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
December 4, 1995
- ------------------------------------------------
Date of Report (Date of earliest event reported)
Harnischfeger Industries, Inc.
- --------------------------------------------------------
(Exact name of registrant as specified in its
charter)
Delaware 1-9299 39-1566457
- ------------------------------------------------------
(State or other (Commission IRS Employer
jurisdiction of File Number)
Identification No.
incorporation)
13400 Bishops Lane, Brookfield, Wisconsin 53005
- ---------------------------------------------------------
(Address of principal executive offices)
(414) 671-4400
- ----------------------------------------------------
(Registrant's telephone number, including area code)
- ----------------------------------------------------
(Former name or former address, if changed since last
report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On December 4, 1995, a wholly-owned subsidiary of
Harnischfeger Industries, Inc. (the "Company") acquired
substantially all of the stock of Dobson Park Industries
plc ("Dobson") following an offer to purchase all of the
outstanding shares of Dobson at a price of 130 pence per
share. The transaction was valued at approximately $330
million, plus the assumption of approximately $40 million
of net debt. Initial payment came from a short-term
bridge financing facility arranged specifically for this
acquisition, issuance of commercial paper, other short-
term facilities and available cash. It is expected that
up to $150 million of these borrowings will be replcaced
with the issuance of 30-year debt securities under the
Company's shelf registration.
Dobson is a manufacturer of mining equipment, industrial
electrical control systems, toys and plastics. Dobson's
principal subsidiary, Longwall International, is engaged
in the manufacture, sale and service of mining equipment
for the international underground coal mining industry.
Its principal products include electronically controlled
hydraulic roof support systems, armored face conveyours,
pumps and belt conveyor components and systems.
Item 7. Financial Statements and Exhibits
Filed with this Current Report on Form 8-K are financial
statements of Dobson for the periods specified in Rule 3-
05(b) of Regulation S-X. Pro forma financial information
relative to the acquisition of Dobson required pursuant
to Article 11 of Regulation S-X and the Company's five-
year historical Computation of Ratio of Earnings to Fixed
Charges are filed on a separate Current Report on Form 8-
K, also dated December 4, 1995(filed on December 11,
1995.
The following financial statements and exhibits are filed
as part of this report:
(a) Financial statements of businesses acquired
(1) Financial statements of Dobson Park Industries
plc as of and for the period(s) ending September
30, 1995 and 1994, in accordance with Rule 3-05
of Regulation S-X
(c) Exhibits
Exhibit
Number Exhibit
------ --------------------------
23(c) Consent of Price Waterhouse
DOBSON PARK INDUSTRIES
ANNUAL REPORT AND ACCOUNTS
1995
DOBSON PARK INDUSTRIES plc
- ----------------------------------------
CONTENTS
- ---------------
Page
3 Directors' Report
5 Profit and Loss Account
6 Balance Sheets
7 Cash Flow Statement
8 Statement of Total Recognised Gains and
Losses
8 Note of Historical Cost Profits and Losses
9 Accounting Policies
10 Notes on the Accounts
25 Principal Subsidiary and Associated Companies
26 Auditors' Report
DIRECTORS' REPORT
The Directors present their report and the Group accounts
of Dobson Park Industries plc for the 52 weeks ended 30
September 1995.
1 Principal Activities
Dobson Park Industries plc is the parent company of a
number of companies engaged in the manufacture of mining
equipment, industrial electronic test, measurement and
control systems and components, toys and specialised
precision plastic components for the pharmaceutical and
other industries.
2 Results for the Year and Dividends
On 17 January 1995 the recommended offer for the 41.1% of
the Group's associated company, Longwall International
Limited ("Longwall") not already owned by the Group, was
declared unconditional and, with effect from this date,
Longwall has been consolidated as a wholly owned
subsidiary. Further financial information on this
acquisition is set out in Note 1 to the accounts.
On 14 November 1995 the recommended offer by
Harnischfeger Industries, Inc for the whole of the share
capital of Dobson Park Industries plc became
unconditional. As such, Harnischfeger Industries, Inc
became the ultimate parent undertaking.
Group turnover was GBP269.7m (1994 : GBP100m) which
includes GBP163.9m from Longwall International for the
period from 17 January 1995 to 30 September 1995. Group
profit, before tax, after provision for bid defence costs
of GBP3.6m, was GBP11.2m (1994 : GBP10.5m). Full
segmental information is set out in Note 2 on the
accounts. After providing for dividends of GBP7.05m (1994
: GBP4.7m) an amount of GBP1.029m has been transferred
from reserves (1994: GBP2.135m transferred to reserves).
An interim dividend of 1.20p per share (1994 : 1.20p)
was paid on 14 August 1995 and a second interim dividend
of 3.3p per share was paid on 10 November 1995. The
Directors do not recommend a final dividend (1994:
2.55p). Total dividends payable for 1995 amount to 4.5p
per share (1994: 3.75p).
3 Directors
The Directors who served during the year were as follows:
A Kaye (resigned 24 November 1995)
A C Buckmaster (appointed 17 January 1995)
P L Crook
M E Fortnam
Dr H D Murdoch (resigned 31 January 1995)
A C Taylor
D Bucks (resigned 23 November 1995)
T M Curtis (appointed 9 November 1994 and resigned 23
November 1995)
C A Lomberg (resigned 9 November 1994)
Dr A K Watkins (resigned 24 November 1995)
The following were appointed on 24 November 1995 :
J C Benjamin
F M Corby Jnr
J T Grade
J N Hanson
K T Lundgren
Directors' interests in the share capital of the Company
and options to subscribe for ordinary shares are shown in
note 19 on the accounts. No Director had an interest at
anytime during the period to 30 September 1995 in the
share capital of the subsidiary companies.
Mr M E Fortnam retires by rotation at the Annual General
Meeting and, being eligible, offers himself for re-
election; the unexpired portion of Mr M E Fortnam's
service contract is two years. Mr J T Grade, Mr J N
Hanson, Mr F M Corby Jnr, Mr K T Lundgren and Mr J C
Benjamin retire at the Annual General Meeting in
accordance with the Articles of Association, and being
eligible, offer themselves for re-election; none of
these Directors has a service contract.
Throughout the year, the Company maintained a directors
and officers liability insurance policy providing
insurance cover for directors and other officers of Group
companies, including those of the Company, against
liabilities that they may incur personally as a
consequence of claims made against them alleging breach
of duty or other wrongful acts or omissions in their
capacity as directors or officers.
4 Employees
The Group has established both formal and informal
procedures for consulting its employees and their trade
unions and for keeping them informed on a regular basis
about the business in which they work. The Group's
performance, the current and prospective work loads and
employment prospects, are amongst matters of common
interest which are reviewed.
The Dobson Park Pension Scheme is open to all eligible UK
employees with whom means of consultation are established
through their relevant Pension Advisory Committee. The
Trustees report annually to members as to the state of
the Scheme. There are 2,616 ex-employees or their
surviving dependants to whom pensions are paid.
5 Employment of Disabled Persons
It is the policy and practice of the Group to give full
and fair consideration and encouragement to assist the
employment of disabled persons and their training and
career development where it is in the joint interest of
the disabled persons and the Group to do so, and in
applying such policies and practices to retain, wherever
practicable, employees who become disabled. It is
recognised that from time to time circumstances may
require such policies and practices to be revised and
they will accordingly be reviewed regularly. Due
recognition will be given to advice from appropriate
advisory bodies.
6 Charitable and Political Contributions
During the 52 weeks ended 30 September 1995 donations by
the Group for charitable purposes in the United Kingdom
amounted to GBP13,037 (1994: GBP14,630). No
contributions for political purposes were made during the
period.
7 Responsibilities of Directors
The Directors are required by the Companies Act 1985 to
prepare accounts for each financial year which give a
true and fair view of the state of affairs of the Company
and of the Group as at the end of the financial year and
of the profit or loss of the Group for the financial
year.
The Directors have responsibility for ensuring that the
Company and the Group keeps accounting records which
disclose with reasonable accuracy the financial position
of the Company and the Group and which enable them to
ensure that the accounts comply with the Companies Act
1985.
The Directors have general responsibility for taking such
steps as are reasonably open to them to safeguard the
assets of the Company and the Group and to prevent and
detect fraud and other irregularities.
The Directors confirm that in preparing the accounts on
pages 5 to 25, they have selected appropriate accounting
policies which have been consistently applied and
supported by reasonable and prudent judgements and
estimates, and that all applicable accounting standards
have been followed.
After making enquiries, the Directors have a reasonable
expectation that the Company has adequate resources to
continue in operational existence for the foreseeable
future. For this reason, they continue to adopt the
going concern basis in preparing the accounts.
<PAGE>
8 Auditors
Price Waterhouse, Chartered Accountants, are willing to
continue in office as auditors of the Company and
resolutions will be submitted to the forthcoming Annual
General Meeting that they be re-appointed and that the
Directors be authorised to fix their remuneration.
By order of the Board
JWRT Middleton, Secretary
Wigan
6 December 1995
Registered Office:
Dobson Park House
Manchester Road
Ince
Wigan
WN2 2 DX
Registered Number : 951411
<TABLE>
<CAPTION>
Consolidated Profit and Loss Account
For the 52 weeks ended 30 September 1995 Note 1995
------
<S> <C> <C>
GBP000
Turnover
Acquisitions - Longwall International 1 163,877
Continuing operations - other businesses 105,814
---------
Cost of sales
Gross profit
Distribution costs
Administrative expenses (including bid
defence costs of GBP3.6m)
Operating profit:
Acquisitions - Longwall International 1 10,419
Continuing operations - other businesses
(after charging bid defence costs of GBP3.6m) 784
---------
Total operating profit
Share of profits of associated companies:
Longwall International 1 1,467
Other 455
---------
Net operating income
Profit on sale of land and buildings
Profit on ordinary activities before
interest
Net interest payable 3
Profit on ordinary activities before
taxation 4
Tax on profit on ordinary activities 6
Profit on ordinary activities after
taxation 7
Dividends 8
Transfer (from)/to reserves 20
Earnings per share 9
Adjustment to eliminate bid defence costs
Adjusted earnings per share
</TABLE>
The above results all derive from continuing operations.
<TABLE>
<CAPTION>
Consolidated Profit and Loss Account
For the 52 weeks ended 30 September 1995 Note 1995
-----
<S> <C> <C>
GBP000
Turnover
Acquisitions - Longwall International 1
Continuing operations - other businesses
269,691
Cost of sales (192,698)
---------
Gross profit 76,993
Distribution costs (25,976)
Administrative expenses (including bid
defence costs of GBP3.6m) (39,814)
Operating profit:
Acquisitions - Longwall International 1
Continuing operations - other businesses
(after charging bid defence costs of GBP3.6m)
Total operating profit 11,203
Share of profits of associated companies:
Longwall International 1
Other
1,922
---------
Net operating income 13,125
Profit on sale of land and buildings -
----------
Profit on ordinary activities before
interest 13,125
Net interest payable 3 (1,900)
-----------
Profit on ordinary activities before
taxation 4 11,225
Tax on profit on ordinary activities 6 (5,204)
---------
Profit on ordinary activities after
taxation 7 6,021
Dividends 8 (7,050)
---------
Transfer (from)/to reserves 20 (1,029)
---------
p
Earnings per share 9 4.05
Adjustment to eliminate bid defence costs 2.42
--------
Adjusted earnings per share 6.47
---------
The above results all derive from continuing operations.
</TABLE>
<TABLE>
<CAPTION>
Consolidated Profit and Loss Account
For the 52 weeks ended 30 September 1995 Note 1994
------
<S> <C> <C>
GBP000
Turnover
Acquisitions - Longwall International 1
Continuing operations - other businesses
99,973
Cost of sales (62,503)
-------
Gross profit 37,470
Distribution costs (17,167)
Administrative expenses (including bid
defence costs of GBP3.6m) (14,526)
---------
Operating profit:
Acquisitions - Longwall International 1 -
Continuing operations - other businesses
(after charging bid defence costs of GBP3.6m) 5,777
---------
Total operating profit 5,777
---------
Share of profits of associated companies:
Longwall International 1 4,353
Other 434
---------
4,787
--------
Net operating income 10,564
Profit on sale of land and buildings 448
-------
Profit on ordinary activities before
interest 11,012
Net interest payable 3 (502)
--------
Profit on ordinary activities before
taxation 4 10,510
Tax on profit on ordinary activities 6 (3,678)
-------
Profit on ordinary activities after
taxation 7 6,832
Dividends 8 (4,697)
------
Transfer (from)/to reserves 20 2,135
------
p
Earnings per share 9 5.27
Adjustment to eliminate bid defence costs -
------
Adjusted earnings per share 5.27
------
</TABLE>
The above results all derive from continuing operations.
<TABLE>
<CAPTION>
Balance Sheets
30 September 1995 The Group
Note 1995 1994
<S> <C> <C> <C>
GBP000 GBP000
Fixed Assets
Intangible assets 10 1,476 1,481
Tangible assets 11 50,332 24,141
Investments 12 2,602 23,892
---------- ---------
54,410 49,514
---------- ---------
Current Assets
Stocks 13 66,064 19,739
Debtors 14 91,166 31,833
Short term deposits 14,759 7,049
Cash at bank and in hand 10,369 3,545
--------- ----
182,358 62,166
--------- ----
Current Liabilities
Creditors: amounts
falling due within
one year 15 (156,276) (44,295)
--------- -----
Net Current Assets
/(Liabilities) 26,082 17,871
--------- -------
Total Assets Less
Current Liabilities 80,492 67,385
Other Liabilities
Creditors: amounts falling
due after more
than one year 15 (3,870) -
Provisions for liabilities
and charges 17 (8,698) (2,634)
----------- -----
Net Assets 67,924 64,751
----------- -------
Capital and Reserves
Called up share capital 18 15,668 12,527
Share premium account 20 27,945 12,240
Capital reserves 20 - 7,940
Revaluation reserve 20 5,828 5,828
Profit and loss account 20 18,483 26,216
--------- ----
Shareholders' Funds 67,924 64,751
--------- --------
</TABLE>
Approved by the Board of Directors on 6 December 1995
A C BUCKMASTER, GROUP CHIEF EXECUTIVE
A C TAYLOR, FINANCE DIRECTOR
<TABLE>
<CAPTION>
Balance Sheets
30 September 1995 The Company
Note 1995 1994
------- GBP000 GBP000
<S> <C> <C> <C>
Fixed Assets
Intangible assets 10 - -
Tangible assets 11 173 90
Investments 12 185,101 157,230
--------- --------
185,274 157,320
--------- --------
Current Assets
Stocks 13 - -
Debtors 14 5,723 5,323
Short term deposits 13,200 4,800
Cash at bank and in hand 572 2,509
-------- --------
19,495 12,632
-------- --------
Current Liabilities
Creditors: amounts
falling due within
one year 15 (40,465) (23,411)
-------- --------
Net Current Assets
/(Liabilities) (20,970) (10,779)
-------- --------
Total Assets Less
Current Liabilities 164,304 146,541
Other Liabilities
Creditors: amounts falling
due after more
than one year 15 (29,461) (30,242)
Provisions for liabilities
and charges 17 (124) (136)
-------- -------
Net Assets 134,719 116,163
-------- --------
Capital and Reserves
Called up share capital 18 15,668 12,527
Share premium account 20 27,945 12,240
Capital reserves 20 49,380 49,380
Revaluation reserve 20 - -
Profit and loss account 20 41,726 42,016
-------- --------
Shareholders' Funds 134,719 116,163
-------- --------
</TABLE>
Approved by the Board of Directors on 6 December 1995
A C BUCKMASTER, GROUP CHIEF EXECUTIVE
A C TAYLOR, FINANCE DIRECTOR
<TABLE>
<CAPTION>
Cash Flow Statement
For the 52 weeks ended 30 September 1995
1995
Note GBP000
<S> <C> <C>
Net cash inflow from
operating activities 22.1 14,049
Returns on investments and
servicing of
finance
Interest received 763
Interest paid (2,508)
Dividends from
associated companies 74
Dividends paid (5,003)
-------
Net cash outflow from
returns on investments
and servicing of finance (6,674)
Corporation tax (paid)/recovered (3,489)
Investing activities
Payments to acquire intangible
fixed assets (456)
Payments to acquire tangible
fixed assets (5,188)
Purchase of investments (256)
Purchase of businesses,
including bank
borrowings assumed:
Longwall International 1 (30,543)
Other businesses 22.5 (1,494)
Receipts from sales of
tangible fixed assets 114
Proceeds from sale of
businesses, net of bank
balances transferred -
-----
Net cash outflow from
investing activities (37,823)
-------
Net cash (outflow)/inflow
before financing (33,937)
Financing 22.3
Issue of ordinary
share capital 19,417
Expenses paid in connection
with share issues (642)
Loans repaid (5) -
-------
Net cash inflow from financing 18,770
--------
(Increase)/reduction in net
bank borrowings 22.2 (15,167)
-------
</TABLE>
<TABLE>
<CAPTION>
Cash Flow Statement
For the 52 weeks ended 30 September 1995
1994
<S> <C> <C> <C>
Note GBP000
------
Net cash inflow from
operating activities 22.1 9,383
Returns on investments and
servicing of finance
Interest received 501
Interest paid (1,005)
Dividends from associated
companies 90
Dividends paid (4,573)
-------
Net cash outflow from returns on
investments and servicing of finance (4,987)
Corporation tax (paid)/recovered 472
Investing activities
Payments to acquire
intangible fixed assets (363)
Payments to acquire
tangible fixed assets (4,850)
Purchase of investments -
Purchase of businesses,
including bank borrowings assumed:
Longwall International 1 -
Other businesses 22.5 (2,641)
Receipts from sales of tangible
fixed assets 2,740
Proceeds from sale of businesses,
net of bank balances transferred 1,344
--------
Net cash outflow from investing
activities (3,770)
--------
Net cash (outflow)/inflow
before financing 1,098
Financing 22.3
Issue of ordinary share capital 5
Expenses paid in connection
with share issues -
Loans repaid -
-------
Net cash inflow from financing 5
------
(Increase)/reduction in
net bank borrowings 22.2 1,103
-------
</TABLE>
<TABLE>
<CAPTION>
Statement of Total Recognised Gains 1995 1994
and Losses GBP000 GBP000
<S> <C> <C>
Profit on ordinary activities
after taxation 6,021 6,832
Currency translation adjustments on
foreign currency net investments 37 (584)
------ ------
Total gains and losses recognised since
last annual report 6,058 6,248
------ ------
Note of Historical Cost Profits
and Losses 1995 1994
GBP000 GBP000
Reported profit on ordinary
activities before taxation 11,225 10,510
Realisation of property revaluation
gains of earlier years - 1,071
-------- --------
Historical cost profit on ordinary
activities before taxation 11,225 11,581
-------- --------
Historical cost (loss)/profit
for the year retained,
after taxation and dividends (1,029) 3,206
-------- -------
</TABLE>
Accounting Policies
Convention and Basis of Consolidation
The accounts of the Company and of all its subsidiaries
are included in the consolidated accounts and are
prepared in accordance with the historical cost
convention as modified by revaluations of freehold and
leasehold properties and in accordance with applicable
accounting standards. Sales between Group companies are
excluded. The results of companies acquired or disposed
of are accounted for from or to the effective date of
acquisition or disposal.
Goodwill
The value of goodwill is not reflected in the Group
balance sheet and premiums paid on acquisition of
subsidiary and associated companies, representing the
excess of purchase consideration over the fair values
attributable to the net assets acquired, are accordingly
written off to reserves in the year of acquisition.
Associated Companies
An associated company is one in which the Group is in a
position to exercise a significant influence, without
having voting control, over the financial and operating
policy decisions of that company. Income from
investments in associated companies represents the
Group's share of profits of the associated companies.
All the Group's associated companies are related
companies for the purposes of the Companies Act 1985.
Investments in associated companies are shown in the
Group's accounts at the Group's share of net tangible
assets on the date of acquisition together with the
Group's share of retained profits or losses since the
date of acquisition but are shown in the Company's
accounts at cost less any amounts written off.
Foreign Currencies
The results and net assets of overseas subsidiary
companies are translated at closing rates of exchange.
Translation differences arising on foreign currency loans
and forward contracts which finance and hedge investments
in overseas subsidiaries are offset against the
differences arising on the retranslation at closing rates
of the opening net assets of those subsidiaries and the
resulting translation differences are accounted for
through reserves. Assets and liabilities of United
Kingdom companies denominated in foreign currencies are
also translated at closing rates but resulting
translation differences, other than those relating to
specific loans financing investments in overseas
subsidiaries, are accounted for through the profit and
loss account.
Turnover
Turnover is the amount derived from the provision of
goods and services falling within the Group's ordinary
activities after deduction of trade discounts, value
added tax and any other taxes based on the amounts so
derived. <PAGE>
Tangible Fixed Assets and Depreciation
Tangible fixed assets other than revalued properties are
shown at cost. Depreciation of fixed assets is
calculated on a straight-line basis on cost or revalued
amounts over periods appropriate to their estimated
useful lives. The normal annual rates of depreciation
are as shown below:
%
Buildings 2-4
Fixed plant, electrical and heating installations10-12
Factory and office fixtures, fittings and furnishings12
Tooling 16-33
Computers 20
Vehicles 25
Stocks
Stocks and work in progress are stated at the lower of
cost, including attributable overheads to the stage of
production reached, and estimated net realisable value.
Research and Development Expenditure
Expenditure on research and development is charged to the
profit and loss account in the year in which it is
incurred with the exception of expenditure on the
development of certain major new product projects where
the outcome of those projects is assessed as being
reasonably certain as regards viability and technical
feasibility. Such expenditure is capitalised and
amortised over a period not longer than five years
commencing in the year sales of the product are first
made.
Deferred Taxation
Tax deferred or accelerated by the effect of timing
differences is accounted for to the extent that a
liability or asset is expected to crystallise. Full
provision is made for the deferred tax implications of
pension costs accounted for in accordance with SSAP 24.
No provision is made for taxation that would arise on the
remittance of retained profits by overseas subsidiaries
subsequent to the balance sheet date as there is no
present intention to remit such retained profits.
Warranty Costs
Provision is made for the estimated cost of rectification
of products sold by the Group still covered by unexpired
contractual warranties by reference to past experience of
warranty costs incurred.
Leasing
Payments under operating leases are charged to the profit
and loss account in the year in which they are incurred.
Pension Costs and Post Retirement Benefits
Pension and other post retirement costs are charged to
the profit and loss account at a consistent percentage of
payroll costs and are subject to adjustment for any
surplus or deficit arising from periodic actuarial
valuations. <PAGE>
Notes on the Accounts
1 Mining Equipment
On 17 January 1995 the recommended offer for the 41.1% of
the share capital of the Group's associated company,
Longwall International Limited ("Longwall") not
previously owned by the Group was declared unconditional
and, with effect from this date, Longwall has been
consolidated as a wholly owned subsidiary.
Longwall's net assets at 17 January comprised :
<TABLE>
<CAPTION>
GBP000
<S> <C>
Tangible fixed assets 27,077
Stocks 37,665
Debtors 49,405
Creditors and provisions (62,274)
Bank and other borrowings
(including loans of GBP3.932m) (16,564)
Taxation, including deferred tax 1,254
--------
Net assets 36,563
--------
</TABLE>
Net assets attributable to the 41.1% holding after taking
into account the preference shares of GBP2m already owned
by the Group and associated preference dividends of GBP
1.5m, were GBP13.5m, for which a cash consideration of
GBP16.8m was paid. Under the terms of the offer, further
consideration is payable up to a maximum of GBP9.3m.
Costs associated with this acquisition were GBP1.3m of
which GBP0.2m were accrued at 30 September 1995.
The acquisition was funded by a 1 for 4 rights issue
which raised GBP18.8m net of expenses (Note 18).
Goodwill of GBP13.9m has been charged against reserves in
accordance with FRS 7 and includes provision for the
deferred consideration of GBP9.3m which is included in
creditors in the Group balance sheet at 30 September
1995.
Longwall's total turnover in the 12 months to 30
September 1995 was GBP235.3m (1994 : GBP224.6m) and
profit before interest was GBP13.9m (1994 : GBP10.1m).
The profit before tax from Mining Equipment for the 52
weeks ended 30 September 1995 comprises :
<TABLE>
<CAPTION>
1995 1994
GBP000 GBP000
<S> <C> <C>
Share of profits of Longwall 1,467 4,353
Trading profits of Longwall
from 17 January 1995 10,419 -
Other fees and rents, after
depreciation,
receivable from Longwall 554 655
------- --------
12,440 5,008
------- --------
</TABLE>
Longwall's operating profit for the period from 17
January 1995 to 30 September 1995 on turnover of
GBP163.9m was GBP10.4m after charging cost of sales of
GBP125.1m, distribution costs of GBP7.4m and
administrative expenses of GBP21.0m. Operating cash flow
for this period was GBP9.6m.<PAGE>
Notes on the Accounts
<TABLE>
<CAPTION>
2 Segmental Information Turnover
2.1 Divisional Analysis 1995 1994
GBP000 GBP000
<S> <C> <C>
Continuing operations:
Mining Equipment (Note 1) 163,877 -
Industrial Electronics 86,262 79,013
Toys and Plastics 19,374 20,578
Property and Investment Management 178 382
-------- --------
Total 269,691 99,973
========= ====
</TABLE>
<TABLE>
<CAPTION>
2 Segmental Information Profit Before Interest
and Bid Defence Costs
2.1 Divisional Analysis 1995 1994
GBP000 GBP000
<S> <C> <C>
Continuing operations:
Mining Equipment (Note 1) 12,440 5,008
Industrial Electronics 3,980 4,718
Toys and Plastics 817 1,633
Property and Investment Management - 448
Corporate expenses (512) (795)
--------- -----
Total 16,725 11,012
====== ======
</TABLE>
<TABLE>
<CAPTION>
2 Segmental Information Capital Employed
2.1 Divisional Analysis 1995 1994
GBP000 GBP000
<S> <C> <C>
Continuing operations:
Mining Equipment (Note 1) 59,321 26,852
Industrial Electronics 36,615 32,153
Toys and Plastics 11,792 12,311
Property and Investment Management 903 1,952
Corporate expenses - -
-------- ---------
Total 108,631 73,268
======== =========
</TABLE>
Turnover and profit before interest include the results
of the business of IRD Condition Monitoring Limited which
was acquired in the year (Note 22.5).
Corporate expenses are reported after deducting the SSAP
24 pension adjustment of GBP0.842m (1994: GBP0.727m)
(Note 5.4).
Capital employed is stated before deducting Group net
borrowings, proposed dividends, provisions for bid
defence costs and deferred consideration, tax liabilities
and excludes the SSAP 24 prepaid pension costs.
2.2 Geographical Analysis by Location
<TABLE>
<CAPTION>
1995
Profit
Before
Turnover Interest*
GBP000 GBP000
<S> <C> <C>
Dobson Park and subsidiaries:
United Kingdom 150,311 8,687
Sales to overseas subsidiaries (60,442)
--------
United Kingdom 89,869
Europe (other than UK) 14,598 579
United States of America 116,423 2,506
Canada 1,699 8
Australasia 35,487 2,073
Africa 11,615 950
------- ----------
269,691 14,803
-------- ----------
Share of profits and assets of
Associated Companies:
United Kingdom - 1,411
United States of America - 81
Australasia - 426
Africa - 4
--------- ------
- 1,922
---------- ------
Total 269,691 16,725
---------- ------
</TABLE>
* Profit before interest is stated before charging
provision for bid defence costs of GBP3.6m.
<TABLE>
<CAPTION>
Capital
Employed Turnover
GBP000 GBP000
<S> <C> <C>
Dobson Park and subsidiaries:
United Kingdom 16,954 44,221
Sales to overseas subsidiaries (4,919)
--------
United Kingdom 39,302
Europe (other than UK) 6,667 12,041
United States of America 60,547 46,705
Canada 449 1,488
Australasia 17,628 437
Africa 4,272 -
-------- ----
106,517 99,973
-------- -----
Share of profits and assets of
Associated Companies:
United Kingdom 2,114 -
United States of America - -
Australasia - -
Africa - -
-------- ------
2,114 -
----- -------
Total 108,631 99,973
------ -------
</TABLE>
<TABLE>
<CAPTION> 1994
Profit
Before Capital
Interest Employed
GBP000 GBP000
<S> <C> <C>
Dobson Park and subsidiaries:
United Kingdom 4,034 24,454
Sales to overseas subsidiaries
United Kingdom
Europe (other than UK) 654 5,408
United States of America 1,720 19,177
Canada (84) 543
Australasia (99) 26
Africa - -
------- -----
6,225 49,608
----- -----
Share of profits and assets of
Associated Companies:
United Kingdom 3,774 2,858
United States of America (31) 14,113
Australasia 882 5,280
Africa 162 1,409
------ ------
4,787 23,660
------ ------
Total 11,012 73,268
------ ------
</TABLE>
Notes on the Accounts
<TABLE>
<CAPTION>
2.3 Turnover: Geographical
Analysis by Destination
1995 1994
GBP000 GBP000
<S> <C> <C>
United Kingdom 54,971 19,886
United States of America 116,656 42,791
Canada 2,678 2,698
EC (other than
United Kingdom) 22,791 19,063
Rest of Europe 6,291 2,305
Australasia 36,597 1,194
Africa 13,710 1,239
Middle East 1,650 1,271
Far East 12,117 5,664
Central and South America 2,230 3,862
-------- --------
Total turnover 269,691 99,973
-------- ---------
</TABLE>
<TABLE>
<CAPTION>
3 Net Interest Payable
1995 1994
GBP000 GBP000
<S> <C> <C>
Interest payable on bank,
loans, overdrafts and other loans:
repayable within 5 years,
not by instalments (2,515) (993)
repayable within 5 years,
by instalments (21) (8)
repayable after 5 years (127) -
----------- ------
Interest payable (2,663) (1,001)
Interest receivable 763 499
----------- ------
Total net interest payable (1,900) (502)
----------- ------
</TABLE>
<TABLE>
<CAPTION>
1995 1994
4 Profit on Ordinary Activities
Before Taxation GBP000 GBP000
<S> <C> <C>
Stated after charging:
Amortisation of intangible
fixed assets 461 370
Depreciation of tangible
fixed assets 5,883 3,385
Research and development
expenditure 4303 5,172
Auditors' remuneration
(including expenses) 380 205
Other fees paid to the auditors
in the UK
(excluding bid defence
costs of GBP0.2m) 305 243
Operating lease rentals -
plant and machinery 1,332 479
Operating lease rentals -
other assets 2,884 1,857
Bid defence costs (including fees paid
to the auditors of GBP0.2m) 3,600 -
------- --------
</TABLE>
On 1 September 1995 Harnischfeger Industries, Inc made a
contested offer for the whole of the issued share capital
of the company at 110p per share. On 27 October 1995
this offer was increased to 130.0p per share, which
received the recommendation of the Board and became
unconditional on 14 November 1995. Provision has been
made for the costs of this defence amounting to GBP3.6m.
Notes on the Accounts
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
5 Employees GBP000 GBP000
5.1 Staff Costs Incurred
by the Group:
Wages and salaries 66,110 29,253
Social security costs 5,207 2,839
Pension costs (Note 5.4) 2,049 377
------- -------
Total staff costs 73,366 32,469
------- -------
</TABLE>
<TABLE>
<CAPTION>
1995 1994
Number Number
<S> <C> <C>
5.2 Average Weekly Number
of Employees:
Mining Equipment
(from 17 January 1995) 2,157 -
Industrial Electronics 1,238 1,174
Toys and Plastics 410 449
Group 23 23
----- ------
Total 3,828 1,646
------ ------
</TABLE>
5.3 Directors' Emoluments:
Directors' emoluments including pension contributions
were GBP869,828 (1994: GBP702,638) which include
performance related bonuses of GBP130,000 (1994:
GBP9,494).
The emoluments of the highest paid director were
GBP190,876, comprising salary, performance related bonus
and benefits of GBP181,216 and pension contributions of
GBP9,660.
The emoluments of the Chairman, who in 1994 was also the
highest paid UK Director, were:
<TABLE>
<CAPTION>
1995 1994
GBP GBP
<S> <C> <C>
Salary and benefits 167,105 140,051
Pension contributions 44,365 42,885
-------- -------
211,470 182,936
-------- -------
</TABLE>
The number of Directors (other than those who discharged
their duties mainly outside the United Kingdom) who
received emoluments (excluding pension contributions) in
the following ranges was:
<TABLE>
<CAPTION>
1995 1994
Number Number
<S> <C> <C>
GBP0 - GBP5,000 1 -
GBP10,001 - GBP15,000 - 1
GBP15,001 - GBP20,000 2 1
GBP20,001 - GBP25,000 1 1
GBP70,001 - GBP75,000 - 2
GBP85,001 - GBP90,000 - 1
GBP90,001 - GBP95,000 1 -
GBP95,001 - GBP100,000 1 -
GBP100,001 - GBP105,000 1 -
GBP140,001 - GBP145,000 - 1
GBP165,001 - GBP170,000 1 -
GBP180,001 - GBP185,000 1 -
</TABLE>
Notes on the Accounts
5.4 Pensions
The Group operates a number of pension schemes throughout
the world. These schemes are mainly of a defined benefit
type with the assets being managed through separate
trustee administered funds. The pension costs of the
schemes are based upon independent actuarial advice using
the accrued benefits funding method.
Triennial actuarial valuations of the UK schemes are made
with the most recent having been carried out at 31 March
1993 although an update review was performed as at 31
March 1995. The most significant assumption in arriving
at these valuations was that the investment return would
exceed the increase in average earnings by 2%. At the
date of the review, the market value of the assets of the
UK schemes was GBP131.6m with the actuarial value of the
assets representing 109% of the liabilities which had
accrued to the members. This surplus is being reduced by
lower contributions being paid by the employer.
At 30 September 1995, the UK pensions schemes were merged
into one scheme.
Actuarial valuations of the overseas pension schemes are
carried out at various intervals with the most recent
having been carried out between 30 September 1993 and 1
January 1995, at which dates the schemes had net assets
of GBP7.1m.
In accordance with SSAP 24, the pension cost for the year
has been reduced by GBP842,000 (1994: GBP727,000) as a
result of the amortisation of the Group's pension surplus
identified at the date of the last valuation and a
prepayment of GBP5,495,000 (1994: GBP4,341,000) is
included in debtors representing the excess of the amount
funded over the accumulated pension cost.
The cost of overseas pensions amounted to GBP408,000
(1994: GBP582,000).
<TABLE>
<CAPTION>
1995 1994
GBP000 GBP000
<S> <C> <C>
6 Taxation
Taxation charged on the
profit for the year of the
Company and its subsidiaries:
United Kingdom corporation tax
at 33% (1994: 33%) 3,802 2,616
Adjustments relating to prior years (403) (335)
Double tax relief on
overseas income (53) (6)
------ ------
United Kingdom corporation tax 3,346 2,275
Overseas taxes 1,974 261
Deferred taxation (938) (531)
------ ------
4,382 2,005
Associated companies 822 1,673
------ ------
Total taxation charged for the year 5,204 3,678
------ ------
</TABLE>
Tax relief on bid defence costs has not been provided and
the tax charge has, therefore, been increased by GBP1.2m
(1994 : GBPnil).
The close company provisions of the Income and
Corporation Taxes Act 1988, as amended, do not apply to
the Company as at 30 September 1995.
<TABLE>
<CAPTION>
1995 1994
GBP000 GBP000
<S> <C> <C>
7 Profit Attributable to Members
of the Company
Dealt with in the accounts
of the Company 2,242 878
Retained by subsidiary companies 2,753 2,930
Retained by associated companies 1,026 3,024
----- ------
Profit attributable to Members
of the Company 6,021 6,832
------ ------
</TABLE>
In accordance with Section 230, Companies Act 1985, the
Company has not presented its own profit and loss
account.
Notes on the Accounts
<TABLE>
<CAPTION>
1995 1994
GBP000 GBP000
<S> <C> <C>
8 Dividends
First interim dividend 1.2p
per share (1994 : 1.20p) 1,880 1,503
Second interim dividend 3.3p
per share (1994 : nil p) 5,170 -
Proposed final dividend
nil p per share (1994: 2.55p) - 3,194
------ ------
Total dividends 7,050 4,697
------ ------
</TABLE>
9 Earnings Per Share
The calculation of earnings per share is based on
earnings of GBP6.021m and 148.5 million shares being the
weighted average number of shares in issue during the
year. The adjusted earnings per share for 1995 is based
on earnings of GBP9.621m before bid defence costs.
Earnings per share for 1994 has been adjusted for the
bonus element of the 1995 rights issue to shareholders in
accordance with Statement of Standard Accounting Practice
No 3. There is no material difference, as a result of
outstanding options to acquire shares, between the
diluted and undiluted earnings per share.
10 Intangible Fixed Assets
<TABLE>
<CAPTION>
Development expenditure: The Group
GBP000
<S> <C>
Cost
At 1 October 1994 1,851
Incurred during the year 456
------
At 30 September 1995 2,307
------
Amortisation
At 1 October 1994 370
Amortised in year 461
-------
831
At 30 September 1995 -------
Net book value:
At 30 September 1995 1,476
-------
At 1 October 1994 1,481
-------
</TABLE>
Development expenditure is the amount incurred by IRD
Mechanalysis in respect of "IQ 2000", a major new range
of products, the launch of which commenced in the latter
part of 1993. These costs are being amortised over a
period of five years from the date on which sales of the
products commence.
11 Tangible Fixed Assets
<TABLE>
<CAPTION>
Cost or valuation
11.1 Summary 1995 1994
GBP000 GBP000
<S> <C> <C>
Freehold land and buildings 31,082 12,748
Leasehold land and buildings:
Over 50 years 688 672
Under 50 years 2,643 1,981
------- --------
Total land and buildings 34,413 15,401
Plant and equipment 84,670 31,349
------- -------
Group total 119,083 46,750
------- -------
</TABLE>
<TABLE>
<CAPTION>
Depreciation
11.1 Summary 1995 1994
GBP000 GBP000
<S> <C> <C>
Freehold land and buildings 2,584 440
Leasehold land and buildings:
Over 50 years 32 15
Under 50 years 824 667
----- -----
Total land and buildings 3,440 1,122
Plant and equipment 65,311 21,487
------ ------
Group total 68,751 22,609
------ ------
</TABLE>
<TABLE>
<CAPTION>
Net book value
11.1 Summary 1995 1994
GBP000 GBP000
<S> <C> <C>
Freehold land and buildings 28,498 12,308
Leasehold land and buildings:
Over 50 years 656 657
Under 50 years 1,819 1,314
------ ------
Total land and buildings 30,973 14,279
Plant and equipment 19,359 9,862
------ ------
Group total 50,332 24,141
------ ------
</TABLE>
Subsequent to the year end a conditional agreement was
signed for the sale of a property at Ashchurch for a
consideration equal to its net book value of GBP4.9m.
Land and buildings also includes other properties with a
net book value of approximately GBP7m which are presently
available for sale.
The Group total includes plant and equipment having a net
book value of GBP173,000 (1994: GBP90,000) carried in the
books of the Company after depreciation of GBP305,000
(1994: GBP328,000).
Notes on the Accounts
<TABLE>
<CAPTION>
11 Tangible Fixed Assets continued
11.2 Movements Land and Plant and
buildings equipment Total
GBP000 GBP000 GBP000
<S> <C> <C> <C>
Cost or valuation:
At 1 October 1994 15,401 31,349 46,750
Translation adjustments (107) (114) (221)
Acquisition of businesses 18,580 53,717 72,297
Additions at cost 517 4,671 5,188
Disposals (556) (4,375) (4,931)
Reclassification 578 (578) -
----------- ----- ------
At 30 September 1995 34,413 84,670 119,083
----------- ------- --------
Depreciation:
At 1 October 1994 1,122 21,487 22,609
Translation adjustments 4 (68) (64)
Charge for the period 625 5,258 5,883
Eliminated on disposals (698) (4,083) (4,781)
Acquisition of business 2,058 43,046 45,104
Reclassification 329 (329) -
-------- ------- -------
At 30 September 1995 3,440 65,311 68,751
-------- ------- -------
Net book value:
At 30 September 1995 30,973 19,359 50,332
------- ------- -------
At 1 October 1994 14,279 9,862 24,141
------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
1995 1994
GBP000 GBP000
<S> <C> <C>
11.3 Valuation of Land and Buildings
The total of land and buildings shown
above at cost or valuation comprises:
Properties as valued at open market
value on the basis of current
existing use in:
1987 1,000 1,000
1990 1,623 1,623
1992 1,928 1,928
1993 8,682 8,682
Other properties at cost
(including subsequent
additions) 21,180 2,168
------ -----
Total of land and buildings 34,413 15,401
------ ------
</TABLE>
Notes on the Accounts
<TABLE>
<CAPTION>
1995 1994
GBP000 GBP000
<S> <C> <C>
If land and buildings had not
been revalued they would have
been included at the following
amounts:
Cost 32,559 13,596
------ ------
Aggregate depreciation 7,785 4,810
------ ------
11.4 Future Capital Expenditure
Contracted for but not provided 206 707
Authorised by the Directors but
not contracted 275 3
------ -------
Total 481 710
------ -------
</TABLE>
<TABLE>
<CAPTION>
12 Fixed Asset Investments
12.1 Group Fixed Asset Investments
Investments
in associated Other
companies investments Total
GBP000 GBP000 GBP000
<S> <C> <C> <C>
Share of net assets on date
of acquisition or cost:
At 1 October 1994 18,598 232 18,830
Additions - 256 256
Transfer to investment in
subsidiaries (18,296) - (18,296)
--------- ------ -----
At 30 September 1995 302 488 790
--------- ------ -----
Share of post acquisition
reserves:
At 2 October 1994 5,062 - 5,062
Retained profit for the period 1,026 - 1,026
Translation adjustment 456 - 456
Transfer to investment in
subsidiaries (4,732) - (4,732)
--------- ------ ----
At 1 October 1995 1,812 - 1,812
--------- ----- -------
Net book value:
At 30 September 1995 2,114 488 2,602
--------- ------- ----
At 1 October 1994 23,660 232 23,892
--------- ------- ----
</TABLE>
A list of the principal associated companies together
with the Group's percentage holdings is given on page 25.
The investment in Instem plc included above at a net book
value of GBP2,094,000 is listed on the London Stock
Exchange and had a market value at 1 October 1995 of
GBP2,630,108 (1994: GBP2,748,126). Dividends received
from Instem plc, including the related tax credit,
amounted to GBP73,761 (1994: GBP65,331).
Other investments comprise 2,560 ordinary shares in
Datastor Systems Limited, being 22.4% of the issued share
capital of that company, together with a 33% interest in
Equipos Mineros De Monclova S.A DE C.V., a company
registered in Mexico which was acquired by Longwall
International during the year. The Directors do not
consider the Group to have significant influence over the
financial and operating policies of these companies and
consequently they have been accounted for as other
investments in the consolidated Group balance sheet.
Notes on the Accounts
12 Fixed Asset Investments continued
12.2 Company Fixed Asset Investments
<TABLE>
<CAPTION>
Subsidiary companies
Shares at
cost Loans
GBP000 GBP000
<S> <C> <C>
Cost:
At 1 October 1994 84,415 55,034
Additions 28,500 26,235
Repayments - (26,864)
Transfer from investment
in associates 30,211 -
------ -----
At 30 September 1995 143,126 54,405
------- ------
Amounts written off:
At 30 September 1995 and
1 October 1994 5,181 8,407
------- -----
Net book value:
At 30 September 1995 137,945 45,998
------- -----
At 1 October 1994 79,234 46,627
------- -----
</TABLE>
A list of the principal United Kingdom and overseas
subsidiary companies is given on page 25.
<TABLE>
<CAPTION>
Associated Other
companies investments
Shares at Shares at
cost cost Total
GBP000 GBP000 GBP000
<S> <C> <C> <C>
Cost:
At 1 October 1994 31,137 232 170,818
Additions - - 54,735
Repayments - - (26,864)
Transfer from investment
in associates (30,211) - -
--------- --------- ---------
At 30 September 1995 926 232 198,689
--------- --------- ---------
Amounts written off:
At 30 September 1995 and
1 October 1994 - - 13,588
--------- --------- ---------
Net book value:
At 30 September 1995 926 232 185,101
--------- --------- ---------
At 1 October 1994 31,137 232 157,230
--------- --------- ---------
</TABLE>
A list of the principal United Kingdom and overseas
subsidiary companies is given on page 25.
<TABLE>
<CAPTION>
13 Stocks The Group
1995 1994
GBP000 GBP000
<S> <C> <C>
Raw materials and
bought out parts 22,694 8,392
Work in progress 18,873 4,712
Finished products held
for sale 27,656 6,635
Payments on account (3,159) -
---------- --------
Total stocks 66,064 19,739
---------- --------
14 Debtors
Amounts falling due within one year:
Trade debtors 76,906 24,655
Amounts owed by subsidiary
companies - -
Amounts owed by associated
companies 5 57
Corporation tax recoverable 2,153 -
Other debtors 2,732 1,432
Prepayments and accrued income 2,519 1,348
------ --------
Total due within one year 84,315 27,492
------ --------
</TABLE>
<TABLE>
<CAPTION>
13 Stocks The Company
1995 1994
GBP000 GBP000
<S> <C> <C>
Raw materials and bought
out parts - -
Work in progress - -
Finished products held for sale - -
Payments on account - -
--------- ---------
Total stocks - -
--------- ---------
14 Debtors
Amounts falling due within one year:
Trade debtors - -
Amounts owed by subsidiary
companies 680 463
Amounts owed by associated
companies 5 8
Corporation tax recoverable - -
Other debtors 174 490
Prepayments and accrued
income 59 21
--------- ----------
Total due within one year 918 982
--------- ----------
</TABLE>
Notes on the Accounts
<TABLE>
<CAPTION>
14 Debtors (continued) The Group
1995 1994
GBP000 GBP000
<S> <C> <C>
Amounts falling due after
more than one year:
Prepaid pension costs (Note 5.4) 5,495 4,341
Trade debtors 491 -
Deferred taxation (Note 17) 865 -
--------- ----
Total debtors 91,166 31,833
--------- ----
15 Creditors
Amounts falling due within one year:
Bank loans 5 -
Bank overdrafts and
short term loans 46,685 17,179
Payments received on account 227 47
Trade creditors 49,409 8,557
Amounts owed to subsidiary
companies - -
Amounts owed to associated
companies 914 297
Dividends payable 5,170 3,194
Corporation tax 5,718 1,402
Other taxation and social
security 1,926 1,243
Other creditors 11,109 6,422
Accruals 22,213 5,954
Deferred consideration (Note 1) 9,300 -
Bid defence costs (Note 4) 3,600 -
--------- ----
Total creditors due within
one year 156,276 44,295
--------- ----
Amounts falling due after
more than one year:
Bank loans 3,870 -
Amounts owed to
subsidiary companies - -
--------- -----
3,870 -
--------- -----
</TABLE>
<TABLE>
<CAPTION>
14 Debtors (continued) The Company
1995 1994
GBP000 GBP000
<S> <C> <C>
Amounts falling due after
more than one year:
Prepaid pension costs (Note 5.4) 4,805 4,341
Trade debtors -
Deferred taxation (Note 17) - -
---- -----
Total debtors 5,723 5,323
---- -----
15 Creditors
Amounts falling due within one year:
Bank loans - -
Bank overdrafts and
short term loans 19,071 17,045
Payments received on account - -
Trade creditors - 42
Amounts owed to subsidiary
companies 1,264 674
Amounts owed to associated
companies - -
Dividends payable 5,170 3,194
Corporation tax 81 208
Other taxation and social security - 31
Other creditors 1,274 1,714
Accruals 705 503
Deferred consideration (Note 1) 9,300 -
Bid defence costs (Note 4) 3,600 -
--------- -----
Total creditors due within
one year 40,465 23,411
--------- -----
Amounts falling due after
more than one year:
Bank loans - -
Amounts owed to
subsidiary companies 29,461 30,242
--------- -----
29,461 30,242
--------- -----
</TABLE>
Bank loans, which are secured by mortgages, on certain
properties fall due for repayment as follows:
<TABLE>
<CAPTION>
1995
Group Company
GBP'000 GBP'000
<S> <C> <C>
By instalments:
In less than one year 5 -
Between one and two years 5 -
Between two and five years 15 -
Over five years 53 -
--------- -------
78 -
Other than by instalments:
Over 5 years 3,797 -
---------- --------
3,875 -
---------- --------
Bank loans incur interest at market variable rates.
</TABLE>
<TABLE>
<CAPTION>
1994
Group Company
GBP'000 GBP'000
<S> <C> <C>
By instalments:
In less than one year - -
Between one and two years - -
Between two and five years - -
Over five years - -
-------- ---------
- -
Other than by instalments:
Over 5 years - -
-------- ---------
- -
-------- ---------
Bank loans incur interest at market variable rates.
</TABLE>
Notes on the Accounts
16 Contingent Liabilities and Commitments
16.1 Contingent Liabilities
The Company has guaranteed the bank borrowings of certain
subsidiaries of GBP41,029,000 (1994: GBP16,387,000) and
performance bonds totalling GBP24,268,000 (1994:
GBP3,374,000).
16.2 Forward Foreign Exchange Contracts
The Group has uncompleted forward foreign exchange
contracts, entered into in the normal course of business,
to sell the proceeds of future trade receivables in
various currencies equivalent to GBP60m (1994: GBP13.1m).
In addition, forward exchange contracts equivalent to
GBP15.6m (1994: GBP8.1m) have been entered into to hedge
investments in overseas subsidiaries.
16.3 Operating Leases
Lease rentals payable in the 52 weeks ending 29 September
1996 under non-cancellable operating leases are as
follows:
<TABLE>
<CAPTION>
Land and Other
buildings assets
GBP000 GBP000
<S> <C> <C>
Operating leases which expire:
Within one year 124 225
In two to five years 694 1,029
In five years or more 1,735 47
--------- -----
Total lease rentals payable 2,553 1,301
--------- -----
</TABLE>
<TABLE>
<CAPTION>
17 Provisions for Liabilities
and Charges The Group The Company
1995 1994 1995 1994
GBP000 GBP000 GBP000 GBP000
<S> <C> <C> <C> <C>
Deferred taxation - 1,677 124 136
Warranty 8,698 957 - -
------- ------- ------ ----
Total provisions 8,698 2,634 124 136
------- ------- ------ -----
Deferred
taxation Warranty
GBP000 GBP000
Movements in the period:
At 1 October 1994 1,677 957
Translation adjustments (15) (25)
Acquisition of businesses (1,454) 8,225
(Released)/charged against
profit on ordinary activities (938) 3,160
Utilised in the period (228) (3,619)
Transfer from corporation tax 93 -
---------- -------
At 30 September 1995 (865) 8,698
----------- -------
</TABLE>
<TABLE>
<CAPTION>
Land and Other
buildings assets
GBP000 GBP000
<S> <C> <C>
Operating leases which expire:
Within one year 124 225
In two to five years 694 1,029
In five years or more 1,735 47
--------- -----
Total lease rentals payable 2,553 1,301
--------- -----
</TABLE>
<TABLE>
<CAPTION>
17 Provisions for Liabilities and Charges
The Group The Company
1995 1994 1995 1994
GBP000 GBP000 GBP000 GBP000
<S> <C> <C> <C> <C>
Deferred taxation - 1,677 124 136
Warranty 8,698 957 - -
--------- ---- --- ----
Total provisions 8,698 2,634 124 136
--------- ----- ---- -----
Deferred
taxation Warranty
GBP000 GBP000
Movements in the period:
At 1 October 1994 1,677 957
Translation adjustments (15) (25)
Acquisition of businesses (1,454) 8,225
(Released)/charged against
profit on ordinary activities (938) 3,160
Utilised in the period (228) (3,619)
Transfer from corporation tax 93 -
---------- -----
At 30 September 1995 (865) 8,698
---------- -----
</TABLE>
Notes on the Accounts
<TABLE>
<CAPTION>
17 Provisions for Liabilities and Charges (Continued)
GBP000 GBP000
<S> <C> <C>
The provision for deferred
taxation comprises:
Accelerated capital allowances 2,430 1,406
Deferred liability in respect
of net short term timing
differences (3,295) 1,073
Advance Corporation Tax Recoverable - (802)
----- -----
Total provision for deferred taxation (865) 1,677
----- -----
</TABLE>
The total amount of taxation, calculated on the liability
method, deferred by all timing differences (including
those arising on revaluation of properties), is an asset
of approximately GBP200,000 (1994: liability of
GBP2,800,000) of which a liability of GBP3,400,000 (1994:
GBP2,300,000) is due to accelerated capital allowances.
<TABLE>
<CAPTION>
18 Ordinary Share Capital 1995 1994
<S> <C> <C>
GBP000 GBP000
Authorised:
200,000,000 ordinary shares of
10p each (1994: 160,000,000) 20,000 16,000
------- ------
Allotted and fully paid:
156,681,805 ordinary shares
of 10p each
(1994: 125,268,756) 15,668 12,527
------ -----
</TABLE>
During the year the allotted share capital was increased
by 31.3m shares as a result of the rights issue in
connection with the acquisition of the 41.1% of Longwall
International Limited not already owned by the Group.
The consideration received for the issue of these shares
was GBP19.4m before expenses of GBP0.64m. In addition,
the issued share capital increased by 95,860 ordinary
shares of which cash allotments comprised 267 ordinary
shares issued to option holders under the 1991 SAYE Share
Option Scheme and 95,593 ordinary shares were issued in
lieu of payment of dividends. The consideration received
for the issue of these shares was GBP71,000. Although
the Company was authorised to make market purchases of
its ordinary shares, no such purchases have been made.
Contingent rights to the allotment of shares:
Options made available to employees through the 1991 SAYE
Employee Share Option Scheme and The Dobson Park
Executive Share Option Scheme outstanding at 1 October
1995 were as follows:
<TABLE>
<CAPTION>
1991 SAYE Employee
Share Option Scheme Year Number of Price
Last date on which
option exercisable granted shares per share
<S> <C> <C> <C>
1 October 1996 1991 26,153 68.21p
1 September 1997 1992 31,653 53.31p
1 September 1999 1994 125,194 65.58p
The Dobson Park Executive
Share Option Scheme Date Number of Price
Last date on
which option exercisable granted shares per share
22 September 1997 23 September 1987 292,040 120.26p
10 December 1997 11 December 1987 20,860 120.26p
5 July 1999 6 July 1989 41,720 120.26p
</TABLE>
Notes on the Accounts
19 Directors' Interests
Directors' shareholdings in accordance with the register
kept by the Company for the purposes of the Companies Act
and share options under the Executive Share Option Scheme
at 30 September 1995 and 2 October 1994 were both as
follows:-
<TABLE>
<CAPTION>
Ordinary shareholding
1995 1994
<S> <C> <C>
A Kaye 35,518 24,665
A C Buckmaster (appointed
17 January 1995) 25,000 - *
P L Crook 5,477 4,197
M E Fortnam 1,655 1,268
A C Taylor 461 355
D Bucks - -
T M Curtis (appointed
9 November 1994) 8,000 - *
Dr A K Watkins 7,249 5,555
* at date of appointment.
</TABLE>
<TABLE>
<CAPTION>
Options under the
Executive Share Option Scheme
<S> <C> <C>
1995 1994
A Kaye 125,160 120,000
A C Buckmaster (appointed
17 January 1995) - - *
P L Crook 83,440 80,000
M E Fortnam 41,720 40,000
A C Taylor 20,860 20,000
D Bucks - -
T M Curtis (appointed
9 November 1994) - - *
Dr A K Watkins - -
* at date of appointment.
</TABLE>
No Director had a non-beneficial interest in any ordinary
shares of the Company apart from Mr A C Taylor who had a
non-beneficial interest in 24,182 ordinary shares (1994:
24,182).
Mr M E Fortnam had an option under the 1991 SAYE Employee
Share Option Scheme over 7,034 ordinary shares at an
option price of 53.3p exercisable not later than 1
September 1997 (1994: 6,744 at 55.6p before adjustment
for rights issue).
Following the rights issue announced on 15 December 1994,
the subscription price of all the options under the
Executive Share Option Scheme was reduced from 125.40p to
120.26p per share and the number of options was increased
by 4.3%; all options are exercisable no later than 5
July, 1999. No options were granted to directors or were
exercised or lapsed during the year.
Mr A C Buckmaster was a shareholder in Longwall
International before the 41.1% of share capital not
already owned by Dobson Park Industries plc was acquired
on 17 January 1995. Mr Buckmaster received his initial
entitlement of GBP1.65m under the terms of the
performance related offer to acquire the shares in
Longwall and is entitled to receive a further payment of
GBP1.1m under the terms of this offer.
With the exception of Mr Buckmaster, referred to above,
and contracts of service as executives, no Director of
the Company has had during the year any material interest
in any contract that was significant in relation to the
Company's business.
20 Share Premium Account and Reserves
<TABLE>
<CAPTION>
Share
premium Capital Revaluation
account reserve reserve
GBP000 GBP000 GBP000
<S> <C> <C> <C>
Group:
At 1 October 1994 12,240 7,940 5,828
Translation adjustments on
foreign currency net
investments - - -
Premium on issue of
shares 15,705 - -
Goodwill written off
on acquisition of
Longwall International
(Note 1) - (7,940) -
Goodwill written off on other
acquisition (Note 22.5) - - -
Transfer from profit and
loss account - - -
--------- ----- ---------
At 30 September 1995 27,945 - 5,828
--------- ----- ---------
Company:
At 1 October 1994 12,240 49,380 -
Premium on issue of shares 15,705 - -
Transfer from profit and
loss account - - -
---------- ----- ---------
At 30 September 1995 27,945 49,380 -
---------- ----- ---------
</TABLE>
20 Share Premium Account and Reserves
<TABLE>
<CAPTION>
Retained
profits
GBP000
<S> <C>
Group:
At 1 October 1994 26,216
Translation adjustments on
foreign currency net investments 37
Premium on issue of shares -
Goodwill written off on acquisition of
Longwall International (Note 1) (5,960)
Goodwill written off on other
acquisition (Note 22.5) (781)
Transfer from profit and loss
account (1,029)
----------
At 30 September 1995 18,483
----------
Company:
At 1 October 1994 42,016
Premium on issue of shares -
Transfer from profit and loss
account (290)
-----------
At 30 September 1995 41,726
-----------
</TABLE>
The Group reserves are stated after deducting goodwill of
GBP70.9m (1994: GBP56.2m) arising on acquisitions of
which GBP14.7m has been written off in the year.
Translation adjustments on foreign currency net
investments are reported net of a related hedging loss of
GBP0.5m. (1994: gain of GBP1m)
Notes on the Accounts
21 Reconciliation of Movement in Shareholders' Funds
<TABLE>
<CAPTION>
1995 1994
GBP000 GBP000
<S> <C> <C>
Profit on ordinary activities
after taxation 6,021 6,832
Dividends (7,050) (4,697)
------- -----
(1,029) 2,135
Translation adjustments
on foreign currency net
investments 37 (584)
Goodwill written off (14,681) (1,948)
New share capital subscribed 18,846 125
--------- ------
Net increase/(reduction)
in shareholders' funds 3,173 (272)
Opening shareholders' funds 64,751 65,023
--------- ------
Closing shareholders' funds 67,924 64,751
--------- -------
22 Notes to the Consolidated Cash Flow Statement
22.1 Reconciliation of Operating Profit to Net Cash
Inflow
from Operating Activities
1995 1994
GBP000 GBP000
Operating profit 11,203 5,777
Depreciation and amortisation 6,344 3,755
(Increase)/decrease in stocks (8,490) 381
Increase in debtors (5,799) (484)
Increase/(decrease) in
creditors and provisions 7,191 (46)
Provision for bid defence costs 3,600 -
------- ------
Net cash inflow from
operating activities 14,049 9,383
------- ------
22.2 Analysis of Changes in Bank Borrowings, Balances of
Cash and Cash Equivalents during the year
1995 1994
GBP000 GBP000
Net bank borrowings at
1 October 1994 (6,585) (8,357)
Net cash (outflow)/inflow
before adjustments for the
effect of foreign exchange
rate changes (15,167) 1,103
--------- ------
(21,752) (7,254)
Effect of foreign exchange
rate changes 195 669
--------- ------
Net bank borrowings at
30 September 1995 (21,557) (6,585)
</TABLE>
--------- ------
22.3 Analysis of Changes in Financing during the year
<TABLE>
<CAPTION>
1995 1995
Share capital
(including premium) Loans
GBP000 GBP000
<S> <C> <C>
Balance at 1 October 1994 24,767 -
Loans assumed on acquisition
of Longwall International - 3,932
Cash inflow/(outflow)
from financing 18,775 (5)
Shares issued in lieu of
dividends (Note 18) 71 -
Effect of foreign exchange
rate changes - (52)
--------- -----
Balance at 30 September 1995 43,613 3,875
--------- -----
</TABLE>
<TABLE>
<CAPTION>
1994 1994
Share capital
(including premium) Loans
GBP000 GBP000
<S> <C> <C>
Balance at 1 October 1994 24,642 -
Loans assumed on acquisition
of Longwall International - -
Cash inflow/(outflow) from financing 5 -
Shares issued in lieu of dividends
(Note 18) 120 -
Effect of foreign exchange rate
changes - -
----- -----
Balance at 30 September 1995 24,767 -
----- ------
</TABLE>
<PAGE>
Notes on the Accounts
22.4 Analysis of Bank Borrowings, Balances of Cash and
Cash Equivalents as shown in the Balance Sheet
<TABLE>
<CAPTION>
Change
1995 1994 in year
GBP000 GBP000 GBP000
<S> <C> <C> <C>
Bank overdrafts and
short-term loans (46,685) (17,179) (29,506)
Short-term deposits 14,759 7,049 7,710
Cash at bank and in hand 10,369 3,545 6,824
--------- ----- ---------
Total net bank
borrowings (Note 22.2) (21,557) (6,585) (14,972)
---------- ----- ---------
Loans (Note 22.3) (3,875) - (3,875)
---------- ----- ---------
(25,432) (6,585) (18,847)
---------- ----- ---------
</TABLE>
22.5 Purchase of other business
On 19 October 1994, the Group acquired the whole of the
share capital of Condition Monitoring Limited. The
following table sets out the effect of this acquisition
on the Group balance sheet.
Net assets acquired GBP000
Tangible fixed assets 116
Stocks 276
Debtors 1,068
Creditors (747)
Bank overdraft (425)
-------
288
Goodwill 781
----
1,069
----
Satisfied by :
Cash 1,069
---------
Analysis of net cash
outflow of cash and
cash equivalents
in respect of the purchase
of the other business
GBP000
Cash consideration 1,069
Overdrafts acquired 425
---------
1,494
---------
Since its acquisition IRD Condition Monitoring generated
turnover of GBP1.4m and incurred an operating loss of
GBP0.1m and generated GBP0.2m of the Group's net
operating cash inflow from operating activities. In the
18 months ended 30 June 1994, Condition Monitoring
Limited has achieved a turnover of GBP2.4m and recorded a
break even position.
23 Differences Between Dobson Park Group Accounting
Policies and Generally Accepted Accounting Principles in
the United States
Accounting principles generally accepted in the United
Kingdom, and specifically those accounting policies used
in the preparation of these accounts, vary in certain
respects from accounting principles generally accepted in
the United States. Such differences relate principally
to the accounting for goodwill, deferred income taxes,
revalued properties, pension costs, and capitalised
research and development expenditures.
<PAGE>
PRINCIPAL SUBSIDIARY AND ASSOCIATED COMPANIES
<TABLE>
<CAPTION>
Country of
Company name incorporation Notes
<S> <C> <C>
Subsidiary Companies
Aqua Hydraulics Limited England 6
Britains Petite Limited England 1 & 8
Byron Mediplastics Limited England 1 & 8
Dobson Park Properties Limited England 1 & 9
Fletcher Sutcliffe Wild Limited England 6
Herbert Cotterill Limited England 6
IRD Condition Monitoring Limited England 7
IRD Mechanalysis (UK) Limited England 1 & 7
Longwall International Limited England 1 & 6
Longwall International Holdings
Limited England 6
Trading as:
Longwall Roof Supports Limited
Longwall AFC Limited
Longwall Roof Supports Repairs Limited
Meco Roadheader Limited
PressTech Controls Limited England 1 & 7
Richard Simon & Sons Limited England 1 & 7
Australian Longwall Pty Limited Australia 6
Meco McCallum Pty Limited Australia 6
IRD Mechanalysis Limited Canada 7
IRD Mechanalysis SA France 7
Revere Transducers Europe BV Netherlands 7
Meco Polska Spolka Z.0.0. Poland 6
Gullick Mining SA (Pty) Limited South Africa 6
South African Longwall
(Pty) Limited South Africa 6
American Longwall Face
Conveyors Inc USA 6
American Longwall Rebuild Inc USA 6
American Longwall Roof Supports Inc USA 6
Britains Petite Inc USA 8
Elgar Electronics Corporation USA 7
IRD Mechanalysis Inc USA 7
Revere Transducers Inc USA 7
Associated Companies
Instem plc England 3 & 7
</TABLE>
Notes
1 With the exception of these subsidiary companies, the
Company's share of the issued share capital is held
through intermediate holding companies.
2 Apart from Longwall International Limited, the issued
share capitals of the subsidiary companies consist of
ordinary shares, with full voting rights, which are
wholly owned by the Group. The issued share capital of
Longwall International Limited comprises both ordinary
and preference shares.
3 The issued share capitals and the percentage
shareholdings of the associated companies are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Associated Percentage
company Issued share capital shareholding
Instem plc 4,495,910 ordinary shares
of 10p each 37.1
</TABLE>
The audit of the accounts of these associated companies
was undertaken by firms other than the Company's
auditors.
4 In addition to the above there are a number of small
overseas trading subsidiaries, intermediate holding
companies in both the United Kingdom and overseas which
do not trade and dormant subsidiaries which are not
material in relation to the Group's operations. A full
list of subsidiaries is given in the Company's Annual
Return.
5 Each company trades in its country of incorporation.
Nature of Business
6 Mining Equipment
7 Industrial Electronics
8 Toys and Plastics
9 Other<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Dobson Park
Industries plc
We have audited the accompanying consolidated balance
sheets of Dobson Park Industries plc and its subsidiaries
as of September 30, 1995 and October 1, 1994 and the
related consolidated profit and loss account and cash
flow statement for the years then ended, all expressed
in Pounds Sterling. As explained on page 4, these
financial statements are the responsibility of the
Company's Directors. Our responsibility is to express an
opinion on these financial statements based on our
audits.
We conducted our audits in accordance with auditing
standards generally accepted in the United Kingdom, which
do not differ significantly from auditing standards
generally accepted in the United States of America.
Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall
financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements
audited by us present fairly, in all material respects,
the financial position of Dobson Park Industries plc and
its subsidiaries at September 30, 1995 and October 1,
1994, and the results of their operations and their cash
flows for the years then ended, in conformity with
accounting principles generally accepted in the United
Kingdom.
Price Waterhouse
Manchester, England
December 6, 1995
<PAGE>
Exhibit 23 (c)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in
the Prospectuses constituting part of the Registration
Statements on Form S-3 and in the Registration Statements
on Form S-8 listed below of Harnischfeger Industries,
Inc. of our report on the consolidated financial
statements of Dobson Park Industries plc dated December
6, 1995 which appears in this Current Report on Form 8-K.
1. Registration Statement on Form S-8 (Registration
No. 33-42833)
2. Registration Statement on Form S-8 (Registration
No. 33-23985)
3. Registration Statement on Form S-8 (Registration
No. 33-18393)
4. Registration Statement on Form S-3 (Registration
No. 33-51436)
5. Registration Statement on Form S-8 (Registration
No. 33-46738)
6. Registration Statement on Form S-8 (Registration
No. 33-46739)
7. Registration Statement on Form S-8 (Registration
No. 33-46740)
8. Registration Statement on Form S-8 (Registration
No. 33-57209)
9. Registration Statement on Form S-3 (Registration
No. 33-57979)
10. Registration Statement on Form S-8 (Registration
No. 33-58087)
PRICE WATERHOUSE
Manchester, England
December 8, 1995
<PAGE>
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.
HARNISCHFEGER INDUSTRIES, INC.
December 11, 1995 By /s/James C. Benjamin
-----------------------
Vice President, Controller
and Chief Accounting Officer
