NATIONAL PARKING CORPORATION LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES
As described in the basis of preparation (Note 1 on page F-7), the
consolidated financial statements do not constitute the statutory financial
statements of National Parking Corporation Limited and its subsidiaries (the
"Group") prepared in accordance with the Companies Act 1985. A copy of the
statutory financial statements of the Group are being delivered to the
Registrar of Companies. The auditors' report on those financial statements was
not qualified. Nevertheless, the Directors acknowledge their responsibility for
the preparation of the consolidated financial statements and for ensuring that
they present fairly the state of affairs of the Group as at the end of the
financial period and of the profit of that Group for the 52 week period ended
27 March 1998.
The Directors consider that in preparing the consolidated financial
statements on pages F-3 to F-23 the Group has used suitable accounting policies,
consistently applied and supported by reasonable and prudent judgements and
estimates, and that all the accounting standards which they consider to be
applicable have been followed.
F-1
NATIONAL PARKING CORPORATION LIMITED
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders of National Parking Corporation
Limited
We have audited the accompanying consolidated balance sheet of National
Parking Corporation Limited and its subsidiaries as of 27 March 1998 and the
related consolidated statements of profit and loss account, cash flow and notes
for the 52 week period to 27 March 1998 (the "Financial Statements") on pages
F-3 to F-23. These financial statements have been prepared in accordance with
generally accepted accounting principles in the United Kingdom and under the
basis of preparation as set out in note 1. As described on page F-1, these
consolidated financial statements are the responsibility of the company's
Directors. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards in the United Kingdom which do not differ in any material respect
from auditing standards generally accepted in the United States. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of National
Parking Corporation Limited and subsidiaries at 27 March 1998 and the results
of their operations and their cash flows for the 52 weeks ended 27 March 1998
in conformity with generally accepted accounting principles in the United
Kingdom.
DELOITTE & TOUCHE
Chartered Accountants Hill House
and Registered Auditors 1 Little New Street
London EC4A 3TR
23 October 1998
F-2
NATIONAL PARKING CORPORATION LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 27 MARCH 1998
NOTE 1998
------ -------------
(pound
sterling)
'000
TURNOVER .............................................. 3 350,727
Cost of sales ......................................... 5 (233,480)
--------
GROSS PROFIT .......................................... 117,247
Administrative expenses ............................... 5 (75,742)
Other operating income (net) .......................... 8 12,662
--------
OPERATING PROFIT ...................................... 54,167
Income from fixed asset investments ................... 429
Other interest receivable and similar income .......... 2,497
Interest payable and similar charges .................. 9 (11,367)
--------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION ......... 4 45,726
Tax on profit on ordinary activities .................. 10 (25,690)
--------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION .......... 20,036
Minority interests .................................... (247)
--------
PROFIT FOR THE FINANCIAL PERIOD ....................... 19,789
Dividends paid and proposed ........................... 11 (3,570)
--------
RETAINED PROFIT FOR THE FINANCIAL PERIOD .............. 16,219
========
The result for the period reflects the continuing operations of the Group
F-3
NATIONAL PARKING CORPORATION LIMITED
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE PERIOD ENDED 27 MARCH 1998
1998
-----------
(pound
sterling)
'000
PROFIT FOR THE FINANCIAL PERIOD ................................................... 19,789
Unrealised surplus on revaluation of properties ................................... 20,179
Deferred tax provision on revaluation of properties ............................... (2,819)
Tax credit on realisation of property revaluation surplus of previous periods ..... 342
Currency differences on translation of foreign subsidiaries ....................... (1,329)
------
TOTAL RECOGNISED GAINS AND LOSSES RELATING TO THE FINANCIAL PERIOD ................ 36,162
======
NOTE OF CONSOLIDATED HISTORICAL COST PROFITS AND LOSSES
FOR THE PERIOD ENDED 27 MARCH 1998
1998
---------
(pound
sterling)
'000
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION .................................... 45,726
Realisation of property revaluation gains of previous periods .................... (216)
------
Historical cost profit on ordinary activities before taxation .................... 45,510
======
HISTORICAL COST PROFIT FOR THE PERIOD RETAINED AFTER TAXATION, MINORITY INTERESTS
AND DIVIDENDS ................................................................... 16,003
======
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
FOR THE PERIOD ENDED 27 MARCH 1998
1998
-----------
(pound
sterling)
'000
PROFIT FOR THE FINANCIAL PERIOD ........................................ 19,789
Dividends .............................................................. (3,570)
------
16,219
Other recognised gains and losses relating to the period (net) ......... 16,373
New share capital subscribed ........................................... 2
Premium on allotment of shares ......................................... 37
------
NET INCREASE IN SHAREHOLDERS' FUNDS .................................... 32,631
OPENING SHAREHOLDERS' FUNDS ............................................ 261,478
-------
CLOSING SHAREHOLDERS' FUNDS ............................................ 294,109
=======
F-4
NATIONAL PARKING CORPORATION LIMITED
CONSOLIDATED BALANCE SHEET
AT 27 MARCH 1998
1998
----------------------------
(pound (pound
sterling) sterling)
NOTE '000 '000
----------- ------------- ------------
FIXED ASSETS
Tangible assets:
Operating properties .................................. 12 367,033
Investment properties ................................. 12 36,999
Other tangible assets ................................. 12 16,704
-------
420,736
Other fixed asset investment ........................... 13(a) 2,161
-------
422,897
CURRENT ASSETS
Properties held for resale and stocks .................. 14 1,401
Debtors falling due within one year .................... 15 37,346
Debtors falling due after one year ..................... 15 20
Investments ............................................ 13(b) 96,398
Cash at bank and in hand ............................... 18,223
-------
153,388
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR ......... 16 (215,816)
--------
NET CURRENT LIABILITIES ................................ (62,428)
-------
TOTAL ASSETS LESS CURRENT LIABILITIES .................. 360,469
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR 17 (1,426)
PROVISIONS FOR LIABILITIES AND CHARGES ................. 18 (63,792)
-------
NET ASSETS ............................................. 3 295,251
=======
CAPITAL AND RESERVES
Called up share capital ................................ 19 11,904
Share premium account .................................. 20 12,825
Revaluation reserve .................................... 20 223,197
Capital redemption reserve ............................. 20 2,801
Profit and loss account ................................ 20 43,382
-------
EQUITY SHAREHOLDERS' FUNDS ............................. 294,109
MINORITY INTEREST ...................................... 1,142
-------
295,251
=======
F-5
NATIONAL PARKING CORPORATION LIMITED
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 27 MARCH 1998
NOTE 1998
------ --------------------------
(pound (pound
sterling) sterling)
'000 '000
------------ -----------
NET CASH INFLOW FROM OPERATING ACTIVITIES .................. 25 78,317
RETURN ON INVESTMENTS AND SERVICING OF FINANCE .............
Interest received .......................................... 2,497
Interest paid .............................................. (11,367)
Dividends received from fixed asset investments ............ 399
-------
NET CASH OUTFLOW FROM RETURNS ON INVESTMENT AND SERVICING OF
FINANCE ................................................... (8,471)
TAXATION
UK corporation tax paid .................................... (23,982)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of tangible fixed assets .......................... (9,008)
Sale of tangible fixed assets .............................. 9,097
-------
89
EQUITY DIVIDENDS PAID ...................................... (45,228)
Cash inflow before management of liquid resources and
financing ................................................. 725
MANAGEMENT OF LIQUID RESOURCES
Increase in current asset investments ...................... (4,507)
FINANCING
Issue of share capital ..................................... 39
Repayment of amounts borrowed .............................. (12,500)
-------
(12,461)
-------
DECREASE IN CASH ........................................... 26 (16,243)
=======
F-6
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 27 MARCH 1998
1. BASIS OF PREPARATION
The consolidated financial statements are prepared in accordance with
applicable generally accepted accounting principles of the United Kingdom under
the historical cost accounting rules, modified to include the revaluation of
properties and of shares in the subsidiary company.
Generally accepted accounting principles in the United Kingdom vary in
certain significant respects from generally accepted accounting principles in
the United States of America.
These financial statements do not constitute the Company's statutory
accounts prepared in accordance with section 227 of the Companies Act 1985.
2. ACCOUNTING POLICIES
A summary of the principal accounting policies applied in preparing these
consolidated financial statements is set out below:
BASIS OF CONSOLIDATION
The consolidated financial statements include the results, assets and
liabilities of the Company and each of its subsidiary companies, which make up
accounts to either the last Friday in March or the 31 March annually. The
principles of merger accounting under Statement of Standard Accounting Practice
23 have been adopted for the consolidation of the results of the Company with
those of National Car Parks Limited and its subsidiary companies. Acquisition
accounting has been adopted for all other purchases of subsidiaries. Goodwill
arising on the acquisition of other subsidiaries is written off immediately on
acquisition against retained profits.
TURNOVER
Group turnover comprises:
o car park receipts, management fees receivable in the course of
managing car parks on behalf of principals and motor trade sales;
o gross rents receivable and the proceeds arising from the disposal of
properties held for resale;
o insurance premiums earned in respect of vehicle breakdown and
recovery and household emergency rectification activities, together
with revenue from provision of other services associated with these
activities which do not require to be performed on an insured basis;
o coach hire receipts.
PROPERTIES
(i) Operating properties
Properties which are used for the Group's trading are regarded as
operating properties, and are stated in the financial statements at directors'
valuation based on open market value for existing use. Provisions in respect of
permanent diminutions in value of properties are charged or released directly
to the profit and loss account. Surpluses and temporary deficits are taken to
the revaluation reserve.
F-7
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
(ii) Investment properties
Properties which are held on a long term basis, but are not used as
operating properties are regarded as investment properties and, in accordance
with Statement of Standard Account Practice 19, are stated in the financial
statements at directors' valuation based on open market value. Provisions in
respect of permanent diminutions in value of properties are charged or released
directly to the profit and loss account. Surpluses and temporary deficits are
taken to the revaluation reserve.
(iii) Properties held for resale
Properties acquired with the intention of resale are stated at the lower
of cost and net realisable value and are included in the financial statements
within current assets.
(iv) Profit on sale of properties
The profit or loss on sale of properties represents the difference between
net sale proceeds and the valuation at the last balance sheet date. A transfer
is made from the revaluation reserve to the profit and loss account reserve of
any surplus or deficit in respect of the property sold.
FIXED ASSETS AND DEPRECIATION
(i) Properties
Depreciation is provided on a straight line basis over the estimated
useful lives of the properties after deducting the expected residual value at
the end of that life. The following rates of property depreciation are applied:
Operating properties:
Freehold (buildings only) ......... 2%
Long leasehold .................... 2%
Short Leasehold ................... Over the term of the lease
Investment properties:
Short Leasehold ................... Over the term of the lease
Leasehold properties with an unexpired term of greater than 50 years are
classified as long leasehold properties. Other leasehold properties are
classified as short leasehold properties.
In accordance with Statement of Standard Accounting Practice No. 19,
depreciation is not provided on freehold or long leasehold investment
properties. This may be a departure from the requirements of the Companies Act
concerning the depreciation of fixed assets. However, the properties concerned
are not held for consumption but for investment, and the directors consider
that systematic annual depreciation would be inappropriate. The accounting
policy adopted is deemed necessary for the financial statements to give a true
and fair view. Depreciation is only one of the factors reflected in the annual
valuation of investment properties and it cannot be separately identified or
quantified.
F-8
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
(ii) Other assets
Depreciation is provided on a straight line basis on other assets over
their estimated useful lives at the following annual rates:
Surface car park construction costs ......... 20%
Equipment, fixtures and fittings ............ 20%
Computer equipment .......................... 33.33%
Coaches ..................................... 10%
Other vehicles .............................. 25%
MAINTENANCE AND REPAIRS OF PROPERTIES
The Group is responsible for refurbishment, maintenance and repairs to all
its freehold properties, except to the extent that any of them are let out on
full repairing leases, and also to many of the leasehold properties, especially
the long leasehold properties, where it is common for the Group, as tenant, to
have full repairing obligations. The costs of carrying out refurbishment,
maintenance and repairs are charged to the profit and loss account of the
period during which the cost is incurred.
FOREIGN CURRENCIES
Transactions in foreign currencies are recorded using the rate of exchange
ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated using the rate of exchange
ruling at the balance sheet date and the gains or losses on translations are
included in the profit and loss account.
For consolidation purposes, the assets and liabilities and profit and loss
accounts of overseas subsidiary undertakings are translated at the closing
exchange rates. Exchange differences arising on these translations are taken to
reserves.
STOCKS
Stocks are stated at the lower of cost and net realisable value.
LEASES
Leases of land and buildings, which do not entail taking substantially all
the risks and rewards of ownership of the assets, are operating leases, and the
rental charges are taken to the profit and loss account on a straight line
basis over the life of the lease.
PENSIONS
The Group operates defined benefit and defined contribution pension
schemes. The assets of each scheme are held separately from those of the Group
in independently administered funds. Contributions to the defined benefit
schemes are charged to the profit and loss account so as to spread the cost of
pensions over employees' working lives with the Group. The amount charged
against profits for the defined contribution scheme represents the
contributions payable to the scheme in respect of the accounting period.
TAXATION
The charge for taxation is based on the profit for the period and takes
into account taxation deferred because of timing differences between the
treatment of certain items for taxation and accounting
F-9
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
purposes. Provision is made for deferred tax only to the extent that it is
probable that an actual liability will crystallise. No provision is made in
respect of taxation that would arise on the disposal of the properties stated
in the accounts at revalued figures where disposal is not intended in the
foreseeable future.
3. SEGMENTAL INFORMATION
PRE-TAX
CLASSES OF BUSINESS TURNOVER PROFIT NET ASSETS
1998 1998 1998
---------- ------------ -----------
(pound (pound (pound
sterling) sterling) sterling)
'000 '000 '000
Car parking and other property income ......... 180,723 47,170 245,774
Assistance services ........................... 158,193 20,079 38,026
Coach activity ................................ 11,811 1,342 1,500
Parent Company ................................ -- -- 9,951
Profit on sale of properties .................. -- 2,165 --
Exceptional items ............................. -- (16,160) --
Net interest payable .......................... -- (8,870) --
------- ------- -------
350,727 45,726 295,251
======= ======= =======
Profit on sale of properties includes (pound sterling)2.0m in respect of
the car parking activity and (pound sterling)0.2m in respect of the property
category.
Exceptional items include (pound sterling)7.0m in respect of the car
parking category, (pound sterling)0.7m in respect of the coaching category and
(pound sterling)8.4m in respect of the assistance services category.
Interest receivable and payable is not allocated to activities, except for
investment income arising on insurance operations, which is included within the
assistance services category.
Included in assistance services is turnover of (pound sterling)15.0m from
Green Flag USA.
4. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
1998
---------
(pound
sterling)
'000
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION IS STATED:
AFTER CHARGING:
Auditors' remuneration:
Audit ................................................... 382
Other services .......................................... 271
Depreciation and amortisation .............................. 9,587
Operating lease rentals on property ........................ 19,180
AFTER CREDITING:
Profit on sale of fixed assets other than property ......... 1,072
Rents receivable from property ............................. 5,772
Exchange losses on foreign currency loans .................. (82)
======
F-10
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
5. EXCEPTIONAL COSTS
Exceptional costs of (pound sterling)16.2m have been charged to the profit
and loss account.
In accordance with FRS 3, these costs have been included in administrative
expenses:
1998
---------
(pound
sterling)
'000
Redundancy costs and reorganisation costs ......... 1,933
Systems write-off costs ........................... 2,565
Demerger/sale of group ............................ 6,300
Head office refurbishment costs ................... 700
Development of brand .............................. 4,662
-----
16,160
======
6. REMUNERATION OF DIRECTORS
The directors who held office during the period were as follows:
R F Hobson ................. (resigned 30 April 1998)
Sir Donald Gosling ......... (resigned 30 April 1998)
R D Mackenzie ..............
G Layton ................... (resigned 30 September 1998)
J G F Flack ................
J E Prangnell .............. (resigned 30 April 1998)
1998
-------
(pound
sterling)
'000
Remuneration (excluding pension contributions) ........................ 1,785
=====
No.
Number of directors who are members of defined benefit pension schemes --
=====
1998
--------
(pound
sterling)
'000
Remuneration, excluding pension contributions, of the highest paid director .. 639,693
=======
During the period (pound sterling)80,000 has been accrued to contribute
towards the pension fund of the highest paid director.
On 3 January 1998, J E Prangnell became a non-executive director of the
Company. The compensation paid for the surrender of rights under his service
contract as an executive director was (pound sterling)293,541.
F-11
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
7. STAFF NUMBERS AND COSTS
The average number of persons employed by the Group during the period,
analysed by category, was as follows:
NUMBER OF
EMPLOYEES
1998
---------
Directors .............................................. 6
Managerial and clerical staff .......................... 612
Car park operatives .................................... 2,504
Coach operation staff .................................. 457
Assistance services staff .............................. 610
-----
4,189
=====
The aggregate payroll costs of these persons were as follows:
1998
---------
(pound
sterling)
'000
Wages and salaries ................................... 52,447
Social security costs ................................ 4,382
Other pension costs .................................. 1,766
------
58,595
======
8. OTHER OPERATING INCOME (NET)
1998
---------
(pound
sterling)
'000
Other operating income ................................. 2,320
Other operating charges ................................ (140)
Profit on sale of properties held as tangible
fixed assets ......................................... 2,165
Investment income -- unrealised ........................ 2,690
Investment income of insurance companies ............... 5,627
------
12,662
======
9. INTEREST PAYABLE AND SIMILAR CHARGES
1998
---------
(pound
sterling)
'000
On bank loans and overdrafts ........................... 11,085
Associated financing costs ............................. 282
------
11,367
======
F-12
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
10. TAXATION
1998
---------
(pound
sterling)
'000
UK corporation tax at 31% ....................... 20,103
Under provision in previous periods ............. 712
Deferred taxation charge - current .............. 1,036
- prior ................ 3,411
Tax credit on franked investment income ......... 86
------
25,348
======
The tax charge is high as a result of prior year corporation tax and
deferred tax charges, non-recognition of deferred tax assets and expenditure
not treated as deductible for taxation purposes.
The tax charge has been included in the financial statements as follows:
1998
---------
(pound
sterling)
'000
Tax on profit on ordinary activities ............ 25,690
Tax on realisation of property revaluation
deficit of previous periods ................... (342)
------
25,348
======
11. DIVIDENDS
1998
-------
(pound
sterling)
'000
Ordinary shares:
Interim ............................................. 3,570
=====
F-13
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
12. TANGIBLE FIXED ASSETS
FIXTURES,
FITTINGS,
LONG-TERM SHORT-TERM EQUIPMENT
FREEHOLD LEASEHOLD LEASEHOLD AND MOTOR
PROPERTY PROPERTY PROPERTY VEHICLES TOTAL
-------------- ----------- ------------ ---------- ------------
(pound (pound (pound (pound (pound
sterling) sterling) sterling) sterling) sterling)
'000 '000 '000 '000 '000
GROUP
Cost or valuation
At 29 March 1997 ......................... 188,299 165,841 37,716 50,538 442,394
Additions at cost ........................ 1,459 -- 15 7,534 9,008
Surplus on revaluation of properties ..... 4,485 7,652 4,568 -- 16,705
Exchange rate adjustment ................. (9) (598) (268) (69) (944)
--------- ------- ------ ------ -------
194,234 172,895 42,031 58,003 467,163
Disposals ................................ (3,900) (799) (80) (7,513) (12,292)
Reclassifications ........................ (349) 1,535 (1,535) -- (349)
-------- ------- ------ ------ -------
At 27 March 1998 ......................... 189,985 173,631 40,416 50,490 454,522
======== ======= ====== ====== =======
Accumulated depreciation
At 29 March 1997 ......................... -- -- -- 34,115 34,115
Charge for the period .................... 686 1,963 825 6,113 9,587
Write back following revaluation of
properties .............................. (686) (1,963) (825) -- (3,474)
Exchange rate adjustment ................. -- -- -- (10) (10)
-------- ------- ------ ------ -------
-- -- -- 40,218 40,218
Disposals ................................ -- -- -- (6,432) (6,432)
-------- ------- ------ ------ -------
At 27 March 1998 ......................... -- -- -- 33,786 33,786
======== ======= ====== ====== =======
Net book value
At 27 March 1998 ......................... 189,985 173,631 40,416 16,704 420,736
======== ======= ====== ====== =======
At 28 March 1997 ......................... 188,299 165,841 37,716 16,423 408,279
======== ======= ====== ====== =======
The valuation of land and buildings may be analysed as follows:
OPERATING INVESTMENT
PROPERTIES PROPERTIES
1998 1998
------------ -----------
(pound (pound
sterling) sterling)
'000 '000
Freehold ................ 168,821 21,164
Long leasehold .......... 161,056 12,575
Short leasehold ......... 37,156 3,260
------- ------
367,033 36,999
======= ======
An independent valuation as at 27 March 1998 of 219 properties, has been
carried out by Grimley, Chartered Surveyors. The valuation comprises
approximately 99.5% of the portfolio by value. The remaining properties have
been valued as at 27 March 1998 by qualified members of the Royal Institution
of Chartered Surveyors and the Incorporated Society of Valuers and Auctioneers
who are employed by the Group.
F-14
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
The operating properties have been valued on the basis of open market
value for existing use. Investment properties, and those elements of operating
properties not dedicated to parking, are valued on an open market value basis.
The revaluation has resulted in a net surplus of (pound sterling)20.2m,
comprising a surplus of (pound sterling)16.7m against the previous valuation
and a write back of (pound sterling)3.5m of depreciation charged in the period.
The net surplus has been credited to a revaluation reserve.
Included in freehold properties is land valued at (pound sterling)80.0m
which is not depreciated.
13. INVESTMENTS
(A) OTHER FIXED ASSET INVESTMENT
This investment is a 4.25% ordinary shareholding in Birmingham Airport
Holdings Limited. It is intended to hold this investment for the foreseeable
future and therefore these shares have been included as a fixed asset
investment.
(B) CURRENT ASSET INVESTMENTS
1998
--------
(pound
sterling)
'000
Listed investments ......................... 5
Loans and deposits ......................... 96,393
------
96,398
======
Of the loans and deposits amounting to (pound sterling)96.4m, insurance
subsidiaries held (pound sterling)89.6m at 27 March 1998.
14. PROPERTIES HELD FOR RESALE AND STOCKS
1998
--------
(pound
sterling)
'000
Freehold properties held for resale ......... 1,037
=====
STOCKS
Raw materials and consumables ............... 61
Finished goods and goods for resale ......... 303
-----
364
=====
Total ....................................... 1,401
=====
F-15
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
15. DEBTORS
1998
--------
(pound
sterling)
'000
AMOUNTS FALLING DUE WITHIN ONE YEAR
Trade debtors ............................... 22,103
Advance corporation tax recoverable ......... 2,450
Other debtors ............................... 3,425
Prepayments and accrued income .............. 9,368
------
37,346
------
AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Other debtors ............................... 20
------
37,366
======
16. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
1998
--------
(pound
sterling)
'000
Bank loans and overdrafts ..................... 138,065
Trade creditors ............................... 12,655
Other creditors including taxation and
social security:
Corporation tax ............................ 12,685
Other taxes ................................ 7,629
Social security ............................ 610
Accruals and deferred income .................. 44,172
-------
215,816
=======
Bank loans and overdrafts include a syndicated loan of (pound
sterling)135m which was repayable by 16 June 2000. Following the acquisition of
the Group post period end, the outstanding loan was repaid in full and has
therefore been classified as a current liability as at 27 March 1998.
The interest rate at the commencement of the syndicated loan was LIBOR
plus a margin of 0.45% per annum to which was added the mandatory liquid asset
costs of the banks from time to time. As the Group gearing reduces, so the
margin over LIBOR also reduces in accordance with a formula, with a floor of
0.25% per annum.
17. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
1998
--------
(pound
sterling)
'000
Other creditors ............................... 1,426
=====
F-16
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
18. PROVISIONS FOR LIABILITIES AND CHARGES
PROVISION
PROVISION FOR FOR
PROVISION FOR PROVISION FOR REORGANISATION UNEARNED
WOLVERHAMPTON REFURBISHMENT AND DEFERRED INSURANCE
CAR PARK OF CAR PARKS REDUNDANCY TAXATION INCOME TOTAL
--------------- --------------- ---------------- ---------- ------------ ------------
(pound (pound (pound (pound (pound (pound
sterling) sterling) sterling) sterling) sterling) sterling)
'000 '000 '000 '000 '000 '000
GROUP
Balance at 29 March 1997 ......... 2,022 932 5,465 (28) 44,114 52,505
Charged to profit and loss
account in the period ........... -- -- 3,032 4,447 94,791 102,270
Credited to profit and loss
account in the period ........... -- -- -- -- (87,669) (87,669)
Deferred tax on revaluation
surplus ......................... -- -- -- 2,819 -- 2,819
Reclassification as current tax -- -- -- (2,818) -- (2,818)
Utilised in the period ........... (604) (458) (2,253) -- -- (3,315)
----- ---- ------ ------ ------- -------
Balance at 27 March 1997 ......... 1,418 474 6,244 4,420 51,236 63,792
===== ==== ====== ====== ======= =======
Provision for unearned insurance income represents that part of the annual
subscription premiums paid by members of Green Flag which is deferred to the
next period.
A total of (pound sterling)2.0m was provided in the prior period in
respect of the demolition of the Wolverhampton car park and the costs relating
to increased survey and inspection programmes for the nine similarly
constructed car parks in the Group's control.
The amounts provided in the financial statements for deferred taxation and
the amounts not provided are as follows:
1998
------------------------
PROVIDED UNPROVIDED
---------- -----------
(pound (pound
sterling) sterling)
'000 '000
Capital allowances in excess of depreciation ......... 954 (1,978)
On revaluation of buildings .......................... 2,819 69,374
Rollover relief ...................................... -- 12,049
Other timing differences ............................. 647 (1,278)
----- ------
4,420 78,167
===== ======
19. CALLED UP SHARE CAPITAL
1998
--------
(pound
sterling)
'000
Authorised
150,000,000 ordinary shares of 10p each ......... 15,000
======
Called up, allotted and fully paid
119,036,701 ordinary shares of 10p each ......... 11,904
======
During the period 12,300 ordinary 10p shares were issued under the 1986
Option Scheme for a consideration of (pound sterling)39,000.
F-17
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
20. SHARE PREMIUM AND RESERVES
PROFIT
SHARE CAPITAL AND
PREMIUM REVALUATION REDEMPTION LOSS
RESERVE RESERVE RESERVE ACCOUNT TOTAL
--------- ------------- ------------ ---------- -----------
(pound (pound (pound (pound (pound
sterling) sterling) sterling) sterling) sterling)
'000 '000 '000 '000 '000
GROUP
Balance at 29 March 1997 ................ 12,788 206,144 3,140 27,504 249,576
Shares issued during the period ......... 37 -- -- -- 37
Transfer of realised revaluation
surplus ................................ -- 216 -- (216) --
Tax charged on realised revaluation
surplus ................................ -- -- -- 342 342
Retained profit for the period .......... -- -- -- 16,219 16,219
Revaluation surplus ..................... -- 20,179 -- -- 20,179
Deferred tax on revaluation surplus ..... -- (2,819) -- -- (2,819)
Exchange rate adjustments ............... -- (523) (339) (467) (1,329)
------ ------- ----- ------ -------
Balance at 27 March 1998 ................ 12,825 223,197 2,801 43,382 282,205
====== ======= ===== ====== =======
The cumulative amount of goodwill resulting from acquisitions in the
current and earlier financial periods which has been written off is (pound
sterling)21.1m.
21. CONTINGENT LIABILITIES
Under a Group registration the Company is jointly and severally liable for
the value added tax due by other Group companies. At 27 March 1998, this
contingent liability amounted to (pound sterling)3.5m.
Under a Group arrangement the Group's principal bankers may utilise the
bank balance of the Company to satisfy liabilities in respect of any overdrafts
due to the bank by Group companies. At 27 March 1998, the Group did not have a
net overdraft liability.
Certain of the Group's leasehold car parking properties are held on leases
that contain full repairing obligations which, amongst other things, require
the property to be handed back in good condition to the landlord at the end of
the lease. Substantial costs are incurred by the Group in carrying out
refurbishment, maintenance and repairs to the properties for which it has
responsibility, but the possibility exists for dilapidation claims to be made
by landlords in individual cases. At present it is not possible to estimate
what liabilities, if any, may arise.
F-18
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
22. FINANCIAL COMMITMENTS
1998
--------
(pound
sterling)
'000
CAPITAL COMMITMENTS
Contracted for but not provided ............... 4,451
=====
Authorised but not yet contracted for ......... 3,482
=====
1998
LAND AND
BUILDINGS
----------
(pound
sterling)
'000
OPERATING LEASE COMMITMENTS
Leases which expire:
Within one year ............................. 2,279
Within 2 to 5 years ......................... 2,009
After 5 years ............................... 11,997
------
16,285
======
23. PENSION SCHEME
NATIONAL CAR PARKS PENSION FUND
Contributions to the funded defined benefit pension scheme are charged to
the profit and loss account so as to spread the cost of pensions over
employees' working lives with the Company. The contributions are determined by
a qualified actuary on the basis of triennial valuations using the projected
unit method. The most recent valuation was at 5 April 1997. The principal
assumptions are:
(i) Existing assets are valued by discounting future income assuming
reinvestment in the FT-Actuaries All Share Index and future dividend growth of
equities at 4.25% per annum.
(ii) Rate of interest from investments is assumed to be 8% per annum.
(iii) Rate of earnings increase is assumed to be 6% per annum with a
further 1% per annum for certain categories of members to allow for promotions.
(iv) Rate of increase in pensions in payment is assumed to be 4% per
annum.
The most recent actuarial valuation showed that the market value of the
schemes' assets was (pound sterling)22.2m and that the actuarial value of those
assets represents 101% of the benefits that had accrued to members, after
allowing for expected future increases in earnings.
The pension charge for the period was (pound sterling)1.0 m. Contributions
amounting to (pound sterling)30,000 were payable to the fund and are included
in creditors.
GREEN FLAG PENSION PLAN
During the year to 31 March 1998 the Group operated a funded pension
scheme for the benefit of its employees, the Green Flag Pension Plan (the
Pension Plan). The Pension Plan provides defined benefits for some members,
based on members' final pensionable salary, and defined contribution benefits
for other members. The Pension Plan is constituted under trust, and its assets
are independent of the Company and the Group. An actuarial valuation of the
Pension Plan is undertaken triennially by independent actuaries, and
contributions are paid by Green Flag Group Limited and its subsidiary
undertakings in accordance with their recommendations.
F-19
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
Prior to 31 March 1997 the Group operated a second funded pension scheme,
the Green Flag Group Retirement Plan (the Retirement Plan). The assets and
liabilities of the Retirement Plan were transferred into the Pension Plan on 31
March 1997, and the Retirement Plan has since been wound up.
The most recent actuarial valuation of the Pension Plan was carried out as
at 31 March 1998 using the projected unit method. At the valuation date, the
market value of the Pension Plan's defined benefit assets excluding additional
voluntary contributions was (pound sterling)4.8m and those assets represented
96% of the Pension Plan's defined benefit liabilities in respect of past
service, allowing for projected future salary increases in the case of members
in service.
The most significant assumptions adopted for the valuations of the Pension
Plan are summarised in the table below:
% P.A.
------
Investment return .................................................... 8.25
Rate of earnings increase (including promotional increases) .......... 6.00
Pension increases on excess over any GMP in payment .................. 3.25
Rate of dividend growth .............................................. 4.25
The pension cost charged to the profit and loss account has been based on
this valuation and is calculated so as to spread the cost of pension over the
members' future working lives with the Company and Group.
The Group's pension cost for the year was (pound sterling)734,000 (1997:
(pound sterling)697,000). This includes the cost of Group life assurance and an
allowance for the administration expenses of the Pension Plan. An amount of
(pound sterling)10,000 (1997: (pound sterling)9,000) has been included in
creditors representing the cumulative difference between pension costs charged
to the profit and loss account and contributions paid to the Pension Plan.
F-20
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
24. INVESTMENTS IN GROUP COMPANIES
The principal companies in which the Group's interest is more than 25% are
shown below. The companies are incorporated in England and the class of shares
is ordinary except where otherwise stated.
COUNTRY OF CLASS AND
REGISTRATION PERCENTAGE OF
OR PRINCIPAL SHARES HELD
INCORPORATION ACTIVITY BY GROUP
- ---------------------------------------------------------------------------------------------------------
National Car Parks Limited Car parking 100%
- ---------------------------------------------------------------------------------------------------------
Europark Srl Italy Car parking 100%
- ---------------------------------------------------------------------------------------------------------
Irish Car Parks Limited Ireland Car parking 100%
- ---------------------------------------------------------------------------------------------------------
Beaconscross Limited Property letting 100%
- ---------------------------------------------------------------------------------------------------------
Beardmore Properties Limited Property letting 100%
- ---------------------------------------------------------------------------------------------------------
Parking Management (Investments) Property letting 100%
Limited
- ---------------------------------------------------------------------------------------------------------
Regent Lion Properties Limited Property letting 100%
- ---------------------------------------------------------------------------------------------------------
Smalton Investments Limited Property letting 100% ordinary and deferred
- ---------------------------------------------------------------------------------------------------------
John Matthews Properties Limited Property trading 100%
- ---------------------------------------------------------------------------------------------------------
Townway Construction and Property trading 100%
Development Limited
- ---------------------------------------------------------------------------------------------------------
Capital Logistics Limited Coach hire 100% ordinary and cumulative
redeemable convertible
participating preference
- ---------------------------------------------------------------------------------------------------------
Green Flag Group Limited Assistance Cumulative preferred ordinary 100%
Services Ordinary 97%
Deferred 100%
- ---------------------------------------------------------------------------------------------------------
Green Flag Limited Assistance 100%
Services
- ---------------------------------------------------------------------------------------------------------
Green Flag USA Inc USA Vehicle breakdown 94.25%
and recovery
- ---------------------------------------------------------------------------------------------------------
SCI APMF France Vehicle breakdown 100%
and recovery
- ---------------------------------------------------------------------------------------------------------
APMF SA France Vehicle breakdown 100%
and recovery
- ---------------------------------------------------------------------------------------------------------
Green Flag Insurance Limited Guernsey Pecuniary loss 100%
insurance
- ---------------------------------------------------------------------------------------------------------
UK Insurance Limited Pecuniary loss Preferred ordinary 100%
insurance Ordinary 97%
Deferred 100%
`A' non-cumulative preference 100%
`B' non-cumulative redeemable
preference 100%
`C' non-cumulative non-voting
redeemable
preference 100%
- ---------------------------------------------------------------------------------------------------------
F-21
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
25. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
1998
----------------------
(pound
Sterling)
'000
Operating profit .................................................. 54,167
Depreciation charges .............................................. 9,587
------
63,754
Provision for permanent diminution in value of properties ......... --
Profit on sale of properties ...................................... (2,165)
Profit on sale of other tangible fixed assets ..................... (1,072)
Amounts written off investments ................................... 30
Working capital movements:
Decrease in properties held for resale and stocks ................ 79
Decrease in debtors .............................................. 683
Increase in creditors ............................................ 10,557
Increase in provisions ........................................... 6,839
------
18,158
Other items ....................................................... (388)
------
NET CASH INFLOW FROM OPERATING ACTIVITIES ......................... 78,317
======
26. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
1998
------------
(pound
Sterling)
'000
Decrease in cash during the period ..................... (16,243)
Cash outflow from decrease in debt financing ........... 12,461
Cash outflow from increase in liquid resources ......... 4,507
-------
Decrease in net debt resulting from cash flows ......... 725
Translation difference ................................. 32
-------
Decrease in net debt in the period ..................... 757
Net debt at 29 March 1997 .............................. (24,201)
-------
Net debt at 27 March 1998 .............................. (23,444)
=======
F-22
NATIONAL PARKING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
PERIOD ENDED 27 MARCH 1998
27. ANALYSIS OF CHANGES IN NET DEBT
AT AT
29 MARCH CASH NON-CASH EXCHANGE 27 MARCH
1997 FLOW CHANGES MOVEMENT 1998
------------- ------------ ------------- ---------- -------------
(pound (pound (pound (pound (pound
sterling) sterling) sterling) sterling) sterling)
'000 '000 '000 '000 '000
Cash ................................... 36,253 (18,023) -- (7) 18,223
Overdrafts ............................. (4,700) 1,741 (145) 39 (3,065)
Bank loan: due within one year ......... (145) -- (134,855) -- (135,000)
due after one year .......... (147,500) 12,500 135,000 -- --
Current asset investments .............. 91,891 4,507 -- -- 96,398
-------- ------- -------- ---- --------
(24,201) 725 -- 32 (23,444)
======== ======= ======== ==== ========
28. ULTIMATE PARENT AND CONTROLLING COMPANY
On 27th April 1998, National Parking Corporation Limited was acquired by
Cendant Corporation which is incorporated in the United States of America.
F-23