Notes to the Financial Statements

 

16. Profit Attributable to DCC plc
Profit after taxation for the year attributable to equity shareholders amounting to €10.284 million (2010: €3.852 million) has been accounted for in the financial statements of the Company. In accordance with Section 148(8) of the Companies Act 1963, the Company is availing of the exemption from presenting its individual Income Statement to the Annual General Meeting. The Company has also availed of the exemption from filing its individual Income Statement with the Registrar of Companies as permitted by Section 7(1A) of the Companies (Amendment) Act 1986.

 

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17. Dividends

Dividends paid per Ordinary Share are as follows: 2011
€’000
2010
€’000
     
Final - paid 43.70 cent per share on 22 July 2010 36,296 32,657
  (2010: paid 39.73 cent per share on 23 July 2009)    
Interim - paid 26.11 cent per share on 3 December 2010 21,738 19,526
  (2010: paid 23.74 cent per share on 4 December 2009)    
  58,034 52,183

 

The Directors are proposing a final dividend in respect of the year ended 31 March 2011 of 48.07 cent per ordinary share (€40.051 million). This proposed dividend is subject to approval by the shareholders at the Annual General Meeting.

 

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18. Earnings per Ordinary Share

  2011
€’000
2010
€’000
     
Profit attributable to owners of the Parent 145,109 130,803
Amortisation of intangible assets after tax 8,220 4,787
Exceptionals after tax (note 11) 15,627 11,049
Adjusted profit after taxation and non-controlling interests 168,956 146,639

 

Basic earnings per ordinary share 2011
cent
2010
cent
     
Basic earnings per ordinary share 174.48c 158.76c
Amortisation of intangible assets after tax 9.88c 5.81c
Exceptionals after tax 18.79c 13.41c
Adjusted basic earnings per ordinary share 203.15c 177.98c
     
Weighted average number of ordinary shares in issue (thousands) 83,167 82,391

 

Basic earnings per share is calculated by dividing the profit attributable to owners of the Parent by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Company and held as treasury shares. The adjusted figures for basic earnings per ordinary share are intended to demonstrate the results of the Group after eliminating the impact of amortisation of intangible assets and net exceptionals.

 

Diluted earnings per ordinary share 2011
cent
2010
cent
     
Diluted earnings per ordinary share 173.90c 157.92c
Amortisation of intangible assets after tax 9.85c 5.78c
Exceptionals after tax 18.73c 13.34c
Adjusted diluted earnings per ordinary share 202.48c 177.04c
     
Weighted average number of ordinary shares in issue (thousands) 83,445 82,830

 

The earnings used for the purposes of the diluted earnings per share calculations were €145.109 million (2010: €130.803 million) and €168.956 million (2010: €146.639 million) for the purposes of the adjusted diluted earnings per share calculations.

 

The weighted average number of ordinary shares used in calculating the diluted earnings per share for the year ended 31 March 2011 was 83.445 million (2010: 82.830 million). A reconciliation of the weighted average number of ordinary shares used for the purposes of calculating the diluted earnings per share amounts is as follows:

  2011
‘000
2010
‘000
     
Weighted average number of ordinary shares in issue 83,167 82,391
Dilutive effect of options 278 439
Weighted average number of ordinary shares for diluted earnings per share 83,445 82,830

 

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. Share options are the Company’s only category of dilutive potential ordinary shares.

 

Employee share options, which are performance-based, are treated as contingently issuable shares because their issue is contingent upon satisfaction of specified performance conditions in addition to the passage of time. These contingently issuable shares are excluded from the computation of diluted earnings per ordinary share where the conditions governing exercisability have not been satisfied as at the end of the reporting period.

 

The adjusted figures for diluted earnings per ordinary share are intended to demonstrate the results of the Group after eliminating the impact of amortisation of intangible assets and net exceptionals.

 

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19. Property, Plant and Equipment

Group Land &
buildings
€’000
Plant &
machinery
& cylinders
€’000
Fixtures &
fittings &
office
equipment
€’000
Motor
vehicles
€’000
Total
€’000
           
Year ended 31 March 2011          
Opening net book amount 138,740 138,665 27,751 52,940 358,096
Exchange differences (134) (54) (125) (60) (373)
Acquisition of subsidiaries (note 45) 1,281 13,778 6,378 1,271 22,708
Disposal of subsidiaries (3,445) (719) (383) (674) (5,221)
Additions 15,929 28,984 12,332 26,778 84,023
Disposals (783) (1,583) (325) (2,077) (4,768)
Depreciation charge (3,097) (25,036) (9,849) (14,924) (52,906)
Impairment charge (note 11) (5,401) (673) - - (6,074)
Reclassifications 2,272 (2,382) 184 (74) -
Closing net book amount 145,362 150,980 35,963 63,180 395,485
           
At 31 March 2011          
Cost 173,732 392,678 106,014 135,954 808,378
Accumulated depreciation (28,370) (241,698) (70,051) (72,774) (412,893)
Net book amount 145,362 150,980 35,963 63,180 395,485
           
Year ended 31 March 2010          
Opening net book amount 118,352 119,924 29,364 51,661 319,301
Exchange differences 2,657 3,894 901 2,031 9,483
Acquisition of subsidiaries (note 45) 18,539 8,929 800 10,264 38,532
Additions 3,661 30,580 7,033 5,655 46,929
Disposals (1,926) (2,631) (884) (3,752) (9,193)
Depreciation charge (2,564) (21,353) (9,642) (13,397) (46,956)
Reclassifications 21 (678) 179 478 -
Closing net book amount 138,740 138,665 27,751 52,940 358,096
           
At 31 March 2010          
Cost 159,466 362,245 91,022 124,548 737,281
Accumulated depreciation (20,726) (223,580) (63,271) (71,608) (379,185)
Net book amount 138,740 138,665 27,751 52,940 358,096

 

Assets held under finance leases
The net carrying amount and the depreciation charge during the year in respect of assets held under finance leases and accordingly capitalised in property, plant and equipment are as follows:

  2011
€’000
2010
€’000
     
Cost 54,712 55,712
Accumulated depreciation (53,215) (52,784)
Net book amount 1,497 2,928
     
Depreciation charge for the year 607 1,119

 

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20. Intangible Assets

Group Goodwill
€’000
Customer
relationships
€’000
Total
€’000
       
Year ended 31 March 2011      
Opening net book amount 561,077 34,013 595,090
Exchange differences 2,170 391 2,561
Arising on acquisition (note 45) 46,783 15,075 61,858
Disposal of subsidiaries (9,394) - (9,394)
Other movements (note 33) (3,039) - (3,039)
Amortisation charge - (10,962) (10,962)
Closing net book amount 597,597 38,517 636,114
       
At 31 March 2011      
Cost 624,397 81,143 705,540
Accumulated amortisation (26,800) (42,626) (69,426)
Net book amount 597,597 38,517 636,114
       
Year ended 31 March 2010      
Opening net book amount 429,299 13,889 443,188
Exchange differences 11,012 943 11,955
Arising on acquisition (note 45) 123,094 25,331 148,425
Revisions to prior year acquisitions (420) - (420)
Impairment charge (1,908) - (1,908)
Amortisation charge - (6,150) (6,150)
Closing net book amount 561,077 34,013 595,090
       
At 31 March 2010      
Cost 588,695 66,687 655,382
Accumulated amortisation (27,618) (32,674) (60,292)
Net book amount 561,077 34,013 595,090

 

Goodwill acquired in business combinations is allocated, at acquisition, to the cash-generating units (CGUs) that are expected to benefit from that business combination. A summary of the allocation of the carrying value of goodwill by segment is as follows:

 

  2011
€’000
2010
€’000
     
DCC Energy 312,460 294,850
DCC SerCom 105,003 77,719
DCC Healthcare 86,296 96,378
DCC Environmental 63,865 62,757
DCC Food & Beverage 29,973 29,373
  597,597 561,077

 

In accordance with IAS 36 Impairment of Assets, the cash generating units to which significant amounts of goodwill have been allocated are as follows:

  2011
€’000
2010
€’000
     
GB Oils Group 214,120 197,556
Fannin Healthcare Group 68,924 71,845

 

Impairment testing of goodwill
Goodwill acquired through business combinations has been allocated to CGUs for the purpose of impairment testing. Goodwill is tested for impairment by review of profit and cash flow forecasts and budgets.

 

The CGUs represent the lowest level within the Group at which the associated goodwill is monitored for management purposes and are not larger than the operating segments determined in accordance with IFRS 8 Operating Segments.


The recoverable amount of each CGU is based on a value in use computation. The cash flow forecasts employed for this computation are extracted from a three year plan and specifically exclude future acquisition activity. Cash flows for a further two years are based on the assumptions underlying the three year plan. A terminal value reflecting inflation (2011: 2.5%; 2010: 2.5%) is applied to the year five cash flows. A present value of the future cash flows is calculated using a before-tax discount rate representing the Group’s estimated before-tax average cost of capital (2011: 8.0%; 2010: 8.0%). Applying these techniques, no impairment charge arose in 2011 (2010: €1.908 million).

 

Key assumptions include management’s estimates of future profitability, capital expenditure requirements, working capital investment and tax considerations. Forecasts are generally based on historical performance together with management’s expectation of future trends affecting the industry and other developments and initiatives in the business.

 

Sensitivity analysis was performed using a discount rate of 10.0% and a terminal growth rate of 1.5% and resulted in an excess in the recoverable amount of all CGUs over their carrying amount. Management believes that any reasonable change in any of the key assumptions would not cause the carrying value of goodwill to exceed the recoverable amount.

 

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