6. Group Operating Profit

Group operating profit has been arrived at after charging/(crediting) the following amounts (including the Group’s share of joint ventures accounted for on the basis of proportionate consolidation):

 

2013

2012

 

€’000

€’000

 

 

 

Provision for impairment of trade receivables (note 47)

4,158

1,830

Profit on sale of property, plant and equipment

(1,271)

(838)

Foreign exchange loss

221

268

Amortisation of government grants (note 36)

(584)

(604)

Operating lease rentals

- land and buildings

18,340

14,749

- plant and machinery

873

788

- motor vehicles

12,672

11,559

31,885

27,096

 

During the year the Group obtained the following services from the Group’s auditors (PricewaterhouseCoopers):

Audit fees

1,780

1,454

Tax compliance and advisory services

783

623

Other non-audit services

60

102

2,623

2,179

 

 

 

Auditor statutory disclosure

The audit fee for the Parent Company is €16,300 (2012: €16,000). This amount is paid to PricewaterhouseCoopers, Ireland, the statutory auditor.

7. Directors’ Emoluments and Interests

Directors’ emoluments (which are included in operating costs) and interests are presented in the Remuneration Report on this page.

8. Proportionate Consolidation of Joint Ventures

Impact on Group Income Statement

Year ended 31 March

2013

2012

Group share of:

€’000

€’000

 

 

 

Revenue

24,887

19,550

Cost of sales

(16,133)

(12,339)

Gross profit

8,754

7,211

Operating costs

(7,208)

(5,789)

Exceptional items

(481)

-

Operating profit

1,065

1,422

Finance income (net)

8

8

Profit before income tax

1,073

1,430

Income tax expense

(127)

(195)

Profit for the financial year

946

1,235

 

Impact on Group Balance Sheet

As at 31 March

2013

2012

Group share of:

€’000

€’000

 

Non-current assets

7,314

7,096

Current assets

3,593

3,890

Total assets

10,907

10,986

 

Total equity

5,888

6,592

Non-current liabilities

-

15

Current liabilities

5,019

4,379

Total liabilities

5,019

4,394

Total equity and liabilities

10,907

10,986

 

Impact on Group Cash Flow Statement

Year ended 31 March

2013

2012

Group share of:

€’000

€’000

 

Net cash flow from operating activities

123

1,165

Net cash flow from investing activities

(1,036)

(1,031)

Net (decrease)/increase in cash and cash equivalents

(913)

134

Cash and cash equivalents at beginning of year

1,737

1,603

Cash and cash equivalents at end of year

824

1,737

 

Reconciliation of cash and cash equivalents to net cash

Cash and cash equivalents as above

824

1,737

Net cash at 31 March

824

1,737

 

The Group’s share of its joint ventures’ capital commitments for property, plant and equipment at 31 March 2013 is €0.703 million (2012: €0.584 million).

Details of the Group’s principal joint ventures are shown in the Group directory on this page.

9. Employment

The average weekly number of persons (including executive Directors and the Group’s share of employees of joint ventures, applying proportionate consolidation) employed by the Group during the year analysed by class of business was:

 

2013

2012

 

Number

Number

 

 

 

DCC Energy

4,507

3,687

DCC SerCom

1,573

1,735

DCC Healthcare

1,280

1,137

DCC Environmental

903

893

DCC Food & Beverage

890

903

9,153

8,355

 

 

 

 

2013

2012

The employee benefit expense (excluding termination payments - note 11) for the above were:

€’000

€’000

 

 

 

Wages and salaries

345,368

298,705

Social welfare costs

35,067

36,581

Share based payment expense (note 10)

1,322

549

Pension costs - defined contribution plans

11,973

7,773

Pension costs - defined benefit plans (note 33)

1,196

1,477

394,926

345,085

 

 

 

10. Employee Share Options and Awards

The Group’s employee share options and awards are equity-settled share-based payments as defined in IFRS 2 Share-based Payment. The IFRS requires that a recognised valuation methodology be employed to determine the fair value of share options granted. The expense reported in the Income Statement of €1.322 million (2012: €0.549 million) has been arrived at by applying a Monte Carlo simulation technique for share awards issued under the DCC plc Long Term Incentive Plan 2009 and a binomial model, which is a lattice option-pricing model, for options issued under the DCC plc 1998 Employee Share Option Scheme.

 

Impact on Income Statement

In compliance with IFRS 2 Share-based Payment, the Group has implemented the measurement requirements of the IFRS in respect of share options that were granted after 7 November 2002 and had not vested by 1 April 2004.

The total share option expense is analysed as follows:

Date of grant

Grant

price

Minimum

duration of

vesting period

Number of

share awards/

options granted

Weighted

average

fair value

Expense in

Income Statement

2013

2012

€’000

€’000

 

 

 

 

 

 

 

DCC plc Long Term Incentive Plan 2009

 

 

 

 

 

 

20 August 2009

15.63

3 years

255,406

8.97

(572)

746

15 November 2010

21.25

3 years

212,525

12.00

850

850

15 November 2011

17.50

3 years

252,697

9.17

772

257

12 November 2012

22.66

3 years

215,489

12.09

290

-

1,340

1,853

 

DCC plc 1998 Employee Share Option Scheme

12 November 2002

10.38

3 and 5 years

609,500

2.81

-

(748)

22 December 2003

10.70

3 and 5 years

132,500

2.76

-

(192)

18 May 2004

12.75

3 and 5 years

162,500

3.42

-

(212)

9 November 2004

15.65

3 and 5 years

219,500

4.15

-

(220)

23 June 2006

18.05

3 years

223,500

4.54

(18)

-

20 May 2008

15.68

3 years

315,500

4.32

-

68

(18)

(1,304)

Total expense

1,322

549

 

 

 

 

 

 

 

Share options and awards

DCC plc Long Term Incentive Plan 2009

At 31 March 2013, under the DCC plc Long Term Incentive Plan 2009, Group employees hold awards to subscribe for 733,414 ordinary shares.

The general terms of the DCC plc Long Term Incentive Plan 2009 are set out in the Remuneration Report on this page.

The DCC plc Long Term Incentive Plan 2009 contains both market and non-market based vesting conditions. Accordingly, the fair value assigned to the related equity instrument on initial application of IFRS 2 Share-based Payment is adjusted to reflect the anticipated likelihood at the grant date of achieving the market based vesting conditions. The cumulative non-market based charge to the Income Statement is only reversed where entitlements do not vest because non-market performance conditions have not been met or where an employee in receipt of share entitlements relinquishes service before the end of the vesting period.

A summary of activity under the DCC plc Long Term Incentive Plan 2009 over the year is as follows:

 

2013

2012

 

Number of

Number of

 

share awards

share awards

 

 

 

At 1 April

714,755

462,058

Granted

215,489

252,697

Exercised

(11,776)

-

Expired

(185,054)

-

At 31 March

733,414

714,755

 

 

 

The weighted average share price at the dates of exercise for share awards exercised during the year under the DCC plc Long Term Incentive Plan 2009 was €22.16. The share awards outstanding at the year end have a weighted average remaining contractual life of 5.5 years (2012: 5.6 years).

 

The weighted average fair values assigned to share awards granted under the DCC plc Long Term Incentive Plan 2009, which were computed in accordance with the Monte Carlo valuation methodology, were as follows:

 

Granted during the year ended 31 March 2013

12.09

Granted during the year ended 31 March 2012

9.17

Granted during the year ended 31 March 2011

12.00

Granted during the year ended 31 March 2010

8.97

 

The fair values of share awards granted under the DCC plc Long Term Incentive Plan 2009 were determined taking account of peer group total share return volatilities and correlations together with the following assumptions:

 

2013

2012

 

 

 

Risk-free interest rate (%)

0.67

1.88

Dividend yield (%)

2.50

2.50

Expected volatility (%)

30.0

30.0

Expected life in years

5.0

5.0

 

 

 

The expected volatility is based on historic volatility over the past 5 years. The expected life is the average expected period to exercise. The risk free rate of return is the yield on zero coupon government bonds of a term consistent with the assumed option life.

Analysis of closing balance - outstanding at end of year

 

 

2013

2012

 

 

Number of

Number of

Date of grant

Date of expiry

share awards

share awards

 

 

 

 

20 August 2009

20 August 2016

52,703

249,533

15 November 2010

15 November 2017

212,525

212,525

15 November 2011

15 November 2018

252,697

252,697

12 November 2012

12 November 2019

215,489

-

Total outstanding at 31 March

 

733,414

714,755

 

 

 

 

Analysis of closing balance - exercisable at end of year

As at 31 March 2013, 52,703 of the outstanding share awards under the DCC plc Long Term Incentive Plan 2009 were exercisable.

DCC plc 1998 Employee Share Option Scheme

At 31 March 2013, under the DCC plc 1998 Employee Share Option Scheme, Group employees hold basic tier options to subscribe for 867,350 ordinary shares and second tier options to subscribe for 157,000 ordinary shares.

The general terms of the DCC plc 1998 Employee Share Option Scheme are set out in the Remuneration Report on this page.

The DCC plc 1998 Employee Share Option Scheme contains non-market based vesting conditions which are not taken into account when estimating the fair value of entitlements as at the grant date. The expense in the Income Statement represents the product of the total number of options anticipated to vest and the fair value of those options. This amount is allocated on a straight-line basis over the vesting period to the Income Statement. The cumulative charge to the Income Statement is only reversed where entitlements do not vest because non-market performance conditions have not been met or where an employee in receipt of share entitlements relinquishes service before the end of the vesting period.

 

A summary of activity under the DCC plc 1998 Employee Share Option Scheme over the year is as follows:

 

2013

2012

 

Average

Average

 

exercise

exercise

 

price in €

price in €

 

per share

Options

per share

Options

 

 

 

 

 

At 1 April

15.51

1,443,000

14.42

1,896,000

Exercised

13.61

(153,150)

11.27

(210,500)

Expired

10.50

(265,500)

10.70

(242,500)

At 31 March

17.09

1,024,350

15.51

1,443,000

 

Total exercisable at 31 March

17.94

867,350

17.29

1,024,500

 

 

 

 

 

The weighted average share price at the dates of exercise for share options exercised during the year under the DCC plc 1998 Employee Share Option Scheme was €23.40 (2012: €18.61). The share options outstanding at the year end have a weighted average remaining contractual life of 3.3 years (2012: 3.4 years).

Analysis of closing balance - outstanding at end of year

2013

2012

Exercise

Exercise

price in €

price in €

Date of grant

Date of expiry

per share

Options

per share

Options

 

 

 

 

 

 

12 November 2002

12 November 2012

10.38

-

10.38

332,000

22 December 2003

22 December 2013

10.70

75,000

10.70

84,000

18 May 2004

18 May 2014

12.75

118,000

12.75

119,500

9 November 2004

9 November 2014

15.65

120,500

15.65

120,500

15 December 2005

15 December 2015

16.70

107,350

16.70

120,000

23 June 2006

23 June 2016

18.05

131,500

18.05

162,000

23 July 2007

23 July 2017

23.35

222,000

23.35

226,000

20 December 2007

20 December 2017

19.50

12,500

19.50

12,500

20 May 2008

20 May 2018

15.68

237,500

15.68

266,500

Total outstanding at 31 March

 

 

1,024,350

1,443,000

 

 

 

 

Analysis of closing balance - exercisable at end of year

 

 

2013

2012

 

 

Exercise

Exercise

 

 

price in €

price in €

Date of grant

Date of expiry

per share

Options

per share

Options

 

 

 

 

 

 

12 November 2002

12 November 2012

10.38

-

10.38

70,500

22 December 2003

22 December 2013

10.70

7,500

10.70

16,500

18 May 2004

18 May 2014

12.75

58,500

12.75

60,000

9 November 2004

9 November 2014

15.65

90,500

15.65

90,500

15 December 2005

15 December 2015

16.70

107,350

16.70

120,000

23 June 2006

23 June 2016

18.05

131,500

18.05

162,000

23 July 2007

23 July 2017

23.35

222,000

23.35

226,000

20 December 2007

20 December 2017

19.50

12,500

19.50

12,500

20 May 2008

20 May 2018

15.68

237,500

15.68

266,500

Total exercisable at 31 March

 

 

867,350

1,024,500

 

 

 

 

 

 

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