Notes to the Accounts (8-13)

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8 Directors’ remuneration

The emoluments, share options, awards under incentive schemes and pension entitlements of the directors are disclosed in the Remuneration Report.

The combined remuneration of the directors of the Group is set out below

	2004 Total	Continuing
Fees for non-executive duties	0.2	0.2
Remuneration for executive duties	0.7	0.5
	0.9	0.7

9 Tax

(a) Analysis of taxation charge in the year

	Before exceptional items, goodwill amortisation and impairment £m	Exceptional items, goodwill amortisation and impairment £m	2004 Total £m	Before exceptional items, goodwill amortisation and impairment £m	Exceptional items, goodwill amortisation and impairment £m	2003 Total £m
UK corporation tax payable at 30% (2003: 30%)	0.1	-	0.1
Overseas corporate tax	5.7	(0.9)	4.8	6.9	(4.1)	2.8
Adjustments in respect of prior years	(0.6)	-	(0.6)	(0.2)		(0.2)
Total current tax	5.2	(0.9)	4.3	6.7	(4.1)	2.6
Overseas deferred taxation	1.6	-	1.6	(0.3)		(0.3)
Taxation on profit on ordinary activities	6.8	(0.9)	5.9	6.4	(4.1)	2.3

(b) Factors affecting the current tax charge

	Before exceptional items, goodwill amortisation and impairment £m	Exceptional items, goodwill amortisation and impairment £m	2004 Total £m	Before exceptional items, goodwill amortisation and impairment £m	Exceptional items, goodwill amortisation and impairment £m	2003 Total £m
Current tax
Profit on ordinary activities before taxation	16.2	(3.9)	12.3	16.1	(8.3)	7.8
Notional charge/(credit) at UK corporation tax rate of 30%	4.9	(1.2)	3.7	4.8	(2.5)	2.3
Profits in tax free and low tax areas	(0.3)	-	(0.3)	(0.5)	-	(0.5)
Amortisation of intangible assets	(0.7)	0.6	(0.1)	(0.7)	1.0	0.3
Higher overseas tax rates	1.7	(0.3)	1.4	1.9	-	1.9
Timing differences	(1.3)	-	(1.3)	(0.2)	-	(0.2)
Tax losses not recognised	1.5	-	1.5	1.6	0.6	2.2
Tax loss on disposal of business	-	-	-	-	(3.2)	(3.2)
Adjustments in respect of prior years	(0.6)	-	(0.6)	(0.2)	-	(0.2)
Current ordinary tax charge for the year	5.2	(0.9)	4.3	6.7	(4.1)	2.6

A significant proportion of the Group’s operating profits will continue to be earned in countries with a higher rate of tax than in the UK.

No deferred tax has been recognised on tax losses of £16.0 million (2003: £11.2 million) as these are not expected to be utilised in the forseeable future.

10 Dividends

	2004 £m	2003 £m
Interim paid of 6.1p per share (2003: 6.1p)	2.5	2.5
Final proposed 8.9p per share (2003: 16.6p)	3.6	6.8
Total dividends 15.0p per share (2003: 22.7p)	6.1	9.3

11 Earnings per ordinary share

The calculation of basic earnings per share is based on profit after tax of £6.4 million (2003: £5.5 million) and on the weighted average number of shares in issue during the year of 41,062,429 (2003: 41,034,098).

Adjusted basic earnings per share is presented as the directors consider that this gives a useful additional indication of the ongoing earnings performance of the Group.

This calculation is based on profit after tax but before exceptional items and amortisation and impairment of goodwill. In 2004 this profit was £9.4 million (2003: £9.7 million).

12 Intangible fixed assets

	Total £m	Development Costs £m	Total Goodwill £m	Total Goodwill £m	Negative Goodwill £m
Cost
At 1 January 2004	16.2	0.7	15.5	15.7	(0.2)
Currency translation adjustment	(0.6)	-	(0.6)	(0.7)	0.1
Additions ⁽¹⁾	0.4	-	0.4	1.0	(0.6)
At 31 December 2004	16.0	0.7	15.3	16.0	(0.7)
Amortisation
At 1 January 2004	6.1	0.2	5.9	6.0	(0.1)
Currency translation adjustment	(0.3)	-	(0.3)	(0.3)	-
Impairment charge ⁽²⁾	0.4	-	0.4	0.4	-
Charge for the year	1.8	0.2	1.6	1.6	-
Negative goodwill written back	(0.2)	-	(0.2)	-	(0.2)
At 31 December 2004	7.8	0.4	7.4	7.7	(0.3)
Net book value
At 31 December 2004	8.2	0.3	7.9	8.3	(0.4)
At 1 January 2004	10.1	0.5	9.6	9.7	(0.1)

⁽¹⁾ Additions of £0.4 million in goodwill represent £1.0 million of goodwill arising on the acquisition of the domestic distribution activity of Multiblitz (Dr. Ing. D.A. Mannesmann GmbH & Co), a distributor of the Group’s Manfrotto products in Germany, on 8 January 2004, and negative goodwill of £0.6 million on acquiring the operating assets and certain liabilities of Charter Broadcast North America Inc., a provider of broadcast rental equipment in the United States and Canada, on 30 March 2004.

The results of Multiblitz have been included in the Photographic Division (see Note 20). The goodwill is being amortised over a period of 10 years. The results of Charter Broadcast North America Inc. have been included in the Broadcast Services Division (see Note 20). The negative goodwill is being recognised in the profit and loss account in the periods in which the non-monetary assets are recovered, through depreciation or sale.

⁽²⁾ The impairment charge is in respect of goodwill that arose on the acquisition of Drake Electronics Limited, in 1998. The impairment review was performed using a discount rate of 10%.

13 Tangible fixed assets

	Total £m	Land and buildings £m	Plant machinery and vehicles £m	Equipment fixtures and fittings £m
Group
Cost or valuation
At 1 January 2004	95.0	19.2	58.4	17.4
Currency translation adjustments	(2.7)	(0.1)	(2.4)	(0.2)
Acquisitions	0.9	-	0.9	-
Additions	10.0	0.6	7.2	2.2
Disposals	(2.6)	-	(2.1)	(0.5)
At 31 December 2004	100.6	19.7	62.0	18.9
Depreciation
At 1 January 2004	60.5	7.3	42.0	11.2
Currency translation adjustments	(1.9)	-	(1.7)	(0.2)
Charge for the year	10.2	0.9	7.1	2.2
Disposals	(2.1)	-	(1.8)	(0.3)
At 31 December 2004	66.7	8.2	45.6	12.9
Net book value
At 31 December 2004	33.9	11.5	16.4	6.0
At 1 January 2004	34.5	11.9	16.4	6.2

Plant, machinery and vehicles includes broadcast equipment rental assets with an original cost of £32.1 million (2003: £27.8 million) and accumulated depreciation of £25.5 million (2003: £17.9 million).

The fixed assets of the Company, comprising principally of land and buildings, at a cost of £3.4 million (2003: £3.3 million) and with accumulated depreciation of £1.5 million (2003: £1.3 million) and net book value of £1.9 million (2003: £2.0 million) are included above. During the year additions at cost were £0.1 million and the depreciation charge was £0.2 million.

	2004 £m	Group 2003 £m	2004 £m	Company 2003 £m
Net book value of land and buildings at cost or valuation comprise the following
Carried at cost	9.8	10.2	0.1	0.3
Carried at valuation (open market basis - 31 March 1989)	1.7	1.7	1.7	1.7
	11.5	11.9	1.8	2.0
Freehold	11.0	11.2	1.7	1.7
Long Leasehold	0.1	-	-	-
Short Leasehold	0.4	0.7	0.1	0.3
	11.5	11.9	1.8	2.0

The Group’s land and buildings shown above at a re-valued net book value of £1.7 million would have been stated under historical cost at £0.7 million and a net book value of £0.2 million.

The revalued amount of the Group’s land and buildings has been retained as allowed for by the transitional provisions set out in FRS 15 ‘Tangible Fixed Assets’.

Capital commitments for which no provision has been made in the accounts amount to £0.1 million (2003: £0.4 million) for the Group and £nil (2003: £nil) for the Company.

Reconciliation of earnings and its effect on basic earnings per share and adjusted basic earnings per share

	2004 £m	Profit 2003 £m	2004 pence	Earnings per share 2003 pence
Profit for the financial year	6.4	5.5	15.6	13.6
Add back: exceptional items	1.2	0.8	2.9	2.0
Add back: goodwill amortisation and impairment	1.8	3.4	4.4	8.3
Earnings before exceptional items and goodwill amortisation and impairment	9.4	9.7	22.9	23.9

The calculation of diluted earnings per share is based on profit after tax of £6.4 million (2003: £5.5 million) and on 41,236,750 (2003: 41,198,148) ordinary shares, calculated as follows:

	2004	2003
Basic weighted average number of shares	41,062,429	41,034,098
Dilutive potential ordinary shares:
Employee share options	143,894	126,558
Deferred Bonus Plan	30,427	37,492
Diluted weighted average number of shares	41,236,750	41,198,148

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Information correct at 13/04/05