other provisions 19 --- (61,217) ---
- -----------------------------------------------------------------------------
(10,707) (76,341) (15,446)
- -----------------------------------------------------------------------------
96,107 109,171 136,183
- -----------------------------------------------------------------------------
Capital and reserves
Called up share capital 20,21 14,148 14,103 14,066
Share premium account 20,21 170,681 169,689 168,881
Revaluation reserve 21 2,113 2,249 2,364
Other reserve 21 92,759 92,759 115,231
Profit and loss account 21 (2,455) 8,615 41,612
- -----------------------------------------------------------------------------
Equity shareholders' funds 277,246 287,415 342,154
- - gross
Goodwill written off 21 (181,982) (179,124) (206,868)
- -----------------------------------------------------------------------------
Equity shareholders' funds 95,264 108,291 135,286
- - net
Minority equity interests 843 880 897
- -----------------------------------------------------------------------------
96,107 109,171 136,183
- -----------------------------------------------------------------------------
Approved by the Board on 14 October 1994
M K Foreman E D Johnson Directors
Company Balance Sheet
At 31 July 1994
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
Notes '000 '000 '000
- -----------------------------------------------------------------------------
Fixed assets
Investments 8 140,356 140,356 93,586
- -----------------------------------------------------------------------------
Current assets
Debtors 10 176,361 178,059 207,700
Investments 11 34 34 34
Cash at bank and in hand 30 2,765 1,855
- -----------------------------------------------------------------------------
176,425 180,858 209,589
- -----------------------------------------------------------------------------
Creditors (amounts falling
due within one year)
Debt finance 12 (8) --- ---
Other creditors 17 (20,732) (21,772) (21,659)
- -----------------------------------------------------------------------------
(20,740) (21,772) (21,659)
- -----------------------------------------------------------------------------
Net current assets 155,685 159,086 187,930
- -----------------------------------------------------------------------------
Total assets less current 296,041 299,442 281,516
liabilities
Provisions for liabilities
and charges 19 (192) (21) (257)
- -----------------------------------------------------------------------------
295,849 299,421 281,259
- -----------------------------------------------------------------------------
Capital and reserves
Called up share capital 20,21 14,148 14,103 14,066
Share premium account 20,21 170,681 169,689 168,881
Other reserve 21 70,074 70,074 70,074
Profit and loss account 21 40,946 45,555 28,238
- -----------------------------------------------------------------------------
Equity Shareholders' Funds 295,849 299,421 281,259
- -----------------------------------------------------------------------------
Approved by the Board on 14 October 1994
M K Foreman E D Johnson Directors
Consolidated Cash Flow Statement
For the year ended 31 July 1994
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
Notes '000 '000 '000
- ----------------------------------------------------------------------------
Net cash inflow from
operating activities 22 53,132 55,918 40,070
- ----------------------------------------------------------------------------
Returns on investments and
servicing of finance
Interest received 4,628 2,943 3,266
Bank and other interest paid (5,238) (5,677) (6,164)
Finance lease interest paid (1,179) (1,613) (943)
Capitalised interest paid (1,661) (2,720) (4,517)
Preference dividends paid (5,571) (5,581) (5,592)
Ordinary dividends paid (14,122) (14,088) (9,643)
Dividends received from
associated undertaking 5 19 25
Dividends paid to minorities (563) (364) (100)
- -----------------------------------------------------------------------------
Net cash outflow from returns on
investments and servicing of finance (23,701) (27,081) (23,668)
- -----------------------------------------------------------------------------
Taxation
Tax paid (8,173) (7,049) (4,884)
- -----------------------------------------------------------------------------
Investing activities
Purchase of subsidiaries (3,703) (4,764) (3,578)
Purchase of tangible fixed assets (21,703) (49,456) (32,291)
Purchase of investments (11) (17) (44)
Purchase of associated undertakings (132) (195) (34)
Advances to associated undertakings (8,720) (4,691) (1,681)
Sale of tangible fixed assets 2,432 5,514 6,781
Sale of investments 176 -- 1,102
Sale of subsidiary 23 26,606 -- --
- -----------------------------------------------------------------------------
Net cash outflow from
investing activities (5,055) (53,609) (29,745)
- -----------------------------------------------------------------------------
Net cash inflow/(outflow)
before financing 16,203 (31,821) (18,227)
- -----------------------------------------------------------------------------
Financing activities
Issue of shares 24 237 46 80,172
New loans 25 33,282 30,911 71,030
Loans and finance
lease principal repaid 25 (58,888) (23,518) (104,836)
- -----------------------------------------------------------------------------
Net cash (outflow)/inflow
from financing (25,369) 7,439 46,366
- -----------------------------------------------------------------------------
(Decrease)/increase in cash
and equivalents 27 (9,166) (24,382) 28,139
- -----------------------------------------------------------------------------
Statement of Accounting Policies
Basis of the accounts
As in previous accounting periods the accounts have been prepared under the
historical cost convention, with the exception that certain fixed assets are
stated at valuations last carried out in 1985. The accounts have been
prepared in accordance with applicable accounting standards, which include
Financial Reporting Standard 4 [FRS 4], adopted last year as the then
Financial Reporting Exposure Draft 3. FRS 4 treats the net proceeds of the
Guaranteed Redeemable Convertible Preference Shares of Attwoods (Finance) NV
as long term debt and the profit and loss account reflects the imputed
interest charge so as to ensure a constant rate over the term of the debt.
On 20 September 1994, Browning-Ferris Industries Inc. announced an offer for
the entire issued ordinary share capital of the Company and the issued
preference share capital of Attwoods (Finance) N.V. Under the terms of the
Group's principal syndicated revolving credit facility, if any person takes
control of th Company then the facility may, inter alia, be cancelled by the
banks and any loans drawn down under the facility may be required to be
repaid. These facilities are essential to the Group.
Consolidation
The consolidated accounts incorporate the accounts of Attwoods plc and its
subsidiaries for the year ended 31 July 1994. When subsidiaries are acquired
or disposed of during an accounting period, the consolidated profit and loss
account includes the results only for that part of the period during which
they are subsidiaries. Attwoods plc has not presented its own profit and
loss account, as permitted by s230 of the Companies Act 1985.
As the impact of acquisitions during the year on the Group's results is
immaterial, no analysis of the effect of such acquisitions has been included
in the consolidated profit and loss account.
Group turnover
The Group turnover represents amounts derived from the provision of goods and
services, after deduction of value added tax and other sales-related taxes.
Fixed assets, depreciation and amortisation
Tangible fixed assets are included in the accounts at cost, or valuation last
carried out in 1985. The cost of mineral bearing sites, landfill airspace
and other assets in the course of construction includes, where applicable,
capitalised interest incurred during their development.
Depreciation is calculated to write off the cost or valuation less residual
value of the assets over their estimated useful lives:
Freehold land Not depreciated
Freehold buildings Over their estimated useful life
Leasehold properties Over the unexpired period of the lease
Motor vehicles 4 to 10 years
Furniture and fittings 5 to 10 years
Machinery and equipment 4 to 15 years
Mineral bearing sites and landfill airspace are amortised on the basis of
minerals extracted and the usage of airspace respectively.
Deferred taxation
Provision is made for deferred taxation under the liability method.
Provision is made for all timing differences (between the taxation treatment
and accounting treatment of items of income and expenditure) where, in the
opinion of the Directors, a liability is likely to arise in the foreseeable
future. No provision is made for any potential liability to corporation tax
on chargeable gains which would arise if the revalued properties were to be
sold at their balance sheet values, except for properties held for disposal
in the foreseeable future.
Stocks
Stocks are valued at the lower of cost and realisable value.
Site clean-up, remediation and other environmental costs
Accruals are made for the costs of landfill engineering, restoration and
reinstatement together with costs in respect of leachate management, gas
control and site management and monitoring incurred during and after the
operational life of landfill sites. Such accruals are provided in respect of
operational and closed landfill sites together with a contingency reserve to
provide a fund in the unlikely event of a significant unexpected
environmental liability. These accruals are built up by charges against
profits at rates calculated by reference to the airspace consumed and based
on management's judgement and past experience of the appropriate levels of
such accruals.
Statement of Accounting Policies
Cost of environmental litigation
Accruals are made, based on estimates made by the directors, for costs which
the Group expects to incur in resolving environmental litigation under US
"Superfund" law. These costs include legal fees and site remediation
expenses. Any amounts which are expected to be recovered from third parties
such as former owners of businesses acquired by the Group and insurance
companies, are recognised as other debtors.
Finance leases
Assets held under finance leases are capitalised and depreciated over their
estimated useful lives. The related obligations under the finance leases are
included in creditors. Interest payable is charged to the profit and loss
account in proportion to the outstanding obligations.
Operating leases
The costs of operating leases are charged to the profit and loss account in
the period to which they relate.
Goodwill
Goodwill arising on the acquisition of subsidiary companies, and the purchase
of waste collection routes, franchises and contracts, is written off to
reserves at the date of acquisition.
The premium arising on the acquisition of the investment in associated
undertakings is amortised over the period of its expected useful life of
forty years and the Group's share of goodwill arising in the financial
statements of associated undertakings is included in the carrying value of
such investments.
Foreign currency
The balance sheets of overseas subsidiaries, and foreign currency assets and
liabilities of UK companies, have been translated into sterling at the rates
of exchange ruling at the balance sheet date. The profit and loss accounts
of overseas subsidiaries have been translated at average rates for the year
or the period for which they were owned. Exchange differences arising on
consolidation of the net investment in overseas subsidiaries have been taken
directly to reserves; all other exchange differences have been taken to the
profit and loss account.
The foreign exchange conversion rates which have been used to translate
principal foreign currencies into UK sterling are as follows:
US Dollars 1994 1993 1992
- ----------------------------------------------------------------------------
Profit and loss account - average rate 1.4995 1.5914 1.7844
Balance sheet - closing rate 1.5366 1.4830 1.9250
- ----------------------------------------------------------------------------
Deutsche Marks
- ----------------------------------------------------------------------------
Profit and loss account - average rate 2.5166 2.4955 2.8948
Balance sheet - closing rate 2.4413 2.5864 2.8450
- ----------------------------------------------------------------------------
Pensions
The expected cost of pensions is charged against profit so as to spread the
cost over the service lives of the employees affected.
Notes to the Accounts
For the year ended 31 July 1994
1 SEGMENTAL ANALYSIS
- -------------------------------------------------------------------
All of the significant activities of the Group are related to or integrated
with the provision of waste management services and accordingly the Group has
only one line of business.
The analysis of turnover by destination is not materially different from that
identified by origin. The classification 'Emerging Markets' includes the
Waste management businesses in the Caribbean and Latin America and the
associated undertaking's contribution derived from a joint venture in Israel.
- -----------------------------------------------------------------
Geographical market for the year ended 31 July 1994
Dis-
contin-
ued
Continuing opera-
operations tions Group
- ---------------------------------------------------------- -------- -------
Unit-
ed
Main- King-
land dom
Eur- Waste
ope man- Uni-
Waste age- Emer- ted
Unit- man- ment ging Unit- States
ed age- and Mark- ed Recy-
States ment min- ets King- cla-
Waste and eral Waste dom bles
man- port- ex- man- Cor- pro-
age- able trac- age- por- Sub- cess-
ment units tion ment ate total ing
Pds* Pds* Pds* Pds* Pds* Pds* Pds* Pds*
'000 '000 '000 '000 '000 '000 '000 '000
- ----------------------------------------------------------------------------
Turn-
over 225,393 63,434 66,672 7,606 1,037 364,142 19,102 383,244
Cost
of
sales (173,125) (47,134) (49,735) (3,843) (170) (274,007)(20,768)(294,775)
- ----------------------------------------------------------------------------
Gross
profit/
(loss) 52,268 16,300 16,937 3,763 867 90,135 (1,666) 88,469
Excep-
tional
items (10,024) (2,370) -- -- -- (12,394) 3,110 (9,284)
Other
Admini-
stra-
tive
ex-
penses (29,920) (13,283) (10,892) (2,007) (2,659) (58,761) (1,444) (60,205)
- -----------------------------------------------------------------------------
Opera-
ting
profit/
(loss) 12,324 647 6,045 1,756 (1,792) 18,980 -- 18,980
Other
in-
come/
(ex-
pense) 141 4 250 33 (201) 227 (1,028) (801)
Loss
on
sale
of
busi-
ness -- -- -- -- -- -- (85,458) (85,458)
Re-
lease
of
pro-
vi-
sion -- -- -- -- -- -- 87,916 87,916
Profit
/(loss)
on dis-
posal
of
fixed
assets 91 (59) (593) -- -- (561) (555) (1,116)
(Loss)/
income
from
inter-
ests
in
asso-
ciated
under-
takings (1,792) -- 169 165 17 (1,441) (11) (1,452)
- -----------------------------------------------------------------------------
Profit
/(loss)
on ordi-
nary
activi-
ties
before
interest 10,764 592 5,871 1,954 (1,976) 17,205 864 18,069
- ----------------------------------------------------------------------------
*Pds = Pounds
Geographical market for the year ended 31 July 1993
Dis-
contin-
ued
Continuing opera-
operations tions Group
- ---------------------------------------------------------- -------- -------
Unit-
ed
Main- King-
land dom
Eur- Waste
ope man- Uni-
Waste age- Emer- ted
Unit- man- ment ging Unit- States
ed age- and Mark- ed Recy-
States ment min- ets King- cla-
Waste and eral Waste dom bles
man- port- ex- man- Cor- pro-
age- able trac- age- por- Sub- cess-
ment units tion ment ate total ing
Pds* Pds* Pds* Pds* Pds* Pds* Pds* Pds*
'000 '000 '000 '000 '000 '000 '000 '000
- ----------------------------------------------------------------------------
Turn-
over 217,719 68,961 55,081 3,412 987 346,160 63,805 409,965
Cost
of
sales (163,314) (51,091) (41,459) (1,261) (169) (257,294)(65,559)(322,853)
- -----------------------------------------------------------------------------
Gross
profit/
(loss) 54,405 17,870 13,622 2,151 818 88,866 (1,754) 87,112
Excep-
tional
items (2,011) -- -- -- -- (2,011) -- (2,011)
Other
Admini-
stra-
tive
ex-
penses (28,219) (11,244) (10,504) (1,047) (2,309) (53,323) (2,420) (55,743)
- -----------------------------------------------------------------------------
Opera-
ting
profit/
(loss) 24,175 6,626 3,118 1,104 (1,491) 33,532 (4,174) 29,358
Other
in-
come/
(ex-
pense) 810 23 205 (36) 4,939 5,941 2,419 8,360
Provi-
sion
for
loss
on
sale
of
busi-
ness -- -- -- -- -- -- (91,026) (91,026)
Profit
/(loss)
on dis-
posal
of fixed
assets 37 (31) 2,507 -- -- 2,513 45 2,558
(Loss)
/income
from
inter-
ests in
assoc-
iated
under-
takings (1,337) -- 55 -- (187) (1,469) (31) (1,500)
- -----------------------------------------------------------------------------
Profit
/(loss)
on ordi-
nary
activi-
ties
before
interest 23,685 6,618 5,885 1,068 3,261 40,517 (92,767) (52,250)
- ----------------------------------------------------------------------------
*Pds = Pounds
Geographical market for the year ended 31 July 1992
Dis-
contin-
ued
Continuing opera-
operations tions Group
- ---------------------------------------------------------- -------- -------
Unit-
ed
Main- King-
land dom
Eur- Waste
ope man- Unit-
Waste age- Emer- ed
Unit- man- ment ging Unit- States
ed age- and Mark- ed Recy-
States ment min- ets King- cla-
Waste and eral Waste dom bles
man- port- ex- man- Cor- pro-
age- able trac- age- por- Sub- cess-
ment units tion ment ate total ing
Pds* Pds* Pds* Pds* Pds* Pds* Pds* Pds*
'000 '000 '000 '000 '000 '000 '000 '000
- -----------------------------------------------------------------------------
Turn-
over 171,053 49,641 50,529 -- 657 271,880 68,983 340,863
Cost
of
sales (124,909) (32,521) (36,668) -- (151) (194,249)(65,161)(259,410)
- -----------------------------------------------------------------------------
Gross
profit 46,144 17,120 13,861 -- 506 77,631 3,822 81,453
Excep-
tional
items (5,300) -- -- -- -- (5,300) -- (5,300)
Other
Admini-
stra-
tive
ex-
penses (22,820) (8,396) (11,214) -- (69) (42,499)(2,420) (44,919)
- -----------------------------------------------------------------------------
Opera-
ting
profit 18,024 8,724 2,647 -- 437 29,832 1,402 31,234
Other
in-
come 172 313 -- 78 563 -- 563
Profit
on dis-
posal
of fixed
assets 135 -- 1,290 -- -- 1,425 -- 1,425
(Loss)
/income
from
inter-
ests in
associ-
ated
under-
takings (425) -- 4 -- (108) (529) -- (529)
- -----------------------------------------------------------------------------
Profit
on ordi-
nary
activi-
ties
before
interest 17,906 8,724 4,254 -- 407 31,291 1,402 32,693
- -----------------------------------------------------------------------------
*Pds = Pounds
Analysis of net assets by geographical market
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- ----------------------------------------------------------------------------
United States:
Waste management 101,703 107,567 73,171
Recyclables processing -- 34,647 75,591
Investment in and amounts due
from associated undertakings 12,981 12,009 6,894
- -----------------------------------------------------------------------------
United States subtotal 114,684 154,223 155,656
- -----------------------------------------------------------------------------
Mainland Europe:
Waste management and portable units 61,026 67,534 47,150
- -----------------------------------------------------------------------------
United Kingdom:
Waste management and mineral extraction 84,078 82,193 78,657
Corporate (18,457) (20,366) (19,218)
Investment in and amounts due from
associated undertakings 22,092 22,188 22,291
- -----------------------------------------------------------------------------
United Kingdom subtotal 87,713 84,015 81,730
- -----------------------------------------------------------------------------
Emerging Markets:
Waste management 1,613 788 --
Investment in and amounts due from
associated undertakings 3,205 -- --
- ----------------------------------------------------------------------------
Emerging Markets subtotal 4,818 788 --
- -----------------------------------------------------------------------------
Net assets excluding debt 268,241 306,560 284,536
Group net borrowings (100,030) (124,811) (75,313)
Guaranteed redeemable convertible
preference shares (72,104) (72,578) (73,040)
- -----------------------------------------------------------------------------
Net assets 96,107 109,171 136,183
- -----------------------------------------------------------------------------
2 PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
- -----------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- -----------------------------------------------------------------------------
(a) Stated after charging/(crediting):
Depreciation:
Owned assets 34,774 30,297 23,148
Leased assets 1,724 1,968 1,901
Amortisation of associated
undertakings' premium 307 293 287
Auditors' remuneration 452 534 472
Operating lease rentals:
Hire of plant and machinery 4,397 3,004 2,598
Other 4,826 3,134 2,372
Net property income (303) (243) (283)
Repairs and maintenance expenses 3,725 6,682 9,514
- ----------------------------------------------------------------------------
Fees paid to auditors for non-audit work in the UK amounted to 225,000 Pounds
during the year (1993 - 196,000 Pounds).
(b) Directors' emoluments comprise:
Fees 63 50 29
Remuneration as executives 571 676 577
Pensions, including past
Directors' pensions 102 58 45
Compensation for loss of office
and ex gratia payment 133 -- 361
- ----------------------------------------------------------------------------
Total charged in arriving at
profit on ordinary activities: 869 784 1,012
- ----------------------------------------------------------------------------
The emoluments (excluding pension contributions)
of the Chairman in the period from
31 January 1994 to 31 July 1994 amounted to: 25,000* NIL* NIL*
The Chairman's pension contributions in the
period from 31 January 1994 to 31 July 1994
amounted to: NIL* NIL* NIL*
The emoluments (excluding pension contributions)
of the previous Chairman, Mr M K Foreman, in the
period from 1 August 1993 to 31 January 1994
amounted to: 71,164* 150,178* 126,317*
The Chairman's pension contributions in the
period from 1 August 1993 to 31 January 1994
amounted to: 24,547* 34,583* 28,750*
- -----------------------------------------------------------------------------
The emoluments (excluding pension contributions)
of the highest UK paid director amounted to: 179,799* 150,178* 126,317*
The highest paid director's pension contributions
amounted to: 63,333* 34,583* 28,750*
- -----------------------------------------------------------------------------
Directors' total emoluments do not include any potential benefit that would
arise on the exercise of share options. Details of Directors' share options
are set out in the Extract of the Report of the Directors.
* = Pounds
- -----------------------------------------------------------------------------
Number of Directors whose total emoluments (excluding pension contributions,
compensation for loss of office and ex gratia payment) were within the
following ranges:
- ----------------------------------------------------------------------------
UK resident Directors Overseas resident Directors
--------------------------- ---------------------------
31 July 31 July 31 July 31 July 31 July 31 July
1994 1993 1992 1994 1993 1992
- ----------------------------------------------------------------------------
Nil - * 5,000 -- -- 2 4 3 3
* 5,001 - * 10,000 1 -- -- 1 -- --
* 10,001 - * 15,000 1 -- -- -- -- --
* 20,001 - * 25,000 -- 2 1 -- -- --
* 25,001 - * 30,000 -- -- 1 -- -- --
* 30,001 - * 35,000 -- -- -- -- -- 1
* 35,001 - * 40,000 1 -- -- -- -- --
* 55,001 - * 60,000 -- -- 1 -- -- 1
* 75,001 - * 80,000 -- -- -- 1 -- --
* 80,001 - * 85,000 -- -- -- 1 -- --
* 85,001 - * 90,000 -- 1 -- -- -- --
*100,001 - *105,000 1 -- -- -- -- --
*105,001 - *110,000 -- -- -- -- 1 --
*125,001 - *130,000 -- -- 1 1 -- 1
*145,001 - *150,000 -- -- -- -- -- 1
*150,001 - *155,000 -- 1 -- -- -- --
*155,001 - *160,000 -- -- -- -- 1 --
*170,001 - *175,000 -- -- -- -- 1 --
*175,001 - *180,000 1 -- -- -- -- --
- ----------------------------------------------------------------------------
*Denotes Pounds
- ----------------------------------------------------------------------------
As disclosed in the Extract from the Report of the Directors, Messrs J R
Casagrande and R Velocci resigned as directors during the year. Messrs
Casagrande and Velocci subsequently entered into consultancy contracts with
Attwoods of North America Inc. to the value of $289,000 and $257,000, per
annum respectively.
(c) Particulars of employees
The average number of persons employed by the Group
(including Directors) during the year was:
- ---------------------------------------------------------------------------
Execu-
tive,
Super-
vis-
Main- Unit- Emerg- ory
Uni- land ed ing and
ted Eur- King- Mar- Corp- Oper- cleri-
States ope dom kets orate Total ating Sales cal Total
- -----------------------------------------------------------------------------
Average
during
year
ended
31 July
1992 3,169 778 1,199 -- 5 5,151 4,128 104 919 5,151
At 31
July
1992 3,203 849 1,199 -- 5 5,256 4,192 118 946 5,256
Average
during
year
ended
31 July
1993 3,154 923 1,206 390 5 5,678 4,541 119 1,018 5,678
At 31
July
1993 3,086 958 1,211 390 5 5,650 4,504 113 1,033 5,650
Average
during
year
ended
31 July
1994 2,710 886 1,218 584 5 5,403 4,153 299 951 5,403
At 31
July
1994 2,589 860 1,218 777 5 5,449 4,266 282 901 5,449
- ----------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- -----------------------------------------------------------------------------
Their total remuneration was:
Wages and salaries 89,515 89,458 77,202
Social security costs 21,577 19,945 7,951
Other pension costs 760 571 598
- -----------------------------------------------------------------------------
111,852 109,974 85,751
- -----------------------------------------------------------------------------
The Company maintains a pension plan for Directors and senior management in
the UK. The plan is administered by Godwins Limited and takes the form of a
defined benefit plan. The pension plan is funded, on the basis of
recommendations by an actuary, partly by contributions from members and
partly by the Company.
- -----------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- -----------------------------------------------------------------------------
The pension expense in respect of this plan was: 535 293 319
- ----------------------------------------------------------------------------
The following are the accumulated plan benefits and plan net assets in the
latest actuarial valuation which was carried out in August 1992.
Pounds
'000
- -----------------------------------------------------------------------------
Actuarial present value of accumulated plan benefits
(projected unit method) 2,054
- ----------------------------------------------------------------------------
Net assets available for benefits 2,091
- ----------------------------------------------------------------------------
The assumed rate of return used in determining the actuarial present value of
accumulated plan benefits is 9.0%. The balance of other pension costs
relates to payments to defined contribution personal pension plans.
(d) Other income/(expense)
- ----------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- ----------------------------------------------------------------------------
Exchange(losses)/gains (321) 5,417 78
(Deficit)/surplus on insurance claims (415) 3,672 --
Rental income 303 243 283
Commodity hedging loss (551) (1,290) --
Miscellaneous income 183 318 202
- -----------------------------------------------------------------------------
(801) 8,360 563
- ----------------------------------------------------------------------------
(e) Exceptional items
- -----------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- ----------------------------------------------------------------------------
Provision for settlement of legal actions
and prior year billing irregularities 7,971 2,011 5,300
Reorganisation and related redundancy costs 1,766 -- --
Asset writedowns 2,657 -- --
Release of disposal provision against
operating losses in discontinued operations (3,110) -- --
- ----------------------------------------------------------------------------
9,284 2,011 5,300
- ----------------------------------------------------------------------------
(f) Other net interest
- ----------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- ---------------------------------------------------------------------------
Interest payable on bank loans and overdrafts
whenever repayable and other loans wholly
repayable within five years 6,460 7,782 9,519
Interest payable on all other loans 311 226 303
Interest payable on finance leases 1,179 1,613 943
Other -- 551 --
- ----------------------------------------------------------------------------
7,950 10,172 10,765
Less: interest capitalised (1,661) (2,720) (4,517)
- ----------------------------------------------------------------------------
Interest payable 6,289 7,452 6,248
- ---------------------------------------------------------------------------
Associated company interest receivable 2,471 1,969 1,629
Other interest receivable 323 639 2,186
- ---------------------------------------------------------------------------
Interest receivable 2,794 2,608 3,815
- ---------------------------------------------------------------------------
Total net interest payable 3,495 4,844 2,433
- ---------------------------------------------------------------------------
3 TAXATION
- ---------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- ---------------------------------------------------------------------------
On the profit for the year:
UK corporation tax 7,247 9,687 3,235
Overseas taxation 1,136 2,642 1,937
Share of tax charge of associated undertakings 197 50 8
Transfer (from)/to deferred taxation:
UK (356) (182) 3,026
Overseas (4,782) (3,582) (387)
- ----------------------------------------------------------------------------
3,442 8,615 7,819
- ---------------------------------------------------------------------------
Reconciliation to UK nominal tax rates:
Effective tax rate (1993 excludes
the Mindis disposal provision) 36.30% 29.90% 31.15%
UK nominal tax rate 33.00% 33.00% 33.00%
Taxes as shown in these financial statements 3,442 8,615 7,819
Corporation tax on pre-tax profit before loss
on sale of business at UK nominal tax rate 3,128 9,508 8,282
- ---------------------------------------------------------------------------
Difference 314 (893) (463)
- ---------------------------------------------------------------------------
The difference is primarily due to:
Effect of foreign income taxed/losses
allowed at foreign rates (846) (975) 1,222
Tax effects of foreign exchange losses 59 (273) (439)
Tax effect of non-allowability of
amortisation of properties for UK tax 253 231 175
Tax saving arising from net operating
losses carried forward -- (75) (104)
Tax effect of non-relievable revenue
losses and interest 4,191 599 1,917
Tax relief on amortisation of intangible
assets charged against shareholders'
equity on consolidation (2,835) -- (2,686)
Other items (508) (400) (548)
- ----------------------------------------------------------------------------
314 (893) (463)
- ----------------------------------------------------------------------------
4 PROFIT FOR THE YEAR
- ---------------------------------------------------------------------------
The profit attributable to the Company dealt with in its own accounts is
9,559,000 Pounds (1993 - 31,441,000 Pounds, 1992 - 36,220,000 Pounds).
5 DIVIDENDS
- --------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- --------------------------------------------------------------------------
Ordinary shares in the Company:
Interim of 1.75p (1993 and 1992 - 1.75p)
net per share paid 1 August 1994 4,951 4,935 4,920
Final of 3.25p (1993 and 1992 - 3.25p)
net per share proposed 9,196 9,167 9,142
Additional dividend relating to the
years ended 31 July 1993, 1992 and 1991 20 22 45
- ---------------------------------------------------------------------------
14,167 14,124 14,107
- ---------------------------------------------------------------------------
6 EARNINGS PER SHARE
- --------------------------------------------------------------------------
Earnings per share is calculated on the profit on ordinary activities after
taxation and minority interests on the basis of the weighted average of the
number of shares in issue during the year of 282,708,038 (1993 - 281,907,105
and 1992 - 252,553,083). The fully diluted earnings per share is higher than
basic earnings per share and accordingly the former is not disclosed.
In calculating earnings per share for 'continuing operations', interest and
tax expense has been allocated between continuing and discontinued operations
to show, within 'continuing operations', the amounts which would have been
incurred if the disposal of Mindis had taken place, on the same terms, at the
start of each accounting period reported.
Normalised earnings per share from continuing operations has been calculated
to show sustainable earnings and has been calculated as follows:
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- ----------------------------------------------------------------------------
Profit for the financial year 5,092 25,251 20,151
Exceptional operating items 12,394 2,011 5,300
Non-recurring foreign exchange gain -- (5,417) --
Tax effect thereon (2,754) 1,025 (1,800)
- ----------------------------------------------------------------------------
Normalised profit for the year 14,732 22,870 23,651
- ----------------------------------------------------------------------------
Normalised earnings per share 5.21p 8.11p 9.36p
- ----------------------------------------------------------------------------
Weighted average number of shares 282,708,038 281,907,105 252,553,083
- ----------------------------------------------------------------------------
The substantial foreign exchange gain arising during 1993 related primarily
to the departure of sterling from the European Exchange Rate Mechanism. This
has been treated as a non-recurring item.
7 TANGIBLE ASSETS
- ----------------------------------------------------------------------------
Land and buildings
--------------------------------
Freehold
-----------------
Plant,
equip-
ment
Opera- Long Short and
ting lease- lease- vehi-
sites Other hold hold cles Total
Pounds Pounds Pounds Pounds Pounds Pounds
'000 '000 '000 '000 '000 '000
- ---------------------------------------------------------------------------
Group:
Cost or valuation
At 1 August 1993 55,969 60,841 5,171 8,396 278,256 408,633
Additions at cost 1,417 1,041 274 597 20,587 23,916
Acquisition of subsidiaries -- -- -- -- 843 843
Disposals -- (17) -- (39) (8,723) (8,779)
Disposal of subsidiary -- (9,440) -- -- (28,291) (37,731)
Reclassification 324 (324) -- -- -- --
Currency adjustments (331) (1,251) -- (6) (516) (2,104)
- ----------------------------------------------------------------------------
At 31 July 1994 57,379 50,850 5,445 8,948 262,156 384,778
- ----------------------------------------------------------------------------
Depreciation and
amortisation
At 1 August 1993 (5,184) (4,036) (42) (2,551)(112,299) (124,112)
Charge for year (1,454) (1,385) (22) (515) (33,122) (36,498)
Disposals -- -- -- 26 5,805 5,831
Disposal of subsidiary -- 158 -- -- 7,921 8,079
Currency adjustments 28 152 -- 6 1,284 1,470
- ----------------------------------------------------------------------------
At 31 July 1994 (6,610) (5,111) (64) (3,034)(130,411) (145,230)
- ----------------------------------------------------------------------------
Net book amounts
At 31 July 1994 50,769 45,739 5,381 5,914 131,745 239,548
- ----------------------------------------------------------------------------
At 31 July 1993 50,785 56,805 5,129 5,845 165,957 284,521
- ----------------------------------------------------------------------------
At 31 July 1992
Cost or valuation 51,849 46,825 4,908 6,990 200,715 311,287
Depreciation and
amortisation (3,661) (2,537) (37) (1,896) (71,259) (79,390)
- ----------------------------------------------------------------------------
Net book amount 48,188 44,288 4,871 5,094 129,456 231,897
- ----------------------------------------------------------------------------
The cost of land and buildings includes capitalised interest of 16,094,000
Pounds (1993 - 14,433,000 Pounds, 1992 - 11,713,000 Pounds).
The cost of freehold land not depreciated amounts to 19,258,000 Pounds (1993
- - 21,326,000 Pounds, 1992 - 17,144,000 Pounds).
- ---------------------------------------------------------------------------
Operating
sites Other
--------- --------------------------
Mineral Sites
extrac- Occu- held
tion pied for
and for future
land- opera- exploi- Total
fill tions tation other
Summary of freehold land and Pounds Pounds Pounds Pounds
buildings as at 31 July 1994: '000 '000 '000 '000
- --------------------------------------------------------------------------
Valuation: 1985 5,495 1,627 570 2,197
Cost 51,884 46,392 2,261 48,653
- --------------------------------------------------------------------------
57,379 48,019 2,831 50,850
- --------------------------------------------------------------------------
Depreciation 6,610 5,111 -- 5,111
- --------------------------------------------------------------------------
Short leasehold properties are stated at cost of 8,401,000 Pounds and
valuation in 1985 of 547,000 Pounds, as at 31 July 1994.
The amount of revalued land and buildings as determined according to historic
cost accounting rules as at 31 July 1994 is:
- -------------------------------------------------------------------------
Free- Lease-
hold hold
Pounds Pounds
'000 '000
- -------------------------------------------------------------------------
Cost 5,447 556
Depreciation (2,750) (556)
- --------------------------------------------------------------------------
Net book value 2,697 --
- -------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Summary of assets held Pounds Pounds Pounds
under finance leases: '000 '000 '000
- --------------------------------------------------------------------------
Cost 14,863 17,211 16,861
Less accumulated depreciation (5,765) (4,618) (2,922)
- --------------------------------------------------------------------------
Net book value 9,098 12,593 13,939
- -------------------------------------------------------------------------
8 FIXED ASSET INVESTMENTS
- ---------------------------------------------------------------------------
Loans to
Associ- associ-
ated ated
under- under Trade
tak- tak- invest-
ings ings ments Total
Pounds Pounds Pounds Pounds
Group '000 '000 '000 '000
- ----------------------------------------------------------------------------
At 1 August 1991 14,619 13,632 142 28,393
Additions 34 1,666 41 1,741
Dividends received/disposals (25) -- (101) (126)
Currency adjustments (44) (550) 2 (592)
Premium amortisation (287) -- -- (287)
Loss for the period (537) -- -- (537)
- --------------------------------------------------------------------------
At 31 July 1992 13,760 14,748 84 28,592
- --------------------------------------------------------------------------
Additions 195 3,599 16 3,810
Dividends received/disposals (19) -- -- (19)
Currency adjustments (59) 1,451 11 1,403
Premium amortisation (293) -- -- (293)
Loss for the period (1,550) -- -- (1,550)
Provided in period -- -- (40) (40)
- ---------------------------------------------------------------------------
At 31 July 1993 12,034 19,798 71 31,903
- --------------------------------------------------------------------------
Additions/advances 132 3,026 11 3,169
Disposals/repayments (329) (2,020) (8) (2,357)
Dividends received/disposals (5) -- -- (5)
Currency adjustments 78 (381) 3 (300)
Premium amortisation (307) -- -- (307)
Loss for the period (1,649) -- -- (1,649)
- --------------------------------------------------------------------------
At 31 July 1994 9,954 20,423 77 30,454
- --------------------------------------------------------------------------
The Group has the following interests in associated undertakings:
(a) A 40% interest in the ordinary share capital of Vesta Technology
Limited, a company engaged in providing the service and sales of mobile
incinerators for the disposal of hazardous waste, operating and
incorporated in the USA.
(b) A 49% interest in the ordinary share capital of A&J Bull (Holdings)
Limited, a company engaged in mineral extraction and waste management
services, operating, registered and incorporated in England. This
investment is held by the parent company.
(c) A 50% interest in the ordinary share capital of Green Land Reclamation
Limited, a company engaged in the provision of environmental and power
generation consultancy services, operating, registered and incorporated
in England.
(d) A 50% interest in the ordinary share capital of Cranford Realty Limited,
a company engaged in the rental of property, operating, registered and
incorporated in England.
(e) A 50% interest, acquired during the year, in the ordinary share capital
of Green Land Limited, a company engaged in waste management services,
operating, registered and incorporated in Israel.
The associated undertaking investments comprise:
- ---------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- ---------------------------------------------------------------------------
Share of net (liabilities)/assets (4,930) 943 2,911
Premium on acquisition and share 16,056 11,956 11,421
of associated undertakings' goodwill
Premium amortisation (1,172) (865) (572)
- --------------------------------------------------------------------------
9,954 12,034 13,760
Long-term loans 20,423 19,798 14,748
- --------------------------------------------------------------------------
30,377 31,832 28,508
- --------------------------------------------------------------------------
There are three loans to associated undertakings:
(a) A loan to A&J Bull (Holdings) Limited, amounting to 8,635,000 Pounds at
31 July 1994 (1993 - 8,274,000 Pounds, 1992 - 7,957,000 Pounds) is
repayable in full on 30 June 1997 and has an effective annual interest
rate of 13%.
(b) A loan to Vesta Technology Limited, amounting to 8,791,000 Pounds at 31
July 1994 (1993 - 11,524,000 Pounds, 1992 - 6,791,000 Pounds) is
repayable on demand and carries interest at US prime (7.25% at 31 July
1994) plus 2%.
(c) A loan to Green Land Limited, amounting to 2,997,000 Pounds at 31 July
1994 is repayable on demand and carries interest at US$ LIBOR plus 1%.
Subsidiary Associated
undertakings undertakings Total
Pounds Pounds Pounds
Company '000 '000 '000
- ---------------------------------------------------------------------------
Cost:
At 1 August 1991 50,305 21,604 71,909
Additions 23,645 2 23,647
Transfer of investments to subsidiaries (1,970) --- (1,970)
- ---------------------------------------------------------------------------
At 31 July 1992 71,980 21,606 93,586
- ---------------------------------------------------------------------------
Additions 60,479 --- 60,479
Transfer of investments to subsidiaries (13,709) --- (13,709)
- --------------------------------------------------------------------------
At 31 July 1993 118,750 21,606 140,356
- --------------------------------------------------------------------------
Additions 2 --- 2
Transfer of investments to subsidiaries (2) --- (2)
- --------------------------------------------------------------------------
At 31 July 1994 118,750 21,606 140,356
- --------------------------------------------------------------------------
Details of the Group's principal operating subsidiaries are as follows:
- ----------------------------------------------------------------------------
Country of Percentage of
incorporation, share capital
registration owned and
and operation voting rights Nature of business
- ----------------------------------------------------------------------------
Drinkwater Sabey Ltd UK 100 Mineral extraction
and waste manage-
ment
Wareham Ball Clay Company Ltd* UK 60 Mineral extraction
Drinkwater Sabey CWD Ltd* UK 80 Sewage sludge
disposal
Attwoods of North America Inc* USA 100 Holding company
Industrial Waste Service Inc* USA 100 Waste management
County Sanitation Inc* USA 100 Waste management
Peterson Corporation* USA 100 Waste management
Waste Aid Systems Inc* USA 100 Waste management
MedX Inc* USA 100 Medical waste
Eastern Waste Industries Inc* USA 100 Waste management
Mindis Industrial Corporation USA 100 Recyclables pro-
(US) Inc*+ cessing and mar-
keting
Attwoods Dominicana SA* Dominican 60 Waste management
Republic
Attwoods Colombiana Columbia 70 Waste management
Attwoods (Finance) NV Netherlands 100 Finance
Antilles
Attwoods Holdings GmbH* Germany 100 Holding company
ADCO Attwoods & Dixi Germany 100 Portable sanita-
Umweltschutz GmbH* tion and waste
management
Dixi Sanitary Services BV* Netherlands 100 Portable sanita-
tion
ADCO SA* Belgium 100 Portable sanita-
tion
- -------------------------------------------------------------------------
*Held through a subsidiary + Disposed on 29 October 1993.
All holdings comprise ordinary shares in subsidiaries.
9 STOCKS - GROUP
- ---------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- ---------------------------------------------------------------------------
Raw materials and consumables 6,572 6,399 4,508
Recycling materials --- 61,780 41,370
- --------------------------------------------------------------------------
6,572 68,179 45,878
- --------------------------------------------------------------------------
10 DEBTORS
- ----------------------------------------------------------------------------
Group Company
31 July 31 July 31 July 31 July 31 July 31 July
1994 1993 1992 1994 1993 1992
Pounds Pounds Pounds Pounds Pounds Pounds
'000 '000 '000 '000 '000 '000
- ----------------------------------------------------------------------------
Gross trade 48,042 51,991 41,478 --- --- ---
debtors
Provision for (4,996) (3,804) (2,027) --- --- ---
doubtful debts
- -----------------------------------------------------------------------------
Net trade debtors 43,046 48,187 39,451 --- --- ---
Amounts owed by
subsidiary --- --- --- 174,848 176,101 203,049
undertakings
Amounts owed by 7,900 2,364 677 63 63 63
associated
undertakings
Taxes recoverable 2,768 1,914 2,972 --- 27 374
Other debtors 7,761 10,697 5,711 28 --- 1,993
Prepayments and 14,803 16,137 10,742 1,422 1,868 2,221
accrued income
- -------------------------------------------------------------------------
76,278 79,299 59,553 176,361 178,059 207,700
- ---------------------------------------------------------------------------
Included in debtors
are the following
amounts which are
due after one year:
Amounts owed by
associated under-
takings 7,383 --- --- --- --- ---
Other debtors 1,947 1,810 2,385 --- --- ---
Prepayments 1,412 2,575 995 923 1,368 ---
- -----------------------------------------------------------------------------
10,742 4,385 3,380 923 1,368 ---
- -----------------------------------------------------------------------------
11 INVESTMENTS
- ----------------------------------------------------------------------------
Group Company
31 July 31 July 31 July 31 July 31 July 31 July
1994 1993 1992 1994 1993 1992
Pounds Pounds Pounds Pounds Pounds Pounds
'000 '000 '000 '000 '000 '000
- ----------------------------------------------------------------------------
Listed in Great
Britain 3 3 2 --- --- ---
Unlisted 34 34 34 34 34 34
- ----------------------------------------------------------------------------
37 37 36 34 34 34
- ----------------------------------------------------------------------------
The market value of the listed investments as at 31 July 1994 was 6,000
Pounds (1993 - 5,000 Pounds, 1992 - 3,000 Pounds).
12 DEBT FINANCE ANALYSIS
- ----------------------------------------------------------------------------
Group Company
31 July 31 July 31 July 31 July 31 July 31 July
1994 1993 1992 1994 1993 1992
Pounds Pounds Pounds Pounds Pounds Pounds
Notes '000 '000 '000 '000 '000 '000
- ----------------------------------------------------------------------------
Less than one year
Bank loans 13 4,395 20,454 13,615 8 --- ---
and overdrafts
Other loans 14 121 2,067 1,996 --- --- ---
Deferred 15 587 1,884 2,503 --- --- ---
purchase
consideration
Amounts owed 16 2,990 3,028 2,656 --- --- ---
under finance
leases and
hire purchase
agreements
- ---------------------------------------------------------------------------
8,093 27,433 20,770 8 --- ---
- ---------------------------------------------------------------------------
More than one year
Bank loans 13 85,434 92,480 67,918 --- --- ---
and overdrafts
Other loans 14 1,939 6,045 6,161 --- --- ---
Deferred 15 1,259 1,959 3,121 --- --- ---
purchase
consideration
Amounts owed 16 6,215 9,206 10,979 --- --- ---
under finance
leases and
hire purchase
agreements
- ---------------------------------------------------------------------------
94,847 109,690 88,179 --- --- ---
- ----------------------------------------------------------------------------
102,940 137,123 108,949 8 --- ---
- ----------------------------------------------------------------------------
13 BANK LOANS AND OVERDRAFTS
- ----------------------------------------------------------------------------
Group Company
31 July 31 July 31 July 31 July 31 July 31 July
1994 1993 1992 1994 1993 1992
Pounds Pounds Pounds Pounds Pounds Pounds
'000 '000 '000 '000 '000 '000
- ----------------------------------------------------------------------------
Drawings under 77,211 96,924 53,021 --- --- ---
$165 million
credit facility
Other bank loans 12,442 15,258 27,054 --- --- ---
Overdrafts 176 752 1,458 8 --- ---
- ----------------------------------------------------------------------------
89,829 112,934 81,533 8 --- ---
Due within one (4,395) (20,454) (13,615) (8) --- ---
year (included in
creditors falling
due within one
year)
- ----------------------------------------------------------------------------
Due after more 85,434 92,480 67,918 --- --- ---
than one year
- -----------------------------------------------------------------------------
Amounts repayable --- 163 955 --- --- ---
by instalments,
any of which are
repayable after
five years
- ----------------------------------------------------------------------------
Aggregate of those --- 148 821 --- --- ---
instalments repay-
able after five
years
- ----------------------------------------------------------------------------
Repayment details:
Within one year 4,395 20,454 13,615 8 --- ---
Between one and 23 11,900 1,427 --- --- ---
two years
Between two and 8 245 12,381 --- --- ---
three years
Between three 85,403 88 194 --- --- ---
and four years
Between four and --- 80,099 53,095 --- --- ---
five years
In five years --- 148 821 --- --- ---
or more
- ----------------------------------------------------------------------------
89,829 112,934 81,533 8 --- ---
- ----------------------------------------------------------------------------
At 31 July 1994, Attwoods had a multi-option revolving credit facility of
$165 million, with a group of international banks at interest rates of 1.0%
above the London Interbank Offer Rate (LIBOR). In addition a commitment fee
of 0.5% is payable on the undrawn, uncancelled amount of the total facility.
The facility, which requires the Company to maintain certain financial
ratios, expires on 30 September 1997. In addition, at 31 July 1994, Attwoods
had further committed and uncommitted working capital facilities denominated
in various currencies, the sterling equivalent of which was 24.2 million
Pounds at interest rates varying between 6.25% and 11.0%. Of the total
drawings on these facilities 51,712 Pounds was secured against certain items
of plant and machinery in the United States.
14 OTHER LOANS - GROUP
- -------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- -------------------------------------------------------------------
Industrial Revenue
Bonds (IRB's) 1,822 2,387 1,945
Others 238 5,725 6,212
- -------------------------------------------------------------------
2,060 8,112 8,157
Due within one year (121) (2,067) (1,996)
(included in creditors
falling due within
one year)
- -------------------------------------------------------------------
Due after more than 1,939 6,045 6,161
one year
- --------------------------------------------------------------------
Amounts repayable by 1,822 3,958 3,664
instalments, any of
which are repayable
after five years
- -------------------------------------------------------------------
Aggregate of those 898 1,412 1,418
instalments repayable
after five years
- ------------------------------------------------------------------
Repayment details:
Within one year 121 2,067 1,996
Between one and two years 244 1,808 1,367
Between two and three years 255 1,808 1,381
Between three and four years 268 662 1,374
Between four and five years 274 355 621
In five years or more 898 1,412 1,418
- -------------------------------------------------------------------
2,060 8,112 8,157
- -------------------------------------------------------------------
The IRB's are not repayable until December 2001, but amounts are required to
be set aside each year in segregated bank accounts to meet the repayment
liability when it falls due. The balance is shown after deducting the
amounts already so set aside, and in the repayment details further amounts
are treated as falling due when they are required to be set aside. Interest
is payable at 3.5% which increases each year to 6.2% in 2001. The bonds are
secured against plant and machinery.
The other loans comprise notes from various third parties predominantly in
the United States. Interest rates on these notes vary between 3.9% and
15.86%. 2,060,320 Pounds of these notes are secured against certain land,
buildings, and items of plant and machinery.
15 DEFERRED PURCHASE CONSIDERATION - GROUP
- -------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- -------------------------------------------------------------------
Total of deferred 1,846 3,843 5,624
purchase consideration
Due within one year (587) (1,884) (2,503)
(included in creditors
falling due within one year)
- -------------------------------------------------------------------
Due after more than 1,259 1,959 3,121
one year
- -------------------------------------------------------------------
Amounts repayable by 885 1,067 1,466
instalments, any of which
are repayable after five years
- -------------------------------------------------------------------
Aggregate of those 62 224 360
instalments due after five
years
- -------------------------------------------------------------------
Repayable as follows:
Within one year 587 1,884 2,503
Between one and two years 459 650 1,576
Between two and three years 346 516 520
Between three and four years 197 365 389
Between four and five years 195 204 276
In five years or more 62 224 360
- -------------------------------------------------------------------
1,846 3,843 5,624
- -------------------------------------------------------------------
16 AMOUNTS OWED UNDER FINANCE LEASES AND HIRE PURCHASE AGREEMENTS
- GROUP
- -------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- -------------------------------------------------------------------
Total of finance lease 9,205 12,234 13,635
and hire purchase
obligations
Due within one year (2,990) (3,028) (2,656)
(included in creditors
falling due within one year)
- -------------------------------------------------------------------
Due after more than 6,215 9,206 10,979
one year
- -------------------------------------------------------------------
Finance lease and hire
purchase obligations fall
due for payment as follows:
Within one year 3,860 4,280 4,054
Between one and two years 3,570 4,066 3,533
Between two and three years 2,702 3,552 4,242
Between three and four years 755 2,555 2,019
Between four and five years 38 805 2,036
In five years or more -- 39 619
- -----------------------------------------------------------------
Total minimum lease 10,925 15,297 16,503
payments
Future interest (1,720) (3,063) (2,868)
- -------------------------------------------------------------------
9,205 12,234 13,635
- -------------------------------------------------------------------
17 TRADE AND OTHER CREDITORS (AMOUNTS FALLING DUE WITHIN ONE YEAR)
- -------------------------------------------------------------------
Group Company
31 July 31 July 31 July 31 July 31 July 31 July
1994 1993 1992 1994 1993 1992
Pounds Pounds Pounds Pounds Pounds Pounds
'000 '000 '000 '000 '000 '000
- -------------------------------------------------------------------
Trade creditors 19,940 21,890 14,497 -- -- --
Amounts owed to -- -- -- 190 210 210
subsidiary under-
takings
Other creditors 3,383 2,440 2,120 110 686 32
Corporation tax 9,918 11,026 8,594 6,097 6,719 5,426
payable
Other taxes and 3,047 2,970 2,755 -- -- --
social security
Accruals and 23,408 28,610 23,903 188 55 1,926
deferred income
Proposed divid- 14,147 14,102 14,065 14,147 14,102 14,065
end
Dividends pay- 98 -- 40 -- -- --
ale to minorities
- -------------------------------------------------------------------
73,941 81,038 65,974 20,732 21,772 21,659
- -------------------------------------------------------------------
18 GUARANTEED REDEEMABLE CONVERTIBLE PREFERENCE SHARES - GROUP
- -------------------------------------------------------------------
Attwoods plc owns all the issued ordinary share capital of Attwoods (Finance)
NV, which is incorporated in the Netherlands Antilles. The eight and one
half pence guaranteed redeemable convertible preference shares issued by
Attwoods (Finance) NV carry no voting rights in normal circumstances and are
as follows:
- -----------------------------------------------------------------------------
Authorised Allotted and fully paid
- ----------------------------------------------------------------------------
31 July 31 July 31 July 31 July 31 July 31 July
1994 1993 1992 1994 1993 1992
- -----------------------------------------------------------------------------
Preference *3,324,121 *3,324,121 *3,324,121 *3,282,752 *3,282,752 *3,282,752
shares of
5p each
- -----------------------------------------------------------------------------
Number of 66,482,411 66,482,411 66,482,411 65,655,051 65,655,051 65,655,051
shares
- -----------------------------------------------------------------------------
*Denotes Pounds
The preference shares are redeemable at the issue price of 100p per share no
later than 21 July 2008 if they have not been converted into ordinary shares
of the Company. Such conversion can take place, at the option of the holder
of the preference shares, on 31 January each year from 1991 to 2003 inclusive
at the conversion price of 178.5p per ordinary share of the Company. Full
conversion at this price would result in the issue of 36,781,541 new ordinary
shares of the Company. If a successful offer is made to acquire the issued
share capital of the Company before 31 January 2003 holders of the preference
shares are entitled to convert their holding into ordinary shares of the
Company immediately at the conversion price of 178.5p. Attwoods (Finance) NV
are entitled, between 31 January 1991 and 31 January 2003, to require
preference shareholders to convert into ordinary shares of the Company at the
prevailing conversion price if the average middle market quotation of
Attwoods plc ordinary shares, during any period of 60 dealing days, is more
than two hundred per cent of the prevailing conversion price, or if seventy-
five per cent or more of the preference shares have been converted or
redeemed.
19 PROVISIONS FOR LIABILITIES AND CHARGES
- -----------------------------------------------------------------------------
Group Company
31 July 31 July 31 July 31 July 31 July 31 July
1994 1993 1992 1994 1993 1992
Pounds Pounds Pounds Pounds Pounds Pounds
'000 '000 '000 '000 '000 '000
- -----------------------------------------------------------------------------
Provision for loss on
disposal of business:
Opening balance 61,217 -- -- -- -- --
(Release of provision)/
provision for loss on
discontinued activity (61,217) 61,217 -- -- -- --
- -----------------------------------------------------------------------------
Closing balance -- 61,217 -- -- -- --
- -----------------------------------------------------------------------------
Deferred Taxation:
Opening balance 15,124 15,446 16,285 21 257 54
Acquisition
of subsidiaries -- 11 -- -- -- --
Transfer (to)/from
profit and
loss account (5,138) (3,764) 2,639 171 (1,038) 989
Advance corporation
tax movements 775 1,714 (2,799) -- 802 (786)
Currency adjustment (54) 1,717 (679) -- -- --
- -----------------------------------------------------------------------------
Closing balance 10,707 15,124 15,446 192 21 257
- -----------------------------------------------------------------------------
Group Company
31 July 31 July 31 July 31 July 31 July 31 July
1994 1993 1992 1994 1993 1992
Deferred taxation Pounds Pounds Pounds Pounds Pounds Pounds
analysis '000 '000 '000 '000 '000 '000
- -----------------------------------------------------------------------------
The balance is made up
as follows:
Accelerated capital 24,362 27,937 20,919 -- -- --
allowances
Other timing differences 2,947 3,632 6,652 192 21 1,059
Advance corporation tax (3,537) (4,068) (5,878) -- -- (802)
Losses carried forward (13,065) (12,377) (6,247) -- -- --
- ----------------------------------------------------------------------------
10,707 15,124 15,446 192 21 257
- ----------------------------------------------------------------------------
The potential liability
is made up as follows:
Accelerated capital 24,847 29,120 21,426 -- -- --
allowances
Other timing differences 2,950 3,750 6,770 192 21 1,059
Chargeable gain on dis- 409 511 624 -- -- --
posal of properties at
their net book value
Advance corporation tax (3,537) (4,068) (5,878) -- -- (802)
Losses carried forward (17,125) (12,377) (6,247) -- -- --
- ---------------------------------------------------------------------------
7,544 16,936 16,695 192 21 257
- ----------------------------------------------------------------------------
20 CALLED UP SHARE CAPITAL
- ----------------------------------------------------------------------------
Authorised Allotted and fully paid
- ----------------------------------------------------------------------------
31 July 31 July 31 July 31 July 31 July 31 July
1994 1993 1992 1994 1993 1992
- -----------------------------------------------------------------------------
Ordinary *19,000,000*19,000,000*19,000,000*14,147,537 *14,102,550 *14,065,668
shares of
5p each
- -----------------------------------------------------------------------------
*Denotes Pounds
The changes in the issued share capital and share premium account of Attwoods
plc since 31 July 1991 are summarised below:
- ----------------------------------------------------------------------------
Allotted and
fully paid
ordinary shares Share
of 5p each premium
- ----------------------------------------------------------------------------
Number Pounds Pounds
- ----------------------------------------------------------------------------
At 1 August 1991 192,116,542 9,605,827 84,752,843
Issue of shares in August 1991 at 895,250 44,763 1,810,196
207.2p per share in consideration
for the acquisition of Ventre Inc.
Issue of shares in September 1991 at 396,040 19,802 780,198
202.0p per share in consideration
for the acquisition of land at
Cranford
Issue of shares in November 1991 at 4,810,504 240,525 5,247,298
114.08p per share in consideration
for the acquisition of
Enviro-Solutions Inc.
Nine for twenty-five rights issue 82,917,694 4,145,885 78,771,809
in December 1991 at 100.0p per share
Issue of shares in February 1992 at 137,307 6,865 266,705
178.5p in respect of preference share
conversions
Shares allotted between 22 April 1992 40,016 2,001 32,882
and 4 June 1992 at prices between
51.565p and 96.238p per share upon
the exercise of options for shares
Issue expenses -- -- (2,780,325)
- ----------------------------------------------------------------------------
At 31 July 1992 281,313,353 14,065,668 168,881,606
- ----------------------------------------------------------------------------
Issue of shares in September 1992 at 680,273 34,014 764,627
117.4p per share to satisfy deferred
purchase consideration for the
acquisition of land at Cranford
Shares allotted between 5 March 1993 and 57,367 2,868 53,171
5 May 1993 at prices between 96.238p
and 117p per share upon the exercise
of options for shares
Issue expenses -- -- (9,845)
- ----------------------------------------------------------------------------
At 31 July 1993 282,050,993 14,102,550 169,689,559
- ----------------------------------------------------------------------------
Issue of shares in September 1993 at 616,333 30,817 769,184
129.8p per share to satisfy deferred
purchase consideration for the
acquisition of land at Cranford
Shares allotted between 12 January 283,408 14,170 223,473
1994 and 28 June 1994 at prices
between 51.565p and 117p per share
upon the exercise of options for
shares
Issue expenses -- -- (1,440)
- ----------------------------------------------------------------------------
At 31 July 1994 282,950,734 14,147,537 170,680,776
- ----------------------------------------------------------------------------
The Company has two share option plans: the Attwoods plc 1985 Share Option
Plan and the Attwoods plc 1991 Overseas Employees Share Option Plan. Both
plans permit the Board of Directors to offer share options to substantially
all employees under the plans at not less than the greater of the nominal
value of an ordinary share and the market value of an ordinary share on the
date of grant. The options are exercisable during the three to ten year
period following the date of grant in respect of the 1985 plan and during a
three to seven year period following the date of grant in respect of the 1991
plan. Changes in options outstanding are as follows:
Share options
---------------------------------
1985 Plan 1994 1993 1992
- ----------------------------------------------------------------------------
Opening balance 8,489,444 8,210,575 6,079,316
Granted 889,500 587,500 2,031,000
Exercised (283,408) (57,367) (40,016)
Lapsed (1,165,132) (251,264) (165,599)
Adjustment for rights issue -- -- 305,874
- ----------------------------------------------------------------------------
Closing balance 7,930,404 8,489,444 8,210,575
- ----------------------------------------------------------------------------
1991 Plan 1994 1993 1992
- ----------------------------------------------------------------------------
Opening balance 1,339,000 1,185,000 --
Granted 278,500 154,000 1,185,000
Exercised -- -- --
Lapsed (127,500) -- --
- ----------------------------------------------------------------------------
Closing balance 1,490,000 1,339,000 1,185,000
- ---------------------------------------------------------------------------
The share options outstanding at 31 July 1994, by option price, are as
follows:
Option Year Year
Number price of of
1985 Plan of shares per share issue expiration
- ----------------------------------------------------------------------------
19,984 51.565p 1985 1995
121,210 91.723p 1986 1996
579,264 96.238p 1987 1997
695,494 135.684p 1988 1998
1,714,549 197.087p 1989 1999
1,665,403 186.774p 1990 2000
1,719,000 117.000p 1992 2002
526,000 138.000p 1992 2002
889,500 112.000p 1994 2004
- ----------------------------------------------------------------------------
7,930,404
- ----------------------------------------------------------------------------
1991 Plan
- ----------------------------------------------------------------------------
1,085,000 117.000p 1992 1999
126,500 138.000p 1992 1999
278,500 112.000p 1994 2001
- ----------------------------------------------------------------------------
1,490,000
- ---------------------------------------------------------------------------
21 CAPITAL AND RESERVES - GROUP
- -----------------------------------------------------------------------------
Undistri- Distri-
butable butable
- ------------------------------------------------------------ -------- ------
Total
Share Revalu- Goodwill Profit capital
Share premium ation Other written and loss and
capital account reserve reserve off account reserves
Pounds Pounds Pounds Pounds Pounds Pounds Pounds
'000 '000 '000 '000 '000 '000 '000
- ------------------------------------------------------------- ------ -------
At 1 August 1991 9,606 84,753 2,449 115,231 (192,581) 49,839 69,297
Retained profit -- -- -- -- -- 3,177 3,177
for the year
Transfer of -- -- (85) -- -- 85 --
amortisation of
revalued properties
Shares issued in 4,453 83,862 -- -- -- -- 88,315
the year (note 20)
Conversion of 7 266 -- -- -- -- 273
preference shares
(note 20)
Write off of goodwill -- -- -- -- (14,287) -- (14,287)
arising on
acquisitions
Foreign currency -- -- -- -- -- (11,489)(11,489)
translation
adjustments
- ------------------------------------------------------------- ------ --------
At 31 July 1992 14,066 168,881 2,364 115,231 (206,868) 41,612 135,286
- ------------------------------------------------------------- ------ --------
Retained loss for -- -- -- -- -- (85,312)(85,312)
the year
Transfer of -- -- (115) -- -- 115 --
amortisation
of revalued
properties
Shares issued in 37 808 -- -- -- -- 845
the year (note 20)
Write off of goodwill -- -- -- -- (2,065) -- (2,065)
arising on
acquisitions
Goodwill written -- -- -- -- 29,809 -- 29,809
back on disposal
of business
Transfer of merger -- -- -- (22,472) -- 22,472 --
relief relating to
business disposed of
Foreign currency -- -- -- -- -- 29,728 29,728
translation
adjustments
- ------------------------------------------------------------- ------ -------
At 31 July 1993 14,103 169,689 2,249 92,759 (179,124) 8,615 108,291
- ------------------------------------------------------------- ------ -------
Retained loss for -- -- -- -- -- (8,741) (8,741)
the year
Transfer of -- -- (136) -- -- 136 --
amortisation
of revalued
properties
Shares issued in 45 992 -- -- -- -- 1,037
the year (note 20)
Write off of goodwill -- -- -- -- (2,858) -- (2,858)
arising on
acquisitions
Foreign currency -- -- -- -- -- (2,465) (2,465)
translation
adjustments
- ------------------------------------------------------------- ------ --------
At 31 July 1994 14,148 170,681 2,113 92,759 (181,982) (2,455) 95,264
- ------------------------------------------------------------- ------ -------
21 CAPITAL AND RESERVES - COMPANY
- -----------------------------------------------------------------------------
Distri-
Undistributable butable
- ------------------------------------------------------------- ------- -------
Total
capi-
Profit tal
Share and and
Share premium Other loss re-
capital account reserve account serves
Pounds Pounds Pounds Pounds Pounds
'000 '000 '000 '000 '000
- ----------------------------------------------------------- ------- --------
At 1 August 1991 9,606 84,753 70,074 6,125 170,558
Share issues in the year 4,453 83,862 -- -- 88,315
(note 20)
Conversion of preference shares 7 266 -- -- 273
(note 20)
Retained profit for the year -- -- -- 22,113 22,113
- ----------------------------------------------------------- ------- -------
At 31 July 1992 14,066 168,881 70,074 28,238 281,259
- ----------------------------------------------------------- ------- -------
Share issues in the
year (note 20) 37 808 -- -- 845
Retained profit for the year -- -- -- 17,317 17,317
- ----------------------------------------------------------- ------- -------
At 31 July 1993 14,103 169,689 70,074 45,555 299,421
- ----------------------------------------------------------- ------- -------
Share issues in the
year (note 20) 45 992 -- -- 1,037
Retained loss for the year -- -- -- (4,609) (4,609)
- ----------------------------------------------------------- ------- --------
At 31 July 1994 14,148 170,681 70,074 40,946 295,849
- ----------------------------------------------------------- ------- --------
22 RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
- ----------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- -----------------------------------------------------------------------------
Operating profit 18,980 29,358 31,234
Release of provision against discontinued (3,110) -- --
activities' operating loss
Other (expense)/income (801) 8,360 563
Exchange gains on short term monetary items not (597) (4,362) (78)
yet realised in cash
Depreciation of tangible assets 36,498 32,265 25,049
Amortisation of associated undertakings' premiums 307 293 287
Increase in stocks (613) (8,564) (12,268)
Increase in debtors (15) (6,158) (4,186)
Increase/(decrease) in creditors 2,483 4,726 (531)
- -----------------------------------------------------------------------------
Net cash inflow from operating activities 53,132 55,918 40,070
- -----------------------------------------------------------------------------
23 ACQUISITIONS AND DISPOSALS
- --------------------------------------------------------------------------
There were no material acquisitions during the course of the year.
The businesses of the subsidiary undertakings acquired in the year were
combined with those of existing group companies shortly after acquisition.
Because of the small size of individual acquisitions, post acquisition
cashflows relating to the acquired businesses have not been analysed in these
accounts.
On 29 October 1993, the Group disposed of its interest in Mindis Consolidated
Corporation, the Group's recyclables processing and marketing division.
Summary of effect of disposal of subsidiary company during the year:
Pounds
'000
- ----------------------------------------------------------------------------
Net assets and liabilities disposed of
Tangible assets and investments 29,833
Stocks 62,042
Debtors 8,865
Creditors (7,547)
Taxation (1,466)
Debt (9,472)
- -----------------------------------------------------------------------------
82,255
Goodwill write off in 1993 29,809
- -----------------------------------------------------------------------------
112,064
Proceeds on disposal (26,606)
- ----------------------------------------------------------------------------
Loss on sale of business 85,458
- ----------------------------------------------------------------------------
In the period up until the date of disposal, Mindis Consolidated Corporation
contributed the following amounts to the Group's cashflows (excluding the
disposal proceeds):
Pounds
'000
- -----------------------------------------------------------------------------
Net cash outflow from operating activities (243)
Net cash outflow from returns on investments and servicing (597)
of finance
Taxation --
Net cash outflow from investing activities (162)
Net cash outflow from financing (657)
- -----------------------------------------------------------------------------
Decrease in cash equivalents (1,659)
- ----------------------------------------------------------------------------
24 ANALYSIS OF CHANGES IN ORDINARY SHARE CAPITAL
- -----------------------------------------------------------------------------
Ordinary share capital (including premium)
31 July 31 July
1994 1993
Pounds Pounds
'000 '000
- -----------------------------------------------------------------------------
Opening balance 183,792 182,947
Shares issued to satisfy deferred consideration 800 799
Net cash inflows from shares issued for cash 237 46
- -----------------------------------------------------------------------------
Closing balance 184,829 183,792
- ----------------------------------------------------------------------------
25 ANALYSIS OF CHANGES IN FINANCING
- -----------------------------------------------------------------------------
Deferred
Bank Other Consider- Finance
loans loans ation leases Total
Pounds Pounds Pounds Pounds Pounds
'000 '000 '000 '000 '000
- ----------------------------------------------------------------------------
At 1 August 1992 80,075 8,157 5,624 13,635 107,491
Loans acquired 346 --- --- 26 372
New loans 30,600 182 129 --- 30,911
New finance leases --- --- --- 370 370
Repayments (15,959) (2,489) (1,916) (3,154) (23,518)
Shares issued --- --- (799) --- (799)
Exchange 17,120 2,262 805 1,357 21,544
- ---------------------------------------------------------------------------
At 31 July 1993 112,182 8,112 3,843 12,234 136,371
- ---------------------------------------------------------------------------
New loans 33,088 129 65 --- 33,282
New finance leases --- --- --- 552 552
Repayments (53,550) (1,460) (1,208) (2,670) (58,888)
Disposed of with (2,799) (4,624) --- (1,361) (8,784)
subsidiary
Shares issued --- --- (800) --- (800)
Exchange 732 (97) (54) 450 1,031
- ---------------------------------------------------------------------------
At 31 July 1994 89,653 2,060 1,846 9,205 102,764
- ---------------------------------------------------------------------------
Non cash transactions
During the year ended 31 July 1994, deferred purchase consideration for the
acquisition of land at Cranford was paid by the issue of ordinary shares,
with a value of 800,001 Pounds.
In addition the value of plant and equipment purchased under finance leases
during the year amounted to 552,000 Pounds.
26 ANALYSIS OF CHANGES IN ATTWOODS (FINANCE) NV GUARANTEED REDEEMABLE
CONVERTIBLE PREFERENCE SHARES
- ---------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- ----------------------------------------------------------------------------
Opening balance 72,578 73,040 73,743
Preference share interest charge 5,097 5,119 5,162
Preference dividends paid (5,571) (5,581) (5,592)
Conversion of preference shares --- --- (273)
- ----------------------------------------------------------------------------
Closing balance 72,104 72,578 73,040
- ----------------------------------------------------------------------------
27 ANALYSIS OF CHANGES IN CASH AND CASH EQUIVALENTS DURING THE YEAR
- ----------------------------------------------------------------------------
Cash Overdrafts Total
Pounds Pounds Pounds
'000 '000 '000
- ----------------------------------------------------------------------------
At 1 August 1992 33,636 (1,458) 32,178
Movement (25,431) 1,049 (24,382)
Exchange 4,107 (343) 3,764
- ----------------------------------------------------------------------------
At 31 July 1993 12,312 (752) 11,560
- ----------------------------------------------------------------------------
Movement (9,056) (110) (9,166)
Disposed of with subsidiary --- 688 688
Exchange (346) (2) (348)
- ----------------------------------------------------------------------------
At 31 July 1994 2,910 (176) 2,734
- ----------------------------------------------------------------------------
28 COMMITMENTS
- ----------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- -------------------------------------------------------------------------
(a) Capital commitments
Contracted for but not provided 5,061 3,048 3,200
in the Group accounts
- ----------------------------------------------------------------------------
(b) Operating leases
At 31 July 1994 the Group had total
commitments under non-cancellable
operating leases as set out below:
- ----------------------------------------------------------------------------
Pounds
'000
- ----------------------------------------------------------------------------
Falling due in:
One year 1,803
One to two years 1,752
Two to three years 1,744
Three to four years 1,595
Four to five years 1,308
After five years 3,653
- ----------------------------------------------------------------------------
11,855
- ----------------------------------------------------------------------------
An analysis of operating lease rentals Land and
payable within the next year is set out buildings Other Total
below: Pounds Pounds Pounds
'000 '000 '000
- -----------------------------------------------------------------------------
On leases expiring within one year 71 --- 71
On leases expiring in one to two years 33 --- 33
On leases expiring in two to three years 15 --- 15
On leases expiring in three to four years 141 92 233
On leases expiring in four to five years 31 717 748
On leases expiring after five years 670 33 703
- ----------------------------------------------------------------------------
961 842 1,803
- ----------------------------------------------------------------------------
29 CONTINGENT LIABILITIES AND LEGAL MATTERS
- ----------------------------------------------------------------------------
Attwoods plc
The Company has guaranteed the payment of all dividends and redemption
monies payable on the preference shares of Attwoods (Finance) NV. At 31
July 1994 the maximum liability which could arise under this guarantee
amounted to 73,862,898 Pounds (1993 - 72,217,745 Pounds, 1992 - 70,727,570
Pounds). The Company had guaranteed loans and other borrowings of Group
companies at 31 July 1994 amounting to 89,601,648 Pounds (1993 - 109,428,186
Pounds, 1992 - 62,492,498 Pounds).
Attwoods plc and subsidiaries
In the ordinary course of conducting its business, the Company and its
subsidiaries are involved in lawsuits, administrative proceedings and
governmental investigations, including environmental matters or proceedings.
Some of these proceedings could result in fines, penalties, loss or
non-renewal of operating licences or judgements against the Company which,
from time to time, could have an impact on earnings for a particular
financial period. For example, one of the Company's subsidiaries is (together
with other numerous defendants) engaged in a civil and governmental action in
the US as transporter of hazardous substances to, and owner-operator (by
succession) of, a Superfund site and has received an order from the US
Environmental Protection Agency to implement certain remedial action at the
site. The Company believes that it has various legal defences, possible
insurance cover and indemnification rights provided in connection with
certain acquisitions to help mitigate the effect of potential liabilities
which might arise from such matters. The Company believes that such matters
will not have a material adverse effect on the Group.
By a letter dated 4 October 1994, the Company was notified by the purchaser
of Mindis of a dispute arising from the sale agreement dated 12 October 1993.
The sale of Mindis was a management-led buyout transaction. This notice
disputed the value of inventories and claimed the misstatement of certain
assets and liabilities and sought damages in the amount of US$78 million or
rescission of the sale. The Company believes the notice has been deliberately
timed. The sale agreement contains no relevant warranties and the Company
believes the purchaser has no evidence that would substantiate its
allegations. The Company, having received legal advice, is of the view that
the claim will not result in any material liability.
The dispute has been notified to the participants in the Company's US$165
million Revolving Credit Facility ("RCF"). The required majority of
participants has confirmed, on behalf of all participants, that the current
circumstances do not constitute a default under the terms of the RCF. The
dispute does not affect the Company's arrangements with its other banks.
Save and subject as mentioned above, the Directors do not believe that there
are any proceedings known to the Company that will result in a material
adverse effect on its financial position.
30 POST BALANCE SHEET EVENT
- ---------------------------------------------------------------------------
This is set out in the Extract of the Report of the Directors. No provision
for defence costs in respect of this matter has been made in these financial
statements.
31 SUMMARY OF DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES
- ---------------------------------------------------------------------------
These consolidated financial statements have been prepared in accordance with
UK Generally Accepted Accounting Principles (UK GAAP), which differs in
certain significant respects from US Generally Accepted Accounting Principles
(US GAAP). A description of the relevant accounting principles which differ
materially is given below.
Sale of Mindis
There are a number of differences between UK and US GAAP when accounting for
the sale of Mindis.
(i) Income Statement
Under UK GAAP Mindis has been treated as a discontinued operation; under US
GAAP it would not be treated as a discontinued operation because it did not
represent a separate segment under US GAAP.
Under UK GAAP the loss on disposal of Mindis is calculated by comparing the
proceeds of the sale and the net assets of Mindis at the date of disposal,
translated at the rate of exchange prevailing, at the relevant date. Under US
GAAP all exchange differences which have arisen during the period of
ownership of Mindis and which have been taken directly to reserves are, on
disposal, reflected in the income statement.
(ii) Balance Sheet
Under UK GAAP the assets and liabilities of Mindis were consolidated in the
normal way last year and, in the absence of evidence which suggests that
specific assets were overstated a provision was carried for the loss arising.
Under US GAAP Mindis was categorised as a subsidiary under temporary control
and, as such, it was included in the 1993 financial statements within current
assets using the equity method of accounting but reducing the carrying amount
to its realisable value.
Goodwill and Intangible assets
US GAAP requires that goodwill and intangible assets be amortised over their
estimated useful lives, which must not exceed 40 years. In these financial
statements goodwill and other intangible assets (which are principally
comprised of the value of acquired customer contracts and which are
considered to be equivalent to goodwill in the UK) are written off directly
to reserves in the year in which they arise, as permitted under UK GAAP. For
the purposes of the reconciliation, goodwill is capitalised and amortised
over its estimated useful life. In the majority of cases this is 40 years.
Other intangible assets are amortised over their economic lives which range
from 3 to 20 years.
Premiums arising on the acquisitions of investments in associated companies
are already capitalised and amortised in the financial statements.
Consolidation of Vesta
The Company owns 40% of the share capital of Vesta Technology Limited
(Vesta). Under UK GAAP, Vesta is treated as an associated company and is
included in the financial statements under the equity method. Under US GAAP,
by reason of the loan made to Vesta, it is treated as a subsidiary and is
therefore consolidated.
Acquisition costs and development costs
Under US GAAP, certain costs associated with the acquisition of subsidiaries
cannot be included in the total cost of acquisition but must be expensed
through the profit and loss account in the period.
Similarly US GAAP requires that certain development costs be expensed through
the profit and loss account in the period they arise. In the financial
statements these costs have been capitalised and are being amortised over the
periods in which the benefits associated with these costs will be received.
Deferred income taxes
The Company accounts for deferred taxes using the liability method.
Provision is made for all timing differences (between the taxation treatment
and accounting treatment of items of income and expenditure) except for those
where the Directors consider that no liability will arise in the foreseeable
future.
The US Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes", provides for the use of the liability method but requires that
provisions be made for all temporary differences.
For the purposes of the reconciliation, the deferred tax amounts included
represent amounts which would be provided if the Company made full provision
for all temporary differences.
Business combinations
The treatment of certain subsidiaries acquired in 1982, 1983 and 1986 has
also been adjusted in the reconciliation due to differences in the treatment
between UK and US accounting practices in determining whether or not the
"pooling of interests" method is applicable and in dealing with any excess of
net assets acquired over cost. Under US GAAP the conditions for using the
"pooling of interests" method were, during those periods, more restricted
than under UK GAAP and an acquisition made by the Group which was treated as
a pooling of interest under UK GAAP has, under US GAAP, been accounted for
using the purchase method, including the restatement of assets and
liabilities at their fair values. In 1992 certain of the affected assets were
sold giving rise to differences in the reported profits which arose from
their disposal. This difference has been reported in note 32 as "disposal of
revalued assets".
The income credit arising from other differences in accounting for business
combinations is reflected in the "other" category of the reconciliation in
note 32.
Revaluation of property
US GAAP requires the strict application of the historical cost concept and
does not allow the periodic revaluation of tangible fixed assets which is
carried out under UK accounting practice. The Company depreciates its
property on the basis of the revalued amounts. The profit or loss on the
disposal of revalued fixed assets is calculated net of revaluation surplus.
The reconciliation takes account of the reduced depreciation charge as part
of the "Other" category in note 32 and greater profits on sale that arise
using US GAAP.
Share options - tax benefits
Under US GAAP, the tax benefit which arises when options over ordinary shares
of Attwoods are exercised by US employees is credited to share premium
account. The Company has recognised this benefit as a reduction in the tax
expense for the year which is included in the "Other" category in note 32.
Weighted average number of shares
Under US GAAP, the weighted average number of shares for primary earnings per
share should include common stock equivalents including convertible shares
(in certain circumstances) as calculated using the If Converted Method, share
options as calculated under the Treasury Stock Method and shares issued after
the year-end to satisfy deferred consideration arising based on the results
of the year. The Company excludes convertible shares, share options and
shares issued after the year-end to satisfy deferred consideration when
computing the weighted average number of shares for basic earnings per share
as calculated on a UK GAAP basis. Fully diluted earnings per share have not
been presented as they do not vary materially from basic earnings per share.
Dividends
Under UK GAAP, final ordinary dividends are provided for in the year in
respect of which they are proposed. Under US GAAP, dividends are provided
when declared by the Directors.
Currency translation
The adjustments arising from the translation of the financial statements of
autonomous foreign subsidiary companies are required, under US GAAP, to be
accumulated as a separate component of shareholders' equity. The Company's
policy is to take such differences to revenue reserves, referred to in the US
as retained earnings.
Fair value of financial instruments
US GAAP requires the disclosure of the fair market value of all financial
instruments for which it is practicable to estimate that value.
The fair market values of cash and cash equivalents, trade and non trade
receivables, payables and loan finance are not materially different from
their carrying values.
It is not practicable to estimate the fair market value of investments in
associated companies. The total carrying value of these, on a US GAAP basis,
including loans, is 27,766,000 Pounds (1993 - 21,575,000 Pounds). The
Group's share of net assets of the associated companies, on a US GAAP basis,
treating loans to associates as equity is 16,207,000 Pounds (1993 -
12,779,000 Pounds).
The only other material financial instruments are the guaranteed redeemable
convertible preference shares. The carrying and fair market value of these
are given below:
- ----------------------------------------------------------------------------
31 July 1994 31 July 1993
Fair Fair
Carrying market Carrying market
value value value value
Pounds Pounds Pounds Pounds
'000 '000 '000 '000
- ----------------------------------------------------------------------------
Guaranteed redeemable 72,104 60,655 72,578 56,135
convertible preference
shares
- ----------------------------------------------------------------------------
Cash Flow Statements
The cash flow statement included in the consolidated financial statements has
been prepared in conformity with the UK Financial Reporting Standard Number
1. The principal differences between this statement and cash flows presented
in accordance with US Statement of Financial Accounting Standards number 95,
"Cash Flow Statements", are as follows:
1. Under the UK standard, net cash flow from operating activities is
determined before considering cash flows from returns on investments and
servicing of finance and taxation. Under the US standard, net cash flows from
operating activities are determined after these items.
2. Under the UK standard, dividends are included in returns on investments
and servicing of finance while under the US standard they are included in
financing activities.
3. Under the UK standard, overdrafts are classified within the heading of
cash and cash equivalents. Under the US standard, overdraft facilities
forming part of a current account banking relationship are considered to be
part of the Group's financing activities.
32 ADJUSTMENTS TO NET INCOME REQUIRED BY US GAAP
- ----------------------------------------------------------------------------
The following is a summary of material adjustments to net income which would
be required if accounting principles generally accepted in the US had been
applied.
- ----------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- ----------------------------------------------------------------------------
Reconciliation of Income attributable to
ordinary shareholders and computation of
earnings per share on a US GAAP basis
- ----------------------------------------------------------------------------
Income attributable to ordinary share- 5,426 (71,188) 17,284
holders (UK GAAP basis) Adjustments to
US GAAP
Sale of business --- 14,065 ---
Amortisation of intangible assets (9,960) (9,180) (8,108)
Consolidation of Vesta Technology Ltd (2,674) (2,005) (652)
Internal acquisition costs and 853 (886) 82
development costs, net of amortisation
Disposal of revalued assets --- --- (1,300)
Other 201 1,101 (445)
Deferred income taxes - arising from 815 (293) (246)
full provision
Deferred income taxes - arising on (1,766) 125 (534)
US GAAP adjustments
- ----------------------------------------------------------------------------
Income attributable to ordinary (7,105) (68,261) 6,081
shareholders as adjusted to conform
with US GAAP
- ----------------------------------------------------------------------------
Weighted average number of shares
outstanding on a UK GAAP basis 282,708 281,907 252,553
Common stock equivalents --- 383 665
- ----------------------------------------------------------------------------
Weighted average number of shares
outstanding on a US GAAP basis 282,708 282,290 253,218
- ----------------------------------------------------------------------------
(Loss)/earnings per ordinary share
on a US GAAP basis (pence) (2.51) (24.18) 2.40
- ----------------------------------------------------------------------------
33 ADJUSTMENTS TO SHAREHOLDERS' FUNDS REQUIRED BY US GAAP
- ----------------------------------------------------------------------------
The following is a summary of material adjustments to shareholders' funds
which would be required if accounting principles generally accepted in the US
had been applied.
- ----------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- ----------------------------------------------------------------------------
Shareholders' funds (UK GAAP basis) 95,264 108,291 135,286
before minority interest
Adjustments to US GAAP
Intangible assets (net of 155,508 165,194 168,365
accumulated amortisation of
50,536,000 Pounds, 41,483,000
Pounds and 28,295,000 Pounds)
Internal acquisition costs and (4,548) (5,385) (3,788)
development costs
Consolidation of Vesta Technology Ltd (7,559) (5,115) (2,940)
Business combinations (1,800) (1,864) (1,928)
Revaluations (2,113) (2,249) (2,364)
Proposed final dividend 9,196 9,167 9,142
Other --- --- (1,100)
Deferred income taxes - arising (486) (1,301) (1,050)
from full provision
Deferred income taxes - arising (5,484) (3,076) (1,796)
on US GAAP adjustments
- -----------------------------------------------------------------------------
Shareholders' funds in accordance 237,978 263,662 297,827
with US GAAP
- ----------------------------------------------------------------------------
34 SUMMARISED BALANCE SHEET (US GAAP BASIS)
- ----------------------------------------------------------------------------
The following is a summary of the consolidated balance sheet prepared in
accordance with accounting principles generally accepted in the US.
- ----------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- ----------------------------------------------------------------------------
Assets
Current assets
Subsidiary under temporary control --- 9,174 ---
(Mindis)
Other current assets 75,031 81,234 130,920
Intangible assets - customer 97,522 107,272 89,750
contracts
Goodwill 58,721 58,972 79,317
Investment in associated undertakings 25,004 21,493 21,523
Property and equipment 235,451 249,506 227,969
Other assets 3,814 4,622 7,658
- ----------------------------------------------------------------------------
Total assets 495,543 532,273 557,137
- ----------------------------------------------------------------------------
Liabilities and shareholders' funds
Current liabilities 73,042 71,179 79,397
Liabilities after more than one year 94,848 104,417 88,179
Deferred taxation 16,680 19,501 18,093
Guaranteed redeemable convertible
preference shares 72,104 72,578 72,744
Minority interest 891 936 897
Shareholders' funds 237,978 263,662 297,827
- ----------------------------------------------------------------------------
Total liabilities and shareholders' funds 495,543 532,273 557,137
- ----------------------------------------------------------------------------
35 TOTAL ASSETS ANALYSED BY GEOGRAPHICAL REGION (US GAAP BASIS)
- ----------------------------------------------------------------------------
31 July 31 July 31 July
1994 1993 1992
Pounds Pounds Pounds
'000 '000 '000
- ----------------------------------------------------------------------------
United States 254,350 282,229 315,328
Mainland Europe 96,982 106,555 98,479
United Kingdom 119,203 113,872 114,196
Emerging Markets 2,570 804 ---
Corporate 22,438 28,813 29,134
- ----------------------------------------------------------------------------
Total assets 495,543 532,273 557,137
- ----------------------------------------------------------------------------
Five Year Financial Record
1994 1993 1992 1991 1990
Pounds Pounds Pounds Pounds Pounds
'000 '000 '000 '000 '000
- ----------------------------------------------------------------------------
Turnover 383,244 409,965 340,863 288,450 232,356
Operating profit 18,980 29,358 31,234 37,597 33,596
Profit/(loss) before 18,069 (52,250) 32,693 40,221 33,926
interest
Guaranteed redeemable (5,097) (5,119) (5,162) (5,180) (4,874)
preference share interest
Other net interest (3,495) (4,844) (2,433) (2,184) (5,408)
Profit/(loss) before tax 9,477 (62,213) 25,098 32,857 23,644
- ----------------------------------------------------------------------------
Shareholders' funds - gross 277,246 287,415 342,154 261,878 216,338
Goodwill written off (181,982) (179,124) (206,868) (192,581) (150,119)
Shareholders' funds - net 95,264 108,291 135,286 69,297 66,219
- ----------------------------------------------------------------------------
Gross borrowings 102,940 137,123 108,949 136,194 43,361
(excluding guaranteed
redeemable convertible
preference shares)
Net borrowings 100,030 124,811 75,313 129,725 33,942
(excluding guaranteed
redeemable convertible
preference shares)
Net interest cover - times 5.2 8.0* 13.4 18.4 6.3
(excluding guaranteed
redeemable convertible
preference shares)
Gearing (%) -
Net borrowings 105.0 115.3 55.7 187.2 51.3
v shareholders'
funds - net
Net borrowings 36.1 43.4 22.0 49.5 15.7
v shareholders'
funds - gross
- ----------------------------------------------------------------------------
Earnings per ordinary 1.92p (25.25)p 6.84p 12.28p 12.18p
share
Dividends per ordinary 5.00p 5.00p 5.00p 5.00p 4.75p
share
- ----------------------------------------------------------------------------
*The 1993 net interest cover is calculated before taking into account the
provision for loss on sale of business.
- -----------------------------------------------------------------------------
(b) Pro Forma Financial Statements.
To be filed as an amendment to this Current Report on Form 8-K as soon
as practicable, but in no event later than 60 days after the date of
this filing.
(c) Exhibits.
23.1 Consent of Binder Hamlyn.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BROWNING-FERRIS INDUSTRIES, INC.
(Registrant)
/s/ Jeffrey E. Curtiss
Date: February 7, 1995 ________________________________
Jeffrey E. Curtiss
Senior Vice President
and Chief Financing Officer
CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS
We hereby consent to the inclusion in this Form 8-K of our report
dated October 24, 1994 relating to the consolidated financial
statements of Attwoods plc for the year ended July 31, 1994.
Binder Hamlyn
Chartered Accountants
Registered Auditors
London, England
February 3, 1995
