Judges Scientific Plc (JDG) 2010年年度報告「LSE」.pdf

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1、Judges Scientific plcANNUAL REPORT&ACCOUNTS 2010Consolidated financial statementsChairmans statement2-3Directors report4-8Independent auditors report9Consolidated statement of comprehensive income10Consolidated balance sheet11Consolidated statement of changes in equity12Consolidated cash flow statem

2、ent13Notes to the consolidated financial statements14-32Parent company financial statementsIndependent auditors report34Parent company balance sheet35Notes to the parent company financial statements36-39Notice of Annual General Meeting41-42Form of Proxy43-44CONTENTSRevenue Adjusted operating profitA

3、djusted operating profit as a percentage of revenue18,00016,00014,00012,00010,0008,0006,0004,0002,000-24%18%12%6%0%Dec 2005000%ageDec 2006Dec 2007Dec 2008Dec 2009Dec 2010LLLLLLRevenue and adjusted operating profitEarnings,dividends and share priceDividend per share Adjusted basic earnings per shareS

4、hare price in pence at the end of the week50.045.040.035.030.025.020.015.010.05.0-Dec 2005Dvidend per share in penceEarnings per share in penceShare price in penceDec 2006Dec 2007Dec 2008Dec 200951046041036031026021016011060Dec 2010Balance of net debt existing at previous year-endNet debt arising in

5、 year from new acquisitionsNet debt as a percentage of Net Assets adjusted for derivatives(shown under IFRS since transition on 1 Jan 2006)2,5002,0001,5001,00050090%80%70%60%50%40%30%20%10%0%Dec 2005Dec 2006Dec 2007Dec 2008Dec 2009000%ageDec 2010LLLLLLNet debtAll net debt at 31 December 2010attribut

6、able toacquisition in 2010The decline in 2009in the operatingprofit percentageresulted in part fromthe acquisition of QuorumTechnologies Limited1LI am delighted to report an excellent set of results for the year to 31 December 2010.Revenues advanced 42%to 16 million comparedwith 11.3 million in 2009

7、(organic growth,excluding Quorums andSircals revenues for both years,was 14%).Profit before tax andminorities,adjusted to exclude amortisation of intangible assets andother exceptional items,rose by 75%from 1.57 million in 2009 to arecord 2.75 million in 2010(the operating contribution of thebusines

8、ses owned on 1 January 2009 grew by 12%).Basic earnings pershare,similarly adjusted,rose from 28p to 45p.CHAIRMANS STATEMENTExceptional items include amortisation ofintangible assets and,for the first time,acquisition expenses.They also reflect thedifference in valuation,from one year-end tothe next

9、,of the Convertible Redeemableshares;the strong increase in the Companysshare price during the year resulted in asizeable charge which your Board regards asunrelated to the Groups operatingperformance and which is therefore treatedas an exceptional item.Profit includingexceptional items but before t

10、ax andminorities amounted to 0.67 million(2009:1.16 million).This equates to basic earningsper share,including exceptional items,of 8.1p(2009:20.6p).Corporate activityOn 18 March 2010,the Group acquiredSircal Instruments(UK)Limited,a companywhich designs,manufactures and sells raregas purifiers for

11、use in metals analysis.Thebasic consideration for the purchase was 1 million,payable in cash and financed by anadditional bank loan.In its last year as anindependent company,Sircal generatedadjusted operating profits of 270,000 onsales of 785,000.Following the relocation ofthe business,with the help

12、 of the vendors,toour East Grinstead facility,the companyenjoyed growing sales and a solid profitcontribution.On 18 March 2011,the Group acquired a51%interest in Deben UK Limited,acompany based in Suffolk which makesinstruments used in electron microscopy.Thevendors retain a 49%non-controlling inter

13、estin the acquisition vehicle set up for thepurpose of the transaction and will continueto manage and expand its activities.Thisacquisition,viewed in the context of the2009 purchase of Quorum,gives the Groupan increasingly strong presence in the field ofelectron microscopy.The purchase price inrespe

14、ct of 100%of Deben was 3.26 million,reflecting the companys adjusted operatingprofit of 707,000 and the 517,000 value ofthe freehold property from which itoperates.To finance the purchase LloydsBank provided the acquisition vehicle with a2.42 million loan,which is guaranteed byJudges.The Company did

15、 not issue anyshares to finance the transaction.TradingThe operations of the Group deliveredsatisfactory results in terms of order intake,sales,margins and cash flow.The year startedwith a healthy order book and demandremained generally robust in our niches;those of our businesses that are moreexpos

16、ed to the private sector benefited froman improved climate,with the Far Eastcontinuing to be an important and growingmarket.Much effort has been invested inupdating and upgrading many of the Groupsproducts.Quorum had an excellent year;the successof the new sample-coater model,launched inthe spring,w

17、as reflected in a good flow oforders in this segment of its business,whichrepresents 80%of its turnover.The sample-freezing(“cryo”)range is also being replacedby a superior product,a development thatwill complete the upgrade of almost all ofQuorums product offering during the lasttwo years.2The posi

18、tive trading performance hasenabled the Group to further improve ourkey performance indicator of Return OnTotal Invested Capital in 2010 to 45%(2009:40%).Financial positionNet debt as at 31 December 2010 stood at788,000;this compared with 1 million atthe previous year-end(adjusted to includethe earn

19、-out on the Quorum acquisition thathad not been paid as of that date).Thisdecline in net debt was achieved despite thenet cash outlay arising on the acquisition ofSircal.As usual,a significant proportion ofour debt is denominated in foreign currencyto hedge against the impact of exchange ratefluctua

20、tions on our export activities.Year-endcash balances amounted to 2.5 million(2009:2.5 million).DividendsYour Board is pleased to recommend a finaldividend of 5p per share(2009:3.7p pershare)which,subject to approval at theforthcoming Annual General Meeting on 31 May 2011,will make a total distributi

21、on of7.5p per share for 2010(2009:5p per share).Despite the increase,the dividend total iscovered 6 times by adjusted earnings pershare,similar to 2009.The proposed final dividend will be payableon 1 July 2011 to shareholders on theregister on 3 June 2011 and the shares willgo ex-dividend on 1 June

22、2011.Current trading and prospectsThe current year has started with a solidorder book and a new acquisition.This,together with the enhanced productdevelopment focus of recent months,shouldserve to underpin the Groups performance.The main challenges remain Sterlingsburgeoning revival and public secto

23、r budgetcuts in the developed world.Judges financialposition is robust and the bank remainssupportive of the Groups prudentacquisition policy.PersonnelOnce again I would like to pay tribute to theefforts of all the Groups executives andemployees which have made it possible tobreak our previous recor

24、d.Alex HambroChairmanDate:29 March 20113Images(pictured below and page 33)were preparedusing the Quorum cryogenic preparation system forscanning electron microscopy(SEM).Fresh specimenwas rapidly frozen in supercritical(“slushy”)liquidnitrogen and then transferred under vacuum into thecryo preparati

25、on chamber which is attached directlyto the SEM.A liquid nitrogen cooled stage in thepreparation chamber maintains the specimen at alow temperature,normally in the range of-1400C.Atypical specimen process could include fracturing thespecimen with a cooled knife to reveal internalinformation,sublimat

26、ion raising the specimentemperatures for a short time to selectively removesurface ice and coating with a thin layer of metalusing the built-in sputter coater.The specimen canthen be transferred through into the SEM where anitrogen gas cooled stage holds the specimen at lowtemperature during observa

27、tion and photography.Both specimens were examined in this way,exceptthat the sublimation stage was omitted.Lavender leaf.Shows branching trichrome structureswhich help to protect the plant from predation.Onthe surface of the leaf are stomata(with theirdistinctive sausage shaped guard cells)through w

28、hichgaseous exchange occurs(carbon dioxide in,oxygenout).The characteristic lavender oil droplets can beseen on the leaf surface.Drosera Adelae(the Adelaide sundew)is pictured onpage 33.DIRECTORS REPORTThe directors present their report and financial statements for theyear ended 31 December 2010.Pri

29、ncipal activities The company is the parent of a trading group involved in the designand manufacture of scientific instruments.Business reviewThe groups trading activities proved to be remarkably resilient in2010 in the face of continuing turmoil in the world economy.Profitsin the previous year had

30、been considered exceptionally high at thetime and the directors were particularly pleased to note that,on alike-for-like basis,increases were seen in 2010 in both revenue andprofits.In addition to this organic growth,Quorum TechnologiesLimited(acquired in mid-2009)performed well above expectations,a

31、sdid Sircal Instruments(UK)Limited(acquired in March 2010).Thiscombination of organic growth and earnings enhancement throughacquisitions fuelled a 61%increase in earnings per share(undiluted,excluding exceptional items).A significant proportion of group output is sold to customersfinanced directly

32、or indirectly by the public sector,albeit in adiversified portfolio of regions and countries.The immediate futureholds challenges for the groups businesses as governments in manyparts of the developed world struggle to bring public sector debt andspending under control.Movements in exchange rates al

33、so influenceinternational competitiveness and trading margins.In this context,the modest strengthening of Sterling in recent months may have adampening effect on profitability.The companys business model calls for a steady increase in the scopeof its operations,achieved both through acquisitions of

34、companiesoperating in its chosen field of activity and through the ongoingperformance of its established subsidiaries.In addition to the dilutionof head office costs that results from acquisitions,the companyclosely monitors the return it derives on the capital invested in itssubsidiaries.The annual

35、 rate of return on total invested capital(“ROTIC”)is computed monthly,both overall and in respect of eachsubsidiary,by comparing attributable earnings before interest,tax andamortisation(“EBITA”)with the investment in property,plant andequipment,goodwill and other intangibles and net current assets(

36、excluding surplus cash).In 2010,the overall return computed in thismanner amounted to 44.8%,before taking account of parent companycosts(other than foreign exchange losses resulting from the hedgingof subsidiary companies equivalent exposure)(2009:40.3%).Acquisitions:the directors reported the acqui

37、sition on 18 March2010 of Sircal Instruments(UK)Limited(“Sircal”).Sircal designs,manufactures and distributes rare gas purifiers for use in metalsanalysis utilising the Arc Spark spectrometry technique.Its tradingperformance since the acquisition has been entirely satisfactory.Itis regarded as param

38、ount that acquisitions are completed onlywhen the directors are satisfied that the target business has soundlong-term strength.Post Balance Sheet Event Acquisition:on 18 March 2011,the company acquired a 51%interest in Deben UK Limited,acompany which designs,manufactures and sells devices used toena

39、ble or to improve the observation of objects undermicroscopes.Further information is set out in note 32 to theconsolidated financial statements.Ongoing performance:the directors regard the trend ofearnings per share(excluding exceptional items),reduction in netdebt and the companys ability to pay di

40、vidends to its shareholdersas key indicators of overall group performance.Undiluted earningsper share(excluding exceptional items)rose from 28.0p in 2009 to45.0p in 2010;the directors consider undiluted earnings to be abetter measure than diluted because,under current accountingstandards,volatility

41、in the share price affects the latter in a way thatis not necessarily correlated with the companys performance.Netdebt,adjusted in 2009 to include deferred consideration potentiallypayable in respect of acquisitions,reduced slightly from 1 millionat 31 December 2009 to 788,000 at 31 December 2010,de

42、spitethe financing during 2010 of the acquisition of Sircal and the effectsof accelerated payments of Corporation Tax under the quarterlypayments regime which the group has now entered.Dividendstotalling 7.5p per share(2009:5p)will be recommended in respectof 2010(including those that have already b

43、een paid at the interimstage);these are covered 5.2 times by earnings excluding thederivative charge(2009:4.1 times)and 6.0 times(2009:5.6 times)by earnings adjusted as set out in note 13 to the financialstatements,despite the proposed 50%increase in the dividend.In addition to these trends and the

44、above“ROTIC”measure forthe rate of return on investments,the company measures theperformance of its individual subsidiaries in a number of ways:Revenue trends The Materials Sciences equipment group(“Materials Sciences”):revenue rose by 16.8%,due in part to the acquisition of SircalInstruments(UK)Lim

45、ited(“Sircal”)which was added to thissegment in March 2010 and which traded much in line withexpectations.Fibre optic testing equipment(“Fibre Optic”):the very challengingbusiness environment which the segment endured during theprevious year gave way to a strong recovery in 2010.Revenuenearly double

46、d in the year,enabling this segment to post asignificant improvement in profits from the break-even of theprevious year.Ultra high vacuum manipulation equipment(“Vacuum”):revenuerose by 6%in 2010,building further on the substantial gains ofrecent years.While this growth appears modest,the underlying

47、technical achievements required to service increasingly complexcustomer needs bode well for the business in the future.Orderintake,particularly in the latter part of the year,was strong,leaving this segment with a healthy order backlog at the start ofthe new year.45 Sample preparation for electron m

48、icroscopy(“Microscopy”):in itslast annual accounts prior to acquisition,the company thatconstitutes this segment generated revenue of 4 million.This hasrisen sharply since acquisition,reaching 5.6 million in 2010.Thesuccessful launch of an upgraded range of sample coater productshelped to deliver th

49、is 40%increase.ProfitabilityThe groups adjusted EBITA margin progressed from 14.9%in 2009 to18.0%in 2010,reflecting an improved performance from Microscopyfollowing the acquisition of this business segment in 2009,the resultsof Sircal(acquired in 2010)and a return to more normal tradingpatterns at F

50、ibre Optic.Cash generation and managementCash generated from operations amounted to 2,508,000(2009:2,005,000).This benefited from a material increase in profits beforeexceptional items and in particular before the charge relating toderivative financial instruments which did not represent a cash flow

51、item in the year.Cash generated was partly offset by a net increasein working capital and was adversely affected by the quarterlyCorporation Tax payments regime referred to above.The othermaterial cash flows related to acquisitions:the loan notes issued in2005 on the acquisition of FTT were redeemed

52、 in the year(500,000),the Quorum deferred consideration was earned in full(300,000)and the Sircal purchase cost amounted to 835,000,netof inherited cash(financed by an increase in bank loans).Consolidated net debt at 31 December 2010 amounted to 788,000(2009:1 million adjusted to include deferred co

53、nsiderationpotentially payable in respect of acquisitions),a level considered bythe directors to reflect encouraging financial strength.Commercial risks and uncertaintiesAn important element of the groups business model is developmentthrough acquisition;the group is exposed to the risk of aninsuffic

54、ient availability of target companies of requisite quality and tothe risk that an acquired company does not meet its expectedprofitability.The group manages this risk by maintaining relationshipswith organisations that market appropriate targets and by performingresearch into potential acquisitions.

55、As regards the groups existing businesses,activities are concentratedin niche markets,serving a worldwide customer base.As such,all thegroups exporting subsidiaries are exposed to possible adverseimpacts on the international competitiveness of their activities causedby fluctuations in exchange rates

56、.Across all the groups activities liesthe exposure to human resource shortages.This reflects the smallniche-serving nature of the groups businesses and the impracticalityat this stage of the groups development of providing significant back-up support in respect of key roles.The principal drivers of

57、each of the segments within the group,together with their individual commercial risks and uncertainties,areas follows:The materials sciences equipment group supplies measurementequipment across both public and private sectors.The principalrisks relate to the degree of funding available to public-sec

58、torcustomers and those private sector industries with a history ofcyclicality and therefore at risk of periodic downturns in activity.The long-term growth of the business is supported by thedevelopment of related safety regulations internationally and by the globalisation of trade,as well as by main

59、taining a strongglobal presence Fibre optic is a significant provider to the telecoms industry ofequipment to test the properties of fibre optic and fibre opticnetworks.The principal risk derives from the cyclical nature ofcapital expenditure in this sector.Vacuum designs and manufactures instrument

60、s to create motion,heating and cooling within ultra high vacuum chambers.It isbenefiting from the buoyancy of the high-tech markets which itserves and their requirements for ultra high vacuum products.Thedirectors consider that there is scope to improve the companysoutput and market share through te

61、chnical innovation andincreased production capability.Vacuum is engaged in a high level ofdevelopment work,with the attendant risk of technical failure ordelays.The directors seek to mitigate this risk through the qualityof the companys technical skills base and through its contractualarrangements w

62、ith its customers.The degree of funding availableto its largely public-sector customer base also represents a risk.Microscopy designs,manufactures and distributes instruments thatprepare samples for examination in electron microscopes.It is welladvanced with its programme of redesign,modernisation a

63、ndconsolidation of its product ranges.Such a programme,whichinvolves the redesign of almost the entire product portfolio,bringswith it the inevitable risk of delay and technical failure.As withVacuum,the directors seek to mitigate this risk through the qualityof the companys technical skills base an

64、d through its contractualarrangements with its customers.The degree of funding available toits largely public-sector customer base also represents a risk.Financial risk management objectives and policiesThe group utilises financial instruments,other than derivatives(seenote 28),comprising borrowings

65、,cash and cash equivalents andvarious other items such as trade receivables and payables that arisedirectly from its operations.The main purpose of these financialinstruments is to raise finance for the groups operations.The mainrisks arising from the groups financial instruments relate to interestr

66、ates,liquidity,credit and foreign currency exposure.The directorsreview and agree policies for managing each of these risks,which aredescribed and evaluated in more detail in note 29 to the consolidatedfinancial statements and which are summarised below.The policieshave remained unchanged from previ

67、ous years.6 Interest rate riskThe group finances its operations through a mixture of bankborrowings(at floating rates),equity and retained profits.With net debt of just 788,000 at 31 December 2010,exposure to interest rate fluctuations is not considered to be a major threatto the group.Liquidity ris

68、kThe group seeks to manage liquidity risk by ensuring sufficientfunds are available to meet foreseeable needs and to invest cashassets safely and profitably.Primarily this is achieved through loansarranged at group level.Short term flexibility is achieved throughthe availability of overdraft facilit

69、ies and through the significant cashbalances that the group currently holds.Credit riskThe group reviews the credit risk relating to its customers byensuring,wherever possible,that it deals with long establishedtrading partners,agents and government/university backed bodies,where the risk of default

70、 is considered low.Where consideredappropriate,the group insists on up-front payment and requiresletters of credit to be provided.Currency riskWith exports representing a significant proportion of its sales,themain risk area to which the group is exposed is that of foreigncurrencies(principally US$a

71、nd Euros).The group adopts astrategy to hedge against this risk in whole or in part bymaintaining a proportion of its bank loans in these currencies,although this does not represent a hedge under IAS 39.Thedirectors review the value of this economic hedge on a regularbasis.There remains,nevertheless

72、,an ongoing threat to the groupscompetitive position in international markets from any sustainedperiod of Sterling strength.Price riskThe conversion terms of the Convertible Redeemable shares giverise to a derivative financial instrument,which is affected byfluctuations in the groups share price.Cas

73、h flow riskThe group manages its cash flow through a mixture of workingcapital,bank borrowings(at floating rates),equity and retainedprofits.With net debt of just 788,000 and cash and cashequivalents at 31 December 2010 of 2,542,000(2009:2,540,000)cash flow is not considered to be a major threat to

74、the group.Capital management objectivesThe group monitors capital on the basis of carrying amount of equity,less cash and cash equivalents as presented on the face of the balancesheet.Judges Scientific manages the capital structure and makesadjustments to it in the light of changes in economic condi

75、tions andthe risk characteristics of the underlying assets.In order to maintainits capital structure the group may adjust the amount of dividendspaid to shareholders,issue new shares or sell assets to reduce debt.The directors seek to maintain a conservative gearing position(15%at 31 December 2010,2

76、009:14%)as they utilise bank funding tosupport their acquisition strategy.The directors capital management objectives are to ensure thegroups ability to continue as a going concern and to provide anadequate return to shareholders.The parent and subsidiarycompanies boards meet regularly to review per

77、formance and discussfuture opportunities and threats with the aim of optimisingsustainable returns and minimising risk.Going concernThe consolidated financial statements have been prepared on a goingconcern basis.The directors have taken note of guidance issued bythe Financial Reporting Council on G

78、oing Concern Assessments indetermining that this is the appropriate basis of preparation of thefinancial statements.The groups principal operating companiesexperienced a strong trading environment in 2010 and overall thegroup enjoys good visibility for 2011,albeit that the global economicenvironment

79、 remains uncertain.The directors consider the financialposition of the group to be healthy,with cash balances at 31 December 2010 in excess of 2.5 million and net debt of just788,000.As a consequence,the directors believe that the parentcompany and group are well placed to manage their business risk

80、ssuccessfully despite the uncertainties surrounding the currenteconomic outlook.The directors have a reasonable expectation that the parent company and the group have adequate resources to continue inoperational existence for the foreseeable future.Accordingly,theycontinue to adopt the going concern

81、 basis in preparing the annualreport and accounts.Results and dividendsThe results for the financial year to 31 December 2010 are set out inthe Statement of Comprehensive Income.The company paid aninterim dividend of 2.5p per Ordinary share on 5 November 2010.At the forthcoming Annual General Meetin

82、g,the directors willrecommend payment of a final dividend for the year of 5p perOrdinary share to be paid on Friday 1 July 2011 to shareholders onthe register on Friday 3 June 2011.The shares will go ex-dividend onWednesday 1 June 2011.DirectorsThe following directors have held office during the yea

83、r:Hon AR Hambro 1-non-executiveMr DE CicurelMr D BarnbrookMr RL CohenMr RJ Elman 1-non-executiveMr GC Reece 1-non-executive1Member of the audit and remuneration committeesDirectors interestsThe directors interests in the Ordinary shares of the company wereas stated below:Ordinary of 5p each1 January

84、 and 31 December 2010SharesOptionsHon AR Hambro100,000-Mr DE Cicurel*526,356-Mr D Barnbrook15,00050,000Mr RL Cohen10,00067,000Mr RJ Elman75,791-Mr GC Reece3,000-*Held at 1 January 2010 by David Cicurel Securities Limited,except for 40shares held directly and at 31 December 2010 all held directly.Div

85、idends paid in the year to directors who hold shares amounted to45,000 in aggregate(2009:27,000).Details of share options are set out in note 24 to the financialstatements.In addition to the above holdings of Ordinary shares,the followingdirectors had interests in the Convertible Redeemable share ca

86、pitalof the company:Convertible Redeemable of 1p each(quarter-paid)1 January and 31 December 2010SharesHon AR Hambro468,751Mr DE Cicurel*4,166,667Mr D Barnbrook52,083Mr RL Cohen52,083Mr RJ Elman260,416*Held at 1 January 2010 by David Cicurel Securities Limited and at 31 December 2010 held directly.T

87、he conversion terms of the Convertible Redeemable shares aredetailed in note 25 to the financial statements.Following a fullconversion of the Convertible Redeemable shares to Ordinaryshares,the directors interests in the enlarged share capital of thecompany as at 31 December 2010 would have been as

88、follows:Ordinary SharesHon AR Hambro153,441Mr DE Cicurel1,001,384Mr D Barnbrook20,938Mr RL Cohen15,938Mr RJ Elman105,480Mr GC Reece3,000There is a deemed Concert Party including David Cicurel and otherswhich holds 26.8%of the Ordinary share capital.Certain authoritieswere granted in previous years t

89、hrough a Takeover Panel whitewashin relation to any requirement on the Concert Party to make an offerpursuant to Rule 9 of the City Code on Takeovers and Mergers;theseauthorities remain in place to cover any conversion by members ofthe Concert Party of their Convertible Redeemable shares.7Directors

90、remunerationThe remuneration paid to or receivable by each person who served as a director during the year was as follows:Base PerformanceContributions Benefits2010 2009salary/feesrelated bonusto pension TotalTotalschemes000000000000000000Executive DirectorsMr DE Cicurel10320-3126121Mr D Barnbrook98

91、2059132123Mr RL Cohen982052125121Non-Executive DirectorsHon AR Hambro14-1414Mr RJ Elman12-1212Mr GC Reece6-618Total3316010144154098Payment policyThe groups policy is to agree terms and conditions with suppliersbefore business takes place and to pay agreed invoices in accordancewith the terms of paym

92、ent.Trade creditor days of the company at theend of the year represented 24 days(2009:27 days).Directors responsibilitiesThe directors are responsible for preparing the Annual Report and thefinancial statements in accordance with applicable law and regulations.Company law requires the directors to p

93、repare financial statementsfor each financial year.Under that law the directors have elected toprepare the parent company financial statements in accordance withUnited Kingdom Accounting Standards(United Kingdom GenerallyAccepted Accounting Practice)and the consolidated financialstatements in accord

94、ance with International Financial ReportingStandards as adopted by the European Union(IFRSs).Under companylaw the directors must not approve the financial statements unlessthey are satisfied that they give a true and fair view of the state ofaffairs of the group and parent company and of the profit

95、or loss ofthe group for that period.In preparing these financial statements,the directors are required to:select suitable accounting policies and then apply them consistently make judgements and estimates that are reasonable and prudent state whether applicable UK Accounting Standards or IFRSs haveb

96、een followed,subject to any material departures disclosed andexplained in the financial statements prepare the financial statements on the going concern basis unless itis inappropriate to presume that the company will continue inbusiness.The directors are responsible for keeping adequate accounting

97、recordsthat are sufficient to show and explain the companys transactions anddisclose with reasonable accuracy at any time the financial position ofthe company and enable them to ensure that the financial statementscomply with the Companies Act 2006.They are also responsible forsafeguarding the asset

98、s of the company and hence for takingreasonable steps for the prevention and detection of fraud and otherirregularities.In so far as each of the directors is aware:there is no relevant audit information of which the companysauditor is unaware;and the directors have taken all steps that they ought to

99、 have taken tomake themselves aware of any relevant audit information and toestablish that the auditor is aware of that information.The directors are responsible for the maintenance and integrity of thecorporate and financial information included on the companyswebsite.Information published on the w

100、ebsite is accessible in manycountries and legislation in the United Kingdom governing thepreparation and dissemination of financial statements may differ fromlegislation in other jurisdictions.Corporate governanceThe directors have established an audit committee and a remunerationcommittee with form

101、ally delegated duties and responsibilities.Themembers of both committees are the non-executive directors.The audit committee determines the terms of engagement of thecompanys auditor and,in consultation with the companys auditor,thescope of the audit.The audit committee has unrestricted access to th

102、ecompanys auditor.The remuneration committee has delegatedauthority to determine the scale and structure of the executivedirectors remuneration and the terms of their service contracts.Theremuneration of the non-executive directors is determined by theboard as a whole.AuditorGrant Thornton UK LLP ha

103、ve expressed willingness to continue inoffice.In accordance with section 489(4)of the Companies Act 2006,aresolution to reappoint Grant Thornton UK LLP will be proposed atthe Annual General Meeting.On behalf of the boardRL CohenDirector and Company SecretaryJudges Scientific plcCompany registration

104、number:459731529 March 2011INDEPENDENT AUDITORSREPORT9We have audited the consolidated financial statements of JudgesScientific plc for the year ended 31 December 2010 which comprisethe consolidated statement of comprehensive income,theconsolidated balance sheet,the consolidated statement of changes

105、 inequity,the consolidated cash flow statement and notes 1 to 32.Thefinancial reporting framework that has been applied in theirpreparation is applicable law and International Financial ReportingStandards(IFRSs)as adopted by the European Union.This report is made solely to the companys members,as a

106、body,inaccordance with Chapter 3 of Part 16 of the Companies Act 2006.Our audit work has been undertaken so that we might state to thecompanys members those matters we are required to state to themin an auditors report and for no other purpose.To the fullest extentpermitted by law,we do not accept o

107、r assume responsibility to anyoneother than the company and the companys members as a body,forour audit work,for this report,or for the opinions we have formed.Respective responsibilities of directors and auditorAs explained more fully in the statement of directors responsibilities,the directors are

108、 responsible for the preparation of the consolidatedfinancial statements and for being satisfied that they give a true and fairview.Our responsibility is to audit and express an opinion on theconsolidated financial statements in accordance with applicable law andInternational Standards on Auditing(U

109、K and Ireland).Those standardsrequire us to comply with the Auditing Practices Boards(APBs)Ethical Standards for Auditors.Scope of the audit of the financial statementsA description of the scope of an audit of financial statements isprovided on the APBs website atwww.frc.org.uk/apb/scope/private.cfm

110、Opinion on financial statementsIn our opinion the consolidated financial statements:give a true and fair view of the state of the groups affairs as at 31December 2010 and of its profit for the year then ended;have been properly prepared in accordance with IFRS as adopted bythe European Union;and hav

111、e been prepared in accordance with the requirements of theCompanies Act 2006.Opinion on other matter prescribed by the CompaniesAct 2006In our opinion the information given in the Directors Report for thefinancial year for which the consolidated financial statements areprepared is consistent with th

112、e consolidated financial statements.Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters wherethe Companies Act 2006 requires us to report to you if,in ouropinion:certain disclosures of directors remuneration specified by law arenot mad

113、e;or we have not received all the information and explanations werequire for our audit.Other matterWe have reported separately on the parent company financial statements of Judges Scientific plc for the year ended 31 December 2010.Paul HoughtonSenior Statutory Auditorfor and on behalf of Grant Thorn

114、ton UK LLPStatutory Auditor,Chartered AccountantsEast Midlands29 March 2011CONSOLIDATED STATEMENTOF COMPREHENSIVE INCOME102010 2009NotesBefore)Exceptional)Total)Before)Exceptional)Total)exceptional)items)exceptional)items)items)items)000)000)000)000)000)000)Revenue716,005)-)16,005)11,295)-)11,295)Op

115、erating costs excluding exceptional items8(13,123)-)(13,123)(9,613)-)(9,613)Operating profit excluding exceptional items2,882)-)2,882)1,682)-)1,682)Exceptional itemsCharge relating to derivative financial instruments25-)(1,752)(1,752)-)-)-)Amortisation of intangible assets16-)(254)(254)-)(415)(415)A

116、cquisition costs31-)(77)(77)-)-)-)Operating profit/(loss)92,882)(2,083)799)1,682)(415)1,267)Interest receivable107)-)7)3)-)3)Interest payable10(137)-)(137)(110)-)(110)Profit/(loss)before tax2,752)(2,083)669)1,575)(415)1,160)Taxation11(725)556)(169)(441)116)(325)Profit/(loss)and total comprehensive i

117、ncome for the year2,027)(1,527)500)1,134)(299)835)Attributable to:Equity holders of the parent company1,860)(1,527)333)1,131)(299)832)Non-controlling interest167)-)167)3)-)3)Earnings per share total and continuingBasic1345.0p)-)8.1p)28.0p)-)20.6p)Diluted1341.0p)-)7.8p)27.3p)-)20.1p)There are no item

118、s of other comprehensive income for the two years in question.The accompanying notes form an integral part of these consolidated financial statements.2010)2009)Note000)000)ASSETSNon-current assetsProperty,plant and equipment14956)921)Goodwill155,290)4,497)Other intangible assets16419)594)Deferred ta

119、x asset23348)-)7,013)6,012)Current assetsInventories171,923)1,241)Trade and other receivables182,515)1,803)Cash and cash equivalents2,542)2,540)6,980)5,584)Total assets13,993)11,596)LIABILITIESCurrent liabilitiesTrade and other payables19(2,730)(2,197)Derivative financial instruments28(1,752)-)Curre

120、nt portion of long-term borrowings20(800)(650)Current tax payable(550)(638)(5,832)(3,485)Non-current liabilitiesLong-term borrowings21(2,530)(2,590)Deferred tax liabilities23-)(188)(2,530)(2,778)Total liabilities(8,362)(6,263)Net assets5,631)5,333)EQUITYShare capital24209)202)Share premium account3,

121、092)2,959)Merger reserve475)475)Retained earnings1,606)1,532)Equity attributable to equity holders of the parent company5,382)5,168)Non-controlling interest249)165)Total equity5,631)5,333)The accompanying notes form an integral part of these consolidated financial statements.The financial statements

122、 were approved by the board on 29 March 2011D.E.CicurelR.L.CohenDirectorDirectorCONSOLIDATED BALANCE SHEET11CONSOLIDATED STATEMENTOF CHANGES IN EQUITY12Share Share MergerRetained)Total*)Non-)Total)capitalpremiumreserveearnings)controlling)equity)interest)Note000000000000)000)000)000)Balance at 1 Jan

123、uary 20102022,9594751,532)5,168)165)5,333)Dividends12-(259)(259)(83)(342)Issue of share capital247133-)140)-)140)Transactions with owners7133-(259)(119)(83)(202)Profit for the year-333)333)167)500)Total comprehensive income for the year-333)333)167)500)Balance at 31 December 20102093,0924751,606)5,3

124、82)249)5,631)Balance at 1 January 20092022,956475849)4,482)162)4,644)Dividends12-(149)(149)-)(149)Issue of share capital24-3-)3)-)3)Transactions with owners-3-(149)(146)-)(146)Profit for the year-832)832)3)835)Total comprehensive income for the year-832)832)3)835)Balance at 31 December 20092022,9594

125、751,532)5,168)165)5,333)*-Total represents amounts attributable to equity holders of the parent company.The accompanying notes form an integral part of these consolidated financial statements.2010)2009)000)000)Cash flows from operating activitiesProfit after tax500)835)Adjustments for:Charge relatin

126、g to derivative financial instruments1,752)-)Depreciation151)107)Amortisation of intangible assets254)415)Loss on disposal of property,plant and equipment11)3)Foreign exchange losses/(gains)on foreign currency loans4)(92)Interest receivable(7)(4)Interest payable137)110)Tax expense recognised in inco

127、me statement169)325)(Increase)/decrease in inventories(638)144)(Increase)/decrease in trade and other receivables(651)257)Increase/(decrease)in trade and other payables826)(95)Cash generated from operations2,508)2,005)Interest paid(136)(107)Tax paid(930)(401)Net cash from operating activities1,442)1

128、,497)Cash flows from investing activitiesPaid on acquisition of new subsidiary(1,316)(1,914)Gross cash inherited on acquisition481)889)Acquisition of subsidiaries,net of cash acquired(835)(1,025)Payment of deferred consideration(300)-)Purchase of property,plant and equipment(207)(125)Proceeds from d

129、isposal of equipment12)1)Interest received7)4)Net cash used in investing activities(1,323)(1,145)Cash flows from financing activitiesProceeds from issue of share capital140)3)Repayments of borrowings(415)(730)Proceeds from bank loans1,000)1,443)Repayment of loan notes(500)-)Dividends paid equity sha

130、re holders(259)(149)Dividends paid non-controlling interest in subsidiary(83)-)Net cash(used in)/from financing activities(117)567)Net increase in cash and cash equivalents2)919)Cash and cash equivalents at beginning of year2,540)1,621)Cash and cash equivalents at end of year2,542)2,540)The accompan

131、ying notes form an integral part of these consolidated financial statements.CONSOLIDATED CASH FLOWSTATEMENT13141.General informationJudges Scientific plc is the ultimate parent company of thegroup,whose principal activities comprise the design,manufacture and sale of scientific instruments.2.Registe

132、red officeThe address of the registered office and principal place ofbusiness of Judges Scientific plc is Unit 19,Charlwoods Road,East Grinstead,West Sussex RH19 2HL.3.Basis of accountingThe consolidated financial statements have been prepared underthe historical cost convention except for certain f

133、inancialinstruments which are carried at fair value.Being listed on the Alternative Investment Market of the LondonStock Exchange,the company is required to present itsconsolidated financial statements in accordance withInternational Financial Reporting Standards(IFRS)as adopted by the European Unio

134、n.Accordingly,these financial statementshave been prepared in accordance with the accounting policiesset out below which are based on the IFRS in issue as adopted by the European Union(EU)and in effect at 31 December 2010.4.Use of accounting estimates and judgementsMany of the amounts included in th

135、e consolidated financialstatements involve the use of judgement and/or estimation.These judgements and estimates are based on managementsbest knowledge of the relevant facts and circumstances,havingregard to prior experience,but actual results may differ fromthe amounts included in the consolidated

136、financial statements.Information about such judgements and estimation is containedin the accounting policies and/or the notes to the consolidatedfinancial statements and the key areas are summarised below:Judgements in applying accounting policies:the directors must judge whether all of the conditio

137、nsrequired for revenues to be recognised in the incomestatement of the financial year,as set out in note 6.4below,have been met;Sources of estimation uncertainty:depreciation rates are based on estimates of the usefullives and residual values of the assets involved(see note 6.6);estimates of future

138、profitability are required for thedecision whether or not to create a deferred tax asset(see note 23);estimates are required as to intangible asset carryingvalues and goodwill impairment charges.These areassessed by reference to budgeted profits and cash flows for future periods for the relevant inc

139、ome generatingunits and an estimate of their values in use(see notes 15 and 16.)warranty provisions are based on estimates of the likelycost of repairing or replacing faulty units.5.Changes in accounting policies5.1Standards adopted for the first timeThe group has adopted IFRS 3 Business Combination

140、s(Revised2008)in its consolidated financial statements,and it has beenapplied prospectively.The new standard has introduced changesto the accounting requirements for business combinations,butstill requires use of the purchase method.In particular,transaction costs must be expensed in the Income Stat

141、ementrather than previously when these were capitalised and dealtwith as part of the acquisition accounting.The group has also adopted IAS 27 Consolidated and SeparateFinancial Statements(Revised 2008)in its consolidated financialstatements,and again this has been applied prospectively,inaccordance

142、with the transitional provisions.The revisedstandard introduces changes to the accounting requirements forthe loss of control of a subsidiary and for changes in the groupsinterest in subsidiaries.There is no immediate effect on thegroups financial statements.IAS 1(Revised 2007)requires presentation

143、of a comparativebalance sheet as at the beginning of the first comparativeperiod,in some circumstances.The directors consider that thisis not necessary this year because the 2008 balance sheet is thesame as that previously published.5.2Standards,amendments and Interpretations to existingStandards th

144、at are not yet effectiveAt the date of authorisation of these consolidated financialstatements,certain new standards,amendments andinterpretations to existing standards have been published aslisted below but are not yet effective,and have not beenadopted early by the group.Management anticipates tha

145、t all of the pronouncements will be adopted in the groups accounting policies for the firstperiod beginning after the effective date of the pronouncement.None of these new standards,amendments and interpretationsis expected to have a significant impact on the groups financial statements.IAS 24(Revis

146、ed 2009)Related Party Disclosures(effective 1 January 2011)IFRIC 19 Extinguishing Financial Liabilities with EquityInstruments(effective 1 July 2010)Disclosures-Transfers of Financial Assets-Amendments toIFRS 7(effective 1 July 2011)Deferred Tax:Recovery of Underlying Assets-Amendments toIAS 12 Inco

147、me Taxes(effective 1 January 2012)6.Accounting policies6.1Basis of consolidationThe consolidated financial statements include those of theparent company and its subsidiaries,all drawn up to 31 December 2010.Subsidiaries are entities over which theNOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTSgroup ha

148、s the power to control the financial and operatingpolicies so as to obtain benefits from their activities.The groupobtains and exercises control through voting rights.Income,expenditure,unrealised gains and intra-group balances arisingfrom transactions within the group are eliminated.Unrealisedlosse

149、s are also eliminated unless the transaction providesevidence of an impairment of the asset transferred.Amountsreported in the financial statements of subsidiaries have beenadjusted where necessary to ensure consistency with theaccounting policies adopted by the group.Acquisitions of subsidiaries ar

150、e dealt with by the purchase method.The purchase method involves the recognition at fair value of allidentifiable assets and liabilities,including contingent liabilities ofthe subsidiary,at the acquisition date,regardless of whether or notthey were recorded in the financial statements of the subsidi

151、aryprior to acquisition.In the case of acquisitions after 31 December2005,goodwill is stated after separating out identifiable intangibleassets.Goodwill represents the excess of acquisition cost overthe fair value of the groups share of the identifiable net assets ofthe acquired subsidiary at the da

152、te of acquisition.The revised standard(IFRS 3R)introduced changes to theaccounting requirements for business combinations.It has beenapplied prospectively to business combinations for which theacquisition date is on or after 1 January 2010.It retains the majorfeatures of the purchase method of accou

153、nting,now referred toas the acquisition method.The most significant change in IFRS 3Rthat had an impact on the groups consolidated financialstatements in 2010 is that acquisition-related transaction costs ofthe combination are now recorded as an expense in the incomestatement.Previously,these costs

154、would have been capitalised aspart of the cost of the acquisition.The parent company is entitled to the merger relief that wasoffered by section 131 of the Companies Act 1985 in respect ofthe fair value of the consideration received in excess of thenominal value of the equity shares issued in connec

155、tion with the acquisition of Fire Testing Technology Limited and UHVDesign Limited.6.2Business combinations completed prior to the date oftransition to IFRSThe group has elected not to apply IFRS 3 BusinessCombinations retrospectively to business combinations prior tothe date of transition to IFRS o

156、n 1 January 2006.Accordinglythe classification of the combination(acquisition,reverseacquisition or merger)remains unchanged from that used underUK GAAP.Assets and liabilities are recognised at the date oftransition if they would be recognised under IFRS,and aremeasured using their UK GAAP carrying

157、amounts immediatelypost-acquisition as deemed cost under IFRS,unless IFRSrequires fair value measurement.Amounts recorded as goodwillunder UK GAAP have not been re-assessed to identifyintangible assets.Deferred tax and minority interest areadjusted for the impact of any consequential adjustments aft

158、ertaking advantage of the transitional provisions.6.3GoodwillGoodwill,representing the excess of the cost of acquisitionover the fair value of the groups share of the identifiable netassets acquired,is capitalised and reviewed annually forimpairment.Goodwill is carried at cost less accumulatedimpair

159、ment losses.Negative goodwill(where the fair value ofnet assets acquired exceeds the purchase price)is recognisedimmediately after acquisition in the income statement.The carrying value of negative goodwill at the date of transitionhas been credited to reserves.There is no reinstatement ofgoodwill o

160、r negative goodwill that was amortised prior totransition to IFRS.6.4RevenueRevenue from the sale of goods is measured by reference to thefair value of consideration received or receivable by the groupfor goods supplied,excluding Value Added Tax,and is recognisedwhen all the following conditions hav

161、e been satisfied:the group has transferred to the buyer the significant risksand rewards of ownership of the goods and effectivecontrol over them,generally on despatch or delivery;the amount of revenue and the costs incurred or to beincurred in respect of the transaction can be measuredreliably;and

162、it is probable that the economic benefits associated withthe transaction will flow to the group.Interest income is recognised using the effective interestmethod which calculates the amortised cost of a financial assetand allocates the interest income over the relevant period.Dividend income is recog

163、nised when the shareholders right toreceive payment is established.6.5Intangible assets acquired as part of a businesscombinationIn accordance with IFRS 3 Business Combinations,an intangibleasset acquired in a business combination is deemed to have acost to the group of its fair value at the acquisi

164、tion date.Thefair value of the intangible asset reflects market expectationsabout the probability that the future economic benefitsembodied in the asset will flow to the group.Amortisation charges are included as adjusting items inoperating costs in the income statement.Amortisation beginswhen the i

165、ntangible asset is first available for use and isprovided at rates calculated to write off the cost of eachintangible asset over its expected useful life,as follows:Customer relationshipsBetween 2 and 3 yearsNon-competition agreements5 yearsDistribution agreements3 yearsResearch and development5 yea

166、rsSales order backlogOn shipmentAdvertisingBetween 1 and 3 yearsDomain names5 years1516Subsequent to initial recognition,intangible assets are stated at deemed cost less accumulated amortisation andimpairment charges.6.6Property,plant and equipmentProperty,plant and equipment is stated at cost,net o

167、fdepreciation and any provision for impairment.Disposal of assets:the gain or loss arising on the disposal of anasset is determined as the difference between the disposalproceeds and the carrying amount of the asset and isrecognised in the income statement.Depreciation:Depreciation is provided at an

168、nual rates calculatedto write off the cost less residual value of each asset over itsexpected useful life,within the following ranges:Property:2%straight-line on cost of buildings(excluding the estimated cost of land)Plant and machinery:15%on written down value to 25%straight-line on cost Fixtures,f

169、ittings15%on written down value to and equipment:33%straight-line on cost Motor vehicles:25%on written down value to 25%straight-line on cost Building 20%straight-line on costimprovements:Material residual value estimates and expected useful lives areupdated as required but at least annually.6.7Impa

170、irment testing of goodwill,other intangible assetsand property,plant and equipmentFor the purposes of assessing impairment,assets are grouped atthe lowest levels for which there are largely independent cashinflows(cash-generating units).As a result,some assets aretested individually for impairment a

171、nd some are tested at cash-generating unit level.Goodwill is allocated to those cash-generating units that are expected to benefit from synergies ofthe related business combination and represent the lowest levelwithin the group at which management monitors goodwill.Cash-generating units to which goo

172、dwill has been allocated aretested for impairment at least annually.All other individualassets or cash-generating units are tested whenever events orchanges in circumstances indicate that the carrying amount maynot be recoverable.An impairment loss is recognised for the amount by which theassets or

173、cash-generating units carrying amount exceeds itsrecoverable amount.The recoverable amount is the higher offair value,reflecting market conditions less costs to sell,andvalue in use based on estimated future cash flows from eachcash-generating unit,discounted at a suitable rate in order tocalculate

174、the present value of those cash flows.The data usedfor impairment testing procedures is directly linked to thegroups latest approved budgets,adjusted as necessary toexclude any future restructuring to which the group is not yetcommitted.Discount rates are determined individually for eachcash-generat

175、ing unit and reflect their respective risk profiles asassessed by the directors.Impairment losses for cash-generating units reduce first thecarrying amount of any goodwill allocated to that cash-generating unit.Any remaining impairment loss is charged prorata to the other assets in the cash-generati

176、ng unit.With theexception of goodwill,all assets are subsequently reassessed forindications that an impairment loss previously recognised mayno longer exist.Impairment charges are included in operatingcosts in the income statement.An impairment charge that hasbeen recognised is reversed if the cash-

177、generating unitsrecoverable amount exceeds its carrying amount.6.8LeasesFor finance leases,in accordance with IAS 17,the economicownership of a leased asset is transferred to the lessee if thelessee bears substantially all the risks and rewards related to theownership of the leased asset.The related

178、 asset is recognised asan asset in the balance sheet at the time of inception of thelease at the fair value of the leased asset or,if lower,the presentvalue of the minimum lease payments plus incidental payments,ifany,to be borne by the lessee.A corresponding amount isrecognised as a finance leasing

179、 liability.The interest element ofleasing payments represents a constant proportion of the capitalbalance outstanding and is charged to the income statementover the period of the lease.All other leases are regarded as operating leases and thepayments made under them are charged to the incomestatemen

180、t on a straight line basis over the period of the leaseterm.Lease incentives are spread over the term of the lease.6.9InventoriesInventories are stated at the lower of cost and net realisablevalue.Costs of ordinarily interchangeable items are assignedusing the first-in,first-out cost formula.Cost in

181、cludes materials,direct labour and an attributable proportion of manufacturingoverheads based on normal levels of activity.6.10 TaxationCurrent tax is the tax currently payable based on taxable profitfor the year.Deferred taxes are calculated using the liability method ontemporary differences.Deferr

182、ed tax is generally provided onthe difference between the carrying amounts of assets andliabilities and their tax bases.However,deferred tax is notprovided on the initial recognition of goodwill,nor on the initialrecognition of an asset or liability unless the related transactionis a business combin

183、ation or affects tax or accounting profit.Deferred tax on temporary differences associated with shares insubsidiaries is not provided if reversal of those temporarydifferences can be controlled by the group and it is probablethat reversal will not occur in the foreseeable future.In addition,tax loss

184、es available to be carried forward as well as otherincome tax credits to the group are assessed for recognition asdeferred tax assets.Deferred tax liabilities are provided in full,with no discounting.Deferred tax assets are recognised to the extent that it isprobable that the underlying deductible t

185、emporary differenceswill be able to be offset against future taxable income.Currentand deferred tax assets and liabilities are calculated at tax ratesthat are expected to apply to their respective period ofrealisation,provided they are enacted or substantively enactedat the balance sheet date.Change

186、s in deferred tax assets or liabilities are recognised as acomponent of tax expense in the income statement,except where they relate to items that are charged or crediteddirectly to equity in which case the related deferred tax isalso charged or credited directly to equity,or where items are recogni

187、sed in other comprehensiveincome,in which case the related deferred tax isrecognised in other comprehensive income.6.11 Share-based paymentsIFRS 2 has been applied,in accordance with IFRS 1 and where theeffect is material,to equity-settled share options granted on orafter 7 November 2002 and not ves

188、ted prior to 1 January 2006.All goods and services received in exchange for the grant of anyshare-based payment are measured at their fair values.Whereemployees are rewarded using share-based payments,the fairvalues of employees services are determined indirectly byreference to the fair value of the

189、 instrument granted to theemployee.This fair value is appraised at the grant date andexcludes the impact of non-market vesting conditions.All equity-settled share-based payments are ultimatelyrecognised as an expense in the income statement,with acorresponding credit to“other reserve”.If vesting per

190、iods or other non-market vesting conditions apply,the expense is allocated over the vesting period,based on thebest available estimate of the number of share options expectedto vest.Estimates are subsequently revised if there is anyindication that the number of share options expected to vestdiffers

191、from previous estimates.Any cumulative adjustment priorto vesting is recognised in the current period.The impact of therevision of the original estimates,if any,is recognised in theincome statement over the remaining vesting period,with acorresponding adjustment to the appropriate reserve.No adjustm

192、ent is made to any expense recognised in priorperiods if share options ultimately exercised are different tothat estimated on vesting.Upon exercise of share options,the proceeds received net ofattributable transaction costs are credited to share capital and,where appropriate,share premium.6.12 Finan

193、cial assetsFinancial assets are assigned to relevant categories bymanagement on initial recognition,depending on the purposefor which they were acquired.At the balance sheet date,thegroup held only loans and receivables.All financial assets are recognised when the group becomes aparty to the contrac

194、tual provisions of the instrument.Loansand receivables are recognised initially at fair value plustransaction costs.Loans and receivables are non-derivative financial assets withfixed or determinable payments that are not quoted in an activemarket.Trade receivables are classified as loans and receiv

195、ables.Loans and receivables are measured subsequent to initialrecognition at amortised cost using the effective interestmethod,less provision for impairment.Any change in their valuethrough impairment or reversal of impairment is recognised inoperating costs in the income statement.Provision against

196、 trade and other receivables is made whenthere is objective evidence that the group will not be able tocollect all amounts due to it in accordance with the originalterms of those receivables.The amount of the write-down isdetermined as the difference between the assets carryingamount and the present

197、 value of estimated future cash flows,discounted at the original effective interest rate.A financial asset is derecognised only where the contractualrights to the cash flows from the asset expire or the financialasset is transferred and that transfer qualifies for derecognition.A financial asset is

198、transferred if the contractual rights toreceive the cash flows of the asset have been transferred or thegroup retains the contractual rights to receive the cash flows ofthe asset but assumes a contractual obligation to pay the cashflows to one or more recipients.A financial asset that istransferred

199、qualifies for derecognition if the group transferssubstantially all the risks and rewards of ownership of the asset,or if the group neither retains nor transfers substantially all therisks and rewards of ownership but does transfer control ofthat asset.6.13 Financial liabilitiesFinancial liabilities

200、 are obligations to pay cash or other financialassets and are recognised when the group becomes a party tothe contractual provisions of the instrument.Financial liabilitiesare recorded initially at fair value net of direct issue costs if theyare not held at fair value through profit or loss.Derivati

201、ves arerecorded at fair value through profit or loss.The fair value ofderivative financial instruments are determined by reference toactive market transactions or using a valuation technique whereno active market exists.All financial liabilities with the exception of ConvertibleRedeemable shares(see

202、 paragraph 6.19)are recorded atamortised cost using the effective interest method,withinterest-related charges recognised as an expense in finance1718cost in the income statement.These financial liabilities includetrade and other payables and borrowings,including bank loans,subordinated loan notes a

203、nd hire purchase commitments.Finance charges,including premiums payable on settlement orredemption and direct issue costs,are charged to the incomestatement on an accruals basis using the effective interest methodand are added to the carrying amount of the instrument to theextent that they are not s

204、ettled in the period in which they arise.A financial liability is derecognised only when the obligation isextinguished,that is,when the obligation is discharged orcancelled or expires.6.14 Cash and cash equivalentsCash and cash equivalents comprise cash on hand and demanddeposits,together with other

205、 short-term,highly liquid investmentsthat are readily convertible into known amounts of cash andwhich are subject to an insignificant risk of changes in value.6.15 PensionsCompanies in the group operate defined contribution pensionschemes for employees and directors.The assets of the schemesare held

206、 by investment managers separately from those of thegroup.The pension costs charged against profits are thecontributions payable to the schemes in respect of the accounting period.6.16 Foreign currenciesTransactions in foreign currencies are translated at the exchangerate ruling at the date of the t

207、ransaction.Monetary assets andliabilities in foreign currencies are translated at the rates ofexchange ruling at the balance sheet date.Exchange differencesarising on the settlement of monetary items or on translatingmonetary items at rates different from those at which they wereinitially recorded a

208、re recognised in the income statement in theperiod in which they arise.6.17 DividendsDividend distributions payable to equity shareholders are includedin trade and other payables when the dividends are approved ingeneral meeting but not paid prior to the balance sheet date.6.18 EquityEquity comprise

209、s the following:“Share capital”represents the nominal value of equity shares.“Share premium”represents the excess over nominal valueof the fair value of consideration received for equity shares,net of expenses of the share issue.“Merger reserve”represents the fair value of theconsideration received

210、in excess of the nominal value ofequity shares issued in connection with acquisitions wherethe company has exercised entitlement to the merger reliefthat was offered by section 131 of the Companies Act 1985.“Retained earnings”represents retained profits and losses.“Revaluation reserve”represents gai

211、ns and losses due tothe revaluation of certain financial assets.“Non-controlling interest”represents retained profits andlosses attributable to minority shareholders in subsidiarycompanies.6.19 Convertible Redeemable sharesUnder the terms of IAS 39 Financial Instruments Recognitionand Measurement,th

212、e Convertible Redeemable shares in thecompany are deemed to represent embedded derivativefinancial instruments.As such,it is a requirement that they befair-valued at each accounting date,with changes in fair-valuebeing recognised through the Statement of ComprehensiveIncome.The fair value is calcula

213、ted by reference to the marketprice of the companys Ordinary shares and the exercise price.6.20 Exceptional itemsThe fair value charge for the Convertible Redeemable shares(see note 25)and the related deferred tax asset representaccounting adjustments reflecting fluctuations in the companysshare pri

214、ce rather than the underlying trading performance ofthe group.As such the directors have concluded that theyshould be treated as exceptional items for the purposes ofpresenting results and earnings per share figures.Exceptionalitems are those which by their size or nature are considered bythe direct

215、ors to be necessary to be disclosed separately so asto inform users of the financial statements.Amortisation ofgoodwill and acquisition costs expensed under IFRS 3R havebeen treated in a similar fashion.7.Segment reporting7.1Identification of reportable segmentsThe groups activities are predominantl

216、y in or in support of thedesign and manufacture of scientific instruments.Separatesubsidiary companies operate to produce the different ranges ofinstruments that fall within the groups portfolio and thesesubsidiaries are considered by the board of directors toconstitute the groups reportable segment

217、s.The group operatesfour main business segments:materials sciences equipment,fibre optic testing equipment,ultra high vacuum manipulationequipment and sample preparation for electron microscopy.7.2Management of operating segmentsEach of the operating segments is managed independently,eachrange of in

218、struments having its individual requirements in termsof design,manufacture and marketing.7.3Measurement policiesThe results of operating segments are prepared by reference totheir contributions to group earnings before interest,tax andamortisation of goodwill and intangible assets(“group EBITA”).Thi

219、s is stated before the allocation of head office costs and afterelimination of minority interest.Assets and liabilities directlyattributable to the activities of the operating segments areincluded in their respective balance sheets;corporate assetsand liabilities held by the parent company are not a

220、llocated to subsidiaries.7.4Segment analysisSegment analysis is as follows:2010Materials Fibre opticUltra high SampleTotalsciences testingvacuum preparationequipmentequipmentmanipulationfor electron equipmentmicroscopy000000000000000Consolidated group revenues from external customers5,6591,8792.9015

221、,56616,005Contributions to group EBITA1,6092296369253,399Depreciation3594950143Amortisation of intangible assets26-4224254Segment assets2,1228111,2792,7266,938Segment liabilities1,4362755831,4033,697Intangible assets-goodwill4,664-5121145,290Other intangible assets53-1365419Additions to non-current

222、assets91313411131,0802009Materials Fibre opticUltra high SampleTotalsciences testingvacuum preparationequipmentequipmentmanipulationfor electron equipmentmicroscopy000000000000000Consolidated group revenues from external customers4,8449732,7292,74911,295Contributions to group EBITA1,40427062342,346D

223、epreciation291447999Amortisation of intangible assets13-4398415Segment assets1,4896121,0591,8384,998Segment liabilities1,2362473338202,636Intangible assets-goodwill3,871-5121144,497Other intangible assets-5589594Additions to non-current assets495401,1771,271Segmental revenue is presented on the basi

224、s of the destination of the goods where known,failing which on the geographical location of customers.Segment assets are based on the geographical location of assets.2010 2009RevenueNon-current RevenueNon-currentassetsassets000 000000000United Kingdom(domicile)1,8996,6651,5646,012Rest of Europe5,916

225、-4,042-United States/Canada2,514-2,157-Rest of the world5,676-3,532-Total16,0056,66511,2956,012197.4 Segment analysis-continuedReconciliations between totals presented by operating segment and the groups consolidated figures are as follows:2010)2009)000)000)Contribution to group EBITATotal contribut

226、ion to group EBITA3,399)2,346)Expenses not allocated(737)(666)Charge relating to derivative financial instruments(1,752)-)Amortisation of intangible assets(254)(415)Expensed acquisition costs(77)-)Elimination of non-controlling interest adjustment in contribution to group EBITA220)2)Operating profit

227、 after exceptional items799)1,267)Interest receivable7)3)Interest payable(137)(110)Profit before tax669)1,160)DepreciationTotal segment depreciation charge143)99)Head office depreciation not allocated8)8)Consolidated depreciation charge151)107)Segment assets and liabilitiesTotal segment assets6,938)

228、4,998)Parent company assets3,062)1,864)Assets eliminated on consolidation(2,064)(357)Other assets-goodwill5,290)4,497)Other assets-intangible assets419)594)Deferred tax348)-)Consolidated total assets13,993)11,596)Total segment liabilities3,697)2,636)Parent company liabilities3,536)3,672)Derivative f

229、inancial instruments1,752)-)Liabilities eliminated on consolidation(2,042)(306)Acquisition related loans1,316)-)Other liabilities119)83)Convertible Redeemable shares12)12)Deferred tax(28)166)Consolidated total liabilities8,362)6,263)Revenues are derived from the sale of manufactured products;revenue

230、s from installation and support services are not material.There are no major customers which make up 10%or more of the groups revenues.Expenses not allocated comprise head office costs.Parent company assets include 569,000(2009:577,000)in respect of a freehold property partly let at open market valu

231、e to a member of the materials sciences equipment segment.208.Operating costs20102009000000Raw materials and consumables6,3164,340Other external charges1,9591,488Staff costs(note 27)4,6973,678Depreciation151107Other operating costs,excluding exceptional items13,1239,613Charge relating to derivative

232、financial instruments1,752-Amortisation of intangible assets254415Acquisition costs77-Total operating costs,including exceptional items15,20610,0289.Operating profit2010)2009)000)000)Operating profit is stated after charging:Loss on disposal of property,plant and equipment11)3)Fees payable to the co

233、mpanys auditorfor the audit of the companys annual accounts21)20)Fees payable to the companys auditor for otherservices:for the audit of the companys subsidiaries,pursuant to legislation43)37)for tax services10)14)for corporate finance transactions14)-)for all other services21)4)Depreciation151)107)

234、Loss/(profit)on foreign exchange85)(11)Amortisation of intangible assets254)415)Operating lease rentals-land and property224)195)Operating lease rentals-vehicles23)9)In addition,fees of 39,000 were paid to the auditor in 2009 in respectof work undertaken in connection with the acquisition of subsidi

235、arycompanies.These costs were included in investments in subsidiaries inthe parent companys financial statements.Equivalent fees paid in 2010were expensed as required by IFRS 3R and are shown above.10.Interest receivable and payable2010)2009)000)000)Interest receivable-short-term bank deposits7)3)In

236、terest payable-bank and hire purchase loans(132)(97)Interest payable-loan notes(5)(13)(137)(110)Net interest payable130)107)11.Taxation2010)2009)000)000)UK corporation tax at 28%(2009:28%)775)460)-current year-prior years(48)(1)727)459)Deferred tax-origination and reversal of temporary differences:C

237、urrent year-excluding derivative financial(74)(132)instruments-derivative financial instruments(473)-)(547)(132)Prior years(11)(2)(558)(134)Tax on profit for the year -current year228)328)-prior years(59)(3)169)325)Factors affecting the tax charge for the year:Profit before tax669)1,160)Profit befor

238、e tax multiplied by standard rate of UK corporation tax of 28%(2009 28%)187)325)Tax relief available on purchased goodwill-)(12)Provisions and expenditure not deductible 47)19)for tax purposesMarginal relief-(4)Change in the rate of corporation tax(28%to 27%for deferred tax)(6)-)Tax on profit for th

239、e year -current year228)328)-prior years(59)(3)Total net taxation charge169)325)12.Dividends20102009p/share000 p/share000Final dividend for the previous year3.71542.497Interim dividend for the current year2.51051.3526.22593.7149The directors will propose a final dividend of 5.0p per share,amounting

240、to 209,000,for payment on 1 July 2011.As thisremains conditional on shareholders approval,provision has notbeen made in these consolidated financial statements.Dividends declared by the groups 51%owned subsidiary arepaid to the non-controlling interest in the period they aredeclared and amounted to

241、83,300 in the year(2009:nil).2113.Earnings per shareOptions and warrants over Ordinary shares and rights ofconversion of the Convertible Redeemable shares are described innotes 24 and 25.The calculation of the basic earnings per share isbased on the earnings attributable to Ordinary shareholdersdivi

242、ded by the weighted average number of shares in issue duringthe period.The calculation of diluted earnings per share is basedon the basic earnings per share,adjusted to allow for the issue ofshares on the assumed conversion of all dilutive options and otherdilutive potential Ordinary shares in line

243、with the treasury methodprescribed in IAS 33.This regards the assumed proceeds fromthese instruments as having been received from the issue ofOrdinary shares at the average market price of Ordinary sharesduring the period.The difference between the number of ordinaryshares issued on the assumed exer

244、cise of the dilutive options andwarrants and the number of Ordinary shares that would havebeen issued at the average market price of Ordinary shares duringthe period is treated as an issue of Ordinary shares for noconsideration,and thus dilutive.Reconciliations of the earnings and the weighted avera

245、ge numberof shares used in the calculations are set out below:Year to 31 December 2010Earnings WeightedEarningsattributable average per shareto equity number of holders of sharesthe parent company000no.penceProfit after tax including exceptional 333items for calculation of basic and diluted earnings

246、 per shareAdd-back exceptional items:Charge relating to derivative1,279financial instruments,net of taxAmortisation of intangible assets,183net of taxAcquisition-related transaction65costs,net of taxBasic and diluted profit after tax,1,860excluding exceptional itemsNumber of shares for calculation o

247、f 4,131,588basic earnings per share including exceptional itemsDilutive effect of potential shares134,197Number of shares for calculation of4,265,785 diluted earnings per share including exceptional itemsDilutive effect of potential derivative265,603 financial instrumentsNumber of shares for calcula

248、tion of4,531,388 diluted earnings per share excluding exceptional itemsBasic earnings per share(including exceptional items)8.1Diluted earnings per share(including exceptional items)7.8Basic earnings per share(excluding exceptional items)45.0Diluted earnings per share(excluding exceptional items)41.

249、0Year to 31 December 2009EarningsWeighted Earningsattributable averageper shareto equity number ofholders of sharesthe parent company000no.penceProfit after tax including exceptional 832items for calculation of basic and diluted earnings per shareAdd-back exceptional items:299amortisation of intangi

250、ble assets,net of taxBasic and diluted profit after tax,1,131 excluding exceptional itemsNumber of shares for calculation of4,038,434basic earnings per shareDilutive effect of potential shares108,212Number of shares for calculation of4,146,646diluted earnings per shareBasic earnings per share(includ

251、ing exceptional items)20.6Diluted earnings per share(including exceptional items)20.1Basic earnings per share(excluding exceptional items)28.0Diluted earnings per share(excluding exceptional items)27.32214.Property,plant and equipmentPlant&Fixtures,)Motor)PropertyTotal)machineryfittings&)vehicles)&b

252、uilding equipment)improvements000000)000)000000)Cost/deemed cost1 January 2009341215)51)6451,252)Additions593)14)13125)Acquisitions838)-)-46)Disposals-(6)(13)-(19)31 December 2009354340)52)6581,404)Additions12252)34)-208)Acquisitions-1)-1)Disposals-(69)(19)-(88)31 December 2010476324)67)6581,525)Dep

253、reciation1 January 200922990)23)49391)Charge4746)9)5107)Disposals-(4)(11)-(15)31 December 2009276132)21)54483)Charge4783)12)9151)Disposals-(56)(9)-(65)31 December 2010323159)24)63569)Net book value 31 December 2010153165)43)595956)Net book value 31 December 200978208)31)604921)15.Goodwill20102009000

254、000Cost1 January4,4974,383Addition in year79311431 December5,2904,497An analysis of goodwill by business segment is given in note 7.The increase in goodwill during 2010 related to the acquisitionof Sircal Instruments(UK)Limited.There have been no impairment charges in either 2010 or 2009.Goodwill is

255、 tested annually for impairment by reference to thevalue in use of the relevant cash generating units,which are thegroups business segments.This is calculated on the basis ofprojected cash flows for the following five years derived fromdetailed budgets for the ensuing year based on past experience,w

256、ith subsequent years including modest nominal rates of salesand cost growth of 3%per annum and generally steady grossmargins.These cash flows are adjusted to present day values ata discount rate based on a weighted average cost of capital of11.88%(2009:12.04%)per annum,calculated by reference toyear

257、-end data on equity values and interest,dividend and taxrates.The residual value at the end of the five years,computedby reference to projected year six cash flows and discounted,isalso included.There was no requirement for any impairmentprovision at 31 December 2010.The directors have considered th

258、e sensitivity of the keyassumptions and have concluded that any possible changes thatmay be reasonably contemplated in these key assumptionswould not result in the value in use falling below the carryingvalue of goodwill,given the amount of headroom available.2316.Other intangible assetsNon-Distribu

259、tion Research Sales orderBrand and Customer Totalcompete agreementsand develop-backlogdomain relation-agreementmentnamesships000000000000000000000Gross carrying amount1 January 20092398-916209427Additions-398180244164-98631 December 2009234961803351702091,413Additions-772-7931 December 2010234961803

260、422422091,492Amortisation and impairment1 January 20091498-916195404Charge for the year47420244591441531 December 2009181722033565209819Charge for the year413336774-25431 December 201022305563421392091,073Carrying amount 31 December 20101191124-103-419Carrying amount 31 December 20095324160-105-594A

261、n analysis of other intangible assets by business segment is given in note 7.The additions to other intangible assets during 2010 related to the acquisition of Sircal Instruments(UK)Limited.17.Inventories20102009000000Raw materials1,521959Work in progress349253Finished goods53291,9231,241In 2010,a t

262、otal of 6,316,000 of inventories was included in theincome statement as an expense(2009:4,340,000).Thisincludes an amount of 85,000(2009:15,000)resulting fromwrite-downs of inventories.The carrying amount of inventoriesheld at fair value less costs to sell is 23,000(2009:10,000).There were no revers

263、als of previous write-downs that wererecognised in the income statement in either 2010 or 2009.Allgroup inventories form part of the assets pledged as security inrespect of bank loans.18.Trade and other receivables20102009000000Trade receivables2,1991,557Prepayments and accrued income160140Other rec

264、eivables1561062,5151,803The carrying value of receivables,all of which are short-term,isconsidered a reasonable approximation of fair value.All tradeand other receivables have been reviewed for impairment withno material provision being required.In addition,some of the unimpaired trade receivables w

265、ere pastdue at the balance sheet date as follows:20102009000000Not more than 3 months958479More than 3 months but not more than 6 months4317More than 6 months but not more than 1 year-1Greater than one year-121,0015092419.Trade and other payablesTrade and other payables20102009000000Trade payables1,

266、368675Accruals and deferred income891753Social security and other taxes241231Other payables2305382,7302,197All amounts are short-term and their carrying values are consideredreasonable approximations of fair value.Other payables also include12,500 of non equity shares classed as financial liabilitie

267、s(see note 25).20.Current portion of long-term borrowings20102009000000Bank loan800150Subordinated loan notes-500800650All amounts are short-term and their carrying values are consideredreasonable approximations of fair value.The subordinated loan noteswere repaid during the year.21.Long-term borrow

268、ings20102009000000Bank loan2,5302,590The bank loan is secured on assets of the group,is repayable inquarterly instalments over the period ending 30 June 2014 andbears interest at 31/4%above LIBOR-related rates.Therepayment profile of borrowings is as set out in note 22.22.Maturity of borrowings and

269、net debt31 December 2010Bank SubordinatedTotalloanloan notes000000000Repayable in less than475-4756 monthsRepayable in months466-4667 to 12Current portion of long-term 941-941borrowingsRepayable in years 1 to 52,708-2,708Total borrowings3,649-3,649Less:interest included above319cash and cash equival

270、ents2,542Total net debt78831 December 2009Bank loan SubordinatedTotalloan notes000000000Repayable in less than1205056256 monthsRepayable in months170-1707 to 12Current portion of long-term 290505795borrowingsRepayable in years 1 to 52,927-2,927Total borrowings3,2175053,722Less:interest included abov

271、e482cash and cash equivalents2,540Total net debt700A proportion of the groups bank loans is drawn in foreigncurrencies to provide a hedge against assets denominated inthose currencies.The Sterling equivalent at 31 December 2010of loans denominated in US$was 1,094,000(2009:765,000)and in Euros was 65

272、2,000(2009:777,000).These amountsare included in the figures above for bank loans,repayable inyears 1 to 5.The subordinated loan notes were repaid in 2010.2523.Deferred tax assets/(liabilities)2010)2009)000)000)1 January(188)(34)Acquisition in year amount recognised-)(11)Acquisition in year attribut

273、able to intangible assets(22)(277)Credit to income statement in the year85)134)Attributable to the derivative financial instruments473)-)31 December348)(188)Deferred tax balances relate to temporary differences as follows:Accelerated capital allowances(27)(39)Provisions allowable for tax in subseque

274、nt period16)17)Goodwill and other intangible assets(114)(168)Fair value adjustment arising on acquisition of FTT-)2)Attributable to the derivative financial instruments473)-)Total348)(188)Amounts provided in respect of deferred tax are computed at27%(2009:28%).The group has unrelieved tax losses at

275、31 December 2010 of325,000(2009:325,000).The group has not recognised adeferred tax asset(2010:88,000;2009:91,000)in respect ofthese losses as it is not considered probable that taxable profitswill be available in the near term against which they can beutilised.However they are available to be offse

276、t against futureprofits of the parent company.24.Share capital20102009000000Authorised-Ordinary shares of 5p each10,000,000 shares500500Allotted,called up and fully paid-Ordinary shares of 5p each1 January:4,040,678 shares(2009:4,037,678)202202Exercise of share options:6,000 shares(2009:3,000)-Exerc

277、ise of warrants to subscribe:133,564 shares7-31 December:4,180,242 shares(2009:4,040,678)209202Allotments of shares in 2010 were made to satisfy the exercise of3,000 share options on each of 27 September 2010 and 19November 2010 when the share price was 322p and 410prespectively and to satisfy the e

278、xercise of warrants to subscribe for133,564 shares on 20 May 2010 when the share price was 180p.The allotment in 2009 was made to satisfy the exercise of shareoptions on 20 October 2009 when the share price was 177p.Equity share options and warrantsAt 31 December 2010,options had been granted and re

279、mainedoutstanding in respect of 307,000 Ordinary shares in thecompany,all priced by reference to the mid-market price of theshares on the date of grant and all exercisable,following a 3-year vesting period,between the third and tenth anniversariesof grant,as below:2010 2009Number)Weighted Number)Wei

280、ghtedaverage averageexercise exercisepricepricep/sharep/share2005 Approved PlanOutstanding at 1 January179,850)104.8141,450)109.2Granted in year22,000)169.244,400)92.0Exercised or lapsed in year(3,000)94.0(6,000)113.8Outstanding at 31 December 198,850)112.1179,850)104.8Of which exercisable at84,000)

281、100.825,000)103.531 December2005 Unapproved PlanOutstanding at 1 January111,150)104.695,550)106.7Granted in year-)-15,600)92.0Exercised or lapsed in year(3,000)103.5-Outstanding at 31 December 108,150)104.7111,150)104.6Of which exercisable at67,000)100.356,000)102.031 DecemberTotalOutstanding at 1 J

282、anuary291,000)104.7237,000)108.2Granted in year22,000)169.260,000)92.0Exercised or lapsed in year(6,000)98.8(6,000)113.8Outstanding at 31 December307,000)109.5291,000)104.7Of which exercisable at31 December151,000)100.681,000)102.5Exercise prices at 31 December 2010 ranged from 92p/share to191.5p/sh

283、are(2009:92p/share to 124p/share),with a weightedaverage remaining contractual life of 6.92 years(2009:7.83years).Options over 37,000 shares were conditional upon theachievement of earnings targets in 2009 and 2010.2624.Share capital-continuedOptions have been granted to two directors as follows:Num

284、ber of sharesMr D BarnbrookMr R L Cohen20 October 2005 at 101.5p5,00037,00022 March 2006 at 103.5p10,000-23 March 2007 at 106.5p10,000-24 September 2007 at 94p5,00010,00028 April 2008 at 124p10,00010,00023 July 2009 at 92p10,00010,00050,00067,000The market price of the companys Ordinary shares on 31

285、 December 2010 was 367.5p,the highest price during 2010was 446.5p on 4 November,the lowest price during 2010 was119.5p on 4 to 7 January and the price on 25 March 2011 was462.5p.In accordance with IFRS 2,a Black Scholes valuation model hasbeen used.This has indicated that no material expense isrequi

286、red to be charged for the years ended 31 December 2010 and 31 December 2009.As such,no adjustment has been made to either the consolidated or parent companyfinancial statements.Warrants to subscribeUnder an agreement dated 22 October 2004,Invex Capital LLPwas granted unquoted warrants to subscribe f

287、or Ordinaryshares in the company in connection with the acquisition of FireTesting Technology Limited.These warrants had an exerciseprice of 1 per share,related to 133,564 shares and wereexercised on 20 May 2010.Loeb Aron&Company Limited,the brokers who conducted ashare placing in 2008,were granted

288、unquoted warrants tosubscribe for Ordinary shares in the company at an exerciseprice of 1.10 per share,expiring on 20 May 2013 and relatingto 23,840 shares.The Loeb Aron warrants have not beenaccounted for in accordance with IFRS 2 on the grounds of materiality.Convertible Redeemable sharesThe conve

289、rsion rights set out in note 25 would have resulted in the issue of 570,033 Ordinary shares if conversion of all the Convertible Redeemable shares had taken place on 31 December 2010.25.Shares classed as financial liabilities20102009000000Authorised5,000,000 Convertible Redeemable shares of 1p each5

290、050Allotted,called up and fully paid5,000,000 Convertible Redeemable shares of 12121p each quarter paidIn accordance with IAS 32,Financial Instruments:Presentation,theConvertible Redeemable shares are classified as financial liabilities.Under the terms of IAS 39 Financial Instruments,Recognition and

291、Measurement,the conversion feature within the ConvertibleRedeemable shares is deemed to represent an embeddedderivative financial instrument.As such,it is a requirement thatthey be fair-valued at each accounting date,with changes in fair-value being recognised through the Statement of ComprehensiveI

292、ncome.The recent increase in the market price of the companysOrdinary shares has correspondingly increased the fair value of theConvertible Redeemable shares,resulting in a 1,752,000 chargebefore tax(1,279,000 after tax)in the year ended 31 December2010 relating to the derivative financial instrumen

293、t(2009:nil).Under the Articles of Association the principal conditionsattached to the Convertible Redeemable shares are as follows:There is no right to participate in the profits of the company.On a winding up or other return of capital,any surplusassets remaining after payment of liabilities shall

294、be applied:i)Firstly in equally repaying the paid up capital on boththe Ordinary shares and the Convertible Redeemableshares;ii)Secondly in distributing the remainder amongst theholders of the Ordinary shares according to theamounts paid up.The holders of the Convertible Redeemable shares are notent

295、itled to attend or vote at General Meetings of thecompany unless the meeting is to consider a resolution forthe winding up of the company.The Convertible Redeemable shares are convertible nolater than 31 December 2014 into such number ofOrdinary shares as would represent 12%of the companysOrdinary s

296、hare capital as enlarged if all convertible shareswere converted;the exercise price is 95p per Ordinaryshare less amounts already paid on the ConvertibleRedeemable shares.The holders of Convertible Redeemable shares shall(subject to the provisions of the Companies Acts)beentitled at any time to rede

297、em all or any of theConvertible Redeemable shares outstanding out of anyprofits or monies of the company which may lawfully beapplied for such purpose.2726.Emoluments of directors and key management personnel20102009no.no.Executive directors33Non-executive directors3366000000Total directors emolumen

298、ts:Emoluments 405399Defined contribution pension scheme contributions1010415409Emoluments of the highest paid director:Emoluments 127118Defined contribution pension scheme contributions55132123During the year two directors participated in a defined contributionpension scheme(2009:two)Compensation of

299、 key management personnel20102009000000Emoluments,benefits,pension contributions and 871797social security costsShort term employee benefits:Salaries including bonuses and social security costs 820751Company car allowance and other benefits2519Total short term employee benefits845770Post-employment

300、benefits:Defined contribution pension plans2627Total post-employment benefits:2627Total remuneration871797Key management personnel comprise directors of the parentcompany and the managing directors of the principal operatingcompanies.The compensation of the non-executive directors ofthe parent compa

301、ny is determined by the Board of directors asa whole,that of the executive directors of the parent companyis determined by the Remuneration Committee of the Board(comprising the non-executive directors)and that of themanaging directors of the principal operating companies isdetermined by the group C

302、hief Executive.27.Employees20102009no.no.Number of employeesBy function manufacturing5645 sales and administration614511790By business segmentmaterials sciences equipment3933fibre optic testing equipment119ultra high vacuum manipulation equipment2723sample preparation for electron microscopy(pro-rat

303、a for 2009 30 at end of 2009)3217head office(including 3 non-executive directors 88in both years)11790Employment costs20102009000000Wages and salaries4,1473,248Social security costs438348Pension costs112824,6973,67828.Financial instrumentsThe groups policies on treasury management and financialinstr

304、uments are given in the directors report.Fair value of financial instruments Financial instruments include the borrowings set out in note 22.All financial instruments denominated in foreign currencies aretranslated at the rate of exchange ruling at the balance sheetdate.The directors believe that th

305、ere is no material differencebetween the book value and fair value of all financialinstruments.Borrowing facilitiesThe group had an undrawn committed overdraft facility of500,000 at 31 December 2010(2009:500,000).Trade payablesAll amounts are short-term(all payable within six months)andtheir carryin

306、g values are considered reasonable approximationsof fair value.The values are set out in note 19.28Fair value hierarchyThe fair value hierarchy has the following levels:Level 1:quoted prices(unadjusted)in active markets foridentical assets or liabilities Level 2:inputs other than quoted prices inclu

307、ded withinLevel 1 that are observable for the asset or liability,eitherdirectly(ie as prices)or indirectly(ie derived from prices)Level 3:inputs for the asset or liability that are not basedon observable market data(unobservable inputs).The derivative financial instruments in respect of the Converti

308、bleRedeemable shares are measured at fair value in accordance withthe fair value hierarchy and are classed as level 2.Summary of financial assets and financial liabilities by category2010)2009)000)000)Financial AssetsTrade and other receivables 2,355)1,663)Cash and cash equivalents2,542)2,540)Loans

309、and receivables4,897)4,203)Financial LiabilitiesDerivative financial instruments1,752)-)Financial liabilities designated at fair value 1,752)-)through profit or lossTrade payables1,368)675)Accruals891)753)Other payables230)538)Current portion of long-term borrowings800)650)Long-term borrowings2,530)

310、2,590)Financial liabilities measured at amortised cost5,819)5,206)Other financial liabilities7,571)5,206)Net financial liabilities(2,674)(1,003)Non financial assets and financial liabilities not within the scope of IAS 39Property,plant and equipment956)921)Goodwill5,290)4,497)Other intangible assets

311、419)594)Inventories1,923)1,241)Prepayments and accrued income160)140)Social security and other taxes(241)(231)Current tax payable(550)(638)Deferred tax assets/(liabilities)348)(188)8,305)6,336)Total equity5,631)5,333)Financial assetsThe groups financial assets(which are summarised in note 29 credit

312、risk)comprise cash and cash equivalents and tradeand other receivables.The amounts derived from these assets and included asinterest income in the income statement are 7,000(2009:3,000).Cash and cash equivalents are principally denominated insterling and earn interest at floating rates.There is no m

313、aterial difference between the book and fairvalues of the financial assets.At 31 December 2010 the group had trade receivablesdenominated in foreign currency as follows:Euros-118,000(2009:358,000),US Dollars-598,000(2009:408,000)and Japanese Yen-2,000(2009:35,000).Financial liabilitiesThe groups pri

314、ncipal financial liabilities are bank loans,trade andother payables,derivative financial instruments and ConvertibleRedeemable shares classed as financial liabilities:The costs attributable to these liabilities and included asinterest expense in the income statement amounted to137,000(2009:110,000),

315、as analysed in note 10.Foreign exchange losses attributable to bank loans(seebelow)and included as operating costs in the incomestatement amounted to 4,000(2009:gain of 93,000);this approximately equates to the foreign exchange gainsarising in the subsidiary companies whose currencyexposure the fore

316、ign exchange bank loans are designed to hedge.A proportion of the bank loans are denominated in foreigncurrencies to provide a hedge against currency risk ongroup assets,as described in note 22.29.Risk management objectives and policiesThe group is exposed to market risks,arising predominantly fromc

317、urrency exposure resulting from its export activities,interestrate fluctuation on its loans and deposits and credit and liquidityrisks.Risk management strategies are co-ordinated by the boardof directors of the parent company.Foreign currency sensitivityThe group exports a substantial proportion of

318、its sales,frequentlydenominated in foreign currencies(principally in US$and Euros).Exposure to currency rate fluctuations exists from the moment asales order is confirmed through to the time when the relatedremittance is converted into Sterling.This exposure is computedmonthly(along with offsetting

319、exposure on purchases,generally ofminimal amounts)and counter-balanced by the conversion of aproportion of the groups bank loans into equivalent foreigncurrencies.The net exposure to risk is therefore substantiallyreduced.Residual exposure is the difference between the netexposure and the converted

320、bank loans,both translated intoSterling at each date of measurement.293029.Risk management objectives and policies-continued31 December 2010Sterling)Sterling)equivalent)equivalent)of US$)of)000)000)Sterling loans denominated in foreign 1,094)652)currencies at year-endResidual exposure at year-end(29

321、)(14)shortImpact on pre-tax profits of a 5%1)1)variation in exchange rate on year-end residual exposureImpact on equity of a 5%variation 1)1)in exchange rate on year-end residual exposure31 December 2009Sterling)Sterling)equivalent)equivalent)of US$)of)000)000)Sterling loans denominated in foreign 7

322、65)777)currencies at year-endResidual exposure at year-end(57)486)(short)/longImpact on pre-tax profits of a 5%3)24)variation in exchange rate on year-end residual exposureImpact on equity of a 5%variation 2)18)in exchange rate on year-end residual exposureInterest rate sensitivityThe groups interes

323、t rate exposure arises in respect of its bank loans,which are LIBOR-linked for interest rate purposes and its surplus funds,which are bank base-rate-linked.The groups sensitivity to interest ratechanges is as follows:20102009000000Bank loans outstanding at year-end3,3302,740Impact on pre-tax profits

324、 of a 1%change 3327in LIBORImpact on equity of a 1%change in LIBOR2419Surplus funds at year-end 2,5422,040(2009:less subordinated loan notes)Impact on pre-tax profits of a 1%change in 2520bank base ratesImpact on equity of a 1%change in bank base rates1814Credit riskThe groups exposure to credit ris

325、k is limited to the carryingamounts of financial assets recognised at the balance sheet date,as follows:20102009000000Cash and cash equivalents2,5422,540Trade and other receivables2,5151,8035,0574,343The group reviews the credit risk relating to its customers byensuring wherever possible that it dea

326、ls with long establishedtrading partners,and agents and government/university backedbodies,where the risk of default is considered low.Whereconsidered appropriate,the group insists on up-front paymentand requires letters of credit to be provided.The directorsconsider that all the groups financial as

327、sets that are notimpaired at each of the reporting dates under review are ofgood credit quality,including those that are past due(see note18).None of the financial assets are secured by collateral orother credit enhancements.Group companies generally trade through overseas agents and credit exposure

328、 to an individual agent can be significant attimes.At 31 December 2010,one counterparty owed morethan 10%of the groups total trade and other receivables,being the China agent of Fire Testing Technology Limited(19.1%)(2009:none).The credit risk for liquid funds and other short-term financialassets is

329、 considered small.The substantial majority of theseassets is deposited with Bank of Scotland,part of the LloydsBanking Group.The British Government holds a substantialinterest in this group.Liquidity riskThe groups longer-term financing needs,principally in respect ofbusiness acquisitions,are satisf

330、ied by bank loans,with theobjective of servicing repayments from the cash flow arisingfrom the businesses acquired.For short and medium termfinancial needs,the group regularly compares its projectedrequirements with available cash and borrowing facilities;thedirectors continue to augment existing ca

331、sh surpluses with a500,000 borrowing facility from the groups bank to provide anadditional margin of liquidity.The periods of maturity of the groups borrowings are set outin note 22.The maturity of all trade and other payables is withinthe period of less than six months.31Price riskThe groups price

332、risk exposure arises in respect of the value ofthe derivative financial instrument which is affected byfluctuations in the companys share price.The groups sensitivityto such changes is as follows:20102009000000Operating profit7991,267Impact on pre-tax profits of a 10%change in 236n/ashare price30.Op

333、erating lease commitments20102009000000Operating lease payments expensed during the year:Land and property224195Vehicles239247204Minimum operating lease commitments falling due:Within one year Land and property213184Within one year Vehicles1821231205Between one and five years Land and property375346Between one and five years Vehicles1739392385Total commitment623590Land and property leases represen