Centaur Holdings plc - Hemscott IR

Notes to financial statements
20
Provisions for liabilities and charges
Group
Onerous
Actual Interest Deferred Restructuring Group
2004 Deferred tax Rate swap consideration provisions Actual 2004
£’000 £’000 £’000 £’000 £’000
At 30 October 2003 - - - - -
Acquired with subsidiary undertaking - 103 2,500 1,024 3,627
Utilised in the period - (57) - (183) (240)
At 30 June 2004 - 46 2,500 841 3,387
Group Deferred tax Onerous Group
Pro forma (see deferred Interest Deferred Restructuring Pro forma
2004 tax note 21) Rate swap consideration provisions 2004
£’000 £’000 £’000 £’000 £’000
At 1 July 2003 247 360 - 1,390 1,997
Arising in the year - - 2,500 - 2,500
Utilised in the period (247) (314) - (549) (1,110)
At 30 June 2004 - 46 2,500 841 3,387
(a) Onerous interest rate swap contract
In 2001 Centaur Communications Ltd entered
into an interest rate swap arrangement, under
which the variable rate applying to a principal
amount of £10,000,000 of a term loan is
swapped to a fixed rate of 5.88% until 1
November 2004. Following the repayment of the
term loan the company fully provided for this
onerous interest rate agreement and the
provision is adjusted to market value at each
period end. On 10 March 2004, the date of
acquisition of the Centaur Communications
Group, the market value of the provision was
£103,000 and at 30 June 2004 the market value
of the provision was £46,000.
(b) Deferred Consideration
Prior to its acquisition by Centaur Holdings plc,
the Centaur Communications Group acquired
100% of the share capital of the Synergy
Software Group ("Synergy") for a total
consideration of £3,742,000. The total
consideration includes a deferred element that is
payable based on the operating profits of
Synergy up to 30 June 2007. At 30 June 2004 a
provision of £2,500,000 is held as the Directors’
best estimate of this deferred payment.
(c) Restructuring provisions
In August 2002, the Centaur Communications
Group disposed of its subsidiary companies
Lawtel Limited and Consultancy Europe
Associates Limited, the online legal reporting
business, to Thomson Legal and Regulatory
Europe Limited. The resulting profit on disposal
was £15,385,000.
As a result of the above disposals, the Centaur
Communications Group was left with a
substantial amount of idle property. This resulted
in an exceptional charge to the Group of
£1,777,000 in the year ended 30 June 2003.
On 10 March 2004, the date of acquisition of the
Centaur Communications Group, an amount of
£1,024,000 remained provided and at 30 June
2004 an amount of £841,000 remained provided.
(d) Deferred tax
At 30 June 2003 the Centaur Communications
Group held a provision in respect of a net
deferred tax liability of £247,000.
At 9 March 2004 the Centaur Communications
Group held a net deferred tax asset of
£2,164,000 and at 30 June 2004 the Group held
a net deferred tax asset of £995,000. The details
of these deferred tax positions are fully reflected
in the "Deferred tax" note below (note 21).
Centaur Holdings plc
42 Review 03/04