GUINNESS PEAT GROUP PLC • ANNUAL REPORT 1ContentsChairman’s Statement (including Coats Report) 2Financial Profile of Operations 10Summary of Principal Quoted Investments 11Board of Directors 12Directors’ Report 13Consolidated Profit and Loss Account 16Consolidated Balance Sheet 17Company Balance Sheet 18Consolidated Statement of Total RecognisedGains & Losses and Reconciliation ofMovements in Shareholders’ Funds 19Consolidated Cash Flow Statement 20Notes to Financial Statements 21Corporate Governance 57Independent Auditor’s Report 66Notice of Annual General Meeting 67Company and Registrar Addresses 71
2 GUINNESS PEAT GROUP PLC • ANNUAL REPORTChairman’s Statement“The directors anticipatean exciting and successfulyear for GPG in 2005”A relatively modest year for GPG inaccounting terms with profit down from£64.0 million to £25.3 million. A ratherbetter result was the continued overallincrease in value of the Company(expressed in terms of market value ofquoted investments and book valueelsewhere) of some £87 million which isprobably a more appropriate measure fora company such as GPG.The reasons for the lower profit arereadily identifiable and are worth furtherexplanation.1. A fewer number of completedcapital transactions.This is essentially a timing issue withvarious projected asset sales now inthe pipeline for 2005.2. Coats’ net loss of £5.6 million.In view of Coats’ importance to GPG,a separate report on this investmentis produced on pages 7 to 9.3. An “exchange translation” lossof £7.0 million compared with aprofit of £15.9 million in 2003.Regardless of annual fluctuations, inthe longer run, the basket ofcurrencies in which our portfolio isheld, must largely equalise. Since1991, the net aggregate outcome ofcurrency changes to date is a deficitof £1 million.4. A £6 million write-off in thevalue of Intellect Holdings Ltd.As foreshadowed in the Interim Report,it has been necessary to make aprovision in respect of what has so farbeen an unsuccessful investment and itwas decided to write off the book valueentirely.We do not believe it to be allbad,however,and since 30 June,wehave contributed an additional £1.3million (wisely or not,remains to beseen) in recapitalising the company.Our holding is now 18%.We have alsoinvested £6.6 million in a new entitycalled TAFMO Ltd, an unlisted publiccompany in which we have a direct56% interest and Intellect has a further28%.TAFMO appears to have goodcredentials in the development ofelectronic payments technology.