1、Judges Scientific plcANNUAL REPORT&ACCOUNTS 2013Consolidated financial statementsChairmans statement2 3Strategic report4 5Directors report6 8Independent auditors report9Consolidated statement of comprehensive income10Consolidated balance sheet11Consolidated statement of changes in equity12Consolidat
2、ed cash flow statement13Notes to the consolidated financial statements14 32Parent company financial statementsIndependent auditors report34Parent company balance sheet35Notes to the parent company financial statements36 39Company meetingsNotice of Annual General Meeting40 41Form of Proxy for the Ann
3、ual General Meeting43 44Front Page:FTT iCone Calorimeter-the new benchmark in calorimetryThe Cone Calorimeter is the mostsignificant bench scale instrument in the field of fire testing.It measuresimportant real fire properties of thematerial being tested under a variety of pre-set conditions.The new
4、 iConeCalorimeter developed by Fire TestingTechnology features an interactive andintuitive interface,sophisticated controloptions and ConeCalc software.It incorporates many new features not seen by fire testing laboratories up untilnow while being compact,accurate,reliable and easily maintained.CONT
5、ENTSRevenue Adjusted operating profit Adjusted operating profit as a percentage of revenue25,00030,00020,00015,00010,0005,00025%20%15%10%5%Dec 2005000Dec 2006Dec 2007Dec 2008Dec 2009Dec 2010LLLLLDec 2011Dec 2012LRevenue and adjusted operating profitEarnings,dividends and share priceDividend per shar
6、e Adjusted basic earnings per share Share price in pence120.0100.080.060.040.020.0-Dvidend per share in pence.Earnings per share in pence2,550.002,050.001,550.001,050.00550.0050.00Balance of net debt existing at previous year-endNet debt arising in year from new acquisitions5,0003,0002,0001,00090%80
7、%70%60%50%40%30%20%10%0%ageAdjusted net debtLL%ageShare price in pence1Dec 201340,0000%LLDec 2005Dec 2006Dec 2007Dec 2008Dec 2009Dec 2010Dec 2011Dec 2012Dec 2013Dec 2005Dec 2006Dec 2007Dec 2008Dec 2009Dec 2010Dec 2011Dec 2012Dec 20134,0000006,000CHAIRMANS STATEMENTI am pleased to be able to report,f
8、or theeighth consecutive year,record levels ofsales,adjusted pre-tax profits,adjustedearnings per share and dividends.Your Company enjoyed a successful year,which saw further corporate activity and asatisfactory trading performance achieved ina challenging economic environment.Group revenues for the
9、 financial year ended31 December 2013 advanced 28%from28.0 million to 36.0 million.This reflectsorganic growth of 4.3%plus a full yearscontribution from Global Digital SystemsLimited(“GDS”-ten months in 2012)and amaiden six-month contribution fromScientifica Limited(“Scientifica”).Profit before tax,
10、exceptional items andminorities increased by 30%to a record7.3 million(2012:5.6 million),with theoperating contribution of the businessesowned as at 1 January 2012 growing by13.8%.Basic earnings per share,beforeexceptional items,rose by 24%from 81.3p to100.5p.This increase was achieved despitethe di
11、lution created by the 2012 and 2013share placings and the conversion in 2012 ofalmost all of the Convertible Redeemableshares.Only 4.2%of the original ConvertibleRedeemable shares now remain outstanding.Fully diluted earnings per share,beforeexceptional items,progressed 31%to 96.4p(2012:73.5p).Excep
12、tional items include the amortisation ofintangible assets,acquisition expenses,taxrelief arising from the issue of shares toemployees and other non-trading items asset out in the income statement.The accounting“loss”attributable to the fewremaining Convertible Redeemable shareswas reduced from 1.6 m
13、illion to 340,000;this adjustment is expected to appear for thelast time in 2014.Profit,including exceptionalitems but before tax and minorities,amounted to 1.2 million(2012:321,000).Including exceptional items,basic earningsper share amounted to 23.4p(2012:4.2ploss)while fully diluted earnings per
14、sharetotalled 22.5p(2012:4.2p loss).Corporate activityOn 26 June 2013,Judges acquired the entireshare capital of Scientifica,a leading specialistin the design and manufacture of systemsused in neuroscience research.The consideration amounted to 12.0 millionin cash and an earn-out capped at 500,000in
15、 cash and 42,372 Ordinary shares in Judges.The earn-out is based on Scientificas financialperformance in respect of the 12 monthperiod to 31 March 2014.The acquisitionwas financed by an extension of the facilitiesprovided by Lloyds Bank Corporate Marketsand from existing cash resources.In October 20
16、13,the Company restored itsability to complete further acquisitions byraising new equity of 8.125 million beforeexpenses.This was achieved through aplacing of 500,000 new Ordinary sharespriced at 1625p,which was substantially over-subscribed.In the main,the newOrdinary shares were placed with existi
17、ngand several new institutional holders.Trading in 2013In common with many companies operatingwithin our sector,the year under reviewproved distinctly challenging.Despite apromising start,the Company experiencedweak order intake,particularly during thesecond quarter of the year.A gradualimprovement
18、as the year progressedculminated in an excellent fourth quarter.I am pleased to report that this leaves theGroup with a comfortable year-end orderbook of ten and a half weeks of budgeted sales.Supported by a healthy order book at thebeginning of 2013 and thanks in part to thediversity of the markets
19、 that we serve,theGroup produced 4.3%organic growth inrevenues.This encompassed a modestreduction in North America,but a solidadvance in Europe.The respective revenuesof GDS and Scientifica,both of which haveincreased strongly post acquisition,are notincluded in the figures for organic growth,these
20、companies having been acquired afterJanuary 2012.Judges Chairman,Alex Hambro2As highlighted in previous annual reports,theinevitable consequence of a large acquisitionat a multiple of six times EBIT is to reducethe Companys Return On Total InvestedCapital;this was again the case withScientifica whic
21、h served to reduce ROTICfrom 40.3%in 2012 to 30.2%in 2013.The development of the Stonecross factorywas completed in the summer of 2013 andthe UHV Design and Quorum businesseswere successfully re-located into the newfacility in August.Your Board expects thesebusinesses to derive significant benefitsd
22、uring the current financial year and beyondfrom operating in this purpose-built unit.Financial positionNet debt as at 31 December 2013 stood at5.5 million;excluding subordinated debtowed to minority shareholders but includingcash amounts still payable in respect ofacquisitions,this figure rises to 5
23、.7 million(2012:1.7 million).The Groups cashposition during the year reflected 12.4million of net debt taken on to purchaseScientifica,1.8 million spent in 2013 tocomplete the Stonecross factory and the net proceeds from the share placing.Year-end cash balances progressed from5.4 million to 10.1 mil
24、lion.DividendsYour Board is pleased to recommend a finaldividend of 13.4p per share(2012:10p pershare)which,subject to approval at theforthcoming Annual General Meeting on 28 May 2014,will make a total distribution of 20.0p per share in respect of 2013(2012:15.0p per share).Despite theproposed incre
25、ase,the dividend total is still covered five times by adjusted earningsper share.The proposed final dividend will be payableon 4 July 2014 to shareholders on theregister on 6 June 2014 and the shares willgo ex-dividend on 4 June 2014.PersonnelThe Judges Share Incentive Plan waslaunched in 2012 to en
26、able all employeeswith a minimum of 12 months service topurchase shares in a tax efficient manner.In the coming tax year,the Company willcontinue to match individual employeesinvestments with free shares,up to amaximum value of 600.The addition of Scientifica brings our totalnumber of Group employee
27、s to more than260 at the end of 2013.Each companywithin the Group has,in its own way,demonstrated resilience and dedication to its particular plans and the enthusiasm andenergy of our stakeholders is the primaryreason why this years results have been sogratifying.Our thanks go to them and all theexe
28、cutive management for their continuedcommitment to Judges future trajectory.Current trading and prospectsCommercial activity in the early weeks of2014 was sedate but,following the buoyantfinal quarter of the previous year,the Groupcontinues to enjoy a robust order book.As in the past we are consciou
29、s of thepotential impact of Sterling strengtheningand of the Chinese economy weakening.Our export driven business should benefitfrom the best climate in the developedworld since 2008 and it is hoped that it willnot be spoilt by the political tensions playingout on the world stage.Alex HambroChairman
30、Date:27 March 20143STRATEGIC REPORTGroup activities and strategyThe company is the parent of a trading group involved in the designand manufacture of scientific instruments.Since its entry into this fieldof activity in 2005,the companys strategy has been to develop itsbusiness through a“buy-and-buil
31、d”acquisitions programme.This has seen the purchase of businesses which meet exactingperformance criteria,including a successful product range,aninternational customer profile and sustainable sales,profits and cashgeneration.Companies are acquired only when sensible terms can benegotiated with vendo
32、rs,debt financing is used to the extent that it isavailable and remains within prudent parameters and the groupsprimary focus is to enrich shareholders through the repayment of debt.Business reviewThe groups activities continued to show resilience in 2013,despite theeconomic difficulties that affect
33、 large parts of the global economy andthe slow pace of recovery in even the more buoyant areas.On a like-for-like basis,increases were seen in 2013 in both revenuesand profits.In addition to this organic growth,both Global DigitalSystems Limited(“GDS”,which was acquired in March 2012)andScientifica
34、Limited(“Scientifica”,which was acquired in June 2013)performed fully in line with expectations.This combination of organicgrowth and earnings enhancement through acquisitions fuelled a 23%increase in earnings per share(undiluted,excluding exceptional items).A significant proportion of group output
35、is sold to customersfinanced directly 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 continue to struggle to bring publicsector debt and spe
36、nding under control.Movements in exchangerates also influence international competitiveness and trading margins.Sterling remained volatile in 2013 but followed a generallystrengthening trend.In consequence,the Directors considered itprudent to maintain the groups hedging strategies,covering bothexis
37、ting exposure on a day-to-day basis throughout the year andaffording some protection from prospective trading risks into 2014.The companys business strategy calls for a steady increase in the scopeof its operations,achieved both through acquisitions of companiesoperating in its chosen field of activ
38、ity and through the ongoingperformance of its established subsidiaries.In addition to the dilution ofhead office costs that results from acquisitions,the company closelymonitors the return it derives on the capital invested in its subsidiaries.The annual rate of return on total invested capital(“ROT
39、IC”)iscomputed monthly,by comparing attributable earnings excludingexceptional items and before interest,tax and amortisation(“EBITA”)with the investment in property,plant and equipment,goodwill andother intangibles and net current assets(excluding cash).In 2012 theoverall return computed in this ma
40、nner amounted to 40.3%.Inevitably,when a material acquisition is made,the overall group ROTIC is diluted,given the profit multiples that such businesses command.This was thecase in 2013,following the acquisition of Scientifica.Taking this intoaccount,the directors view the 2013 ROTIC of 30.2%with sa
41、tisfaction.Acquisitions:on 26 June 2013,the company acquired the entireissued share capital of Scientifica,a company which designs,manufactures and sells instruments used for the purpose ofconducting electrophysiology research with a particular emphasison neuroscience.Further details of this transac
42、tion are set out innote 31.The subsequent trading performance of this acquisitionhas been entirely satisfactory.It is regarded as paramount thatacquisitions are completed only when the directors are satisfiedthat the target business has sound long-term strength.Ongoing performance:the directors rega
43、rd the trend ofearnings per share(excluding exceptional items),reduction in netdebt and the companys ability to pay dividends to itsshareholders as key indicators of its performance against theoverall group strategy.Undiluted earnings per share(excludingexceptional items)rose from 81.3p in 2012 to 1
44、00.5p in 2013;thedirectors note with satisfaction that this latter figure exceeds forthe first time in a single year the price per share at which thecompany was floated on AIM in 2003.Net debt increased from2,000,000 at 31 December 2012 to 5,500,000 at 31 December2013,reflecting the acquisition of S
45、cientifica,as described below.Dividends totalling 20.0p per share(2012:15.0p)will berecommended in respect of 2013(including those that havealready been paid at the interim stage).These are covered 5times by adjusted earnings per share(2012:5.4 times),despite theproposed 33%increase in the dividend.
46、Revenue trends The Materials Sciences group:revenues increased by 14%in comparison with 2012.Approximately half of this increasewas derived from the inclusion in 2013 of a full year of tradingfrom GDS(2012:10 months).The Vacuum group:revenues rose by 41%,driven by theacquisition of Scientifica in Ju
47、ne 2013.Strong growth was alsoseen at UHV Design.ProfitabilityThe groups operating profit margin(excluding exceptional items)progressed from 21.2%in 2012 to 21.7%in 2013.Cash generation and managementCash generated from operations amounted to 5,009,000(2012:6,360,000).The cash flow benefit accruing
48、from a materialincrease in profits before exceptional items(aided by the contribution from the acquisition in the year of Scientifica)was offset by investments in working capital.Capital expenditureexceeded 2 million,the majority of which related to theconstruction of the new“Stonecross”factory in E
49、ast Sussex.The investment in the Scientifica acquisition resulted in an outflow(net of inherited cash)of 11,628,000,financed by bank loans andexisting cash resources.Subsequent to the acquisition,the companyconducted an 8.1 million share placing(7.7 million net of costs)with the aim of restoring the
50、 groups financial capacity to completefurther acquisitions.Consolidated net debt at 31 December 20134amounted to 5,500,000,a level considered by the directors to reflectencouraging financial strength in the context of the size of the groupsearnings and balance sheet.Commercial risks and uncertaintie
51、sThe groups customers are located in all parts of the globe and amajor part of sales is to enterprises that are state-owned or closelytied to state spending.Accordingly,the prevailing uncertainties in theworld economy,and particularly the borrowing constraints currentlyaffecting many western nations
52、,represent a risk to the groupsprospects.In addition,the groups exporting subsidiaries are exposedto possible adverse impacts on the international competitiveness oftheir activities caused by fluctuations in exchange rates.The group seeks,so far as is practicable,to mitigate these currencyeffects,as
53、 set out in note 29.An important element of the groups business strategy is developmentthrough acquisition;the group is exposed to the risk of an insufficientavailability of target companies of requisite quality and to the risk thatan acquired company does not meet its expected profitability.The gro
54、up manages this risk by maintaining relationships withorganisations that market appropriate targets and by performingdetailed research into potential acquisitions.Across all the groups activities lies the exposure to human resourceshortages.This reflects the small niche-serving nature of the groupsb
55、usinesses and the impracticality at this stage of the groups developmentof providing significant back-up support in respect of key roles.The principal drivers of the individual segments within the group,together with their individual commercial risks and uncertainties,areas follows:The Materials Sci
56、ences group supplies measurement equipmentacross both public and private sectors.The principal risks relate to the degree of funding available to public-sectorcustomers.Sales to the private sector into industries with ahistory of cyclicality are at risk of periodic downturns in activity.Overall,the
57、long-term growth of the business is supported bythe development of safety regulations internationally and by the globalisation of trade,as well as by maintaining a strong global presence;The Vacuum group designs and manufactures instruments to aidthe examination of samples in optical and electron mi
58、croscopesand to create motion,heating and cooling within ultra highvacuum chambers.It is continuing to benefit from the buoyancy of the high-tech markets which it serves,though the directorsconsider that there is scope to improve the divisions output andmarket share through technical innovation and
59、increasedproduction capability.The division 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 divisions technical skills base and through its contractualarrangements with its customer
60、s.The degree of funding availableto its public-sector customer base also represents a risk.Capital management objectivesThe group monitors capital on the basis of the carrying amount ofequity,less cash and cash equivalents as presented on the face of thebalance sheet.The directors manage the capital
61、 structure and makeadjustments to it in the light of changes in economic conditions 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 direc
62、tors seek to maintain a conservative gearing position(27%at 31 December 2013,2012:16%)as they utilise bank funding to support their acquisition strategy.In pursuance of this policy,thedirectors concluded that the groups borrowing capacity had beenstretched by the purchase of Scientifica to a point w
63、here furtheracquisition activity would be compromised;as a result,an 8.125million(before expenses)placing of new shares was successfullycompleted in October 2013,thereby restoring the groups ability to complete further acquisitions.The directors capital management strategy is to ensure the groupsabi
64、lity to continue as a going concern and to provide an adequatereturn to shareholders.The parent and subsidiary companies boardsmeet regularly to review performance and discuss futureopportunities and threats with the aim of optimising sustainablereturns and minimising risk.On behalf of the boardRL C
65、ohenDirector and Company SecretaryJudges Scientific plcCompany registration number:459731527 March 20145The directors present their report and financial statements for theyear ended 31 December 2013.Results and dividendsThe results for the financial year to 31 December 2013 are set out inthe Consoli
66、dated Statement of Comprehensive Income.The companypaid an interim dividend of 6.6p per Ordinary share on 8 November2013.At the forthcoming Annual General Meeting,the directors willrecommend payment of a final dividend for the year of 13.4p perOrdinary share to be paid on Friday 4 July 2014 to share
67、holders onthe register on Friday 6 June 2014.The shares will go ex-dividend onWednesday 4 June 2014.Going concernThe consolidated financial statements have been prepared on a goingconcern basis.The directors have taken note of guidance issued by theFinancial Reporting Council on Going Concern Assess
68、ments indetermining that this is the appropriate basis of preparation of thefinancial statements.The groups principal operating companiesexperienced a difficult trading environment in 2013 but overall the groupwent into 2014 with a robust order book.Nevertheless,the globaleconomic environment remain
69、s uncertain.The directors consider thefinancial position of the group to be healthy,with cash balances at 31 December 2013 in excess of 10 million and net debt of just5,500,000.As a consequence,the directors believe that the parentcompany and the group are well placed to manage their business risks
70、successfully despite the uncertainties surrounding the currenteconomic outlook.The directors have a reasonable expectation that the parent companyand the group have adequate resources to continue in operationalexistence for the foreseeable future.Accordingly,they continue to adoptthe going concern b
71、asis in preparing the annual report and accounts.Financial risk management objectives and policiesThe group utilises financial instruments,other than derivatives(see note 28),comprising borrowings,cash and cash equivalents andvarious other items such as trade receivables and payables that arisedirec
72、tly 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 interestrates,liquidity,credit and foreign currency exposure.The directorsreview and agree policies for managing
73、each of these risks,which aredescribed and evaluated in more detail in note 29 and which aresummarised below.Except as stated,the policies have remainedunchanged from previous years.1.Interest rate riskThe group finances its operations through a mixture of bankborrowings,equity and retained profits.
74、With net debt of just5,039,000 at 31 December 2013(excluding 497,000 ofsubordinated loans which do not bear interest),exposure tointerest rate fluctuations is not considered to be a major threatto the group;however,the groups loans are subject to interestrate hedges,as described in note 29.2.Liquidi
75、ty riskThe group seeks to manage liquidity risk by ensuring thatsufficient funds are available to meet foreseeable needs and toinvest cash assets safely and profitably.Primarily this is achievedthrough loans arranged at group level.Short term flexibility isachieved through the availability of overdr
76、aft facilities and throughthe significant cash balances that the group currently holds.3.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 backedbodies,where the ris
77、k of default is considered low.Whereconsidered appropriate,the group insists on up-front payment and requires letters of credit to be provided.4.Currency riskWith exports representing a significant proportion of its sales,themain risk area to which the group is exposed is that of foreigncurrencies(p
78、rincipally US$and Euros).The group adopts astrategy to hedge against this risk by entering into currencyoptions and/or by maintaining a proportion of its bank loans inthese currencies,although this does not represent a hedge underIAS 39.The directors review the value of this economic hedge ona regul
79、ar basis.There remains,nevertheless,an ongoing threat tothe groups competitive position in international markets from anysustained period of Sterling strength.For the past two years,forward and option contracts have been entered into in both US$and Euros maturing in the subsequent year;these were ai
80、med atprotecting the ensuing years competitive position and marginsfrom adverse currency movements.5.Price riskThe conversion terms of the Convertible Redeemable shares giverise to a derivative financial instrument,which is affected byfluctuations in the companys Ordinary share price.As described in
81、note 25,the great majority of the Convertible Redeemable shareswere converted or redeemed during 2012,with the remainderexpected to follow by 31 December 2014 or soon thereafter.6.Cash flow riskThe group manages its cash flow through a mixture of workingcapital,bank borrowings,equity and retained pr
82、ofits.With netdebt at 31 December 2013 of just 5,500,000 and cash and cashequivalents of 10,054,000,the groups cash position is consideredto be one of its key strengths.6DIRECTORS REPORTDirectorsThe following directors have held office during the year:Hon AR Hambro1-non-executiveMr DE CicurelMr D Ba
83、rnbrookMr RL CohenMr RJ Elman1-non-executiveMr GC Reece1-non-executive1Member of the audit and remuneration committeesDirectors interestsThe directors interests in the Ordinary shares of the company wereas stated below:Ordinary of 5p each31 December 2013 1 January 2013SharesOptionsSharesOptionsHon A
84、R Hambro92,500-110,000-Mr DE Cicurel916,3891,775916,236-Mr D Barnbrook22,38128,32522,24850,000Mr RL Cohen50,90744,87550,75543,100Mr RJ Elman32,429-82,429-Mr GC Reece-Dividends paid in the year to directors who hold shares amounted to196,000 in aggregate(2012:108,000).Details of share options and Sha
85、re Incentive Plan purchases bydirectors are set out in note 24.In addition to the above holdings of Ordinary shares,the followingdirector had interests in the Convertible Redeemable share capital ofthe company:Convertible Redeemable of 1p each(quarter-paid)31 December 20131 January 2013SharesSharesM
86、r RJ Elman208,333208,333The conversion terms of the Convertible Redeemable shares andmovements in the year are detailed in note 25.Following a fullconversion of the remaining Convertible Redeemable shares toOrdinary shares,Mr Elmans interests in the enlarged share capital ofthe company as at 31 Dece
87、mber 2013 would have increased by29,459 shares to 61,888 shares.7Base Performance ContributionBenefits20132012salary/feesrelated bonusto pensionTotalTotalschemes000000000000000000Non Executive DirectorsHon AR Hambro30-3025Mr RJ Elman20-2015Mr GC Reece37-3720Executive DirectorsMr DE Cicurel15030-4184
88、166Mr D Barnbrook12124615166157Mr RL Cohen13025-6161154Total48879625598537During 2013 one director exercised share options as disclosed under note 24.Directors remunerationThe remuneration paid to or receivable by each person who served as a director during the year was as follows:During 2012 five d
89、irectors converted and/or redeemed some or all oftheir holdings of Convertible Redeemable shares.Under current taxlaw,conversions of these shares are considered to give rise to deemed“remuneration”,the amounts of which were as follows.There were noconversions during 2013:2013 2012TotalTotal000000Hon
90、 AR Hambro-38Mr RJ Elman-8Mr DE Cicurel-313Mr D Barnbrook-8Mr RL Cohen-8Directors 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 prepare financial statem
91、ents for 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 accordance with Internationa
92、l Financial ReportingStandards as adopted by the European Union(IFRSs).Under companylaw the directors must not approve the financial statements unless theyare satisfied that they give a true and fair view of the state of affairsand of the profit or loss of the company and the group for that period.I
93、n preparing these financial statements,the directors are required to:select suitable accounting policies and then apply them consistentlymake judgements and accounting estimates that are reasonable and prudentstate whether applicable UK Accounting Standards or IFRSs havebeen followed,subject to any
94、material departures disclosed andexplained in the financial statementsprepare the financial statements on the going concern basis unless it is inappropriate to presume that the company willcontinue in business.The directors are responsible for keeping adequate accounting recordsthat are sufficient t
95、o show and explain the companys transactions anddisclose with reasonable accuracy at any time the financial position ofthe company and the group and enable them to ensure that thefinancial statements comply with the Companies Act 2006.They arealso responsible for safeguarding the assets of the compa
96、ny and groupand hence for taking reasonable steps for the prevention and detectionof fraud and other irregularities.In so far as each of the directors is aware:there is no relevant audit information of which the companysauditor is unaware;andthe directors have taken all steps that they ought to have
97、 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 companys website.Information published on the websi
98、te is accessible in many countriesand legislation in the United Kingdom governing the preparation anddissemination of financial statements may differ from legislation inother jurisdictions.Corporate governanceBeing AIM listed,the Company is not required to and does not fullycomply with the UK Corpor
99、ate Governance Code.However,drawingupon best practice,the directors have established an audit committeeand a remuneration committee with formally delegated duties andresponsibilities.The members of both committees are the non-executive directors.The audit committee determines the terms of engagement
100、 of thecompanys auditor and,in consultation with the companys auditor,thescope of the audit.The audit committee has unrestricted access to the companys auditor.The remuneration committee has delegatedauthority to determine the scale and structure of the executivedirectors remuneration and the terms
101、of their service contracts.The remuneration of the non-executive directors is determined by the board as a whole.Payment policyThe groups policy is to agree terms and conditions with suppliersbefore business takes place and to pay agreed invoices in accordancewith the terms of payment.Trade creditor
102、 days of the company at theend of the year represented 16 days(2012:22 days).AuditorGrant Thornton UK LLP have expressed willingness to continue inoffice.In accordance with section 489(4)of the Companies Act 2006,a resolution to reappoint Grant Thornton UK LLP will be proposed atthe Annual General M
103、eeting.On behalf of the boardRL CohenDirector and Company SecretaryJudges Scientific plcCompany registration number:459731527 March 20148INDEPENDENT AUDITORSREPORTWe have audited the consolidated financial statements of JudgesScientific plc for the year ended 31 December 2013 which comprisethe conso
104、lidated statement of comprehensive income,the consolidatedbalance sheet,the consolidated statement of changes in equity,theconsolidated cash flow statement and notes 1 to 31.The financialreporting framework that has been applied in their preparation isapplicable law and International Financial Repor
105、ting Standards(IFRSs)as adopted by the European Union.This report is made solely to the companys members,as a 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
106、to them in an auditors report and for no other purpose.To the fullest extentpermitted by law,we do not accept or 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 o
107、f directors and auditorAs explained more fully in the statement of directors responsibilities,the directors are 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
108、theconsolidated financial statements in accordance with applicable law andInternational Standards on Auditing(UK 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
109、scope of an audit of financial statements isprovided on the Financial Reporting Councils website atwww.frc.org.uk/apb/scope/private.cfmOpinion on financial statementsIn our opinion the consolidated financial statements:give a true and fair view of the state of the groups affairs as at 31 December 20
110、13 and of its profit for the year then ended;have been properly prepared in accordance with IFRS as adoptedby the European Union;andhave been prepared in accordance with the requirements of theCompanies Act 2006Opinion on other matter prescribed by the Companies Act 2006In our opinion the informatio
111、n given in the Strategic Report andDirectors Report for the financial year for which the consolidatedfinancial statements are prepared is consistent with the consolidatedfinancial statements.Matters on which we are required to report by exceptionWe have nothing to report in respect of the following:
112、Under the Companies Act 2006 we are required to report to you if,inour opinion:certain disclosures of directors remuneration specified by law arenot made;orwe have not received all the information and explanations werequire for our audit.Other matterWe have reported separately on the parent company
113、financial statements of Judges Scientific plc for the year ended 31 December 2013.Philip SayersSenior Statutory Auditorfor and on behalf of Grant Thornton UK LLPStatutory Auditor,Chartered AccountantsEast Midlands27 March 20149CONSOLIDATED STATEMENT OFCOMPREHENSIVE INCOME102013)2012)NoteBefore)Excep
114、tional)Total)Before)Exceptional)Total)exceptional)items)exceptional)items)items)items)000)000)000)000)000)000)Revenue736,041)-)36,041)28,041)-)28,041)Operating costs excluding exceptional items8(28,228)-)(28,228)(22,097)-)(22,097)Operating profit excluding exceptional items7,813)-)7,813)5,944)-)5,94
115、4)Exceptional itemsAmortisation of intangible assets16-)(4,498)(4,498)-)(3,294)(3,294)Contingent consideration measured at fair value31-)(317)(317)-)-)-)Financial instruments measured at fair value)Convertible Redeemable shares25-)(340)(340)-)(1,573)(1,573)Hedging contracts-)24)24)-)-)-)Relocation c
116、osts8-)(158)(158)-)-)-)Acquisition costs31-)(794)(794)-)(444)(444)Operating profit/(loss)7,813)(6,083)1,730)5,944)(5,311)633)Interest receivable106)-)6)7)-)7)Interest payable10(497)-)(497)(319)-)(319)Profit/(loss)before tax7,322)(6,083)1,239)5,632)(5,311)321)Taxation11(1,530)1,632)102)(1,302)850)(45
117、2)Profit/(loss)and total comprehensive income for the year5,792)(4,451)1,341)4,330)(4,461)(131)Attributable to:Equity holders of the parent company5,444)(4,178)1,266)3,887)(4,087)(200)Non-controlling interest348)(273)75)443)(374)69)Earnings per share-total and continuingBasic13100.5p)-23.4p)81.3p)-)
118、(4.2)pDiluted1396.4p)-22.5p)73.5p)-)(4.2)pThere are no items of other comprehensive income for the two years in question.The accompanying notes form an integral part of these consolidated financial statements.2013)2012)Note000)000)ASSETSNon-current assetsProperty,plant and equipment144,695)2,702)Goo
119、dwill158,678)5,809)Other intangible assets1612,913)7,095)26,286)15,606)Current assetsInventories175,824)3,529)Trade and other receivables186,547)3,988)Cash and cash equivalents10,054)5,418)22,425)12,935)Total assets48,711)28,541)LIABILITIESCurrent liabilitiesTrade and other payables19(6,075)(5,659)D
120、erivative financial instruments:Convertible Redeemable shares25(574)(234)Payables relating to acquisitions(1,554)(246)Current portion of long-term borrowings20(4,043)(2,028)Current tax payable(1,320)(633)(13,566)(8,800)Non-current liabilitiesLong-term borrowings21(11,547)(5,390)Deferred tax liabilit
121、ies23(2,704)(1,562)(14,251)(6,952)Total liabilities(27,817)(15,752)Net assets20,894)12,789)EQUITYShare capital24293265)Share premium account14,186)6,467)Capital redemption reserve22)22)Merger reserve475)475)Retained earnings5,635)5,254)Equity attributable to equity holders of the parent company20,61
122、1)12,483)Non-controlling interest283)306)Total equity20,894)12,789)The accompanying notes form an integral part of these consolidated financial statements.The financial statements were approved by the board on 27 March 2014D.E.CicurelR.L.CohenDirectorDirectorCONSOLIDATED BALANCE SHEET11CONSOLIDATED
123、STATEMENTOF CHANGES IN EQUITYShare ShareCapitalMergerRetainedTotal*Non-Total)capital premium redemption reserveearningscontrollingequity)reserveinterestNote000000000000000)000)000)000)Balance at 1 January 20132656,467224755,254)12,483)306)12,789)Dividends12-(885)(885)(98)(983)Issue of share capital2
124、4287,719-)7,747)-)7,747)Transactions with owners287,719-(885)6,862)(98)6,764)Profit for the year-1,266)1,266)75)1,341)Total comprehensive income for the year-1,266)1,266)75)1,341)Balance at 31 December 201329314,186224755,635)20,611)283)20,894)Balance at 1 January 20122143,19534753,489)7,376)335)7,7
125、11)Dividends12-(587)(587)(98)(685)Issue of share capital24513,272-)3,323)-)3,323)Arising on conversion and redemption of Convertible 25-19-2,552)2,571)-)2,571)Redeemable shares Transactions with owners513,27219-1,965)5,307)(98)5,209)(Loss)/profit for the year-(200)(200)69)(131)Total comprehensive in
126、come for the year-(200)(200)69)(131)Balance at 31 December 20122656,467224755,254)12,483)306)12,789)*-Total represents amounts attributable to equity holders of the parent company.The accompanying notes form an integral part of these consolidated financial statements.122013)2012)000)000)Cash flows f
127、rom operating activitiesProfit/(loss)after tax1,341)(131)Adjustments for:Financial instruments measured at fair valueConvertible Redeemable shares340)1,573)Hedging contracts(24)-)Contingent consideration measured at fair value317)-)Depreciation292)235)Amortisation of intangible assets4,498)3,294)Los
128、s on disposal of property,plant and equipment18)-)Foreign exchange loss/(gain)on foreign currency loans127)(78)Interest receivable(6)(7)Interest payable497)319)Tax expense recognised in income statement(102)452)Increase in inventories(783)(581)(Increase)/decrease in trade and other receivables(798)2
129、77)(Decrease)/increase in trade and other payables(709)1,007)Cash generated from operations5,008)6,360)Interest paid(497)(324)Tax paid(840)(1,374)Net cash from operating activities3,671)4,662)Cash flows from investing activitiesPaid on acquisition of new subsidiary(13,400)(8,022)Gross cash inherited
130、 on acquisition1,772)1,378)Acquisition of subsidiaries,net of cash acquired(11,628)(6,644)Paid on the acquisition of trade and certain assets(91)(94)Purchase of property,plant and equipment(2,080)(909)Interest received6)7)Net cash used in investing activities(13,793)(7,640)Cash flows from financing
131、activitiesProceeds from issue of share capital7,747)3,323)Repaid on conversion/redemption of Convertible Redeemable shares-)(516)Repayments of borrowings(1,776)(3,155)Proceeds from bank loans9,770)5,475)Dividends paid-equity share holders(885)(587)Dividends paid-non-controlling interest in subsidiar
132、y(98)(98)Net cash from financing activities14,758)4,442)Net increase in cash and cash equivalents4,636)1,464)Cash and cash equivalents at beginning of year5,418)3,954)Cash and cash equivalents at end of year10,054)5,418)The accompanying notes form an integral part of these consolidated financial sta
133、tements.CONSOLIDATED CASH FLOWSTATEMENT131.General informationJudges Scientific plc is the ultimate parent company of the group,whose principal activities comprise the design,manufacture andsale of scientific instruments.2.Registered officeThe address of the registered office and principal place ofb
134、usiness 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 financialinstruments which are carried at fair value.Being listed on th
135、e Alternative Investment Market of the London Stock Exchange,the company is required to present itsconsolidated financial statements in accordance with InternationalFinancial Reporting Standards(IFRS)as adopted by the EuropeanUnion.Accordingly,these financial statements have been preparedin accordan
136、ce with the accounting policies set out below whichare based on the IFRS in issue as adopted by the European Union(EU)and in effect at 31 December 2013.4.Use of accounting estimates and judgementsMany of the amounts included in the consolidated financialstatements involve the use of judgement and/or
137、 estimation.These judgements and estimates are based on managements bestknowledge of the relevant facts and circumstances,having regardto prior experience,but actual results may differ from theamounts included in the consolidated financial statements.Information about such judgements and estimation
138、is contained in 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 conditions required for revenues to be recognised in the income statement of
139、the financial year,as set out in note 6.4 below,have been met;Sources of estimation uncertainty:depreciation rates are based on estimates of the useful lives and residual values of the assets involved(see note 6.6);estimates are required as to intangible asset carrying values,their useful lives and
140、goodwill impairment charges.These are assessed by reference to budgeted profits and cash flows for future periods for the relevant income generating units and an estimate of their values in use(see notes 15 and 16);warranty provisions are based on estimates of the likely cost of repairing or replaci
141、ng faulty units.5.Changes in accounting policies5.1Standards adopted for the first timeIFRS 13 Fair Value Measurement(IFRS 13)IFRS 13 clarifies the definition of fair value and provides relatedguidance and enhanced disclosures about fair valuemeasurements.It does not affect which items are required
142、to befair-valued.The scope of IFRS 13 is broad and it applies for bothfinancial and non-financial items for which other IFRSs require orpermit fair value measurements or disclosures about fair valuemeasurements except in certain circumstances.IFRS 13 applies prospectively for annual periods beginnin
143、g on orafter 1 January 2013.Its disclosure requirements need not beapplied to comparative information in the first year of application.The Group has however included as comparative information theIFRS 13 disclosures that were required previously by IFRS 7Financial Instruments:Disclosures.The Group h
144、as applied IFRS 13 for the first time in the currentyear(see note 28).5.2 Standards,amendments and interpretations to existing Standards that are not yet effectiveAt the date of authorisation of these consolidated financialstatements,certain new standards,amendments andinterpretations to existing st
145、andards have been published but arenot yet effective,and have not been adopted early by the group.Management anticipates that all of the pronouncements will beadopted in the groups accounting policies for the first periodbeginning after the effective date of the pronouncement.None ofthese new standa
146、rds,amendments and interpretations are expectedto have a significant impact on the groups financial statements.IFRS 10 Consolidated Financial Statements(EU effective date1 January 2014)IFRS 11 Joint Arrangements(EU effective date 1 January 2014)IFRS 12 Disclosure of Interests in Other Entities(EU ef
147、fective date 1 January 2014)IAS 27(Revised),Separate Financial Statements(EU effective date 1 January 2014)IAS 28(Revised),Investments in Associates and Joint Ventures(EU effective date 1 January 2014)Transition Guidance-Amendments to IFRS 10,IFRS 11 and IFRS12(EU effective date 1 January 2014)Inves
148、tment Entities-Amendments to IFRS 10,IFRS 12 and IAS 27(effective 1 January 2014)Offsetting Financial Assets and Financial Liabilities-Amendmentsto IAS 32(effective 1 January 2014)IFRIC Interpretation 21 Levies(effective 1 January 2014)Recoverable Amount Disclosures for Non-Financial Assets(Amendmen
149、ts to IAS 36)(effective 1 January 2014)Novation of Derivatives and Continuation of Hedge Accounting(Amendments to IAS 39)(effective 1 January 2014)Defined Benefit Plans:Employee Contributions(Amendments to IAS 19)(IASB effective date 1 July 2014)IFRS 9 Financial Instruments(no mandatory effective da
150、te)NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS146.Accounting policies6.1Basis of consolidationThe consolidated financial statements include those of the parentcompany and its subsidiaries,all drawn up to 31 December 2013.Subsidiaries are entities over which the group has the power tocontrol the fi
151、nancial and operating policies so as to obtain benefitsfrom their activities.The group obtains and exercises controlthrough voting rights.Income,expenditure,unrealised gains andintra-group balances arising from transactions within the groupare eliminated.Unrealised losses are also eliminated unless
152、thetransaction provides evidence of an impairment of the assettransferred.Amounts reported in the financial statements ofsubsidiaries have been adjusted where necessary to ensureconsistency with the accounting policies adopted by the group.Acquisitions of subsidiaries are dealt with by the acquisiti
153、onmethod.The acquisition method involves the recognition at fairvalue of all identifiable assets and liabilities,including contingentliabilities of the subsidiary,at the acquisition date,regardless ofwhether or not they were recorded in the financial statements of the subsidiary prior to acquisition
154、.In the case of acquisitionsafter 31 December 2005,goodwill is stated after separating outidentifiable intangible assets.Goodwill represents the excess ofacquisition cost over the fair value of the groups share of theidentifiable net assets of the acquired subsidiary at the date ofacquisition.Acquis
155、ition-related transaction costs are recorded asan expense in the income statement.The parent company is entitled to the merger relief that wasoffered by section 131 of the Companies Act 1985 in respect of thefair value of the consideration received in excess of the nominalvalue of the equity shares
156、issued in connection with the acquisitionof Fire Testing Technology Limited and UHV Design Limited.6.2Business combinations completed prior to the date oftransition to IFRSThe group has elected not to apply IFRS 3 Business Combinationsretrospectively to business combinations prior to the date oftran
157、sition to IFRS on 1 January 2006.Accordingly the classificationof the combination(acquisition,reverse acquisition or merger)remains unchanged from that used under UK GAAP.Assets andliabilities are recognised at the date of transition if they would berecognised under IFRS,and are measured using their
158、 UK GAAPcarrying amounts immediately post-acquisition as deemed costunder IFRS,unless IFRS requires fair value measurement.Amountsrecorded as goodwill under UK GAAP have not been re-assessedto identify intangible assets.Deferred tax and minority interest areadjusted for the impact of any consequenti
159、al adjustments aftertaking advantage of the transitional provisions.6.3GoodwillGoodwill,representing the excess of the cost of acquisition overthe fair value of the groups share of the identifiable net assetsacquired,is capitalised and reviewed annually for impairment.Goodwill is carried at cost les
160、s accumulated impairment losses.Negative goodwill(where the fair value of net assets acquiredexceeds the purchase price)is recognised immediately afteracquisition in the income statement.The carrying value ofnegative goodwill at the date of transition has been credited toreserves.There is no re-inst
161、atement of goodwill or negativegoodwill that was amortised prior to transition to IFRS.6.4RevenueRevenue is measured by reference to the fair value ofconsideration received or receivable by the group,excluding ValueAdded Tax,and is recognised when all the following conditionshave been satisfied:sale
162、s of instruments and spares are recognised on point of despatch to the customer;income from services such as installation,support,training or consultancy is recognised when the service is performed;the amount of revenue and the costs incurred or to be incurred in respect of the transaction can be me
163、asured reliably;and it is probable that the economic benefits associated with the transaction will flow to the group.Interest income is recognised using the effective interest methodwhich calculates the amortised cost of a financial asset andallocates the interest income over the relevant period.Div
164、idendincome is recognised when the shareholders right to receivepayment is established.6.5Intangible assets acquired as part of a business combinationIn accordance with IFRS 3 Business Combinations,an intangibleasset acquired in a business combination is deemed to have a costto the group of its fair
165、 value at the acquisition date.The fair valueof the intangible asset reflects market expectations about theprobability that the future economic benefits embodied in theasset will flow to the group.Amortisation charges are included as adjusting items in operatingcosts in the income statement.Amortisa
166、tion begins when theintangible asset is first available for use and is provided at ratescalculated to write off the cost of each intangible asset over itsexpected useful life,as follows:Customer relationships3 yearsNon-competition agreements2 yearsDistribution agreementsBetween 2 and 5 yearsResearch
167、 and development5 yearsSales order backlogOn shipmentBrand and domain namesBetween 1 and 5 yearsSubsequent to initial recognition,intangible assets are statedat deemed cost less accumulated amortisation and impairment charges.6.6Property,plant and equipmentProperty,plant and equipment is stated at c
168、ost,net ofdepreciation and any provision for impairment.Disposal of assets:the gain or loss arising on disposal of an asset156.6Property,plant and equipment-continuedis determined as the difference between the disposal proceedsand the carrying amount of the asset and is recognised in theincome state
169、ment.Depreciation:Depreciation is provided at annual rates calculatedto write off the cost less residual value of each asset over itsexpected useful life,within the following ranges:Property2%straight-line on cost of buildings(excluding the estimated cost of land)Plant and machinery15%on written dow
170、n value to 25%straight-line on cost Fixtures,fittings 15%on written down value to 33%and equipmentstraight-line on cost Motor vehicles25%on written down value to 25%straight-line on cost Building over the minimum life of the leaseimprovementsMaterial residual value estimates and expected useful live
171、s areupdated as required but at least annually.6.7Impairment 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 resu
172、lt,some assets are testedindividually for impairment and some are tested at cash-generatingunit level.Goodwill is allocated to those cash-generating unitsthat are expected to benefit from synergies of the relatedbusiness combination and represent the lowest level within thegroup at which management
173、monitors goodwill.Cash-generating units to which goodwill has been allocated are tested 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 los
174、s is recognised for the amount by which theassets or cash-generating units carrying amount exceeds itsrecoverable amount.The recoverable amount is the higher of fairvalue,reflecting market conditions less costs to sell,and value in usebased on estimated future cash flows from each cash-generatinguni
175、t,discounted at a suitable rate in order to calculate the presentvalue of those cash flows.The data used for impairment testingprocedures is directly linked to the groups latest approved budgets,adjusted as necessary to exclude any future restructuring to whichthe group is not yet committed.Discount
176、 rates are determinedindividually for each cash-generating unit and reflect their respectiverisk profiles as assessed by the directors.Impairment losses for cash-generating units reduce first thecarrying amount of any goodwill allocated to that cash-generatingunit.Any remaining impairment loss is ch
177、arged pro rata to theother assets in the cash-generating unit.With the exception ofgoodwill,all assets are subsequently reassessed for indications thatan impairment loss previously recognised may no longer exist.Impairment charges are included in operating costs in the incomestatement.An impairment
178、charge that has been recognised isreversed if the cash-generating units recoverable amount exceedsits 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
179、related to theownership of the leased asset.The related asset is recognised asan asset in the balance sheet at the time of inception of the leaseat the fair value of the leased asset or,if lower,the present valueof the minimum lease payments plus incidental payments,if any,tobe borne by the lessee.A
180、 corresponding amount is recognised asa finance lease liability.The interest element of leasing paymentsrepresents a constant proportion of the capital balanceoutstanding and is charged to the income statement over theperiod of the lease.All other leases are regarded as operating leases and thepayme
181、nts made under them are charged to the income statementon a straight line basis over the period of the lease term.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 ass
182、igned usingthe first-in,first-out cost formula.Cost includes materials,directlabour and an attributable proportion of manufacturing overheadsbased on normal levels of activity.6.10 TaxationCurrent tax is the tax currently payable based on taxable profitfor the year.Deferred taxes are calculated usin
183、g the liability method ontemporary differences.Deferred tax is generally provided on thedifference between the carrying amounts of assets and liabilitiesand their tax bases.However,deferred tax is not provided on theinitial recognition of goodwill,nor on the initial recognition of anasset or liabili
184、ty unless the related transaction is a businesscombination or affects tax or accounting profit.Deferred tax ontemporary differences associated with shares in subsidiaries is notprovided if reversal of those temporary differences can becontrolled by the group and it is probable that reversal will not
185、occur in the foreseeable future.In addition,tax losses available tobe carried forward as well as other income tax credits to thegroup are assessed for recognition as deferred tax assets.Deferred tax liabilities are provided in full,with no discounting.Deferred tax assets are recognised to the extent
186、 that it is probablethat the underlying deductible temporary differences will be able tobe offset against future taxable income.Current and deferred taxassets and liabilities are calculated at tax rates that are expected toapply to their respective period of realisation,provided they areenacted or s
187、ubstantively enacted at the balance sheet date.16Changes 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 credited directly to equity in which case the related deferred tax is also charged
188、or credited directly to equity,or where items are recognised in other comprehensive income,in which case the related deferred tax is recognised 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 s
189、hare options granted on orafter 7 November 2002 and not vested 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
190、 determined indirectly byreference to the fair value of the 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 ultimately recognisedas an expense in the income statement,
191、with a correspondingcredit to“other reserve”.If vesting periods or other non-market vesting conditions apply,theexpense is allocated over the vesting period,based on the bestavailable estimate of the number of share options expected tovest.Estimates are subsequently revised if there is any indicatio
192、nthat the number of share options expected to vest differs fromprevious estimates.Any cumulative adjustment prior to vesting isrecognised in the current period.The impact of the revision of theoriginal estimates,if any,is recognised in the income statementover the remaining vesting period,with a cor
193、respondingadjustment to the appropriate reserve.No adjustment is made toany expense recognised in prior periods if share options ultimatelyexercised are different to that estimated on vesting.Upon exercise of share options,the proceeds received net ofattributable transaction costs are credited to sh
194、are capital and,where appropriate,share premium.6.12 Financial assetsFinancial assets(other than cash)are assigned to relevantcategories by management on initial recognition,depending on thepurpose for which they were acquired.At the balance sheet date,the group held only loans and receivables.All f
195、inancial assets are recognised when the group becomes aparty to the contractual provisions of the instrument.Loans and receivables are recognised initially at fair value plustransaction costs.Loans and receivables are non-derivative financial assets with fixedor determinable payments that are not qu
196、oted in an activemarket.Trade receivables are classified as loans and receivables.Loans and receivables are measured subsequent to initialrecognition at amortised cost using the effective interest method,less provision for impairment.Any change in their value throughimpairment or reversal of impairm
197、ent is recognised in operatingcosts in the income statement.Provision against trade and other receivables is made when thereis objective evidence that the group will not be able to collect allamounts due to it in accordance with the original terms of thosereceivables.The amount of the write-down is
198、determined as thedifference between the assets carrying amount and the presentvalue of estimated future cash flows,discounted at the originaleffective interest rate.A financial asset is derecognised only where the contractual rightsto the cash flows from the asset expire or the financial asset istra
199、nsferred and that transfer qualifies for derecognition.A financial asset is transferred if the contractual rights to receivethe cash flows of the asset have been transferred or the groupretains the contractual rights to receive the cash flows of theasset but assumes a contractual obligation to pay t
200、he cash flowsto one or more recipients.A financial asset that is transferredqualifies for derecognition if the group transfers substantially allthe risks and rewards of ownership of the asset,or if the groupneither retains nor transfers substantially all the risks and rewardsof ownership but does tr
201、ansfer control of that asset.6.13 Financial liabilitiesFinancial liabilities are obligations to pay cash or other financialassets and are recognised when the group becomes a party to thecontractual provisions of the instrument.Financial liabilities arerecorded initially at fair value net of direct i
202、ssue costs if they arenot held at fair value through profit and loss.Derivatives arerecorded at fair value through profit or loss.The fair value ofderivative financial instruments is determined by reference toactive market transactions or using a valuation technique whereno active market exists.All
203、financial liabilities with the exception of Convertible Redeemableshares(see paragraph 6.19),interest rate swaps and foreigncurrency options are recorded at amortised cost using the effectiveinterest method,with interest-related charges recognised as anexpense in finance cost in the income statement
204、.These financialliabilities include trade and other payables and borrowings,includingbank loans,subordinated loans and 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
205、the effective interest methodand are added to the carrying amount of the instrument to theextent that they are not settled in the period in which they arise.Interest rate swaps and foreign currency options are treated asderivative financial instruments and are accounted for at fair valuethrough prof
206、it and loss.176.13 Financial liabilities-continuedA 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 w
207、ith other 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 scheme
208、sare held by investment managers separately from those of the group.The pension costs charged against profits are the contributionspayable to the schemes in respect of the accounting period.6.16 Foreign currenciesTransactions in foreign currencies are translated at the exchangerate ruling at the dat
209、e of the transaction.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
210、recorded are 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 EquityEquit
211、y comprises the following:“Share capital”represents the nominal value of equity shares.“Share premium”represents the excess over nominal value of the fair value of consideration received for equity shares,net of expenses of the share issue.“Capital redemption reserve”represents amounts set aside fro
212、m retained earnings on conversion of Convertible Redeemable shares equal to the reduction then arising in the overall nominal value of share capital of all classes.“Merger reserve”represents the fair value of the consideration received in excess of the nominal value of equity shares issued in connec
213、tion with acquisitions where the company has exercised entitlement to the merger relief that was offered by section 131 of the Companies Act 1985.“Retained earnings”represents retained profits and losses.“Revaluation reserve”represents gains and losses due to the revaluation of certain financial ass
214、ets.“Non-controlling interest”represents retained profits and losses attributable to minority shareholders in subsidiary companies.6.19 Convertible Redeemable sharesUnder the terms of IAS 39 Financial Instruments-Recognitionand Measurement,the Convertible Redeemable shares in thecompany are deemed t
215、o represent a derivative financialinstrument.As such,it is a requirement that they be fair-valued ateach accounting date,with changes in fair-value being recognisedthrough profit and loss.The fair value is calculated with referenceto the market price of the companys Ordinary shares and theexercise p
216、rice.In accordance with IAS 32 Financial Instruments:Presentation,on conversion the fair value of the ConvertibleRedeemable shares converted is transferred directly to equity.6.20 Exceptional itemsExceptional items(and their related tax impact)are those whichby their size or nature are disclosed sep
217、arately for the purposesof presenting results and earnings per share figures so as toinform users of the financial statements.6.21 Research and developmentResearch and development expenditure is recognised in the IncomeStatement as an expense as incurred until it can be demonstratedthat the conditio
218、ns for capitalisation under IAS 38 apply.The criteria for capitalisation include demonstration that theproject is technically and commercially feasible,the Group hassufficient resources to complete development and that the assetwill generate probable future economic benefit.No research and developme
219、nt expenditure has been capitalised todate.Research and development expenditure was not disclosedin the prior year accounts.The 2012 expenditure has not beendisclosed in the current year accounts due to the difficulty inobtaining accurate information for this period.7.Segment reporting7.1 Identifica
220、tion of reportable segmentsThe groups activities are predominantly in or in support of the design and manufacture of scientific instruments.The groupoperates two main operating segments:the Materials Sciencesgroup and the Vacuum group.No operating segments have been aggregated.7.2 Management of oper
221、ating segmentsThe operating segments are monitored by the groups Chief Operating Decision Maker.Each of the operating segments is managed independently,each range of instrumentshaving its individual requirements in terms of design,manufactureand marketing.7.3 Measurement policiesThe results of opera
222、ting segments are prepared by reference totheir contributions to group earnings before interest,tax andexceptional items(“group EBITA”).This is stated before theallocation of head office costs and after elimination of non-controlling interest.Assets and liabilities directly attributableto the activi
223、ties of the operating segments are included in theirrespective balance sheets;corporate assets and liabilities held bythe parent company are not allocated to subsidiaries.187.4Segment analysisSegment analysis is as follows:2013Materials SciencesVacuumTotal000000000Consolidated group revenues from ex
224、ternal customers14,76421,27736,041Contributions to group EBITA3,7104,6318,341Depreciation91177268Amortisation of intangible assets1,6472,8514,498Segment assets7,37513,23420,609Segment liabilities5,00921,22526,234Intangible assets-goodwill5,1563,5228,678Other intangible assets4,1568,75712,913Addition
225、s to non-current assets3913,64713,6862012Materials SciencesVacuumTotal000000000Consolidated group revenues from external customers12,94915,09228,041Contributions to group EBITA3,4482,7006,148Depreciation72155227Amortisation of intangible assets2,1841,1103,294Segment assets6,1416,27312,414Segment lia
226、bilities3,1805,7648,944Intangible assets-goodwill5,1576525,809Other intangible assets5,8021,2937,095Additions to non-current assets8,7401748,914Segment revenue is presented on the basis of the destination of the goods where known,failing which on the geographical location ofcustomers.Segment assets
227、are based on the geographical location of assets.20132012RevenueNon-current RevenueNon-currentassetsassets000 000000000United Kingdom(domicile)6,68026,2863,51715,606Rest of Europe11,434-9,375-United States/Canada6,055-4,434-Rest of the world11,872-10,715-Total36,04126,28628,04115,606197.4Segment ana
228、lysis-continuedReconciliations between totals presented by operating segment and the groups consolidated figures are as follows:2013)2012)000)000)Contribution to group EBITATotal contribution to group EBITA)8,341)6,148)Expenses not allocated(980)(806)Exceptional itemsAmortisation of intangible asset
229、s(4,498)(3,294)Contingent consideration measured at fair value(317)-)Financial instruments measured at fair valueConvertible Redeemable shares(340)(1,573)Hedging contracts24)-)Relocation costs(158)-)Acquisition costs attributable to group(794)(428)Acquisition costs attributable to non-controlling in
230、terest-)(16)Acquisition costs expensed(794)(444)Elimination of non-controlling interest adjustment in contribution to group EBITA452)602)Operating profit after exceptional items1,730)633)Interest receivable6)7)Interest payable(497)(319)Profit before tax1,239)321)DepreciationTotal segment depreciatio
231、n charge268)227)Head office depreciation not allocated24)8)Consolidated depreciation charge292)235)Segment assets and liabilitiesTotal segment assets20,609)12,414)Parent company assets(excluding corporation tax)16,510)5,667)Assets eliminated on consolidation(9,999)(2,444)Other assets-goodwill8,678)5
232、,809)Other assets-intangible assets12,913)7,095)Consolidated total assets48,711)28,541)Total segment liabilities26,234)8,944)Parent company liabilities6,661)5,578)Derivative financial instruments574)234)Liabilities eliminated on consolidation(11,312)(2,441)Acquisition related loans1,316)1,316)Other
233、liabilities1,711)583)Convertible Redeemable shares1)1)Deferred tax2,632)1,537)Consolidated total liabilities27,817)15,752)Revenues are derived from the sales of manufactured products;revenues from installation and support services are not material.There are no majorcustomers which make up 10%or more
234、 of the groups revenues.Expenses not allocated comprise head office costs.Parent company assets include 3,318,000(2012:1,540,000)in respect of two freehold properties.One is partly let at open market value to a member of the Materials Sciences segment,whilst the other is let at open market value to
235、two members of theVacuum segment.208.Operating costs2013)2012)000)000)Raw materials and consumables14,232)11,334)Other external charges4,435)3,424)Staff costs9,269)7,104)Depreciation292)235)Other operating costs,excluding exceptional items28,228)22,097)Charge relating to derivative financial instrum
236、ents340)1,573)Contingent consideration measured at fair value317)-)Hedging contracts(24)-)Relocation costs158)-)Amortisation of intangible assets4,498)3,294)Acquisition costs794)444)Total operating costs,including exceptional items34,311)27,408)Relocation costs relate to the rehousing of the QuorumT
237、echnologies Limited and UHV Design Limited operations fromtheir pre-existing sites into the new factory at Laughton,East Sussex,owned by Judges Scientific plc.The costs include the physicalrelocation and related staff expenditure.These are one-off costs andthe directors consider that they should be
238、classed as exceptional.Research and development expensed in the year totalled1,366,000.This does not include amortisation of research anddevelopment intangibles arising on acquisition.9.Operating profit2013)2012)000)000)Operating profit is stated after charging:Fees payable to the companys auditorfo
239、r the audit of the companys annual accounts20)20)Fees payable to the companys auditor for other services:for the audit of the companys subsidiaries,pursuant to legislation70)60)for tax services29)17)for corporate finance transactions66)53)for all other services13)6)Depreciation292)235)Crystallised l
240、oss on foreign exchange(prior to accounting for enhanced gross profits estimated in a similar amount arising from currency movements)431)147)Amortisation of intangible assets4,498)3,294)Operating lease rentals-land and property322)270)Operating lease rentals-vehicles24)22)10.Interest receivable and
241、payable2013)2012)000)000)Interest receivable-short-term bank deposits6)7)Interest payable-bank loans(497)(319)Net interest payable(491)(312)11.Taxation2013)2012)000)000)UK corporation tax at 23.25%(2012:24.5%)Current year1,339)1,099)Prior years(163)(95)1,176)1,004)Deferred tax-origination and revers
242、al of temporary differences:Current year-excluding derivative financial instruments(1,271)(973)Current year-derivative financial instruments-)426)(1,271)(547)Prior years(7)(5)(1,278)(552)Tax on profit for the year-current year68)552)Tax on profit for the year-prior years(170)(100)(102)452)Factors af
243、fecting the tax charge for the year:Profit before tax1,239)321)Profit before tax multiplied by standard rate of UK corporation tax of 23.25%(2012:24.5%)288)76)Carry back against prior year losses(40)-)Exercise of share options(154)(138)Provisions and expenditure not deductible128)60)for tax purposes
244、)Derivative charge79)707)Contingent consideration74)-)Other differences(19)3)Change in the rate of corporation tax(288)(156)Tax on profit for the year-current year68)552)Tax on profit for the year-prior years(170)(100)Total net taxation(credit)/charge(102)452)12.Dividends20132012p/share000p/share000
245、Final dividend for the previous year10.05326.7325Interim dividend for the current year6.63535.026216.688511.7587The directors will propose a final dividend of 13.4p per share,amounting to 791,000,for payment on 4 July 2014.As thisremains conditional on shareholders approval,provision has notbeen mad
246、e in these consolidated financial statements.Dividends declared by subsidiaries that are not wholly-owned arepaid to the non-controlling interest in the period in which they aredeclared and amounted to 98,000 in the year(2012:98,000).2113.Earnings per shareYear to 31 December 2013Earnings attributab
247、le to equity)Weighted average)Earnings)holders of the parent company)number of shares)per share)000)no.)pence)Profit after tax including exceptional items for calculation of basic and diluted earnings per share1,266)Add-back exceptional items net of tax and non-controlling interest,as applicable:Cha
248、rge relating to derivative financial instrumentsHedging contracts(18)Convertible Redeemable shares340)Contingent consideration measured at fair value317)Tax relief on exercise of share options(154)Amortisation of intangible assets2,897)Acquisition-related transactions costs716)Relocation costs120)Ut
249、ilisation of prior year tax losses(40)Basic and diluted profit after tax,excluding exceptional terms5,444)Number of shares for calculation of basic earnings per share including exceptional items5,417,971)Effect of potential shares201,205)Number of shares for calculation of diluted earnings per share
250、 including exceptional items5,619,176)Dilutive effect of potential derivative financial instruments26,068)Number of shares for calculation of diluted earnings per share excluding exceptional items5,645,244)Basic earnings per share(including exceptional items)23.4Diluted earnings per share(including
251、exceptional items)22.5Basic earnings per share(excluding exceptional items)100.5Diluted earnings per share(excluding exceptional items)96.4Year to 31 December 2012Earnings attributable to equity)Weighted average)Earnings)holders of the parent company)number of shares)per share)000)no.)pence)Loss aft
252、er tax including exceptional items for calculation of basic and diluted earnings per share(200)Add-back exceptional items net of tax and non-controlling interest,as applicable:Charge relating to derivative financial instruments)Convertible Redeemable shares1,895)Tax relief on exercise of share optio
253、ns(133)Amortisation of intangible assets1,972)Acquisition-related transactions costs358)Utilisation of prior year tax losses(5)Basic and diluted profit after tax,excluding exceptional items3,887)Number of shares for calculation of basic earnings per share including exceptional items4,780,562)Dilutiv
254、e effect of potential shares209,208)Number of shares for calculation of diluted earnings per share including exceptional items4,989,770)Dilutive effect of potential derivative financial instruments299,106)Number of shares for calculation of diluted earnings per share excluding exceptional items5,288
255、,876)Basic earnings per share(including exceptional items)(4.2)Diluted earnings per share(including exceptional items)(4.2)Basic earnings per share(excluding exceptional items)81.3)Diluted earnings per share(excluding exceptional items)73.5)Options over Ordinary shares and rights of conversion of th
256、eConvertible Redeemable shares are described in notes 24 and 25.The calculation of basic earnings per share is derived from the earningsattributable to Ordinary shareholders divided by the weighted averagenumber of shares in issue during the period.The calculation of dilutedearnings per share is der
257、ived from the basic earnings per share,adjustedto allow for the issue of shares on the assumed conversion of alldilutive options and other dilutive potential Ordinary shares in line withthe treasury method prescribed in IAS 33.This regards the assumedproceeds from these instruments as having been re
258、ceived from theissue of Ordinary shares at the average market price of Ordinaryshares during the period.The difference between the number ofOrdinary shares issued on the assumed exercise of the dilutive optionsand the number of Ordinary shares that would have been issued at theaverage market price o
259、f Ordinary shares during the period is treated asan issue of Ordinary shares for no consideration,and thus dilutive.No account has been taken in the figures below of shares that will beissued to the vendors of Scientifica Limited in the event that profits ofthat company in the twelve months period e
260、nding 31 March 2014 areabove the rate prevailing at the time of acquisition.This is inaccordance with IAS 33-Earnings per Share.Reconciliations of theearnings and the weighted average number of shares used in thecalculations are set out below:2214.Property,plant and equipmentPlant&)Fixtures,)Motor)P
261、roperty)Total)machinery)fittings&)vehicles)&building)equipment)improvements)000)000)000)000)000)Cost/deemed cost1 January 2012466)376)95)1,681)2,618)Additions167)196)13)573)949)Acquisitions-)25)-)23)48)31 December 2012633)597)108)2,277)3,615)Additions38)159)67)1,816)2,080)Acquisitions-)67)37)119)223
262、)Disposals(22)(34)(28)(59)(143)31 December 2013649)789)184)4,153)5,775)Depreciation1 January 2012337)209)47)85)678)Charge65)97)28)45)235)31 December 2012402)306)75)130)913)Charge63)120)39)70)292)Disposals(12)(26)(28)(59)(125)31 December 2013453)400)86)141)1,080)Net book value 31 December 2013196)389
263、)98)4,012)4,695)Net book value 31 December 2012231)291)33)2,147)2,702)Included in the net book value of property and building improvements at 31 December 2013 is 2,764,000(2012:978,000)relating to the developmentof a new factory in Laughton,East Sussex.Quorum Technologies Limited and UHV Design Limi
264、ted relocated to the premises in September 2013.The remaining contractual commitment under this project,not provided for in these financial statements,amounted to 36,000 at 31 December 2013(2012:2,000,000).The net book value of plant,machinery and vehicles included above held under finance leases an
265、d hire purchase contracts amounted to70,000 at 31 December 2013(2012:nil).15.Goodwill20132012000000Cost1 January5,8095,316Addition in year2,86949331 December8,6785,809An analysis of goodwill by operating segment is given in note 7.The increase in goodwill during 2013 related to the acquisitionof Sci
266、entifica Limited.There have been no impairment charges in either 2013 or 2012.Goodwill is tested annually for impairment by reference to thevalue in use of the relevant cash generating units,which are thegroups operating segments.This is calculated on the basis ofprojected cash flows for the followi
267、ng five years derived fromdetailed budgets for the ensuing year based on past experience,with subsequent years including modest nominal rates of salesand cost growth of 3%per annum and generally steady grossmargins.The 3%long term growth rate takes into account bothUK and overseas markets.These cash
268、 flows are adjusted topresent day values at a discount rate based on a weightedaverage cost of capital of 10.6%(2012:11.3%)per annum,calculated by reference to year-end data on equity values andinterest,dividend and tax rates.The long term growth rate anddiscount rate is consistent for all segments
269、on the basis thatthey all operate in similar markets and are exposed to similarrisks.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 2013.The direc
270、tors have considered the 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 intang
271、ible assetsNon-Distribution Research Sales orderBrand and Customer Totalcompete agreementsand backlogdomain relationshipsagreementdevelopmentnames000000000000000000000Gross carrying amount1 January 20124977164305635921,5634,361Additions-8032,5007922,3001,8618,25631 December 20124971,5192,9301,3552,8
272、923,42412,617Additions-4301,5089214,4563,00110,31631 December 20134971,9494,4382,2767,3486,42522,933Amortisation and impairment1 January 20122105241325632335662,228Charge for the year2383025027924929683,29431 December 20124488266341,3557251,5345,522Charge for the year492577379219951,5394,49831 Decem
273、ber 20134971,0831,3712,2761,7203,07310,020Carrying amount 31 December 2013-8663,067-5,6283,35212,913Carrying amount 31 December 2012496932,296-2,1671,8907,095An analysis of other intangible assets by business segment is given in note 7.The additions to other intangible assets during 2013 relate to t
274、he acquisition ofScientifica Limited.17.Inventories20132012000000Raw materials4,3262,499Work in progress848857Finished goods6501735,8243,529In 2013,a total of 14,232,000 of inventories was included inthe income statement as an expense(2012:11,334,000).This includes an amount of 52,000(2012:28,000)re
275、sultingfrom write-downs of inventories and an amount of 64,000(2012:101,000)which is the reversal of previous write-downs.The carrying amount of inventories held at fair value less coststo sell is 463,000(2012:31,000).All group inventories formpart of the assets pledged as security in respect of ban
276、k loans.18.Trade and other receivables20132012000000Trade receivables5,5953,370Prepayments and accrued income417325Other receivables5352936,5473,988The carrying value of receivables,all of which are short-term,is considered a reasonable approximation of fair value.All tradeand other receivables have
277、 been reviewed for impairment withno material provision being required.In addition,some of the unimpaired trade receivables were pastdue at the balance sheet date as follows:20132012000000Not more than 3 months2,1891,238More than 3 months but not more than 6 months737270More than 6 months but not mo
278、re than 1 year1317Greater than one year12-3,0691,5152419.Trade and other payables20132012000000Trade payables3,6173,286Accruals and deferred income1,6941,554Social security and other taxes428256Other payables3365636,0755,659All amounts are short-term and their carrying values areconsidered reasonabl
279、e approximations of fair value.Other payables include 521(2012:521)of non equity sharesclassed as financial liabilities(see note 25).20.Current portion of long-term borrowings20132012000000Bank loans3,5231,531Subordinated loans497497Net obligations under hire purchase contracts23-4,0432,028All amoun
280、ts are short-term and their carrying values areconsidered reasonable approximations of fair value.The subordinated loans were advanced by minority shareholdersin Bordeaux Acquisition Limited.They are unsecured,interest freeand repayable at the discretion of that company.21.Long-term borrowings201320
281、12000000Bank loans11,5195,390Net obligations under hire purchase contracts28-11,5475,390Borrowings comprise four bank loans and a mortgage securedon assets of the group.The hire purchase obligations aresecured on the related assets.The repayment profile ofborrowings is as set out in note 22:The firs
282、t loan is repayable in quarterly instalments over the period ending 31 March 2017 and bears interest at 3.35%above LIBOR-related rates.The second loan is repayable in quarterly instalments with a final payment in March 2016 and bears interest at 3.25%above LIBOR-related rates.The third loan is repay
283、able in quarterly instalments over the period ending 31 March 2019 and bears interest at 3.75%above LIBOR-related rates.The fourth loan is repayable in quarterly instalments over the period ending 30 June 2018 and bears interest at 2.75%aboveLIBOR-related rates.The mortgage is repayable in quarterly
284、 instalments over the period ending 31 December 2016 with a final payment in March 2017 and bears interest at 3.35%above LIBOR-related rates.22.Maturity of borrowings and net debt31 December 2013Bank SubordinatedTotalloanloans 000000000Repayable in less than 6 months2,0694972,566Repayable in months
285、7 to 122,036-2,036Current portion of long-term 4,1054974,602borrowingsRepayable in years 1 to 512,331-12,331Later than 5 years11-11Total borrowings16,44749716,944Less:interest included above1,405-1,405cash and cash equivalents10,054-10,054Total net debt4,9884975,485In addition,hire purchase debts am
286、ounted to 51,000.31 December 2012Bank SubordinatedTotalloanloans000000000Repayable in less than 6 months9344971,431Repayable in months 7 to 12919-919Current portion of long-term 1,8534972,350borrowingsRepayable in years 1 to 55,832-5,832Later than 5 years59-59Total borrowings7,7444978,241Less:intere
287、st included above823-823cash and cash equivalents5,418-5,418Total net debt1,5034972,000A 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 2013of loans denominated in Euros was 499
288、,000(2012:1,460,000).These amounts are included in the figures above for bank loans,repayable in years 1 to 5.2523.Deferred tax liabilities2013)2012)000)000)1 January1,562)122)Acquisition in year-amount recognised48)3)Acquisition in year-attributable to intangible assets2,372)1,989)Credit to income
289、statement in the year(1,278)(978)Attributable to the derivative financial instruments-)426)31 December2,704)1,562)Deferred tax balances relate to temporary differences as follows:Accelerated capital allowances72)25)Provisions allowable for tax in subsequent period5)(45)Intangible assets2,627)1,582)T
290、otal2,704)1,562)Amounts provided in respect of deferred tax are computed at21%(2012:23%).24.Share capital20132012000000Allotted,called up and fully paid-Ordinary shares of 5p each 1 January:5,312,499 shares(2012:4,289,967)265214Placing of 500,000 new Ordinary shares at 1625p/share2525(2012:500,000 s
291、hares at 600p/share)Exercise of share options:49,771 shares(2012:89,900)34Conversion of Convertible Redeemable shares:nil(2012:423,632 shares)-2231 December:5,862,270 shares(2012:5,312,499)293265Allotments of Ordinary shares in 2013 were made:by way of the above placing on 18 October,when the share
292、price was 1747.5p,with the aim of restoring the groups financial capacity to complete further acquisitions following the purchase of Scientifica Limited in June 2013;andto satisfy the exercise of 49,771 share options in aggregate on 11 occasions during the year when the share price was within the ra
293、nge of 975.0p to 1830.0p(2012:the exercise of 89,900 share options when the share price was within the range 626.5p to 972.5p).Equity share options and warrantsAt 31 December 2013,options had been granted and remainedoutstanding in respect of 241,204 Ordinary shares in the company,all priced by refe
294、rence to the mid-market price of the shares on thedate of grant and all exercisable,following a 3-year vesting period,between the third and tenth anniversaries of grant,as below:2013 2012Number)WeightedNumber)Weightedaverageaverageexerciseexercisepricepricep/sharep/share2005 Approved PlanOutstanding
295、 at 1 January140,450)229.9211,350)154.2Granted in year22,875)1,642.610,000)821.5Exercised or lapsed in year(49,771)119.3(80,900)105.3Outstanding at 31 December 113,554)563.0140,450)229.9Of which exercisable at55,179)110.592,950)104.831 December2005 Unapproved PlanOutstanding at 1 January127,650)186.
296、1136,650)180.9Exercised or lapsed in year-)-(9,000)107.2Outstanding at 31 December 127,650)186.1127,650)186.1Of which exercisable at99,150)104.599,150)104.531 DecemberTotalOutstanding at 1 January268,100)209.1348,000)164.7Granted in year22,875)1,642.610,000)821.5Exercised or lapsed in year(49,771)11
297、9.3(89,900)105.4Outstanding at 31 December 241,204)636.5268,100)209.1Of which exercisable at154,329)106.6192,100)104.631 DecemberExercise prices at 31 December 2013 ranged from 92p/share to1690/share(2012:92p/share to 865.0p/share),with a weightedaverage remaining contractual life of 5.32 years(2012
298、:5.74 years).26Options were exercised during 2013 by one director(2012:two)as follows:Grant of optionsMarket price on Number of sharesdate of exerciseMr D Barnbrookper share22 March 2006 at 103.5p1467.5p5,00023 March 2007 at 106.5p1467.5p10,00024 Septmeber 2007 at 94p1467.5p5,00028 April 2008 at 124
299、p1467.5p3,45023,450Options remain exercisable by three directors as follows:Grant of optionsNumber of sharesMr D E CicurelMr D Barnbrook Mr R L Cohen20 October 2005-5,00037,000at 101.5p28 April 2008-6,550-at 124p23 July 2009-10,0001,100at 92p9 May 2011-5,0005,000at 470p25 October 20131,7751,7751,775
300、at 1690p1,77528,32544,875The market price of the companys Ordinary shares on31 December 2013 was 2042.5p,the highest price during 2013was 2042.5p on 31 December,the lowest price during 2013 was 967.5p on 11 January and the price on 14 March 2014 was 2362.5p.In accordance with IFRS 2,a Black Scholes
301、valuation model hasbeen used.This has indicated that no material expense isrequired to be charged for the years ended 31 December 2013and 31 December 2012.As such,no adjustment has been made toeither the consolidated or parent company financial statements.Throughout 2013,the group continued to award
302、 a free“matching share”under the Judges Scientific Share Incentive Planfor every share purchased up to a maximum value of 600 peremployee per tax year.In 2013,an average of 55 employeesparticipated in the scheme each month(2012:51 employees),purchasing 8,560 shares in total,including matching shares
303、(2012:9,225 shares).Included in these figures,shares acquiredby directors,including matching shares,were 153 acquired byMr D E Cicurel(2012:166),133 by Mr D Barnbrook(2012:330)and 152 by Mr R L Cohen(2012:217).Convertible Redeemable sharesThe conversion rights set out in note 25 would have resulted
304、inthe issue of 29,459 Ordinary shares if conversion of all theoutstanding Convertible Redeemable shares had taken place on31 December 2013.25.Convertible Redeemable shares classed as financial liabilities2013)2012)000)000)Allotted shares of 1p each1 January 2013:208,333 shares(2012:4,272,974)1)11)-a
305、ll 1/4p paidPaid up to 1p per share-nil shares(2012:4,064,641)-)31)Conversion into Ordinary shares:nil shares-)(34)(2012:3,342,221)-see note 24Redemption-nil shares(2012:722,420)-)(7)31 December 2013:208,333 shares1)1)(2012:208,333)-all 1/4p paidIn accordance with IAS 32,Financial Instruments:Presen
306、tation,the Convertible Redeemable shares are classified as financialliabilities.Under the terms of IAS 39 Financial Instruments,Recognition and Measurement,the conversion and redemptionfeature within the Convertible Redeemable shares is deemed torepresent a derivative financial instrument.As such,it
307、 is arequirement that they be fair-valued at each accounting date,with changes in fair-value being recognised through the incomestatement.The continuing increase in the market price of thecompanys Ordinary shares has correspondingly increased thefair value of the Convertible Redeemable shares.This h
308、asresulted in a 340,000 charge(before and after tax)in the yearended 31 December 2013(2012:1,573,000 charge before tax,1,895,000 including tax).Reductions in the provision arising onredemptions and conversions into Ordinary shares aretransferred directly to equity,with cash payments arising onredemp
309、tions being charged against the provision.The fair valueliability at 31 December 2013 is 574,000(2012:234,000).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 wi
310、nding up or other return of capital,any surplus assetsremaining after payment of liabilities shall be applied:i)Firstly in equally repaying the paid up capital on both the Ordinary shares and the Convertible Redeemable shares;ii)Secondly in distributing the remainder amongst the holdersof the Ordina
311、ry shares according to the amounts paid up.The holders of the Convertible Redeemable shares are not entitled to attend or vote at General Meetings of the company unless the meeting is to consider a resolution for the winding up of the company.2725.Convertible Redeemable shares classed as financial l
312、iabilities-continued The remaining Convertible Redeemable shares are convertible no later than 31 December 2014(subject to extension if the company is in a“close period”on that date)into such number of Ordinary shares as would represent 0.5%of the companys Ordinary share capital as enlarged;the exer
313、cise price is 95p per Ordinary share less amounts already paid on the Convertible Redeemable shares.The holders of Convertible Redeemable shares shall(subject to the provisions of the Companies Acts)be entitled at any time to redeem all or any of the Convertible Redeemable shares outstanding out of
314、any profits or monies of the company which may lawfully be applied for such purpose.26.Emoluments of directors and key management personnel20132012no.no.Executive directors33Non-executive directors3366000000Total directors emoluments:Emoluments 592530Defined contribution pension scheme contributions
315、67598537Emoluments of the highest paid director:Emoluments 184166During the year two directors participated in a defined contributionpension scheme(2011:two)Compensation of key management personnelEmoluments,benefits,pension contributions and social security costs1,3551,157Short term employee benefi
316、ts:Salaries including bonuses and social security costs 1,2511,062Company car allowance and other benefits5749Total short term employee benefits1,3081,111Post-employment benefits:Defined contribution pension plans4746Total post-employment benefits:4746Total remuneration1,3551,157Key management perso
317、nnel comprise directors of the parentcompany and the managing directors of the principal operatingcompanies.The compensation of the non-executive directors ofthe parent company is determined by the Board of directors asa whole,that of the executive directors of the parent companyis determined by the
318、 Remuneration Committee of the Board(comprising the non-executive directors)and that of themanaging directors of the principal operating companies isdetermined by the group Chief Executive.27.Employees20132012no.no.Number of employees average in the yearBy function-manufacturing11489-sales and admin
319、istration10887222176By business segmentMaterials Sciences group9187Vacuum group12381head office(including 3 non-executive directors 88in both years)222176Employment costs20132012000000Wages and salaries8,2096,261Social security costs866671Pension costs1941729,2697,10428.Financial instrumentsThe grou
320、ps policies on treasury management,capital managementobjectives and financial instruments are given in the directors report.Fair value of financial instrumentsFinancial instruments include the borrowings set out in note 22.The group enters into derivative financial instruments in order tomanage its
321、interest rate and foreign currency exposure.The principalderivatives used include interest rate swaps and foreign currencyoptions.Material changes in the carrying values of these instrumentsare recognised in the income statement in the periods in which thechanges arise.Such recognition is treated as
322、 an exceptional item inthe income statement where the foreign currency hedge was enteredinto in order to protect profits in later accounting periods.In suchcases,the charge or credit will be reversed out of exceptional itemsin the accounting period for which the hedge was intended and willbe shown i
323、n results before exceptional items.All financialinstruments denominated in foreign currencies are translated at therate of exchange ruling at the balance sheet date.The directorsbelieve that there is no material difference between the book valueand fair value of all financial instruments.28Borrowing
324、 facilitiesThe group had an undrawn committed overdraft facility of2.7 million at 31 December 2013(2012:3.8 million).Trade payablesAll amounts are short-term(all payable within six months)andtheir carrying values are considered reasonable approximations offair value.The values are set out in note 19
325、.Fair value hierarchyThe fair value hierarchy has the following levels:Level 1:quoted prices(unadjusted)in active markets for identical assets or liabilities Level 2:inputs other than quoted prices included within Level 1 that are observable for the asset or liability,either directly(ie as prices)or
326、 indirectly(ie derived from prices)Level 3:inputs for the asset or liability that are not based on observable market data(unobservable inputs).The interest rate swaps and foreign currency options aremeasured at fair value in accordance with the fair valuehierarchy and are classed as level 2.The deri
327、vative financial instruments in respect of the ConvertibleRedeemable shares are measured at fair value in accordance withthe fair value hierarchy and are classed as level 2.The fair value of contingent consideration relating to theacquisition of Scientifica Limited is classed as level 3 and furtherd
328、escribed in note 31.Summary of financial assets and financial liabilities by category2013)2012)000)000)Financial AssetsTrade and other receivables 6,130)3,663)Cash and cash equivalents10,054)5,418)Loans and receivables16,184)9,081)Financial LiabilitiesDerivative financial instruments574)234)Financia
329、l liabilities designated at fair value574)234)through profit or lossTrade payables3,617)3,286)Accruals1,694)1,554)Other payables336)563)Trade and other payables relating to acquisitions1,554)246)Current portion of long-term borrowings4,043)2,028)Long-term borrowings11,547)5,390)Financial liabilities
330、 measured at amortised cost22,791)13,067)Total financial liabilities23,365)13,301)Net financial liabilities7,181)4,220)Non financial assets and financial liabilities not within the scope of IAS 39Property,plant and equipment4,695)2,702)Goodwill8,678)5,809)Other intangible assets12,913)7,095)Inventor
331、ies5,824)3,529)Prepayments and accrued income417)325)Social security and other taxes(428)(256)Current tax payable(1,320)(633)Deferred tax liabilities(2,704)(1,562)28,075)17,009)Total equity20,894)12,789)2928.Financial instruments-continuedFinancial assetsThe groups financial assets(which are summari
332、sed in note 29-credit risk)comprise cash and cash equivalents and trade andother receivables.The amounts derived from these assets and included as interest income in the income statement are 6,000(2012:7,000).Cash and cash equivalents are principally denominated in sterling and earn interest at floa
333、ting rates.There is no material difference between the book and fair values of the financial assets.At 31 December 2013 the group had trade receivables denominated in foreign currency as follows:US$-1,606,000(2012:511,000)and Euros-655,000(2012:472,000).Financial liabilitiesThe groups principal financial liabilities are bank loans,trade andother payables,derivative financial instruments and Conver
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