OAKHILL GROUP ANNUAL REPORT 2000 ANNUAL REPORT 2000

Transcription

1 OAKHILL GROUP ANNUAL REPORT 2000 ANNUAL REPORT 2000

2 Corporate Profile OakHill is a leading provider of turnkey print solutions for clients through a wide range of quality leading edge products and services. We are committed to innovation and development in all aspects of our business to ensure we add value to the requirements of clients. From the latest on-line communication capability to extensive investment in digital technology we are constantly developing our business. With extensive production facilities, a wide geographic base of operation and comprehensive management support services, OakHill is in a unique position to service clients requirements. Print on demand Print management Direct mail Corporate print Plastic cards Labels

3 Financial Summary Pro forma 31 Dec Dec 1999 Change % Sales Print 83,576 78, Packaging 35,468 31, , , Operating profit * Print 8,425 11, Packaging 2,373 2, Centre costs (1,845) (1,893) 8,953 12, Profit before taxation* 5,441 9, (Loss)/Profit before tax ** (4,805) 5,318 Adjusted earnings per share (cents)* * before goodwill amortisation, exceptional operating costs and impairment provision ** after goodwill amortisation, exceptional operating costs and impairment provision

4 A H D C H E H F G H B A E B F C F MERIDIAN D G STINEHOUR PRESS D H

5 1 Contents Chairman s statement 2 Financial review 6 Summary financial information 9 Board of directors 14 Directors report 16 Statement of Directors Responsibilities 21 Report of the auditors 22 Consolidated profit and loss account 24 Consolidated balance sheet 25 Company balance sheet 26 Consolidated cash flow statement 27 Other statements 28 Accounting policies 29 Notes on the financial statements 31 Shareholder and other information 48

6 2 Chairman s Statement Results The overall results show a disappointing 27% decrease in operating profits and a 39% decrease in adjusted earnings per share compared with last year (based upon pro forma figures for full year ended 31 December 1999). Operating cash flow was 11.6m with capital expenditure of 3.7m. Print division The printing division recorded a 6% increase in sales to 83.6m from 78.6m while operating profits decreased 26% from 11.5m to 8.4m with margins declining from 14.6% to 10.1%. During 2000 the printing industry experienced very modest growth in demand, which was outstripped by capacity increases from new equipment installations as well as efficiency improvements. This overcapacity has contributed to margin erosion in the industry and the print division. However, upward pricing pressure on raw materials is being offset to some extent through improved group sourcing initiatives. Efficiency improvements continue to offset wage inflation and other cost increases. The investment in additional selling and administrative costs over the past 2-3 years aimed at growing revenue in conventional print sectors has not yet delivered the expected revenue growth. Oakhill Group plc

7 3 For the future the group is now focussing its investment on selling, administrative and systems support to grow its presence in the Added Value areas of Print Management, Direct Mail, On-Demand Print and Card Solutions. An e-trading capability is in place to support this strategy. The results include exceptional operating costs associated with the continuing reorganisation of the Group s activities to improve efficiency and productivity as well as costs associated with development initiatives undertaken during the period Packaging division In the Packaging division sales increased by 11% up to 35.5m from 32.0m and operating profits decreased 12% from 2.7m to 2.4m. This Division was disposed of in January 2001 to Brodr. Sunde for a consideration of Stg m for net assets of Stg 6.5m, excluding goodwill and net debt. The consideration is subject to a proportionate adjustment on a Stg 1 for Stg 1 basis for any increase or decrease in the net assets from Stg 6.5 million. On completion Stg 6.25m was receivable and the balance is receivable on collection of the debtors in Foam Plus and Lochaber Box. The consideration represents a gain on net asset value with the proceeds reducing year-end net debt to 20m, representing, on a proforma basis, gearing of 44%. Dividends An interim dividend of 0.5 cents per share was paid on 15 December As a result of the impairment provision, exceptional operating costs and poor performance in 2000 referred to above, a final dividend will not be paid in respect of the year ended 31 December Furthermore based upon the poor performance to date in 2001 the board expects that it is unlikely that it will declare a dividend in respect of the first half of Strategy The group is pursuing a strategy with an emphasis on developing the value added areas of print management, direct marketing, cards and ondemand print. These value added sectors have shown consistent growth over the last few years. This strategy, which involves repositioning the group from a conventional print business to an Added Value Print Solutions business, is being achieved principally through organic development. Capital expenditure will be used to support these areas of activity. Keytech & Stinehour Following a review of the businesses within the group, a write-down of 5.09m is included in the accounts in respect of the US businesses of Keytech and Stinehour, which continue to perform below expectations despite significant re-engineering and restructuring.

8 4 Chairman s Statement Trading commentary and short-term outlook Following the disposal of the packaging companies the group will not have any profit contribution from these businesses in The group s printing companies experienced difficult trading conditions in 2000 resulting in a significantly reduced performance for these companies versus These conditions are continuing into 2001 with a very weak performance in the first quarter. Margins continue to be under pressure. The group is budgeting for an improved performance for the remainder of the year but is not, based upon current market conditions and predictions, expecting a significant recovery and therefore the outcome for the year as a whole is likely to be well down on the full year Accordingly, the group has adopted an aggressive programme on purchasing cost reductions, efficiency improvements, group synergy optimisation, overhead cost reductions and cash flow maximisation through tight control on spending, capital investment and working capital requirements. M Delany 26 June 2001 Oakhill Group plc

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10 6 Financial Review Pro forma financial information The statutory financial information in respect of the prior period includes the results of subsidiaries from 6 August 1999, the date of the de-merger. In order to provide comparative financial information which is more meaningful, pro forma financial information for the year ended 31 December 1999 is included. This pro forma financial information is included in the Summary Financial Information on pages 9 to 13 and the basis of preparation is set out at note 1 on page 12. Operating results Sales for the year ended 31 December 2000 were 119 million, an increase of 8% over 1999 sales of million. Operating profit before exceptional operating costs, impairment provision and goodwill amortisation was 8.9 million, a decrease of 27% on Exchange rates The profit and loss accounts and cash flows of UK and US based operations are translated into euro based on the average exchange rate for the period. The balance sheets are translated using the period end exchange rate. Exchange rates Average rate Pound sterling US dollar Period end rate Pound sterling US dollar Net interest expense Net interest expense for 2000 was 3.5 million. Interest cover, based on operating profit before exceptional operating costs, impairment provision and goodwill amortisation, is 2.5 times, a reduction from 4 times in Earnings per Share The basic and diluted adjusted earnings per share for the year ended 31 December 2000 was 6.98 cents. This represents a 39% decrease compared to Oakhill Group plc

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12 8 Financial Review The table below summarises the cash flow for 2000 and Cash flow and net debt Million Million Operating profit before exceptional items and goodwill amortisation Exceptional operating costs (1.5) (0.6) Depreciation Net working assets (2.1) 0.6 Operating cash flow Capital expenditure (3.7) (4.6) Net interest (3.5) (3.1) Taxation (0.7) (1.4) Other - (0.7) Dividends (0.7) - Acquisitions (0.5) (2.2) Net cash flow Opening net debt (35.9) (36.5) Currency translation (0.6) (5.1) Closing net debt (34.0) (35.9) The weak euro relative to both the pound sterling and the US dollar resulted in adverse currency translation movements on recording sterling and dollar borrowings at period end exchange rates in both years. The ratio of net debt to shareholders funds at 31 December 2000 was 75%. This reduces to 44% on a pro forma basis following the sale of the packaging division. Accounting policies and standards The financial statements are prepared on the basis of current guidance issued by the Accounting Standards Board. Treasury policy and management The Group has a central treasury function which operates under policies approved by the board. Both currency and interest rate exposure is managed on a non-speculative basis. The Group s policy is to reduce balance sheet exposure by matching foreign currency assets with foreign currency borrowings in so far as this is practicable. Significant foreign currency transaction exposures arising from trading or capital investment are hedged. The Group does not hedge accounting translation exposure. The Group uses interest rate swaps, options and collars in order to reduce interest rate risks. The Group uses no other derivatives. Oakhill Group plc

13 9 Summary Financial Information Unaudited Summary Group Profit and Loss Account for the year ended 31 December 2000 Pro forma Year ended year ended 31 Dec Dec 1999 Notes Sales Continuing 2 83,576 78,585 Discontinued 2 35,468 31, , ,562 Operating profit before goodwill amortisation, exceptional operating costs and impairment provision Continuing 2 6,580 9,568 Discontinued 2 2,373 2,697 8,953 12,265 Goodwill amortisation Continuing (3,235) (2,932) Discontinued (408) (357) (3,643) (3,289) Exceptional operating costs Continuing (1,440) (570) Discontinued (73) - 3 (1,513) (570) Impairment provision - continuing 4 (5,090) - Operating (loss) / profit on ordinary activities Continuing (3,185) 6,066 Discontinued 1,892 2,340 (1,293) 8,406 Interest - net (3,512) (3,088) (Loss) / profit on ordinary activities before taxation (4,805) 5,318 Taxation (1,208) (2,582) (Loss) / profit on ordinary activities after taxation (6,013) 2,736 Dividends (282) (452) (Loss) / profit for the period (6,295) 2,284 (Loss) / earnings per share 5 Basic and diluted (cents) (10.65) 4.85 Adjusted earnings per share 5 Basic and diluted (cents)

14 10 Summary Financial Information Unaudited Summary Group Balance Sheet at 31 December Dec Dec Fixed assets Tangible fixed assets 34,300 36,850 Intangible assets 41,189 47,892 75,489 84,742 Current assets Stocks 5,027 5,617 Debtors 27,753 25,672 Cash and bank balances 9,209 11,153 41,989 42,442 Creditors (amounts falling due within one year) Trade and other creditors 23,350 24,042 Bank and other loans 14,713 7,382 Taxation 2,157 2,132 Dividends ,220 34,008 Net current assets 1,769 8,434 Total assets less current liabilities 77,258 93,176 Creditors (amounts falling due after more than one year) Bank and other loans 28,517 39,700 Provision for liabilities and charges 3,637 3,102 Shareholders funds 45,104 50,374 Oakhill Group plc

15 11 Summary Financial Information Unaudited Summary Group Cash Flow for the year ended 31 December 2000 Pro forma Year ended year ended 31 Dec Dec Operating profit before goodwill 8,953 12,265 amortisation, exceptional operating costs and impairment provision Exceptional operating costs (1,513) (570) Depreciation 6,301 5,413 Net working assets (2,135) 560 Operating cash flow 11,606 17,668 Net interest (3,512) (3,088) Taxation (680) (1,439) Capital expenditure (3,672) (4,604) Other - (655) Dividends (734) - Cash flow before acquisitions 3,008 7,882 Acquisitions (473) (2,186) 2,535 5,696 Currency (627) (5,132) Opening net debt (35,929) (36,493) Closing net debt (34,021) (35,929)

16 12 Notes on the Summary Financial Information 1. Basis of preparation The comparative amounts in the consolidated statutory accounts of the Group include the results of the print and packaging subsidiaries of Crean from 6 August 1999, the date on which OakHill acquired these companies as part of the de-merger. Pro forma financial information has been prepared as if the companies comprising the OakHill Group had been part of the group for all periods presented or in the case of those acquired during these periods from the date of acquisition. Due to the impact of the de-merger on corporate costs, financing structure and taxation the comparative pro forma financial information has been adjusted to reflect the financial and management structures of the group as if they had been in place from 1 January The comparative pro forma financial information excludes corporate charges from the Crean group in respect of the period prior to de-merger.the combined financial information included in the Listing Particulars was inclusive of these charges, which were not representative of the position following the de-merger. 2. Segmental information Sales Operating Net Sales Operating Net profit* Assets profit* Assets By activity Continuing Print 83,576 8,425 72,518 78,585 11,461 81,168 Centre costs - (1,845) - - (1,893) - 83,576 6,580 72,518 78,585 9,568 81,168 Discontinued Packaging 35,468 2,373 13,642 31,977 2,697 13,066 Unallocated assets and liabilities - - (41,056) - - (43,860) 119,044 8,953 45, ,562 12,265 50,374 * Before goodwill amortisation, exceptional operating costs and impairment provision. Unallocated assets and liabilities include dividends payable, taxation, net borrowings and non-operating assets and liabilities. Oakhill Group plc

17 13 Notes on the Summary Financial Information 3. Exceptional items Reorganisation costs (a) (841) (570) Development costs (b) (672) - (1,513) (570) (a) These costs were incurred in respect of the ongoing reorganisation of the Group s activities. (b) These relate to costs in respect of the Group s development strategy to move its activities into higher value added areas including print management and include costs in respect of market research and discontinued acquisition activities. 4. Impairment Provision Provision in respect of impairment of goodwill and fixed assets in Stinehour Press and Keytech (5,090) - 5. (Loss) / earnings per share (Loss) / profit after taxation (6,013) 2,736 Goodwill amortisation 3,643 3,289 Exceptional operating costs net of taxation 1, Impairment provision 5,090 - Adjusted profit after taxation 3,937 6,424 Basic and diluted (loss) / earnings per share cents cents (Loss) / earnings per share (cents) (10.65) 4.85 Goodwill amortisation Exceptional operating costs net of taxation Impairment provision Adjusted earnings per share (cents) Weighed average number of shares ( 000) 56,439 56,439

18 14 Board of Directors Martin Delany - Chairman (aged 51) Martin Delany was appointed to the Board in May 2001 as non-executive Chairman. He previously held executive positions with Coats Viyella, Rank Xerox and James Crean plc, and is a non-executive director of James Crean plc. Donnacha Hurley - Chief Executive (aged 48) Donnacha Hurley joined James Crean plc in January 1999 as Chief Executive designate for OakHill. He joined from Aer Lingus where he had been Chief Executive of TEAM Aer Lingus from Prior to this he held executive positions with ECCO Limited, M F Kent & Co Limited and Sterling Drug. Alan Jordan - Finance Director (aged 42) Alan Jordan joined the group in May He previously held senior commercial and financial positions in WF Electrical plc and the electrical division of James Crean plc. Pierce Casey - Non-executive Director (aged 46) Pierce Casey is an experienced venture capitalist and is an investor and director of several public and private companies across Europe. Alastair McGuckian - Non-executive Director (aged 64) Alastair McGuckian is the founder and chairman of Masstock, which has activities in food, farming and agrichemicals in the United Kingdom, Middle East, Eastern Europe and Russia. He is a non-executive director of James Crean plc. Raymond McLoughlin - Non-executive Director (aged 61) Raymond McLoughlin has been chief executive of James Crean plc since its establishment in Previously he was head of the planning and policy division of the Industrial Development Authority of Ireland and was subsequently a Non-executive Director of Allied Irish Banks plc, the Custom Docks Development Authority, The National Board of Science & Technology and a number of other companies and organisations. Denis O Brien - Non-executive Director (aged 43) Denis O Brien is the founder and former chairman and chief executive officer of Esat Telecom Group plc. He is a director of Bank of Ireland and his business interests include telecommunications, radio and real estate. Gerard O Toole - Non-executive Director (aged 53) Gerard O Toole is executive chairman of Nissan Ireland and chairman of Daewoo Ireland and holds a number of other directorships and investments within the motor industry. He is a non-executive director of James Crean plc. Board Committees Audit committee Gerard O Toole (Chairman) Alastair McGuckian, Pierce Casey Nominations committee Raymond McLoughlin (Chairman) Gerard O Toole, Donnacha Hurley Remuneration committee Raymond McLoughlin (Chairman) Gerard O Toole, Alastair McGuckian Oakhill Group plc

19 15 Martin Delany - Chairman Donnacha Hurley - Chief Executive Alan Jordan - Finance Director Pierce Casey - Non-executive Director Alastair McGuckian - Non-executive Director Raymond McLoughlin - Non-executive Director Denis O Brien - Non-executive Director Gerard O Toole - Non-executive Director

20 16 Directors Report The Directors present their report and the financial statements of the Company and the Group for the year ended 31 December Principal activity The principal activity of the Group is the provision of print solutions. Review of business A review of the business and future development of the Group is set out in the Chairman s Statement on pages 2 to 4. Results and dividend The results are set out in the consolidated profit and loss account on page 24 and in the related notes. The comparative financial information for 1999 includes the results of the print and packaging subsidiaries from 6 August 1999, the date they were acquired by the company. Pro forma financial information has been prepared which includes the results of the subsidiaries for the twelve months to 31 December 1999 and this is set out at pages 9 to 13. An interim dividend of 0.5 cents per share was paid on 15 December As a result of the impairment provision, exceptional operating costs and poor performance in 2000, the Directors do not recommend the payment of a final dividend. Directors The current Directors of the Company and their biographical details are set out on page 14. Mr Michael Gannon retired from the board on taking up a position outside the Group on 16 January Mr Martin Delany and Mr Alan Jordan were appointed to the board on 10 May 2001 and 25 May 2001 respectively. In accordance with the Articles of Oakhill Group plc Association of the Company, Mr Martin Delany and Mr Alan Jordan retire from the Board and, being eligible, offer themselves for reappointment. In accordance with the Articles of Association of the Company Mr Alastair McGuckian and Mr Gerard O Toole retire from the Board by rotation and, being eligible, offer themselves for reappointment. None of the Directors proposed for reappointment at the Annual General Meeting has a service contract. Mr. Donnacha Hurley has a service contract with the Company, which is terminable by either party giving not less than 12 months notice to each other. The Company s obligation to give twelve months notice will be increased to two years notice if the Company is taken over at any time prior to 13 December If OakHill terminates Mr. Hurley s contract at any time other than in the one-year period following a takeover, it can call upon Mr. Hurley to either serve out his notice period, take leave or accept a payment of salary in respect of the unexpired period. Directors and Company Secretary s share interests The beneficial interests of the Directors and Company Secretary, including their respective families interests, in the share capital of the Company were as follows: Ordinary Shares At 31 At 31 December December * Directors P Casey 3,176,984 3,176,984 D Hurley 17,575 17,575 M Gannon - - G Loughrey # - - A McGuckian - - R McLoughlin 5,204,126 5,204,126 D O Brien - - G O Toole 50,657 50,657 Secretary P Kearns - - * or at date of appointment, if later # alternate to P Casey

21 17 Mr Martin Delany and Mr Alan Jordan were appointed as Directors on 10 May and 25 May 2001 respectively and they did not have beneficial interests in the ordinary shares on the dates of appointment. There were no changes in the Directors or Secretary s interests between 31 December 2000 and 19 June The details of Directors and Secretary s share options are as follows: At 1 January Granted At 31 Exercise Date from which Expiry 2000 December 2000 Price exercisable Date D Hurley 1,000,000-1,000,000 48c October 2002 October 2009 M Gannon 200, ,000 48c October 2002 October 2009 P Kearns 150, ,000 48c October 2002 October 2009 Substantial shareholdings At 19 June 2000 the Company had been advised, in addition to Directors interests, of the following interests in its share capital: No of Shares % James Crean Investments Limited 11,287, Peter Lynch 4,700, Bank of Ireland Nominees Limited 2,556, The shares registered in the name of Bank of Ireland Nominees Limited are as registered holder only, on behalf of a range of clients who are each the beneficial owner of a portion of the shareholding. Annual general meeting The notice of the meeting includes a number of matters, which are special business to be considered at the meeting, and these are set out in a separate letter to shareholders, which is enclosed with the Annual Report. Subsidiaries The Company s principal subsidiary undertakings are set out on page 46. Health and safety In accordance with the requirements of Section 12 of the Safety, Health and Welfare at Work Act 1989, safety statements are prepared by each of the relevant companies in the Group and the policies set out in these statement are kept under review. Research and development The Group is committed to ongoing research and development aimed at improving the products and services provided.

22 18 Directors Report Political contribution There were no political contributions. Taxation status So far as the Directors are aware, the Company is not a close company within the meaning of the Corporation Tax Act, Corporate governance The Directors are committed to maintaining the highest standard of corporate governance in accordance with the Principles of Good Governance set out in the Combined Code. The Board The Board is made up of two Executive and six Non-executive Directors. Biographies of each of the Directors are set out on page 14. Board meetings are held on a regular basis and the Board has adopted a formal schedule of matters reserved for Board approval. The Directors are empowered to take independent professional advice if necessary at the Company s expense and all Directors have access to the advice and services of the company secretary. All Directors bring an independent judgment to bear on issues of strategy, performance, resources and standard of conduct. Chairman and chief executive The role of Chairman and Chief executive are separate and the Chairman is non-executive. In view of this and the size of the Group the Board does not consider it necessary to appoint a senior independent Director. This matter will be kept under review. Board balance A majority of the Board comprises Non-executive Directors. All Non-executive Directors are considered independent. Supply of information The Board receives monthly Group financial information and detailed Board papers are sent to each Director in a timely manner. Appointment to the Board A nominations committee has been established to make recommendations to the Board on all new Board appointments. The members of the committee are identified on page 14. All Directors are subject to election by shareholders at the first opportunity after their appointment and to re-election at intervals of not more than three years. Non-executive Directors are appointed for specified terms subject to reelection. Directors remuneration The Remuneration Committee consists solely of non-executive Directors. Membership of the Committee is set out on page 14. The Company s policy is to ensure that the remuneration of Executive Directors is appropriate to the nature and size of the Group s business and properly rewards and motivates them to perform in the best interests of shareholders. In framing the remuneration policy, the Remuneration Committee has given full consideration to Section B of the Best Practice Provisions annexed to the Irish Stock Exchange Listing Particulars. The main elements of the remuneration package for Executive Directors are basic salary, annual performance related bonus, pension benefits and share options. The remuneration of Non-executive Directors is determined by the Board within the limits set by the Articles of Association. Oakhill Group plc

23 19 Details of Directors remuneration are set out in note 8 on the financial statements on page 34. The interest of Directors in shares and Directors service agreements are set out on page 16 and 17. Details of the Group share option scheme are set out in note 24 on the financial statements. It is the policy to grant options to executives to encourage identification with shareholders interest. Communications with shareholders It is the Company s policy to enter into dialogue with shareholders in so far as is permissible having regard to the rules of the Stock Exchange and the Companies Acts requirements. The Company s AGM affords individual shareholders the opportunity to question the Board. In addition the Company responds throughout the year to communications from shareholders. Directors responsibilities The Directors responsibilities are contained within the Statement of Directors Responsibilities on page 21. Going concern The Directors, after making enquiries, have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. For that reason, they continue to adopt the going concern basis in preparing the financial statements. Accountability and audit An audit committee has been established with written terms of reference which deal clearly with its authority and duties which include, inter alia, keeping under review the scope and results of the audit and its cost effectiveness. The Board is ultimately responsible for the Group s systems of internal control and for reviewing its effectiveness. However such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss. The Combined Code introduced a requirement that the Directors review the effectiveness of the Group s system of internal controls. This extended the existing requirement in respect of financial controls to cover all controls including financial, operational, compliance and risk management. The Board has established procedures to implement the Turnbull guidance (Internal Control: Guidance for Directors on the Combined Code, published in September 1999) such that the Group was in compliance with it for the accounting year ended 31 December The Group operates through an organisation structure with clearly defined levels of responsibility and authority and appropriate reporting procedures. Annual budgets are prepared for all business units and these identify key risks and opportunities. The Group budget is approved by the Board. Performance is measured against budget and prior years and Group performance is reported to the Directors on a monthly basis. The operating companies maintain controls and procedures which are appropriate to their size and the environment in which they operate. There are regular visits to the operating companies by Group operating and financial management at which a detailed review of operating and financial matters, including business risk and internal control issues, takes place.

24 20 Directors Report The Board receives reports on the key risks to the business and the steps taken to manage such risks. The Directors have, through the Audit Committee, reviewed the effectiveness of the Group s system of internal control. Compliance Statement The Listing rules require the Board to report on compliance with the Combined Code provisions throughout the accounting period. Save for the exceptions outlined below, the Company has complied with the provisions set out in section 1 of the Code for the whole of the year under review. A senior independent Director has not been appointed for the reasons set out above. The service contract of Mr Hurley requires a notice period in excess of twelve months in certain circumstances. The Remuneration Committee believes that these terms are appropriate and necessary. Auditors The auditors, PricewaterhouseCoopers will continue in office in accordance with the provisions of Section 160(2) of the Companies Act, On behalf of the Board. D Hurley Chief Executive A Jordan Finance Director OakHill House, Rowan Avenue Stillorgan Industrial Park, Blackrock, Co. Dublin. 26 June 2001 Oakhill Group plc

25 21 Statement of Directors Responsibilities Company law requires the Directors to ensure that the Company prepares financial statements for each financial year which give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period. In preparing those financial statements, the Directors are required to: select suitable accounting policies and then apply them consistently; make judgments and estimates that are reasonable and prudent; disclose and explain any material departures from applicable accounting standards; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are required to take all reasonable steps to secure compliance by the Company with its obligations in relation to the preparation and maintenance of proper books of account and financial statements which disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 1963 to 1999 and the European Communities (Companies: Group Accounts) Regulations, The Directors have a general duty to act in the best interests of the Company and are required to take such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

26 22 Report of the Auditors - year ended 31 December 2000 To the members of Oakhill Group plc We have audited the financial statements on pages 24 to 47 and the detailed information on directors interests in shares and share options on pages 16 and 17. Respective responsibilities of Directors and auditors The Directors are responsible for preparing the Annual Report. As described on page 21 this includes responsibilities for preparing the financial statements in accordance with Accounting Standards generally accepted in Ireland. Our responsibilities, as independent auditors, are established in Ireland by statute, the Auditing Practices Board, the Listing Rules of the Irish Stock Exchange and our profession s ethical guidance. We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with Irish Statute comprising the Companies Acts, 1963 to 1999, and the European Communities (Companies: Group Accounts) Regulations, We state whether we have obtained all the information and explanations we consider necessary for the purposes of our audit and whether the Company balance sheet is in agreement with the books of account. We also report to you our opinion as to: whether the Company has kept proper books of account; whether the Directors Report is consistent with the financial statements; and whether at the balance sheet date there existed a financial situation which may require the Company to convene an extraordinary general meeting; such a financial situation may exist if the net assets of the Company, as stated in the Company balance sheet, are not more than half of its called-up share capital. We also report to you if, in our opinion, information specified by law or the Listing Rules regarding directors remuneration and transactions is not disclosed. We read the other information contained in the Annual Report and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. We review whether the statement on page 20 reflects the Company s compliance with the seven provisions of the Combined Code specified for our review by the Irish Stock Exchange and we report if it does not. We are not required to consider whether the board s statements on internal control cover all risks and controls or to form an opinion on the effectiveness of the Company s or Group s corporate governance procedures or its risk and control procedures. Basis of audit opinion We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Company s circumstances, consistently applied and adequately disclosed. Oakhill Group plc

27 23 We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion the financial statements give a true and fair view of the state of affairs of the Company and the Group at 31 December 2000 and of the loss and cash flows of the Group for the year then ended and have been properly prepared in accordance with the Companies Acts, 1963 to 1999, and the European Communities (Companies: Group Accounts) Regulations, The net assets of the Company, as stated in the balance sheet on page 26, are more than half of the amount of its called-up share capital and, in our opinion, on that basis there did not exist at 31 December 2000 a financial situation which under Section 40(1) of the Companies (Amendment) Act, 1983 would require the convening of an extraordinary general meeting of the Company. PricewaterhouseCoopers Chartered Accountants and Registered Auditors Dublin 26 June 2001 We have obtained all the information and explanations we consider necessary for the purposes of our audit. In our opinion proper books of accounts have been kept by the Company. The Company balance sheet is in agreement with the books of account. In our opinion the information given in the Directors Report on pages 16 to 20 is consistent with the financial statements.

28 24 Consolidated Profit & Loss Account - year ended 31 December 2000 Notes Sales Continuing 1 83,576 34,657 Discontinued 1 35,468 14, ,044 49,041 Cost of sales 2 75,727 30,597 Gross profit 43,317 18,444 Net operating expenses 2 (34,364) (12,741) Operating profit before goodwill amortisation, exceptional operating costs and impairment provision Continuing 1 6,580 4,124 Discontinued 1 2,373 1,579 8,953 5,703 Goodwill amortisation Continuing (3,235) (1,246) Discontinued (408) (152) 13 (3,643) (1,398) Exceptional operating costs Continuing (1,440) (570) Discontinued (73) - 3 (1,513) (570) Impairment provision - continuing 4 (5,090) - Operating (loss) / profit on ordinary activities Continuing (3,185) 2,308 Discontinued 1,892 1,427 (1,293) 3,735 Interest - net 5 (3,512) (1,277) (Loss) / profit on ordinary activities before taxation 6 (4,805) 2,458 Taxation 7 1,208 1,191 (Loss) / profit for the financial period (6,013) 1,267 Dividends 9 (282) (452) (Loss absorbed) / retained profit (6,295) 815 Basic and diluted (loss) / earnings 10 (10.65) 2.24 per share - cents Basic adjusted earnings per share - cents D Hurley Chief Executive A Jordan Finance Director Oakhill Group plc

29 25 Consolidated Balance Sheet - at 31 December 2000 Notes Fixed assets Tangible fixed assets 12 34,300 36,850 Intangible fixed assets 13 41,189 47,892 75,489 84,742 Current assets Stocks 14 5,027 5,617 Debtors 15 27,753 25,672 Cash and bank balances 9,209 11,153 41,989 42,442 Creditors (amounts falling due within one year) Trade and other creditors 16 23,350 24,042 Bank and other loans 17 14,713 7,382 Taxation 2,157 2,132 Dividends ,220 34,008 Net current assets 1,769 8,434 Total assets less current liabilities 77,258 93,176 Creditors (amounts falling due after more than one year) Bank and other loans 17 28,517 39,700 Provisions for liabilities and charges 18 3,637 3,102 45,104 50,374 Capital and reserves Called-up equity share capital 19 5,644 5,644 Share premium 20 41,346 41,346 Currency reserve 21 3,594 2,569 Profit and loss account 21 (5,480) 815 Shareholders funds equity interests 45,104 50,374 D Hurley Chief Executive A Jordan Finance Director

30 26 Company Balance Sheet - at 31 December 2000 Notes Fixed assets Interest in subsidiary undertakings 22 35,858 35,858 Current assets Debtors 15 11,615 12,365 Creditors (amounts falling due within one year) Trade and other creditors Dividends Net current assets 11,540 11,822 Total assets less current liabilities 47,398 47,680 Capital and reserves Called-up share capital 19 5,644 5,644 Share premium 20 41,346 41,346 Profit and loss account Shareholders funds - equity interests 47,398 47,680 D Hurley Chief Executive A Jordan Finance Director Oakhill Group plc

31 27 Consolidated Cash Flow Statement - year ended 31 December 2000 Notes Cash flow from operating activities Continuing operations 23 9,236 7,998 Discontinued operations 23 2,370 3,214 11,606 11,212 Returns on investments and servicing of finance Interest received Interest paid (3,501) (1,242) Finance lease interest paid (303) (147) (3,512) (1,277) Taxation Corporation tax paid (680) (438) Capital expenditure Purchase of fixed assets (3,964) (2,053) Sale of fixed assets (3,672) (2,010) Acquisitions and disposals Investment in subsidiary undertakings 23 (473) 1,331 (473) 1,331 Equity dividends paid (734) - Cash inflow before use of liquid resources and financing 2,535 8,818 Management of liquid resources 3,239 (415) Financing New loans 455 1,839 Repayments of amounts borrowed (5,687) (2,637) Capital element of finance lease payments (942) (493) Issue of shares - 11,466 Issue expenses ordinary share capital - (221) Repayment of amounts due to Crean - (11,466) (6,174) (1,512) (Decrease) / increase in cash 23 (400) 6,891

32 28 Other Statements - year ended 31 December 2000 Statement of total recognised gains and losses (Loss) / profit for the financial period (6,013) 1,267 Currency translation differences on foreign currency net investments 1,025 2,569 Total gains and losses relating to the period (4,988) 3,836 Reconciliation of movements in group shareholders funds (Loss) / profit for the financial period (6,013) 1,267 Dividends (282) (452) (6,295) 815 Shares issued - 46,990 Currency translation differences on foreign currency net investments 1,025 2,569 (5,270) 50,374 Opening group shareholders funds 50,374 - Closing group shareholders funds 45,104 50,374 Note of historical cost profits and losses There is no difference between the historical cost loss / profit on ordinary activities before taxation and the historical cost loss absorbed / retained profit and the reported amounts in either year. Oakhill Group plc

33 29 Accounting Policies Basis of accounting The financial statements are prepared in Euro under the historical cost convention. They have been prepared in accordance with accounting standards generally accepted in the Republic of Ireland and the United Kingdom and with Irish statute comprising the Companies Acts, 1963 to 1999, and the European Communities (Companies: Group Accounts) Regulations, Accounting standards generally accepted in Ireland and the United Kingdom in preparing financial statements giving a true and fair view are those issued by the Accounting Standards Board. Consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiary undertakings. The annual audited financial statements of all subsidiary undertakings are made up to the end of the Group financial period. Where the accounting policies of subsidiary undertakings differ from the policies adopted for the purpose of the group financial statements, appropriate adjustments are made on consolidation to ensure uniformity of accounting policies in the Group financial statements. The results of subsidiary undertakings acquired or disposed of during the period are included in the Group financial statements from the date of acquisition or up to the date of disposal. The results of the companies acquired from Crean are included for the period from 6 August 1999, the date of the de-merger from Crean. Goodwill Goodwill represents the excess of the consideration over the fair value of the assets acquired. Goodwill in respect of subsidiary undertakings is amortised over 10 to 20 years, being the estimated useful economic life, in equal annual installments. The carrying value of goodwill is reviewed annually and provision is made for any permanent diminution in value. Depreciation Depreciation is calculated to reduce fixed assets to their estimated residual value by equal installments over their useful lives as follows: Buildings 40 to 50 years Plant and equipment 3 to 12 years Vehicles and computers 2 to 5 years Stocks Stocks are valued at the lower of cost and net realisable value. The cost of finished goods includes an appropriate proportion of production overheads. Net realisable value is based on estimated selling price less further costs expected to be incurred to completion and sale. Deferred taxation Deferred taxation is provided at the anticipated tax rates on differences arising from the inclusion of items of income and expenditure in tax computations in periods different from those in which they are included in the financial statements to the extent that it is probable that a liability or asset will crystallise in the future.

34 30 Accounting Policies Foreign currencies The balance sheets of foreign subsidiaries are translated at the closing rate of exchange. The profit and loss accounts and cash flow statements have been translated using the average rate for the period. The exchange differences between the retained profits of subsidiary and associated undertakings translated at average and closing rates of exchange are taken to reserves, as are differences arising on the retranslation of foreign currency net assets at the beginning of the period, after taking into account related foreign currency borrowings. Transactions in foreign currencies during the period have been translated at the rate ruling at the date of the transaction. Foreign currency assets and liabilities have been translated at the closing period-end rate except when covered by a forward exchange agreement, where the forward rate is used. The resulting profits or losses are dealt with in the results for the period. Pensions Pension costs for the Group s defined benefit pension schemes are charged to the profit and loss account over the period of employment of pensionable employees. Variations from regular costs are spread over the expected remaining service lives of the relevant employees. Leasing Assets acquired under finance leases are capitalised and depreciated over the shorter of the lease term or their estimated useful lives and the related obligation is included in borrowings. The interest element of the rental obligation is charged to the profit and loss account over the period to which they relate. Rentals in respect of all other leases are charged to the profit and loss account as incurred. Financial Instruments Forward foreign exchange contracts and currency options are used to hedge forecast transactional cash flows and accordingly any gains and losses on these contracts are recognised in the profit and loss account when the underlying transaction occurs. Interest rate swap agreements and similar contracts are used to manage interest rate exposures. Amounts payable or receivable in respect of these derivatives are recognised as adjustments to interest expense over the period of the contract. Payments to defined contribution pension schemes are charged to the profit and loss account in the period to which they relate. Research and development Expenditure on research and development is written off to the profit and loss account as incurred. Oakhill Group plc

35 31 Notes on the Financial Statements 1. Segmental Information Sales Operating Net Sales Operating Net profit* assets profit* assets By activity Continuing Print 83,576 8,425 72,518 34,657 5,024 81,168 Centre costs - (1,845) - - (900) - 83,576 6,580 72,518 34,657 4,124 81,168 Discontinued Packaging 35,468 2,373 13,642 14,384 1,579 13,066 Unallocated assets and liabilities - - (41,056) - - (43,860) 119,044 8,953 45,104 49,041 5,703 50,374 By geographic market Continuing Europe 57,752 4,234 53,973 24,221 2,721 57,824 United States 25,824 2,346 18,545 10,436 1,403 23,344 Discontinued Europe 35,468 2,373 13,642 14,384 1,579 13, ,044 8,953 86,160 49,041 5,703 94,234 Unallocated assets and liabilities - - (41,056) - - (43,860) 119,044 8,953 45,104 49,041 5,703 50,374 * Before goodwill amortisation, exceptional operating costs and impairment provision. The geographical analysis of sales set out above shows the origin of sales. The analysis of sales by geographical destination is not materially different. Unallocated assets and liabilities include dividends payable, taxation, net borrowings and non-operating assets and liabilities.

36 32 Notes on the Financial Statements 2. Cost of sales and net operating expenses Cost of sales Continuing 48,980 19,773 Discontinued 26,747 10,824 75,727 30,597 Net operating expenses Continuing Discontinued Total Continuing Discontinued Total operations operations operations operations Selling and distribution costs 8,129 2,074 10,203 2, ,409 Administration expenses 19,887 4,274 24,161 7,851 1,481 9,332 28,016 6,348 34,364 10,728 2,013 12, Exceptional operating costs Reorganisation costs (a) (841) (570) Development costs (b) (672) - (1,513) (570) (a) These costs were incurred in respect of the ongoing reorganisation of the Group s activities. (b) These relate to costs in respect of the Group s development strategy to move its activities into higher value added areas including print management and include costs in respect of market research and discontinued acquisition activities. 4. Impairment provision Provision in respect of impairment of goodwill and fixed assets in Stinehour Press and Keytech 5,090 - Oakhill Group plc

37 33 5. Interest - net Interest payable and similar charges On bank loans, overdrafts and other loans: Repayable within five years, not by installments 2, Repayable within five years, by installments 1, On finance leases ,804 1,389 Interest receivable ,512 1, (Loss) / profit on ordinary activities before taxation This is stated after charging Depreciation 6,301 2,428 Auditors remuneration Operating lease rentals - land and buildings 1, plant and machinery Taxation Based on the profit for the period: Irish corporation tax Overseas corporation tax 973 1,103 Deferred tax (note 18) ,504 1,362 Exceptional operating costs (296) (171) 1,208 1,191

38 34 Notes on the Financial Statements 8. Directors Remuneration Fees/ Performance Consultancy Other Total salary related bonus (a) benefits Total (b) Executive Directors D Hurley M Gannon Non-executive Directors P Casey (a) D Chambers G Loughrey (a) A McGuckian R McLoughlin D O Brien G O Toole (a) A subsidiary of the company entered into an agreement with Adelaide Capital Corp Limited, a management company owned by Mr Casey whereby 108,000 per annum is payable in respect of consultancy services.the agreement is for twelve months and commenced on 9 March It may be extended by mutual consent and can be terminated by giving three months notice. Mr Loughrey is Mr Casey s alternate director on the Board. Mr Casey and Mr Loughrey are directors of Adelaide Capital Corp Limited. (b) Directors remuneration in 1999 is in respect of the period from 6 August 1999, the date of the de-merger, to 31 December Increase Transfer Total accrued Pension in accrued value of pension at contribution pension increase 31 December Executive Directors D Hurley M Gannon Details of directors share options and service contracts are set out on pages 16 and Dividends Interim ordinary dividend of 0.5 cents (1999 nil) per share Final ordinary dividend of nil ( cents) per share Oakhill Group plc

39 (Loss) / earnings per share (Loss) / profit after taxation for the financial period (6,013) 1,267 Exceptional operating costs - net of taxation 1, Goodwill amortisation 3,643 1,398 Impairment provision 5,090 - Adjusted profit after taxation 3,937 3,064 cents cents Basic and diluted (loss) / earnings per share (10.65) 2.24 Exceptional operating costs - net of taxation Goodwill amortisation Impairment provision Adjusted basic and diluted earnings per share Weighted average number of shares in issue during the year ( 000) 56,439 56, Employment information No. No. Average number of employees for the period Print Packaging ,037 1, Employment costs Wages and salaries 31,122 12,244 Social welfare costs 2,758 1,054 Other pension costs ,649 13,597

40 36 Notes on the Financial Statements 12. Tangible fixed assets Freehold and Plant, long term equipment leasehold land and and buildings motor vehicles Total Cost At 1 January ,830 63,289 72,119 Additions at cost 246 3,718 3,964 Disposals - (2,062) (2,062) Currency effect At 31 December ,169 65,493 74,662 Depreciation At 1 January ,502 33,767 35,269 Charge to profit and loss account 317 5,984 6,301 Impairment provision Disposals - (1,770) (1,770) Currency effect At 31 December ,365 37,997 40,362 Net book value at 31 December ,804 27,496 34,300 Net book value at 31 December ,328 29,522 36,850 The net book value of tangible fixed assets includes an amount of 2,061,000 (1999-3,273,000) in respect of assets held under finance leases. Depreciation charged during the period on such assets amounted to 953,000 ( ,000). Oakhill Group plc

41 Intangible assets Goodwill 000 Cost At 1 January ,341 Additions 320 Currency effect 1,114 At 31 December ,775 Amortisation At 1 January ,449 Charge to profit and loss account 3,643 Impairment provision 4,553 Currency effect (59) At 31 December ,586 Net book value at 31 December ,189 Net book value at 31 December , Stocks Raw materials 2,065 2,392 Work in progress 1,392 1,565 Finished products 1,570 1,660 5,027 5,617 The replacement cost of stocks does not differ significantly from the amounts shown above. 15. Debtors Group Company Group Company (Amounts falling due within one year) Trade debtors 26,059-23,767 - Amounts owed by subsidiary undertakings - 11,615-12,365 Prepayments 897-1,215 - Other debtors Value added tax ,753 11,615 25,672 12,365

42 38 Notes on the Financial Statements 16. Trade and other creditors Group Company Group Company (Amounts falling due within one year) Trade creditors 15,597-13,783 - Other creditors and accruals 5, , Payroll tax and social insurance Value added tax 1,074-1,354-23, , Borrowings and financial instruments The Group s treasury policy and management of derivatives and financial instruments is discussed in the Financial Review on page 8. The Group has availed of the exemption provided within FRS13 Derivatives and other Financial Instruments: Disclosures, to exclude its short-term debtors and creditors from the disclosures noted below. (a) Interest rate risk profile of financial liabilities The following table sets out the composition of the Group s floating rate financial liabilities, as stated on the balance sheet Euro Sterling 33,860 36,911 Dollar 8,544 9,599 43,230 47,082 The interest rate risk on floating rate borrowings has been reduced by the use of interest rate collars. Oakhill Group plc

43 39 (b) Maturity analysis Due after one year Between Between Due within one and two and one year two years five years Total Bank overdrafts 2, Bank loans - repayable by installments 6,173 6,294 1,645 7,939 - repayable other than by installments 5,250-19,757 19,757 Other borrowings Finance leases December ,713 6,807 21,710 28,517 Under the terms of a bank loan agreement, the revolving credit facilities which are repayable other than by installments of million are repayable within one year of the balance sheet date. However, these amounts are then available for redrawing and accordingly have been classified as repayable between two and five years after the balance sheet date. There are no material undrawn committed facilities at 31 December (c) Interest rate analysis The floating rate borrowings bear interest rates based on LIBOR/EURIBOR. At 31 December 2000 there were financial assets of 6.2 million ( million) bearing interest based on EUROBID/LIBID.

44 40 Notes on the Financial Statements (d) Fair value of financial assets and liabilities The fair values of the Group s financial assets and liabilities at 31 December 2000 are not considered to be materially different to their book values. (e) Gains and losses on hedges The Group enters into forward foreign currency contracts to eliminate the exposures that arise on revenue and costs denominated in foreign currencies. Changes in the fair value of instruments used as hedges are not recognised in the financial statements until the hedged position matures.there were no material gains or losses at 31 December 2000 (f) Currency risk At 31 December 2000, after taking into account the effects of foreign currency contracts, the Group had no material currency exposures. 18. Provisions for liabilities and charges Deferred taxation At 1 January ,102 2,715 Taxation charge (note 7) Currency effect At 31 December ,637 3,102 The difference between the Group s full potential deferred taxation liability and the provision made above is immaterial. The deferred taxation provision arises as a result of an excess of tax allowances over depreciation. Oakhill Group plc

45 Called up equity share capital Group and company 2000 & Authorised 80,000,000 ordinary shares of 0.10 each 8,000 Issued 56,439,080 ordinary shares of 0.10 each 5, Share premium 000 At 1 January 2000 and 31 December , Other reserves Group Currency reserve Profit and loss account At 1 January , Loss absorbed for the period - (6,295) Currency effect 1,025 - At 31 December ,594 (5,480) Company Profit and loss account 000 At 1 January Loss absorbed for the period (282) At 31 December As permitted by Section 3(2) of the Companies Amendment Act, 1986, the profit and loss account of the Company has not been separately presented in these financial statements. nil of the loss for the financial year has been dealt with in the financial statements of the Company.

46 42 Notes on the Financial Statements 22. Interest in subsidiary undertakings 2000 & Shares in subsidiaries 35,858 The principal subsidiary undertakings are set out in note Consolidated cash flow (a) Cash flow from operating activities Continued Discontinued Total Continued Discontinued Total operations operations operations operations Operating profit 6,580 2,373 8,953 4,124 1,579 5,703 Exceptional operating costs (1,440) (73) (1,513) (570) - (570) Depreciation 5,233 1,068 6,301 2, ,428 Stocks Debtors (1,539) (1,873) (3,412) 1,118 (1,222) (104) Creditors (135) ,884 2,792 9,236 2,370 11,606 7,998 3,214 11,212 (b) Investment in subsidiary undertakings Goodwill (320) (300) Net assets (153) - Cash acquired with subsidiary undertakings - 2,550 Bank overdrafts acquired with subsidiary undertakings - (919) (473) 1,331 Oakhill Group plc

47 43 (c) Analysis of net debt At 1 At 31 January Cash Non cash Exchange December 2000 flow changes movement Cash 7,867 1, ,139 Bank overdrafts (802) (1,615) - 33 (2,384) 7,065 (400) ,755 Debt due within one year (5,570) 5,687 (11,627) 32 (11,478) Debt due after more than one year (38,137) (455) 11,627 (731) (27,696) Finance leases (2,573) (41) (1,672) (46,280) 6,174 - (740) (40,846) Liquid resources 3,286 (3,239) Net debt (35,929) 2,535 - (627) (34,021) Liquid resources are deposit accounts other than demand deposits accounts, with a maturity of less than one year when acquired.

48 44 Notes on the Financial Statements (d) Reconciliation of net cash flow to movement in net debt (Decrease) / Increase in cash (400) 6,891 Cash outflow from decrease in debt 6,174 1,291 Cash (inflow) / outflow from (decrease) / increase in liquid resources (3,239) 415 Decrease in net debt resulting from cash flows 2,535 8,597 Loans, finance leases and liquid resources acquired with subsidiary undertakings - (42,065) Currency effect (627) (2,461) Movement in net debt 1,908 (35,929) Net debt at 1 January 2000 (35,929) - Net debt at 31 December 2000 (34,021) (35,929) Oakhill Group plc

49 Share option scheme The OakHill share option scheme provides for the granting of options to full time directors and employees of the Group. Employees of the Group may be granted options at an option price no less than the middle market price of the Company shares on the day prior to the date an employee is invited to accept an option. The number of options granted under the scheme cannot be more than 10% of the issued share capital of OakHill in any ten year period. No more than 3% of the share capital may be the subject of options in the first year after adoption of the scheme and no more than 4% of the share capital may be the subject of options in the three-year period after such date. An option may not be exercised unless the earnings per share of OakHill have increased in the three year period prior to the date of exercise of the option by an amount equal to the increase in the consumer price index plus 5% compound per annum. At 31 December 2000 there were 1,350,000 (1999 1,350,000) options in issue at an option price of 0.48 per share. 25. Commitments (a) Capital commitments not provided for Contracted Authorised but not contracted (b) Operating lease commitments The annual commitments payable during the next twelve months amount to 1,555,000 (1999 1,668,000) for the Group payable as follows: Land and buildings Other Total Payable on leases in which the commitment expires: Within one year Within two to five years After five years , ,555

50 46 Notes on the Financial Statements 26. Pensions The Group operates a number of defined contribution schemes and a defined benefit scheme which are funded and are independent of its assets. The pension cost relating to the Group s defined benefit scheme is assessed in accordance with the advice of independent qualified actuaries. An actuarial valuation of the defined benefit scheme will be carried out in The pension charge for the defined benefit and defined contribution schemes were 95,000 and 674,000 respectively. 27. Subsidiary undertakings The principal subsidiary undertakings are as follows: Name of subsidiary % Holding 31 December 2000 Business Incorporated and operating in the United Kingdom Droyhurst Limited 100% Print The Plastic Card Company Limited 100% Print Speedprint (Horsforth) Limited 100% Print Top Copy Image Centres Limited 100% Print Bell & Bain Limited 100% Print Technique Labels Limited 100% Print Plasboard Plastics Limited 100% Packaging Foam Plus Limited 100% Packaging Incorporated and operating in the United States of America Milton Holdings Inc 100% Print Incorporated and operating in Ireland Label Art Limited 100% Print As referred to in note 28, the shares in Plasboard Plastics Limited and the trade and business assets of Foam Plus Limited were disposed of on 9 January Oakhill Group plc

51 Post balance sheet events Packaging Disposal The sale of the Packaging Division, comprising the shares in Plasboard Plastics Limited and Polypackaging Limited and the trade and assets of Foam Plus Limited and Lochaber Box Limited to Brodr. Sunde for a consideration of Stg m, based on expected aggregate net assets of Stg 6.5m, excluding goodwill and net debt, was approved by shareholders at an EGM on 23 December.The consideration is subject to a proportionate adjustment on a Stg 1 for Stg 1 basis pursuant to any deviation from the net asset amount of Stg 6.5million.The transaction was completed on 9 January On completion Stg 6.25m was receivable and the balance is receivable on collection of the debtors in Foam Plus and Lochaber Box. 29. Approval of financial statements The financial statements were approved by the Board of Directors on 26 June 2001.

52 48 Shareholder and Other Information Financial calendar Preliminary results announced 30 April 2001 Annual General Meeting 26 July 2001 Proposed announcement of 2001 interim results August 2001 Registered Office Auditors OakHill House PricewaterhouseCoopers Rowan Avenue Chartered Accountants Stillorgan Industrial Park Wilton Place Blackrock Dublin 2 Co. Dublin T Stockbrokers F J & E Davy E info@oakhillplc.ie Davy House 49 Dawson Street Dublin 2 Registrar and transfer office Computershare Services (Ireland) Ltd Heron House Corrig Road Sandyford Industrial Estate Dublin 18 Oakhill Group plc

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