2004 IFRS Figures

3 Aug 2005 10:13

Skyepharma PLC03 August 2005 FOR IMMEDIATE RELEASE 3 August, 2005 SkyePharma PLC SkyePharma Restates 2004 Financial Information for IFRS LONDON, ENGLAND, 3 August, 2005 -- SkyePharma PLC (Nasdaq: SKYE; LSE: SKP)announces that it has restated its results for the year ending 31 December 2004,previously prepared under UK Generally Accepted Accounting Principles ("UK GAAP"), under International Financial Reporting Standards ("IFRS"). From 1 January 2005 all of SkyePharma's consolidated financial statements will be prepared under IFRS and the restatement of the 2004 results is provided to assist in comparisons with the prior year. The table below summarises the principle changes arising from the restatement ofthe Consolidated Profit and Loss account: Year to 31 December 2004 UK GAAP Adjustment IFRS (Unaudited) £ '000 £ '000 £ '000 Revenue 62,168 13,052 75,220 Gross Profit 31,014 16,029 47,043 Operating loss (20,689) 16,944 (3,745) Retained loss (24,296) 494 (23,802) Loss per Ordinary Share (3.9p) - (3.9)p EBITDA (6,370) 12,808 6,438 Donald Nicholson, SkyePharma's Finance Director, said: "The retrospectiveapplication of IFRS to our 2004 financial statements has resulted in minimal netimpact on our 2004 retained loss and loss per share. However, IFRS materiallyalters the composition of our reported Profit & Loss account, particularly asregards the recognition of milestone payments and the treatment of ourtransactions with Paul Capital Royalty Acquisition Fund that have been used tofund part of our late-stage clinical development programme. I would stress thatthese are merely accounting changes and have no impact on the company's cashflow." SkyePharma intends to report its unaudited financial statements for the sixmonths ended 30 June 2005 in September. For further information please contact: SkyePharma PLC +44 207 491 1777 Donald Nicholson, Finance Director Peter Laing, Director of Corporate Communications +44 207 491 5124 Sandra Haughton, US Investor Relations +1 212 753 5780 Buchanan Communications +44 207 466 5000 Tim Anderson / Mark Court/ Rebecca Skye Dietrich Notes to Editors About SkyePharma SkyePharma PLC develops pharmaceutical products benefiting from world-leadingdrug delivery technologies that provide easier-to-use and more effective drugformulations. There are now eleven approved products incorporating SkyePharma'stechnologies in the areas of oral, injectable, inhaled and topical delivery,supported by advanced solubilisation capabilities. For more information, visitwww.skyepharma.com. Certain statements in this news release are forward-looking statements and aremade in reliance on the safe harbour provisions of the U.S. Private SecuritiesLitigation Act of 1995. Although SkyePharma believes that the expectationsreflected in these forward-looking statements are reasonable, it can give noassurance that these expectations will materialize. Because the expectations aresubject to risks and uncertainties, actual results may vary significantly fromthose expressed or implied by the forward-looking statements based upon a numberof factors, which are described in SkyePharma's 20-F and other documents on filewith the SEC. Factors that could cause differences between actual results andthose implied by the forward-looking statements contained in this news releaseinclude, without limitation, risks related to the development of new products,risks related to obtaining and maintaining regulatory approval for existing, newor expanded indications of existing and new products, risks related toSkyePharma's ability to manufacture products on a large scale or at all, risksrelated to SkyePharma's and its marketing partners' ability to market productson a large scale to maintain or expand market share in the face of changes incustomer requirements, competition and technological change, risks related toregulatory compliance, the risk of product liability claims, risks related tothe ownership and use of intellectual property, and risks related toSkyePharma's ability to manage growth. SkyePharma undertakes no obligation torevise or update any such forward-looking statement to reflect events orcircumstances after the date of this release. SKYEPHARMA PLC Unaudited Restatement of Financial Information for the year ended 31 December 2004 to International Financial Reporting Standards Introduction From 1 January 2005 SkyePharma is required to prepare its consolidated financialstatements in accordance with International Financial Reporting Standards,International Accounting Standards and interpretations (referred to collectivelyhereafter as 'IFRS'). These standards represent a significant change from UKGenerally Accepted Accounting Principles ('UK GAAP'), SkyePharma's historicalprimary reporting GAAP. SkyePharma's 2004 consolidated financial statements approved on 31 May 2005 wereprepared in accordance with UK GAAP. This document sets out and explains therestatements that are required to conform the Group's published 2004consolidated financial statements to IFRS. The financial information presentedbelow is unaudited. Basis of Preparation Transition Date IFRS 1 'First time adoption of International Financial Reporting Standards'deals with how companies will have to apply IFRS for the first time. IFRS 1requires that comparative information be restated retrospectively for all yearsthat a full set of comparatives is provided. SkyePharma will provide one year ofcomparative information in its Annual Report for the year ended 31 December 2005and therefore the Group's IFRS transition date is 1 January 2004. SkyePharma'sfirst report published using IFRS will be its interim results for the period to30 June 2005 to be published in September 2005. Assumptions The financial impact of the transition to IFRS has been assessed based upon theassumption that all IFRS standards issued by the International AccountingStandards Board ('IASB') that are effective for 2005 reporting are endorsed bythe European Commission. At present, the European Commission has not endorsedall of these standards. Although the IASB has issued all standards that will beeffective for the year ended 31 December 2005, some new standards may beavailable for early adoption, changes are still anticipated to others and theinterpretation and application of certain recently revised standards is stillbeing debated. Therefore the IFRS 2004 financial information presented here maystill be subject to change. Presentation of financial information For ease of comparison, and in order to minimise the number of restatementadjustments, the financial information included within this document ispresented in the format of our 2004 consolidated financial statements. Theinformation has not been presented in accordance with IAS 1 'Presentation ofFinancial Statements' and accordingly further presentational adjustments may berequired at a later date. IFRS 1 Exemptions In general a company is required to determine its IFRS accounting policies andapply these retrospectively to determine its opening balance sheet under IFRS atits transition date (1 January 2004 for SkyePharma). However IFRS 1 permits anumber of exemptions from this general rule in order to assist companies intheir transition to IFRS. The key IFRS 1 provisions relevant to the Group areoutlined below. • IFRS 3: Business combinations A first time adopter has the option not to restate most aspects of past businesscombinations and instead to apply IFRS 3 prospectively from the transition date.SkyePharma has elected to take this option. As a result the goodwill balanceunder IFRS at 1 January 2004 remains unchanged from that previously recordedunder UK GAAP. No amortisation is charged from 1 January 2004, SkyePharma'stransition date. • IFRS 2: Share-based payment IFRS 2 applies to equity instruments, such as share options, granted since 7November 2002 and not vested at 1 January 2005. However under the transitionalarrangements of IFRS 1, there is the option to adopt retrospective applicationof the standard where companies have previously publicly disclosed the fairvalue of those equity instruments determined at the measurement date. SkyePharmahas previously disclosed those fair values in its US GAAP ('US GenerallyAccepted Accounting Principles') disclosures and therefore elected to adoptretrospective application of IFRS 2. • IAS 19: Employee benefits In accordance with IFRS1, the Group expects to elect to fully recognise allactuarial gains and losses on its pension scheme in France at 1 January 2004,its transition date. Subject to the endorsement by the European Union of IAS 19(revised), ongoing actuarial gains and losses will be recognised in theStatement of Recognised Income and Expenditure. • IAS 32 and IAS 39: Financial Instruments IFRS1 allows companies the option to not present comparative information onfinancial instruments in accordance with IAS 32 'Financial Instruments:Disclosure and presentation' and IAS 39 'Financial Instruments: Recognition andMeasurement'. The Group will not utilise this exemption and has elected to applyIAS 32 and IAS 39 retrospectively. • IAS 21: The Effects of Changes in Foreign Exchange Rates An exemption offered by IFRS 1 in respect of IAS 21 gives the Group the optionto reset its cumulative translation differences to zero at 1 January 2004, itsdate of transition. The Group has elected not to take this exemption and willinclude its cumulative translation differences as a separate component withinequity. This is because the information is readily available and will beconsistent with its reporting under US GAAP. Impact of Restatement The impact of restatement to IFRS on the 2004 financial information issummarised below. Year to 31 December 2004 UK GAAP Adjustment IFRS (Unaudited) £ '000 £ '000 £ '000 Revenue 62,168 13,052 75,220 Gross Profit 31,014 16,029 47,043 Operating loss (20,689) 16,944 (3,745) Retained loss (24,296) 494 (23,802) Loss per Ordinary Share (3.9)p - (3.9)p EBITDA (6,370) 12,808 6,438 The overall impact is positive to revenue, gross profit, operating profit andEBITDA and broadly neutral to retained loss. The principal items that lead to the IFRS adjustments are set out in the tablebelow. The impact of these adjustments on SkyePharma's income statement andbalance sheet is presented at pages 10 to 13. Year to 31 December 2004 Operating Loss Retained Loss Net Assets £ '000 £ '000 £ '000 UK GAAP (20,689) (24,296) 63,623 Revenue Recognition 13,052 13,052 (6,727)Sale of Royalty Interests to Paul Capital 3,032 (6,954) (43,225)Share Based Payment (2,837) (2,837) -Goodwill Amortisation 4,136 4,136 4,136Convertible Bonds: Interest Charge - (309) 16,429 Exceptional Loss on Bond Exchange - (6,174)Financial Instruments: Fixed Asset Investments - - (543) Other (516) (516) (162)Other 77 96 (271)Total Adjustments 16,944 494 (30,363) IFRS (3,745) (23,802) 33,260 Each of the IFRS adjustments set out in the table above is explained below.Revenue Recognition Year to 31 December 2004 Operating Loss Retained Loss Net Assets £ '000 £ '000 £ '000 IFRS/ UK GAAP Difference 13,052 13,052 (6,727) Under IFRS SkyePharma has adopted a revenue recognition policy in accordancewith IAS 18 'Revenue' which is similar to the policy that SkyePharma hashistorically applied under US GAAP. Under UK GAAP SkyePharma has generallyrecognised up front payments immediately in full where there are no materialfuture obligations and the payments are nonrefundable, on the basis that the upfront payment is for past services. Under IFRS generally up front payments willbe deferred and amortised on a systematic basis over the period of developmentto filing. This is the same as the treatment adopted under US GAAP. However, theaccounting for each agreement will continue to be determined on an individualbasis. Under IFRS revenue in relation to upfront payments will generally berecognised at a later date than under UK GAAP and therefore will not correspondwith cash flow. The IFRS restatement increases 2004 revenue so reducing operating and retainedloss by £13.1 million. This relates to upfront payments that have beenpreviously recognised in our UK GAAP financial statements in earlier years butwhich under IFRS would not have been recognised in full but been spread forwardacross the period of development to filing. The IFRS restatement increasesdeferred income at 31 December 2004 by £6.7 million. Under IFRS at 31 December2004 SkyePharma has recorded £14.1 million of deferred income. It is likely that£11.8 million of this deferred income will be recognised in 2005. Sale of Royalty Interests Year to 31 December 2004 Operating Loss Retained Loss Net Assets £ '000 £ '000 £ '000 IFRS/ UK GAAP Difference 3,032 (6,954) (43,225) The Group entered into two transactions with Paul Capital Royalty AcquisitionFund ('Paul Capital') in 2000 and 2002. Under these transactions Paul Capitalprovided a total of $60 million in return for the sale of a portion of thepotential future royalty and revenue streams on a selection of the Group'sproducts. Under UK GAAP the proceeds received from Paul Capital are treated asa sale and recorded as Other Operating Income and royalties are expensed whenincurred. Under IFRS the sale of royalty interests to Paul Capital is accounted for on asimilar basis to that under US GAAP. Under IFRS the proceeds received from PaulCapital meet the definition of a financial liability under IAS 32, and aretreated as such. Under IFRS no Other Operating Income is recognised, royaltiespaid to Paul Capital are treated as repayment of the liability and in additionnotional interest is charged on the liability. The contractual arrangement withPaul Capital is unaffected by this change in accounting and the arrangementremains a royalty agreement under which royalties are payable on revenues earnedand payments received. The liability has no face value but represents the netpresent value of royalties we expect to pay Paul Capital over the term of theagreement. If ultimately revenues are lower than we forecast, the royaltypayments to Paul Capital will be lower and the calculated value of the liabilitywill fall. The IFRS restatement reduces operating loss by £3.0 million, being the removalof royalties payable of £3.0 million, the removal of foreign exchange losses of£1.2 million net of the removal of Other Operating Income of £1.2 million.However the IFRS restatement increases the 2004 interest charge by £10.0 millionto result in an overall increase in retained loss by £7.0 million. Therestatement decreases net assets at 31 December 2004 by £43.2 million being therecognition of the Paul Capital debt of £49.0 million, the removal of £7.1million of deferred Other Operating Income that will no longer be recognisedunder IFRS and is removed from the opening balance sheet plus other balancesheet reclassifications of £1.3 million in relation to prepaid royalties. The interest charge recognised under IFRS in any given year is calculated byapplying an effective interest rate to the outstanding liability and has nodirect correlation to the amount of cash we will pay to Paul Capital in thatyear. The effective interest rate is based on the cash flows anticipated overthe full term of the agreement based upon the projected royalties payable toPaul Capital. In the early years of the agreement, where royalty income andtherefore royalties payable to Paul Capital are forecast to be lower and theliability higher, the effective interest charge will therefore be higher.However, over time, as royalty income and therefore royalties payable increaseand the interest charge is based on the decreasing liability, the interestcharge is expected to fall. Share Based Payment Year to 31 December 2004 Operating Loss Retained Loss Net Assets £ '000 £ '000 £ '000 IFRS/ UK GAAP Difference (2,837) (2,837) - IFRS 2 requires that for share option awards to employees, the fair value of theemployee services received should be measured by reference to the fair value ofthe share option at the grant date. This differs significantly from thetreatment under UK GAAP where the charge to the profit and loss account is basedon the difference between the fair value of the shares at the date of grant andthe exercise price. Since SkyePharma has historically granted employee optionswhere the share price at the date of grant equals the exercise price, there hasbeen no charge to record under UK GAAP. SkyePharma is adopting retrospective application of IFRS 2 since it haspreviously publicly disclosed the fair value of employee share option awards inits US GAAP disclosures and 20-F. The charge under IFRS for 2004 will thereforebe the same as that previously disclosed under US GAAP standard FAS 123. TheIFRS restatement results in an additional charge to the 2004 income statement of£2.8 million, increasing both operating and retained loss. The restatement hasno impact on net assets. Goodwill Amortisation Year to 31 December 2004 Operating Loss Retained Loss Net Assets £ '000 £ '000 £ '000 IFRS/ UK GAAP Difference 4,136 4,136 4,136 UK GAAP required goodwill to be amortised over its estimated expected usefullife which the Directors determined as 20 years. Under IFRS, goodwill isconsidered to have an indefinite life and so is not amortised, but is subject toannual impairment testing. Therefore the annual goodwill charge made under UKGAAP will not be recorded under IFRS from 1 January 2004, the IFRS transitiondate. The IFRS restatement results in a reduction in the 2004 amortisationcharge of £4.1 million thereby reducing both operating and retained loss. Netassets at 31 December 2004 are increased by the same amount. Convertible Bonds Year to 31 December 2004 Operating Loss Retained Loss Net Assets £ '000 £ '000 £ '000 Interest Charge - (309) 16,429Exceptional Loss on Bond Exchange - (6,174)Total IFRS/ UK GAAP Difference - (6,483) 16,429 In total the IFRS adjustments on the convertible bonds result in an additionalinterest charge in the 2004 income statement of £6.5 million and an increase innet assets at 31 December 2004 by £16.4 million. Of the £6.5m additionalinterest charge, £0.3m relates to the IFRS accounting for convertible bonds ingeneral and £6.2 million is an additional exceptional IFRS charge caused by the2004 refinancing of SkyePharma's convertible bond due 2005. Under UK GAAP the total net proceeds of the convertible bond issues in 2000 (due2005) and 2004 (due 2024) were recorded as debt. Under IFRS the conversionfeature of each of the bonds must be separated ('bifurcated') from the debt andclassified separately as equity. The net impact of the changes to IFRS and inparticular the bifurcation of the equity component of each bond has led, at 31December 2004, to a reduction in the carrying value of convertible debt of £16.4million and an increase in equity of £16.4 million. While the carrying value ofthe convertible debt in the balance sheet is reduced, the amount of debtrepayable at maturity is unchanged and consequently under IFRS the Group willrecord higher interest charges in each year to maturity or conversion. In 2004,the impact of these factors has led to an additional interest charge of £0.3million. The terms of the debt are unaffected and the physical cash payments dueremain the same; as such the cost of the debt in cash terms is unaffected. During 2004 the Group exchanged £49.6 million of the convertible bonds due 2005for bonds due 2024 in the same amount, leaving £9.8 million 2005 bondsoutstanding. Under UK GAAP no gain or loss arose on the exchange. Howeverunamortised issue costs of £0.3 million were written off as a UK GAAPexceptional interest charge. Under IFRS the refinancing of the £49.6 millionconvertible is treated as an extinguishment of the original debt and the issueof new debt recorded at fair value since the discounted present value of thecash flows of the two instruments differ by more than 10% (2005 Bond replaced bya 2024 Bond). The extinguishment and debt issue costs lead to the additionalexceptional interest charge of £6.2 million recorded in the IFRS incomestatement in 2004. Fixed Asset Investments Year to 31 December 2004 Operating Loss Retained Loss Net Assets £ '000 £ '000 £ '000 IFRS/ UK GAAP Difference - - (543) Under UK GAAP fixed asset investments are stated at the lower of cost and netrealisable value. Under IFRS most of SkyePharma's investments are classified as'Available for sale investments' and as such stated at fair value with anyunrealised gains or losses recorded in equity. The IFRS restatement reduces netassets at 31 December 2004 by £0.5 million and does not effect the incomestatement. Other Financial Instruments Year to 31 December 2004 Operating Loss Retained Loss Net Assets £ '000 £ '000 £ '000 IFRS/ UK GAAP Difference (516) (516) (162) Under UK GAAP, periodic gains and losses on interest and foreign currencyderivatives designated as hedges are not recognised until the operationaltransactions to which they are linked occur. No derivatives have been designatedas hedges under IFRS and therefore in accordance with IAS 39 such instrumentshave been recognised at fair value at the balance sheet date with gains andlosses being recorded in the income statement. SkyePharma is adopting fullretrospective application of IAS 32 and IAS 39 and has therefore restated itsopening balance and 2004 result accordingly. This restatement has led to anadditional charge to the 2004 income statement of £0.5 million, increasing bothoperating and retained loss. As at 31 December 2004 the IFRS restatement reducesnet assets by £0.2 million. Other Differences Other differences relate primarily to the Company's pension scheme in France. Inaccordance with IFRS1, the Group has fully recognised all actuarial gains andlosses on its pension scheme in France at 1 January 2004, its transition date.Subject to the endorsement by the European Union of IAS 19 (revised), ongoingactuarial gains and losses will be recognised in the Statement of RecognisedIncome and Expenditure. Under IFRS the Group is required to capitalise research and development costswhen the criteria laid out in IAS 38 are met. The Group has reviewed itshistorical research and development projects and determined that no expenditureincurred to date meets the criteria for capitalisation in IAS 38. However theGroup will continue to review its development expenditure against the relevantcriteria and will capitalise such expenditure when it is appropriate. Income Statement Year ended 31 December 2004 IFRS UK GAAP Adjustments IFRS (Unaudited) £'000 £'000 £'000 ----- ----- ----- Revenue 62,168 13,052 75,220 Cost of sales (31,154) 2,977 (28,177) ----- ----- -----Gross profit 31,014 16,029 47,043Other operating income 1,237 (1,237) -Selling, marketing and distribution (1,728) - (1,728)expensesAdministration expenses Amortisation (6,314) 4,136 (2,178) Other administration expenses (16,937) (1,984) (18,921) (23,251) 2,152 (21,099)Research and development expenses (27,961) - (27,961) ----- ----- -----Operating (loss)/profit (20,689) 16,944 (3,745)Profit on disposal of investment 2,021 - 2,021Share of post tax (loss)/ profit in (16) 6 (10)associate ----- ----- -----(Loss)/ profit on ordinary activitiesbefore interest and taxation (18,684) 16,950 (1,734)Interest receivable 758 42 800Interest payable (6,122) (16,498) (22,620) ----- ----- -----(Loss)/ profit on ordinary activities (24,048) 494 (23,554)before taxationTaxation (248) - (248) ----- ----- -----Retained (Loss)/ profit (24,296) 494 (23,802) ----- ----- -----Earnings per Ordinary Share Basic (3.9p) - (3.9p) Diluted (3.9p) - (3.9p) ======== ======== ======== Income Statement Adjustments (Unaudited) Year ended 31 December 2004 Revenue Sale of Share Amortisati- Convertible Convertible Other Other Total IFRS recognition royalty based on of bonds- bonds - financial Adjustments interests payment goodwill Interest Exceptional instruments £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 ----- ----- ----- ----- ----- ----- ----- ---- ----- Revenue 13,052 - - - - - - - 13,052 Cost of - 2,977 - - - - - - 2,977 sales ----- ----- ----- ----- ----- ----- ----- ---- ----- Gross 13,052 2,977 - - - - - - 16,029 profit Other - (1,237) - - - - - - (1,237) operating income Selling, - - - - - - - - - marketing and distribution expenses Administration expenses Amortisation - - - 4,136 - - - - 4,136 Other - 1,292 (2,837) - - - (516) 77 (1,984) administration expenses - 1,292 (2,837) 4,136 - - (516) 77 2,152 Research - - - - - - - - - and development expenses ----- ----- ----- ----- ----- ----- ----- ---- ----- Operating 13,052 3,032 (2,837) 4,136 - - (516) 77 16,944 (loss)/profit Profit on - - - - - - - - - disposal of investment Share of - - - - - - - 6 6 post tax (loss)/ profit in associate ----- ----- ----- ----- ----- ----- ----- ---- ----- (Loss)/ 13,052 3,032 (2,837) 4,136 - - (516) 83 16,950 profit on ordinary activities before interest and taxation Interest - - - - - - - 42 42 receivable Interest - (9,986) - - (309) (6,174) - (29) (16,498) payable ----- ----- ----- ----- ----- ----- ----- ---- ----- Loss on 13,052 (6,954) (2,837) 4,136 (309) (6,174) (516) 96 494 ordinary activities before taxation Taxation - - - - - - - - - ----- ----- ----- ----- ----- ----- ----- ---- ----- Retained 13,052 (6,954) (2,837) 4,136 (309) (6,174) (516) 96 494 Loss ----- ----- ----- ----- ----- ----- ----- ---- ----- Earnings per Ordinary Share Basic 2.1p (1.1p) (0.5p) 0.7p (0.1p) (1.0p) (0.1p) - - Diluted 2.1p (1.1p) (0.5p) 0.7p (0.1p) (1.0p) (0.1p) - - ========= ======== ========= ========== ========= ========= ========== ====== ========== Consolidated Balance Sheet Year ended 31 December 2004 UK IFRS GAAP Adjustments IFRS (Unaudited) £'000 £'000 £'000 ----- ----- -----Fixed assetsIntangible assets 91,519 4,136 95,655Property, plant and equipment 40,628 - 40,628Investments 20,104 (537) 19,567 ----- ----- ----- 152,251 3,599 155,850 ----- ----- -----Current assetsInventories 1,531 - 1,531Trade and other receivables Due within one year 19,093 (1,329) 17,764 Due after more than one year 770 - 770Financial assets 1,093 - 1,093Cash and cash equivalents 15,337 - 15,337 ----- ----- ----- 37,824 (1,329) 36,495 ----- ----- -----Current liabilitiesFinancial liabilities: Borrowings (3,876) (7,009) (10,885) Convertible bonds due June 2005 (9,774) 333 (9,441)Trade and other payables (20,610) - (20,610)Deferred income (14,291) 2,483 (11,808) ----- ----- ----- (48,551) (4,193) (52,744) ----- ----- -----Net current assets/(liabilities) (10,727) (5,522) (16,249) ----- ----- -----Non-current liabilitiesFinancial liabilities: Borrowings - (42,187) (42,187) Convertible bonds due May 2024 (66,478) 16,096 (50,382)Other non-current liabilities (10,462) - (10,462) Deferred income (250) (2,072) (2,322) Provisions (711) (277) (988) ----- ----- ----- (77,901) (28,440) (106,341) ----- ----- -----Net assets 63,623 (30,363) 33,260 ========= ========= =========Shareholders' equityOrdinary shares 63,440 - 63,440Share premium 320,980 - 320,980Other reserves 9,350 23,062 32,412Retained earnings (330,147) (53,425) (383,572) ----- ----- -----Total equityAttributable to equity interests 52,313 (30,363) 21,950Attributable to non-equity interests 11,310 - 11,310 ----- ----- ----- 63,623 (30,363) 33,260 ========= ========= ========= Consolidated Balance Sheet Adjustments (Unaudited) Year ended 31 December 2004 Revenue Sale of Amortisation Convertible Fixed Other Total IFRS recognition royalty of bonds asset financial Other Adjustments interests goodwill £'000 investments instruments £'000 £'000 £'000 £'000 £'000 £'000 £'000 ----- ----- ----- ----- ----- ----- ----- ----- Fixed assets Intangible assets - - 4,136 - - - - 4,136 Property, plant - - - - - - - - and equipment Investments - - - - (543) - 6 (537) ----- ----- ----- ----- ----- ----- ----- ----- - - 4,136 - (543) - 6 3,599 ----- ----- ----- ----- ----- ----- ----- ----- Current assets Inventories - - - - - - - - Trade and other receivables Due within one - (1,329) - - - - - (1,329) year Due after more - - - - - - - - than one year Financial assets - - - - - - - - Cash and cash - - - - - - - - equivalents ----- ----- ----- ----- ----- ----- ----- ----- - (1,329)) - - - - - (1,329) ----- ----- ----- ----- ----- ----- ----- ----- Current liabilities Financial liabilities: Borrowings - (6,847) - - - (162) - (7,009) Convertible bonds - - - 333 - - - 333 due June 2005 Trade and other - - - - - - - - payables Deferred income (4,655) 7,138 - - - - - 2, 483 ----- ----- ----- ----- ----- ----- ----- ----- (4,655) 291 - 333 - (162) - (4,193) ----- ----- ----- ----- ----- ----- ----- ----- Net current (4,655) (1,038) - 333 - (162) - (5,522) assets/(liabilities) Non-current liabilities Financial liabilities: Borrowings - (42,187) - - - - - (42,187) Convertible bonds - - - 16,096 - - - 16,096 due May 2024 Other non-current - - - - - - - - liabilities Deferred income (2,072) - - - - - - (2,072) Provisions - - - - - - (277) (277) ----- ----- ----- ----- ----- ----- ----- ----- (2,072) (42,187) - 16,096 - - (277) (28,440) ----- ----- ----- ----- ----- ----- ----- ----- Net assets (6,727) (43,225) 4,136 16,429 (543) (162) (271) (30,363) ========= ======== ========= ========= ========= ========= ========= ========= Shareholders' equity Ordinary shares - - - - - - - - Share premium - - - - - - - - Other reserves - - - 23,062 - - - 23,062 Retained earnings (6,727) (43,225) 4,136 (6,633) (543) (162) (271) (53,425) ----- ----- ----- ----- ----- ----- ----- ----- Total equity Attributable to (6,727) (43,225) 4,136 16,429 (543) (162) (271) (30,363) equity interests Attributable to - - - - - - - - non-equity interests ----- ----- ----- ----- ----- ----- ----- ----- (6,727) (43,225) 4,136 16,429 (543) (162) (271) (30,363) ========= ======== ========= ========= ========= ========= ========= ========= This information is provided by RNS The company news service from the London Stock Exchange