<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 14, 1994
COMMISSION FILE NUMBER 1-6402-1
---------------------
SERVICE CORPORATION INTERNATIONAL
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
<TABLE>
<S> <C>
TEXAS 74-1488375
(STATE OR OTHER JURISDICTION OF (I. R. S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
1929 ALLEN PARKWAY, HOUSTON, TEXAS 77019
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
(713) 522-5141
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
---------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
ITEM 5. OTHER EVENTS
In June 1994, Service Corporation International ("SCI") announced an
unsolicited offer to acquire 100% of the outstanding common shares of the Great
Southern Group plc, ("GSG"). As of September 30, 1994, SCI owned or had
commitments to acquire in excess of 98% of GSG's voting shares. SCI
anticipates that the total acquisition cost will approximate $192,777,000,
including the assumption of approximately $14,751,000 of existing indebtedness
which SCI intends to repay. GSG is a funeral provider in the United Kingdom
("UK") and owns 157 funeral homes, 13 crematories and two cemeteries.
In September 1994, SCI announced its offer to acquire 100% of the
outstanding common shares of Plantsbrook Group plc ("PG") for approximately
$312,690,000, including the assumption of approximately $13,873,000 of existing
debt. PG is a funeral provider in the UK and owns 380 funeral homes. As of
September 30, 1994, SCI owned or had commitments to acquire in excess of 95% of
PG's voting shares.
In addition to the acquisitions of GSG and PG, during the six months
ended June 30, 1994, SCI continued to acquire funeral and cemetery operations
in the United States, Australia and Canada. Excluding GSG and PG during such
period, SCI acquired 64 funeral homes and 13 cemeteries (the "Other Acquired
Companies") in 38 separate transactions for an aggregate purchase price of
approximately $175,000,000 in the form of combinations of cash, SCI common
stock, issued and assumed debt, convertible debentures and retired loans
receivable held by SCI's finance subsidiary. None of SCI's acquisitions,
including GSG and PG, individually meet the definition of a significant
subsidiary as defined in the Securities and Exchange Commission's (the
"Commission") Regulation S-X.
Pursuant to the Commission's Regulation S-X Rule 3-05, SCI is hereby
reporting the individual financial statements in pound sterling of GSG and PG
for the year ended December 31, 1993 and six months ended June 30, 1994
and 1993, respectively. GSG and PG represent a substantial majority of SCI's
1994 acquisitions.
2
<PAGE> 3
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
OF GREAT SOUTHERN GROUP PLC
We have audited the financial statements appearing on pages 4 to 27 of
Great Southern Group PLC and its subsidiaries which are expressed in pounds
sterling. These consolidated financial statements and schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and related schedules based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United Kingdom and United States. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material mis-statement. 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 presentation of the financial statements. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Great Southern Group and
its subsidiaries at 31 December 1993 and the results of its operations and its
cash flows for the year ended 31 December 1993, in conformity with accounting
principles generally accepted in the United Kingdom, on the bases described in
Note 1 to the consolidated financial statements.
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 expressed in pounds sterling for the
year ended 31 December 1993 and the determination of consolidated shareholders'
equity also expressed in pounds sterling at 31 December 1993 to the extent
summarised in Note 27 to the consolidated financial statements.
ROBSON RHODES
Chartered Accountants and Registered
Auditor
London
England
November 14, 1994
3
<PAGE> 4
GREAT SOUTHERN GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31ST DECEMBER 1993
<TABLE>
<CAPTION>
NOTES TOTAL
----- -------
BRITISH
POUND'000
<S> <C> <C>
Group turnover from continuing operations.................................. 1&2(a) 32,743
Operating expenses......................................................... 2(b) 25,609
-------
Operating profit from continuing operations................................ 2(a) 7,134
Net Interest payable....................................................... 5 919
-------
Profit on ordinary activities before taxation.............................. 6,215
Tax on profit on ordinary activities....................................... 6 2,162
-------
Profit on ordinary activities after taxation............................... 4,053
Dividends.................................................................. 7 1,906
-------
Transfer to reserves....................................................... 19 2,147
=======
Earnings per share
Basic.................................................................... 8(a) 30.4p
Fully diluted............................................................ 8(b) 28.1p
=======
</TABLE>
There were no recognized gains and losses other than the profit reported
above.
NOTE OF HISTORICAL COST PROFITS AND LOSSES:
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Reported profit on ordinary activities before taxation.............................. 6,215
-----
Historical cost profit on ordinary activities before taxation....................... 6,215
=====
Historical cost retained profit..................................................... 2,147
=====
</TABLE>
The following notes form part of these financial statements.
4
<PAGE> 5
GREAT SOUTHERN GROUP PLC
CONSOLIDATED BALANCE SHEET
AS AT 31ST DECEMBER 1993
<TABLE>
<CAPTION>
BRITISH
NOTES POUND'000
----- ---------
<S> <C> <C>
Fixed assets
Tangible assets.......................................................... 9 27,346
Investments.............................................................. 11 116
-------
27,462
-------
Current assets
Stocks................................................................... 1 729
Debtors.................................................................. 12 5,634
Cash at bank and in hand................................................. 21(d) 18
-------
6,381
-------
Creditors: amounts falling due within one year............................. 13
Borrowings............................................................... 5,871
Other creditors.......................................................... 7,337
-------
13,208
-------
Net current liabilities............................................... (6,827)
-------
Total assets less current liabilities................................. 20,635
Creditors: amounts falling due after more than one year.................... 14 (5,057)
Provision for liabilities and charges...................................... 16 (500)
-------
Net assets.......................................................... 2(a) 15,078
=======
Capital and reserves
Called up share capital.................................................. 18 1,527
Share premium account.................................................... 19 9
Revaluation reserve...................................................... 19 4,007
Goodwill reserve......................................................... 19 (3,150)
Profit and loss account.................................................. 19 12,685
-------
Shareholders' funds................................................. 20 15,078
=======
</TABLE>
Approved by the Board of Directors on 30th March 1994 and signed on its
behalf by:
<TABLE>
<S> <C>
James Smillie
Directors
Eric Norman Spencer
</TABLE>
The following notes form part of these financial statements.
5
<PAGE> 6
GREAT SOUTHERN GROUP PLC
BALANCE SHEET
AS AT 31ST DECEMBER 1993
<TABLE>
<CAPTION>
BRITISH
NOTES POUND'000
----- ---------
<S> <C> <C>
Fixed assets
Tangible assets.......................................................... 9 250
Investment in group companies............................................ 10 31,874
Other investments........................................................ 11 116
-------
32,240
-------
Current assets
Debtors.................................................................. 12 4,177
Cash at bank and in hand................................................. 6
-------
4,183
-------
Creditors: amounts falling due within one year............................. 13
Borrowings............................................................... 5,437
Other creditors.......................................................... 2,088
-------
7,525
-------
Net current liabilities............................................... (3,342)
-------
Total assets less current liabilities................................. 28,898
Creditors: amounts falling due after more than one year.................... 14 (4,093)
Provision for liabilities and charges...................................... 16 (4)
-------
Net assets.......................................................... 24,801
=======
Capital and reserves
Called up share capital.................................................. 18 1,527
Share premium account.................................................... 19 9
Revaluation reserve...................................................... 19 3,171
Merger reserve........................................................... 19 3,540
Special reserve.......................................................... 19 6,854
Profit and loss account.................................................. 19 9,700
-------
Shareholders' funds................................................. 20 24,801
=======
</TABLE>
Approved by the Board of Directors on 30th March 1994 and signed on its
behalf by:
<TABLE>
<S> <C>
James Smillie
Directors
Eric Norman Spencer
</TABLE>
The following notes form part of these financial statements.
6
<PAGE> 7
GREAT SOUTHERN GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31ST DECEMBER 1993
<TABLE>
<CAPTION>
BRITISH BRITISH
POUND'000 POUND'000
--------- ---------
<S> <C> <C>
Net cash inflow from operating activities (note 21a)........................ 8,762
=======
Net cash outflow from returns on investments and servicing of finance
Interest received......................................................... 88
Interest paid............................................................. (1,007)
Dividends paid to shareholders............................................ (1,812) (2,731)
------
Taxation paid............................................................... (2,804)
Net cash outflow from investing activities
Purchase of tangible fixed assets......................................... (3,895)
Purchase of investments................................................... (2)
Disposal of tangible fixed assets......................................... 958
(Acquisition)/disposal of goodwill (note 21b)............................. (423) (3,362)
------ -------
(8,897)
=======
Net cash (outflow)/inflow before financing.................................. (135)
Net cash outflow from financing activities
New amounts borrowed...................................................... 656
Repayment of amounts borrowed (note 21c).................................. (1,006)
Capital element of hire purchase payment (note 21c)....................... (1,084) (1,434)
------ -------
(Decrease) in cash (note 21d)............................................... (1,569)
=======
</TABLE>
The following notes form part of these financial statements.
7
<PAGE> 8
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST DECEMBER 1993
1. ACCOUNTING POLICIES
Basis of accounting
The financial statements have been prepared in accordance with the
historical cost convention (as modified by the revaluation of certain fixed
assets) and applicable accounting standards. As permitted by section 210 of the
Companies Act 1985, the profit and loss account of the parent company has not
been separately presented in the financial statements.
Consolidation
The group financial statements deal with the state of affairs and earnings
of the company and all its subsidiary undertakings. The only subsidiary
undertakings of the group are subsidiary companies. Where acquisitions are
accounted for on the acquisition basis of accounting, the results are included
from the date of purchase and the difference between the price paid and the fair
value of net assets acquired, after providing for any costs arising as a
consequence of integration, is taken to reserves.
Turnover
The turnover of the Group represents income receivable from the provision
of: cremations and interments; funeral services, monumental masonry and
contracting; and membership fees and other income from the sale of pre-arranged
funeral plans. Turnover is shown exclusive of inter-company trading,
disbursements and value added tax.
Value Added Tax
The provision of funeral services, cremation and burial are exempt supplies
for Value Added Tax and as a consequence related Value Added Tax on expenses and
direct costs may not be recovered and is included in costs and expenses.
Deferred Taxation
Where there is a reasonable probability that a liability may arise in the
future, provision is made for taxation deferred by relief available on fixed
assets in excess of the depreciation charged in the financial statements. This
provision is made at the rate of corporation tax due to be applicable at the
date that the deferred taxation is estimated to become payable. Advance
corporation tax on current dividends which will be offset against future
corporation tax liabilities is deducted from the deferred taxation account.
Where material, provision is also made for short term timing differences.
Tangible fixed assets
(i) All freehold properties including group cemeteries and crematoria and
funeral directing establishments are maintained, as a matter of group policy, by
a programme of repair and refurbishment such that the residual values of these
properties are at least equal to their book values. Having regard to this, it is
the opinion of the Directors that depreciation of any such property as required
by the Companies Act 1985 and standard accounting practice would not be
material.
(ii) Depreciation is calculated to write off all other tangible fixed
assets by equal instalments over their expected useful lives at the following
annual rates:
<TABLE>
<S> <C>
Computer equipment............................ 25.0 per cent
Vehicles...................................... 12.5 per cent
Others........................................ 10.0 per cent
</TABLE>
8
<PAGE> 9
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
1. ACCOUNTING POLICIES -- (CONTINUED)
Short leasehold property is amortised over the life of the lease.
Stocks
Stocks comprise finished goods being assembled coffins, fittings and
memorials and are valued at the lower of cost and estimated realisable value.
There is no material difference between replacement value and cost.
Pension Arrangements
The Group operates a Retirement and Death Benefit scheme and an Executive
Pension scheme. It also makes provision for pensions for employees outside those
schemes through the Great Southern Welfare Trust. In each case the assets of the
pension schemes are separate from the assets of the Group. The Executive Pension
Scheme and the Great Southern Welfare Trust are treated as defined contribution
schemes. As such the pension cost charge is the amount of contributions paid in
the year. The Retirement and Death Benefit scheme is a defined benefit pension
scheme. In principle the group contributes to this scheme an amount equal to the
regular cost of pensions as calculated by a qualified actuary based on a
constant percentage of current and expected pensionable payroll. The regular
pension costs so calculated are charged to profit and loss accounts. Triennial
valuations of the Retirement and Death Benefit scheme are performed by the
actuary using the aggregate method. These actuarial valuations may reveal an
experience surplus or deficit.
Any surplus or deficit is amortised through the profit and loss account
evenly over the average remaining service life of current employees.
Leased Assets
Rentals are charged to profit on a straight line basis over the lease term.
Assets held under finance leases are included in the balance sheets and
depreciated in accordance with the Group's normal accounting policies. The
present value of future rentals is shown as a liability. The interest element of
rental obligations is charged to the profit and loss account over the period of
the lease in proportion to the balance of capital repayments outstanding.
Financial Reporting Standard Number 3
The 1992 profit and loss account has been restated by minor amounts in
accordance with FRS3 which affects the group accounts for the first time.
Interest receivable and investment income is now excluded from operating profit.
Profit on disposal of fixed assets now excludes realised revaluation reserve.
9
<PAGE> 10
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
<TABLE>
<CAPTION>
BRITISH
2(A) SEGMENTAL REPORTING POUND'000
<S> <C>
Turnover
Retail funeral services.......................................................... 25,080
Crematoria and Cemeteries........................................................ 5,925
Pre-arranged funeral plans....................................................... 1,738
-------
32,743
=======
Operating Profit
Retail funeral services.......................................................... 4,825
Crematoria and Cemeteries........................................................ 1,906
Pre-arranged funeral plans....................................................... 878
-------
7,609
Provision for permanent diminution in property values............................ (475)
-------
7,134
=======
Net Assets
Retail funeral services.......................................................... 13,024
Crematoria and Cemeteries........................................................ 10,539
Pre-arranged funeral plans....................................................... 751
-------
24,314
Group Borrowings................................................................... (9,236)
-------
Group Net Assets................................................................... 15,078
=======
</TABLE>
The amounts shown above for pre-arranged funeral plans relate to the Income
and Net Assets of Chosen Heritage Limited. Funeral pre-payments are paid to an
independent Trust, details of which are set out in note 26, and are not included
in the income of the Group.
The turnover, operating profit and net assets of acquisitions are not
considered sufficiently material to require separate disclosure.
10
<PAGE> 11
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
2(B) OPERATING EXPENSES
<TABLE>
<CAPTION>
BRITISH
POUND'000
---------
<S> <C>
Operating profit is stated after charging:
Changes in stock of finished goods............................................... 5
Raw materials and consumables.................................................... 3,167
Staff costs...................................................................... 11,482
Depreciation of tangible fixed assets
-- owned......................................................................... 1,040
-- subject to Hire Purchase agreement............................................ 471
Auditors' remuneration
-- audit including expenses...................................................... 65
-- other services................................................................ 80
Operating lease rentals:
Buildings.......................................................................... 1,398
Other operating charges............................................................ 7,667
Property Provision................................................................. 475
-------
25,850
and crediting:
Profit on sale of tangible fixed assets.......................................... (33)
Operating lease rentals: land and buildings...................................... (208)
-------
25,609
=======
</TABLE>
11
<PAGE> 12
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
3. DIRECTORS
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Directors' emoluments:
Management remuneration............................................. 482
Executive Incentive Scheme.......................................... 35
Fees................................................................ 59
Pension contributions............................................... 105
---
681
===
Pensions to former directors........................................ 7
===
</TABLE>
The Executive Incentive Scheme applies to Executive Directors of the
Company and is paid annually in arrears at the discretion of the Remuneration
Committee, based on an increase in the Group's profit before taxation over the
previous year.
<TABLE>
<CAPTION>
HIGHEST PAID
CHAIRMAN DIRECTOR
-------- ------------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Fees/management remuneration............................ 25 117
Executive Incentive Scheme.............................. -- 8
--- ---
25 125
Pension Contributions................................... -- 23
--- ---
25 148
=== ===
</TABLE>
Number of other directors (excluding pension contributions) in the range:
<TABLE>
<CAPTION>
NUMBERS
-------
<S> <C>
British Pound 5,001 to British Pound 10,000........................ 1
British Pound 10,001 to British Pound 15,000........................ 1
British Pound 15,001 to British Pound 20,000........................ 1
British Pound 60,001 to British Pound 65,000........................ 1
British Pound 101,001 to British Pound 105,000........................ 1
British Pound 105,001 to British Pound 110,000........................ 1
British Pound 115,001 to British Pound 120,000........................ 1
</TABLE>
12
<PAGE> 13
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
4. EMPLOYEES
<TABLE>
<CAPTION>
NUMBERS
-------
<S> <C>
Average number of people (including directors) employed by the Group during the
year was:
Administration and Managerial.................................................... 121
Operational including Retail Branch Staff........................................ 857
-------
978
=======
BRITISH
POUND'000
Costs in respect of these employees:
Wages and salaries............................................................... 10,249
Social security costs............................................................ 873
Pension contributions............................................................ 360
-------
11,482
=======
Pension Costs
Defined benefit scheme.............................................................
Regular costs.................................................................... 466
Amortisation of experience surplus............................................... (206)
-------
260
Defined contributions schemes...................................................... 100
-------
360
=======
</TABLE>
The most recent formal actuarial review of the Retirement and Death Benefit
Scheme was at 6 April 1991 and the results of this show that the market value of
assets was British Pound 6.1 million. At the valuation date the actuarial value
of the assets was sufficient to cover 132% of the accrued liabilities, allowing
for future salary increases. The main actuarial assumptions were:
<TABLE>
<S> <C>
Investment returns....................................... 10% p.a.
Salary increases......................................... 7.5% p.a.
Pension increase......................................... 5% p.a.
Average remaining service lives.......................... 10.5 years
</TABLE>
The Trustees have recommended enhanced benefits which will reduce the
experience surplus. The remainder of the surplus will be addressed by reductions
in the annual contribution calculated by the actuary to spread the reduction in
contributions over the average remaining service lives of members of the scheme.
5. NET INTEREST PAYABLE
<TABLE>
<CAPTION>
BRITISH
POUND'000
---------
<S> <C>
On bank loans and overdrafts and on other loans wholly repayable within five
years............................................................................ 698
On hire purchase contracts......................................................... 296
On Great Southern Group PLC floating rate unsecured loan notes 1998................ 13
-------
1,007
Interest receivable and investment income.......................................... (88)
-------
Net Interest payable............................................................... 919
=======
</TABLE>
13
<PAGE> 14
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
6. TAXATION
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Charge for taxation based on the profit for the year:
Corporation tax at 33%.................................................... 2,138
Deferred tax at 33%....................................................... 24
------
2,162
Under provisions for earlier years:
Deferred tax.............................................................. --
------
2,162
======
</TABLE>
No Corporation Tax or Deferred Tax was provided in respect of chargeable
gains arising on the disposal of operating premises due to the availability of
rollover relief. This is in accordance with the Group's accounting policy for
Deferred Tax.
7. DIVIDENDS
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Preference Dividends........................................................ 460
Ordinary Dividends.......................................................... --
Interim dividend of 4p per 10p ordinary share............................... 474
Proposed final dividend of 8.2p per 10p ordinary share...................... 972
------
1,906
======
</TABLE>
8. EARNING PER SHARE
Earnings per share has been calculated on the following basis:
<TABLE>
<S> <C>
(a) Basic
Profit on ordinary activities after taxation........................... 4,053
Preference dividend.................................................... (460)
------
3,593
======
</TABLE>
<TABLE>
<CAPTION>
NUMBER
------
'000
<S> <C>
Weighted average of ordinary shares in issue during the year............... 11,838
------
Earnings per share......................................................... 30.4p
======
</TABLE>
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
(b) Fully diluted
Profit on ordinary activities after taxation........................... 4,053
======
</TABLE>
<TABLE>
<CAPTION>
NUMBER
------
'000
<S> <C>
Number of ordinary shares assuming full conversion of 6.75p cumulative
convertible redeemable preference shares.................................. 14,425
------
Earning per share........................................................... 28.1p
======
</TABLE>
14
<PAGE> 15
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
9. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION> THE
THE GROUP COMPANY
----------------------------------------------------------- -------
CEMETERIES OTHER PROPERTIES PLANT
AND --------------------- VEHICLES
CREMATORIA AND
SHORT EQUIPMENT TOTAL TOTAL
Cost or Valuation FREEHOLD FREEHOLD LEASEHOLD
- ----------------------------------- ---------- -------- --------- --------- ------- -------
BRITISH BRITISH BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C> <C> <C>
At 1st January 1993.............. 8,481 9,392 1,681 13,336 32,890 586
Acquired with new subsidiaries... -- 120 -- 111 231 --
Additions........................ 615 597 133 2,403 3,748 93
Provision for permanent
diminution in value........... -- (475) -- -- (475) --
Disposals........................ -- (732) (15) (1,184) (1,931) (85)
----- ----- ----- ------ ------ ---
At 31st December 1993.............. 9,096 8,902 1,799 14,666 34,463 594
----- ----- ----- ------ ------ ---
Depreciation
At 1st January 1993.............. -- -- 549 5,979 6,528 315
Acquired with new subsidiaries... -- -- -- 84 84 --
Charge in year................... -- -- 78 1,433 1,511 75
Eliminated on disposal........... -- -- (4) (1,002) (1,006) (46)
----- ----- ------ ------ ------ ---
At 31st December 1993.............. -- -- 623 6,494 7,117 344
----- ----- ------ ------ ------ ---
Written down value 31st December
1993............................. 9,096 8,902 1,176 8,172 27,346 250
===== ===== ====== ====== ====== ===
</TABLE>
The tangible fixed assets owned by the Company comprise plant, vehicles and
equipment. The Group's freehold and certain leasehold properties were valued at
30th June 1986 on the following basis:
(i) Cemeteries and Crematoria -- at the net current replacement cost
of land and buildings;
(ii) Other properties -- at the open market value for existing use
purposes;
Cemeteries and Crematoria and other properties comprise:
<TABLE>
<CAPTION>
CEMETERIES
AND OTHER
CREMATORIA PROPERTIES
---------- ----------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
At cost less provision for diminution in value........... 4,386 7,003
At valuation in 1986..................................... 4,710 1,899
----- -----
At 31st December 1993.................................... 9,096 8,902
===== =====
</TABLE>
The historical cost equivalent at 31st December 1993 of Cemeteries,
Crematoria and other freehold properties included at valuation was:
<TABLE>
<CAPTION>
CEMETERIES
AND OTHER
CREMATORIA PROPERTIES
---------- ----------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Cost..................................................... 1,271 935
===== ===
</TABLE>
15
<PAGE> 16
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
9. TANGIBLE FIXED ASSETS -- (CONTINUED)
Motor vehicles included above which are subject to hire purchase agreements
have a net book value of:
<TABLE>
<CAPTION>
THE GROUP THE COMPANY
--------- -----------
<S> <C> <C>
Cost........................................... 3,768 57
Depreciation................................... (1,072) (15)
------ ---
Net book value................................. 2,696 42
====== ===
</TABLE>
10. INVESTMENT IN GROUP COMPANIES
This represents the cost of shares in subsidiary companies:
<TABLE>
<CAPTION>
COST
-------
BRITISH
POUND'000
<S> <C>
1st January 1993........................................... 31,384
Additions during the year at cost.......................... 490
------
31,874
======
</TABLE>
The principal subsidiary companies are all wholly owned, operate in Great
Britain and are registered in England. Great Southern Group PLC holds 100% of
the voting rights of these companies.
<TABLE>
<CAPTION>
PRINCIPAL SUBSIDIARY COMPANIES ACTIVITIES
------------------------------ ----------
<S> <C>
The Crematorium Company Limited.......... Operation of crematoria and cemeteries
Family Funeral Directors Limited......... Provision of funeral services
Monumental Masons Limited................ Manufacture and provision of memorials
Chosen Heritage Limited.................. Provision of pre-arranged funeral plans
and the arrangement of related funeral
services.
</TABLE>
Information on non-principal subsidiary companies will be contained in the
company's next Annual Return.
11. OTHER INVESTMENTS
<TABLE>
<CAPTION>
STAFF
UNLISTED MORTGAGE REDEMPTION
INVESTMENTS LOAN POLICIES TOTAL
----------- -------- ---------- -----
BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C>
The Group and the Company
Cost at 1st January 1993.................... 38 25 51 114
Additions................................... -- -- 2 2
--- --- --- ----
38 25 53 116
=== === === ====
</TABLE>
<TABLE>
<CAPTION>
AT
31ST
DECEMBER
--------
BRITISH
POUND'000
<S> <C>
Directors' valuation of unlisted investments............................... 184
Surrender value of redemption policies..................................... 68
====
</TABLE>
16
<PAGE> 17
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
11. OTHER INVESTMENTS -- (CONTINUED)
At 31st December 1993 the Group held 14.4% of the issued share capital of
Kent County Crematorium PLC which is registered in England.
12. DEBTORS
<TABLE>
<CAPTION>
THE THE
GROUP COMPANY
------- -------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Trade debtors..................................................... 3,462 --
Amounts due from parent company................................... 49 43
Amounts due from subsidiary companies............................. -- 3,456
Other debtors..................................................... 1,370 5
Prepayments and accrued income.................................... 753 334
Advance corporation tax recoverable............................... -- 339
------- -------
5,634 4,177
====== =======
</TABLE>
13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
THE THE
GROUP COMPANY
------- -------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Bank Overdraft.................................................... 419 694
Terms loans (note 15)............................................. 4,700 4,700
Unsecured loans................................................... 30 30
Hire purchase creditor............................................ 722 13
------- -------
Borrowings................................................. 5,871 5,437
====== =======
Payments received on account...................................... 240 --
Trade creditors................................................... 1,210 46
Corporation tax................................................... 1,633 --
Advance corporation tax........................................... 477 477
Taxation and social security...................................... 324 18
Accruals and deferred income...................................... 2,251 345
Proposed dividend................................................. 1,202 1,202
------- -------
Other Creditors............................................ 7,337 2,088
====== =======
</TABLE>
14. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
<TABLE>
<CAPTION>
THE THE
GROUP COMPANY
------- -------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Borrowings (note 15).............................................. 5,057 4,093
====== =======
</TABLE>
17
<PAGE> 18
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
15. BORROWINGS
<TABLE>
<CAPTION>
THE THE
GROUP COMPANY
------- -------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Great Southern Group PLC floating rate unsecured loan notes 1998
Due within one year..................................................... 30 30
Due between 1-2 years................................................... 21 21
Due between 2-5 years................................................... 147 147
Due beyond 5 years...................................................... -- --
------- -------
198 198
======= =======
Barclays de Zoete Wedd Limited, unsecured, at LIBOR plus 1.25%, due 16th
September 1999
Due within one year..................................................... 325 325
Due between 1-2 years................................................... 347 347
Due between 2-5 years................................................... 322 322
------- -------
994 994
======= =======
Barclays Bank PLC, unsecured, at LIBOR plus 1%
Due within one year..................................................... 2,500 2,500
======= =======
Hill Samuel Bank Ltd, unsecured, British Pound 4,125 at LIBOR plus 1%,
British Pound 1,000 at LIBOR plus .875%
Due within one year..................................................... 1,875 1,875
Due between 1-2 years................................................... 1,125 1,125
Due between 2-5 years................................................... 2,125 2,125
------- -------
5,125 5,125
======= =======
Hire purchase creditors
Due within one year..................................................... 722 13
Due between 1-2 years................................................... 593 6
Due between 2-5 years................................................... 377 --
------- -------
1,692 19
======= =======
Total Borrowings
Due within one year (see note 13)....................................... 5,871 5,437
Due between 1-2 years................................................... 2,086 1,499
Due between 2-5 years................................................... 2,971 2,594
Due beyond 5 years...................................................... -- --
------- -------
10,928 9,530
======= =======
</TABLE>
18
<PAGE> 19
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
16. PROVISIONS FOR LIABILITIES AND CHARGES
<TABLE>
<CAPTION> THE THE
GROUP COMPANY
--------- -------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Environmental Protection Provision
Balance 1st January............................................. 232 --
Released to Profit and loss account............................. (232) --
--------- -------
Balance 31st December........................................... -- --
Deferred Taxation (note 17)..................................... 500 4
--------- -------
500 4
======== =======
</TABLE>
17. DEFERRED TAXATION
(a) The Group
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Deferred taxation provided at 33%
At 1st January 1993.................................................. 813
Acquired with new subsidiaries....................................... 2
Charged to profit and loss account................................... 24
-----
At 31st December 1993................................................ 839
Advance corporation tax recoverable.................................. (339)
-----
500
=====
</TABLE>
<TABLE>
<CAPTION> NOT
PROVIDED PROVIDED
-------- --------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Capital expenditure allowances.................................... 909 --
Other timing differences.......................................... (70) --
Property revaluation surplus and gains rolled over................ -- 696
-------- --------
839 696
Advance Corporation Tax........................................... (339) --
-------- --------
500 696
====== ======
</TABLE>
Potential and unprovided deferred tax relating principally to property
revaluation surpluses will be dependent on the agreement of March 1982
valuations with the Inland Revenue.
(b) The Company
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Deferred taxation provided at 33%
At 1st January 1993................................................... 10
Released to profit and loss account................................... 6
-----
At 31st December 1993................................................. 4
====
</TABLE>
19
<PAGE> 20
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
17. DEFERRED TAXATION -- (CONTINUED)
<TABLE>
<CAPTION> NOT
PROVIDED PROVIDED
-------- ---------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Capital expenditure allowances.................................... 4 --
Gains rolled over................................................. -- 61
----- ------
4 61
===== ======
</TABLE>
18. CALLED UP SHARE CAPITAL
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Authorised
18,200,000 ordinary shares of 10p each.................................... 1,820
6,928,571 6.75p cumulative convertible redeemable preference shares of 5p
each................................................................... 346
------
2,166
======
Allotted, called up and fully paid
11,852,678 ordinary shares of 10p each.................................... 1,185
6,817,690 6.75p cumulative convertible redeemable preference shares of 5p
each................................................................... 341
136,060 deferred shares of 1p each........................................ 1
------
1,527
======
</TABLE>
The preference shares are convertible into ordinary shares between 1st June
1994 and 2009. The basis of conversion is the rate of 37.736 ordinary shares of
10p each for every British Pound 5 in nominal value of preference shares so
converted. Full conversion of the preference shares will increase the current
issued ordinary share capital of the company by 2,572,719 ordinary shares.
On 13th June 1993 the holders of 86,479 cumulative convertible redeemable
preference shares exercised their right to convert such shares to ordinary
shares. 32,633 ordinary shares were issued as a consequence together with
106,050 deferred shares. The deferred shares arise from the consolidation and
subdivision of fractions arising on conversion and carry no voting rights and
may be redeemed by the company for a total value of 1p following conversion of
all preference shares.
19. RESERVES
<TABLE>
<CAPTION>
SHARE OTHER RESERVES PROFIT &
PREMIUM REVALUATION MERGER SPECIAL GOODWILL LOSS
ACCOUNT RESERVE RESERVE RESERVE RESERVE ACCOUNT
------- ----------- ------- ------- -------- ---------
BRITISH BRITISH BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C> <C> <C>
Group
At 1st January 1993............... 9 4,007 -- -- (2,727) 10,538
Goodwill arising on acquisition... -- -- -- -- (423) --
Retained profit................... -- -- -- -- -- 2,147
------- -------- ------ ------ ------- -------
At 31st December 1993............. 9 4,007 -- -- (3,150) 12,685
======= ======== ====== ====== ======= =======
Company
At 1st January 1993............... 9 3,171 3,540 6,937 -- 7,702
Goodwill arising on acquisition... -- -- -- (83) -- --
Retained profit................... -- -- -- -- -- 1,998
------ -------- ------ ------ ------- -------
31st December 1993................ 9 3,171 3,540 6,854 -- 9,700
======= ======== ====== ====== ======= =======
</TABLE>
20
<PAGE> 21
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
19. RESERVES -- (CONTINUED)
On 13th June 1988 a special resolution was passed reducing the share
premium account by British Pound 9,101,000. This was confirmed by the court on
9th July 1988 and the amount arising on the reduction was transferred to a
special reserve.
The cost of cumulative goodwill for companies and businesses remaining in
the group at the year end, written off to reserves, is British Pound 15,791,000.
The revaluation reserve in the company relates to properties which have,
since valuation, been transferred to subsidiary companies and is considered
unrealised.
The Company has taken advantage of section 230 of the Companies Act 1985
and a separate profit and loss account for the Company is not therefore
presented. The Company's profit after taxation for the financial year was
British Pound 3,904,000.
20. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
The Group
Profit for the financial year.............................................. 4,053
Dividends.................................................................. (1,906)
Goodwill taken to Reserves................................................. (423)
-------
Increase in shareholders' funds............................................ 1,724
Shareholders' funds at 1st January 1993.................................... 13,354
-------
Shareholders' funds at 31st December 1993............................. 15,078
=======
The Company
Profit for the financial year.............................................. 3,904
Dividends.................................................................. (1,906)
Goodwill taken to Reserves................................................. (83)
-------
Increase in shareholders' funds............................................ 1,915
Shareholders' funds at 1st January 1993.................................... 22,886
-------
Shareholders' funds at 31st December 1993.................................. 24,801
=======
</TABLE>
21
<PAGE> 22
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
21. NOTES TO THE CASH FLOW STATEMENT
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C> <C>
(a) Net cash inflow from operating activities
Operating Profit....................................................... 7,609
Depreciation........................................................... 1,511
Profit on sale of tangible fixed assets................................ (33)
Increase in stock...................................................... (17)
Increase in debtors.................................................... (552)
Increase in creditors.................................................. 476
Provision released..................................................... (232)
-------
8,762
=======
(b) Effect of acquisition and disposal of businesses
Fixed assets........................................................... 147
Goodwill............................................................... 423
Debtors................................................................ 49
Stock.................................................................. 5
Creditors.............................................................. (51)
-------
573
=======
Satisfied by Cash...................................................... 417
Loan Notes............................................................. 156
-------
See also note 2(a)................................................... 573
=======
(c) Analysis of changes in financing
Loans and hire purchase obligations
Balance at 1st January................................................. 11,943
New loans.............................................................. 500
Loan Notes issued...................................................... 156
Cash outflows of financing............................................. (2,090)
-------
Balance at 31st December............................................. 10,509
=======
</TABLE>
<TABLE>
<CAPTION> CHANGE
1993 IN YEAR 1992
---- ------- ----
BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C>
(d) Analysis of the balance of cash equivalents included
in the balance sheet.
Cash at bank.......................................... 18 (1,150) 1,168
Bank overdrafts....................................... (419) (419) --
---- ------ -----
(401) (1,569) 1,168
==== ====== =====
</TABLE>
22
<PAGE> 23
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
22. FUTURE EXPENDITURE
Capital Expenditure
Commitments for capital expenditure at 31st December not provided in these
financial statements.
<TABLE>
<CAPTION>
THE THE
GROUP COMPANY
----- -------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Contracted for..................................................... 1,171 --
Approved by the Directors but not contracted for................... 2,248 120
===== ===
</TABLE>
Commitments under operating leases
At 31st December there were annual commitments under operating leases as
follows:
<TABLE>
<CAPTION>
THE THE
GROUP COMPANY
----- -------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Land and buildings
Expiring within one year......................................... 137 --
Expiring between two and five years inclusive.................... 544 --
Expiring in more than five years................................. 634 230
=== ===
Other assets:
Expiring within one year......................................... 17 17
=== ===
</TABLE>
23. GUARANTEES
The Company has given a guarantee to secure the bank borrowings and hire
purchase liabilities of certain subsidiary companies. At 31st December 1993
these borrowings amounted to British Pound 1,725,014.
24. DIRECTORS' INTERESTS
Messrs. E.E. Field, B.J.A. Field, C.P.J. Field, P.G. Wills and S.J.
Cockburn were Directors and Shareholders in J.D. Field & Sons Limited throughout
the year ended 31st December 1993. Rents totalling British Pound 257,922 for the
year ended 31st December 1993 have been paid to J.D. Field & Sons Limited in
respect of operating leases all expiring in more than five years.
Mr. C.P.J. Field is a non-executive Director of Lear of London Limited,
which supplied equipment and embalming services to the Group during 1993
amounting to British Pound 68,327. Lear of London Limited leases premises from
the Group at a peppercorn rent as part of an agreement to provide embalming
services at a discounted rate.
25. ULTIMATE PARENT COMPANY
J.D. Field & Sons Limited, is the ultimate parent company. It is registered
in England. Copies of its group financial statements will be obtainable from
Companies Registration Office, Companies House, Crown Way, Maindy, Cardiff CF4
3UZ.
26. PRE-ARRANGED FUNERAL
Chosen Heritage Limited markets pre-arranged and pre-paid funeral plans.
Members' pre-payments for funerals are held on trust by National Funeral Trust
and are not included in the income results or Balance
23
<PAGE> 24
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
26. PRE-ARRANGED FUNERAL -- (CONTINUED)
Sheet of the Group. The value of plans sold during the year amounted to British
Pound 14,856,351 (including instalment payments receivable) and the market value
of funds held in the Trust at 31st December 1993 was British Pound 40,928,984.
With the exception of payments for funerals performed by Family Funeral
Directors Limited, contributions from National Funeral Trust to the profit of
the Group arise only from the allocation of such part of any actuarial surpluses
as may be approved by the Managing Trustees following the recommendation of
the Trust's Independent Actuary.
27. ADJUSTMENTS AND DISCLOSURES TO REFLECT UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES (U.S. GAAP)
GREAT SOUTHERN GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
U.K. U.S.
GAAP ADJUSTMENTS GAAP
STATUTORY ------------------------------------- AS
ACCOUNTS DEPRECIATION AMORTISATION DIVIDENDS ADJUSTED
----------- ------------ ------------ --------- --------
BRITISH BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C> <C>
Turnover
Continuing Operations............ 32,743 32,743
Operating Expenses............... (25,609) (182)(1) (383)(2) (26,174)
-------- ----- ----- ---- -------
Operating Profit from Continuing
Operations....................... 7,134 6,569
Net Interest Payable............... (919) (919)
-------- ----- ----- ---- -------
Profit on Ordinary Activities
before Taxation.................. 6,215 (182) (383) 5,650
Tax on Profit on Ordinary
Activities....................... (2,162) (2,162)
-------- ----- ----- ---- -------
Profit on Ordinary Activities after
Taxation......................... 4,053 (182) (383) 3,488
Dividends.......................... (1,906) 94(3) (1,812)
-------- ----- ----- ---- -------
Transfer to Reserves............... 2,147 (182) (383) 94 1,676
======== ===== ===== ==== =======
</TABLE>
24
<PAGE> 25
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
27. ADJUSTMENTS AND DISCLOSURES TO REFLECT UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES (U.S. GAAP) -- (CONTINUED)
GREAT SOUTHERN GROUP PLC
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
ADJUSTMENTS
----------------------------------------
REVALUATION
U.K. TO REINSTATEMENT U.S.
GAAP HISTORIC OF GAAP
STATUTORY COST/ GOODWILL/ AS
ACCOUNTS DEPRECIATION AMORTISATION DIVIDENDS ADJUSTED
-------- ------------ ------------ --------- --------
BRITISH BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C> <C>
Fixed Assets
Tangible Assets excluding Land and
Buildings............................... 9,348 9,348
Land and Buildings........................ 17,998 (4,007)(1) 12,666
(1,325)(1)
-------- ------- -------- ------- -------
Total Tangible Assets................. 27,346 (5,332) 22,014
Intangible Assets: Goodwill............... -- 15,791(2) 13,093
(2,698)(2)
Investments............................... 116 116
-------- ------- -------- ------- -------
Total Fixed Assets.................... 27,462 (5,332) 13,093 35,223
Current Assets
Stock..................................... 729 729
Debtors................................... 5,634 (339)(3) 5,295
Cash at Bank and in Hand.................. 18 18
-------- ------- -------- ------- -------
6,381 (339) 6,042
Creditors Amounts falling due within One
Year
Borrowings................................ (5,871) (5,871)
Other Creditors........................... (7,337) 1,541(3) (5,796)
-------- ------- -------- ------- -------
(13,208) 1,541 (11,667)
-------- ------- -------- ------- -------
Net Current Liabilities..................... (6,827) 1,202 (5,625)
-------- ------- -------- ------- -------
Total Assets less Current
Liabilities........................ 20,635 (5,332) 13,093 1,202 29,598
Creditors Amounts falling due after more
than One Year............................. (5,057) (5,057)
Provisions for Liabilities and Charges...... (500) (500)
-------- ------- -------- ------- -------
15,078 (5,332) 13,093 1,202 24,041
======== ======= ======== ======= =======
Capital and Reserves
Called Up Ordinary Share Capital.......... 1,185 -- -- -- 1,185
Called Up Cumulative Convertible
Redeemable Preference Shares (Note 6)... 341 -- -- -- 341
Called Up Deferred Shares................. 1 -- -- -- 1
-------- ------- -------- ------- -------
1,527 1,527
Share Premium Account..................... 9 9,110(2) 9,119
Merger Reserve............................ -- 3,531(2) 3,531
Revaluation Reserve....................... 4,007 (4,007)(1) 0
Goodwill Reserve.......................... (3,150) 3,150(2) 0
Profit and Loss Account................... 12,685 (1,325)(1) (2,698)(2) 1,202(3) 9,864
-------- ------- -------- ------- -------
Shareholders Funds.......................... 15,078 (5,332) 13,093 1,202 24,041
========= ======== ======== ======= =======
</TABLE>
Land and Buildings comprises Freehold Cemeteries and Crematoria plus Other
Freehold Properties.
25
<PAGE> 26
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
27. ADJUSTMENTS AND DISCLOSURES TO REFLECT UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES (U.S. GAAP) -- (CONTINUED)
The following adjustments have been made to the consolidated profit and
loss account for the year then ended and the consolidated balance sheet of Great
Southern Group plc as at 31 December 1993 to determine the figures as would be
reported under US GAAP.
1. Freehold Buildings have been written down to reflect a depreciation charge
that assumes that the asset will be written down to a residual value of 20%
of cost over a fifty year period. It has been assumed that 66% of the
carrying value of "Land and Buildings" as stated in the consolidated
Financial Statements is attributable to the buildings.
2. Goodwill has been capitalised and is being amortised over a period of 40
years.
3. Proposed final ordinary dividends are not recognised, being declared after 31
December 1993. Similarly, ordinary dividends proposed for the year ended 31
December 1992 but declared during 1993 have been accounted for.
The preference dividend for the six months to 31 December 1993 is not
recognised, the entitlement not arising until 1 January 1994. The entitlement
to the preference dividend for the six months ended 31 December 1992 has thus
been recognised.
4. The defined benefit pension scheme has, by the actuarial methods used, a
surplus of projected assets over projected liabilities and any adjustment to
reflect the basis set out in FAS87 is not considered likely to be material.
5. As disclosed in note 26, Great Southern Group recognises profits from its
pre-arranged and pre-paid funeral plans with actuarial surpluses approved by
the Managing Trustees of National Funeral Trust, on the recommendation of the
Trust's independent actuary. The actuarial surplus recognised for 1993
amounted to British Pound 851,000. Approximately 50% of the funeral costs
claimed under these plans relate to funerals conducted by non-Group funeral
homes. This accounting policy is generally acceptable under US GAAP rules and
no material adjustment arises.
No adjustment has been made to consolidate the accounts of National Funeral
Trust which holds the funds received from members (see note 26).
6. Subject to the provisions of the Companies Act 1985, the company shall, on 31
December 2009, redeem all the convertible preference shares then in issue at
par, together with a premium of 95p per share and any arrears or accruals of
dividend (whether or not such dividend has been declared), by giving not less
than 14 days prior written notice.
7. Operating Leases
The annual payments under non-cancellable operating leases to which the
company is committed are as follows:
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
1994....................................... 1,307
1995....................................... 1,290
1996....................................... 1,274
1997....................................... 1,245
1998....................................... 1,186
Thereafter................................. 13,398
--------
19,700
</TABLE>
The majority of operating lease commitments relate to land and buildings.
26
<PAGE> 27
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEAR ENDED 31ST DECEMBER 1993
27. ADJUSTMENTS AND DISCLOSURES TO REFLECT UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES (U.S. GAAP) -- (CONTINUED)
8. Earnings per share
Earnings per share under U.S. GAAP is as follows:
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Primary
Profit on ordinary activities after taxation.............. 3,488
Preference dividend....................................... (463)
------
3,025
======
NUMBER
------
'000
Weighted average of ordinary shares in issue during the
year.................................................... 11,838
------
Earnings per share........................................ 25.6p
======
BRITISH
POUND'000
Fully diluted
Profit on ordinary activities after taxation.............. 3,488
======
NUMBER
------
'000
Number of ordinary shares assuming full conversion of
6.75p cumulative convertible redeemable preference
shares.................................................. 14,425
------
Earnings per share........................................ 24.2p
======
</TABLE>
27
<PAGE> 28
GREAT SOUTHERN GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 30TH JUNE 1994 AND 1993
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1993
---------------------------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Turnover........................................................................... 17,181 16,583
Cost............................................................................... 12,975 12,633
------- -------
Operating profit................................................................... 4,206 3,950
Interest payable................................................................... 384 503
------- -------
Profit before taxation............................................................. 3,822 3,447
Taxation........................................................................... 1,261 1,138
------- -------
Profit after taxation.............................................................. 2,561 2,309
Preference dividend................................................................ 229 230
------- -------
2,332 2,079
Interim dividend 4.5p.............................................................. 534 474
------- -------
1,798 1,605
======= =======
Earnings per share -- basic*....................................................... 19.7p 17.6p
======= =======
Earnings per share -- fully diluted+............................................... 17.8p 16.0p
======= =======
</TABLE>
- ---------------
<TABLE>
<CAPTION>
-------------------------
000'S 000'S
------- -------
<S> <C>
* Based on a weighted average of Ordinary Shares in issue of....................... 11,853 11,822
+ After assuming full conversion of the 6.75 pence Convertible Preference Shares
and the resulting total of Ordinary Shares in issue of........................... 14,425 14,425
</TABLE>
28
<PAGE> 29
GREAT SOUTHERN GROUP PLC
CONSOLIDATED BALANCE SHEET
AS AT 30TH JUNE 1994
(UNAUDITED)
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Fixed assets
Tangible assets................................................................ 28,410
Investments.................................................................... 120
-------
28,530
-------
Current assets
Stocks......................................................................... 709
Debtors........................................................................ 4,542
Cash at bank and in hand....................................................... 109
-------
5,360
-------
Creditors: Amounts falling due within one year
Borrowings..................................................................... 5,560
Other creditors................................................................ 7,115
-------
12,675
-------
Net current liabilities................................................... (7,315)
-------
Total assets less current liabilities..................................... 21,215
Creditors: Amounts falling due after more than one year
Borrowings..................................................................... (4,019)
Provisions for liabilities and charges......................................... (648)
-------
16,548
=======
Capital and reserves
Called up share capital........................................................ 1,527
Share premium account.......................................................... 9
Revaluation reserve............................................................ 4,007
Goodwill reserve............................................................... (3,478)
Profit and loss account........................................................ 14,483
-------
16,548
=======
</TABLE>
29
<PAGE> 30
GREAT SOUTHERN GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30TH JUNE 1994 AND 1993
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1993
---------------------------------------------------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C> <C> <C>
Operating profit...................................................... 4,206 3,950
Depreciation.......................................................... 814 726
Profit on Sale of Tangible Fixed Assets............................... (12) (24)
Decrease/(Increase) in Inventory...................................... 20 (24)
Decrease in Debtors................................................... 1,092 522
Increase in Creditors................................................. (691) 5,429 (272) 4,878
------- -------
Interest Paid......................................................... (384) (503)
Dividends Paid........................................................ (1,202) (1,586) (1,108) (1,611)
------- -------
Taxation Paid......................................................... (205) (1,321)
Purchase of Tangible Fixed Assets..................................... (2,058) (1,402)
Purchase of Investments............................................... (4) (6)
Disposal of Tangible Fixed Assets..................................... 192 344
Acquisition of Goodwill............................................... (328) (2,198) (276) (1,340)
------- ------- ------- -------
1,440
Loan Notes Issued..................................................... -- 156 606
Repayment of Amounts Borrowed......................................... (906) (411)
Repayment of Hire Purchase contracts.................................. (443) (1,349) (399) (654)
------- ------- ------- -------
Increase/(Decrease) in Cash........................................... 91 (48)
======= =======
</TABLE>
- ---------------
Notes
<TABLE>
<S> <C>
1. Acquisitions
Fixed Assets.................................................... 25 147
Goodwill........................................................ 328 276
------- -------
353 423
======= =======
Financed by Cash
2. Changes in financing
Loans & Hire Purchase at 31st December 1993 and 1992............ 10,928 11,943
Loan Notes Issued............................................... -- 156
Cash outflows at 30th June 1994................................. (1,349) (810)
------- -------
9,579 11,289
======= =======
</TABLE>
30
<PAGE> 31
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30TH JUNE 1994 AND 1993
(UNAUDITED)
1. ADJUSTMENTS AND DISCLOSURES TO REFLECT U.S. GAAP
CONSOLIDATED PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
1994
-------------------------------------------------------
U.K. U.S.
GAAP ADJUSTMENTS GAAP
STATUTORY --------------------------- AS
ACCOUNTS DEPRECIATION AMORTISATION ADJUSTED
--------- ------------ ------------ --------
BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C>
Turnover............................ 17,181 17,181
Costs............................... 12,975 91(1) 192(2) 13,258
Net Interest Payable................ 384 384
Tax on Profit on Ordinary
Activities........................ 1,261 1,261
------- ------- ------- -------
Profit on Ordinary Activities....... 2,561 (91) (192) 2,278
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
1993
-------------------------------------------------------
U.K. U.S.
GAAP ADJUSTMENTS GAAP
STATUTORY --------------------------- AS
ACCOUNTS DEPRECIATION AMORTISATION ADJUSTED
--------- ------------ ------------ --------
BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C>
Turnover............................ 16,583 16,583
Costs............................... 12,633 98(1) 191(2) 12,922
Net Interest Payable................ 503 503
Tax on Profit on Ordinary
Activities........................ 1,138 1,138
------- ------- ------- -------
Profit on Ordinary Activities....... 2,309 (98) (191) 2,020
======= ======= ======= =======
</TABLE>
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
ADJUSTMENTS
----------------------------
REVALUATION
U.K. TO U.S.
GAAP HISTORIC GAAP
STATUTORY COSTS/ GOODWILL/ AS
ACCOUNTS DEPRECIATION AMORTISATION DIVIDENDS ADJUSTED
--------- ------------ ------------ --------- --------
BRITISH BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C> <C>
Fixed assets
Tangible assets..................... 28,410 (5,423)(1) 22,987
Investments......................... 120 120
------- ------- ------- ------- -------
28,530 (5,423) 23,107
------- ------- ------- ----- -------
Intangible Assets: Goodwill........... -- 13,229(2) 13,229
Current assets
Stocks.............................. 709 709
Debtors............................. 4,542 4,542
Cash at bank and in hand............ 109 109
------- ------- ------- ------- -------
5,360 5,360
Creditors: Amounts falling due within
one year
Borrowings.......................... 5,560 5,560
Other creditors..................... 7,115 (763)(3) 6,352
------- ------- ------- ---- -------
12,675 (763) 11,912
------- ------- ------- ---- -------
Net current liabilities........ (7,315) 763 (6,552)
------- ------- ------- ---- -------
Total assets less current
liabilities................. 21,215 (5,423) 13,229 763 29,784
Creditors: Amounts falling due after
more than one year
Borrowings.......................... (4,019) (4,019)
Provisions for liabilities and
charges.......................... (648) (648)
------- ------- ------- ---- -------
16,548 (5,423) 13,229 763 25,117
======= ======= ======= ==== =======
Capital and reserves.................. 16,548 (5,423) 13,229 763 25,117
======= ======= ======= ==== =======
</TABLE>
- ---------------
1. Freehold Buildings have been written down to reflect a depreciation charge
that assumes that the asset will be written down to a residual value of 20%
of cost over a fifty year period. It has been assumed that 66% of the
carrying value of "Land and Buildings" as stated in the consolidated
Financial Statements is attributable to the buildings.
2. Goodwill has been capitalised and is being amortised over a period of 40
years.
3. Proposed interim ordinary dividends are not recognised being declared after
30th June 1994. The preference dividend for the six months to 30th June 1994
is not recognised, the entitlement not arising until 1st July 1994.
31
<PAGE> 32
GREAT SOUTHERN GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE SIX MONTHS ENDED 30TH JUNE 1994 AND 1993
(UNAUDITED)
1. ADJUSTMENTS AND DISCLOSURES TO REFLECT U.S. GAAP -- (CONTINUED)
4. Earnings per share
Earnings per share under U.S. GAAP is as follows:
<TABLE>
<CAPTION>
1994 1993
--------------------------------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Primary
Profit on ordinary activities after taxation................... 2,278 2,020
Preference dividend............................................ (230) (233)
--------- ---------
2,048 1,787
========= =========
</TABLE>
<TABLE>
<CAPTION>
NUMBER NUMBER
'000 '000
<S> <C> <C>
Weighted average of ordinary shares in issue during the year... 11,853 11,822
--------- ---------
Earnings per share............................................. 17.3p 15.1p
========= =========
</TABLE>
<TABLE>
<CAPTION>
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Fully diluted
Profit on ordinary activities after taxation................... 2,278 2,020
========= =========
</TABLE>
<TABLE>
<CAPTION>
NUMBER NUMBER
'000 '000
<S> <C> <C>
Number of ordinary shares assuming full conversion of 6.75p
cumulative convertible redeemable preference shares......... 14,425 14,425
--------- ---------
Earnings per share............................................. 15.8p 14.0p
========= =========
</TABLE>
32
<PAGE> 33
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
OF PLANTSBROOK GROUP PLC
We have audited the consolidated financial statements appearing on pages 34
to 56 of Plantsbrook Group plc and its subsidiaries which are expressed in
pounds sterling. These financial statements and schedules are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United Kingdom and the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material mis-statement. 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 presentation of the financial statements. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Plantsbrook
Group plc and its subsidiaries at 31 December 1993 and the results of its
operations, and its cash flows for the year ended 31 December 1993, 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 expressed in pounds sterling for the
year ended 31 December 1993 and the determination of consolidated shareholders'
equity and consolidated financial position also expressed in pounds sterling at
31 December 1993 to the extent summarised in Note 21 to the consolidated
financial statements.
PRICE WATERHOUSE
Chartered Accountants and Registered
Auditors
Cornwall Court
19 Cornwall Street
Birmingham
B3 2DT
England
November 14, 1994
33
<PAGE> 34
PLANTSBROOK GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 1993
<TABLE>
<CAPTION>
BRITISH
NOTES POUND'000
-----
<S> <C> <C>
Turnover
Continuing Operations................................................... 51,249
Acquisitions............................................................ 2 800
-------
2 52,049
Cost of sales............................................................. (15,429)
-------
Gross Profit.............................................................. 36,620
Administrative expenses................................................. (24,017)
-------
Operating Profit.......................................................... 12,603
Interest receivable..................................................... 210
Interest payable........................................................ 3 (796)
-------
Profit on Ordinary Activities before Taxation............................. 4 12,017
Taxation................................................................ 6 (3,781)
-------
Profit on Ordinary Activities after Taxation.............................. 8,236
Minority Interest....................................................... (5)
-------
Profit for the Financial Year............................................. 8,231
Dividends............................................................... 7 (4,969)
-------
Retained Profit for the Financial Year.................................... 19(a) 3,262
=======
Earnings per Share: 8
Basic................................................................... 8.46p
-------
Fully diluted........................................................... 7.77p
-------
</TABLE>
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 31 DECEMBER 1993
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Profit for the financial year........................................................ 8,231
Unrealised gain on Trust Fund investments............................................ 136
-----
Total Recognised Gains relating to the Year................................... 8,367
=====
</TABLE>
34
<PAGE> 35
PLANTSBROOK GROUP PLC
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 1993
<TABLE>
<CAPTION>
BRITISH
NOTES POUND'000
-----
<S> <C> <C>
Fixed Assets
Tangible assets....................................................... 9 36,353
Trust fund assets..................................................... 10 1,170
-------
Current Assets
Stocks................................................................ 12 919
Debtors............................................................... 13 9,215
Cash at bank and in hand.............................................. 1,924
-------
12,058
-------
Creditors
Amounts falling due with one year..................................... 14 (16,449)
-------
Net Current Liabilities.......................................... (4,391)
-------
Total Assets Less Current Liabilities................................... 33,132
Creditors:
Amounts falling due after more than one year.......................... 15 (8,366)
-------
24,766
=======
Capital and Reserves
Called up share capital............................................... 18 11,551
Share premium account................................................. 19(a) 10,967
Merger reserve........................................................ 19(a) 81,563
Capital redemption reserve............................................ 19(a) 2
Revaluation reserve................................................... 19(a) 136
Profit and loss account............................................... 19(a) 1,634
-------
Shareholders' Funds -- Gross............................................ 105,853
Goodwill written off.................................................... 19(a) (81,091)
-------
Shareholders' Funds -- Net.............................................. 24,762
Minority interests...................................................... 4
-------
24,766
=======
Reconciliation of movements in Shareholders' Funds
Profit for the financial year........................................... 8,231
Dividends............................................................. (4,969)
-------
Retained profit for the financial year................................ 3,262
Issue of shares....................................................... 18 1,964
Goodwill written off.................................................. 19(a) (1,640)
Revaluation of Trust Fund investments................................. 19(a) 136
-------
Net additions to Shareholders' Funds.................................... 3,722
Opening Shareholders' Funds -- Net...................................... 21,040
-------
Closing Shareholders' Funds -- Net...................................... 24,762
=======
</TABLE>
Approved by the Board on 24 March 1994 and signed on its behalf.
<TABLE>
<S> <C>
P T Hindley Directors
R A W Middleton
</TABLE>
35
<PAGE> 36
PLANTSBROOK GROUP PLC
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 1993
<TABLE>
<CAPTION>
BRITISH
NOTES POUND'000
----- ---------
<S> <C> <C>
Fixed Assets
Tangible Assets....................................................... 9 9,068
Investments........................................................... 11 122,502
-------
131,570
-------
Current Assets
Stocks................................................................ 12 908
Debtors............................................................... 13 41,253
Cash at bank and in hand.............................................. 1,525
-------
43,686
-------
Creditors:
Amounts falling due within one year................................... 14 (25,520)
-------
Net Current Assets...................................................... 18,166
-------
Total Assets Less Current Liabilities................................... 149,736
Creditors:
Amounts falling due after more than one year.......................... 15 (33,333)
Provisions for Liabilities and Charges.................................. 17 (1,910)
-------
114,493
=======
Capital and Reserves
Called up share capital............................................... 18 11,551
Share premium account................................................. 19(b) 10,967
Merger reserve........................................................ 19(b) 81,563
Capital redemption reserve............................................ 19(b) 2
Profit and loss account............................................... 19(b) 10,410
-------
114,493
=======
</TABLE>
Approved by the Board on 24 March 1994 and signed on its behalf.
<TABLE>
<S> <C>
P T Hindley Directors
R A W Middleton
</TABLE>
36
<PAGE> 37
PLANTSBROOK GROUP PLC
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 1993
<TABLE>
<CAPTION>
BRITISH BRITISH
NOTES POUND'000 POUND'000
----- --------- ---------
<S> <C> <C> <C>
Net cash inflow from operating activities....................... (i) 17,130
Returns on investments and servicing of finance
Net interest paid............................................. (665)
Dividends paid................................................ (4,610)
------
(5,275)
Taxation
Taxation paid................................................. (2,849)
------
Net cash inflow before investing activities..................... 9,006
Investing activities
Purchase of tangible fixed assets............................. (3,419)
Purchase of trust fund investments............................ (1,253)
Purchase of businesses net of cash and cash equivalents....... (iv) (2,537)
Purchase of minority interest in subsidiary................... (20)
Disposal of tangible fixed assets............................. 1,570
------
(5,659)
------
Net cash inflow before financing................................ 3,347
Financing
Issue of shares............................................... (ii) 2,008
Share conversion and issue expenses........................... (ii) (44)
Hire purchase repayments...................................... (ii) (3,881)
Loan notes repaid............................................. (ii) (409)
------
(2,326)
------
Increase in cash and cash equivalents........................... (iii) 1,021
======
</TABLE>
37
<PAGE> 38
PLANTSBROOK GROUP PLC
CASH FLOW STATEMENT -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
NOTES
(I) RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Operating profit............................................................... 12,603
Depreciation................................................................... 2,709
Loss on disposal of tangible fixed assets...................................... 22
Increase in liability in respect of pre-paid funeral plans..................... 1,253
Working capital movements:
Stocks....................................................................... (134)
Debtors...................................................................... (337)
Creditors.................................................................... 1,014
------
17,130
======
</TABLE>
(II) ANALYSIS OF MOVEMENTS IN FINANCING DURING THE YEAR
<TABLE>
<CAPTION>
LOAN
STOCK
AND
SHARE HIRE BANK
CAPITAL* PURCHASE LOAN
------- -------- ------
BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000
<S> <C> <C> <C>
At 31 December 1992....................................... 102,119 4,659 7,500
Share issue proceeds...................................... 2,008 -- --
Share conversion and issue expenses....................... (44) -- --
Hire purchase and loan finance............................ -- 1,080 --
Hire purchase repayments.................................. -- (3,881) --
Loan notes repaid......................................... -- (409) --
------- ------ -----
At 31 December 1993.................................. 104,083 1,449 7,500
======= ====== =====
</TABLE>
- ---------------
* Including share premium, merger reserve and capital redemption reserve.
(III) ANALYSIS OF MOVEMENTS IN CASH AND CASH EQUIVALENTS DURING THE YEAR
<TABLE>
<CAPTION>
MOVEMENT
IN
1993 1992 YEAR
----- ----- ------
BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000
<S> <C> <C> <C>
Cash at bank and in hand..................................... 1,924 950 974
Bank overdraft............................................... -- (47) 47
----- ----- -----
1,924 903 1,021
===== ===== =====
</TABLE>
38
<PAGE> 39
PLANTSBROOK GROUP PLC
CASH FLOW STATEMENT -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
NOTES -- (CONTINUED)
(IV) PURCHASE OF BUSINESSES
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Fair value of net assets acquired
Tangible fixed assets........................................................... 1,084
Stocks.......................................................................... 8
Debtors......................................................................... 45
Creditors....................................................................... (240)
Cash............................................................................ 36
Bank loan....................................................................... (63)
-----
870
Goodwill........................................................................ 1,640
-----
Cash consideration.............................................................. 2,510
=====
Analysis of the net outflow of cash and cash equivalents
in respect of the purchase of businesses
Cash consideration.............................................................. 2,510
Bank loans of acquired businesses............................................... 63
Cash acquired................................................................... (36)
-----
2,537
=====
</TABLE>
39
<PAGE> 40
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 31 DECEMBER 1993
1. ACCOUNTING POLICIES
Basis of preparation and consolidation
The financial statements have been prepared under the historical cost
convention as modified by the valuation of trust fund assets at market value and
in accordance with applicable accounting standards. In the balance sheet, trust
fund assets are shown after deduction of the related liability for future
funeral costs. This represents a departure from the requirement of the Companies
Act 1985. In the opinion of the Directors, this departure is necessary for the
accounts to give a true and fair view. An explanation of the departure is given
in the note on trust fund assets below.
The consolidated accounts include the accounts of the Company and its
subsidiaries. In accordance with the concession granted under Section 230 of the
Companies Act 1985, the profit and loss account of Plantsbrook Group plc has not
been separately presented in the accounts.
Cost of acquisitions and goodwill
In the accounts of the Company, investments in subsidiaries are stated at
cost less provisions for permanent diminution in value.
In the Group accounts goodwill, representing the excess of the purchase
price of subsidiaries and other businesses over the fair value of the net assets
acquired, is written off to a goodwill write-off reserve in the year of
acquisition.
Where the conditions of Section 131 of the Companies Act 1985 are met, the
share premium arising on the issue of shares in consideration for the
acquisition of shares is credited to a merger reserve.
Depreciation
Depreciation of tangible fixed assets other than properties is provided
from the date of acquisition so as to write off assets over the term of their
estimated useful lives. The bases and rates in use for the various classes of
assets are as follows:
<TABLE>
<S> <C>
Freehold and long leasehold premises Nil
Short leasehold premises Over term of lease
Plant, machinery, fixtures and fittings:
Computers 25% on cost
Others 15% reducing balance basis
Motor vehicles:
Limousines 10% on cost
Others 15% to 25% on cost
</TABLE>
No depreciation is provided on freehold and long leasehold properties since
it is the Group's policy to maintain all of its funeral homes and other
properties to a high standard in order to protect their trade. Consequently the
Directors consider the lives of these properties to be so long and the residual
property values so high, based on prices prevailing at the time of acquisition,
that there is no significant annual depreciation.
Hire purchase contracts and operating leases
Assets acquired under hire purchase contracts and finance lease agreements
are capitalised at cost and depreciated in accordance with the note above. The
capital element of future rentals is included under creditors. The interest is
charged to the profit and loss account over the period of the lease.
Rental costs of operating leases are charged to the profit and loss account
in the period to which they relate.
40
<PAGE> 41
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
1. ACCOUNTING POLICIES -- (CONTINUED)
Stocks
Stocks, which comprise funeral supplies and monumental masonry, are stated
at the lower of cost and net realisable value.
Pre-need funeral plans
Income from pre-need funeral plans is taken to the profit and loss account
as received. The liability for future funeral costs is determined based on
actuarial principles and charged to cost of sales to match income. A proportion
of the income received sufficient to meet the anticipated future liability to
conduct funerals is deposited with independent trustees. The liability for
future funeral costs and the transfers to the trust fund are determined based on
advice from independent actuaries.
Trust fund assets
Trust fund assets include investments which are stated at market value.
Unrealised surpluses arising on revaluation are credited to a revaluation
reserve. Deficits resulting from the aggregate market value of investments
falling below cost are charged to the profit and loss account.
In the consolidated balance sheet, trust fund assets are shown after
deducting the related liability for future funeral costs. This departure from
the Companies Act 1985, which requires assets and liabilities to be shown
separately, is, in the opinion of the Directors, necessary for the accounts to
show a true and fair view.
Deferred taxation
The Group provides for deferred taxation, using the liability method, to
take account of timing differences between the treatment of certain items for
accounts purposes and the treatment for taxation purposes. Provision is made
only to the extent that there is a reasonable probability that such tax will
become payable in the foreseeable future.
Repairs and renewals
All repairs and renewals are charged against profits as incurred.
Pension costs
The Group operates a contributory defined benefit pension scheme covering
the majority of its permanent employees. The scheme funds are administered by
trustees and are independent of the Group's finances.
Contributions are charged to the profit and loss account so as to spread
the regular cost over the average service lives of employees in accordance with
the advice of qualified actuaries. Actuarial surpluses and deficits are spread
forward over the average remaining service lives of employees.
Turnover
Turnover comprises the amount receivable from customers for the provision
of funeral and other services, excluding Value Added Tax.
2. SEGMENTAL AND GEOGRAPHICAL INFORMATION
No segmental analysis is relevant since the Group's activities are all
related to the provision of funeral services. The turnover relating to
acquisitions made during the year is British Pound 800,022. It is not feasible
to separately disclose the impact of these acquisitions on operating profit
since the new businesses have been fully integrated into the Group's existing
branch network and financial reporting structure.
41
<PAGE> 42
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
2. SEGMENTAL AND GEOGRAPHICAL INFORMATION -- (CONTINUED)
All turnover is derived from the United Kingdom except for exports of
British Pound 355,000. No geographical analysis is provided on the grounds of
immateriality.
3. INTEREST PAYABLE
Interest on borrowings repayable within five years:
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Hire purchase advances.............................................. 192
Bank overdraft, bank loan and loan notes............................ 604
-----
796
=====
</TABLE>
4. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
The profit on ordinary activities before taxation is arrived at after
charging/(crediting):
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Depreciation:
Owned assets....................................................... 2,495
Assets held under hire purchase.................................... 214
-----
2,709
Auditor's remuneration, including expenses........................... 49
Redundancy costs..................................................... 16
Property repairs..................................................... 974
Operating lease rentals:
Property........................................................... 2,351
Other.............................................................. 137
Loss on disposal of tangible fixed assets.......................... 22
=====
</TABLE>
Additional fees paid to the auditors, Price Waterhouse, were British
Pound 89,000 in respect of taxation services and British Pound 24,000 for other
services.
5. DIRECTORS AND EMPLOYEES
Staff costs (including directors):
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Wages and salaries.................................................. 14,341
Social Security costs............................................... 1,218
Pension costs (note 20)............................................. 510
------
16,069
======
</TABLE>
The average weekly number of persons (including directors) employed by the
Group during the year was:
<TABLE>
<CAPTION>
NUMBER
-----
<S> <C>
Management and administration....................................... 80
Funeral staff....................................................... 1,175
-----
1,255
=====
</TABLE>
42
<PAGE> 43
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
5. DIRECTORS AND EMPLOYEES -- (CONTINUED)
Emoluments paid to all directors, including pension contributions:
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Fees.............................................................. 44,000
Performance-related bonuses....................................... 26,000
Other emoluments.................................................. 220,806
Pension contributions............................................. 20,048
--------
310,854
========
</TABLE>
The performance-related bonuses are based upon the Group profitability.
Emoluments of Chairman and highest paid director:
<TABLE>
<S> <C>
Chairman
Fees............................................................ 16,000
========
Highest paid director:
Performance-related bonus....................................... 23,000
Other emoluments................................................ 107,543
Pension contributions........................................... 10,000
--------
140,543
========
</TABLE>
Emoluments of the directors excluding pension contributions:
<TABLE>
<CAPTION>
NUMBER
<S> <C>
British Pound Nil to British Pound 5,000.......................... 1
British Pound 5,001 to British Pound 10,000.......................... 3
British Pound 15,001 to British Pound 20,000.......................... 1
British Pound 20,001 to British Pound 25,000.......................... 2
British Pound 70,001 to British Pound 75,000.......................... 1
British Pound 130,001 to British Pound 135,000.......................... 1
===
</TABLE>
43
<PAGE> 44
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
5. DIRECTORS AND EMPLOYEES -- (CONTINUED)
Directors' share options
<TABLE>
<CAPTION>
NUMBER PRICE
OF PER FIRST DATE LAST DATE
DIRECTORS' SHARE OPTIONS SHARES SHARE EXERCISABLE EXERCISABLE
- ----------------------------------- ------ ---- ------------------ ------------------
<S> <C> <C> <C> <C>
P. T. Hindley...................... 75,000 60p 1 November 1994 1 November 2001
25,000 42p 22 April 1995 22 April 2002
75,000 68p 28 April 1996 28 April 2003
37,500 84p 20 September 1996 20 September 2003
R. A. W. Middleton................. 70,000 42p 22 April 1995 22 April 2002
50,000 68p 28 April 1996 28 April 2003
25,000 84p 20 September 1996 20 September 2003
D. G. Barber....................... 25,000 60p 1 November 1994 1 November 2001
45,000 42p 22 April 1995 22 April 2002
50,000 68p 28 April 1996 28 April 2003
25,000 84p 20 September 1996 20 September 2003
J. Brown........................... 25,000 60p 1 November 1994 1 November 2001
45,000 42p 22 April 1995 22 April 2002
50,000 68p 28 April 1996 28 April 2003
25,000 84p 20 September 1996 20 September 2003
</TABLE>
6. TAXATION
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Taxation based on profits for the year:
United Kingdom corporation tax at 33%................................ 4,650
Deferred taxation (note 17).......................................... (713)
Adjustments in respect of previous years............................. (156)
-----
3,781
=====
</TABLE>
7. DIVIDENDS
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Interim ordinary dividend paid of 1.1p per share..................... 1,099
Final ordinary dividend proposed of 2.3p per share................... 2,300
Convertible Preference shares 1991-2001 dividend paid................ 1,048
Convertible Preference shares 1991-1997 dividend paid................ 522
-----
4,969
=====
</TABLE>
8. EARNINGS PER SHARE
The basic earnings per share calculation for the year ended 31 December
1993 is based on the weighted average of 78,751,619 Ordinary shares in issue
during the year and the profit of British Pound 6,661,000 which is after
taxation, minority interests and preference dividends.
The fully diluted earnings per Ordinary share calculation is based on
106,477,621 Ordinary shares in issue, after allowing for full conversion rights
attaching to convertible securities and the allotment of shares under the option
scheme, with a corresponding adjustment to income for interest. The conversion
of the 1997 Preference shares in October 1993 has been reflected in this
calculation.
44
<PAGE> 45
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
9. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
PLANT,
FREEHOLD LEASEHOLD MACHINERY
LAND LAND FIXTURES
AND AND AND MOTOR
GROUP BUILDINGS BUILDINGS FITTINGS VEHICLES TOTAL
------------------------------ --------- --------- -------- -------- -----
BRITISH BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C> <C>
COST
At 31 December 1992........... 22,181 4,128 4,793 14,613 45,715
Additions..................... 2,449 519 784 1,358 5,110
Acquisition of subsidiary..... 450 -- 23 97 570
Disposals..................... (903) (406) (69) (1,185) (2,563)
Reclassification.............. (83) 83 -- -- --
------ ----- ----- ------ ------
At 31 December 1993........... 24,094 4,324 5,531 14,883 48,832
====== ===== ===== ====== ======
ACCUMULATED DEPRECIATION
At 31 December 1992........... 26 918 2,925 6,776 10,645
Charge........................ -- 296 433 1,980 2,709
Acquisition of subsidiary..... -- -- 19 78 97
Disposals..................... -- (39) (58) (875) (972)
Reclassification.............. 4 (4) -- -- --
------ ----- ----- ------ ------
At 31 December 1993........... 30 1,171 3,319 7,959 12,479
====== ===== ===== ====== ======
NET BOOK AMOUNT
At 31 December 1993........... 24,064 3,153 2,212 6,924 36,353
====== ===== ===== ====== ======
</TABLE>
Of the net book amounts stated above, the following amounts relate to
assets held under hire purchase arrangements:
<TABLE>
<CAPTION>
MOTOR
VEHICLES
--------
BRITISH
POUND'000
<S> <C>
Cost............................................................... 1,600
Depreciation....................................................... (284)
--------
1,316
=======
</TABLE>
The net book amount of leasehold land and buildings is further analysed as
follows:
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Long leasehold..................................................... 1,284
Short leasehold.................................................... 1,869
--------
3,153
=======
Capital commitments
Capital expenditure authorised by the Board and contracted for..... 249
=======
Capital expenditure authorised by the Board but not contracted
for.............................................................. 482
=======
</TABLE>
45
<PAGE> 46
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
9. TANGIBLE FIXED ASSETS -- (CONTINUED)
<TABLE>
<CAPTION>
PLANT,
MACHINERY,
FIXTURES
AND MOTOR
COMPANY FITTINGS VEHICLES TOTAL
-------- -------- -----
BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000
<S> <C> <C> <C>
COST
At 31 December 1992........................... 4,696 14,537 19,233
Additions..................................... 763 1,357 2,120
Transferred from other Group companies........ 38 84 122
Disposals..................................... (33) (1,162) (1,195)
----- ------ ------
At 31 December 1993............................. 5,464 14,816 20,280
===== ====== ======
ACCUMULATED DEPRECIATION
At 31 December 1992........................... 2,860 6,746 9,606
Charge........................................ 427 1,967 2,394
Transferred from other Group companies........ 27 72 99
Disposals..................................... (21) (866) (887)
----- ------ ------
At 31 December 1993............................. 3,293 7,919 11,212
===== ====== ======
NET BOOK AMOUNT
At 31 December 1993............................. 2,171 6,897 9,068
===== ====== ======
</TABLE>
10. TRUST FUND ASSETS
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Bank deposit accounts............................................... 1,800
Unit trusts......................................................... 1,537
Listed investments
Government gilts.................................................. 1,999
------
5,336
Deduct:
Liability in respect to pre-need funeral plans.................... (4,166)
------
1,170
======
</TABLE>
Investments are shown at market value. At 31 December 1993 investments at
cost were British Pound 5,200,000.
Assets are held by independent custodian trustees and are available to the
Group only to meet the liabilities arising on the death of plan holders and are
expected to be recoverable in more than twelve months time. The liability in
respect of pre-need funeral plans is determined based on actuarial principles.
11. INVESTMENTS
<TABLE>
<CAPTION>
BRITISH
POUND'000
<S> <C>
Investment in shares of Group companies at cost:
At 1 January 1993................................................ 97,918
Additions........................................................ 25,020
Disposal......................................................... (436)
-------
At 31 December 1993................................................ 122,502
=======
</TABLE>
46
<PAGE> 47
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
11. INVESTMENTS -- (CONTINUED)
The Company's major trading subsidiaries during the year were as follows:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE
ACTIVITY SHARES HELD HELD
-------- ----------- -----
<S> <C> <C> <C>
Dignity Limited (formerly Pre-need funeral plans 18,810 Ordinary 95%
Dignity in Destiny Limited) at British Pound 1
each
750,000 Redeemable 100%
Preference at
British Pound 1 each
Plantsbrook Properties plc Property holding company 277,376,905 Ordinary 100%
(formerly PFG Hodgson Kenyon at 10p each
(Properties) plc)
Pitcher & Le Quesne Limited Funeral directors, 100 Ordinary 100%
Channel Islands at British Pound 1
each
Kenyon Air Transportation Repatriation, emergency 12,500 Ordinary 100%
Limited services and exhumations at British Pound 1
each
</TABLE>
All of the above are registered and operate in England except Pitcher & Le
Quesne Limited, which is registered and operates in the Channel Islands.
The accounting reference dates of the subsidiaries are 31 December, except
for Plantsbrook Properties plc which is 21 December.
A complete list of subsidiaries is available upon request to the Company
and will be filed with the next Annual Return to the Registrar of Companies.
12. STOCKS
<TABLE>
<CAPTION>
GROUP COMPANY
---- -------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Funeral supplies and monumental masonry......................... 919 908
==== ===
</TABLE>
In the opinion of the Directors there is no significant difference between
the balance sheet amount of stocks and the replacement cost.
13. DEBTORS
<TABLE>
<CAPTION>
GROUP COMPANY
---- -------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Trade debtors................................................... 7,035 6,863
Amounts due from Group companies................................ -- 32,072
Other debtors................................................... 165 95
Prepayments..................................................... 710 597
Corporation tax recoverable..................................... 730 730
Advance corporation tax recoverable............................. 575 575
Group tax relief receivable..................................... -- 321
----- ------
9,215 41,253
===== ======
</TABLE>
47
<PAGE> 48
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
GROUP COMPANY
------- -------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
BORROWINGS
Bank overdraft................................................ -- 4,004
Hire purchase obligations (note 16)........................... 388 388
------ -------
388 4,392
OTHER
Trade creditors............................................... 2,487 2,487
Amounts owed to Group companies............................... -- 6,591
Corporation tax............................................... 4,547 3,139
Advance corporation tax....................................... 1,046 1,046
Other taxation and social security............................ 459 457
Proposed dividend............................................. 2,300 2,300
Accruals and deferred income.................................. 4,889 4,459
10% loan notes 1994........................................... 333 333
Group tax relief payable...................................... -- 316
------ -------
16,449 25,520
====== ======
</TABLE>
15. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
<TABLE>
<CAPTION>
GROUP COMPANY
------- -------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Borrowings
Bank loan..................................................... 7,500 7,500
Loan from subsidiary company.................................. -- 25,000
Hire purchase obligations (note 16)........................... 728 728
----- -------
8,228 33,228
Other
Corporation tax............................................... 32 --
Other creditors............................................... 106 105
----- ------
8,366 33,333
====== ======
</TABLE>
The bank loan bears interest at 0.75% over LIBOR and is due for repayment
on 31 March 1995.
16. OBLIGATIONS UNDER HIRE PURCHASE AGREEMENTS AND OPERATING LEASES
<TABLE>
<CAPTION>
GROUP COMPANY
------- -------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Payable within one year......................................... 388 388
Payable between one and five years.............................. 728 728
----- ------
1,116 1,116
===== ======
</TABLE>
The hire purchase liabilities are secured on the related assets.
48
<PAGE> 49
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
16. OBLIGATIONS UNDER HIRE PURCHASE AGREEMENTS AND OPERATING
LEASES -- (CONTINUED)
Charges under non-cancellable operating leases to which the Group is
committed in the year ending 31 December 1993:
<TABLE>
<CAPTION>
LAND
AND
BUILDINGS OTHER TOTAL
--------- ----- -----
BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000
<S> <C> <C> <C>
On leases expiring
Within one year.......................................... 129 22 151
Between two and five years............................... 765 80 845
After five years......................................... 1,595 12 1,607
----- ---- -----
2,489 114 2,603
===== ==== =====
</TABLE>
17. PROVISIONS FOR LIABILITIES AND CHARGES
<TABLE>
<CAPTION>
GROUP COMPANY
-------- -------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Deferred taxation:
At 31 December 1992............................................. 713 1,297
Profit and loss account (note 6)................................ (713) 613
----- -------
At 31 December 1993............................................. -- 1,910
====== =======
</TABLE>
The full potential deferred tax liability and provision calculated at the
rate of 33% is as follows:
<TABLE>
<CAPTION>
FULL
POTENTIAL PROVISION
--------- ---------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Accelerated capital allowances.................................. 847 201
Other short term timing differences............................. (155) (201)
----- -------
692 --
==== =======
</TABLE>
18. CALLED UP SHARE CAPITAL
<TABLE>
<CAPTION>
NUMBER
----------
<S> <C> <C>
Authorised share capital
Ordinary shares of 10p each............................ 128,452,401 12,845,240
6.75p Convertible Preference shares 1991-2001 of 10p
each................................................ 15,983,537 1,598,354
6.75p Convertible Preference shares 1991-1997 of 10p
each................................................ 15,982,423 1,598,242
Deferred shares of 10p each............................ 18,525 1,853
-----------
16,043,689
==========
Allotted, called up and fully paid
Ordinary shares of 10p each............................ 99,981,806 9,998,181
6.75p Convertible Preference shares 1991-2001 of 10p
each................................................ 15,528,640 1,552,864
-----------
11,551,045
==========
</TABLE>
Issued during the year
On 10 February 1993, 20,000 new Ordinary shares were issued and allotted at
42p fully paid per share under the terms of the Company's employee share option
scheme.
49
<PAGE> 50
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
18. CALLED UP SHARE CAPITAL -- (CONTINUED)
On 3 June 1993, the Company issued 2,985,075 new Ordinary shares at a price
of 67p per share by way of a private placing.
On 8 September 1993, 2,491 6.75p Convertible Preference shares 1991-2001
were converted to 1,027 Ordinary shares at the then applicable conversion rate.
The balance was converted into 1,464 Deferred shares of 10p each which, on 8
October 1993, were redeemed by the Company for a total consideration of 1p.
On 8 October 1993, 15,417,957 6.75p Convertible Preference shares 1991-1997
were converted to 25,859,017 Ordinary shares at the then applicable conversion
rate. Conversion was effected by the issue of the appropriate number of new
Ordinary shares at an aggregate subscription price sufficient to fund the
redemption of the shares converted at a redemption price of British Pound 1 per
share.
On 30 November 1993, 39,075 6.75p Convertible Preference shares 1991-1997
were converted to 65,494 Ordinary shares at the then applicable conversion rate.
Conversion was effected by redeeming the shares to be converted for British
Pound 1 per share and applying the proceeds in paying up the appropriate number
of new Ordinary shares arising on conversion.
On 30 November 1993, 9,443 6.75p Convertible Preference shares 1991-1997
were redeemed by the Company in accordance with its articles of association at a
total redemption price of British Pound 1.0283 per share.
The 6.75p Convertible Preference shares 1991-2001 will ordinarily be
convertible at the option of the holder on 31 August in each of the years 1991
to 2001 inclusive. Conversion will be effected on the basis of 0.413639 Ordinary
shares for every 10p in nominal amount of the 6.75p Convertible Preference
shares 1991-2001. Redemption is at the Company's option after the last date for
conversion in 2001. Any such shares not previously converted or redeemed will be
redeemed subject to statutory provisions on 30 October 2002. The shares will be
redeemed at the amount paid-up on each share together with a premium of 90p per
share and any arrears and accruals of dividends to the date of redemption.
Subsequent event
On 5 January 1994, 20,000 new Ordinary shares were issued and allotted at
42p fully paid per share under the terms of the Company's employee share option
scheme.
Share options
Under the terms of the Company's employee share option scheme, the
following options are outstanding at 31 December 1993.
<TABLE>
<CAPTION>
NUMBER OF SHARES
- --------------------------------------
LAPSED,
AT 31 RELEASED OR AT 31
DECEMBER EXERCISED ISSUED IN DECEMBER PRICE PER FIRST DATE LAST DATE
1992 1993 1993 1993 SHARE EXERCISABLE EXERCISABLE
- -------- ----------- --------- --------- --------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
5,364 (5,364) -- -- 85p 13 June 1989 13 June 1996
535,551 (408,155) -- 127,396 138p 22 December 1992 22 December 1999
25,000 -- -- 25,000 98p 14 May 1994 14 May 2001
125,000 -- -- 125,000 60p 1 November 1994 1 November 2001
639,698 (40,000) -- 599,698 42p 22 April 1995 22 April 2002
-- -- 225,000 225,000 68p 28 April 1996 28 April 2003
-- -- 257,500 257,500 84p 20 September 1996 20 September 2003
- --------- ----------- --------- ---------
1,330,613 (453,519) 482,500 1,359,594
========= =========== ========= =========
</TABLE>
50
<PAGE> 51
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
18. CALLED UP SHARE CAPITAL -- (CONTINUED)
Options over 433,519 Ordinary shares to former employees of the Company
lapsed under the terms of the scheme's rules and accordingly the holders were
informed by the Company Secretary on 1 July 1993.
19. RESERVES
<TABLE>
<CAPTION>
CAPITAL PROFIT
REDEMP- REVALU- AND GOODWILL
SHARE MERGER TION ATION LOSS WRITTEN
PREMIUM RESERVE RESERVE RESERVE ACCOUNT OFF
------ ------ ------- ------- ------- -------
BRITISH BRITISH BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C> <C> <C>
(a) Group
At 31 December 1992.................. 10,349 81,563 2 -- (1,628) (79,451)
Conversion of Preference shares... (1,075) -- -- -- -- --
Premium arising on new share
issues.......................... 1,707 -- -- -- -- --
Expenses arising on new share
issues.......................... (14) -- -- -- -- --
Goodwill written off (note
19(c)).......................... -- -- -- -- -- (1,640)
Revaluation of Trust Fund
investments..................... -- -- -- 136 -- --
Retained profit................... -- -- -- -- 3,262 --
------ ------ --- --- ------ -------
At 31 December 1993............. 10,967 81,563 2 136 1,634 (81,091)
====== ====== === === ====== =======
</TABLE>
<TABLE>
<CAPTION>
PROFIT
CAPITAL AND
SHARE MERGER REDEMPTION LOSS
PREMIUM RESERVE RESERVE ACCOUNT
------ ------ ------- -------
BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C>
(b) Company
At 31 December 1992................................ 10,349 81,563 2 6,240
Conversion of Preference shares................. (1,075) -- -- --
Premium arising on new share issues............. 1,707 -- -- --
Expenses arising on new share issues............ (14) -- -- --
Retained profit................................. -- -- -- 4,170
------ ------ ---- ------
At 31 December 1993........................... 10,967 81,563 2 10,410
====== ====== ==== ======
</TABLE>
<TABLE>
<CAPTION>
BOOK FAIR
VALUE VALUE
OF FAIR OF
NET VALUE NET CONSID-
ASSETS PROVISIONS ASSETS GOODWILL ERATION
------ ---------- ------ -------- -------
BRITISH BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C> <C>
(c) Goodwill written off
Businesses acquired:
Portland Funeral Services................ 320 (30) 290 615 905
Henry Paul Limited....................... 420 (160) 260 594 854
Fisher Funeral Services.................. 115 (10) 105 137 242
John Campbell Funeral Undertakers........ 195 (15) 180 42 222
Hannington Funeral Directors............. 75 (40) 35 245 280
Others................................... -- -- -- 7 7
----- ---- --- ----- -----
1,125 (255) 870 1,640 2,510
===== ==== === ===== =====
</TABLE>
The provisions of British Pound 255,000 relate to refurbishments of
properties acquired to bring these properties up to the Group standard.
51
<PAGE> 52
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
20. PENSION COMMITMENTS
The Group operates a defined benefit pension scheme for its employees, the
funds of which are administered by Trustees. Actuarial valuations are performed
every three years and contributions made in accordance with the actuaries'
recommendations. The scheme is an Exempt Approved Scheme under the terms of the
Income and Corporation Taxes Act 1988 and members are contracted out of the
State Earnings Related Pension Scheme.
The profit and loss account charge for pension costs is made in accordance
with the accounting policy in note 1.
The Group Pension Scheme had an actuarial valuation undertaken as at 6
April 1993 using the Projected Unit method of valuation, with a five year
control period. The principal assumptions were investment yields of 9% and
increases in pensionable earnings of 7% per annum.
At 6 April 1993, Group scheme assets had a fund value of British Pound
3,085,000 representing 76% of the liabilities for benefits that had accrued
to members, allowing for expected future increases in pensionable earnings.
Following recommendations from the Actuary, the total contribution was increased
from 13.6% to 16.2% with effect from 1 January 1993, allowing for the
amortisation of the deficit over 15 years, the average remaining service life of
employees.
The net pension cost charged to the profit and loss account in the year
ended 31 December 1993 in respect of the defined benefit scheme amounted to
British Pound 510,000 and no accounting adjustment has been made for the deficit
referred to above on the grounds of immateriality.
52
<PAGE> 53
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
21. ADJUSTMENTS AND DISCLOSURES TO REFLECT U.S. GAAP
These consolidated financial statements have been prepared in accordance
with generally accepted accounting principles in the United Kingdom (UK GAAP)
which conform in all material respects with generally accepted accounting
principles in the United States (US GAAP) except as set out below.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
U.K. ADJUSTMENTS
GAAP -----------------------------
STATUTORY DEFERRED U.S.
ACCOUNTS DEPRECIATION GOODWILL TAX DIVIDENDS GAAP
------- ------------ -------- --- --------- -----
BRITISH BRITISH BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C> <C> <C>
Turnover
Continuing operations.... 51,249 51,249
Acquisitions............. 800 800
------- ---- ------ --- ---- -------
52,049 52,049
Cost of sales............ (15,429) (15,429)
------- ---- ------ --- ---- -------
Gross Profit............... 36,620 36,620
Administrative expenses.... (24,017) (24,017)
Depreciation-buildings..... -- (203)(1) (203)
Goodwill amortisation...... -- (2,027)(2) (2,027)
------- ---- ------ --- ---- -------
Operating profit........... 12,603 (203) (2,027) 10,373
Interest receivable........ 210 210
Interest payable........... (796) (796)
------- ---- ------ --- ---- -------
Profit on Ordinary
activities before
Taxation................. 12,017 (203) (2,027) 9,787
Taxation................... (3,781) 68(3) (3,713)
------- ---- ------ --- ---- -------
Profit on Ordinary
activities after
Taxation................. 8,236 (203) (2,027) 68 6,074
Minority interests......... (5) (5)
------- ---- ------ --- ---- -------
Profit for the Financial
Year..................... 8,231 (203) (2,027) 68 6,069
Dividends.................. (4,969) 879(4) (4,090)
------- ---- ------ --- ---- -------
Retained Profit for the
Financial Year........... 3,262 (203) (2,027) 68 879 1,979
======= ==== ====== == ==== =======
</TABLE>
The adjustments included in the above note are explained beginning on page 54
53
<PAGE> 54
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
21. ADJUSTMENTS AND DISCLOSURES TO REFLECT U.S. GAAP -- (CONTINUED)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
U.K.
GAAP ADJUSTMENTS
STATUTORY ----------------- DEFERRED
ACCOUNTS DEPRECIATION GOODWILL TAX DIVIDENDS U.S. GAAP
------- ------------ -------- --- --------- ---------
BRITISH BRITISH BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C> <C> <C>
Fixed Assets
Tangible assets excluding land
& buildings.................... 9,136 9,136
Land & buildings: NBV at
31.12.93....................... 27,217 (893)(1) 26,324
------- ---- ------ ---- ------- ---------
Total tangible assets........ 36,353 (893) 35,460
Intangible assets: Goodwill
31.12.93......................... 72,143(2) 72,143
Trust fund assets.................. 1,170 1,170
------- ---- ------ ---- ------- ---------
37,523 (893) 72,143 108,773
Current Assets
Stock............................ 919 919
Debtors.......................... 9,215 (575) 8,640
Cash at hand and in bank......... 1,924 1,924
------- ---- ------ ---- ------- --------
12,058 (575) 11,483
Creditors: Amounts falling due
within one year.................. (16,449) 2,875 (13,574)
------- ---- ------ ---- ------- --------
Net Current Liabilities............ (4,391) 2,300 (2,091)
------- ---- ------ ---- ------- --------
Total Assets less Current
Liabilities............... 33,132 (893) 72,143 2,300 106,682
Creditors: Amounts falling due
after more than one year......... (8,366) (8,366)
Provision for liabilities and
Charges.......................... (692)(3) (692)
------- ---- ------ ---- ------- -------
24,766 (893) 72,143 (692) 2,300 97,624
======== ==== ====== ==== ======= =======
Capital and Reserves
Called up share capital.......... 11,551 11,551
Share premium account............ 10,967 10,967
Merger reserve................... 81,563 81,563
Capital redemption reserve....... 2 2
Revaluation reserve.............. 136 136
Profit and loss account-b/f...... (1,628) (690)(1) (6,921)(2) (760)(3) 1,421 (8,578)
Profit and loss account-1993..... 3,262 (203)(1) (2,027)(2) 68(3) 879 1,979
------- ---- ------ ---- ------- -------
Shareholders' Funds-Gross.......... 105,853 (893) (8,948) (692) 2,300 97,620
Goodwill written off............... (81,091) 81,091(2)
Shareholders' Funds-Net............ 24,762 (893) 72,143 (692) 2,300 97,620
Minority interests................. 4 4
------- ---- ------ ---- ------- -------
24,766 (893) 72,143 (692) 2,300 97,624
======= ==== ====== ==== ======= =======
</TABLE>
- ---------------
(1) Under UK GAAP, in certain circumstances, it is acceptable not to provide for
depreciation on freehold and long leasehold land and buildings. Under US
GAAP buildings must be depreciated. For the purposes of the above
adjustment, depreciation has been provided on freehold and long leasehold
buildings on a straight line basis over 50 years.
54
<PAGE> 55
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
21. ADJUSTMENTS AND DISCLOSURES TO REFLECT U.S. GAAP -- (CONTINUED)
(2) Under UK GAAP, goodwill can be eliminated from the accounts immediately on
acquisition against reserves. Under US GAAP, goodwill must be capitalised
and amortised to the income statement over its estimated useful life. For
the purposes of the above adjustment, goodwill has been capitalised and is
being amortised over a 40 year period.
(3) Under UK GAAP, deferred taxation is provided under the liability method
only to the extent that it is probable that an asset or liability will
crystalize. Under US GAAP deferred tax liabilities or assets are provided
on all temporary timing differences existing at the end of a financial
period. For the purposes of the above adjustment, a deferred tax provision
has been recognised in respect of all timing differences.
(4) Under UK GAAP, dividends are recognised in the period to which they relate.
Under US GAAP, dividends are recognised in the period when they are
formally declared. For the purposes of the above adjustment, the 1993
proposed dividend that was recognised in the 1993 Plantsbrook accounts has
not been recognised in the 1993 US GAAP figures. However the 1993 US GAAP
profit and loss account has been adjusted to reflect the 1992 proposed
dividend that was declared during 1993.
(5) Under UK GAAP, income from pre-need funeral plans is taken to the profit
and loss account as received. This is disclosed in Note 1 to the financial
statements on page 41. Under the US GAAP it is not acceptable to recognise
principal payments pursuant to the sale of pre-need funeral plans until the
funeral has been conducted. No adjustment has been made for this difference
between UK GAAP and US GAAP as the impact on the profit and loss account is
not considered likely to be material.
(6) Operating Lease Commitments
The annual payments under non-cancellable operating leases to which
the company is committed are as follows:
<TABLE>
<CAPTION>
BRITISH
POUND'000
---------
<S> <C>
1994............................................................ 2,549
1995............................................................ 2,398
1996............................................................ 2,145
1997............................................................ 1,910
1998............................................................ 1,751
Thereafter...................................................... 12,942
23,695
</TABLE>
The majority of operating lease commitments relate to land and buildings.
(7) Hire purchase obligations
The future payments to which the company is committed under hire
purchase arrangements are as follows:
<TABLE>
<CAPTION>
BRITISH
POUND'000
---------
<S> <C>
1994............................................................. 388
1995............................................................. 337
1996............................................................. 300
1997............................................................. 91
1998............................................................. --
Thereafter....................................................... --
------
1,116
</TABLE>
55
<PAGE> 56
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS -- (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1993
21. ADJUSTMENTS AND DISCLOSURES TO REFLECT U.S. GAAP -- (CONTINUED)
(8) Taxation
The provision for taxation for the year ended 31 December 1993 in
accordance with US GAAP is as follows:
<TABLE>
<CAPTION>
BRITISH
POUND'000
---------
<S> <C>
Current taxes.................................................... 4,650
Current deferred................................................. (861)
Future deferred.................................................. 80
Adjustment in respect of prior years............................. (156)
------
3,713
</TABLE>
Deferred tax assets and liabilities as at 31 December 1993 were as follows:
<TABLE>
<CAPTION>
BRITISH
POUND'000
---------
<S> <C>
Non current -- Accelerated capital allowances.................... 847
Non current -- Pre arranged funeral plans........................ 355
------
Deferred tax liabilities......................................... 1,202
Current -- Accrued liabilities................................... (510)
------
Deferred tax assets.............................................. (510)
------
Net deferred tax liabilities..................................... 692
</TABLE>
(9) Earnings per share
The Earnings per share under US GAAP is as follows:
<TABLE>
<S> <C>
Primary.......................................................... 5.67p
Fully Diluted.................................................... --
</TABLE>
The primary earnings per share figure for the year ended 31 December 1993
is based on the weighted average number of 80,071,289 Ordinary shares in issue
during the year, after allowing for the allotment of shares under the share
option scheme and the profit of British Pound 4,543,000 which is stated after
taxation minority interests and preference dividends, and an adjustment to
income for interest on the share options.
The fully diluted earnings per share calculation is based on 106,477,621
Ordinary shares in issue after allowing for full conversion rights attaching to
convertible securities and the allotment of shares under the share option scheme
and a corresponding adjustment to income for interest. The conversion of the
1997 Preference shares in October 1993 has been taken into consideration. The
calculation produced anti-dilutive results.
56
<PAGE> 57
PLANTSBROOK GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 30TH JUNE, 1994 AND 1993
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1993
----------------------------
BRITISH BRITISH
NOTES POUND'000 POUND'000
------ --------- ---------
<S> <C> <C> <C>
Turnover
Continuing Operations................................................. 26,222 26,346
Acquisitions.......................................................... 845 --
-------- --------
27,067 26,346
Cost of Sales........................................................... (8,195) (7,569)
-------- --------
Gross Profit............................................................ 18,872 18,777
Administrative Expenses................................................. (12,270) (12,482)
-------- --------
Operating Profit........................................................ 6,602 6,295
Interest Receivable..................................................... 130 126
Interest Payable........................................................ (292) (460)
-------- --------
Profit on Ordinary Activities before Taxation........................... 6,440 5,961
Taxation................................................................ (2,029) (1,967)
-------- --------
Profit on Ordinary Activities after Taxation............................ 4,411 3,994
Minority Interests...................................................... (2) (4)
-------- --------
Profit after Taxation................................................... 4,409 3,990
Dividends -- Preference and Ordinary.................................... (524) (1,861)
-------- --------
Profits Retained........................................................ 3,885 2,129
-------- --------
Earnings per Share
Fully diluted......................................................... 2 4.11p 3.83p
-------- --------
Basic................................................................. 3.89p 4.11p
</TABLE>
- ---------------
Notes
1. It is not feasible to separate the impact of acquisitions on operating profit
since the new businesses have been fully integrated into the Group's existing
branch network and financial reporting structure.
2. The basic earnings per share calculation for the six months ended 30th
June, 1994 has been based on the weighted average of 100,001,364
(1993: 71,512,061) Ordinary shares in issue during the period and the
profit after taxation, minority interests and preference dividends.
The fully diluted earnings per Ordinary share calculation has been based upon
107,764,651 (1993: 105,270,093) Ordinary shares in issue, after allowing for
full conversion rights attaching to convertible securities and the
allotment of shares under the option scheme, with a corresponding
adjustment to income for interest.
3. The financial information set out in this announcement which has been
prepared under Accounting Policies consistent with those adopted for the
accounts for the year ended 31st December, 1993 does not constitute full
accounts as referred to in Section 254 of the Companies Act 1985.
57
<PAGE> 58
PLANTSBROOK GROUP PLC
CONSOLIDATED BALANCE SHEET
AS AT 30TH JUNE, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
BRITISH
POUND'000
---------
<S> <C>
Fixed Assets
Tangible assets.................................................................. 39,362
Trust Fund assets................................................................ 625
-------
39,987
Current assets
Stocks........................................................................... 1,068
Debtors.......................................................................... 6,656
Cash at bank and in hand......................................................... 2,412
-------
10,136
-------
Creditors: Amounts falling due within one year
Borrowings....................................................................... (500)
Other creditors.................................................................. (16,920)
-------
(17,420)
Net current liabilities............................................................ (7,284)
-------
Total assets less current liabilities.............................................. 32,703
Creditors: Amounts falling due after more than one year
Borrowings....................................................................... (8,509)
Other creditors.................................................................. (326)
Provisions for liabilities and charges............................................. --
-------
23,868
-------
Capital and Reserves
Called up share capital.......................................................... 11,553
Share premium account............................................................ 10,972
Merger reserve................................................................... 81,563
Capital redemption reserve....................................................... 2
Profit and loss account.......................................................... 5,519
-------
Shareholders' Funds -- Gross....................................................... 109,609
Goodwill written off............................................................... (85,748)
-------
Shareholder's Funds -- Net......................................................... 23,861
Minority interests................................................................. 7
-------
23,868
-------
Reconciliation of movements in Shareholders' Funds
Profit for the period............................................................ 4,409
Dividends........................................................................ (524)
-------
Retained profit for the period..................................................... 3,885
Issue of Shares.................................................................... 7
Goodwill written off............................................................... (4,657)
Revaluation of Trust Fund Investments.............................................. (136)
-------
Net reduction to Shareholders' Funds............................................... (901)
Opening Shareholders' Funds -- Net................................................. 24,762
-------
Closing Shareholders' Funds -- Net................................................. 23,861
-------
</TABLE>
58
<PAGE> 59
PLANTSBROOK GROUP PLC
CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30TH JUNE, 1994 AND 1993
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1993
--------------------------------------------------
BRITISH BRITISH BRITISH BRITISH
NOTES POUND'000 POUND'000 POUND'000 POUND'000
------ --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net cash inflow from operating activities.................... (i) 10,220 8,620
Returns on investments and servicing of finance..............
Net interest paid.......................................... (166) (275)
Dividends paid............................................. (524) (2,488)
------ ------
(690) (2,763)
Taxation.....................................................
Taxation received/(paid)..................................... 581 (41)
------ -------
Net cash inflow before investing activities.................. 10,111 5,816
Investing activities.........................................
Purchase of tangible fixed assets............................ (2,213) (1,611)
Purchase of trust fund investments........................... (608) --
Purchase of businesses net of cash and cash equivalents...... (6,497) (2,005)
Disposal of tangible fixed assets............................ 294 582
------ ------
(9,024) (3,034)
------ ------
Net cash inflow before financing............................. 1,087 2,782
Financing..................................................
Issue of shares............................................ (ii) 8 2,008
Share conversion and issue expenses........................ (ii) (1) (15)
Hire purchase repayments................................... (ii) (273) (3,371)
Loan notes repaid.......................................... (ii) (333) (409)
------ ------
(599) (1,787)
------ -------
Increase in cash and cash equivalents........................ (iii) 488 995
------ -------
</TABLE>
59
<PAGE> 60
PLANTSBROOK GROUP PLC
CASH FLOW STATEMENT (CONTINUED)
FOR THE SIX MONTHS ENDED 30TH JUNE, 1994 AND 1993
(UNAUDITED)
NOTES
(I) RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
<TABLE>
<CAPTION>
1994 1993
----------------------------
BRITISH BRITISH
POUND'000 POUND'000
--------- ---------
<S> <C> <C>
Operating profit............................................................ 6,602 6,295
Depreciation................................................................ 1,472 1,324
Profit on disposal of tangible fixed assets................................. (66) 14
Trust fund investment written down.......................................... 313 --
Increase in liability in respect of prepaid funeral plans................... 704 583
Working capital movements:
Stocks...................................................................... (139) 70
Debtors..................................................................... 1,254 1,034
Creditors................................................................... 80 (700)
------ ------
10,220 8,620
====== ======
</TABLE>
(II) ANALYSIS OF MOVEMENTS IN FINANCING DURING THE YEAR
<TABLE>
<CAPTION>
LOAN
STOCK
AND
SHARE HIRE BANK
CAPITAL* PURCHASE LOAN
------- -------- -------
BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000
<S> <C> <C> <C>
At 31st December, 1992.................................. 104,083 1,449 7,500
Share issue proceeds.................................... 8 0 0
Share conversion and issue expenses..................... (1) 0 0
Hire purchase and loan finance.......................... 0 666 0
Hire purchase repayments................................ 0 (273) 0
Loan notes repaid....................................... 0 (333) 0
------- ----- -----
At 30th June, 1994...................................... 104,090 1,509 7,500
======= ===== =====
</TABLE>
- ---------------
* Including share premium, merger reserve and capital redemption reserve.
(III) ANALYSIS OF MOVEMENTS IN CASH AND CASH EQUIVALENTS DURING THE YEAR
<TABLE>
<CAPTION>
MOVEMENT
IN 1994
1994 1993 PERIOD
---- ---- ------
BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000
<S> <C> <C> <C>
Cash at bank and in hand.................................. 2,412 1,924 488
Bank overdraft............................................ 0 0 0
----- ----- -----
2,412 1,924 488
===== ===== =====
</TABLE>
60
<PAGE> 61
PLANTSBROOK GROUP PLC
CASH FLOW STATEMENT -- (CONTINUED)
FOR THE SIX MONTHS ENDED 30TH JUNE, 1994 AND 1993
(UNAUDITED)
NOTES -- (CONTINUED)
(IV) PURCHASE OF BUSINESSES
Fair value of net assets acquired
<TABLE>
<CAPTION>
1994 1993
---------------------------
BRITISH BRITISH
POUND'000 POUND'000
<S> <C> <C>
Tangible fixed assets........................................................ 1,830 395
Stock........................................................................ 10 --
----- -----
1,840 395
Goodwill..................................................................... 4,657 1,610
----- -----
6,497 2,005
===== =====
Analysis of the net outflow of cash and cash equivalents in respect of the
purchase of businesses
Cash consideration......................................................... 6,497 2,005
Bank loans of acquired businesses.......................................... 0 --
Cash acquired.............................................................. 0 --
----- -----
6,497 2,005
===== =====
</TABLE>
61
<PAGE> 62
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS
FOR THE SIX MONTHS ENDED 30TH JUNE, 1994 AND 1993
(UNAUDITED)
1. MATERIAL CHANGES
The directors of Plantsbrook are not aware of any material changes in the
financial or trading position of the Plantsbrook Group since 31st December,
1993, the date to which the last audited consolidated accounts were drawn up.
2. ADJUSTMENTS AND DISCLOSURES TO REFLECT U.S. GAAP
These consolidated financial statements have been prepared in accordance
with generally accepted accounting principles in the United Kingdom (UK GAAP)
which conform in all material respects with generally accepted accounting
principles in the United States (US GAAP) except as set out below.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
1994
----------------------------------------------
U.K. ADJUSTMENTS
GAAP --------------------- U.S.
ACCOUNTS DEPRECIATION GOODWILL GAAP
------- ------------ -------- -------
BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C>
Turnover....................................... 27,067 27,067
Costs and Expenses............................. (20,465) (102)(1) (1,043)(2) (21,610)
Net Interest Payable........................... (162) (162)
Tax on Profit on Ordinary Activities........... (2,029) (2,029)
------- ---- ------ -------
Profit on Ordinary Activities.................. 4,411 (102) (1,043) 3,266
======= ==== ====== =======
</TABLE>
<TABLE>
<CAPTION>
1993
----------------------------------------------
U.K. ADJUSTMENTS
GAAP --------------------- U.S.
ACCOUNTS DEPRECIATION GOODWILL GAAP
------- ------------ -------- -------
BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C>
Turnover....................................... 26,346 26,346
Costs and Expenses............................. (20,051) (100)(1) (995)(2) (21,146)
Net Interest Payable........................... (334) (334)
Tax on Profit on Ordinary Activities........... (1,967) (1,967)
------- ---- ------ -------
Profit on Ordinary Activities.................. 3,994 (100) (995) 2,899
======= ==== ====== =======
</TABLE>
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
ADJUSTMENTS
U.K. ----------------------------
GAAP DEFERRED U.S.
ACCOUNT DEPRECIATION GOODWILL TAX GAAP
--------- ------------ -------- -------- -----
BRITISH BRITISH BRITISH BRITISH BRITISH
POUND'000 POUND'000 POUND'000 POUND'000 POUND'000
<S> <C> <C> <C> <C> <C>
Fixed Assets............................ 39,987 (995) 38,992
Intangible Asset: Goodwill.............. -- 75,757(2) 75,757
Net Current Liabilities................. (8,534) (8,534)
Creditors: Amounts due After One Year... (8,835) (692)(3) (9,527)
------ ---- ------ ---- ------
22,618 (995) 75,757 (692) 96,688
------ ---- ------ ---- ------
Capital and Reserves.................... 22,618 (995) 75,757 (692) 96,688
====== ==== ====== ==== ======
</TABLE>
- ---------------
(1) Under UK GAAP, in certain circumstances, it is acceptable not to provide
for depreciation on freehold and long leasehold land and buildings. Under
US GAAP buildings must be depreciated. For the purposes of the above
adjustment, depreciation has been provided on freehold and long leasehold
buildings on a straight line basis over 50 years.
(2) Under UK GAAP, goodwill can be eliminated from the accounts immediately on
acquisition against reserves. Under US GAAP, goodwill must be capitalised
and amortised to the income statement over its estimated useful life. For
the purposes of the above adjustment, goodwill has been capitalised and is
being amortised over a 40 year period.
(3) Under UK GAAP, deferred taxation is provided under the liability method
only to the extent that it is probable that an asset or liability will
crystallize. Under US GAAP deferred tax liabilities or assets are provided
on all temporary timing differences existing at the end of a financial
period. For the purposes of the above adjustment, a deferred tax provision
has been recognised in respect of all timing differences.
62
<PAGE> 63
PLANTSBROOK GROUP PLC
NOTES TO THE ACCOUNTS
FOR THE SIX MONTHS ENDED 30TH JUNE, 1994 AND 1993
(UNAUDITED)
2. ADJUSTMENTS AND DISCLOSURES TO REFLECT U.S. GAAP -- (CONTINUED)
(4) Under UK GAAP, dividends are recognised in the period to which they relate.
Under US GAAP, dividend are recognised in the period when they are formally
declared. For the purposes of the above adjustment, the 1993 proposed
dividend that was recognised in the 1993 Plantsbrook accounts has not been
recognised in the 1993 US GAAP figures. However the 1993 US GAAP profit and
loss account has been adjusted to reflect the 1992 proposed dividend that
was declared during 1993.
(5) Under UK GAAP, income from pre-need funeral plans is taken to the profit
and loss account as received. This is disclosed in Note 1 to the financial
statements on page 41. Under US GAAP it is not acceptable to recognise
principal payments pursuant to the sale of pre-need funeral plans until
the funeral has been conducted. No adjustment has been made for this
difference between UK GAAP and US GAAP as the impact on the profit and
loss account is not considered likely to be material.
(6) Earnings per share
<TABLE>
1994 1993
--------------------
<S> <C> <C>
The Earnings per share under US GAAP is as follows:
Primary............................................................. 2.73p 2.59p
Fully Diluted....................................................... * *
</TABLE>
- ---------------
* Anti-dilutive
The primary earnings per share figure for the six months ended 30th June
1994 is based on the weighted average number of 101,341,400 (1993: 72,905,409)
Ordinary shares in issue during the period, after allowing for the allotment of
shares under the share option scheme and the profit of British Pound 2,796,000
(1993: British Pound 1,892,000) which is stated after taxation minority
interests and preference dividends, and an adjustment to income for interest
on the share options.
63
<PAGE> 64
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
23.1 -Consent of Independent Accountants (Robson Rhodes)
23.2 -Consent of Independent Accountants (Price Waterhouse)
64
<PAGE> 65
SIGNATURE
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 thereunto duly authorized.
SERVICE CORPORATION INTERNATIONAL
By: /s/ SAMUEL W. RIZZO
Samuel W. Rizzo
Executive Vice President
Chief Financial Officer/Treasurer
(Principal Financial Officer)
November 14, 1994
65
<PAGE> 66
EXHIBIT INDEX
Exhibit No.
23.1 -Consent of Independent Accountants (Robson Rhodes)
23.2 -Consent of Independent Accountants (Price Waterhouse)
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements on
Form S-4 (File No. 33-54996), on Form S-3 (File No. 33-56069), on Form S-8
(File No. 33-9790), on Form S-8 (File No. 33-17982), on Form S-8 (File No.
33-54401) and on Form S-8 (File No. 33-50987) of our report on our audit of the
financial statements of Great Southern Group PLC as of December 31, 1993 and
for the year then ended, which report is included in Service Corporation
International's Form 8-K, dated November 14, 1994.
Yours faithfully
/s/ ROBSON RHODES
ROBSON RHODES
14 November 1994
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-4 (File No 33-54996), on Form S-3 (File No 33-56069), on
Form S-8 (File No. 33-9790), on Form S-8 (File No. 33-17982), on Form S-8 (File
No. 33-54401) and on Form S-8 (File No. 33-50987) of Service Corporation
International of our report dated November 14, 1994 relating to the financial
statements of Plantsbrook Group plc which report is included in Service
Corporation International's Form 8-K dated November 14, 1994.
/s/ PRICE WATERHOUSE
Price Waterhouse
Birmingham
England November 14, 1994
