13 Sep 2005 07:02
Kiln PLC13 September 2005 Kiln plc Interim results for the six months to 30th June 2005 Kiln plc, the specialist Lloyd's insurance group, announces record interimresults. Financial highlights • Gross written premiums £195.1m (2004: £162.4m) up 20% • Record profits before tax of £34.3m (2004: £27.6m) up 24% • Earnings per share of 11.24p (2004: 9.42p) up 19% • Annualised return on equity 33.5% (2004: 33.7%) • Investment income £6.8m (2004: £3.5m) up 94% • Shareholders' funds increased by £30.1m to £163.6m (14.75p per share) • Interim dividend 1p per share (2004: 0.6p) and reiterates dividend strategy. Financial summary 2005 half year 2004 half year (1)Profit before tax £34.3m £27.6mEarnings per share 11.24p 9.42pCombined ratio 83% 80%Return on equity 33.5% 33.7%Dividend per share - six months to June 1.0p 0.6pNet assets per share 80.19p 65.44p Operational highlights • Combined ratio of 83% and claims ratio of 49% (2004: 80%(2) and 44%(2) respectively) • Net earned premiums(3) of £100.0m (2004: £67.1m) up 49% • Stable 2005 rating environment Outlook • Multiple income streams all delivering • Continuing underwriting discipline and underwriting for profit not volume • Hurricane Katrina cost to Kiln shareholders estimated at between £30 million and £35 million (4) • Hurricane Katrina likely to extend and significantly improve favourable underwriting environment Commenting on these results, Chief Executive Officer Edward Creasy said: 'Kiln is performing well as these record profits demonstrate. Hurricane Katrinahas brought devastation to the lives of many and the human cost is inestimable.The global insurance industry will be affected financially by Katrina; webelieve, however, that it will result in a rise in prices overall and willgenerate good opportunities for Kiln as a specialist underwriter.' (1)Restated under International Financial Reporting Standards (2)The basis of calculation for the expense ratio has been changed from NetWritten Premium to Net Earned Premium, to bring it into line with the methodused by insurance markets outside Lloyd's. (3) The basis of calculation has changed for IFRS and the treatment of GearingQuota Shares. (4) This figure represents the full estimated amount of the loss. Part of thisloss will be absorbed as expected normal loss activity. 13th September 2005 Enquiries:Kiln plc Tel: 020 7886 9000 Edward Creasy, Chief Executive Officer Peter Haynes, Chief Financial Officer Kate Rogers, Head of CommunicationsCollege Hill Tel: 020 7457 2020 Tony Friend Roddy Watt Photographs available on request Notes to Editors Kiln, established in 1962, is an international insurance and reinsuranceunderwriting group that specialises in complex, unusual risks. Kiln plc islisted on the London Stock Exchange. Its operating subsidiary, R J Kiln & CoLimited has £703 million of capacity under management for the 2005 year ofaccount, making it one of the largest agencies trading in the Lloyd's insurancemarket. A recognised leader in each of the five main business areas in which itoperates: reinsurance, accident and health, aviation, marine and special risks,and property, Kiln enjoys a security rating of 'A' (Strong) assigned to Lloyd'sby Standard and Poor's. These are the first published results for Kiln plc under International FinancialReporting Standards Chairman's report Kiln's strong performance of recent years has continued during the first half of2005 and I am pleased to announce that we have earned record profits before taxof £34.3 million, an increase of 24% on the same period last year (2004: £27.6million). This is in line with the recent trend of healthy profits andrepresents an annualised return on equity of 33.5% (2004: 33.7%). Thisperformance demonstrates the continuing underlying strength of Kiln's business. We are declaring an interim dividend of 1p per share (2004: 0.6p) to be paid on18th November 2005 to shareholders on the register on 19th October 2005. At the2004 year end we stated that it was our intention to maintain the dividend at orabove 3p per share throughout the insurance business cycle. This remains ourintention, and a decision on the level of the full year dividend will be madebased on the full year financial results. During 2005 Kiln has finalised its approach to determining the appropriate levelof risk adjusted capital to support its business plans for 2006 and the future.We have determined a level of capital for 2006 which reflects our objective ofproviding attractive returns for shareholders at the same time as striking abalance between our rigorous, conservative approach to risk management and ourhighly specialised, short tail underwriting expertise. The introduction of theFSA's Individual Capital Regime has had little impact on the Risk Based Capitalratio which would have been applied by Lloyd's to our 2006 underwriting plans.We are currently re-evaluating these plans and the consequent capitalrequirements for 2006 following the destruction caused by Hurricane Katrina. Kiln is a strong and successful business with underwriting at its heart. It hasa clear strategy of managing a clean, short tail book of specialist business,and focuses its appetite for risk on its underwriting activities; elsewhere inthe business it takes a conservative approach. We adopt a partnership mindset tobusiness relationships, including our clients, our brokers, our employees andour distribution network, which we continue to seek ways to expand. We have not seen a significant decline in insurance pricing so far this year,and in the light of Hurricane Katrina, we anticipate a continuation of thisfavourable underwriting environment. We will continue both to make the most ofunderwriting opportunities as they emerge and to be rigorous and disciplined inour approach to underwriting; Kiln has a history of underwriting well across theinsurance cycle, and the board is confident that over the long term the companyis well positioned to translate this underwriting performance into excellentvalue for our shareholders. Nick Cosh Chairman 13th September 2005 Chief Executive Officer's report Kiln has sustained its excellent recent performance in the first half of 2005.Profits before tax for the first six months of 2005 are £34.3 million (2004:£27.6 million), a 24% increase on last year's interim result. These recordprofits result in earnings per share for the half year of 11.24p, an increase of19% from 9.42p at the same time last year. Shareholders' funds increased to£163.6 million (2004: £133.5 million), amounting to 80.19p (2004: 65.44p) pershare and net tangible assets per share increased 26% from 57.55p to 72.62p yearon year. Gross Written Premium in the first half of 2005 has risen from £162.4 million to£195.1 million which is an increase of 20%. The rise in 2005 is largely drivenby the effects of opportunistic underwriting in our property division; theproperty team has taken advantage of favourable pricing in the first half of theyear, writing the majority of its capacity by the end of June; particularly inrespect of delegated authority underwriting where written premium is estimatedover an eighteen month period. Both our Net Written and Net Earned Premiums haveincreased by around 50% which, had they been prepared under the previousaccounting regime, would have amounted to around 25%; presentational changes andIFRS account for the balance of the stated increase. Managing the cycle Insurance is a cyclical business and one of the ways in which we measure oursuccess is the extent to which we manage the cycle. The unusually high level ofhurricane and typhoon activity in the second half of last year resulted inpricing being maintained at higher levels than we would otherwise have expected.The impact of the insurance cycle is an inevitable feature of our business,whether as a result of a shortage of capital following a large catastrophe or aprolonged period of attritional losses, or as a consequence of enhancedcompetition and the subsequent pressure on price levels. The losses of 2004 and2005 have the potential to create opportunities for continued sustainedprofitable underwriting, and it is Kiln's intention to ensure that we take fulladvantage of any improvement in underwriting conditions in 2006. We arecurrently re-evaluating our plans for 2006 in the light of the damage caused byHurricane Katrina. Our approach to underwriting remains unchanged; we apply rigorous underwritingdiscipline to the business presented to us and we manage our levels of capitaland capacity accordingly. For the first six months of 2005, in spite of relativeweakening of prices, our internal measurement of changes in rates for renewalbusiness (the Premium Rating Index) shows prices to be stable, whichdemonstrates that Kiln's underwriters are maintaining discipline on renewalbusiness and are prepared to turn away business that does not meet ourrequirements in terms of price and therefore profitability. In the first half of2005, the volume of new business written was 14% of the total, compared with 23%for the same period last year, which illustrates clearly our determination tomaintain the quality of our business and to underwrite for profit rather thanvolume. Premium volume for Kiln Syndicate 510 Premium volume Premium volume Lloyd's Year of Account Lloyd's Year of Account Six months Six months to June 2004 to June 2005 £ £Accident & Health 22,939,514 24,915,651Aviation 20,881,336 20,621,582Marine 50,254,757 55,271,267Property 236,512,102 232,609,006Reinsurance 71,453,345 75,204,392Syndicate 510 Total 402,041,054 408,621,898 Underwriting review 2005 has seen its fair share of claims activity for Kiln, with the hurricaneseason beginning vigorously and early, together with a series of individual (asopposed to catastrophic) losses in the first half of the year. HurricaneKatrina, a widespread category four hurricane which resulted in devastationacross the southern United States, is the most notable catastrophe so far. Theloss is a complex one, and it will be a substantial length of time beforeprecise forecasts of the ultimate loss can be made. Complications include thenecessary length of time it will take to assess losses, coverage issues and thepotential for litigation. This estimate is therefore based on an insured marketloss of $40 billion, split $35 billion for on-shore losses and $5 billion foroff-shore losses. The loss falls principally on Kiln's property catastrophe reinsurance, propertyand marine portfolios of business. The 100% net loss for Kiln's business isexpected to be in the region of £80 million to £100 million, if taken inisolation. We estimate that the equivalent loss to Kiln plc shareholders wouldbe between £30 million and £35 million. Stepping back from immediate events, the principal measure of underwritingquality is the claims ratio. The last three years have seen Kiln's claims ratioeither first or second among our peer group of ILVs and our current claims ratioof 49%, along with our expense ratio of 34%, makes for a combined ratio of 83%. Interim 2004 Full year 2004 Interim 2005Claims ratio 44 53 49Expense ratio 36* 33* 34Combined ratio 80 86 83 \* The basis of calculation for the expense ratio has been changed from NetWritten Premium to Net Earned Premiums, to bring it into line with the methodused by insurance markets outside Lloyd's. The following table shows Kiln's pricing levels for the half year expressed as apercentage of those 12, 24 and 36 months before, illustrating that in thespecialist areas on which we focus, rates are very close to those of theprevious three - highly profitable - years. The figures are drawn from theclasses of business that make up Kiln's flagship Syndicate 510, which accountsfor about 80% of Kiln Underwriting Limited's business. For Syndicate 510 as awhole, 2005 rates are 1.8% below 2004 levels and 3.7% below 2003, which was arecord high; rates are still 3.2% higher than in 2002. Kiln Premium Rating Index June June June 2005/2004 2005/2003 2005/2002 % % %Accident & Health 99.9 104.0 111.5Property 97.5 96.0 103.0Reinsurance 98.4 96.7 99.8Marine 100.9 95.5 107.8Aviation 98.9 94.4 99.7Syndicate 510 Total 98.2 96.3 103.2 Multiple income streams Kiln has three discrete income streams that are all continuing to contribute tothe company's profits. Kiln Underwriting Limited is delivering excellent returnson its capital of 36.8% after tax, and the flow of profit commission to themanaging agency, R J Kiln & Co, together with its relatively conservativeapproach to the recognition of profit, achieved a 59.4% return. The market inwhich W. R. Berkley Insurance (Europe), Limited (W R B (E)), operates hasattracted large volumes of new underwriting capital recently, putting pressureon margins. The strategy of W R B (E) - the FSA regulated specialist casualtyinsurer in which Kiln has a 20% investment - is the same as Kiln's, namely tounderwrite for profit rather than volume. Returns have inevitably therefore beenreduced, giving a return on capital of 9.8% after tax. We support thisdisciplined approach to underwriting, and believe it will allow the company tomanage the casualty insurance cycle over the long term. Investment returns Annualised investment returns in the first half of 2005 of 3.9% pa made agreater contribution to Kiln's performance than for the same period last year(2004: 1.6% pa) as a result of improving returns on Funds at Lloyd's of 2.99%for the year to June 2005 (2004: 1.94%) combined with better bond performancefor the year to date (GBP 2.90% vs 1.76% and USD 1.24% vs 0.31%). International Financial Reporting Standards (IFRS) This is the first published set of accounts that we have produced under IFRS.At Kiln we do not expect the introduction of IFRS to have any significant impacton how we manage our business or on its fundamental economics, its capitalsolvency or its ability to pay dividends. We do, however, believe that the newIFRS accounting standards introduce undue volatility to our income statement,which has the potential to distract attention from the performance of ourunderlying business. Specifically, the most material aspect of the new IFRSrequirements is the treatment of the foreign exchange (FX) re-translation ofnon-monetary items (for example, unearned premium reserves and deferredacquisition costs). Here IFRS dictates that their value is fixed and carried inthe accounts at the historic exchange rate at the time of the transaction. Asthese items are recognised in the following period's income statement at theserates, volatility is introduced to the result. These interim results include a£3.6 million positive impact on profits before tax from this effect, which is10.5% of the overall result. In order to give more transparency for the effectsof FX, we have identified all FX aspects of our business, including our hedging,in a separate line in our Income statement. Pension fund deficit On 1st January 2005 we transferred a proportion of the pension deficit thatrelates to Kiln employees working on syndicate matters to the Kiln syndicates'balance sheets. This reduces the pension deficit attributable to shareholders ofKiln plc. In addition, we are progressing with the implementation of a programmeof measures, including an enhanced transfer value offer for former employees,which is designed to continue to manage the overall size and impact of thepension deficit on Kiln plc's profit and loss statement and its balance sheet. Outlook We have declared our intention to increase, steadily and gradually, theproportion of Kiln's ownership of underwriting capacity in our main Syndicate510 in order to increase our shareholders' exposure to the profits resultingfrom our underwriting activities. At the same time as increasing Kiln's share inSyndicate 510, which accounts for approximately 80% of our total underwriting,we intend to withdraw from the more capital intensive Catastrophe Syndicate 557next year. With both substantial amounts of unearned premium underwritten on attractiveterms, and profit commission receipts yet to flow through the profit and lossaccount, we are in a strong position to maintain the good level of returns thatwe have achieved for our shareholders. Kiln focuses on a clean, short tail bookof specialist business, concentrating the company's risk exposure on theunderwriting activity, while pursuing a conservative risk management policy andexploiting the advantages of managing multiple sources of capital. This strategyhas served us well and we believe it will continue to do so. Consolidated Income StatementFor the six months ended 30th June 2005 Six months to Six months to Year to 31st 30th June 2005 30th June 2004 December 2004 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000 Gross written premiums 1 195,069 162,381 313,528 Net written premiums 8 131,804 86,861 186,113Change in the provision for unearned premiums: - (31,827) (19,777) (4,821) Earned premiums, net of reinsurance 8 99,977 67,084 181,292Claims incurred net of reinsurance 8 (44,262) (21,448) (95,139)Investment return from underwriting assets 4 3,484 1,349 4,796Net operating expenses (32,950) (21,336) (55,192) Profit from underwriting operations 26,249 25,649 35,757 Investment income 4 3,338 2,190 5,913Net fair value gains/(losses) on investments 4 (21) (1,031) (1,039)Other income 6 13,849 14,557 27,539Other charges 6 (16,237) (13,765) (27,565)Foreign exchange gains/(losses) 3 6,298 (203) (3,443)Share of operating results of associated companies 13 803 202 1,121 Profit on ordinary activities before taxation 34,279 27,599 38,283Income tax expense (11,351) (8,382) (12,435)Profit after tax attributable to the equity 22,928 19,217 25,848shareholders Earnings per ordinary share -Basic 11.24 9.42 12.67Diluted 11.24 9.42 12.67All earnings are from continuing operations Subsequent to 30th June 2005, the directors proposed an interim dividend for2005 of 1.0p (interim 2004: 0.6p) per ordinary share, £2,039,651 (interim 2004:£1,224,000) in total. This will be accounted for as an appropriation of retainedearnings in the full year ending 31st December 2005. Consolidated Statement of Recognised Income and Expenses For the six months ended 30th June 2005 Six months to Six months to Year to 31st 30th June 2005 30th June 2004 December (unaudited) (unaudited) 2004 (audited) Note £'000 £'000 £'000 Actuarial gains/(losses) on pension scheme 21 (891) 1,050 (1,150)Retirement benefit asset recognised 21 9,730 - - Net income/(expense) recognised directly in equity 8,839 1,050 (1,150)Profit for the period 22,928 19,217 25,848 Total recognised income and expense for the period 20 31,767 20,267 24,698 Consolidated balance sheet As at 30th June 2005 30th June 2005 30th June 2004 31st December (unaudited) (unaudited) 2004 (audited) Note £'000 £'000 £'000Assets Cash and cash equivalents 10 169,476 144,827 152,302Financial investments 11 199,339 171,319 181,745Investments in associated undertakings 13 16,967 15,793 16,432Debtors arising out of direct insurance operations 54,400 80,028 44,876Debtors arising out of reinsurance operations 151,681 92,400 111,794Other assets - 16,481 18,267 7,472Prepayments and accrued income 12,207 10,172 15,213Reinsurers' share of technical provisions: Provision for unearned premiums - 48,339 48,642 36,485 Reinsurance recoveries on outstanding claims - 121,426 92,722 138,873Retirement benefit obligation recoverable 21 15,295 - -Deferred tax asset 6,122 8,220 10,575Deferred acquisition costs - 50,397 44,834 38,363Property, plant and equipment 15 760 816 929Intangible assets 16 15,431 16,085 15,454Total Assets 878,321 744,125 770,513 LiabilitiesBank loans and overdrafts 17 - 108 18Liabilities arising out of direct insurance 4,374 15,422 3,573operationsLiabilities arising out of reinsurance operations 188,059 154,710 151,928Current taxes 12,746 1,206 5,727Other liabilities 24,707 32,295 22,839Technical provisions Provision for unearned premiums - 166,750 146,763 123,007 Claims outstanding - gross amount - 266,265 223,479 279,782Deferred tax liabilities 21,363 10,367 18,644Retirement benefit obligation 21 30,503 26,300 28,313Total Liabilities 714,767 610,650 633,831 Shareholders' Equity Called up share capital - ordinary shares - 2,040 2,040 2,040Share premium - 94,275 94,275 94,275Retained earnings - 43,657 13,578 16,785Other reserves - 23,582 23,582 23,582Total Shareholders' Equity 20 163,554 133,475 136,682 Total Equity and Liabilities 878,321 744,125 770,513 Consolidated cash flow statementFor the six months ended 30th June 2005 Six months to Six months to Year to 31st 30th June 2005 30th June 2004 December 2004 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000 Net cash from operating activities 18 31,093 (1,391) 8,304 Investing activitiesPurchase of intangible assets (732) (133) (938)Purchase of property, plant and equipment (210) (119) (646)Net (purchase)/sale of investments (19,036) 70,917 64,097Interest received 6,417 3,590 11,031Inflows from other investments - 129 129Net cash used in investing activities (13,561) 74,384 73,673 Financing activitiesRepayment of borrowings (340) (230) (404)Dividends paid to Company's shareholders - (816) (2,040)Decrease in borrowings - (42) (63)Net cash (used in) / from financing activities (340) (1,088) (2,507) 17,192 71,905 79,470 Net increase (decrease) in cash and cash equivalents 13,751 72,516 79,638Effect of exchange rate changes on cash and cashequivalents 3,441 (611) (168) 17,192 71,905 79,470 Cash and cash equivalents at beginning of year 152,284 72,814 72,814 Net cash and cash equivalents at end of year 10 169,476 144,719 152,284 The notes on the pages that follow form part of these financial statements. Summary of significant accounting policies (a) Basis of presentation The financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRS) expected to be endorsed and applicable atyear end, incorporating IFRIC interpretations, and with those parts of theCompanies Act 1985, applicable to companies reporting under IFRS. Thedisclosures required by IFRS1 concerning the transition from UK GAAP to IFRS aregiven in note 23. The comparative figures presented in the financial statements for the year ended31st December 2004 and the six months ended 30th June 2004, have been re-statedin order to comply with these revised accounting polices. Kiln plc's consolidated balance sheet at 1st January 2004 (the restated IFRSopening balance sheet) has been prepared in accordance with IFRS issued by theIASB and expected to be endorsed by the European Commission effective for 2005year ends. In addition Kiln plc plans to adopt early the recently issuedAmendment to IAS19 Employee Benefits (2004). It is assumed that the amendmentwill be endorsed by the European Commission so as to be available for adoptionin 2005. The IFRS themselves are subject to possible amendment by interpretativeguidance from the IASB or other external bodies and are therefore subject tochange prior to publication of the first annual IFRS financial statements in2006. The results for the six months to 30th June 2005 and the results for the sixmonths to 30th June 2004 are unaudited but have been reviewed by the auditor,Ernst & Young LLP. The interim accounts do not constitute statutory accounts asdefined in Section 240 of the Companies Act 1985. The results on an IFRS basisfor the full year 2004 have been audited by Ernst & Young LLP. The Group's 2004Annual Report and Accounts have been filed with the Registrar of Companies. Theformer auditors (PricewaterhouseCoopers) have reported on the 2004 accounts andtheir report was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. Copies of this report are available fromthe company secretary at the registered office, 106 Fenchurch Street, London,EC3M 5NR. The accounting policies set out below have been applied consistently to allperiods presented in these financial statements and in preparing the openingIFRS balance sheets, as at 1st January 2004 for the purpose of transition toIFRS. (b) First Time Adoption of IFRS A company is required to determine its IFRS accounting policies and, in general,apply these retrospectively to determine its opening balance sheet under IFRS.However IFRS1 allows a number of exemptions to this general principle. We have taken advantage of the following transitional arrangements: 1. Cumulative translation differences: Kiln has elected that the cumulative translation differences of our foreign related business were deemed to be zero at the transition date to IFRS. 2. Employee benefits: All cumulative actuarial gains and losses on the defined benefit pension scheme have been recognised in equity at the transition date (1st January 2004). 3. Comparatives: Kiln has not taken advantage of the disclosure exemption within IFRS1 that permits non-compliance with IAS32 (Financial Instruments: Disclosure and Presentation), IAS39 (Financial Instruments: Recognition and Measurement) and IFRS4 (Insurance Contracts) with respect to comparative information. 4. Estimates: Where estimates had previously been made under UK GAAP, consistent estimates have been made for the same date on transition to IFRS ie judgements affecting Kiln's opening balance sheet have not been revisited for the benefit of hindsight. 5. Syndicate capacity: The cost of the purchased capacity in Lloyd's syndicates has been included in the opening balance sheet at original purchase cost. A series of reconciliations between IFRS and UKGAAP are found at the end ofthese financial statements. There is a possibility that changes to accountingpolicies under IFRS will be required for the presentation of the group financialstatements as at 31st December 2005. This is because the IFRS standards andIFRIC interpretations that will be applicable and adopted for use for the yearend are not all currently known with certainty. (c) Basis of consolidation The consolidated financial statements incorporate the financial statements ofthe company, and entities controlled by the company (its subsidiaries), for thesix months ended 30th June 2005. Certain subsidiary undertakings underwrite ascorporate members of Lloyd's on syndicates managed by the group. The group'sshare of the transactions, assets and liabilities relating to syndicateparticipation is included in the consolidated financial statements. Inter-company transactions, balances and unrealised gains on transactionsbetween group companies are eliminated. Unrealised losses are also eliminatedunless the transaction provides evidence of impairment of the asset transferred. (d) Investments in associates An associate is an entity over which the group is in a position to exercisesignificant influence, but not control or joint control, through participationin the financial and operating policy decisions of the investee. The results and assets and liabilities of associates are incorporated in thesefinancial statements using the equity method of accounting. Investments inassociates are carried in the balance sheet at fair value. Losses of theassociates in excess of the group's interest in those associates are notrecognised. Where a group company transacts with an associate of the group, profits andlosses are eliminated to the extent of the group's interest in the relevantassociate. Losses may provide evidence of an impairment of the asset transferredin which case appropriate provision is made for impairment. (e) Premiums Gross premiums written and outwards reinsurance premiums relate to policiesincepting during the financial year and include estimates of 'pipeline' premiumstogether with any difference between booked premiums for prior years and thosepreviously accrued. Written premiums are stated inclusive of acquisition costsbut exclusive of premium taxes. The provision for unearned premium comprises the proportion of gross premiumswritten in the year which is estimated to be earned after the balance sheetdate. The earning of premiums is based primarily on time apportionment, with anadjustment for the risk profile of certain classes of business particularlythose exposed to seasonal weather related events. (f) Incurred claims and related reinsurance recoveries Paid claims represent all claims paid during the year and include claimshandling expenses. Claims incurred comprise claims and related expenses paid in the year andchanges in the provisions for outstanding claims, including provisions forclaims incurred but not reported and related expenses, together with anyadjustments to claims from previous years. Where applicable, deductions are madefor salvage and other recoveries. Provision is made at the year-end for the estimated cost of claims incurred butnot settled at the balance sheet date, including the cost of claims incurred butnot yet reported ('IBNR') to the company. The estimated cost of claims includesexpenses to be incurred in settling claims and a deduction for the expectedvalue of salvage and other recoveries. The company takes all reasonable steps toensure that it has appropriate information regarding its claims exposures.However, given the uncertainty in establishing claims provisions, it is likelythat the final outcome will prove to be different from the original liabilityestablished. All claims provisions are reported on a undiscounted basis. The estimation of claims incurred but not reported is generally subject to agreater degree of uncertainty than the estimation of the cost of settling claimsalready notified to the company, where more information about the claim event isgenerally available. Claims IBNR may often not be apparent to the insurer untilmany years after the event giving rise to the claims has happened. Classes ofbusiness where the IBNR proportion of the total reserve is high will typicallydisplay greater variations between initial estimates and final outcomes becauseof the greater degree of difficulty of estimating these reserves. Classes ofbusiness where claims are typically reported relatively quickly after the claimevent tend to display lower levels of volatility. In calculating the estimatedcost of unpaid claims the company uses a variety of estimation techniques,generally based upon statistical analyses of historical experience, whichassumes that the development pattern of the current claims will be consistentwith past experience. Allowance is made, however, for changes or uncertaintieswhich may create distortions in the underlying statistics or which might causethe cost of unsettled claims to increase or reduce when compared with the costof previously settled claims including: • Changes in company processes which might accelerate or slow down the development and/or recording of paid or incurred claims compared with the statistics from previous periods • Changes in the legal environment • The effects of inflation • Changes in the mix of business • The impact of large losses • Movements in industry benchmarks. A component of these estimation techniques is usually the estimation of the costof notified but not paid claims. In estimating the cost of these the company hasregard to the claim circumstance as reported, any information available fromloss adjusters and information on the cost of settling claims with similarcharacteristics in previous periods. Large claims impacting each relevant business class are generally assessedseparately, being measured on a case by case basis or projected separately inorder to allow for the possible distortive effect of the development andincidence of these large claims. Where possible the company adopts multiple techniques to estimate the requiredlevel of provisions. This assists in giving greater understanding of the trendsinherent in the data being projected. The projections given by the variousmethodologies also assist in setting the range of possible outcomes. The mostappropriate estimation technique is selected taking into account thecharacteristics of the business class and the extent of the development of eachaccident year. Provisions are calculated gross of any reinsurance recoveries. A separateestimate is made of the amounts that will be recoverable from reinsurers basedupon the gross provisions and having due regard to collectability. Property & Risk Solutions, Reinsurance, Accident & Health, and Life business These business areas are predominantly 'short tail', that is there is not asignificant delay between the occurrence of the claim and the claim beingreported to the company. The costs of claims notified to the company at thebalance sheet date are estimated on a case by case basis to reflect theindividual circumstances of each claim. The ultimate expected cost of claims isprojected from this data by reference to statistics which show how estimates ofclaims incurred in previous periods have developed over time to reflect changesin the underlying estimates of the cost of notified claims and latenotifications. All life business represents term life insurance or reinsurance which has beenaccounted for on the same basis. Marine and Aviation business These business areas have a mix of hull and cargo risks that are 'short tail' innature, and liability risks which are longer tail. The methodology forestimating the short tail element of the business is the same as describedabove. Liability claims are longer tail than the classes of business described aboveand so a larger element of the claims provision relates to IBNR claims. Claimsestimates for the company's liability business are derived from a combination ofloss ratio based estimates and an estimate based upon actual claims experienceusing a predetermined formula whereby greater weight is given to actual claimsexperience as time passes. The initial estimate of the loss ratio based on theexperience of previous years adjusted for factors such as premium rate changesand claims inflation, and on the anticipated market experience, is an importantassumption in this estimation technique. The assessment of claims inflation andanticipated market experience is particularly sensitive to the level of courtawards and to the development of legal precedent on matters of contract andtort. This class of business is also subject to the emergence of new types oflatent claims but no allowance is included for this as at the balance sheetdate. Reinsurance recoveries Reinsurance recoveries in respect of estimated claims IBNR are assumed to beconsistent with the historical pattern of such recoveries, adjusted to reflectchanges in the nature and extent of the company's reinsurance programme overtime. An assessment is also made of the recoverability of reinsurance recoverieshaving regard to market data on the financial strength of each of thereinsurers. (g) Coinsurance and Underwriting Pools Where the company participates in underwriting pools or coinsurance, its shareof premiums and claims are taken into the accounts regardless of whether Kiln isthe lead underwriter or not. Most business is coinsurance in nature. (h) Acquisition costs Acquisition costs comprise brokerage incurred and other direct expenses oninsurance contracts written during the financial year. Deferred acquisition costs, representing the proportion of commission and otheracquisition costs that relate to policies in force at the year-end, are deferredand amortised over the period in which related premiums are earned. (i) Unexpired risk provision Provision has been made for any deficiencies arising when unearned premiums, netof associated acquisition costs, are insufficient to meet expected claims andexpenses after taking into account future investment return on the investmentssupporting the unearned premiums provision and unexpired risks provision. Theexpected claims are calculated having regard only to events that have occurredprior to the balance sheet date. The need for an unexpired risk provision isassessed on a 'managed together' basis. Unexpired risk surpluses and deficits are offset where business classes aremanaged together and a provision is made if an aggregate deficit arises. (j) Commission and Profit Commission Inwards business Brokerage and commission is paid on inwards premiums to placing brokers andcoverholders. Brokers act for both underwriters and clients but are usually paidby the underwriter in accordance with prevailing business practice. Asunderwriters, the group receive the premium after deduction of brokerage andcommission. Brokerage and commissions are treated as acquisition costs. Profit commission is paid to coverholders based on the profitability of thebusiness written and is recognised as profits on the underlying business emerge. Outwards business Overriding commission is receivable by the group on some reinsurance contractsin order to compensate the business for expenditure incurred in writing inwardsbusiness. Outwards proportional treaties are grossed up by the percentage of brokers andcommission paid on inwards business. This is in order to maintain therelationship between reinsurance and gross premiums. Overriding commission andgrossed up proportional treaty commission and brokerage are treated asreinsurance acquisition costs. Profit commission is receivable on certain types of reinsurance contract and isrecognised when a reliable estimate of the underlying profit can be made. Profit Commission on Managing Agency activities Profit commissions are receivable when the relevant Lloyd's year of accountcloses, normally after three years, and are received in cash when thesyndicate's financial statements are dispatched to the capital providers. An accrual for profit commission receivable from managed syndicates isrecognised using an earnings pattern of 0%/50%/50% over three years of the openLloyd's year of account. Profit commission is not therefore recognised for thecurrent underwriting year. 50% is recognised from the previous underwritingyear, and for the year which is two years before the current underwriting year,the remaining 50% of profit commission is recognised. The management considers the treatment of profit commission is compliant withIAS18. IAS18 is based on the presumption that revenue from rendering services isrecognised by reference to the stage of completion if the following conditionsare satisfied: i) the amount of revenue can be reliably measured; ii) it is probable that economic benefits will flow to the service provider; iii) the stage of completion of the transaction can be measured reliably; and iv) the costs of transactions, including future costs can be measured reliably. If the outcome cannot be measured reliably, revenue is recognised only to theextent of the expenses recognised that are recoverable. (k) Reinsurance to close (RITC) Each syndicate underwriting account is normally closed at the end of the thirdyear by means of reinsurance into the following year, which reinsures all futureliabilities for the closed year and all previous years in return for a premiumcalculated by the underwriter and approved by the managing agent. To the extentthat the group increases its participation on a managed syndicate from oneLloyd's year of account to the next, it is a net recipient of premium toreinsure the earlier year of account into the latter. This share of the RITCpremium is accounted for in the period in which the contract is finalised and isrepresented in the balance sheet by the related share of assets and liabilitiestransferred between the two Lloyd's years of account of the managed syndicate. Under IFRS, RITC is a post balance sheet event. Where the group has changed itscapacity in a managed syndicate, reinsurance is effectively either acquired orsurrendered. This movement is explained in note 8 to these statements. (l) Investment return Investment return comprises interest receivable, dividends received, and othercash flows receivable for the period together with realised and unrealisedinvestment gains and losses. (m) Quota-share reinsurance contract Kiln Underwriting Limited, Kiln Underwriting (807) Limited and Kiln Underwriting(308) Limited have in place a number of whole account quota-share reinsuranceagreements. The reinsurers participate in their share of the net underwritingresults arising from the companies' participations in one or more syndicates.Other key aspects of the agreements are that the companies may receive a feebased on underwriting capacity and profit commission where the reinsurersparticipate in a profit on the business written. Amounts payable or receivableare settled upon the closure of the underwriting year. These characteristicssupport the accounting treatment of these agreements as insurance contractsunder IFRS4. The fee based income is recognised on the same basis that the underlying grosspremium is earned, and the underwriting element is recognised in accordance withthe earning of the underwriting profit or loss. (n) Investments Investments in marketable securities are stated at their bid-market value at thebalance sheet date. The group values its financial assets at fair value through profit and loss.Gains or losses on the revaluation of financial assets held at fair value arerecognised through profit and loss. Investments in unlisted securities arevalued at fair value. (o) Derivative financial instruments and hedge accounting The group's activities expose it to the financial risks of changes in foreigncurrency exchange rates. The group uses foreign exchange contracts to hedgethese exposures. The group does not use derivative financial instruments forspeculative or trading purposes. Derivatives are initially recognised at fairvalue on the date on which a derivative contract is entered into and aresubsequently valued at their fair value. Changes in the fair value of derivative financial instruments do not qualify forhedge accounting under IAS39 and are recognised in the income statement as theyarise. The use of financial derivatives is governed by the group's policies approved bythe board of directors, which provide written principles on the use of financialderivatives. (p) Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprisecash at bank and other short-term highly liquid investments with a maturity ofthree months or less from the date of acquisition and bank overdrafts. (q) Intangible assets Purchased syndicate capacity is recognised as having an indefinite usefuleconomic life and is therefore not amortised, but is subject to an annualimpairment review. The amount of any impairment is recognised directly in theincome statement. Computer software costs that are directly associated with the production ofidentifiable and unique software products controlled by the group, and that willgenerate economic benefits exceeding costs beyond one year, are recognised asintangible assets. Computer software development costs recognised as assets are amortised using thestraight line method over their useful lives, not exceeding a period of threeyears. (r) Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciationand any recognised impairment loss. They are depreciated on a straight-linemethod over the expected useful lives of each category of asset as follows: Computer Hardware 3 yearsOffice furniture and equipment 4 years Expenditure to restore the future economic benefit of an asset, if it extendsthe useful life of the asset, is capitalised. Costs for repairs and maintenanceare expensed. (s) Impairment of property, plant and equipment and intangible assets Assets that have an indefinite useful life are not subject to amortisation andare tested annually for impairment. Assets that are subject to amortisation arereviewed for impairment whenever events or changes in circumstances indicatethat the carrying amount may not be recoverable. An impairment loss is recognised by the amount by which the asset's carryingamount exceeds its recoverable amount. The recoverable amount is the higher ofan asset's fair value less selling costs and value in use. For the purposes of assessing impairment, assets are grouped at the lowestlevels for which there are separately identifiable cash flows. (t) Pension costs Contributions to the group defined contribution pension scheme are charged whendue. For the group defined benefit scheme (now closed to future benefitaccrued), the cost of providing benefits is determined by the Scheme Actuarywith actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised through the statement of recognisedincome and expenses in full in the period in which they occur. The retirement benefit obligation recognised in the balance sheet represents thepresent value of the defined benefit obligation as adjusted for unrecognisedpast service cost, and as reduced by the fair value of scheme assets. Any assetresulting from this calculation is limited to past service cost, plus thepresent value of available refunds and reductions in future contributions to theplan. The total pension scheme obligations are recognised on the Kiln plc balancesheet. Also recognised are the amounts receivable from the Lloyd's syndicatesfor their share of the scheme deficit (that is, obligations less assets).Pension costs are allocated to the Kiln companies and syndicates managed basedon the working patterns of the scheme's active members. (u) Foreign currency translations (a) Functional and presentation currency Items included in the financial statements of each of the group's entities aremeasured using the currency of the primary economic environment in which theentity operates ('the functional currency'). The consolidated financialstatements are presented in pounds sterling which is the functional andpresentation currency. (b) Transactions and balances Foreign currency transactions are recorded in the functional currency using theexchange rates prevailing at the dates of the transactions or an appropriateaverage rate of exchange. Foreign exchange gains and losses resulting from thesettlement of monetary items relating to such transactions and from thetranslation at year-end exchange rates of monetary assets and liabilitiesdenominated in foreign currencies are recognised in the income statement.Non-monetary assets (ie those without a corresponding cashflow) such as unearnedpremium reserves and deferred acquisition costs are translated at historicaverage rates. Prior to the adoption of IFRS the group converted non-monetaryassets and liabilities at the exchange rate at the balance sheet date. In order to hedge its exposure to certain foreign exchange risks, the groupenters into forward contracts and options (see (o) above for details of thegroup's accounting policies in respect of such financial instruments). (c) Group companies The results and financial position of Kiln South Africa, the only group entitywhich has a functional currency different from the presentation currency, istranslated into the presentation currency as follows: (i) assets and liabilities are translated at the closing rate at the balance sheet date; (ii) income and expenses are translated at average exchange rates; and (iii) all resulting exchange differences are recognised as a separate component of equity. (v) Taxation The tax expense represents the sum of the current tax and deferred tax. The tax currently payable is based on taxable profit for the year. Taxableprofit differs from net profit as reported in the income statement because itexcludes items of income or expense that are taxable or deductible in otheryears and it further excludes items that are never taxable or deductible. Thegroup's liability for current tax is calculated using tax rates applicable as atthe balance sheet date. Deferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of assets and liabilities in the financialstatements and the corresponding tax bases used in the computation of taxableprofit, and is accounted for using the balance sheet liability method. Deferredtax liabilities are generally recognised for all taxable temporary differencesand deferred tax assets are recognised to the extent that it is probable thattaxable profits will be available against which deductible temporary differencescan be utilised. Deferred tax liabilities are recognised for taxable temporary differencesarising on investments in subsidiaries and associates, and interests in jointventures, except where the group is able to control the reversal of thetemporary difference and it is probable that the temporary difference will notreverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheetdate and reduced to the extent that it is no longer probable that sufficienttaxable profits will be available to allow all or part of the asset to berecovered. Deferred tax is calculated at the tax rates that are expected to apply in theperiod when the liability is settled or the asset is realised. Deferred tax ischarged or credited in the income statement, except when it relates to itemscharged or credited directly to equity, in which case the deferred tax is alsodealt with in equity. (w) Recognition of non-insurance revenue a) Rendering of services Managing agency fees are recognised on an accrual basis. All other fees aretreated on a cash basis. b) Interest Income Interest income for financial assets is recognised on an accruals basis. c) Dividend Income Dividend income is recognised when the right to receive payment is established;this is the ex-dividend date for equity securities. (x) Performance Related Remuneration Performance related remuneration (PRR), inclusive of employer's nationalinsurance contributions, is calculated as 20% of Kiln plc's group profit beforetax in excess of 10% of opening shareholders' funds. PRR is recognised in theaccounts over the employment period to vesting, with the first instalmentcharged to the current financial year. The typical pattern of charging from 2005is 50%/30%/20% years 1/2/3. The second and third instalments fall within theIAS19 definition of long term employee benefits and as such are not recognisedwithin these financial statements but are disclosed in note 7. Notes to the financial statements 1. Segmental Analysis Consolidated Income Statement by Business Segments The segmental analysis of the group's income statement and balance sheet isreported using the divisional structure of the group as this is how performanceis monitored by management. Technical result Six months ended 30th June 2005 Marine Aviation Life, Reinsurance Property Group Accident & Health £'000 £'000 £'000 £'000 £'000 £'000 Gross premium written 26,962 10,619 22,438 39,060 95,990 195,069Gross premium earned 20,854 9,729 18,954 23,435 78,354 151,326Gross incurred claims (11,738) (4,670) (9,140) (9,674) (44,797) (80,019)Gross operating expenses (6,046) (2,322) (7,711) (5,665) (25,316) (47,060)Reinsurance balance (527) (484) (59) (461) 127 (1,404)Other underwriting charges (10) (4) (13) (9) (42) (78)Profit from underwritingoperations excludinginvestment return 2,533 2,249 2,031 7,626 8,326 22,765 Profit & Loss six months ended 30th June 2005 Underwriting Managing Associated Kiln plc Group Agency Undertakings £'000 £'000 £'000 £'000 £'000 Profit from underwriting operations excludinginvestment return 22,765 - - - 22,765Investment return 3,484 - - - 3,484Profit from underwriting operations 26,249 - - - 26,249Investment income 2,119 642 273 304 3,338Net fair value gains/(losses) on investments (287) - - 266 (21)Other income (3,528) 17,377 - - 13,849Other charges (990) (10,030) - (5,217) (16,237)Foreign exchange gains/(losses) 7,585 - - (1,287) 6,298Share of operating results of associated - - 803 - 803companiesProfit on ordinary activities before taxation 31,148 7,989 1,076 (5,934) 34,279Income tax expense (10,890) (2,309) (268) 2,116 (11,351)Profit after tax attributable to the equityshareholders 20,258 5,680 808 (3,818) 22,928 Consolidated Balance Sheet by Business Segments Assets as at 30th June 2005 Underwriting Managing Associated Kiln plc Group Agency Undertakings £'000 £'000 £'000 £'000 £'000 Cash and cash equivalents 140,187 18,619 - 10,670 169,476Investments 196,914 137 16,967 2,288 216,306Debtors 220,203 2,359 - - 222,562Prepayments and accrued income 882 11,325 - - 12,207Reinsurers' share of technical provisions 169,765 - - - 169,765Retirement benefit obligation recoverable - - - 15,295 15,295Deferred tax 1,053 214 - 4,855 6,122Deferred acquisition costs 50,397 - - - 50,397Property, plant and equipment - 760 - - 760Intangible assets 12,766 2,665 - - 15,431Total assets 792,167 36,079 16,967 33,108 878,321 Equity and liabilities as at 30th June 2005 Underwriting Managing Associated Kiln plc Group Agency Undertakings £'000 £'000 £'000 £'000 £'000 Creditors 205,298 16,277 - 8,311 229,886Technical provisions 433,015 - - - 433,015Deferred taxes 20,750 - - 613 21,363Pension deficit liability - - - 30,503 30,503Shareholders equity 133,104 19,802 16,967 (6,319) 163,554Total equity and liabilities 792,167 36,079 16,967 33,108 878,321 Net assets 133,104 19,802 16,967 (6,319) 163,554Net tangible assets 120,338 17,137 16,967 (6,319) 148,123Net assets 31st December 2004 110,031 19,114 16,432 (8,895) 136,682Post tax return on opening net assets* 36.8% 59.4% 9.8% - 33.5% * Annualised Consolidated Income Statement by Business Segments Technical result Six months ended 30th June 2004 Marine Aviation Life, Reinsurance Property Group Accident & Health £'000 £'000 £'000 £'000 £'000 £'000 Gross premium written 17,232 10,534 16,727 28,597 89,290 162,381Gross premium earned 14,115 10,864 15,139 16,534 79,114 135,766Gross incurred claims (4,977) (4,668) (5,731) (3,279) (35,764) (54,419)Gross operating expenses (3,266) (2,405) (5,701) 1,249 (24,219) (34,342)Reinsurance balance (2,185) (2,152) (1,942) (10,720) (5,699) (22,698)Other underwriting charges (1) (1) (1) (1) (3) (7)Profit from underwritingoperations excludinginvestment return 3,686 1,638 1,764 3,783 13,429 24,300 Profit & loss six months ended 30th June 2004 Underwriting Managing Associated Kiln plc Group Agency Undertakings £'000 £'000 £'000 £'000 £'000 Profit from underwriting operations excludinginvestment return 24,300 - - - 24,300Investment return 1,349 - - - 1,349Profit from underwriting operations 25,649 - - - 25,649Investment income 1,921 - 273 (4) 2,190Net fair value gains/(losses) on investments (1,147) - - 116 (1,031)Other income (2,421) 16,961 - 17 14,557Other charges (206) (10,073) - (3,486) (13,765)Foreign exchange gains/(losses) (565) - - 362 (203)Share of operating results of associated companies - - 202 - 202Profit on ordinary activities before taxation 23,231 6,888 475 (2,995) 27,599Income tax expense (6,741) (2,661) (56) 1,076 (8,382)Profit after tax attributable to the equityshareholders 16,490 4,227 419 (1,919) 19,217 Consolidated Balance Sheet by Business Segments Assets as at 30th June 2004 Underwriting Managing Associated Kiln plc Group Agency Undertakings £'000 £'000 £'000 £'000 £'000 Cash and cash equivalents 133,230 6,811 - 4,786 144,827Investments 168,934 132 15,793 2,253 187,112Debtors 188,681 2,014 - - 190,695Prepayments and accrued Income 1,358 8,812 - 2 10,172Reinsurers' share of technical provisions 141,364 - - - 141,364Deferred tax 139 - - 8,081 8,220Deferred acquisition costs 44,834 - - - 44,834Property, plant and equipment - 816 - - 816Intangible assets 13,416 2,669 - - 16,085Total assets 691,956 21,254 15,793 15,122 744,125 Equity and liabilities as at 30th June 2004 Underwriting Managing Associated Kiln plc Group Agency Undertakings £'000 £'000 £'000 £'000 £'000 Creditors 194,555 8,191 - 995 203,741Technical provisions 370,242 - - - 370,242Deferred taxes 10,137 230 - - 10,367Retirement benefit obligation - - - 26,300 26,300Shareholders equity 117,022 12,833 15,793 (12,173) 133,475Total equity and liabilities 691,956 21,254 15,793 15,122 744,125 Net assets 117,022 12,833 15,793 (12,173) 133,475Net tangible assets 103,606 10,164 15,793 (12,173) 117,390Net assets 31st December 2003 97,809 11,067 15,647 (10,499) 114,024Post tax return on opening net assets* 33.7% 76.4% 5.4% - 33.7% * Annualised Consolidated Income Statement by Business Segments Technical result Six months ended 31st December 2004 Marine Aviation Life, Reinsurance Property Group Accident & Health £'000 £'000 £'000 £'000 £'000 £'000 Gross premium written 45,581 19,260 29,895 47,297 171,495 313,528Gross premium earned 44,292 21,042 30,053 47,516 172,847 315,750Gross incurred claims (23,872) (6,180) (15,400) (25,110) (117,501) (188,063)Gross operating expenses (12,046) (4,897) (12,357) (12,484) (55,434) (97,218)Reinsurance balance 122 (744) (153) (243) 1,656 638Other underwriting charges (21) (9) (14) (22) (80) (146)Profit from underwritingoperations excludinginvestment return 8,475 9,212 2,129 9,657 1,488 30,961 Profit & loss six months 31st December 2004 Underwriting Managing Associated Kiln plc Group Agency Undertakings £'000 £'000 £'000 £'000 £'000 Profit from underwriting operations excludinginvestment return 30,961 - - - 30,961Investment return 4,796 - - - 4,796Profit from underwriting operations 35,757 - - - 35,757Investment income 4,841 435 551 86 5,913Net fair value gains/(losses) on investments (1,598) - - 559 (1,039)Other income (7,587) 35,126 - - 27,539Other charge (1,308) (17,381) - (8,876) (27,565)Foreign exchange gains/(losses) (6,447) - - 3,004 (3,443)Share of operating results of associated companies - - 1,121 - 1,121Profit on ordinary activities before taxation 23,658 18,180 1,672 (5,227) 38,283Income tax expense (8,323) (4,991) (501) 1,380 (12,435)Profit after tax attributable to the equityshareholders 15,335 13,189 1,171 (3,847) 25,848 Consolidated Balance Sheet by Business Segments Assets as at 31st December 2004 Underwriting Managing Associated Kiln plc Group Agency Undertakings £'000 £'000 £'000 £'000 £'000 Cash and cash equivalents 140,940 6,861 - 4,501 152,302Investments 177,888 159 16,432 3,698 198,177Debtors 160,779 3,800 - (437) 164,142Prepayments and accrued income 1,389 22,192 - (8,368) 15,213Reinsurers' share of technical provisions 175,358 - - - 175,358Deferred tax 1,053 291 - 9,231 10,575Deferred acquisition costs 38,363 - - - 38,363Property, plant and equipment - 929 - - 929Intangible assets 12,780 2,674 - - 15,454Total assets 708,550 36,906 16,432 8,625 770,513 Equity and liabilities as at 31st December 2004 Underwriting Managing Associated Kiln plc Group Agency Undertakings £'000 £'000 £'000 £'000 £'000 Creditors 177,086 17,792 - (10,793) 184,085Technical provisions 402,789 - - - 402,789Deferred taxes 18,644 - - - 18,644Retirement benefit obligation - - - 28,313 28,313Shareholders equity 110,031 19,114 16,432 (8,895) 136,682Total equity and liabilities 708,550 36,906 16,432 8,625 770,513 Net assets 110,031 19,114 16,432 (8,895) 136,682Net tangible assets 97,251 16,440 16,432 (8,895) 121,228Net assets 31st December 2003 97,809 11,067 15,647 (10,499) 114,024Post tax return on opening net assets 15.7% 119.2% 7.5% - 22.7% Gross written premiums and investments by geographical segments The geographical region 'other countries' combines Africa, Middle East,Australasia, South America with worldwide risks. £'000 UK Other Europe NAFTA Region Asia Other Countries TotalGross written premiums- 30th June 2005 21,099 25,009 91,655 17,337 39,969 195,069 Gross written premiums- 30th June 2004 18,104 19,561 79,131 12,304 33,281 162,381 Gross written premiums- 31st December 2004 35,872 38,606 151,977 24,538 62,535 313,528 Agency income and the result of associated undertakings are earned in the UnitedKingdom. Investments by geographical segments The group financial investments have been split by the regions the underwritingbusiness of which these assets are designed to support. The geographical region'other countries' combines Africa, Middle East, Australasia, South America withworldwide risks. Other relates to premiums written on worldwide policies, or where the riskscovered by a policy are located in more than one country. £'000 UK Other Europe NAFTA Region Asia Other Countries TotalMarket Value as at30th June 2005 7,854 9,154 158,825 6,414 17,092 199,339 Market Value as at30th June 2004 8,320 11,256 131,507 2,457 17,779 171,319 Market Value as at31st December 2004 14,013 12,533 132,666 2,736 19,797 181,745 Net assets supporting the agency business and associated companies are alllocated in the United Kingdom. Currency split The settlement currency for gross premiums written by the Kiln syndicates issplit approximately as follows: US dollars 60% GB pounds 35% Canadian dollars 5% 2. 100% operating results of managed syndicates The group operating result is derived from its participation in the syndicatesmanaged. The table below sets out the 100% underwriting operating results ofthese syndicates on an annual accounting basis. The basis for the calculation ofthe expense ratio has been changed from net written premiums to earned premiums,net of reinsurance. This aligns the calculation to other global insurancemarkets. Six months to Six months to Year to 30th June 2005 30th June 2004 31st December 2004 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Gross written premiums 482,310 412,948 798,381Net written premiums 397,201 320,933 609,968Change in the provision for unearned premiums: (94,412) (85,759) (36,604)Earned premiums, net of reinsurance 302,789 235,174 573,364Investment return from underwriting assets 10,244 3,439 12,076Claims incurred net of reinsurance (148,587) (102,615) (303,885)Net commissions (75,357) (52,691) (134,466)Operating expenses (27,519) (32,205) (52,686)Net operating expenses (102,876) (84,896) (187,152)Profit from underwriting operations 61,570 51,102 94,403Claims ratio (%) 49% 44% 53%Expense ratio (%) 34% 36% 33%Combined ratio % 83% 80% 86% Definitions Claims ratio Net incurred claims as a percentage ofnet earned premium Expense ratio Net operating expenses after as apercentage of net earned premium Combined ratio Claims ratio plus expense ratio Net earned premium Earned premium net of outwards reinsurance but gross of all policy acquisition costs The impact of a 1% change in the combined ratio on underwriting profit is: Six months to Six months to Year to 31st 30th June 2005 30th June 2004 December 2004 (unaudited) (unaudited) (audited) £'000 £'000 £'000 For the syndicates at 100% level 3,028 2,352 5,734At Group level 1,000 671 1,813 The combined ratio above is calculated by excluding the accounting effect ofrevaluing the syndicate balance sheets from average exchange rates for theperiod to closing exchange rates. This method shows more clearly the trueoperating efficiency of the business and eliminates the volatility in the ratiofrom exchange rate fluctuations. If exchange rate revaluation were included, the ratios would be: Six months to Six months to Year to 31st 30th June 2005 30th June 2004 December 2004 Claims ratio (%) 49% 44% 53%Expense ratio (%) 31% 36% 34%Combined ratio (%) 80% 80% 87% 3. Foreign exchange Foreign Exchange Six months to Six months to Year to 31st 30th June 2005 30th June 2004 December 2004 £'000 £'000 £'000 Net gains/(losses) on forward exchange hedges (1,287) 361 3,003Revaluation of closing balance sheet 4,018 (619) (4,095) 2,731 (258) (1,092)Retranslation of unearned premium reserves anddeferred acquisition costs to historic rates 3,567 55 (2,351) Total 6,298 (203) (3,443) 30th June 2005 30th June 2004 31st December 2004 31st December 2003AverageUS dollar 1.87 1.82 1.83 1.64Canadian dollar 2.31 2.44 2.38 2.29 ClosingUS dollar 1.79 1.81 1.92 1.79Canadian dollar 2.20 2.43 2.30 2.31 4. Investment Return Six months to Six months to Year to 31st 30th June 2005 30th June 2004 December 2004 (unaudited) (unaudited) (audited) £'000 £'000 £'000Investment IncomeInvestment return from underwriting assets 3,484 1,349 4,796Income from other investments 3,338 2,190 5,913 6,822 3,539 10,709 Net fair value gains/(losses) on investments (21) (1,031) (1,039) Total investment return 6,801 2,508 9,670 An analysis of the investment return by investment type is shown below: Six months to Six months to Year to 31st 30th June 2005 30th June 2004 December 2004 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Syndicate investments 3,484 1,349 4,796Funds at Lloyd's :Equities - - -Fixed interest and cash 1,240 754 2,766 4,724 2,103 7,562 Corporate investments 2,077 405 2,108 6,801 2,508 9,670 Note: Corporate investments includes income from trade investments and loannotes issued by associated companies 5. Group participation in managed syndicates Syndicate 2005 Group % of total 2004 Group owned capacity Group owned Group % of total capacity capacity capacity £'000 £'000Life 308 5,508 57.1% 4,306 86.2%Combined 510 225,971 41.4% 207,577 40.9%Non- Marine 557 2,500 5.2% 12,760 23.2%Non-Marine 807 45,693 45.7% 38,308 33.8%Total 279,672 39.7% 262,951 38.7% Of the group owned capacity above, the following is supplied by Gearing QuotaShare reinsurers. Syndicate 2005 2004 GQS element of GQS as a % of GQS element of GQS as a % of group capacity group capacity group capacity group capacity £'000 £'000 Life 308 1,507 27.4% 1,658 38.5%Combined 510 17,500 7.7% 15,500 7.5%Non- Marine 557 - - - -Non-Marine 807 16,250 35.6% 16,250 42.4%Total 35,257 12.6% 33,408 12.7% For the accounting treatment of Gearing Quota Share, please see note 8. 6. Other Income and charges 30th June 2005 30th June 2004 31st December 2004 (unaudited) (unaudited) (audited) Income Expenses Income Expenses Income Expenses £'000 £'000 £'000 £'000 £'000 £'000 Agency fees received from non-group participants 1,571 - 1,546 - 3,086 - Profit commission 4,644 509 5,227 664 10,266 1,459 Expenses recharged to non-group participants 7,597 7,597 7,240 7,240 13,465 13,465 Corporate administration costs - 3,669 - 3,558 - 6,246 Profit related remuneration - 4,175 - 2,303 - 4,605 Other 37 287 544 - 722 1,790 Total 13,849 16,237 14,557 13,765 27,539 27,565 7. Performance Related Remuneration (PRR) PRR is calculated as 20% of Kiln plc's group profit before tax in excess of 10%of opening shareholders' funds. PRR is recognised in the accounts over theemployment period to vesting, with the first instalment charged in the currentfinancial year. The table below shows the timing of the charging to Income of PRR to date. PRR Costs £'000 PRR allocated to employees based on profits in the financial year 2002 1,941 2003 5,552 2004 6,321 2005 interim 4,392 To be Year to Year to Six Year to Six Year to Six Year to Six charged months months months months to to to to IFRS charge to 31.12.02 31.12.03 30.06.04 31.12.04 30.06.05 31.12.05 30.06.06 31.12.06 30.06.07Income as follows:- £'000 2002 1,941 647 647 324 647 - - - - -2003 5,552 - 1,851 925 1,851 925 1,851 - - -2004 6,321 - - 1,054 2,107 1,054 2,107 1,054 2,107 -Interim 2005 4,392 2,196 1,318 878Charge to Income 647 2,498 2,303 4,605 4,175 PRR liability atBalance Sheet datecontingent on future employment 5,208 6,065 6,282 As disclosed in the annual report and accounts 2004, the deferred elements ofawards will be accelerated in the case of the more junior and middle managementlevels for 2005. 8. Effect of transition to IFRS on premiums and claims Under IFRS, RITC is a post balance sheet event (see note (k), accountingpolicies). The Income statement recognises that element of the RITC whichrelates to changes in syndicate participation included in the current period.The effect of these changes on premiums is outlined below. There is no effect onprofit before tax. With the implementation of IFRS, the group has taken the opportunity to changethe accounting disclosure for Gearing Quota Share (GQS) arrangements.Previously, GQS was separately disclosed as paid and received within netoperating expenses. GQS is now accounted for in the relevant categories in theIncome statement. There is no effect on profit before tax. Under IFRS unearned premium reserves and deferred acquisition costs aretranslated at historic rates. Previously these items were translated at closingbalance sheet rates of exchange. Six months to Six months to Year toEffect of RITC, GQS and UPR 30th June 2005 30th June 2004 31st December 2004 £'000 £'000 £'000 Gross Written Premiums 195,069 162,381 313,528 Net Written Premiums Per Income Statement 131,804 86,861 186,113 GQS 21,149 23,996 34,390 RITC 7,668 18,480 18,480 Per UK GAAP basis 160,621 129,337 238,983 Earned premiums, net of reinsurance Per Income Statement 99,977 67,084 181,292 UPR (1,129) (4,775) (5,609) GQS 13,690 12,908 27,626 RITC 7,668 18,480 18,480 Per UK GAAP basis 120,206 93,697 221,789 Claims incurred net of reinsurance Per Income Statement 44,262 21,448 95,139 GQS 7,178 1,431 10,720 RITC 7,668 18,480 18,480 Per UK GAAP basis 59,108 41,359 124,339 The RITC adjustments relate to the overall decrease in Kiln's ownership ofcapacity in Lloyd's years of account (YOA) 2001 and 2002. The RITC from YOA 2001being reinsured into YOA 2002 is recognised in the reinsurance premiums inKiln's financial year 2004. Similarly, the RITC from YOA 2002 reinsured intoYOA 2003 is required to be recognised in the 2005 financial statements. 9. Dividends Amounts recognised as distributions to equity shareholders in the period: Six months Six months to Year to 31st to 30th June 30th June 2004 December 2004 2005 £'000 £'000 £'000 Final dividend for the year ended 31st December 2003 of 0.4p - 816 816 Interim dividend for the year ended 31st December 2004 of 0.6p - - 1,224 (2004: xx p) per shareFinal dividend for the year ended 31st December 2004 of 2.4p 4,895 - - 4,895 816 2,040 10. Cash and cash equivalents These comprise cash held by the company and short-term bank deposits with anoriginal maturity of three months or less. The carrying amount of these assetsapproximates their fair value. Reconciliation of amounts in cash flow statement with cash and cash equivalents 30th June 30th June 31st December 2005 2004 2004 £'000 £'000 £'000 Cash at bank and in hand 32,389 43,701 50,231 Short-term bank deposits 137,087 101,126 102,071 169,476 144,827 152,302 Cash and bank overdrafts include the following for the purposes of the cash flowstatement: 30th June 30th June 31st December 2005 2004 2004 £'000 £'000 £'000 Cash and cash equivalents 169,476 144,827 152,302Bank overdrafts - (108) (18) 169,476 144,719 152,284 11. Financial Investments At fair value through profit and loss 30th June 30th June 31st December 2005 2004 2004 £'000 £'000 £'000 Debt securities and other fixed income securities 196,915 164,500 167,782Money markets and short-term deposits held within investment - 4,567 8,594fundsDerivative financial instruments 432 1,159 3,620Unlisted investments 1,992 1,093 1,749Fair value at balance sheet date 199,339 171,319 181,745Cost at balance sheet date 197,507 130,284 155,965 All investments are listed on recognised securities exchanges around the worldor represent balances with credit institutions apart from the unlistedinvestments. Financial investments include corporate investments held by group companies andthe group's share of syndicate assets. The corporate investments can be furtheranalysed between Funds at Lloyd's and other investments. 30th June 2005 Corporate Syndicate investments investments Funds at Other Lloyd's £'000 £'000 £'000 £'000 Debt securities and other fixed income securities 196,915 49,510 - 147,405Money markets, and short-term deposits held within - - - -investment fundsDerivative financial investments 432 - 432 -Unlisted investments 1,992 - 1,992 - Fair value at 30th June 199,339 49,510 2,424 147,405 30th June 2004 Corporate Syndicate investments investments Funds at Other Lloyd's £'000 £'000 £'000 £'000 Debt securities and other fixed income securities 164,500 32,211 - 132,289Money markets, and short-term deposits held within 4,567 4,567 - -investment fundsDerivative financial investments 1,159 - 1,159 -Unlisted investments 1,093 - 1,093 - Fair value at 30th June 171,319 36,778 2,252 132,289 31st December Corporate Syndicate 2004 investments investments Funds at Other Lloyd's £'000 £'000 £'000 £'000 Debt securities and other fixed income securities 167,782 48,200 - 119,582Money markets, and short-term deposits held within 8,594 8,594 - -investment fundsDerivative financial investments 3,620 - 3,620 -Unlisted investments 1,749 - 1,749 - Fair value at 31st December 181,745 56,794 5,369 119,582 12. Financial investments - credit profile The group uses two external fund managers to run both syndicate assets and thoseassets the group uses to support its Lloyd's underwriting activities. Assets areallocated as between Newton Investment Management Limited and Threadneedle AssetManagement Limited. The table below details their credit risk (based on Standard& Poors credit ratings) and their interest rate risk (as demonstrated by thebond portfolio duration profile). The credit profile of the pension scheme isexcluded. AAA AA A Cash Average Duration: % % % %As at 30th June 2005Syndicate Assets* YearsUS dollars 86 2 2 10 0.5Pounds sterling 91 9 - - 2.53Canadian dollars 100 - - - 1.22Funds at Lloyd's* 62 21 4 13 0.77 AAA AA A Cash Average Duration: % % % %As at 31st December 2004Syndicate Assets* YearsUS dollars 70 3 3 24 1.08Pounds sterling 91 9 - - 1.97Canadian dollars 100 - - - 1.39Funds at Lloyd's* 57 19 4 20 0.72 * Syndicate assets are managed by Threadneedle Asset Management. Funds atLloyd's are managed by Newton Investment Management and Threadneedle AssetManagement. 13. Investments in associated undertakings Kiln plc holds 20% of the issued share capital of W. R. Berkley London FinanceLimited, and 20% of the equity share capital of W. R. Berkley London HoldingsLimited, an insurance holding company. In addition, Kiln plc holds £7,200,0007.65% loan notes issued by W. R. Berkley London Finance Limited. Both companiesare incorporated in Great Britain. W. R. Berkley London Finance Limited holds 100% of the issued non-votingpreference shares in W. R. Berkley London Holdings Limited. W. R. Berkley London Holdings Limited owns 100% of the ordinary shares in W. R.Berkley Insurance (Europe), Limited, an FSA regulated specialist casualtyinsurance company writing business in the London market. The group's share of the results of associated companies is analysed as follows: Six months to Six months to Year to 30th June 2005 30th June 2004 31st December 2004 £'000 £'000 £'000 Profit/(Loss) on ordinary activities before tax 803 202 1,121Taxation (268) (56) (336)Share in result for the period 535 146 785 The balance sheet valuation is as follows: Six months to Six months to Year to 30th June 2005 30th June 2004 31st December 2004 £'000 £'000 £'000 Cost of shares 8,800 8,800 8,800Loan notes 7,200 7,200 7,200Total costs 16,000 16,000 16,000Share in the result brought forward 432 (353) (353)Share in the result for the period 535 146 785Balance sheet valuation 16,967 15,793 16,432 The directors consider that the group's share of net assets properly reflectsthe fair value for W. R. Berkley London Finance Limited and W. R. Berkley LondonHoldings Limited. 14. Reinsurance receivables - credit profile Credit ratings are based on data from Standards & Poors rating agency. As at 30th June As at 30th June As at 31st 2005 2004 December 2004 % % % AAA 3 3 3AA 17 20 18A 69 60 63A (less than) 6 11 9NR 5 6 7Total reinsurance receivables due to Kiln managed syndicates £174 million £156 million £214 million NR (not rated) is a term used by the external rating agencies. This can implythat the rating agencies have no current opinion about the financial security ofthe particular entity or that their guidelines do not promote a rating, forexample where there is insufficient data available or where the rating procedureis inapplicable. Additionally, it may be that the companies are not formallyfollowed by the agency or at the individual company's request. 10% of ourreinsurance receivables are collateralised (and held as cash) by the group. 15. Property, plant and equipment At the balance sheet date, commitments outstanding to purchase items of officefurniture and fittings and hardware amounted to nil. Office furniture Computer hardware Total Owned Leased Owned £'000 £'000 £'000 £'000Book CostAt 1st January 2005 1,616 193 2,599 4,408Difference on exchange (6) (1) (6) (13)Additions 53 3 154 210Disposals - - - -At 30th June 2005 1,663 195 2,747 4,605 Less DepreciationAt 1st January 2005 (1,083) (182) (2,214) (3,479)Difference on exchange 3 - 7 10Charge for the period (211) (2) (163) (376)Elimination re:disposals - - - -At 30th June 2005 (1,291) (184) (2,370) (3,845) Net Book Value 30th June 2005 372 11 377 760 Office furniture Computer hardware Total Owned Leased Owned £'000 £'000 £'000 £'000Book CostAt 1st January 2004 1,311 180 2,261 3,752Difference on exchange 5 - 4 9Additions - 7 110 117Disposals - - - -At 30th June 2004 1,316 187 2,375 3,878 Less Depreciation At 1st January 2004 (769) (143) (1,751) (2,663)Difference on exchange (2) - (3) (5)Charge for the period (129) (32) (233) (394)Elimination re:disposals - - - -At 30th June 2004 (900) (175) (1,987) (3,062) Net Book Value 30th June 2004 416 12 388 816 Office furniture Computer hardware Total Owned Leased Owned £'000 £'000 £'000 £'000Book CostAt 1st January 2004 1,311 180 2,261 3,752Difference on exchange 5 - 8 13Additions 300 13 331 644Disposals - - (1) (1) At 31st December 2004 1,616 193 2,599 4,408 Less DepreciationAt 1st January 2004 (769) (143) (1,751) (2,663)Difference on exchange (2) - (5) (7)Charge for the year (312) (39) (458) (809)Elimination re:disposals - - - -At 31st December 2004 (1,083) (182) (2,214) (3,479) Net Book Value 31st December 2004 533 11 385 929 16. Intangible assets Syndicate Capacity Computer Software Total £'000 £'000 £'000 CostAt 1st January 2005 12,781 6,471 19,252Additions 1 731 732Disposals (16) - (16)At 30th June 2005 12,766 7,202 19,968 Less AmortisationAt 1st January 2005 - (3,798) (3,798)Amortisation in period - (739) (739)At 30th June 2005 - (4,537) (4,537) Net Book Value 30th June 2005 12,766 2,665 15,431 CostAt 1st January 2004 13,416 5,533 18,949Additions - 133 133Disposals - - -At 30th June 2004 13,416 5,666 19,082 Less AmortisationAt 1st January 2004 - (2,165) (2,165)Amortisation in period - (832) (832)At 30th June 2004 - (2,997) (2,997) Net Book Value 30th June 2004 13,416 2,669 16,085 CostAt 1st January 2004 13,416 5,533 18,949Additions - 938 938Disposals (635) - (635)At 31st December 2004 12,781 6,471 19,252 Less AmortisationAt 1st January 2004 - (2,165) (2,165)Amortisation in period - (1,633) (1,633)At 31st December 2004 - (3,798) (3,798) Net Book Value 31st December 2004 12,781 2,673 15,454 17. Bank Loans and overdrafts 30th June 2005 30th June 2004 31st December 2004 £'000 £'000 £'000Bank overdrafts - repayable on demand - 87 18Other (bank loan) - 21 -Total - 108 18 18. Reconciliation of operating profit to net cash inflow from operatingactivities Six months to Six months to Year to 30th June 2005 30th June 2004 31st December 2004 £'000 £'000 £'000 Net profit (loss) before taxation 34,279 27,599 38,283Adjustments for:Depreciation and amortisation charge including profit/ 1,134 1,224 3,077(loss) on disposalsShare of associated undertaking's result (803) (202) (1,121)Disposal of investment in Anton Holdings - (129) (129)Unrealised (gain)/loss on investments 2,530 (1,198) (3,873)Realised (gain)/loss on investments (1,088) (1,077) (2,009)Effect of exchange rate changes on cash and cash (3,441) 611 168equivalentsChange in debtors less creditors 4,559 (24,854) (15,460)Interest received (6,417) (3,590) (11,031)Interest paid 340 225 399Net cash from operating activities 31,093 (1,391) 8,304 19. Return on Equity 6 months 6 months 12 months 31st 30th June 2005 30th June 2004 December 2004 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Profit after Tax 22,928 19,217 25,848Opening Shareholders funds 136,682 114,024 114,024Annualised return on opening equity 33.5% 33.7% 22.7% Return on equity is calculated as the profit on ordinary activities after taxattributable to equity shareholders divided by opening shareholders' equity (asadjusted for the time weighted impact of additional capital raised orrepurchased). 20. Consolidated Statement of Changes in Equity For the six months ended 30th June 2005 Six months to Six months to Year to 31st 30th June 2005 30th June 2004 December (unaudited) (unaudited) 2004 (audited) £'000 £'000 £'000Balance at 1st January 136,682 114,024 114,024 Total recognised income and expense for the period 31,767 20,267 24,698Dividend (4,895) (816) (2,040) Closing shareholders equity 163,554 133,475 136,682 21. Pension arrangements The company provides pensions for its eligible employees through the R J Kiln &Co Limited Pension and Assurance Scheme ('the scheme'). The assets of the schemeare held in a separate trustee-administered fund. The company currently contributes to the defined benefit (DB) scheme an amountequal to the contribution recommended by the current Scheme Actuary, ClairGemmell, BSc, FFA, of HSBC Actuaries and Consultants Limited. IAS19 a. Under IAS19, the valuation of the liability amount by the SchemeActuary, for 2004 and 30th June 2005, has been estimated using appropriateactuarial techniques and major assumptions as set out below: 30th June 2005 31st December 2004 (per annum) (per annum) % % Rate of increase in salaries 5.00 5.00 Rate of increase of pensions in payment -benefits accrued prior to 1st May 1999: 5.00 5.00 -benefits accrued after 1st May 1999: 2.50 3.00 Rate of revaluation of deferred pensions in excess of GMP 5.00 5.00 Discount rate 5.10 5.40 Inflation assumption 2.50 3.00 The DB scheme provided benefits on the basis of one forty-fifth of final salaryfor each year of pensionable employment. Certain members of the scheme have beenguaranteed a two-thirds pension at normal retirement date, although their lengthof service will be less than that normally required to produce that level ofpension: this has resulted in some additional funding for these members. The 5%rate of revaluation of deferred pensions is the subject of a legal underpin andmay not therefore be changed. b. Asset value in the Final Salary Scheme under IAS19 Long-term rate of Long-term rate of return expected at return expected at 30th June 2005 31st December 2004 % % Equities 8.00 8.00Property N/A N/ABonds 5.10 5.40Cash 4.50 4.00 Value at Value at 30th June 2005 31st December 2004 £'000 £'000 Equities 22,011 20,501Property - -Bonds 16,694 16,016Cash 1,089 844Total market value of assets 39,794 37,361 The following amounts at the 31st December balance sheet dates were measured inaccordance with the requirements of IAS19. Deficit in Final Salary Scheme - 100% Value at Value at 30th June 2005 31st December 2004 £'000 £'000 Total market value of assets 39,794 37,361Present value of Scheme liabilities (70,297) (65,674)Deficit in the Scheme (30,503) (28,313)Related deferred tax asset 9,151 8,494Kiln Capital Pensions Trust - -Net pension liability (21,352) (19,819) Reconciliation of Surplus (Deficit) - 100% 30th June 2005 31st December 2004 £'000 £'000 Surplus/(deficit) in scheme at beginning of the (28,313) (26,949)periodMovement:Current service cost - (229)Contributions 857 1,573Other finance income (493) (1,065)Actuarial gain/(loss) (2,554) (1,643)Surplus/(Deficit) in Scheme at end of the period (30,503) (28,313) Analysis of the amount credited to other income - 30th June 2005 31st December 2004100% £'000 £'000 Expected return on pension scheme assets 1,268 2,301Interest on pension scheme liabilities (1,761) (3,366)Net return (493) (1,065)Employer's current service cost 0 229 Analysis of the amount recognised in the Statement of 30th June 2005 31st December 2004Recognised Income and Expenses (SORIE) £'000 £'000 Actual return less expected return on scheme assets 607 590Experience gain/(loss) arising on the scheme's liabilities (129) 427Changes in assumptions underlying the present value of scheme (1,751) (2,660)liabilitiesActuarial gain/(loss) recognised in SORIE before tax (1,273) (1,643) Accounting for the Pension Scheme The scheme's gross obligations, its assets and the implied deferred tax creditfor the scheme's deficit are disclosed on the face of the balance sheet. As from1st January 2005, Kiln allocates a proportion of the scheme deficit to themanaged syndicates' balance sheets. The amounts as at 30th June 2005 and thecalculation methodology is shown below: £'000 Scheme gross deficit before tax, 30th June 2005 30,503 Relevant proportion of deficit allocated to % Syndicate share Of whichSyndicates Kiln plc share £'000 Syndicate 308 2.658% 463 Syndicate 510 62.563% 7,898 Syndicate 557 5.759% 92 Syndicate 807 12.657% 1,764 83.637% 10,217 R J Kiln share 16.363% 4,991Total Kiln plc gross obligation 15,208Due from third parties - balance sheet 15,295 100% 30,503 The retirement benefit asset recognised in the Consolidated Statement ofRecognised Income and Expenses comprises the following: £'000 Gross pension share deficit as at 1st January 2005 28,313Of which 83.64% allocated to the managed syndicate balance sheets 23,680Elimination of amounts related to: Kiln Underwriting Limited (8,782) KU807 and KU308 (700)Net deferred tax effect (4,468)Net opening syndicate share of pension scheme deficit 9,730 The Pension Trust R J Kiln & Co Limited, in common with many companies with a Defined Benefit (DB)Pension Scheme, has a deficit o-n the scheme's overall funding. Rather than takethe traditional route of relying solely o-n increased funding and movements inthe financial markets, Kiln is also tackling the deficit by establishing aPension Trust. This approach will help enable the company to fulfil itsobligations to the scheme at the same time as allowing it access to the funds ifand when the scheme moves from a funding deficit to a surplus. Funding will bemade in to the Trust periodically. The level of this funding will be determinedby reference to the overall net pension scheme deficit on the balance sheet. 22. Post balance sheet event Kiln has given preliminary guidance on its initial estimate of the loss causedby Hurricane Katrina. The loss is a complex one, and it will be a substantiallength of time before precise forecasts of the ultimate loss can be made.Complications include the necessary length of time it will take to assesslosses, coverage issues and the potential for litigation. This estimate istherefore based on an insured market loss of $40 billion, split $35 billion foron-shore losses and $5 billion for off-shore losses. The loss falls principally on Kiln's property catastrophe reinsurance, propertyand marine portfolios of business. The 100% net loss for Kiln's managedsyndicates is expected to be in the region of £80 million to £100 million, iftaken in isolation. We estimate that the equivalent loss to Kiln plcshareholders would be between £30 million and £35 million. 23. Explanation of transition to IFRS This is the first year that the group has presented their financial statementsunder IFRS. The following disclosures are required in the year of transition. The lastfinancial statements under UK GAAP were for the year ended 31st December 2004 and the date of transition to IFRSs was therefore 1st January2004. The principal changes are explained below. a. Cash and cash equivalents IAS7 - Cash Flow Statements defines cash and cash equivalents as short term (3months or less from the date of acquisition), highly liquid investments that arereadily convertible to known amounts of cash and which are subject to aninsignificant risk of changes in value. All investments that meet thisdefinition have been reclassified from investments to cash and cash equivalentson transition to IFRS. b. Investments In the group's UK GAAP financial statements, listed investments are stated atmarket value at the balance sheet date. Other investments are stated at cost ordirectors' valuation. Market value is determined by mid market prices. All gainsand losses on investments representing the difference between carrying value atbalance sheet date and their purchase price are taken to the income statement. On adoption of IAS39 - Financial Instruments: Recognition and Measurement, thegroup categorised all investments as financial assets through profit and lossand valued them at fair value. Fair value is determined by reference to bidmarket price. The accounting for gains or losses on these financial assets issimilar to UK GAAP. c. Gearing Quota Share (GQS) Historically the ceded amounts in respect of the GQS were included withinexpenses in the Income statement and Creditors arising out of reinsuranceoperations in the Balance Sheet. Under the group's new policy, the GQS isdisclosed in the same manner as all other reinsurance protections. d. Foreign exchange on non-monetary assets and liabilities In accordance with IAS21 - The Effects of Changes in Foreign Exchange Rates,non-monetary assets and liabilities (ie those without a corresponding cashflow)such as unearned premium reserves and deferred acquisition costs are translatedat historic average rates. Prior to the adoption of IFRS the group convertednon-monetary assets and liabilities at the exchange rate at the balance sheetdate. e. Syndicate capacity In accordance with IAS38 - Intangible Assets, purchased syndicate capacity isrecognised as having an indefinite useful economic life and is therefore notamortised, but is subject to an annual impairment review. Previously under UKGAAP, purchased syndicate capacity was capitalised and amortised on a straightline basis over its useful economic life, which was estimated to be 20 years. f. Reinsurance to close (RITC) The syndicate underwriting account is normally closed at the end of the thirdyear by means of reinsurance into the following year, which reinsures all futureliabilities for the closed year and all previous years reinsured into it. As the RITC contract is finalised after the balance sheet date, it is treated asa non-adjusting event under IAS10 - Events After the Balance Sheet Date. TheRITC transaction is therefore accounted for in the period when the contract isfinalised. g. Retirement benefit obligations In accordance with IAS19 - Employee Benefits, the present value of definedbenefit obligations are matched against the fair value of the plan assets. Theresulting surplus or deficit is recognised as an asset or liability on thebalance sheet. Previously under SSAP24 - Accounting for Pension Costs, pension costs wererecognised in the income statements over the employees' working lives with thegroup. The difference between the amount recognised in the income statement andthe contribution made by the group were treated as an asset or liability on thebalance sheet. The assets and liabilities of the defined benefit scheme were notrecognised on the balance sheet but disclosed in the notes to the financialstatements. h. Dividends In accordance with IAS10 - Events after the Balance Sheet Date, dividends arerecognised in the period in which they are declared. Under UK GAAP dividends arerecognised as a liability in the period to which they relate regardless of whenthey were declared and approved. i. Performance Related Remuneration (PRR) In accordance with IAS19 - Employee Benefits, the deferred instalments of thePRR fall within the definition of long term employee benefits and as such arenot recognised in the financial statements but are disclosed as a liabilitycontingent to future employment. j. Explanation of material adjustments to the cash flow statement On transition to IFRS, highly liquid investments with maturities of less than 3months are classified as cash and cash equivalents. Previously these wererecognised as investments. Reconciliation of equity at 1 January 2004 (date of transition to IFRSs) UK GAAP Effect of transition IFRS to IFRS £'000 £'000 £'000AssetsCash and cash equivalents a 34,855 38,149 73,004Financial investments b 260,717 (20,756) 239,961Investments in associated undertakings 15,647 - 15,647Debtors arising out of direct insurance 73,416 - 73,416operationsDebtors arising out of reinsurance operations c 36,897 48,576 85,473Current taxes - - -Other assets 26,155 (16,490) 9,665Prepayments and accrued income 10,480 - 10,480Reinsurers' share of technical provisions: Provision for unearned premiums c,d 35,092 11,936 47,028 Reinsurance recoveries on outstanding claims c 91,263 30,350 121,613Deferred tax asset - 8,405 8,405Deferred acquisition costs d 29,098 1,552 30,650Property, plant and equipment 4,457 (3,368) 1,089Intangible assets e 10,356 6,428 16,784Total Assets 628,433 104,782 733,215 LiabilitiesBank Loans and Overdrafts - 253 253Liabilities arising out of direct insurance 4,771 - 4,771operationsLiabilities arising out of reinsurance c 91,015 88,804 179,819operationsCurrent taxes - 1,335 1,335Other liabilities 27,558 (14,710) 12,848Technical provisions: Provision for unearned premiums d 118,554 6,682 125,236 Claims outstanding - gross amount 258,355 - 258,355Deferred tax liabilities - 9,625 9,625Retirement Benefit Obligation g - 26,949 26,949Total Liabilities 500,253 118,938 619,191 Shareholders' EquityCalled up share capital - ordinary shares 2,040 - 2,040Share premium 94,275 - 94,275Retained earnings 8,283 (14,156) (5,873)Other reserves 23,582 - 23,582Total shareholders' equity 128,180 (14,156) 114,024 Total equity and liabilities 628,433 104,782 733,215 Notes to the reconciliation of equity at 1st January 2004 1st January 2004 £'000 Total equity previous GAAP 128,180Pension scheme obligations (18,864)Add back of capacity - 31st December 2003 3,060Final dividend 2003 816Investments valued at bid price - Anton and Suffolk Life 967Financial investments - mid to bid price valuation adjustment (64)Deferred PRR adjustment 4,471Revaluation of non-monetary items (3,072)Deferred tax (1,470)Total adjustment to equity (14,156)Total equity IFRS 114,024 Reconciliation of equity at 30th June 2004 UK GAAP Effect of transition IFRS to IFRS £'000 £'000 £'000AssetsCash and cash equivalents 76,986 67,841 144,827Financial investments 238,246 (66,927) 171,319Investments in associated undertakings 15,793 - 15,793Debtors arising out of direct insurance 80,028 - 80,028operationsDebtors arising out of reinsurance operations 43,675 48,725 92,400Current taxes - - -Other assets 18,267 - 18,267Prepayments and accrued income 55,128 (44,956) 10,172Reinsurers' share of technical provisions: Provision for unearned premiums 32,789 15,853 48,642 Reinsurance recoveries on outstanding claims 73,533 19,189 92,722Deferred tax asset - 8,220 8,220Deferred acquisition costs - 44,834 44,834Property, plant and equipment 3,484 (2,668) 816Intangible assets 10,021 6,064 16,085Total Assets 647,950 96,175 744,125 LiabilitiesBank loans and overdrafts - 108 108Liabilities arising out of direct insurance 15,422 - 15,422operationsLiabilities arising out of reinsurance 70,824 83,886 154,710operationsCurrent taxes - 1,206 1,206Other liabilities 47,808 (15,513) 32,295Technical provisions: Provision for unearned premiums 147,281 (518) 146,763 Claims outstanding - gross amount 223,479 - 223,479Deferred tax liabilities - 10,367 10,367Retirement benefit obligation - 26,300 26,300Total Liabilities 504,814 105,836 610,650 Shareholders' EquityCalled up share capital - ordinary shares 2,040 - 2,040Share premium 94,275 - 94,275Retained earnings 23,239 (9,661) 13,578Other reserves 23,582 - 23,582Total shareholders' equity 143,136 (9,661) 133,475 Total equity and liabilities 647,950 96,175 744,125 Notes to the reconciliation of equity at 30th June 2004 30th June 2004 £'000Total equity previous GAAP 143,136Pension scheme obligations (18,400)Interim dividend 2004 1,224Investments valued at bid price - Anton and Suffolk Life 967Add back of syndicate capacity - 30th June 2004 3,396Financial investments - mid to bid valuation adjustment (53)Deferred PRR adjustment 5,140Revaluation of non-monetary items 277Deferred tax (2,212)Total adjustment to equity (9,661)Total equity IFRS 133,475 Reconciliation of equity at 31st December 2004 UK GAAP Effect of transition IFRS to IFRS £'000 £'000 £'000AssetsCash and cash equivalents 106,987 45,315 152,302Financial investments 210,034 (28,289) 181,745Investments in associated undertakings 16,432 - 16,432Debtors arising out of direct insurance 44,876 - 44,876operationsDebtors arising out of reinsurance operations 77,712 34,082 111,794Current taxes - - -Other assets 23,088 (15,616) 7,472Prepayments and accrued income 15,213 - 15,213Reinsurers' share of technical provisions: Provision for unearned premiums 22,619 13,866 36,485 Reinsurance recoveries on outstanding claims 101,514 37,359 138,873Deferred tax asset - 10,575 10,575Deferred acquisition costs 37,514 849 38,363Property, plant and equipment 3,605 (2,676) 929Intangible assets 9,240 6,214 15,454Total Assets 668,834 101,679 770,513 LiabilitiesBank loans and overdrafts - 18 18Liabilities arising out of direct insurance 3,573 - 3,573operationsLiabilities arising out of reinsurance 67,345 84,583 151,928operationsCurrent taxes - 5,727 5,727Other liabilities 34,772 (11,933) 22,839Proposed dividend 4,895 (4,895) -Technical provisions: Provision for unearned premiums 119,655 3,352 123,007 Claims outstanding - gross amount 279,782 - 279,782Provision for other risks and charges 13,645 (13,645) -Deferred tax liabilities - 18,644 18,644Retirement benefit obligation - 28,313 28,313Total Liabilities 523,667 110,164 633,831 Shareholders' EquityCalled up share capital - ordinary shares 2,040 - 2,040Share premium 94,275 - 94,275Retained earnings 25,270 (8,485) 16,785Other reserves 23,582 - 23,582Total shareholders' equity 145,167 (8,485) 136,682 Total equity and liabilities 668,834 101,679 770,513 Notes to the reconciliation of equity at 31st December 2004 31st December 2004 £'000 Total equity previous GAAP 145,167Pension scheme obligations (28,313)Final dividend 2004 4,895Investments valued at bid price - Anton and Suffolk Life 1,410Add back capacity - 31st December 2004 3,540Deferred PRR adjustment 6,188Revaluation of non-monetary items (1,780)Deferred tax 5,575Total adjustment to equity (8,485)Total equity IFRS 136,682 Reconciliation of profit at 30th June 2004 UK GAAP Effect of IFRS transition to IFRS £'000 £'000 £'000OPERATING INCOME Gross written premiums 162,381 - 162,381 Net written premiums 129,337 (42,476) 86,861Change in the provision for unearned premiums: (35,640) 15,863 (19,777)Earned premiums, net of reinsurance 93,697 (26,613) 67,084Claims incurred net of reinsurance (41,359) 19,911 (21,448) Net operating expenses (31,332) 9,996 (21,336)Investment return from underwriting assets 7,041 (5,692) 1,349 Profit from underwriting operations 28,047 (2,398) 25,649 Investment return from other assets (4,545) 5,704 1,159Other income 14,557 - 14,557Other charges (13,919) 154 (13,765)Foreign exchange gains/(losses) 362 (565) (203)Share of operating results of associated companies 202 - 202 Profit on ordinary activities before taxation 24,704 2,895 27,599 Income tax expense (7,905) (477) (8,382)Profit after tax attributable to equity 16,799 2,418 19,217shareholders Notes to the reconciliation of profit 30th June 2004 Profit from Profit on ordinary Net profit for underwriting activities before the year operations taxation £'000 £'000 £'000Profit previous GAAP 28,047 24,704 16,799Amortisation of syndicate capacity - 335 335Reallocation of investment return (5,692) - -Revaluation of financial investments - 11 11Profit and loss impact of bringing pension - (850) (850)deficit onto balance sheetMovement of foreign exchange - (619) (619)Reduction in PRR expense - 669 669Change in deferred tax - - (477)Revaluation of non-monetary items 3,294 3,349 3,349Profit IFRS 25,649 27,599 19,217 Reconciliation of material adjustments to the cash flow statement at 30th June2004 Previous GAAP Effect of IFRS transition to IFRS £'000 £'000 £'000Net cash from operating activities 4,386 (5,777) (1,391)Net cash used in investing activities 38,935 35,449 74,384Net cash (used in)/from financing activities (1,088) - (1,088) Net increase (decrease) in cash and cash 42,233 29,672 71,905equivalents Cash and cash equivalents at beginning of period 34,666 38,148 72,814Cash and cash equivalents at end of period 76,899 67,820 144,719 Reconciliation of profit at 31st December 2004 UK GAAP Effect of IFRS transition to IFRS £'000 £'000 £'000OPERATING INCOME Gross written premiums 313,528 - 313,528 Net written premiums 238,983 (52,870) 186,113Change in the provision for unearned premiums: (17,194) 12,373 (4,821)Earned premiums, net of reinsurance 221,789 (40,497) 181,292Claims incurred net of reinsurance (124,339) 29,200 (95,139) Net operating expenses (70,132) 14,940 (55,192)Investment return from underwriting assets 14,098 (9,302) 4,796 Profit from underwriting operations 41,416 (5,659) 35,757 Investment return from other assets (4,935) 9,809 4,874Other income 27,539 - 27,539Other charges (30,041) 2,476 (27,565)Foreign exchange gains/(losses) 3,003 (6,446) (3,443)Share of operating results of associated 1,121 - 1,121companies Profit on ordinary activities before taxation 38,103 180 38,283Income tax expense (10,902) (1,533) (12,435)Profit after tax attributable to equity 27,201 (1,353) 25,848shareholders Notes to the reconciliation of profit at 31st December 2004 Profit from Profit on ordinary Net profit for underwriting activities before the year operations taxation £'000 £'000 £'000 Profit previous GAAP 41,416 38,103 27,201Amortisation of syndicate capacity - 481 481Reallocation of investment return (9,302) - -Profit and loss impact of bringing pension - 279 279deficit onto balance sheetMovement of foreign exchange - (4,095) (4,095)Unrealised gains on Anton and Suffolk Life - 443 443investmentsReduction in PRR expense - 1,716 1,716Revaluation of financial investments - 64 64Change in deferred tax - - (1,533)Revaluation of non-monetary items 3,643 1,292 1,292Profit IFRS 35,757 38,283 25,848 Reconciliation of material adjustments to the cash flow statement at 31stDecember 2004 Previous GAAP Effect of IFRS transition to IFRS £'000 £'000 £'000Net cash from operating activities 10,431 (2,127) 8,304Net cash used in investing activities 64,379 9,294 73,673Net cash (used in)/from financing activities (2,507) - (2,507) Net increase (decrease) in cash and cash equivalents 72,303 7,167 79,470 Cash and cash equivalents at beginning of period 34,666 38,148 72,814Cash and cash equivalents at end of period 106,969 45,315 152,284 Independent review report to Kiln plc Introduction We have been instructed by the company to review the financial information forthe six months ended 30th June 2005 which comprises Consolidated IncomeStatement, Consolidated Balance Sheet, Consolidated Cash Flow Statement,Consolidated Statement of Recognised Income and Expense and the related notes 1to 23. We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the company in accordance with guidance containedin Bulletin 1999/4 'Review of interim financial information' issued by theAuditing Practices Board. To the fullest extent permitted by law, we do notaccept or assume responsibility to anyone other than the company, for our work,for this report, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority. As disclosed in the summary of significant accounting policies note (a), thenext annual financial statements of the group will be prepared in accordancewith those IFRSs adopted for use by the European Union. The accounting policies are consistent with those that the directors intend touse in the next financial statements. There is, however, a possibility that thedirectors may determine that some changes to these policies are necessary whenpreparing the full annual financial statements for the first time in accordancewith those IFRSs adopted for use by the European Union. This is because, asdisclosed in the summary of significant accounting policies note (a), thedirectors have anticipated that amended IAS19 Employee Benefits (2004), whichhas yet to be formally adopted for use in the EU will be so adopted in time tobe applicable to the next annual financial statements. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4'Review of interim financial information' issued by the Auditing Practices Boardfor use in the United Kingdom. A review consists principally of makingenquiries of group management and applying analytical procedures to thefinancial information and underlying financial data, and based thereon,assessing whether the accounting policies have been applied. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with United Kingdom Auditing Standards and thereforeprovides a lower level of assurance than an audit. Accordingly we do notexpress an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30th June 2005. Ernst & Young LLP London 12th September 2005 Professional advisers Stockbrokers and joint financial advisers Numis Securities Limited Cheapside House 139 Cheapside London EC2V 6LH Joint financial advisers Lexicon Partners Limited No. 1 Paternoster Square London EC4M 7DX Investment managers Threadneedle Asset Management Limited 60 St Mary Axe London EC3A 8JQ Newton Investment Management Limited 71 Queen Victoria Street London EC4V 4DR Solicitors Norton Rose Kempson House Camomile Street London EC3A 7AN Auditors Ernst & Young LLP 1 More London Place London SE1 2AF Registrars Lloyds TSB Registrars The Causeway Worthing West Sussex BN99 6DA Registered office 106 Fenchurch Street London EC3M 5NR Registered number 2949032 This information is provided by RNS The company news service from the London Stock Exchange
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| Date | Source | Headline | |
|---|---|---|---|
| 7th Mar 2008 | 5:00 pm | RNS | Delisting |
| 6th Mar 2008 | 4:00 pm | RNS | Director/PDMR Shareholding |
| 29th Feb 2008 | 1:07 pm | RNS | Syndicate results |
| 13th Feb 2008 | 6:28 pm | RNS | Results of SGM |
| 8th Feb 2008 | 5:35 pm | RNS | Director/PDMR Shareholding |
| 22nd Jan 2008 | 4:12 pm | RNS | Results of the SGM |
| 16th Jan 2008 | 12:48 pm | RNS | Holding(s) in Company |
| 16th Jan 2008 | 11:09 am | RNS | Rule 8.3- Kiln Ltd |
| 15th Jan 2008 | 10:54 am | RNS | Rule 8.1/8.3 - Kiln Ltd |
| 11th Jan 2008 | 5:09 pm | RNS | Holding(s) in Company |
| 11th Jan 2008 | 12:00 pm | RNS | Shareholder circular |
| 10th Jan 2008 | 1:03 pm | RNS | Rule 8.1/8.3 - Kiln Ltd |
| 4th Jan 2008 | 9:43 am | RNS | Holding(s) in Company |
| 2nd Jan 2008 | 4:52 pm | RNS | Holding(s) in Company |
| 28th Dec 2007 | 2:45 pm | RNS | Rule 8.3- Kiln Ltd |
| 14th Dec 2007 | 7:01 am | RNS | Recommended Cash Acquisition |
| 12th Dec 2007 | 9:45 am | RNS | Relevant securities in issue |
| 11th Dec 2007 | 2:56 pm | RNS | Share Price Movement |
| 6th Dec 2007 | 3:41 pm | RNS | Holding(s) in Company |
| 22nd Nov 2007 | 11:30 am | RNS | Trading Statement |
| 6th Nov 2007 | 5:30 pm | RNS | Proposed return of capital |
| 13th Sep 2007 | 4:51 pm | RNS | Holding(s) in Company |
| 5th Sep 2007 | 7:02 am | RNS | Interim Results |
| 22nd Aug 2007 | 10:49 am | RNS | Updated Syndicate Forecasts |
| 20th Aug 2007 | 12:33 pm | RNS | Holding(s) in Company |
| 16th Aug 2007 | 12:07 pm | RNS | Investment Update |
| 18th Jul 2007 | 4:30 pm | RNS | Presentation to analysts |
| 6th Jul 2007 | 7:00 am | RNS | 2008 business plans |
| 28th Jun 2007 | 4:30 pm | RNS | Future reporting dates |
| 25th Jun 2007 | 10:08 am | RNS | Company reorganisation |
| 6th Jun 2007 | 1:15 pm | RNS | Holding(s) in Company |
| 31st May 2007 | 5:07 pm | RNS | Reorganisation Completed |
| 31st May 2007 | 10:48 am | RNS | Holding(s) in Company |
| 24th May 2007 | 4:39 pm | RNS | Holding(s) in Company |
| 21st May 2007 | 10:56 am | RNS | Director/PDMR Shareholding |
| 21st May 2007 | 8:00 am | RNS | Cancellation |
| 18th May 2007 | 3:48 pm | RNS | Result of Court Hearing |
| 16th May 2007 | 4:22 pm | RNS | Director/PDMR Shareholding |
| 16th May 2007 | 12:16 pm | RNS | AGM Statement |
| 16th May 2007 | 7:01 am | RNS | Trading Statement |
| 10th May 2007 | 3:24 pm | RNS | Annual Information Update |
| 30th Apr 2007 | 4:42 pm | RNS | Holding(s) in Company |
| 24th Apr 2007 | 5:31 pm | RNS | Interest in Shares |
| 16th Apr 2007 | 11:58 am | RNS | EGM Statement |
| 13th Apr 2007 | 4:42 pm | RNS | Annual Report and Accounts |
| 4th Apr 2007 | 4:15 pm | RNS | Holding(s) in Company |
| 3rd Apr 2007 | 12:32 pm | RNS | Voting Rights and Capital |
| 23rd Mar 2007 | 5:05 pm | RNS | Posting of Documents |
| 23rd Mar 2007 | 9:19 am | RNS | Notice of Results |
| 13th Mar 2007 | 5:49 pm | RNS | Directors Shareholding |
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