The fair values of the above equity instruments have been determined using the following criteria:
Share Options
Share price on grant 111 - 295.25p Expected volatility 26.8% - 39.3%
Expected life 3 or 5 years
Expected dividend yield 1.45% - 2.01% Risk-free interest rate 2.8% - 5.2% Fair value at
measurement date 33.01p - 94.22p
Weighted fair value 43.42p
The volatility has been based on the annualised average of the standard deviations of the daily historical continuously compounded returns of the Group’s share price over the most appropriate period from the date of grant.
The risk-free rate of interest was assumed to be the yield to maturity on a UK Gilt strip with the term to maturity equal to the expected life of the option.
The expected dividend yield is an estimate of the dividend yield at the date of grant for the duration of the option’s life.
LTIP
For LTIP awards with an earnings per share performance condition, the fair value has
been calculated as the market value of the shares on the date of grant adjusted to reflect the fact that a participant is not entitled to receive dividends over the three year performance period.
LTIP awards
Fair value at
measurement date 133.63p - 301.25p Weighted fair value 185.53p
Holding period 3 years
Expected dividend yield 0.95% - 2.38%
PSP
For the purposes of calculating the fair value of conditional shares awarded under the PSP the fair value was calculated as the market value of the shares at the date of grant adjusted to reflect the fact that a participant is not entitled to receive dividends over the performance period.
PSP awards
Fair value at
measurement date 130.01p - 202.58p Weighted fair value 165.36p
Holding period 3 years
Expected dividend yield 0.9% - 2.44%
SIP
For the purposes of calculating the fair value of conditional shares awarded under
the SIP, the fair value was calculated as the market value of the shares at the date of grant. Participants are entitled to receive dividends over the three year holding period therefore no adjustment was made to the market value.
SIP awards
Fair value at
measurement date 126.00p - 335.75p Weighted fair value 193.31p
Holding period 3 years
During the year ended 31 December 2010, the Group recognised expense of £1,626,000 related to the fair value of the share based payment arrangements (year ended 31 December 2009: £3,280,000). In determining the charge to the income statement the Group made the following assumptions with regard to annual lapse rates as at the date of grant:
Share scheme Annual lapse rate
ESOS 0%
LTIP 0%
PSP 5%
SIP 10%
In addition, the Group estimated that all non-market based performance conditions would be satisfied in full.
Report and Accounts 2010
10632. Events after the balance
sheet date
Evans-Hamilton Incorporated
The Group completed the acquisition of 100% of the issued share capital of Evans- Hamilton Incorporated, a US-based oceanographic consulting firm, on 18 February 2011 for a maximum cash cash consideration of US$8.67 million (£5.5 million).
In the financial year ended 31 December 2010 Evans-Hamilton Inc had revenues of US$7.5 million (£4.7 million) and profit before tax of US$1.4 million (£0.9 million) after adjustment for non-recurring items. Net assets at 31 December 2010 were US$0.6 million (£0.4 million) after adjusting for assets excluded from the transaction. On the same basis, gross assets at 31 December 2010 were US$3.75 million (£2.4 million). Net debt at 31 December 2010 was US$1.5 million (£1.0 million). Initial consideration of US$4.67 million (£3.0 million) has been paid.
Subject to certain operational conditions being met, two further sums of US$2.0 million (£1.3million) will be paid on the first and second anniversaries of the transaction.
32. Events after the balance
sheet date
The Nautilus Group
The Group completed the acquisition 100% of the issued share capital of Nautilus Ltd and Nautilus World Ltd (together “Nautilus”), a UK/US based business providing
geosciences and petroleum engineering training to the oil and gas industry on 2 March 2011, for a maximum cash consideration of £18.6 million. In the year ended 31 December 2010 Nautilus had revenues of £10.2 million and profit before tax of £3.1 million, after adjustment for non-recurring items. Net assets at 31 December 2010 were £1.2 million, after adjusting for assets excluded from the transaction. On the same basis, gross assets at 31 December 2010 were £6.8 million. The business has no significant debt. Consideration paid at completion was £10.6 million. Subject to certain operational conditions being met, three further sums of £2.8 million, £2.7 million and £2.6 million will be paid on the first three anniversaries of the transaction.
32. Events after the balance
sheet date
Since these acquisitions were completed on 18 February 2011 and 2 March 2011, it is not practicable to provide the remaining information required by IFRS 3.
Notes to the Consolidated Financial Statements continued
33. Contingent liabilities
As at 31 December 2010, the Group had contingent liabilities in respect of contractual performance guarantees and other matters entered into, for or on behalf of certain Group undertakings. It is not expected that any material liability will arise in respect thereof, and the Directors estimate that the fair value of such guarantees is not material.
Accounts
107 As at As at 31 Dec 31 Dec 2010 2009 Note £000s £000s Fixed assets Intangible assets 3 778 844 Tangible assets 4 1,241 2,469 Investments 5 234,259 192,132 236,278 195,445 Current assets Debtors 6 48,125 77,473Cash at bank and in hand 273 3,115
48,398 80,588
Creditors: amounts falling due within one year 7 25,986 28,115
Provisions for liabilities 9 16 –
26,002 28,115
Net current assets 22,396 52,473
Total assets less current liabilities 258,674 247,918
Creditors: amounts falling due after more than one year 8 41,064 40,931
Provisions for liabilities 9 59 52
Net assets 217,551 206,935
Capital and reserves
Called up share capital 11, 12 6,516 6,457
Share premium account 12 101,941 98,238
Profit and loss reserve 12 93,710 85,940
Other reserves 12 15,384 16,300
Shareholders’ funds 217,551 206,935
These financial statements were approved and authorised for issue by the Board on 2 March 2011. The notes on pages 108 to 114 form part of these financial statements.
Dr Alan Hearne, Director Gary Young, Director
On behalf of the Board of RPS Group Plc.